Court Opinion

ID: 4270437
Source: CourtListenerOpinion
Date Created: 2018-04-26 20:00:30.463469+00
Date Added: 2024-06-11T13:05:14.089137
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            APR 26 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

EDEN SURGICAL CENTER,                            No.   16-56422

              Plaintiff-Appellant,               D.C. No.
                                                 2:15-cv-01633-RGK-E
 v.

COGNIZANT TECHNOLOGY                             MEMORANDUM*
SOLUTIONS CORP., in its capacity as
Plan Administrator of the Cognizant
Group Health Plan; and COGNIZANT
GROUP HEALTH PLAN,

              Defendants-Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                    R. Gary Klausner, District Judge, Presiding

                       Argued and Submitted April 12, 2018
                              Pasadena, California

Before: ROGERS,** BYBEE, and WATFORD, Circuit Judges.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable John M. Rogers, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
                                                                           Page 2 of 4
      The district court properly granted summary judgment for Defendants on

Eden Surgical Center’s claims under the Employee Retirement Income Security

Act of 1974 (ERISA).

      Eden concedes that its sole basis for standing is as an assignee. It also

concedes that the benefit plan contained a valid anti-assignment provision, which,

if enforceable, would bar its suit. Eden argues, however, that the doctrines of

equitable estoppel and waiver render the provision unenforceable. We take each

argument in turn.

      Reasonable reliance on a material misrepresentation is one of the

requirements necessary to establish an equitable estoppel claim. Pisciotta v.

Teledyne Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996). Eden contends that

Aetna, the claims administrator, made two misrepresentations: First, a week or so

before the surgery, Aetna incorrectly advised Eden regarding the applicable

reimbursement rate; and second, roughly four months after the surgery, Aetna

mistakenly told Eden that the benefit plan did not contain an anti-assignment

provision.

      We will assume that Eden can invoke equitable estoppel as to the first

misrepresentation. But that first misrepresentation is irrelevant to the standing

analysis, the dispositive issue here, because a misrepresentation concerning the
                                                                             Page 3 of 4
reimbursement rate has no impact on whether the anti-assignment provision is

enforceable or not. As to the second misrepresentation, it is at least potentially

relevant to whether the anti-assignment provision can be enforced. But Eden’s

equitable estoppel claim fails because Eden could not have reasonably relied on

Aetna’s misrepresentation in deciding to file suit. Eden could have—and should

have—attempted to obtain the plan documents from the purported assignor to

verify whether the plan contained an anti-assignment provision, if knowledge of

that fact was indeed critical to its decision to file suit. The undisputed facts

establish, however, that Eden did not attempt to obtain the plan documents from its

purported assignor until after it had already filed this action. In these

circumstances, any reliance Eden placed on Aetna’s misrepresentation concerning

the existence of an anti-assignment provision was unreasonable.

      Eden’s waiver argument is likewise unavailing. While it is true that a “plan

administrator may not fail to give a reason for a benefits denial during the

administrative process and then raise that reason for the first time when the denial

is challenged in federal court,” Harlick v. Blue Shield of Cal., 686 F.3d 699, 719

(9th Cir. 2012), that is not what happened here. Defendants raised the anti-

assignment provision after the suit commenced to contest Eden’s standing to sue,

not as a reason to deny benefits. In fact, as the district court properly noted, no
                                                                         Page 4 of 4
benefits were payable here because the beneficiary’s deductible had not been met.

In addition, although Eden takes issue with Defendants’ pre-litigation conduct—in

particular, its silence in response to Eden’s administrative appeals—Eden cites no

authority for the proposition that Defendants had an affirmative duty to make it

aware of the anti-assignment provision. For these reasons, waiver is inapplicable.

      Because the anti-assignment provision is valid and enforceable, Eden lacks

derivative standing to sue. See DB Healthcare, LLC v. Blue Cross Blue Shield of

Ariz., Inc., 852 F.3d 868, 876 (9th Cir. 2017).

      AFFIRMED.