IN THE UNITED STATED DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

ROBERT E. COLE Attorney For Plaintiff

ROBERT E. COLE, P.C.

ATTORNEY I.D. NO. 73263

437 CHESTNUT STREET, SUITE 218

PHILADELPHIA, PA 19106

(215) 922-2050

___________________________________

OWEN J. ROGAL, D.D.S., P.C. :

d/b/a THE PAIN CENTER

501-07 SOUTH 12TH STREET

PHILADELPHIA, PA 19147

Plaintiff :

V. : NO. 3:06cv728-MHT

SKILSTAF, INC. :

P.O. BOX 729

ALEXANDER CITY, AL 35011

Defendant :

___________________________________

PLAINTIFF OWEN J. ROGAL, D.D.S., P.C.’S BRIEF IN OPPOSITION TO

DEFENDANT SKILSTAF, INC.’S OBJECTIONS TO PLAINTIFF’S WITNESS AND

EXHIBIT LIST

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 1 of 12
TABLE OF CONTENTS

I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . .3

A. COUNTER-STATEMENT OF UNDISPUTED FACTS. . . . . . . . .3

B. STATEMENT OF DISPUTED FACTS. . . . . . . . . . . . . .4

II. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . 5

A.

DEFENDANT HAS AGAIN MISIDENTIFIED THE CORRECT STANDARD OF

REVIEW REGARDING AN ADMINISTRATOR’S INTERPRETATION OF AN

ERISA PLAN, WHICH PROPERLY IN THIS MATTER IS THE HEIGHTENED

ARBITRARY AND CAPRICIOUS STANDARD

B.

PRECEDENTIAL CASELAW INDICATES THAT THE COURT IS FULLY WITHIN

ITS RIGHTS TO CONSIDER EVIDENCE BEYOND THE ADMINISTRATIVE

RECORD IN ERISA CASES

III. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . .11

CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . .12

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 2 of 12
I. INTRODUCTION

The plaintiff in this matter is Owen J. Rogal, D.D.S.,

P.C., d/b/a The Pain Center, a corporation with principal place

of business being located at 501-07 South 12th Street,

Philadelphia, PA 19147. Defendant Skilstaf, Inc. is an Alabama

corporation and insurance provider/plan administrator with its

headquarters and principal place of business located at P.O. Box

729, Alexander City, AL 35011.

This matter commenced in October, 2005 in Philadelphia

County, PA and was removed to federal court for the eastern

district of Pennsylvania on or about November of 2005. This

matter was transferred to the present venue by the Court on June

26, 2006. This matter concerns plaintiff medical provider’s

allegations of non-payment of medical bills by defendant

incurred by patient/insured Dianna Berry. Mrs. Berry executed

an assignment of rights to plaintiff which has been reproduced

in defendant’s Exhibit 3 to its motion for summary judgment.

A. COUNTER STATEMENT OF UNDISPUTED FACTS

1. Plaintiff claims that it is entitled to medical

coverage under defendant’s Group Health Plan regarding

radiofrequency treatment it rendered to patient Dianna Berry.

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 3 of 12
B. STATEMENT OF DISPUTED FACTS

1. Defendant’s plan administrator is vested with

discretionary authority with regard to plan interpretation and

construction.

2. Defendant’s plan is funded based upon determination of

amounts necessary to timely pay benefits and expenses; as such,

the plan sponsor is directly interested in payments made from

the plan.

3. As the plan affords the administrator discretion and

the administrator has a conflict of interest, the Eleventh

Circuit has held that a heightened arbitrary-and-capricious

standard of review applies to the plan administrator's

interpretation of the plan. Brown v. Blue Cross & Blue Shield

of Ala., Inc., 898 F.2d 1556 (1990).

4. Judicial review of denial of benefits under ERISA

plans involves a multi-step approach commencing with de novo

review. Williams v. BellSouth Telecomms., 373 F.3d 1132, 1137-38

(11th Cir. 2004).



5. In de novo review, the Court "is not limited to the

facts available to the Administrator at the time of the

determination." Kirwan v. Marriott Corp., 10 F.3d 784, 789

(11th Cir. 1994). See also, Moon v. American Home Assurance

Co., 888 F.2d 86 (1989).

6. Defendant has filed an administrative record herein

consisting of some 2000 pages of documents, only several hundred

of which concern plaintiff’s treatment of Dianna Berry.

7. Evidence and documentation concerning the efficacy of

treatment rendered by plaintiff to Dianna Berry, as well as peer

review documentation regarding radiofrequency surgery treatment,

was available to defendant prior to its determination to deny

payment for medical services rendered.

