Court Opinion

ID: 2964933
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:33:09.744107+00
Date Added: 2024-06-11T11:37:26.384223
License: Public Domain

USCA1 Opinion

	

                           UNITED STATES COURT OF APPEALS 
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 97-1253

                      RONALD J. TURNER, AS ADMINISTRATOR OF THE
                   ESTATE OF CHARLOTTE M. TURNER, AND INDIVIDUALLY,

                                Plaintiff, Appellant,

                                          v.

                         FALLON COMMUNITY HEALTH PLAN, INC.,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
                                        _____________

                             Hill,* Senior Circuit Judge,
                                    ____________________

                         and Pollak,** Senior District Judge.
                                       _____________________

                                 ____________________

            Burton  Chandler with  whom  Seder &  Chandler  was on  brief  for
            ________________             _________________
        appellant.
            Daly D.E. Temchine with  whom Thomas I. Elkind and Epstein  Becker
            __________________            ________________     _______________
        & Green, P.C. were on brief for appellee.
        _____________

                                 ____________________

                                   October 20, 1997
                                 ____________________

                            
        ____________________

        *Of the Eleventh Circuit, sitting by designation.

        **Of the Eastern District of Pennsylvania, sitting by designation.

                 BOUDIN,  Circuit Judge.   Ronald  Turner,  on behalf  of
                          _____________

            himself and  as administrator of  the estate of  his deceased

            wife,  Charlotte Turner, brought  this suit  in Massachusetts

            state  court  against  Fallon  Community  Health  Plan,  Inc.

            ("Fallon").   The gravamen  was Fallon's  refusal to  provide

            coverage  for a treatment regime proposed by Charlotte Turner

            and her  doctor to  address her  metastasized breast  cancer.

            After  the case  was removed  to federal district  court, the

            district  court  granted  summary  judgment for  Fallon,  and

            Ronald Turner appealed.

                 The  pertinent facts are  largely undisputed.   In 1991,

            Charlotte  Turner  was  diagnosed with  breast  cancer.   The

            disease was  at first  treated by  surgery, chemotherapy  and

            radiation.   In May  1993, tests showed  that the  cancer had

            metastasized, was beyond  control by conventional  therapies,

            and  threatened Charlotte Turner  with death within  12 to 18

            months.   Ronald Turner was  employed by General  Motors, and

            Charlotte  Turner was  covered by  the  health coverage  that

            Fallon  provided  for   family  members  of   General  Motors

            employees.

                 Fallon  is  a   health  maintenance  organization   that

            provides  or reimburses  health care  for its  members.   Its

            "Member  Handbook," which  is  presented  as  "part  of  [the

            member's]  contract with [Fallon],"  describes in  detail the

            various   medical   costs   that   Fallon   will   cover  for

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            beneficiaries.  Among the express exclusions set forth in the
                                              __________

            handbook was "bone  marrow transplant for treatment  of solid

            tumors  . .  . ."    Dr. Ronald  Hochman, Charlotte  Turner's

            oncologist at  Fallon, nevertheless concluded  that Charlotte

            Turner's  only hope was an autologous bone marrow transplant,

            a  procedure  by which  the  patient's  own  bone  marrow  is

            extracted,  stored and  then reintroduced  after the  patient

            receives high dosage chemotherapy.   Marrow is the source  of

            vital white blood cells needed to fight infection and without

            the transplant procedure, the high dosage  chemotherapy would

            impair the bone marrow's ability to continue to produce white

            blood cells.

                 In May  1993, Fallon approved Charlotte Turner's request

            that she  be evaluated by  Dana Farber  Cancer Institute  for

            possible participation in its bone marrow transplant program.

            Fallon continued to assert that a bone  marrow transplant was

            not a covered procedure for  solid tumor cancer but said that

            if the treatment was recommended by  Dana Farber, the request

            for   coverage   would  be   reviewed   further  by   Fallon.

            Ultimately, Dana Farber concluded  that Charlotte Turner  was

            not  eligible for  the Dana  Farber  protocol because  cancer

            cells  had already been  detected in Charlotte  Turner's bone

            marrow.

                 Charlotte   Turner  then  asked   Fallon  to  cover  her

            examination  for   eligibility  to  enter   a  program  being

                                         -3-
                                         -3-

            conducted by  the Duke  University Medical Center.   In  this

            program,   Duke   not   only   removed    bone   marrow   for

            reimplantation,  in aid of high dosage chemotherapy, but also

            employed procedures to  attempt to "purge" the  marrow of its

            cancer cells.  Fallon declined to  cover the cost of a "third

            opinion."   Charlotte  Turner then  had  herself examined  by

            doctors at the  Duke program who concluded that  she might be

            eligible to  participate, subject  to further  testing.   The

            cost of her  participation in  the program  was estimated  at

            $100,000.

