Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_14-cv-01957/USCOURTS-casd-3_14-cv-01957-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1362 E.R.I.S.A.: Liability for Termination of Single Employer Plans

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

VABLIN KOJIMA,

Plaintiff,

v.

BLUE CROSS AND BLUE SHIELD OF 

ALABAMA, et al.,

Defendants.

Case No.: 14-cv-1957-JLS-DHB

ORDER (1) DENYING PLATINIFF’S 

CONTINUANCE MOTION; (2) 

DENYING PLAINTIFF’S MOTION 

FOR SUMMARY JUDGMENT; AND 

(3) GRANTING DEFENDANTS’ 

MOTION FOR SUMMARY 

JUDGMENT

(ECF Nos. 41, 43, 53) 

Presently before the Court are Plaintiff’s Cross-Motion for Summary Judgment, 

(“Pl.’s MSJ”) (ECF No. 41) and corresponding support and opposition briefs; Defendants 

Blue Cross and Blue Shield of Alabama’s (“BCBS”) and Vulcan Materials Company 

Group Health Care Plan’s (together, “Defendants”) Motion for Summary Judgment,

(“Defs.’ MSJ”) (ECF No. 43) and corresponding support and opposition briefs;

Defendants’ Supplemental Brief re Pending Summary Judgment Motions, (“Defs.’ Suppl. 

Br.”) (ECF No. 55); and Plaintiff’s Ex Parte Motion to Continue the Date for Filing of 

Supplemental Brief by Additional Thirty Days, (“Cont. Mot.”) (ECF No. 53). Having 

considered the parties arguments and the law, the Court rules as follows.

/ / /

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PROCEDURAL BACKGROUND

Both motions for summary judgment were initially set for hearing at 1:30 p.m. on 

October 20, 2016; however, on October 6, 2016 the Court vacated the hearing and 

requested supplemental briefing from both parties “addressing the issue whether Plaintiff 

Kojima or the primary insured received the relevant EOBs electronically or by United 

States mail or any other means.” (October 6, 2016 Order 1, ECF No. 49.) On October 19, 

Plaintiff submitted an Ex Parte Motion requesting forty-five additional days in which to 

file a supplemental brief because “counsel for Plaintiff ha[d] been unable to make contact 

or communicate with Plaintiff.” (Pl.’s Ex Parte Mot. to Continue the Date for Filing of 

Suppl. Br. by Forty-Five Days 1, ECF No. 50.) The Court granted the motion the following

day. (ECF No. 50.) 

Plaintiff now again requests an extension of time because “counsel for Plaintiff has 

remained unable to make contact or communicate with Plaintiff.” (Cont. Mot. 1.) 

However, Defendants have filed a Supplemental Brief that clarifies the issue on which the 

Court requested supplemental briefing, and Plaintiff tacitly concedes that this information 

should be sufficient for the Court to proceed with the pending cross-motions for summary 

judgment. (Id. at 2 (“Plaintiff reiterates that Defendants’ counsel should have evidence of 

whether or not BCBS of Alabama, electronically or via US mail, transmitted the relevant 

EOBs . . . to its participant, Patrick Kojima, or Plaintiff, its beneficiary.”); see also id.

(“Surely, if Defendants cannot provide the answer that the Court seeks then it would not 

be prejudicial to the parties or to the Court to allow Plaintiff’s counsel 30 additional days 

to make contact with Plaintiff . . . .”).) Given the foregoing, the Court DENIES Plaintiff’s 

Continuance Motion and takes the cross motions for summary judgment under submission 

without oral argument pursuant to Civil Local Rule 7.1(d). 

FACTUAL BACKGROUND

I. Plaintiff and Her Surgical History

Plaintiff is a 54-year-old woman with a history of lower back pain who is a covered 

dependent under the BCBS healthcare plan at issue in this case. (Mem. of Fact and Law 

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in Supp. of Pl.’s Cross-Mot. for Summ. J. (“Pl.’s Supp.”) at 1, ECF No. 41-1; Mem. of P. 

