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IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

ANCHOR HEALTH SYSTEMS, INC., 

Plaintiff, 

v. 

DENNIS RADOWSKI, THE CITY OF 

HAMMOND, PROFESSIONAL CLAIMS 

MANAGEMENT, INC., UNITED FOOD & 

COMMERCIAL WORKERS UNION & 

EMPLOYERS CALUMET REGION 

INSURANCE FUND, 

Defendants. 

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CASE NO. 2:16-cv-00065-TLS 

REPLY BRIEF IN SUPPORT OF 

CITY DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

 The City of Hammond and Professional Claims Management, Inc., collectively, 

the “City Defendants,” by counsel submit their Reply Brief in support of their Motion 

for Summary Judgment. 

I. INTRODUCTION 

Plaintiff violated N.D. Ind. L.R. 56-1(b)(2) in failing to include a “Statement of 

Genuine Disputes” in its Response Brief (“Response”). (See Response, Doc. No. 105). 

Plaintiff’s failure to comply with the local rules results in an admission of City 

Defendants’ Statement of Material Facts. Plaintiff made other errors in filing its 

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Response, including failing to have consecutively numbered pages as required by N.D. 

Ind. L.R. 5-4(a)(6) and incorrect citation forms. The fourteen-page argument section 

of Plaintiff’s Response contains but two sub-headings: “The City Plan Is An ERISA 

Plan,” and “Anchor is entitled to a jury trial in this case.” (See Response, pp. 2 and 

14). The lack of organization in Plaintiff’s Response makes it difficult to formulate a 

Reply. 

Plaintiff spends the majority of its Response arguing that the City health plan 

is an ERISA plan. It is not. Plaintiff admitted that the City plan is not an ERISA plan 

when Plaintiff’s counsel signed the Report of Parties Planning Meeting filed on 

August 16, 2017: “There is no basis for federal jurisdiction under ERISA as to 

Hammond and PCM as Hammond’s plan is not subject to ERISA.” (Doc. No. 49, p. 

1). Even if this Court disregards Plaintiff’s admission, the law clearly establishes that 

the City’s plan is not governed by ERISA. Thus, any arguments relying on the false 

premise that the City plan is an ERISA plan should be disregarded. 

Plaintiff disputes the admissibility of certain evidence, namely the 

independent medical review reports attached to the City Defendants’ Brief in Support 

of its Motion for Summary Judgment as Exhibits C-8, 10 and 11. (See Response, pp. 

11-12). However, Plaintiff failed to address this dispute in a separate motion as 

required by N.D. Ind. L.R. 56-1(e) and 7-1(a). As such, admissibility of the reports is 

effectively undisputed. Moreover, even if this Court overlooks Plaintiff’s failure to 

comply with the local rules, the reports are admissible. Plaintiff’s only argument 

against admissibility is that the reports are hearsay. The reports are admissible 

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under the business records exception to the rule against hearsay. (See Fed. R. Evid. 

803(6)). 

Finally, Plaintiff discusses an issue in its Response which is unrelated to the 

Motion for Summary Judgment, namely its very belated request for a jury trial. 

This portion of Plaintiff’s Response should be disregarded because Plaintiff has 

failed to comply with procedural requirements, and because the request is untimely 

II. ARGUMENT 

A. Plaintiff’s failure to comply with the local rules results in an admission 

of City Defendants’ Statement of Material Facts. 

On March 25, 2019, the City Defendants filed a Motion for Summary 

Judgment, Brief in Support, and Designation of Evidence, including 12 exhibits. (Doc 

Nos. 91-93). The City Defendant’s Brief in Support of Motion for Summary Judgment 

contains a section labeled “Statement of Material Facts,” as required by N.D. Ind. 

L.R. 56-1(a). (Doc. No. 92, pp. 5-11). 

On June 17, 2019, Plaintiff filed a Response to City Defendants’ Motion 

For Summary Judgment, and Designation of Evidence, including 12 exhibits. (Doc. 

Nos. 105, 105-1 – 105-13). Neither Plaintiff’s Response Brief nor its Designation of 

Evidence contains a section labeled “Statement of Genuine Disputes.” 

