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RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

ELECTRONIC CITATION: 2004 FED App. 0097P (6th Cir.)

File Name: 04a0097p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

COB CLEARINGHOUSE

CORPORATION, also known as

Digital Healthcare, Inc.,

Plaintiff-Appellant,

v.

AETNA U.S. HEALTHCARE,

INC.; GREAT WEST LIFE AND

ANNUITY INSURANCE CO.;

BLUE CROSS & BLUE SHIELD

OF KANSAS CITY;

CONNECTICUT GENERAL LIFE

INSURANCE COMPANY,

Defendants-Appellees.

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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. Healthcare, Inc., et al.

No. 02-3645

*

The Honorable William O. Bertelsman, United States District Judge

for the Eastern District of Kentucky, sitting by designation.

Before: SILER and COOK, Circuit Judges;

BERTELSMAN, District Judge.*

_________________

COUNSEL

ARGUED: Steven M. Ott, OTT & ASSOCIATES,

Cleveland, Ohio, for Appellant. Andrew S. Pollis, HAHN,

LOESER & PARKS, Cleveland, Ohio, for Appellees.

ON BRIEF: Steven M. Ott, OTT & ASSOCIATES,

Cleveland, Ohio, for Appellant. Andrew S. Pollis, Robert J.

Fogarty, HAHN, LOESER & PARKS, Cleveland, Ohio,

Mark J. Schwemler, ELLIOTT, REIHNER, SIEDZKOWSKI

& EGAN, Blue Bell, Pennsylvania, Christopher S. Williams,

Henry G. Grendell, CALFEE, HALTER & GRISWOLD,

Cleveland, Ohio, Shaunda A. Patterson-Strachan, Stephen H.

Goldberg, Waldemar J. Pflepsen, Jr., JORDEN BURT LLP,

Washington, D.C., for Appellees.

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OPINION

_________________

COOK, Circuit Judge. Plaintiff-Appellant, COB

Clearinghouse Corp. (COB), appeals the district court’s

dismissal of its claims against Aetna U.S. Healthcare, Inc.,

Great West Life and Annuity Insurance Company, Blue Cross

and Blue Shield of Kansas City, and Connecticut General Life

Insurance Co. (collectively the Insurers). We affirm.
No. 02-3645 COB Clearinghouse Corp. v. Aetna

U.S. Healthcare, Inc., et al.

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Aetna filed a Motion to Dismiss, in which Connecticut General and

Great-West joined. Upon disposition, the district court also granted a

dismissal, sua sponte, to Blue Cross & Blue Shield.

I. BACKGROUND

A. Procedure

COB filed a Complaint against the Insurers, alleging that it

was an authorized agent of Goodyear Tire & Rubber

(Goodyear), Bridgestone-Firestone, Inc. (Bridgestone),

Babcock & Wilcox, Progressive Processing, Inc.

(Progressive), FirstMerit Bank (FirstMerit), Cambridge

Industries, Inc. (Cambridge), and State Industries, Inc. (State)

(collectively the Employers). The Employers provide

ERISA-regulated health care benefits plans to their employees

and their employees’ dependents. COB claimed that it

represented the interests of the Employers pursuant to

contracts it had entered into with each Employer. 

The Insurers, on the other hand, contracted with different

employers to provide similar health care benefits through

non-ERISA health insurance policies. 

The Complaint set forth five claims. Count One alleged a

violation of the Employee Retirement Income Security Act

(“ERISA”), and Count Two alleged “federal common law

claims.” Counts Three through Five alleged claims for unfair

and deceptive insurance practices, bad faith, and unjust

enrichment.

The Insurers

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 filed Motions to Dismiss the Complaint

pursuant to Federal Rules of Civil Procedure 12(b)(1) and

12(b)(6), arguing that COB lacked standing to bring the

claims and failed to state a claim upon which relief could be

granted. The district court agreed, finding that COB had no

standing to bring Counts One and Two and, therefore, the

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U.S. Healthcare, Inc., et al.

No. 02-3645

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The district court also found that Counts One and Two failed to state

a claim upon which relief could be granted. COB alleged several errors

challenging that determination, and the Insurers alleged an alternative

argument for affirming the district court’s decision. Due to our

disposition of the issue of COB’s standing, it is not necessary for us to

address these other issues.

3

See Ohio Administrative Code § 3901-1-56(G).

4

In some cases, the insurance policy at issue may also incorporate the

provisions of the NAIC Model Regulations. See Baptist Mem’l Hosp. v.

