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IHC Health Services, Inc. v. Citibank NMTC Corp.

United States District Court, D. Utah

August 8, 2019

IHC HEALTH SERVICES, INC., dba LOGAN REGIONAL HOSPITAL, Plaintiff,
v.
CITIBANK NMTC CORPORATION and ANTHEM BLUE CROSS AND BLUE SHIELD, Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING MOTION TO DISMISS PLAINTIFF'S SECOND AND THIRD CAUSES OF ACTION

          Jill N. Parrish District Judge.

         This matter comes before the court on a motion to dismiss filed by defendants Citibank NMTC Corporation (“Citi”) and Anthem Blue Cross and Blue Shield (“Anthem”) on November 9, 2018. (ECF No. 8). Plaintiff IHC Health Services, Inc. (“IHC”) responded in opposition on December 7, 2018 (ECF No. 19). Defendants replied on December 21, 2018. (ECF No. 23). On the basis of the parties' briefs, a review of relevant law, and for the reasons below, defendants' motion to dismiss is granted.

         I. BACKGROUND

         Citi sponsors and is the named administrator of a group health plan regulated by the Employee Retirement Income Security Act (“ERISA”). Citi contracts with Anthem for Anthem to provide claims administration services to the plan's participants and beneficiaries. J.O., a beneficiary of the plan, received spinal cord stimulation to treat pain caused by degenerative joint disease at IHC's Logan Regional Hospital in September and October of 2015. Before the procedure, J.O. executed a Consent and Condition of Service form containing an assignment of benefits (“AOB”) provision that assigns to IHC the benefits owed to J.O. under any insurance policy.[1]

         IHC billed $56, 471.80 for J.O.'s treatment. Anthem paid $20, 668.67, but denied the remainder on grounds that the treatment was not medically necessary. IHC appealed, but Anthem did not alter its initial determination. In 2016, IHC sent two requests for the summary plan description and the plan document, but erroneously sent those requests to a claims administration entity not connected to this plan. On July 6, 2018, IHC sent a request for that same information to Anthem, but received no response.

         On September 4, 2018, IHC filed a complaint asserting three causes of action under ERISA: (1) for recovery of plan benefits under 29 U.S.C. § 1132(a)(1)(B); (2) for breach of fiduciary duty under § 1132(a)(2); and (3) for statutory penalties for failure to provide plan information as requested under § 1132(c)(1). Defendants seek dismissal of the second and third causes of action.

         II. ANALYSIS

         In response to defendants' motion, IHC concedes that it cannot maintain its breach of fiduciary duty claim “because it is duplicative of the first cause of action for plan benefits.”[2] (ECF No. 19 at 2). Thus, IHC's second cause of action is dismissed, and the court need only resolve defendants' motion insofar as it seeks dismissal of IHC's third cause of action.

         IHC's third cause of action seeks statutory penalties under § 1132(c)(1), which provides that:

Any administrator . . . who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary . . . by mailing the material requested . . . within 30 days after such request may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal . . . .

§ 1132(c)(1).

         Defendants contend that IHC-a healthcare provider that is neither a beneficiary nor a participant of the plan-does not have standing to assert a claim for statutory penalties. Defendants further argue that even if IHC possessed derivative standing to bring that claim by virtue of a valid assignment of benefits, all of IHC's requests for plan information were sent either to third parties with no connection to the plan, or to Citi's claims administrator, Anthem. Thus, defendants argue, the plan's named administrator, Citi, has received no request for plan information, and therefore cannot be liable under § 1132(c)(1).

         As explained below, the court agrees with defendants that IHC has no standing to assert this claim. As a result, the court does not reach defendants' argument regarding substantive liability under subsection (c).

         A. IHC is Without Standing to Assert a Claim under ...


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