The local rules of the Northern District court require a Response Brief or 

Appendix to contain a section titled “Statement of Genuine Disputes”: 

(2) Content of Response Brief or Appendix. The response brief or its appendix 

must include a section labeled “Statement of Genuine Disputes” that identifies 

the material facts that the party contends are genuinely disputed so as to make 

a trial necessary. 

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N.D. Ind. L.R. 56-1(b)(2). 

“[W]hen a non-movant fails to controvert a moving party’s Statement of 

Material Facts with a properly supported Statement of Genuine Disputes, the 

movant’s facts may be deemed admitted ... We have consistently held that a failure 

to respond by the nonmovant as mandated by the local rules results in an admission.” 

Caldwell v. Klemz, No. 2:14-CV-455, 2017 WL 4620693, at *3 (N.D. Ind. Oct. 12, 2017) 

(citing Smith v Lamz, 321 F.3d 680, 683 (7th Cir. 2003)). 

Plaintiff’s Response fails to controvert the City Defendants’ Statement of 

Material Facts with a properly supported Statement of Genuine Disputes, as it is 

completely devoid of this required section. Plaintiff’s failure to comply with the local 

rules results in an admission of City Defendants’ Statement of Material Facts. 

B. Plaintiff’s argument that the City Defendants failed to discuss a Standard 

of Review should be disregarded because the City Defendants cited the 

standard relevant to summary judgment. 

Plaintiff takes issue with the City Defendants’ statement in their Brief in 

Support of Motion for Summary Judgment relating to standard of review, stating: 

“The City Plan does not make any arguments regarding the standard of review this 

Court should use such as a de novo standard or an arbitrary and caprcious [sic] 

standard so the plaintiff will nor [sic] argue this in this response.” Of course, the City 

Defendants’ Brief does address the standard of review, which, in this matter, is the 

summary judgment standard. (See Doc. 92, pp. 11-12). Plaintiff appears to be 

confusing an appellate standard of review with the summary judgment standard. As 

such, Plaintiff’s statements relating to standard of review in this matter should be 

disregarded. 

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C. Any arguments in Plaintiff’s Response Brief relying on the false premise 

that the City plan is an ERISA plan should be disregarded because 

Plaintiff admitted the City plan is not an ERISA plan, and the law 

supports such a conclusion. 

Plaintiff admitted that the City plan is not an ERISA plan when Plaintiff’s 

counsel signed the Report of Parties Planning Meeting filed on August 16, 2017, 

stating: “There is no basis for federal jurisdiction under ERISA as to Hammond and 

PCM as Hammond’s plan is not subject to ERISA.” (Doc. No. 49, p. 1). Furthermore, 

Plaintiff’s failure to comply with N.D. Ind. L.R. 56-1(b)(2) may constitute an 

admission of the Statement of Material Facts submitted in the City Defendants’ Brief, 

namely in paragraph four (4): “The City plan is not an ERISA plan. (See City 

Defendants’ Brief in Support of Summary Judgment, Doc. 92, p. 5, ¶ 4, citing Doc. 

No. 93-4, and Doc. No. 49, ¶ 2).” 

Aside from Plaintiff’s admission that the City Plan is not an ERISA plan, there 

is abundant law supporting this conclusion. An employee benefit plan is exempt from 

ERISA if it is a governmental plan as defined in 29 U.S.C. § 1002(32) (“a plan 

established or maintained for its employees by the Government of the United States, 

by the government of any State or political subdivision thereof, or by any agency or 

instrumentality of any of the foregoing.”). See 29 U.S.C. § 1003(b)(1). The Seventh 

Circuit adopted the Hawkins test to determine whether a plan is a governmental plan 

for purposes of ERISA in Shannon v. Shannon. 965 F.2d 542, 548 (7th Cir. 1992). 

Under the Hawkins test, an entity administering a plan will be deemed a political 

subdivision if it is either (1) created directly by the United States/state/other political 

subdivision, so as to constitute a department or administrative arm of government, 

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or (2) administered by individuals who are responsible to public officials or to general 

electorate. Id. (citing NLRB v. Natural Gas Utility District of Hawkins County, 

Tennessee, 402 U.S. 600, 602-03 (1971)). A city is considered a political subdivision 

within the meaning of 29 U.S.C. § 1002(32). See Halttunen v. City of Livonia, 664 Fed. 

