Court Opinion

ID: 3188908
Source: CourtListenerOpinion
Date Created: 2016-03-25 15:00:36.51832+00
Date Added: 2024-06-11T07:39:02.645451
License: Public Domain

15-1234
     S.M. v. Oxford Health Plans

                          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,
 4       on the 25th day of March, two thousand sixteen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                PETER W. HALL,
 8                              Circuit Judges.
 9                JANE A. RESTANI,*
10                              Judge.
11
12       - - - - - - - - - - - - - - - - - - - -X
13       S.M.,
14                Plaintiff-Appellant,
15
16                    -v.-                                               15-1234
17
18       Oxford Health Plans (NY),
19       Incorporated, a/k/a Oxford Health
20       Insurance, Inc., Oxford Health Plans
21       LLC, United Healthcare Services, Inc.,
22       United Health Group Incorporated,
23                Defendants-Appellees.
24       - - - - - - - - - - - - - - - - - - - -X

                *
                  The Honorable Jane A. Restani, Judge for the
         United States Court of International Trade, sitting by
         designation.
                                                  1
 1   FOR APPELLANT:             GABRIEL BERG, Kennedy Berg LLP,
 2                              New York New York (Charles
 3                              Matays, Matays Law Group PLLC,
 4                              New York, New York on the
 5                              brief).
 6
 7   FOR APPELLEES:             JOHN F. KAPACINSKAS (Richard A.
 8                              Ross & Pari I. McGarraugh on the
 9                              brief) Fredrikson & Byron, P.A.,
10                              Minneapolis, Minnesota.
11
12        Appeal from a judgment of the United States District
13   Court for the Southern District of New York (Ramos, J.).
14
15        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
16   AND DECREED that the judgment of the district court be
17   AFFIRMED.
18
19        Plaintiff S.M. appeals from the judgment of the United
20   States District Court for the Southern District of New York
21   (Ramos, J.), granting summary judgment in favor of
22   defendants Oxford Health Plans (NY), Inc., a/k/a Oxford
23   Health Insurance, Inc. (“Oxford”), Oxford Health Plans LLC,
24   United Healthcare Services, Inc., and United Health Group
25   Incorporated. Plaintiff argues (1) the district court
26   improperly weighed Oxford’s structural conflict of interest;
27   (2) the district court abused its discretion by declining to
28   expand the administrative record; (3) the district court
29   erred in finding Oxford’s decision supported by substantial
30   evidence and not arbitrary and capricious; (4) the district
31   court erred by not granting relief on the basis that Oxford
32   withheld information from the external reviewer; (5) the
33   district court erred by dismissing Oxford's corporate
34   parents as defendants; and (6) the district court erred in
35   declining to award damages or attorney's fees to S.M.
36
37        This Court reviews the grant of summary judgment in an
38   ERISA action de novo and generally applies the same legal
39   standard of review employed by the district court. McCauley
40   v. First Unum Life Ins. Co., 551 F.3d 126, 130 (2d Cir.
41   2008). An administrator’s decision to deny benefits is
42   ordinarily reviewed de novo; but if, as here, “written plan
43   documents confer upon a plan administrator the discretionary
44   authority to determine eligibility, we will not disturb the
45   administrator’s ultimate conclusion unless it is ‘arbitrary
46   and capricious.’” Pagan v. NYNEX Pension Plan, 52 F.3d 438,
47   441 (2d Cir. 1995).   Thus, we may upset Oxford’s

                                  2
 1   determination only if it was “without reason, unsupported by
 2   substantial evidence or erroneous as a matter of law.”
 3   Miles v. Principal Life Ins. Co., 720 F.3d 472, 486 (2d Cir.
 4   2013) (internal quotation marks omitted). In our review, we
 5   assume the parties’ familiarity with the facts and the
 6   record of prior proceedings, which we reference only as
 7   necessary to explain our decision to affirm.
 8
 9        1.  Conflict of interest is a factor in the arbitrary
10   and capricious standard of review. Once a conflict has been
11   identified, “the court goes on to determine how heavily to
12   weight the conflict of interest thus identified, considering
13   such circumstances as whether procedural safeguards are in
14   place that abate the risk, ‘perhaps to the vanishing
15   point.’” Durakovic v. Bldg. Serv. 32 BJ Pension Fund, 609
16 F.3d 133, 138 (2d Cir. 2010) (quoting Metro. Life Ins. Co.
17   v. Glenn, 554 U.S. 105, 117 (2008)). Courts decline to
18   “assign any weight to a conflict of interest ‘in the absence
19   of any evidence that the conflict actually affected the
20   administrator’s decision.’” Roganti v. Metro. Life Ins.
21   Co., 786 F.3d 201, 218 (2d Cir. 2015) (quoting Durakovic,
22 609 F.3d at 140).
23
24        As the district court ruled, Oxford took affirmative
25   steps to reduce the risk of bias, including consulting with
26   the plaintiff and her treating physician and assigning
27   separate individuals to process plaintiff’s appeal.
28   Plaintiff argues that Oxford has a history of biased claims.
29   The district court’s rejection of that argument was properly
30   supported by citation to prior decisions in which Oxford’s
31   conflict of interest was given little weight. See Fay v.
32   Oxford Health Plan, 287 F.3d 96, 109 (2d Cir. 2002).
33
34        In any event, there was no indication in the record
35   that the conflict affected the outcome in the plaintiff’s
36   case. Oxford’s initial agreement to pay for three months of
37   IVIG treatment makes it unlikely that the decision not to
38   extend that coverage was driven by financial interest. See
39   Durakovic, 609 F.3d at 140 (“No weight is given to a
40   conflict in the absence of any evidence that the conflict
41   actually affected the administrator’s decision.”).
42
43        2. The district court’s refusal to expand the
44   administrative record was not an abuse of discretion. In
45   ERISA cases applying the arbitrary and capricious standard
46   of review, we have “repeatedly said that a district court’s
47   decision to admit evidence outside the administrative record

