Norvell v. Blue Cross And Blue Shield Association

MOTION for Judgment on the Pleadings and Joinder in Federal Defendants' Motion to Dismiss Samuel Andrew Diddle appearing for Defendants Blue Cross and Blue Shield Association, Blue Cross of Idaho Health Service Inc, Special Agents Mutual Benefit Association.Motions referred to Ronald E. Bush. Responses due

D. IdahoSeptember 15, 2016

NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 1 6065-91/00600670.000 Samuel A. Diddle, ISB #4967 EBERLE, BERLIN, KADING, TURNBOW & MCKLVEEN, CHARTERED 1111 W. Jefferson St., Suite 530 P.O. Box 1368 Boise, ID 83701-1368 Telephone: (208) 344-8535 Facsimile: (208) 344-8542 Anthony F. Shelley Adam P. Feinberg MILLER & CHEVALIER CHARTERED 900 16t Street, NW Washington, DC 20006-2901 Telephone: (202) 626-5800 Facsimile: (202) 626-5801 Attorneys for Defendants Blue Cross and Blue Shield Association, Blue Cross of Idaho Health Service Inc., and Special Agent Mutual Benefit Association IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO BRUCE NORVELL, Plaintiff, vs. BLUE CROSS AND BLUE SHIELD ASSOCIATION; BLUE CROSS OF IDAHO HEALTH SERVICE, INC.; SPECIAL AGENTS MUTUAL BENEFIT ASSOCIATION; DIRECTOR, OFFICE OF PERSONNEL MANAGEMENT; SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES; and DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendants. Case No. 1:16-cv-00195-EJL-REB NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS Case 1:16-cv-00195-EJL-REB Document 27 Filed 09/15/16 Page 1 of 3 NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 2 6065-91/00600670.000 Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(c), and Local Rule Civ. 7.1(a), Defendants Blue Cross of Idaho Health Service (“BCI”), Blue Cross and Blue Shield Association (“BCBSA”), and Special Agent Mutual Benefit Association (“SAMBA”) (collectively, “Non-Government Defendants”) respectfully move for judgment on the pleadings and ask that Plaintiff’s Complaint (Docket No. 1) be dismissed as against the Non-Government Defendants for lack of standing, for the reasons stated in the accompanying Memorandum of Points and Authorities and in the Federal Defendants’ Motion to Dismiss and memoranda in support (ECF Nos. 10, 10-1, 25). DATED this 15th day of September, 2016. EBERLE, BERLIN, KADING, TURNBOW & McKLVEEN, CHARTERED By /s/ Samuel A. Diddle Samuel A. Diddle – Of the Firm MILLER & CHEVALIER CHARTERED Attorneys for Defendants Blue Cross and Blue Shield Association, Blue Cross of Idaho Health Service Inc., and Special Agent Mutual Benefit Association Case 1:16-cv-00195-EJL-REB Document 27 Filed 09/15/16 Page 2 of 3 NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 3 6065-91/00600670.000 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 15th day of September, 2016, I filed the foregoing electronically through the CM/ECF system, which caused the following parties or counsel to be served by electronic means, as more fully reflected on the Notice of Electronic Filing: Nicholas J. Woychick Attorneys for Federal Defendants Nick.Woychick@usdoj.gov AND I FURTHER CERTIFY that on such date I served the foregoing on the following non- CM/ECF Registered Participants in the manner indicated: Bruce Norvell P.O. Box 4037 Hailey, ID 83333 Plaintiff Pro Se U.S. Mail Hand Delivery Overnight Mail Fax /s/ Samuel A. Diddle Samuel A. Diddle Case 1:16-cv-00195-EJL-REB Document 27 Filed 09/15/16 Page 3 of 3 MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 1 6065-91/00600676.000 Samuel A. Diddle, ISB #4967 EBERLE, BERLIN, KADING, TURNBOW & MCKLVEEN, CHARTERED 1111 W. Jefferson St., Suite 530 P.O. Box 1368 Boise, ID 83701-1368 Telephone: (208) 344-8535 Facsimile: (208) 344-8542 Anthony F. Shelley Adam P. Feinberg MILLER & CHEVALIER CHARTERED 900 16t Street, NW Washington, DC 20006-2901 Telephone: (202) 626-5800 Facsimile: (202) 626-5801 Attorneys for Defendants Blue Cross and Blue Shield Association, Blue Cross of Idaho Health Service Inc., and Special Agent Mutual Benefit Association IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO BRUCE NORVELL, Plaintiff, vs. BLUE CROSS AND BLUE SHIELD ASSOCIATION; BLUE CROSS OF IDAHO HEALTH SERVICE, INC.; SPECIAL AGENTS MUTUAL BENEFIT ASSOCIATION; DIRECTOR, OFFICE OF PERSONNEL MANAGEMENT; SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES; and DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendants. Case No. 1:16-cv-00195-EJL-REB MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS Case 1:16-cv-00195-EJL-REB Document 27-1 Filed 09/15/16 Page 1 of 7 MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 2 6065-91/00600676.000 Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(c), and Local Rule Civ. 7.1(a), Defendants Blue Cross of Idaho Health Service (“BCI”), Blue Cross and Blue Shield Association (“BCBSA”), and Special Agent