App’x. 510, 512-13 (6th Cir. 2016) (“[Defendant] would be hard-pressed to find [a case 

where a city was held not to be a political subdivision of the state]”) (citing Fromm v. 

Principal Health Care of Iowa, Inc., 244 F.3d 652, 653 (8th Cir. 2001) (per curiam); 

Weiner v. Klais & Co., 108 F.3d 86, 89-90 (6th Cir. 1997), abrogated on other grounds 

by Swierkiewicz v. Sorema, N.A., 534 U.S. 506 (2002); Silvera v. Mut. Life Ins. Co. of 

New York, 884 F.2d 423, 427 (9th Cir. 1989); In re Pensions of the 19th District Judges 

under Dearborn Emps. Ret. Sys., 540 N.W.2d 784, 787 (Mich. Ct. App. 1995)). 

A health plan that is established and maintained by a City is a governmental 

plan exempt from ERISA even when the plan is offered and administered by a private 

party. See Fromm, 244 F.3d at 653 (citing Silvera, 884 F.2d at 426; Simac v. Health 

Alliance Medical Plans, Inc., 961 F. Supp. 216 (C.D. Ill. 1997)). The only exception to 

the exemption provided to governmental plans by ERISA occurs when a political 

subdivision participates in a multi-employer plan in which at least one of the 

employer-participants is a private entity. See City of Warwick v. Laborers’ 

International Union of North America National (Industrial) Pension Fund, No. 08-

366ML, 2009 WL 462690, at *4 (D. R.I. Feb. 23, 2009); Brooks v. Chicago Housing 

Authority, No. 89 C 9304, 1990 WL 103572, at *2 (N.D. Ill. July 5, 1990); Livolsi v. 

City of New Castle, 501 F. Supp. 1146 (W.D. Pa. 1980). David Baker is the CEO of 

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Professional Claims Management, Inc., the third-party administrator of the City of 

Hammond’s health plan. In his declaration, Mr. Baker avers: 

“The City’s plan is not a multi-employer plan. In other words, the only 

employer included in the City’s health insurance plan is the City of Hammond 

and the agencies and departments that are a part of the City, such as the 

Hammond Sanitary District. There are no non-governmental entity employers 

that participate in the City’s plan.” 

Declaration of David J. Baker, Doc. No. 93-4. 

The parties cannot create federal court subject-matter jurisdiction by 

stipulation, by conduct, or by estoppel. See Holman v. Laulo-Rowe Agency, 994 F.2d 

666, 668 n.1 (9th Cir. 1993) (citing Neirbo Company v. Bethlehem Shipbuilding Corp., 

308 U.S. 165 (1939)); 13 Charles Alan Wright & Arthur R. Miller, Federal Practice & 

Procedure § 3522 (3d ed. 2008). See also Silberstein v. U.S. Securities, 153 F. Supp. 

3d 233, 236 (D.D.C. 2016) (citing Akinseye v. District of Columbia, 339 F.3d 970, 971 

(D.C. Cir. 2003) (“No action of the parties can confer subject matter jurisdiction on a 

federal court because subject matter jurisdiction is both a statutory requirement and 

an Article III requirement.”). Therefore, whether a party intends ERISA to govern is 

irrelevant because the application of ERISA depends on whether the plan satisfies 

the statutory definition. See Smith v. Regional Transit Authority, 827 F.3d 412, 420 

(5th Cir. 2016) (citing Meredith v. Time Ins. Co., 980 F.2d 352, 354 (5th Cir. 1993); 

MDPhysicians & Assocs., Inc. v. State Bd. Of Ins., 957 F.2d 178, 183 n.7 (5th Cir. 

1992)). 

In this case the City of Hammond, a political subdivision of the state of 

Indiana, created the City plan and therefore satisfies the Hawkins test. See 

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Halttunen, 664 Fed. App’x. at 512-13; Shannon, 965 F.2d at 548. The City of 

Hammond maintains the City plan and is its only participant. See Fromm, 244 F.3d 

at 653; City of Warwick, 2009 WL 462690, at *4; Brooks, 1990 WL 103572, at *2; 

Livolsi, 501 F. Supp. at 1150. Furthermore, whether the City of Hammond 

transferred the administration of the City plan to a private third-party is irrelevant, 

because such a fact does not exclude the City plan from the ERISA exemption for 

governmental plans. See Fromm, 244 F.3d at 653. 

