1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Six

th Circuit Rul e 206

ELECTRO NIC CIT

ATION: 2004 FED App . 0097P (6th C ir.) File Name: 04a00 97p.06



### UNITED STATES COURT OF APPEALS

FOR THE SIXT H CIR CUIT

_________________
COB C LEARINGH OUSE C ORPORATI ON , also known as Digital Healthcare, I

nc., Plaintiff- Appellant

,

v.

A ETNA U.S. H EALTHCARE , I NC .; G REAT W EST L IF E AND ANNUITY I

NSURANCE C O .; B LUE C ROSS & B LUE S HIELD
OF K ANSAS C ITY ; C ONNEC TIC UT G ENERA L L IFE I NSURANCE C OMPANY , Defenda nts-Appe llees. X - - - -
> , - - - - - - - - - - - - - N No. 02-3645

Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 02-00020—Patricia A. Gaughan, District Judge.

Argued: December 12, 2003 Decided and Filed: April 5, 2004 2 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. No. 02-3645

* The Hon or abl e Wi ll ia m O. Bertels man, Unit ed States Distr ict Judge for the Eastern Dist

rict of Kentucky, sitting by designati on. Befor e: SIL ER and COO K, Circui

t Judges; BERTELSMAN, District Judge. *

_________________ COUNSEL

ARGUED: Steven M. Ott , OTT & ASSOCI ATES, Cleveland, Ohio, for Appellant. And r ew S. Pollis, HAHN, LOESER & PARKS , Clevelan

d, Ohio, f

or Appel lees. ON BRIE F: Steven M. O tt , OTT & ASSO CIAT ES, Cleveland, Ohio, for Appellant. Andrew S. Pollis, Robert J. Fo ga rt y, HAHN, LOESER & PARKS, Cleveland, Ohio, Mark J. Schwemler, ELLIOTT, REI HNER, SIEDZKOWSKI & EGAN, Blue Bell, Pennsy lvania, Christopher

S. Williams, Henry G. G ren del l, CALF EE, HALT ER & GR ISW OLD , Cleveland, Ohio, Shaunda A. Patterson-Strachan, Stephen H. Goldb erg, Wald

ema r J. Pflepsen , Jr., JORDEN B URT LL P, Washingt on, D.C., f

or Appel lees.

_________________ OPINION

_________________ COOK, Circuit J udge. Plaintiff-Appellant, COB Clearing houseCorp. (CO B), app eals the district c our t’s dismissal of its claims against Aetna U. S. Healthcare, I nc., Great West Li fe and A

nnuity Insu rance C ompany, Blue Cr

oss and Bl ue Sh ie ld of

Ka ns as Ci ty, and Connecticut General L ife Insu rance C o. (colle ctively

the I nsurers ). We aff

irm.No. 02-3645 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. 3

1 Aetna fil ed a Motion to Dismi ss, in whi ch Connecti cut Generaland Grea t-West joined. Upon dis position, the dis tri ct c ourt als o gran ted a dismi ssal , s ua spon te, to Blu e Cross & Blue Shi eld.

I. BACKGROUND
A. Procedure

COB filed a Complaint against the Insure rs, alleging that

it
was an authorized agent of Goody ear Tire & Rubber (Goodyea r), Bridg estone- Firesto ne , Inc. (Bridg estone), Babcock & Wilcox, Progressive Proces si ng, In c

. (Progressive), Fi rs tMeri t Bank ( First Merit ), Cam bridge Indu stries, Inc. (Cambridge ), and State Indu stries, Inc. (State) (collectively

the Employers). The Empl oyers provide ER IS A-regulated

health care benefits plans to t heir employee s and their emp loyees’ de

pendents . CO B claim ed that it represented

the inter

ests of the

Emp lo ye

rs pursua nt to contracts it had entered into with each Employ er.
The Insurers, on the

othe r hand, contracted with different empl oyers

to pro vide s imil ar heal th care benefi ts th rough non-ERISA health insurance policies. The Complaint set forth five claims. Count One alleged a viol ationof the Employee Retire ment Income Security