& A. in Supp. of Defs.’ Mot. for Summ. J. (“Defs.’ Supp.”) at 2, ECF No. 43-1; see First 

Am. Compl. (“FAC”) ¶ 9, ECF No. 14.) Vulcan Materials Company is the Plan Sponsor 

and Plan Administrator, and BCBS Alabama is the claims administrator. (Defs.’ Supp. 2; 

FAC ¶¶ 3–4.) Because the coverage at issue was employment based, Plaintiff’s claim is 

governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). (FAC 

¶ 1; Pl.’s Supp. 1.)

The BCBS policy provisions relevant to this case provide that BCBS will cover up 

to 80% of out-of-network surgeon fees,1 pursuant to a calculation according to the “allowed 

amount.” (Pl.’s MSJ Ex. B, ECF No. 42-5 at 52–53.) The allowed amount may be 

calculated in several ways, including by basing it on “the negotiated rate payable to innetwork providers,” “the average charge for care in the area,” or “historical data and 

information from various sources” inclusively listed in the policy. (Id., ECF No. 42-5 at 

83–84.) 

From 2010 to 2013, Plaintiff underwent three surgeries administered by an out-ofnetwork provider all attempting to fix Plaintiff’s persistent lower back pain. (Pl.’s Supp. 1.) 

The final two surgeries, performed by Dr. Sanjay Ghosh at his San Diego Neurological 

Associates facility (together, “SDNA”), were intended to diagnose and correct the initial, 

2010 surgery. (See id.) These final two surgeries—one investigatory in 2012 and one 

corrective in 2013—and SDNA’s corresponding services, were not reimbursed in full by 

BCBS and now form the basis of this suit. (FAC ¶¶ 10–15.)

There were several discrete charges resulting from each surgery (Pl.’s Supp. 5); each 

is addressed in turn according to the relevant surgery date.

/ / /

 

1 An out-of-network provider is one who does not fall within the umbrella of BCBS’s “contract[s] with 

providers to furnish care for a negotiated price.” (Deagon Decl. Ex. A, at 46–47, ECF No. 43-2.) This 

often results in higher out-of-pocket expenses for plan members because, by contrast, in-network 

providers often contract with BCBS at “a discounted rate” in exchange for the peace of mind that they 

will be fully reimbursed by BCBS. (See id.) 

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A. The 2012 Surgery

There were three bills generated from the 2012 surgery. The billed amounts are 

underlined, and BCBS’s reimbursement payments are bolded:

(1) $119,760.80/$67,199.88—Grossmont Hospital charges (where the surgery 

was performed), (Pl.’s MSJ Ex. B, ECF No. 42-2 at 61); 

(2) $62,700.00/$6,465.31—Dr. Ghosh’s surgical fee, (id., ECF No. 42-2 at 

62); and 

(3) $73,000.00/$1,119.79—Felix Regala’s surgical assistance fee, (id., 42-2

at 64).

Respectively, these BCBS payments represent approximately 56.1%, 10.3%, and 

1.5% of the total amounts billed. 

B. The 2013 Surgery

There were two bills generated from the 2013 surgery. The billed amounts are 

underlined, and BCBS’s initial reimbursement payments2are bolded:

(1) $26,400.00/$2,991.52—Dr. Ghosh’s surgical fee, (id., ECF No. 42-4 at

91); and 

(2) $34,400.00/$370.38—Amanda Williams’s surgical assistance fee, (id., 

ECF No. 42-5 at 15).

Respectively, these BCBS payments represent approximately 11.3% and 1% of the 

total amounts billed. 

Plaintiff points out that, in total, BCBS reimbursed Dr. Ghosh and the relevant 

surgical assistants for $14,671.93 of the total $129,400.00 billed—a rate of approximately 

11.4%. (Pl.’s Supp. 11.) With the Grossmont Hospital charges added in, BCBS’s total 

reimbursements equal $79,805.81 of the total $316,260.80 billed—a rate of approximately 

25.2%.

/ / /

 

2 BCBS actually ended up paying $1,658.93 more in reimbursement for the two charges related to the 

2013 surgery, although it is unclear why BCBS did so. (See Pl.’s Supp. at 8.)