                 In July  1993, Charlotte  Turner and  Dr. Hochman  asked

            Fallon to  pay for  her inclusion in  the Duke  program.   In

            August 1993,  Fallon's Transplant  Committee met to  consider

            Charlotte Turner's  request and the broader  question whether

            coverage should be extended, on a case-by-case basis, to bone

            marrow  transplants to treat solid tumor cancers either under

            the Dana  Farber protocol or  the Duke program or  both.  Dr.

            Hochman supported Charlotte Turner's application for coverage

            to the Duke program.

                 The  Transplant  Committee  decided  that,  despite  its

            handbook  exclusion, it would  in the future  extend coverage

            for  the  Dana  Farber  protocol   if  it  concluded  in  the

            particular case that  the treatment was critically  necessary

            and showed  a strong  likelihood of  success.  It  concluded,

            however,  that  the  Duke  program  had  as yet  produced  no

                                         -4-
                                         -4-

            adequate  data  suggesting  a   likelihood  of  success,  and

            therefore declined to  extend coverage for the  Duke program.

            At Charlotte Turner's  request, Fallon's Grievance  Committee

            held a  hearing in September  1993 to review the  decision of

            the  Transplant Committee,  but in  early  October 1993,  the

            Grievance Committee  upheld the  denial of  coverage for  the

            Duke program.

                 Immediately after the Grievance Committee's decision  in

            October 1993,  Charlotte Turner  underwent conventional  low-

            dosage chemotherapy without bone marrow transplantation.  She

            died on August 17, 1994.  Ronald  Turner then brought suit in

            the Massachusetts superior  court against Fallon  charging it

            with breach of  contract, wrongful death and  other state-law

            claims.  Fallon removed the case to federal district court on

            the ground that state-law claims were preempted under ERISA--

            the  Employee  Retirement  Income Security  Act  of  1974, 29

            U.S.C.    1001 et seq.   See  Metropolitan Life  Ins. Co.  v.
                           ______    ___  ___________________________

            Taylor, 481 U.S. 58, 66-67 (1987). 
            ______

                 Ronald Turner  responded by  amending  his complaint  to

            delete  the state  claims  and to  substitute  a claim  under

            ERISA.    The  amended single-count  complaint  charged  that

            Fallon's  denial of  coverage for  the  Duke program  "denied

            Charlotte of the rights and benefits due under the policy and

            was arbitrary, illegal, capricious, unreasonable and not made

            in good faith  and was a breach of  [Fallon's] fiduciary duty

                                         -5-
                                         -5-

            which  it owed to  Charlotte."  The  complaint sought damages

            and a trial by jury.

                 In  March  1996,  Fallon  moved  for  summary  judgment.

            Ronald  Turner opposed  the  motion  and  asked  for  further

            discovery, which Fallon in turn opposed.  The  district court

            then ruled  that a civil  ERISA action could be  brought by a

            plan beneficiary  only  (in the  words  of the  statute)  "to

            recover benefits due  to him under the terms of  his plan, to

            enforce his rights under the terms of the plan, or to clarify

            his rights to  future benefits under the terms  of the plan."

            29 U.S.C.    1132(a)(1)(B).  Concluding that  Ronald Turner's

            damage action was  not authorized by  ERISA, the court  ruled

            that the case had to  be dismissed and that further discovery

            would be futile.

                 Ronald  Turner  then  sought  reconsideration  and  also

            sought  to amend  the complaint  to  reassert the  previously

            withdrawn state-law claims.  He argued that if ERISA provided

            no federal remedy, it ought not be read to preempt his state-

            law  claims.  Alternatively, he urged that if ERISA preempted

            the  state-law claims,  then  a federal  remedy  ought to  be

            inferred  or created  by  the  court  to permit  damages  for

            wrongful withholding of treatment under the employee benefits

            plan.  The district court wrote a thoughtful  opinion denying

            these requests.

                                         -6-
                                         -6-

                 On this appeal, we begin with Ronald Turner's claim that

            ERISA should be read  to confer a claim for damages where, as

            charged in  the amended complaint, a beneficiary  of the plan

            has  been  denied "the  rights  and  benefits due  under  the

            policy" or has suffered "a breach of . . . fiduciary duty" in

            the withholding of  those benefits.  ERISA is a comprehensive

            federal statute that governs not only pension  plans but also

            nonpension benefit plans, including the General Motors health

            benefits plan at issue in this case.