Ac t (“ERISA”), and Count Two alleged “ federal common law claims.” Counts Three through Fivealleged claims for unfair and deceptive insuranc e practic es, bad f aith, and unjust enrichment.
The In surer s 1 filed Motions to Dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that COB lacke d standing to bring the claims and

failed to state a

claim upon which relief could be granted. The district court agree d, finding that COB had no standing to bring Counts One and Tw o and, therefore, the 4 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. No. 02-3645

2 The distri ct court also f ound that Counts One and Two faile d to state

a claim upon which relief could be granted. COB alleged several err ors challenging that determinat ion, and t he Insurers all eged an alternati ve argument for affirmin g the d istrict c ourt’s d ecision. Due to our d ispos it ion of the issue of CO B’s standing, it is not necessa ry for us t o addre ss these other issues.

3 See Ohio Adm inist

rative Code § 3901 -1-56(G).

4 In some cases, the insurance poli cy at iss ue may also incorporate the provi sion s of

the N AIC M ode l Regu lations. See Bap tist Mem’l Hosp. v. Pan American Li

fe I ns. Co. , 45 F.3d 992 , 995 (6th Cir. 1995). districtcourt

had no subject matter jurisdiction over the case. 2 Counts Three through Five were dismissed as state law claims whichwere pree mpted by E RISA. COB has a

ppealed only the district court’s dismissal of Counts One and Two.

B. Coordination of Benefits I ssues
COB’s Complaint r

aised al legati o ns relating to “coordination

of benefi ts ” issues. The nec essity for hea lth insurers to co ordi nate health benefits arises when two (or more) hea lth care pl ans provi de bene fits to the same in dividua l. The insur ers must then deter

mine who is primaril y and who is second a rily liable for the pa yment of that individual’s health care benefits. This determination can somet imes be made by r eviewing the provisions of th e individua l insurance contr

acts. I n some instance s, however, the insurance contracts may conflict. For example, each may statethat it provides only secondar y covera ge under the circumst ances. See McG

url v. Truck ing Employ

ees of Nort

h Jersey Welfare Fund, Inc. , 124 F.3d 471, 473 (3d Cir. 1997). Many states, in cluding Ohio , 3 h ave res olved the se confl icts by a dopting p art or a

ll of the Model Regulations set forth by the National Association of Insuranc e Commissioners (NAIC), an independent group of stat e i nsurance regulatory commissioners. See McG url , 124 F.3d at 483. 4 That stat eNo. 02-3645 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. 5

law woul d apply

in cases where c oordinat

ion of benefits is required between two plans which are not subject to ERISA.
ERISA, however, provides no guidance oncoordination of benefit s issues. See Regents of the Univ. of Mich. v. Employees of Agenc

y Rent-a -Car H

os p. Assoc. , 122 F.3d 336, 339 (6th Cir. 1997). Incases involving two ERISA-re gulated plans, therefore, federal cour ts have fashioned federal
commo n law to resolve these issues. McGurl, 124 F.3d at 484 (adopting “employ

er first” rule, providing tha t plan whichcovers b enefic iary as employ

ee is primary and plan whichcovers b enefic iary as depen

dent of e

mp loy ee is seconda ry ). See also PM Group Li fe Ins. Co. v. W

estern Grower s Assu r. Trust, 953 F.2d 543, 548 (9th Cir. 1992); Reinforcing

Iron Workers v. Mich. Be ll Tel. Co. , 746 F. Supp. 668, 670-71 (E.D. Mich. 1990) (adopting the “birthday r

ule,” declaring plan of e mploy ee whose birthday occurs e arlie r in the ye ar prima

rily responsi ble for me dical be

nefits of a minor, where parents are both covere d by separa te ERISA plans).

