12-3023-cv

Biomed Pharmaceuticals, Inc. v. Oxford Health Plans (NY), Inc.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED

ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE

PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A

DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN

ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST

SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals

2 for the Second Circuit, held at the Thurgood Marshall United

3 States Courthouse, 40 Foley Square, in the City of New York,

on the 18th 4 day of June, two thousand thirteen.

5

6 PRESENT: DENNIS JACOBS,

7 Chief Judge,

8 CHRISTOPHER F. DRONEY,

9 Circuit Judge,

10 JOHN F. KEENAN,

District Judge.* 11

12

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14 BIOMED PHARMACEUTICALS, INC., 

15 Plaintiff-Appellant,

16

17 -v.- 12-3023-cv

18

19 OXFORD HEALTH PLANS (NY), INC., 

20 Defendant-Appellee,

21

22 OXFORD HEALTH INSURANCE, INC.,

23 UNITEDHEALTH GROUP INCORPORATED,

24 Defendants.

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* Judge John F. Keenan, of the United States District

Court for the Southern District of New York, sitting by

designation.

1
1 FOR APPELLANT: MARCOS DANIEL JIMENEZ (Michael

2 Dillon, McDermott Will & Emery

3 LLP, New York, New York, on the

4 brief), McDermott Will & Emery

5 LLP, Miami, Florida.

6

7 FOR APPELLEE: MICHAEL H. BERNSTEIN (John T.

8 Seybert, on the brief), Sedgwick

9 LLP, New York, New York.

10

11 Appeal from a judgment of the United States District

12 Court for the Southern District of New York (Rakoff, J.).

13

14 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

15 AND DECREED that the judgment of the district court be

16 AFFIRMED. 

17

18 Biomed Pharmaceuticals, Inc. appeals from the judgment

19 of the United States District Court for the Southern

20 District of New York (Rakoff, J.), dismissing Biomed’s

21 complaint after a bench trial. We assume the parties’

22 familiarity with the underlying facts, the procedural

23 history, and the issues presented for review. 

24

25 Biomed, a provider of injectable medications, sued

26 Oxford Health Plans (NY), Inc., under the Employee

27 Retirement Income Security Act (“ERISA”), 29 U.S.C. §

28 1132(a)(1)(B) (allowing a beneficiary to bring a civil

29 action for benefits due under a plan), after Oxford reduced

30 payments to Biomed for services that Biomed provided to a

31 boy suffering from hemophilia. After discovering that

32 Biomed had waived the patient’s deductible and coinsurance

33 obligations, Oxford launched an investigation and ultimately

34 concluded that the waivers granted by Biomed were

35 fraudulent. Because the deductible and coinsurance

36 obligations were unpaid and no valid waiver had been

37 granted, Oxford stopped paying Biomed the full amount

38 charged. 

39

40 After a bench trial, we review a district court’s

41 factual findings for clear error and its legal conclusions

42 de novo. Giordano v. Thomson, 564 F.3d 163, 168 (2d Cir.

43 2009). On de novo review of a claim of denial of benefits,

44 we apply the same standard that the district court applied

2
1 to the ERISA fund administrator’s decision. McCauley v.

2 First Unum Life Ins. Co., 551 F.3d 126, 130 (2d Cir. 2008). 

3 When (as here) an ERISA fund administrator has discretionary

4 authority to deny benefits, we review the denial of benefits

5 under a deferential “arbitrary and capricious” standard. 

6 Hobson v. Metro. Life Ins. Co., 574 F.3d 75, 82-83 (2d Cir.

7 2009). “Under the arbitrary and capricious standard of

8 review, we may overturn a decision to deny benefits only if

9 it was without reason, unsupported by substantial evidence

10 or erroneous as a matter of law.” Pagan v. NYNEX Pension

11 Plan, 52 F.3d 438, 442 (2d Cir. 1995) (internal quotation

12 marks omitted). An administrator that both evaluates and

13 pays claims for benefits has a conflict of interest, and a

14 reviewing court “should weigh the conflict as a factor in

15 its analysis.” Durakovic v. Bldg. Serv. 32 BJ Pension Fund,

16 609 F.3d 133, 138 (2d Cir. 2010).

17

18 Under the relevant provision of ERISA (Section 502,

19 codified at 29 U.S.C. § 1132), “[a] civil action may be

20 brought . . . by a participant or beneficiary . . . to

21 recover benefits due to him under the terms of his plan.” 

22 29 U.S.C. § 1132(a). ERISA plaintiffs are thus “required to

23 prove their case; to establish that they were entitled to

24 that benefit pursuant to the terms of the Contract or

25 applicable federal law.” Juliano v. Health Mgmt. Org. of

26 N.J., Inc., 221 F.3d 279, 287-88 (2d Cir. 2000). Oxford’s

27 determination that the beneficiary had not satisfied the

28 plan’s cost-share obligations was reasonable and supported

29 by substantial evidence. Biomed’s waivers were not based on

30 a good faith inquiry into the family’s financial condition,

31 and it appeared that Biomed granted such waivers routinely.

32 Given the beneficiary’s failure to fulfill the deductible

33 and coinsurance obligations or to obtain an appropriately

34 vetted waiver, it was reasonable for Oxford to pay a reduced

35 amount. These determinations were not arbitrary and

36 capricious, and the judgment should be affirmed.

37

38 For the foregoing reasons, and finding no merit in

39 Biomed’s other arguments, we hereby AFFIRM the judgment of

40 the district court.

41

42 FOR THE COURT:

43 CATHERINE O’HAGAN WOLFE, CLERK

44

45

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