Finally, the City of Hammond could not have agreed to or decided that ERISA 

governs its City plan, because the plan does not satisfy the ERISA statutory 

definition. See Smith v. Regional Transit Authority, 827 F.3d at 420; Holman, 994 

F.2d 666, 668 n.1; Silberstein v. U.S. Securities, 153 F. Supp. 3d at 236; 13 Charles 

Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3522 (3d ed. 2008). 

Plaintiff fails to provide any evidence or procedural or substantive grounds to support 

its claim that the City plan is an ERISA plan; thus, any arguments relying on the 

false premise that the City plan is an ERISA plan should be disregarded. 

D. The independent medical review reports submitted by the City 

Defendants are admissible and are deemed admitted. 

1. The Independent Medical Review Reports are Deemed Admitted. 

On pages 11-12 of its Response, Plaintiff disputes the admissibility of the 

independent medical reports attached in Exhibit C to the City Defendants’ Motion for 

Summary Judgment. (See Doc. Nos. 93-3, pp. 61-79). However, Plaintiff failed to 

address this dispute in a separate motion as required by N.D. Ind. L.R. 56-1(e) and 

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7-1(a). As such, admissibility of the evidence offered in support of the City 

Defendants’ Motion for Summary Judgment is effectively undisputed. See Craig v. 

Nicholson, No. 2:17-cv-00220-WTL-DLP, 2018 WL 5830706, at *2 (S.D. Ind. Nov. 7, 

2018) (“The Court will assume that the facts as claimed and supported by admissible 

evidence by the movant are admitted without controversy unless ‘the non-movant 

specifically controverts the facts as in that party’s ‘Statement of Material Facts in 

Dispute’ with admissible evidence’ .... ”). 

Furthermore, Plaintiff’s failure to comply with N.D. Ind. L.R. 56-1(b)(2), as 

discussed in section A above, may constitute an admission of the “Statement of 

Material Facts” submitted in the City Defendants’ Brief, namely in paragraphs 26, 

29 and 30 which reference and incorporate the three independent medical reports. 

(See Doc. No. 92, pp. 9-10). 

2. The Independent Medical Review Reports Are Admissible Under 

Fed. R. Evid. 803(6). 

Even if this Court decides to disregard Plaintiff’s failure to comply with the 

local rules, the reports are admissible. Plaintiff’s argument against admissibility is 

that the documents are hearsay. Hearsay is defined as a statement not made by the 

declarant while testifying at the trial or hearing that is offered in evidence to prove 

the truth of the matter asserted. See Fed. R. Evid. 801(c); Ind. R. Evid. 801(c). There 

are several exceptions to the hearsay rule, including records of a regularly conducted 

activity (often referred to as the business records exception): 

Rule 803. Exceptions to the Rule Against Hearsay – Regardless 

of Whether the Declarant is Available as a Witness. 

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The following are not excluded by the rule against hearsay, regardless 

of whether the declarant is available as a witness: 

... 

(6) Records of a Regularly Conducted Activity. A record of an 

act, event, condition, opinion, or diagnosis, if: 

(A) the record was made at the time or near the time by—or from 

information transmitted by—someone with knowledge; 

(B) the record was kept in the course of a regularly conducted 

activity of a business ...; 

(C) making the record was a regular practice of that activity; 

(D) all these conditions are shown by the testimony of the 

custodian or another qualified witness ...; and 

(E) neither the sources of information nor the method or 

circumstances of preparation indicate a lack of trustworthiness. 

Fed. R. Evid. 803(6); Ind. R. Evid. 803(6). 

Independent medical review reports are records of a regularly conducted 

activity, in this case, insurance claim administration. These records are generated 

during the External Review Process after a coverage denial and are routinely kept as 

part of a claimant’s record. (See City Def.’s Mot. for Summ. J. Ex. C-5, Doc. No. 93-3, 

p. 19). Furthermore, these reports are created by physicians associated with a 

qualified independent medical review organization who evaluate the information in 

a claimant’s medical record and opine on the medical necessity of treatment provided. 

Thus, the independent medical review reports are admissible because they qualify 

under the “records of a regularly conducted activity” exception to the Rule Against 

Hearsay, Fed. R. Evid. 803(6). 