COB alleged that, in this cas e, certain beneficiaries were insured both under one of

the Employ

ers’ se lf-fund

ed ERI SA plans and under one of the

Insu rers’ non-ERI SA policie s. COB cl ai me d t ha t t he Ins ur er s’ po li ci es we re pr im ar y, presuma bly because the coord ination of benefits clauses of the applicable insurance contrac ts conflicted. COB then argued that the d

istr ict court should extend the federal
commonlaw established in McGurl to th e se cases that involve only one ERI SA-re gula ted plan. Under such a rule, COB cont

ends that the Employ

ers paid claims for

which the Insurerswere primaril

y liable an d they were on ly s econda

rily liable. C. COB’s Contracts with the Employers
COB bases its claim to being an authorized a gent of the Employersupon the contract—called either th e “Audit Agreement ” o r the “Re covery Service Agree ment”—that it 6 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. No. 02-3645

entered into with e ach Employe

r. While the

contracts with the seven Emp loyers were each slightly different, the agree ments gener

ally provided that COB would review each Em ployer’s

records, use its “proprietary systems” to d etermine if the Emp loyer made pay ments unde

r its heal th
care plan for

which the Employ er was only

seconda rily liable, and at tempt to collect payment fr om the party that COB believed to be prima

rily liable in exchange for a percenta ge of the amounts recovered.

The relevant prov isi ons of the Goodyea r, Bridgestone, Progressive, Babcoc

k & Wilcox, a

nd FirstM erit ag

reemen ts
were substantivel y identica l. Each o f these f

ive agr eements contained an “a ge nc y c laus e,” appointing COB its agent for certain purposes : [Employer

will] make [COB,] an d it s contractors, [the Employer’ s] agents for the purpose of car rying out a

n audit of coo rdination of benefits issues, and the subrogation

and colle ction of in

demnities due as a r esult of suchaudit

as provided for and privileged by standard rules [or law] (for ex amp le, Section 3902.13(F) of the Ohio Revised Code or the ru l e[s] of the [NAIC], as interpreted by

the state at issue on any g iven claim).

Thoseagree

ments then required COB to make three attempts to collect every

claim and “furt

her pursue every

claim of a value exceeding $500.00 for the period of at least one year, or until collection of the correct indemnity , or settlement of the claim, whichever occurs first.” The ag reements all provided, however, that COB wo ul d “commence no litigation in the
name of [the Employer], or on its behalf, without prior notice to [the Employer].”

The other two

agree ments wer

e similar . The State agreement

differe d in that it

aut horized COB to report potential claims to St

ate, but d id not authorize COB to pursue them. The Cambr

idge ag reemen t differ ed in that it authorizedNo. 02-3645 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. 7

COB to “conduct litigation to recover amounts owed” without requiring prior notice to Cambridge.

II. AN ALYS IS

The district court dismissed those counts COB appeals —Counts One and Two of COB’s Complaint—on the ground that COB did not have standing to bring the case. “We r eview a district court’s decision to grant a motion to dismiss for lack of subject matter juri sdictio n de novo. ” Joelson v. United

States , 86 F.3d

1413, 1416 (6th Cir. 1996). “For purposes of ruling on a motion

to dismiss f

o r want of standin g, bot h the trial and reviewing courts must accept a s true all material allegations of the complaint, and m ust
con strue the complaint in favor of the complaining party .” Warthv. Seldin , 422 U.S. 490, 501 (1975). Having invoked the jurisdiction of the federal courts, however, it is the plaintiff’s burden to

demonstr

ate that j urisdicti on is p ro per. See Lujan v. De

fenders of Wil dlife , 504 U.S. 555, 561 (1992); Kardules v. City of Columbus , 95 F.3d 1335, 1346 (6th Cir. 1996 ).