                                  3
 1   is discretionary, ‘but which discretion ought not to be
 2   exercised in the absence of good cause.’” Krauss v. Oxford
 3   Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008)
 4   (quoting Juliano v. Health Maint. Org. of N.J., Inc., 221
 5 F.3d 279, 289 (2d Cir. 2000)).
 6
 7        As to the deposition of Dr. Lundblad, the district
 8   court correctly reasoned that it shed no additional light on
 9   the merits because it revealed no bias in the coverage
10   determination. Similarly, the report for S.M.’s treatment
11   in 2013 was relevant in that it tended to show the 2011
12   denial was not impacted by a structural conflict, but did
13   not bear on whether the 2011 denial of coverage was
14   arbitrary and capricious. Finally, the district court
15   determined that because S.M. had not challenged the IVIG
16   Policy itself, there was not good cause to admit the medical
17   journal articles demonstrating the reasonableness of the
18   Policy.
19
20        3. A medical necessity determination is arbitrary and
21   capricious only if the decision is "without reason,
22   unsupported by substantial evidence or erroneous as a matter
23   of law." Fay, 287 F.3d at 104 (citation omitted). It is
24   undisputed that the plaintiff's plan only covers medically
25   necessary services and that medical necessity for
26   continuation of IVIG coverage is governed by the terms of
27   the IVIG Policy. Defendant’s doctor concluded that S.M.’s
28   undisputed condition did not meet the standard for coverage
29   contained in the policy because: (1) there was no evidence
30   that S.M. had a confirmed diagnosis of any approved
31   condition; (2) there was no documentation of impaired
32   production of antibodies to specific antigens; and (3) there
33   was no documentation that the medical condition under
34   treatment had not fully resolved. The reasonableness of
35   this decision is further confirmed by the external review
36   sought by S.M., which agreed with Oxford's denial of
37   coverage. The district court did not err in determining
38   that defendant did not act arbitrarily or capriciously and
39   that defendant’s decision was supported by substantial
40   evidence.
41
42        4. The plaintiff contends that Oxford withheld from
43   the external reviewer an internal Oxford report. However,
44   the report was merely a collection of the information
45   submitted by S.M. The same clinical information that Oxford
46   considered when it initially denied the coverage request was
47   provided to the external reviewer. Compare Joint App’x A-

                                  4
 1   831-841, 843-854 (materials submitted to Oxford by S.M.)
 2   with Joint App’x 777-817 (S.M.’s external appeal
 3   applications). The district court properly declined to
 4   grant relief because Oxford withheld no clinical information
 5   from the external reviewer.
 6
 7        5. The plaintiff argues that other defendants were
 8   improperly dismissed. As a general matter, “a parent
 9   corporation and its subsidiary are regarded as legally
10   distinct entities and a contract under the corporate name of
11   one is not treated as that of both.” Carte Blanche (Sing.)
12   Pte., Ltd. v. Diners Club Int’l, Inc., 2 F.3d 24, 26 (2d
13   Cir. 1993). The district court properly relied on corporate
14   disclosure statements to determine that Oxford, Oxford
15   Health Plans LLC, and United Healthcare Services, Inc., are
16   all wholly owned subsidiaries of United Health Group
17   Incorporated. The plaintiff alleges no wrongdoing by the
18   other defendants, was not in privity with them, and has
19   offered no reason to pierce the corporate veil and attribute
20   any conduct by Oxford to them.
21
22        6. To get an award of attorney’s fees in an ERISA
23   action, a plaintiff “must show ‘some degree of success on
24   the merits.’” Hardt v. Reliance Standard Life Ins. Co., 560
25 U.S. 242, 255 (2010) (quoting Ruckelshaus v. Sierra Club,
26   463 U.S. 680, 694 (1983)). This plaintiff achieved no
27   success, and is therefore not entitled to fees or costs.
28
29
30        For the foregoing reasons, and finding no merit in
31   plaintiff’s other arguments, we hereby AFFIRM the judgment
32   of the district court.
33
34
35                              FOR THE COURT:
36                              CATHERINE O’HAGAN WOLFE, CLERK
37

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