8. Defendant deprived plaintiff of rights under the Plan

to offer additional evidence/documentation in support of its

position prior to administrator’s decision, as defendant

willfully failed to disclose to plaintiff that it had obtained a

utilization review until discovery commenced upon litigation and

defendant only relied upon said utilization review when

litigation commenced and not during the administrative review

process.

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 4 of 12
II. ARGUMENT

A. Defendant has continued to identify the incorrect

legal standard in its denial of medical benefits/plan

interpretation by fiduciary operating under conflict

of interest

This Court has stated:

The Eleventh Circuit has held that a heightened arbitraryand-capricious standard of review applies to the plan

administrator's interpretation of the plan where the plan

affords the administrator discretion and the administrator

has a conflict of interest. See 898 F.2d at 1566-67. "[A]

fiduciary operating under a conflict of interest may be

entitled to review by the arbitrary and capricious standard

for its discretionary decisions as provided in the ERISA

plan documents, but the degree of deference actually

exercised in application of the standard will be

significantly diminished." Id. at 1568. The Brown court

reasoned that, "when an insurance company serves as ERISA

fiduciary to a plan composed solely of a policy or contract

issued by that company, it is exercising discretion over a

situation for which it incurs 'direct, immediate expense as

a result of benefit determinations favorable to plan

participants.'" Id. at 1561 (quoting De Nobel v. Vitro

Corp., 885 F.2d 1180, 1191 (4th Cir. 1989)).

The Eleventh Circuit applies a burden-shifting analysis

under the heightened arbitrary-and-capricious standard

applicable to the plan administrator's interpretation of a

plan. See Brown, 898 F.2d at 1566-67; Sahlie v. Nolen, 984

F. Supp. 1389, 1400 (M.D. Ala. 1997) (Thompson, C.J.).

Under this approach, the court first must determine whether

the interpretation of the plan proffered by the claimant is

reasonable. See Florence Nightingale Nursing Serv., Inc.

v. Blue Cross/Blue Shield of Ala., 41 F.3d 1476, 1481 (11th

Cir. 1995), cert. denied, 514 U.S. 1128, 115 S. Ct. 2002,

131 L. Ed. 2d 1003 (1995); Sahlie, 984 F. Supp. at 1400-01.

If it determines that the claimant's interpretation is

reasonable, the court applies the principle of contra

proferentem, n84 construing ambiguities in the facts

against the plan administrator, to find that the

administrator's interpretation of the plan is wrong. See

Florence Nightingale, 41 F.3d at 1481; Sahlie, 984 F. Supp.

at 1401. Next, the court determines whether the plan

administrator was arbitrary and capricious in adopting its

incorrect interpretation. See Sahlie, 984 F. Supp. at

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 5 of 12
1401. In so doing, the court places the burden upon the

administrator to establish that its action was not tainted

by self-interest. See Florence Nightingale, 41 F.3d at

1481; Sahlie, 984 F. Supp. at 1401. Even a reasonable

interpretation will be found arbitrary and capricious

unless the administrator can demonstrate that its decision

was not motivated by self-interest. See Brown, 898 F.2d

1556 at 1566-67; Sahlie, 984 F. Supp. at 1401. Finally, if

the administrator does manage to carry this burden, the

claimant may still succeed if the administrator's action

was arbitrary and capricious by other measures. See Brown,

898 F.2d at 1568; Sahlie, 984 F. Supp. at 1401.

n84 "Contra proferentem" is a term "used in connection with

the construction of written documents to the effect that an

ambiguous provision is construed most strongly against the

person who selected the language." Black's Law Dictionary

327 (6th ed. 1990) (citing United States v. Seckinger, 397

U.S. 203, 216, 90 S. Ct. 880, 887-88, 25 L. Ed. 2d 224

(1970)).

Lake v. UNUM Life Ins. Co. of Amer., 50 F. Supp. 2d 1243 (1999).

In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 103,

109 S. Ct. 948, 103 L. Ed. 2d 80 (1989), the Supreme Court held

that a denial of ERISA benefits is to be reviewed under a de

novo standard, unless the benefit plan gives the administrator

or fiduciary discretionary authority to determine eligibility

for benefits or to construe the terms of the plan. Where such

discretion is granted, the administrator's decision would

ordinarily not be subject to judicial review except to prevent

an abuse of that discretion. Id. However, where a benefit plan

gives discretion to an administrator or fiduciary who is

operating under a conflict of interest, the court must weigh

that conflict in determining whether the discretion has been

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 6 of 12
abused under a heightened arbitrary and capricious standard. Id.

at 115.