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II. The BCBS Explanation of Benefits/Denial Letters

Especially relevant to the pending motions for summary judgment are two aspects 

of the explanation of benefits (“EOB”) letters BCBS sent to Plaintiff regarding the 

reimbursement amounts BCBS paid for the underlying surgeries and services at issue in 

this case. First, all of the EOB letters that did not fully reimburse SDNA for the billed 

amounts used only the following language to explain BCBS’s reason for only issuing 

partial reimbursement:

(1) THE SUBMITTED CHARGE EXCEEDS THE ELIGIBLE CHARGE 

WHICH IS THE MAXIMUM ALLOWANCE FOR THIS SERVICE.

(2) OUR RECORDS INDICATE YOU USED AN OUT OF NETWORK 

PROVIDER, WHICH WILL INCREASE THE AMOUNT YOU MUST 

PAY OUT OF POCKET. YOU WILL OWE THE DIFFERENCE 

BETWEEN THE ‘SUBMITTED’ CHARGE AND THE ‘BENEFITS 

PAID.’

(E.g., Defs.’ Suppl. Br. Exs. G, H, I, J, ECF No. 55-1.) Second, in their initial rounds of 

briefing Plaintiff and Defendants disagreed regarding whether the EOBs contained 

language advising Plaintiff of her appeal rights. (Compare Barker Decl., Ex. D, at 35–36, 

38–39, 45–47, ECF No. 46-5, with Pl.’s Opp’n to Defs.’ Mot. for Summ. J. (“Pl.’s Opp’n”) 

13, ECF No. 45.) Although BCBS plan members can elect to receive EOBs electronically 

or by regular mail, in the present case it was initially “unclear whether or not BCBS . . . 

sent this explanation of benefits electronically or by mail . . . .” (Barker Decl. Ex. D, at 47, 

ECF No. 46-5.) 

Defendants assert that if the EOB is sent by regular mail, then the back side of the 

document summarizes the member’s appeal rights. (Id. at 38–39, ECF No. 46-5; see also 

Deagon Decl. 4, Ex. K, ECF No. 55-1.) On the other hand, if the EOB is sent online then 

down “in the corner . . . [of] your computer screen, it would have a little link that says, 

‘Your Rights,’” (Barker Decl. Ex. D, at 38–39, ECF No. 46-5), which, once the member 

clicked through, would open a new page summarizing the member’s appeal rights. Plaintiff

/ / /

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attached to her filings copies of the online EOBs relevant to this case; notably, these EOBs 

neither include such a link nor otherwise mention Plaintiff’s appeal rights. (See, e.g., Pl.’s 

MSJ Ex. B, ECF No. 42-2 at 62.)

However, Defendants in their supplemental brief attached: (1) a supplemental 

declaration by Jan B. Deagon, “Customer Services Manager for BCBS Alabama” during 

the time period relevant to this litigation; and (2) copies of the EOBs relevant to this action

which were maintained “in the books and records of BCBS Alabama . . . .” (Deagon Decl. 

¶¶ 1, 6, Exs. G, H, I, J, ECF No. 55-1; see also id. Ex. K.) Declarant Deagon notes that 

“neither Patrick Kojima nor Vablin Kojima . . . ever registered for the ‘My Blue Cross’ 

electronic access to information portal with BCBS Alabama, so BCBS Alabama does not 

have an email address for either of them.” (Id. ¶ 3.) This means that “all documents 

communicated to [the Kojimas] by BCBS Alabama” were necessarily “mailed via regular 

U.S. Postal Service mail, to the following address: Patrick Kojima[,] 1668 Toledo Way, 

#2[,] Chula Vista CA 91913 . . . .” (Id.) This assertion is further substantiated by the 

attached EOBs, which each list this same California address near the top. (Id. Exs. G, H, 

I, J.) And, as Defendants previously noted, each mailed EOB contained a section on its 

back side outlining Plaintiff’s appeal rights. (Id. Ex. K (form language); id. ¶ 8 (“[T]he 

pre-printed language in Exhibit ‘K’ was on the back side of all four Processed Claim Report 

forms BCBS Alabama mailed to Patrick Kojima . . . .”).) 