Mutual Benefit Association (“SAMBA”) (collectively, “Non-Government Defendants”) respectfully submit this Memorandum of Points and Authorities in support of their Motion for Judgment on the Pleadings and Joinder in Federal Defendants’ Motion to Dismiss. I. INTRODUCTION Plaintiff Bruce Norvell (“Plaintiff”) is enrolled in a health plan governed by the Federal Employees Health Benefits Act (“FEHBA”), 5 U.S.C. §§ 8901-14. In 2014, he filed a lawsuit in this Court alleging that the FEHBA plan in which he was enrolled – and various other FEHBA plans with which he had no connection – violated several federal laws because they did not adequately define the terms “inpatient” and “outpatient.” See Norvell v. OPM, Case No. 1:14-cv-421-BLW (D. Idaho) (“Norvell I”). Plaintiff argued in Norvell I that he was injured by the insufficient definitions in five distinct ways, including purportedly being “unable to compare various [FEHBA] policies because their statements of benefits contain ambiguous definitions.” Norvell I, Memorandum Decision and Order at 6 (Docket No. 126) (Sept. 23, 2015) (hereinafter, “Norvell I Decision”). On September 23, 2015, Chief Judge Winmill dismissed Norvell I for lack of standing, holding, among other things, that “the inability to compare various plans does not constitute an injury in fact” in part because that “so-called injury is neither concrete nor particularized.” Id. at 7. Plaintiff then appealed the dismissal, and the Ninth Circuit summarily affirmed Chief Judge Winmill’s ruling. See Norvell v. OPM, No. 15-35783, Order (Docket No. 38, 9th Cir. Feb. 25, 2016). Instead of seeking further review in Norvell I, Plaintiff filed a new case containing essentially the same allegations. Once again, Plaintiff alleges that “inpatient” and “outpatient” are Case 1:16-cv-00195-EJL-REB Document 27-1 Filed 09/15/16 Page 2 of 7 MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 3 6065-91/00600676.000 undefined and thus that several FEHBA plans violate federal law. See, e.g., Compl. ¶¶ 45, 47, 54, 75, 81 (Docket No. 1). Further, Plaintiff’s only purported injury here is one of the five injuries that Chief Judge Winmill found insufficient in Norvell I – namely, that the supposedly inadequate definitions leave Plaintiff “unable to understand the [FEHBA] plans” and thus unable to “compare them.” Id. ¶ 62. Plaintiff believes “that Judge Winmill did not understand the nature of the injury that [Plaintiff] alleged in Norvell I” and wants “a fresh look by another judge.” Pl.’s Br. in Supp. of Mot. to Deny Fed. Defs.’ Request for Case Reassignment at 2 (Docket No. 23-1). This case must be dismissed as against the Non-Government Defendants for many of the same reasons expressed in the Federal Defendants’ Motion to Dismiss and memoranda in support (Docket Nos. 10, 10-1, 25). Specifically, Plaintiff fails to allege any cognizable injury and thus the case must be dismissed for lack of standing, as Chief Judge Winmill and the Ninth Circuit held in Norvell I. Moreover, the judgment in Norvell I precludes Plaintiff from re-litigating the issue of standing. II. PLAINTIFF’S ALLEGATIONS Plaintiff was enrolled in the Service Benefit Plan (the “Plan”) – a nationwide health benefits plan created pursuant to FEHBA, which authorizes Defendant U.S. Office of Personnel Management (“OPM”) to enter into contracts with private entities (known as “carriers”) to offer insurance plans to federal employees, retirees, and their dependents. See 5 U.S.C. § 8902(a); see also Compl. ¶¶ 6-8. The Plan is one such plan and is created by a contract between OPM and BCBSA, the latter of which is the Plan’s carrier and acts on behalf of local Blue Cross and Blue Shield companies such as BCI that in turn administer the Plan with respect to health care services rendered in their individual localities. See Compl. ¶¶ 7-8; see also Norvell I Decision at 2-3. Case 1:16-cv-00195-EJL-REB Document 27-1 Filed 09/15/16 Page 3 of 7 MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 4 6065-91/00600676.000 Plaintiff had heart ablation surgery in 2013. Compl. ¶ 38; Norvell I Decision at 3. He was dissatisfied with the $3,917 cost share the Plan originally computed in connection with that surgery. Compl. ¶¶ 40-44; id., Ex. 7 at ¶ j (Docket No. 1-8) (Affidavit of Bruce Norvell); Norvell I Decision at 3. According to Plaintiff, the Plan’s original determination was based on the treatment being incorrectly categorized as “outpatient” instead of “inpatient.” Id. Plaintiff challenged the amount of the cost share through a mandatory appeals process culminating with an administrative review by OPM. Id.; see also 5 C.F.R. § 890.105(a), (e). Through that administrative process, Plaintiff had his cost share reduced to $100. Compl. ¶¶ 40-44; id., Ex. 7 at ¶ j; Norvell I Decision at 3. That should have been