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Plaintiff states in its Response, “Finally, even if admissible pursuant to some 

exception to hearsay, it is self contradictory [sic].” (Doc. No. 105, p. 12). Whether the 

reports are “self-contradictory” goes to the weight, not the admissibility, of the 

evidence. Plaintiff had ample opportunity during the discovery phase of this lawsuit 

to investigate and depose the Medical Review Institute of America and its physicians 

who prepared the reports, but it failed to do so. 

E. Plaintiff’s request for a jury trial should be disregarded because Plaintiff has 

failed to comply with procedural requirements, and the request is untimely. 

Plaintiff requests a jury trial in its Response, although that issue is unrelated 

to the Motion for Summary Judgment. (See Response, pp. 14-15). Local Rule 7-1(a) 

establishes that motions must be filed separately, and Plaintiff failed to file a 

separate motion. See N.D. Ind. L.R. 7-1(a). For this reason, Plaintiff’s insertion of a 

request for jury trial in its Rule 56 Response should be disregarded. 

Moreover, Plaintiff’s belated request for a jury trial should be dismissed as it 

is untimely. Plaintiff had ample opportunity to request jury trial in the original 

Complaint filed in state court (Doc. No. 6) and in the two Amended Complaints filed 

in this court (Doc. Nos. 32 and 51) but failed to do so. Interestingly, Plaintiff’s request 

for a jury trial is incompatible with its assertion that this is a claim governed by 

ERISA: “when relief is sought under § 1132(a)(1)(B), the relief is considered equitable, 

meaning that there is no right to a jury trial, a view shared by every circuit to consider 

the issue.” See Coburn v. Continental Cas. Co., 306 F. Supp. 2d 815, 817 (N.D. Ind. 

2003) (referring to the Seventh Circuit conclusion that ERISA claims do not provide 

for a right to jury trial). 

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Plaintiff’s request for jury trial should be disregarded by this Court in its 

determination of the City Defendants’ Motion for Summary Judgment. 

III. CONCLUSION 

For all the foregoing reasons, Defendants City of Hammond and Professional 

Claims Management, Inc., by counsel, respectfully request that this Court deem 

Plaintiff’s failure to comply with procedural rules an admission of City Defendants’ 

Statement of Material Facts; that this Court disregard Plaintiff’s arguments relying 

on the premise that the City plan is an ERISA plan; that this Court determine that 

the independent medical review reports submitted by City Defendants are admitted; 

that this Court disregard Plaintiff’s request for a jury trial; and that this Court grant 

summary judgment in their favor and against Plaintiff Anchor Health Systems, Inc., 

and for all other proper relief. 

Respectfully submitted, 

FROST BROWN TODD LLC

By: /s/ Amy Stewart Johnson

Anthony W. Overholt, #16481-49 

Amy Stewart Johnson, #16257-49 

Attorneys for Defendants The City of 

Hammond and Professional Claims 

Management, Inc.

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CERTIFICATE OF SERVICE 

This is to confirm that a copy of the foregoing was electronically filed on the 29th day of 

July, 2019. Notice of this filing will be sent to all parties by operation of the Court's electronic 

filing system, and the filing may be accessed through that system. 

Jonathan R. O’Hara 

Attorney at Law 

1304 Vale Park Road 

Valparaiso, IN 46383 

oharalawoffice@gmail.com 

Counsel for Plaintiff 

Robert A. Montgomery 

Law Office of Robert Montgomery 

30 N. LaSalle Street, Suite 2950 

Chicago, IL 60602 

rm@rmontlaw.com 

Counsel for Defendant Dennis Radowski 

Jonathan D. Karmel 

Joseph C. Torres 

Karmel Law Firm 

221 North LaSalle Street, Suite 1550 

Chicago, IL 60601 

jon@karmellawfirm.com 

joe@karmellawfirm.com 

Counsel for United Food & Commercial 

Workers Union & Employers Calumet Region 

Insurance Fund

/s/Amy Stewart Johnson

Amy Stewart Johnson

FROST BROWN TODD LLC 

201 North Illinois Street, Suite 1900 

P.O. Box 44961 

Indianapolis, IN 46244-0961 

317-237-3800 

Fax: 317-237-3900 

aoverholt@fbtlaw.com 

asjohnson@fbtlaw.com

EN21182.Public-21182 4850-7869-6093v3 

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