III. The Provider Appeals to BCBS

BCBS recognizes two discrete types of appeals: (1) member appeals, and (2) 

provider appeals. Member appeals—labeled “an appeal of an adverse benefit 

determination” in the BCBS member policy materials—are explained at length in the 

BCBS policy materials. The appeals section of the BCBS policy materials note that only 

the member or an authorized representative, who must be so authorized in writing by the 

member, may validly appeal an adverse benefit determination. (Pl.’s MSJ Ex. B, ECF No. 

42-5 at 72–74.) For an appeal to be valid it must be filed within 180 days and submitted 

in writing to BCBS of Alabama. (Id., ECF No. 42-5 at 73.) The policy further provides 

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that if an inquiry labeled as an appeal is submitted “without following the rules just 

described for filing an appeal” then BCBS “will not treat your inquiry as an appeal.” (Id., 

ECF No. 42-5 at 72.) 

Separate and apart from member appeals, Defendants assert that provider appeals—

never mentioned in the BCBS member policy materials—are “a courtesy offered to 

providers” and do not fall under ERISA’s provisions. (Deagon Dep. 13, ECF No. 46-5.) 

BCBS alleges that providers must appeal their reimbursement rates—a provider appeal—

to their local arm of BCBS, and must appeal their reimbursement rates on behalf of the 

member—a member appeal, if the provider is so authorized to act on behalf of the 

member—to the BCBS arm that issued the member’s policy. (See id. at 17.) Members 

must always appeal to the BCBS arm that issued their policy. (See id.) Finally, the policy 

notes that the member “cannot file a claim for benefits under the plan in federal or state 

court (or in arbitration if provided by your plan) unless you exhaust these administrative 

remedies.” (Id. at 35.) 

SDNA submitted several letters to BCBS of California, each entitled in part 

“APPEAL FOR VABLIN Y. KOJIMA,” then stating that “[t]his appeal is for SD[NA],” 

and ultimately “request[ing] that you reconsider the claim for additional payment to 

SD[NA].” (Id. Pl.’s MSJ Ex. A, ECF No. 42-1 at 17, 23, 28.) On April 3, 2013—sixtytwo days after BCBS issued the relevant EOB—SDNA submitted to BCBS two letters 

requesting that BCBS reconsider the reimbursement amounts given to Dr. Ghosh and Ms. 

Regala, respectively, for the 2012 surgery. (Id. Ex. B, ECF No. 42-4 at 47.) BCBS of 

California responded to SDNA forty-three days later, acknowledging receipt of SDNA’s 

earlier letters and stating that “the inquiry has been sent for medical review for possible 

additional consideration.” (Id. Ex. A, ECF No. 42-1 at 27.) This was the last 

communication to either Plaintiff or SDNA regarding these appeals. On August 29, 

2013—twenty-three days after BCBS issued the relevant EOB—SNDA submitted to 

BCBS a request that BCBS reconsider the reimbursement amount given to Mrs. Williams 

for the 2013 surgery. (Id. Ex. B., ECF No. 42-4 at 74.) On September 10, 2013—thirtyCase 3:14-cv-01957-JLS-DHB Document 56 Filed 12/08/16 Page 7 of 13
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four days after BCBS issued the relevant EOB—SDNA submitted to BCBS a request that 

BCBS reconsider the reimbursement amount given to Dr. Ghosh for the 2013 surgery. (Id., 

ECF No. 42-4 at 61, 84.) Neither SDNA nor Plaintiff received any communication 

regarding these requests.

However, BCBS internal memoranda discloses internal communications regarding 

Plaintiff’s surgery and SDNA’s requests. (E.g., id., ECF No. 42-3 at 8, 55; ECF No. 42-4

at 4, 8, 11, 25, 27, 43, 57, 59, 67, 70, 92; ECF No. 42-5 at 1.) These communications 

included, among others: (1) a note that “this is a provider appeal not a sub appeal” with a 

corresponding request to “verify since this is a provider appeal that the allowed amounts 

provided were correct,” (id., ECF No. 42-4 at 57); (2) an inquiry marked “Blue2 Claim 

Appeal” by “Provider on Behalf of Member” with a corresponding answer that “this is a 

professional reimbursement issue and is not handled by BCBSAL,” (id., ECF No. 42-4 at

70); and (3) a note responding to an inquiry on behalf of the primary insured—Mr. 