Pan American Life Ins. Co., 45 F.3d 992, 995 (6th Cir. 1995).

district court had no subject matter jurisdiction over the case.2

Counts Three through Five were dismissed as state law claims

which were preempted by ERISA. COB has appealed only

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

B. Coordination of Benefits Issues

COB’s Complaint raised allegations relating to

“coordination of benefits” issues. The necessity for health

insurers to coordinate health benefits arises when two (or

more) health care plans provide benefits to the same

individual. The insurers must then determine who is

primarily and who is secondarily liable for the payment of

that individual’s health care benefits. This determination can

sometimes be made by reviewing the provisions of the

individual insurance contracts. In some instances, however,

the insurance contracts may conflict. For example, each may

state that it provides only secondary coverage under the

circumstances. See McGurl v. Trucking Employees of North

Jersey Welfare Fund, Inc., 124 F.3d 471, 473 (3d Cir. 1997).

Many states, including Ohio,

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 have resolved these conflicts

by adopting part or all of the Model Regulations set forth by

the National Association of Insurance Commissioners

(NAIC), an independent group of state insurance regulatory

commissioners. See McGurl, 124 F.3d at 483.4 That state
No. 02-3645 COB Clearinghouse Corp. v. Aetna

U.S. Healthcare, Inc., et al.

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law would apply in cases where coordination of benefits is

required between two plans which are not subject to ERISA.

ERISA, however, provides no guidance on coordination of

benefits issues. See Regents of the Univ. of Mich. v.

Employees of Agency Rent-a-Car Hosp. Assoc., 122 F.3d 336,

339 (6th Cir. 1997). In cases involving two ERISA-regulated

plans, therefore, federal courts have fashioned federal

common law to resolve these issues. McGurl, 124 F.3d at

484 (adopting “employer first” rule, providing that plan

which covers beneficiary as employee is primary and plan

which covers beneficiary as dependent of employee is

secondary). See also PM Group Life Ins. Co. v. Western

Growers Assur. Trust, 953 F.2d 543, 548 (9th Cir. 1992);

Reinforcing Iron Workers v. Mich. Bell Tel. Co., 746 F. Supp.

668, 670-71 (E.D. Mich. 1990) (adopting the “birthday rule,”

declaring plan of employee whose birthday occurs earlier in

the year primarily responsible for medical benefits of a minor,

where parents are both covered by separate ERISA plans).

COB alleged that, in this case, certain beneficiaries were

insured both under one of the Employers’ self-funded ERISA

plans and under one of the Insurers’ non-ERISA policies.

COB claimed that the Insurers’ policies were primary,

presumably because the coordination of benefits clauses of

the applicable insurance contracts conflicted. COB then

argued that the district court should extend the federal

common law established in McGurl to these cases that

involve only one ERISA-regulated plan. Under such a rule,

COB contends that the Employers paid claims for which the

Insurers were primarily liable and they were only secondarily

liable. 

C. COB’s Contracts with the Employers

COB bases its claim to being an authorized agent of the

Employers upon the contract—called either the “Audit

Agreement” or the “Recovery Service Agreement”—that it

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U.S. Healthcare, Inc., et al.

No. 02-3645

entered into with each Employer. While the contracts with

the seven Employers were each slightly different, the

agreements generally provided that COB would review each

Employer’s records, use its “proprietary systems” to

determine if the Employer made payments under its health

care plan for which the Employer was only secondarily liable,

and attempt to collect payment from the party that COB

believed to be primarily liable in exchange for a percentage of

the amounts recovered. 

The relevant provisions of the Goodyear, Bridgestone,

Progressive, Babcock & Wilcox, and FirstMerit agreements

were substantively identical. Each of these five agreements

contained an “agency clause,” appointing COB its agent for

certain purposes:

[Employer will] make [COB,] and its contractors, [the

Employer’s] agents for the purpose of carrying out an

audit of coordination of benefits issues, and the

subrogation and collection of indemnities due as a result

of such audit as provided for and privileged by standard

rules [or law] (for example, Section 3902.13(F) of the

Ohio Revised Code or the rule[s] of the [NAIC], as

interpreted by the state at issue on any given claim).

Those agreements then required COB to make three attempts

to collect every claim and “further 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 agreements all provided,

however, that COB would “commence no litigation in the

name of [the Employer], or on its behalf, without prior notice

to [the Employer].” 