Assum ing, as we must , that COB was an authorized agent of the Employers under

the terms of t

he parti es’ ag

reemen ts,
we m ust determine whether such an authorized age nt has standing under ERI SA to pursue these c laims. 8 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. No. 02-3645

5 COB d id n ot identif

y the ERISA provision under which it brought its Comp laint. The district court, however, broadly interpreted t he Comp laint

and a ss umed t

hat th e action was brou ght pur sua nt to 2 9 U.S. C. § 1132(a)(3), wh ich wa s the pro vision id entified b y CO B in its b rief in opposition to the M otion to Dismiss. There was some dispute before the dist rict court regarding whether COB sought equitable rel ief or monetary dama ges. We not e th at 29 U. S.C. § 1132(a) (3), whi ch prov ides for equ itable relief, allows “participants, bene ficiaries, an d fiduc iaries” to bring claims, w hile 29 U.S.C. § 11 32(a)(1), which provides for monetary dama ges, only allows “participants and beneficiaries” to file suit. Like the dist rict cour t, we will ass ume t hat COB brought t he act ion purs uant

to 29 U.S. C. § 1132 (a )(3), as that is the only sect ion which gives r ise to any argument

that COB has st anding i n thi s case. ERISA strictly limits standing. 29 U.S.C. § 1132(a )(3) 5 provides , in pertin

ent part , that: A civil action may be br

ought -

. . . (3) by a partic ipant, benefic iary , or fiduc iary (A) to enjoin an y a ct or

practice which violates any provision of this subchapter or the terms of the plan,
or (B) to obtain othe

r appropriate eq

uitable r elief (i ) to redr ess such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan

. . . . And courts nar

rowl y construe ERI SA to permit only the parties specifically e

numerated to bring suit. See Simon v. Value Behavioral Health, Inc. , 208 F.3d 1073, 1081 (9th Cir. 2000) (citing Franchise TaxBd. v. Constr. Laborers Vacation Trust for S. Cal. , 463 U.S. 1, 27 (1983)). See also Teagardener

v. Repu blic-Franklin Inc. Pension Plan , 909 F.2d 947, 951 (6th Cir. 1990 ) (narr owly constr uing proper p arties under 29 U.S.C. § 1132(a)(1)). I ndeed, eve n a n assignee of

a participant, beneficiary, or fiducia ry is gene rally notper mi tt ed t o m ain tai n an ER IS A clai m. See Simon v.No. 02-3645 COB Clearinghouse Corp. v. Aetna U.S. Hea lthcare, Inc., et

al. 9

Belwith Int’l, Inc. , 3 Fed. Appx. 363, 364 (6th Cir. 2 001 ). It is undisp uted th at COB was neither a participant, a be ne fi ci ar y, nor a fiduciary a ccording to the dictates of the statute. COB arg

ues, nev erthele ss, that the Employerswhom it represented were fiduciar ies and that as the agent of the Employers, it could bring suit.

Whether an employer w

ho is also an ERISA plan sponsor is a fiduciary

of the plangener

ally require s a detai led anal

ysi s of the employer’ s actions and whether those action s were performed

in the employer’s f

iduciary ca

pacity. See Hunter

v. Caliber Sys., Inc. , 220 F.3d 702, 718 ( 6th Cir. 2000 ). “[W]emust examine the conduct at issue t o de termine whether it constitutes ‘management ’ or ‘administ ratio n’ of the pla n, giving rise to fiduciary concerns, or merely

a bu sines s decisionth at has an

effect on an ERI SA plan not subject to fiduciary duties.” Id. (citations and in tern al quotations omitted). But even assuming that the Employ ers were fiduciaries who had a

right to file suit pursuant

to 29 U.S.C. § 1132(a)(3), that assumption does not confer standing on COB to sue in its

own name

as the E mploy

ers’ ag ent. Restatement

(Second) of Agency

§ 372(2) (1958) provides that “an agent does not have such an interest in a contract as to entitle him to maintain an action at lawuponit in his own
name merely bec ause he is entit led to a portion of the proceeds as compe

nsation f or making

it or bec ause he i s liable for its breach.”

III. CONCL

USION
GivenCOB’s lack of standing, we aff irm the deci sion of the distri ct court

.