Further, the Court has stated:

Pursuant to Firestone, the Eleventh Circuit

incorporated these varying levels of judicial review

in a multi-step approach:



(1) Apply the de novo standard to determine whether

the claim administrator's benefits-denial decision is

"wrong" (i.e., the court disagrees with the

administrator's decision); if it is not, then end the

inquiry and affirm the decision.

(2) If the administrator's decision in fact is "de

novo wrong," then determine whether he was vested with

discretion in reviewing claims; if not, end judicial

inquiry and reverse the decision.

(3) If the administrator's decision is "de novo wrong"

and he was vested with discretion in reviewing claims,

then determine whether "reasonable grounds supported

it" (hence, review his decision under the more

deferential arbitrary and capricious standard).

(4) If no reasonable grounds exist, then end the

inquiry and reverse the administrator's decision; if

reasonable grounds do exist, then determine if he

operated under a conflict of interest.

(5) If there is no conflict, then end the inquiry and

affirm the decision.

(6) If there is a conflict of interest, then apply

heightened arbitrary and capricious review to the

decision to affirm or deny it.



Williams v. BellSouth Telecomms., Inc., 373 F.3d 1132, 1137-38

(11th Cir. 2004).



Section 15 of the Plan provides general information

regarding the plan. Under TYPE OF PLAN, it states, “The plan is

administered by the plan administrator, which exercises

authority (1) to construe all of the terms, provisions,

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 7 of 12
conditions, and limitations of the plan, including, but not

limited to, any uncertain terms contained in the plan and (2) to

make determinations regarding eligibility for benefits under the

plan”. See defendant’s Exhibit A. Further, Section 14, (B)(6)

reads, “The plan administrator has full discretion to interpret

the plan and to apply these claim review procedures”. As such,

the plan vests discretionary authority with the plan

administrator.

Further, under FUNDING, the plan states, “Plan benefits are

self-insured. Based upon its determination of the amounts

necessary to timely pay benefits and expenses, Skilstaf, Inc.

shall make contributions to the plan.” (emphasis added). See

defendant’s Exhibit A. The plan does not identify a trust or

set-aside fund for payment of benefits. Rather, the plan bases

its [self-insured] contributions on an ad-hoc basis. Plaintiff

submits that this may only be seen as a conflict of interest as

by plan directive the plan must determine funding based upon the

volume and amount of claims at any given time. As such, plan

determinations must be judicially reviewed within the heightened

arbitrary-and-capricious standard of review as identified in

Lake above.

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 8 of 12
B. This Court has considered evidence beyond the

administrative record in ERISA matters for many years

The Court has considered this issue previously. It has

spoken with regard thereto:

In the de novo review of BellSouth's decision, this Court

"is not limited to the facts available to the Administrator

at the time of the determination." 10 Kirwan v. Marriott

Corp., 10 F.3d 784, 789 (11th Cir. 1994). Thus, this Court

is privileged to review information that was not before

BellSouth when applying the de novo standard. Id.

10 This Court is aware of recent district court cases that

do not allow the court to go beyond the administrative

record during a de novo review. See Anderson v. Unum Life

Ins. Co. of Am., 414 F. Supp. 2d 1079, 1100-03 (M.D. Ala.

2006); see also Hawkins v. Arctic Slope Reg'l Corp., 344 F.

Supp. 2d 1331, 1335 n.6 (M.D. Fla. 2002). However, to the

extent they apply to this case, this Court remains

steadfast to the clearly established precedent in Kirwan,

which has not been overruled. Anderson and Hawkins rely on

Brown v. Blue Cross & Blue Shield, 898 F.2d 1556 (11th Cir.

1990), which holds that the court is to conduct a de novo

review, but does not address the scope of the review. In

fact, none of Brown's Eleventh Circuit progeny directly

addresses the scope of the de novo review. Therefore, this

Court aligns itself with Kirwan, which considered the issue

post-Brown and clearly established the scope of a de novo

review pursuant to ERISA.

Dunlap v. Bellsouth Telecommunications, Inc., 431 F. Supp.

2d 1210 (2006).