                 ERISA   sets  forth  a   half  dozen  civil  enforcement

            provisions.   29  U.S.C.    1132(a).   Under  the first  such

            provision, a beneficiary may bring a federal civil action "to

            recover  benefits due to him under the  terms of his plan, to

            enforce his rights under the terms of the plan, or to clarify

            his rights to  future benefits under the terms  of the plan."

            Id.    1132(a)(1)(B).   The relief  expressly provided  is to
            ___

            secure benefits  under the  plan rather  than  damages for  a

            breach of the plan.  Here, treatment coverage is no longer of

            any significance.  

                 The other pertinent remedial provision authorizes  civil

            action  by   a  beneficiary  "to  obtain   other  appropriate

            equitable  relief" to  address  violations  of  ERISA  or  to

            enforce the  plan.  29  U.S.C.   1132(a)(3)(B).   The Supreme

            Court recently held in  Varity Corp. v. Howe, 116 S. Ct. 1065
                                    ____________    ____

            (1996),  that  this  provision  may  permit  equitable relief

                                         -7-
                                         -7-

            against  a plan administrator  for breaches of  the fiduciary

            duty imposed  on such  administrators by ERISA.   See  id. at
                                                              ________

            1075-79.     But  this  provision  is  expressly  limited  to

            providing equitable relief, and equitable relief is not being

            sought in this case.

                 Ronald  Turner points  to  no  other  specific  remedial

            provision in ERISA that might  arguably be brought into  play

            in this case.   In fact, the Supreme Court  has stressed that

            ERISA  does  not  create  compensatory   or  punitive  damage

            remedies  where an administrator  of a plan  fails to provide

            the benefits  due under  that plan.   See  Massachusetts Mut.
                                                  ___  __________________

            Life  Ins. Co.  v. Russell,  473  U.S. 134  (1985); see  also
            ______________     _______                          _________

            Drinkwater v. Metropolitan  Life Ins. Co., 846  F.2d 821, 825
            __________    ___________________________

            (1st Cir.), cert. denied, 488 U.S. 909 (1988).  This is not a
                        ____________

            minor  technicality:   damage awards  may increase  effective

            coverage but  may  also add  significantly  to the  costs  of

            coverage.

                 The lack of  an express damage  remedy under ERISA  does

            not necessarily  end  the story.    The federal  courts  have

            regularly  inferred  or  created remedies  in  the  shadow of

            federal statutes, although the practice has waned somewhat in

            recent  years.    See,  e.g.,  Northwest  Airlines,  Inc.  v.
                              __________   __________________________

            Transport Workers, 451  U.S. 77, 94 (1981).   But the Supreme
            _________________

            Court has adamantly ruled that ERISA's express remedies are a

            signal to courts not to  create additional remedies of  their

                                         -8-
                                         -8-

            own.   Russell, 473 U.S. at 145-48.   See also Reich v. Rowe,
                   _______                        ________ _____    ____

            20 F.3d  25, 31-33 (1st  Cir. 1994); Drinkwater, 846  F.2d at
                                                 __________

            824.  

                 In  the alternative, Ronald Turner argues that ERISA, if

            it provides no  damage remedy of its own  either expressly or

            by  implication, should  at least  not be  taken  to preclude

            existing  state  remedies.     Absent  preemption,  a  health

            benefits plan like Fallon's  could certainly be treated as  a

            contract enforceable under state law and subject to the usual

            contractual   remedies,   including   compensatory   damages.

            Depending on the  jurisdiction, state law might  provide even

            more substantial relief, including punitive damages.  

                 ERISA  contains a  vague but  broadly  worded preemption

            provision.   With exceptions  not relevant here,  it provides

            that  the pertinent subchapter  of ERISA shall  supersede any

            and  all "State  laws insofar  as they  may now  or hereafter

            relate to  any employee benefit  plan" covered by ERISA.   29

            U.S.C.    1144(a).    However  this  general  language  might

            otherwise  have been read, the Supreme Court has construed it

            to preclude  state claims  to enforce  rights under  an ERISA

            plan or obtain damages for the wrongful withholding of  those

            rights, Pilot  Life Ins. Co.  v. Dedeaux, 481 U.S.  41, 52-57
                    ____________________     _______