Kojima—noting that Mr. Kojima requested “status on claim appeal for svcs on 6/13 . . . 

[because] he ha[d] not rec’d a resp yet and the prov has not rec’d a resp,” and replying to 

relevant BCBS employees requesting they “advs the appeals on file and refund req on file 

are for DOS 12/6/12,” (id., ECF No. 42-5 at 1). 

LEGAL STANDARD

Under Federal Rule of Civil Procedure 56(a), a party may move for summary 

judgment as to a claim or defense or part of a claim or defense. Summary judgment is 

appropriate where the Court is satisfied that there is “no genuine dispute as to any material 

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); 

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Material facts are those that may affect 

the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A 

genuine dispute of material fact exists only if “the evidence is such that a reasonable jury 

could return a verdict for the nonmoving party.” Id. When the Court considers the 

evidence presented by the parties, “[t]he evidence of the non-movant is to be believed, and 

all justifiable inferences are to be drawn in his favor.” Id. at 255.

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The initial burden of establishing the absence of a genuine issue of material fact falls 

on the moving party. Celotex, 477 U.S. at 323. The moving party may meet this burden 

by identifying the “portions of ‘the pleadings, depositions, answers to interrogatories, and 

admissions on file, together with the affidavits, if any,’” that show an absence of dispute 

regarding a material fact. Id. When a party seeks summary judgment as to an element for 

which it bears the burden of proof, “it must come forward with evidence which would 

entitle it to a directed verdict if the evidence went uncontroverted at trial.” See C.A.R. 

Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting 

Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)).

Once the moving party satisfies this initial burden, the nonmoving party must 

identify specific facts showing that there is a genuine dispute for trial. Celotex, 477 U.S. 

at 324. This requires “more than simply show[ing] that there is some metaphysical doubt 

as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 

586 (1986). Rather, to survive summary judgment, the nonmoving party must “by her own 

affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ 

designate ‘specific facts’” that would allow a reasonable fact finder to return a verdict for 

the non-moving party. Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 248. The nonmoving party cannot oppose a properly supported summary judgment motion by “rest[ing] 

on mere allegations or denials of his pleadings.” Anderson, 477 U.S. at 256. 

ANALYSIS

Plaintiff in her MSJ puts forth solid arguments both that BCBS’s reimbursement 

rates were unreasonable under any calculation and that BCBS’s two separate appeals 

processes—an explanation of which appears nowhere in BCBS literature—could easily 

confuse a BCBS subscriber into thinking his provider is appealing on his behalf.3 However, 

 

3 Plaintiff also argues (1) that the relevant EOBs do not comply with ERISA regulations due to lack of 

sufficient specificity in the provided reasons for denial of Plaintiff’s reimbursement requests, and (2) that 

BCBS had a duty to assume SDNA’s appeals were on behalf of Mrs. Kojima and 

therefore also “had an affirmative obligation to point this out to Mrs. Kojima and inform her of what was 

necessary to perfect her appeal.” (Pl.’s Supp. 20.) As discussed in Section I, infra, the Court need not 

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because Defendants argue the BCBS policy provisions explicitly require a subscriber to 

exhaust administrative remedies before filing suit in federal court, and because if Plaintiff 

did not here exhaust her administrative remedies this suit is improperly before this Court, 

the Court first addresses this threshold jurisdictional issue. 

I. Failure to Exhaust Administrative Remedies

In the present case, the controlling Vulcan and BCBS policy clearly states that a 

member “cannot file a claim for benefits under the plan in federal or state court . . . unless 

[the member] exhaust[s] . . . administrative remedies.” (Deagon Decl. 35, ECF No. 43-4.) 

