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IHC Health Service, Inc. v. Swire Pacific Holdings Inc.

United States District Court, D. Utah

January 8, 2019



          Jill N. Parrish District Judge

         Before the court is a Motion to Dismiss filed by defendant Swire Pacific Holdings Inc. on April 26, 2018. ECF No. 17. Plaintiff IHC Health Service, Inc. filed an opposition to that motion on May 17, 2018, ECF No. 25, to which defendant replied on May 31, 2018, ECF No. 26. For the reasons below, defendant's motion is granted in part and denied in part.

         I. BACKGROUND

         Defendant Swire Pacific Holdings, Inc., dba Swire Coca-Cola USA (“Swire”) funds a health insurance plan (the “plan”) regulated by the Employee Retirement Income Security Act (“ERISA”), of which M.O. is a participant. Swire, as the plan administrator, “has the final authority for the administration and interpretation of the Plan documents.” ECF No. 25-1 at 59.[1] Swire is additionally the plan's named fiduciary, which ERISA defines as the entity with the “authority to control and manage the operation and administration of the plan.'” In re Luna, 406 F.3d 1192, 1201 (10th Cir. 2005).

         The plan document designates Regence BlueCross and BlueShield of Utah (“Regence”) as the plan's claims administrator, declaring that Regence “is a Plan fiduciary for purposes of paying claims.” ECF No. 25-1 at 73.

         Plaintiff IHC Health Services, Inc., (“IHC”), operates hospitals in the Intermountain area, including Intermountain Medical Center in Salt Lake City, Utah. IHC provided medical treatment to M.O. at the Intermountain Medical Center from January 14, 2015, through January 20, 2015. IHC billed $82, 202.13 for the treatment provided. M.O. signed an Assignment of Benefits (“AOB”) in favor of IHC. As a result, IHC “stands in the shoes” of M.O. as beneficiary of the plan, and is thus authorized to appeal, negotiate, or otherwise seek payment of benefits from the plan for M.O.'s treatment. Pursuant to the AOB, IHC submitted a timely claim to Regence seeking payment of benefits. Regence paid $50, 143.31, but denied the remainder of the claim on grounds that M.O.'s treatment exceeded usual, customary, and reasonable costs. IHC satisfied the plan's exhaustion requirement through multiple appeals, but Regence did not alter its initial determination.

         On January 22, 2018, IHC filed a complaint asserting two causes of action under ERISA: (1) for recovery of plan benefits under 29 U.S.C. § 1132(a)(1)(B); and (2) for breach of fiduciary duty under 29 U.S.C. §§ 1132(a)(2), (3). ECF No. 2.

         II. ANALYSIS

         A. Motion to Dismiss Standard

          Under Rule 12(b)(6), a defendant may move to dismiss a claim when the plaintiff fails to state a claim upon which relief can be granted. The court's function on a Rule 12(b)(6) motion is to “assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (quoting Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991)).

         “A court reviewing the sufficiency of a complaint presumes all of plaintiff's factual allegations are true and construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1108 (10th Cir. 1991) (citing Scheuer v. Rhodes, 416 U.S. 232 (1974)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         B. Count I-Recovery of Plan Benefits

         29 U.S.C. § 1132(a) enumerates “[p]ersons empowered to bring a civil action” under ERISA. Subsection (a)(1) authorizes a plan's participant or beneficiary to bring a civil action “to recover benefits due to him under the terms of his plan[.]” § 1132(a)(1)(B). But while other provisions in § 1132 indicate against whom certain actions may be brought, subsection (a)(1) contains no specification of the entities that may be properly sued thereunder. As evidenced by the parties' briefing for this motion, Congress's failure to so specify has led to a variegated body of law regarding which entities are proper defendants to an action under subsection (a)(1), in turn creating uncertainty for prospective litigants and opportunities for dilatory procedural motions.

         Against this uncertainty, Swire-the plan's sponsor, administrator, and named fiduciary-argues that it is not a proper defendant to an action seeking recovery of plan benefits.[2] Specifically, Swire argues that IHC's complaint must be dismissed because it fails to allege any facts to suggest that Swire, rather than its ...

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