the end of this matter. Instead, Plaintiff filed Norvell I with the purported purpose of requiring the carriers of all nationwide FEHBA plans – even the ones with which he had no connection – to define the terms “inpatient” and “outpatient” and to pay penalties for their purported failure to define those terms previously. Norvell I Decision at 3. As noted above, Norvell I was dismissed for lack of standing and that dismissal was affirmed by the Ninth Circuit and not appealed further, which really should have been the end of this matter. But, instead, Plaintiff filed this case in an attempt to get a second bite at the apple. The crux of both of Plaintiff’s cases is that FEHBA plans’ lack of definitions for the terms “inpatient” and “outpatient” violates two separate laws: (1) FEHBA; and (2) section 2715 of the Public Health Service Act (42 U.S.C. § 300gg-15) [hereinafter, “PHSA § 2715”], which requires the use of certain uniform definitions in summary documents describing health plans. See Compl. ¶¶ 77-86; Norvell I Decision at 4. As against the Non-Government Defendants, this suit is somewhat narrower in that the only claims against them are brought under PHSA § 2715 (but not FEHBA). See Compl. ¶¶ 81- Case 1:16-cv-00195-EJL-REB Document 27-1 Filed 09/15/16 Page 4 of 7 MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 5 6065-91/00600676.000 82. As noted above, Plaintiff’s only purported injury in this case is that the supposedly inadequate definitions of “inpatient” and “outpatient” leave Plaintiff “unable to understand the [FEHBA] plans” and thus unable to “compare them.” Id. ¶ 62. III. ARGUMENT A. THIS CASE MUST BE DISMISSED FOR LACK OF STANDING, AND PLAINTIFF IS BARRED FROM RE-LITIGATING THAT ISSUE. Plaintiff’s Complaint must be dismissed for lack of standing because Plaintiff’s only purported injury – being supposedly unable to compare various FEHBA plans – is insufficiently concrete or particularized to qualify as an injury-in-fact for Article III standing purposes. See Norvell I Decision at 7; see also id. at 4-6. Further, Plaintiff is barred from re-litigating the issue of whether that purported injury is sufficient, because that precise issue was litigated in Norvell I. Indeed, if Plaintiff’s view were correct, he could always file another lawsuit alleging the same purported injury no matter how many times this Court or the Ninth Circuit rejected that injury, resulting potentially in an endless series of lawsuits. That cannot be right. In further support of their arguments, the Non-Government Defendants join, adopt, and incorporate herein the standing and issue preclusion arguments made by the Federal Defendants in their Motion to Dismiss and supporting memoranda. See Docket Nos. 10, 10-1, 25. IV. CONCLUSION BCI’s, BCBSA’s, and SAMBA’s Motion for Judgment on the Pleadings should be granted and all claims against them in the Complaint should be dismissed with prejudice.1 1 The Non-Government Defendants have numerous other defenses, including that the federal laws at issue do not offer a private right of action against them and do not require that the terms “inpatient” or “outpatient” be defined at all. See, e.g., Norvell I, Docket No. 106-1 at 10-21; id., Docket No. 115 at 2-7. If the Court were to deny the Non-Government Defendants’ current Motion for Judgment on the Pleadings, they intend to raise these arguments in due course. Case 1:16-cv-00195-EJL-REB Document 27-1 Filed 09/15/16 Page 5 of 7 MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 6 6065-91/00600676.000 DATED this 15th day of September, 2016. EBERLE, BERLIN, KADING, TURNBOW & McKLVEEN, CHARTERED By /s/ Samuel A. Diddle Samuel A. Diddle – Of the Firm MILLER & CHEVALIER CHARTERED Attorneys for Defendants Blue Cross and Blue Shield Association, Blue Cross of Idaho Health Service Inc., and Special Agent Mutual Benefit Association Case 1:16-cv-00195-EJL-REB Document 27-1 Filed 09/15/16 Page 6 of 7 MEMORANDUM IN SUPPORT OF NON-GOVERNMENT DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND JOINDER IN FEDERAL DEFENDANTS’ MOTION TO DISMISS – PAGE 7 6065-91/00600676.000 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 15th day of September, 2016, I filed the foregoing electronically through the CM/ECF system, which caused the following parties or counsel to be served by electronic means, as more fully reflected on the Notice of Electronic Filing: Nicholas J. Woychick Attorneys for Federal Defendants Nick.Woychick@usdoj.gov AND I FURTHER CERTIFY that on such date I served the foregoing on the following non- CM/ECF Registered Participants in the manner indicated: Bruce Norvell P.O. Box 4037 Hailey, ID 83333 Plaintiff Pro Se U.S. Mail Hand Delivery Overnight Mail Fax /s/ Samuel A. Diddle Samuel A. Diddle Case 1:16-cv-00195-EJL-REB Document 27-1 Filed 09/15/16 Page 7 of 7