Exhaustion under the plan requires that a member or an authorized representative, who 

must be so authorized in writing by the member, appeal an adverse benefit determination 

by conforming to the requirements of (1) writing (2) to BCBS of Alabama (3) within 180 

days of the underlying adverse benefit determination. (Id. at 73.) The policy further 

provides that if an inquiry labeled as an appeal is submitted “without following the rules 

just described for filing an appeal” then BCBS “will not treat your inquiry as an appeal.” 

(Id. at 72.)

Both Plaintiff and Defendants seemingly agree that Ms. Kojima did not herself 

appeal. (See Pl.’s Opp’n 5–6; Defs.’ Reply 2–3.) Given this, Plaintiff argues that because 

it is “standard practice for medical providers to initiate appeals on their patients [sic] 

behalf” the SDNA appeals should have been treated as member appeals despite Plaintiff’s 

admission that “Ms. Kojima . . . failed to comply with the requirement . . . that she first fill 

out the proper form.” (Pl.’s Opp’n 19.) However, both the language of the BCBS policy 

and the Department of Labor (“DOL”) regulations specify that only an authorized

representative may bring such an appeal, (see 29 C.F.R. § 2560.503-1(b)(4)), and to 

designate an authorized representative under the BCBS policy requires a written 

authorization by the member. Because in the present case Plaintiff did not by writing 

 

reach this argument due to Plaintiff’s failure to exhaust her administrative remedies. Further, even if 

Plaintiff did succeed on these additional arguments the Court would be unable to award the substantive 

remedy Plaintiff requests. See note 4, infra, and accompanying text. 

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authorize SDNA to act on her behalf, Plaintiff’s contention here fails.4 Plaintiff thus failed 

to exhaust her administrative remedies before filing suit in federal court.

However, failure to exhaust administrative remedies may in some instances be

forgiven. DOL regulations regarding ERISA require plan administrators, upon issuing any 

adverse benefit determination, to provide written notice to the claimant of:

(1)The specific reason for the denial;

(2)Specific reference to the pertinent plan provisions on which the denial is 

based;

(3)A description of any additional material or information necessary for the 

claimant to perfect the claim and an explanation of why such material or 

information is necessary; and

(4)Appropriate information as to the steps to be taken if the participant or 

beneficiary wishes to submit his or her claim for review.

29 C.F.R. § 2560.503-1(f). Specifically, when an adverse benefit determination “fails to 

explain the proper steps for appeal, the plan’s time bar is not triggered.” See White v. 

Jacobs Eng’g Grp. Long Term Disability Benefit Plan, 896 F.2d 344, 350 (9th Cir. 1989).5 

 

4 Plaintiff argues that not once did BCBS indicate to the Kojimas that the SDNA appeals were being 

treated as provider rather than member appeals and notes that “[i]t would have been the simplest thing for 

someone at BCBS of Alabama to have mentioned, even in passing, that [Plaintiff] needed to fill out its 

form in order to have the appeals considered.” (Pl.’s Opp’n 20.) This may well be true, and the Court is 

indeed troubled by the internal BCBS communication on August 22, 2014 noting that Mr. Kojima inquired 

about the “status on claim appeal for svcs on 6/13 . . . [because] he ha[d] not rec’d a resp yet and the prov 

has not rec’d a resp . . . .” (Pl.’s MSJ Ex. B, ECF No. 42-5 at 1). This would seem to indicate that at least 

one BCBS employee had notice that the Kojimas might have thought SDNA’s appeals applied to them as 

well. However, the language of both the relevant policy and the EOB Appeals Sections were clear 

regarding all of the requirements to appeal an adverse benefit determination, including that any 

designation to an authorized representative had to be in writing. (E.g., Defs.’ Suppl. Br. Ex. K, ECF No. 

55-1). Accordingly, while the employees involved in the August 22, 2014 communication may have acted 

harshly, BCBS’s EOBs and appeals policy both comply with relevant ERISA provisions.

5 This appeals-rights-specific holding could arguably be expanded to encompass any inadequate notice, 

including technical, rather than substantive, violations of the relevant ERISA provisions. See White, 896 

F.2d at 350 (labeling opinion’s Section III—containing the above-quoted holding—as “Inadequate notice 

did not trigger the 60-day time bar” and Section III immediately following the previous section’s

description of all the ways in which the notice at issue was inadequate). However, such an expansion 

would almost certainly run afoul of a separate strand of Ninth Circuit case law. See, e.g., Hancock v. 