The other two agreements were similar. The State

agreement differed in that it authorized COB to report

potential claims to State, but did not authorize COB to pursue

them. The Cambridge agreement differed in that it authorized
No. 02-3645 COB Clearinghouse Corp. v. Aetna

U.S. Healthcare, Inc., et al.

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COB to “conduct litigation to recover amounts owed” without

requiring prior notice to Cambridge. 

II. ANALYSIS

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 review a district court’s decision to grant a motion to

dismiss for lack of subject matter jurisdiction de novo.”

Joelson v. United States, 86 F.3d 1413, 1416 (6th Cir. 1996).

“For purposes of ruling on a motion to dismiss for want of

standing, both the trial and reviewing courts must accept as

true all material allegations of the complaint, and must

construe the complaint in favor of the complaining party.”

Warth v. Seldin, 422 U.S. 490, 501 (1975). Having invoked

the jurisdiction of the federal courts, however, it is the

plaintiff’s burden to demonstrate that jurisdiction is proper.

See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992);

Kardules v. City of Columbus, 95 F.3d 1335, 1346 (6th Cir.

1996).

Assuming, as we must, that COB was an authorized agent

of the Employers under the terms of the parties’ agreements,

we must determine whether such an authorized agent has

standing under ERISA to pursue these claims.

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U.S. Healthcare, Inc., et al.

No. 02-3645

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COB did not identify the ERISA provision under which it brought

its Complaint. The district court, however, broadly interpreted the

Complaint and assumed that the action was brought pursuant to 29 U.S.C.

§ 1132(a)(3), which was the provision identified by COB in its brief in

opposition to the Motion to Dismiss. There was some dispute before the

district court regarding whether COB sought equitable relief or monetary

damages. We note that 29 U.S.C. § 1132(a)(3), which provides for

equitable relief, allows “participants, beneficiaries, and fiduciaries” to

bring claims, while 29 U.S.C. § 1132(a)(1), which provides for monetary

damages, only allows “participants and beneficiaries” to file suit. Like the

district court, we will assume that COB brought the action pursuant to 29

U.S.C. § 1132(a)(3), as that is the only section which gives rise to any

argument that COB has standing in this case.

ERISA strictly limits standing. 29 U.S.C. § 1132(a)(3)5

provides, in pertinent part, that:

A civil action may be brought - 

. . .

(3) by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any

provision of this subchapter or the terms of the plan,

or (B) to obtain other appropriate equitable relief (i)

to redress such violations or (ii) to enforce any

provisions of this subchapter or the terms of the plan

. . . .

And courts narrowly construe ERISA to permit only the

parties specifically enumerated to bring suit. See Simon v.

Value Behavioral Health, Inc., 208 F.3d 1073, 1081 (9th Cir.

2000) (citing Franchise Tax Bd. v. Constr. Laborers Vacation

Trust for S. Cal., 463 U.S. 1, 27 (1983)). See also

Teagardener v. Republic-Franklin Inc. Pension Plan, 909

F.2d 947, 951 (6th Cir. 1990) (narrowly construing proper

parties under 29 U.S.C. § 1132(a)(1)). Indeed, even an

assignee of a participant, beneficiary, or fiduciary is generally

not permitted to maintain an ERISA claim. See Simon v.
No. 02-3645 COB Clearinghouse Corp. v. Aetna

U.S. Healthcare, Inc., et al.

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Belwith Int’l, Inc., 3 Fed. Appx. 363, 364 (6th Cir. 2001). It

is undisputed that COB was neither a participant, a

beneficiary, nor a fiduciary according to the dictates of the

statute. COB argues, nevertheless, that the Employers whom

it represented were fiduciaries and that as the agent of the

Employers, it could bring suit. 

Whether an employer who is also an ERISA plan sponsor

is a fiduciary of the plan generally requires a detailed analysis

of the employer’s actions and whether those actions were

performed in the employer’s fiduciary capacity. See Hunter

v. Caliber Sys., Inc., 220 F.3d 702, 718 (6th Cir. 2000).

“[W]e must examine the conduct at issue to determine

whether it constitutes ‘management’ or‘administration’ of the

plan, giving rise to fiduciary concerns, or merely a business

decision that has an effect on an ERISA plan not subject to

fiduciary duties.” Id. (citations and internal quotations

omitted). But even assuming that the Employers 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 Employers’ agent.

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 law upon it in his own

name merely because he is entitled to a portion of the

proceeds as compensation for making it or because he is

liable for its breach.”

III. CONCLUSION

Given COB’s lack of standing, we affirm the decision of

the district court.