Further, in Moon v. American Home Assurance Co., 888 F.2d

86 (1989), the Court stated quite clearly, “American Home’s

contention that a court conducting a de novo review must examine

only such facts as were available to the plan administrator at

the time of the benefits denial is contrary to the concept of a

de novo review...Thus, what the Supreme Court said of a similar

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 9 of 12
contention advanced in Firestone is equally applicable to this

contention: “Adopting [this] reading of ERISA would require us

to impose a standard of review that would afford less protection

to employees and their beneficiaries than [they enjoyed] before

ERISA was enacted”. Firestone, 109 S.Ct. at 956.

Given the mandate of Firestone and its progeny, it is only

appropriate for this Court to consider all relevant evidence at

its disposal. Additionally, even a casual review of the

administrative record herein reveals that defendant based its

denial of benefits upon an incorrect determination that

plaintiff was providing Dianna Berry chiropractic treatment when

in fact it only provided radiofrequency treatment.

Only after litigation commenced did plaintiff discover that

defendant had obtained a utilization review of treatment

plaintiff provided to Dianna Berry. However, defendant never

relied upon this opinion during the administrative review

process. Interestingly, defendant did include said utilization

review in its administrative record for consideration by this

Court. Plaintiff submits that defendant’s actions thus can only

be considered in bad faith, as plaintiff was afforded no

opportunity to rebut a utilization review prior to denial of

benefits of which it had no knowledge until discovery revealed

same during the litigation process.

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 10 of 12
III. CONCLUSION

In conclusion, for the foregoing reasons, Plaintiff

respectfully requests that this Honorable Court enter the

attached Order Denying Defendant’s Objections to Plaintiff’s

Witness/Exhibit List.

Respectfully submitted,

/s/Robert E. Cole______________________

Robert E. Cole, Esquire

Attorney for Plaintiff

Atty. I.D. No. 73263

437 Chestnut Street, Suite 218

Philadelphia, PA 19106

(215) 922-2050

recoleesq6@juno.com

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 11 of 12
IN THE UNITED STATED DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

ROBERT E. COLE Attorney For Plaintiff

ROBERT E. COLE, P.C.

ATTORNEY I.D. NO. 73263

437 CHESTNUT STREET, SUITE 218

PHILADELPHIA, PA 19106

(215) 922-2050

___________________________________

OWEN J. ROGAL, D.D.S., P.C. :

d/b/a THE PAIN CENTER

V. : NO. 3:06cv728-MHT

SKILSTAF, INC. :

CERTIFICATE OF SERVICE

Robert E. Cole, Esquire, attorney for plaintiff, hereby

verifies that on the 16th day of August, 2007, he electronically

filed the foregoing with the Clerk of the Court using the CM/ECF

system, which will send notification of such filing as follows:

Amelia T. Driscoll, Esquire

Bradley Arant et al.

1819 Fifth Avenue North

Birmingham, AL 35203-2104

Robert E. Cole, Esquire, attorney for plaintiff, hereby

verifies that on the 16th day of August, 2007, he served upon

Jeanne L. Bakker, Esquire, attorney for defendant above, a true

and correct copy of the foregoing by first class mail, postage

prepaid to the following address:

Montgomery, McCracken et al.

123 South Broad Street

Philadelphia, PA 19109

 

/s/Robert E. Cole________________

Robert E. Cole, Esquire

Attorney for Plaintiff

Atty. I.D. No. 73263

437 Chestnut Street, Suite 218

Philadelphia, PA 19106

(215) 922-2050

recoleesq6@juno.com

Case 3:06-cv-00728-MHT-WC Document 72 Filed 08/16/2007 Page 12 of 12
IN THE UNITED STATED DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

ROBERT E. COLE Attorney For Plaintiff

ROBERT E. COLE, P.C.

ATTORNEY I.D. NO. 73263

437 CHESTNUT STREET, SUITE 218

PHILADELPHIA, PA 19106

(215) 922-2050

___________________________________

OWEN J. ROGAL, D.D.S., P.C. :

d/b/a THE PAIN CENTER

501-07 SOUTH 12TH STREET

PHILADELPHIA, PA 19147

Plaintiff :

V. : NO. 3:06cv728-MHT

SKILSTAF, INC. :

P.O. BOX 729

ALEXANDER CITY, AL 35011

Defendant :

___________________________________

ORDER

AND NOW, this day of , 2007, upon

consideration of defendant's Objections to Plaintiff’s

Witness/Exhibit List and plaintiff’s Memorandum in Opposition

thereto, it is hereby ORDERED and DECREED that the Objections

are DENIED.

BY THE COURT:

_________________________

 J.

Case 3:06-cv-00728-MHT-WC Document 72-2 Filed 08/16/2007 Page 1 of 1