Court Opinion

ID: 903068
Source: CourtListenerOpinion
Date Created: 2013-06-18 14:21:22.023643+00
Date Added: 2024-06-11T09:08:46.049574
License: Public Domain

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,
 4       on the 18th 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,
11                              District Judge.*
12
13       - - - - - - - - - - - - - - - - - - - -X
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.
25       - - - - - - - - - - - - - - - - - - - -X

                *
                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
46

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