Montgomery Ward Long Term Disability Tr., 787 F.2d 1302, 1308 (9th Cir. 1986) (“Substantive remedies 

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This comports with the Ninth Circuit’s general view regarding ERISA and the 

corresponding DOL regulations as requiring “a meaningful dialogue between ERISA plan 

administrators and their beneficiaries.” Booton v. Lockheed Med. Benefit Plan, 110 F.3d 

1461, 1463 (9th Cir. 1997).

Accordingly, in the present case the Court may validly consider Plaintiff’s claims if 

BCBS’s notice to Plaintiff of her appeal rights was deficient. Prior to the supplemental 

briefing the record was both too ambiguous and too sparse for the Court to render a decision 

on this issue. Defendants claimed that the EOBs “sent to plaintiff’s spouse, the plan 

participant, included notification about plaintiff’s appeal rights. As part of the EOB form, 

on the back side of the hard copy sent to the member, a page describing member’s appeal 

rights was produced and testified about [(Exhibit 11)].” (Defs.’ Opp’n 8 (emphasis 

added).) Contrastingly, Plaintiff claimed that “the Exhibit 11 form is actually describing 

some other type of EOB than the ones sent to Ms. Kojima,” and notes that the online EOBs 

in Plaintiff’s disclosures “do not appear to be incomplete; they each state how many pages 

they include, and all the pages are accounted for in the Record . . . .” (Pl.’s Reply 4.) 

Further underscoring this conflict, the witness introducing Exhibit 11 was asked whether 

in the present case “BCBS of Alabama sent t[he relevant] explanation of benefits 

electronically or by mail” and responded that “[i]t was sent one way or the other, but I 

don’t know which way without referring to the contract.” (Deagon Dep. 47.)

However, Defendants’ Supplemental Brief has now resolved this factual dispute. As 

noted above, Defendants attached to their Supplemental Brief both the specific EOBs—

 

are available for procedural defects under ERISA only when the defects ‘caused a substantive violation 

or themselves worked a substantive harm.’” (citing Ellenburg v. Brockway, Inc., 763 F.2d 1091, 1096 (9th 

Cir. 1985)); Parker v. BankAmerica Corp., 50 F.3d 757, 768 (9th Cir. 1995) (noting that “[o]rdinarily, a 

claimant who suffers because of a fiduciary’s failure to comply with ERISA’s procedural requirements is 

entitled to no substantive remedy” (citing Blau v. Del Monte Corp., 748 F.2d 1348, 1353 (9th Cir. 1984), 

cert. denied, 474 U.S. 865 (1985))). Thus, although in the present case Plaintiff’s MSJ could be correct 

that the BCBS EOBs’ cursory reasoning behind the adverse benefits determinations was inadequate under 

ERISA, it would be hard if not impossible to find substantive harm for this procedural violation given that 

Plaintiff did not appeal those determinations. 

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rather than merely form EOBs—sent to Plaintiff, and the Deagon Declaration verifying 

that Plaintiff had not signed up for electronic receipt of the EOBs. This leaves regular U.S. 

Postal Service mail as the only possible way by which the Kojimas could have received 

the EOBs, a conclusion that is bolstered by the inclusion of the Kojimas’ mailing address 

at the top of each relevant EOB. Further, because each mailed EOB had specific 

information regarding Plaintiff’s appeal rights, there is no longer any genuine issue of 

material fact concerning whether BCBS’s EOBs complied with the ERISA requirements

concerning notice and explanation of an insured’s appeal rights—they did.

CONCLUSION

Given the foregoing, the Court concludes that Plaintiff failed to exhaust her 

administrative remedies, as required by the BCBS plan, and is thus barred from bringing 

suit in federal court. Accordingly, the Court GRANTS Defendants’ Motion for Summary 

Judgment and DENIES AS MOOT Plaintiff’s Motion for Summary Judgment.

IT IS SO ORDERED.

Dated: December 8, 2016

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