            (1987), and this construction has been repeatedly followed.1 

                                
            ____________________

                 1See, e.g.,  Ingersoll-Rand Co.  v. McClendon, 498  U.S.
                  _________   __________________     _________
            133, 144 (1990); Carlo v. Reed Rolled Thread Die Co., 49 F.3d
                             _____    __________________________
            790, 794 (1st Cir. 1995); Rosario-Cordero v. Crowley Towing &
                                      _______________    ________________

                                         -9-
                                         -9-

                 The  Supreme Court has  recently set some  new limits on

            preemption  by holding  that  certain  state  laws  were  not

            sufficiently "related" to  ERISA to deserve preemption.   See
                                                                      ___

            De Buono v.  NYSA-ILA Medical & Clinical Servs.  Fund, 117 S.
            ________     ________________________________________

            Ct.  1747, 1752-53 (1997); California Div. of Labor Standards
                                       __________________________________

            Enforcement v. Dillingham  Constr., N.A., 117 S. Ct. 832, 842
            ___________    _________________________

            (1997).    But  neither  of these  cases  involved  a state's

            attempt to  provide state remedies  for what is in  essence a

            plan  administrator's  refusal  to   pay  allegedly  promised

            benefits.  It would be difficult to think of a state law that

            "relates" more closely  to an employee benefit  plan than one

            that affords  remedies for  the breach  of obligations  under

            that plan.

                 Ronald  Turner more or less admits that existing Supreme

            Court precedent  is  against  him, both  as  to  an  implicit

            federal cause of action and  the preemption of state  claims.

            But he  says that it  is grossly unjust  to deny  any remedy,

            either state or federal, to compensate in damages the victim,

            family  or  estate of  one  who  has  been wrongfully  denied

            promised  health-care benefits.  Further, he argues that this

            gap provides  a cruel  incentive for  plan administrators  to

            withhold treatment or delay it as long as possible, since the

                                
            ____________________

            Transp.  Co., 46  F.3d  120,  126 (1st  Cir.  1995); Nash  v.
            ____________                                         ____
            Trustees of  Boston Univ.,  946 F.2d 960,  964 n.8  (1st Cir.
            _________________________
            1991); Wickman v. Northwestern Nat'l Ins. Co., 908 F.2d 1077,
                   _______    ___________________________
            1082 (1st Cir.), cert. denied, 498 U.S. 1013 (1990).
                             ____________

                                         -10-
                                         -10-

            claim  for benefits may be mooted by the beneficiary's death.

                 There are in reality two quite different problems of law

            and policy entangled  in this argument.  The  one that Ronald

            Turner  seeks  to  present  is  the  case  of  a  beneficiary

            wrongfully  denied promised  benefits.   There  is reason  to

            doubt that that is the true problem in this case (a  point to
                                                   ____

            which we will return), but such cases are easy to imagine and

            certain  to occur.   Compensatory damages are  a conventional

            and  potent remedy  that might  indeed  deter misconduct  and

            mitigate loss,  although the cost  of the plan would  also be

            increased.  

                 On the other hand, some might think it perverse to dwell

            on damage remedies, which apply where the patient has died or

            already suffered injury,  and might urge instead  that courts

            improve access  to equitable  relief.   This remedy,  already
                               _________

            available  under  ERISA,  can address  a  wrongful  denial of

            benefits  while  the  patient is  still  alive  and unharmed.

            Although  Ronald Turner  says that  such  judicial relief  is

            readily frustrated by exhaustion of remedies rules, a failure

            to exhaust is easily forgiven  for good reason, and no reason

            is better than an  imminent threat to life or health.   E.g.,
                                                                    ____

            Portela-Gonzalez v.  Secretary of the  Navy, 109 F.3d  74, 77
            ________________     ______________________

            (1st  Cir. 1997); see also  DePina v. General Dynamics Corp.,
                              ________  ______    ______________________

            674 F. Supp. 46, 49 (D. Mass. 1987). 

                                         -11-
                                         -11-

                 In all events,  it is certainly a matter  for reasonable

            debate whether  a damage  remedy should  be added,  either by

            judicial interpolation or by Congress.  But only the  Supreme

            Court could alter the existing case law that precludes such a

            remedy.  And  whether or not Congress ever  thought about the

            impact on  health care  in particular  when it wrote  ERISA's

            remedies and preemption provisions, Congress is well equipped

            to revisit  the issue and  alter the statutory  language that

            now stands as a bar.

                 Although   the  question  of  a  damages  remedy  is  an

            important one, it likely has  n