Griffin v. Teamcare et al, No. 1:2018cv01772 - Document 55 (N.D. Ill. 2019)

Court Description: MEMORANDUM Opinion and Order: In 18 CV 1772, plaintiff W.A. Griffin, M.D.'s motion for summary judgment (Doc. 30 ) is denied as moot on Count I and granted on Count III. The court denies the consolidated summary judgment motion (Doc. 42 ) filed by defendants TeamCare, a Central States Health Plan, and Trustees of the Central States, Southeast and Southwest Areas Health and Welfare Fund. In 18 CV 8297, plaintiff's motion for summary judgment (Doc. 38 ) is granted. The court, havi ng considered the facts of both cases and exercising its discretion under 29 U.S.C. § 1132(c)(1), imposes a statutory penalty of $3,555. Civil case terminated. Signed by the Honorable Robert W. Gettleman on 9/27/2019. Mailed notice (cn).

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Griffin v. Teamcare et al Doc. 55 IN THE UNITED STATES DISTR ICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVIS ION W.A. GRIFFIN, M.D., Plaintif, v. TEAMCARE, a Central States Health Plan, and TRUSTEES OF THE CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS HEALTH AND WELFARE FUND, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 18 CV 1772 Case No. 18 CV 8297 Judge Robert W. Gettleman MEMORANDUM OPINION A ND ORDER Pro se plaintif W.A. Griin, a doctor, provided medical services to three patients. hose patients were the beneiciaries of a health plan administered by defendants TeamCare and Trustees of the Central States, Southeast and Southwest Areas Health and Welfare Fund. he patients assigned their health plan beneits to plaintif, who billed defendants for the medical services she rendered. Defendants did not pay the full amount billed. Plaintif challenged the payment amounts. She also requested documents that defendants were required to provide under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. Defendants failed to timely produce those documents. Plaintif iled two suits. In case 18 CV 1772, plaintif sued for: (1) failure to pay beneits due, 29 U.S.C. § 1132(a)(1)(B); (2) breach of iduciary duties, 29 U.S.C. § 1104; and (3) failure to provide requested documents, 29 U.S.C. § 1132(c)(1)(B). his court dismissed plaintif’s suit. Griin v. TeamCare, 18 CV 1772, 2018 WL 3685511, at *3 (N.D. Ill. June 21, 2018). he Dockets.Justia.com Seventh Circuit vacated and remanded in part, holding that plaintif had stated claims for failure to pay beneits due and for failure to provide requested documents. Griin v. TeamCare, 909 F.3d 842, 847 (7th Cir. 2018). On remand, plaintif accepted defendants’ ofer of judgment on her claim for failure to pay beneits due, which included interest. he parties move for summary judgment on the only remaining claim in case 18 CV 1772: plaintif’s document request claim under 29 U.S.C. § 1132(c)(1)(B). hey also move for summary judgment on plaintif’s sole claim in case 18 CV 8297: another document request claim with similar alleged facts, brought under the same statutory provision. For the following reasons, the court grants plaintif’s motions for summary judgment in both cases, denies defendants’ motions, and imposes a statutory penalty of $3,555. BACKGROUND Plaintif’s allegations are described in Griin, 2018 WL 3685511 at *1, and Griin, 909 F.3d at 844–45. he court states only the facts relevant to the parties’ summary judgment motions. hose facts are taken from the parties’ L.R. 56.1 statements and exhibits and are not genuinely disputed. Plaintif provided medical services to three patients. hose patients assigned their plan beneits to plaintif. Plaintif billed defendants for her medical services; defendants did not pay her the full amount. Plaintif challenged the payment amounts. She requested copies of various documents, including: (1) the summary plan description; (2) fee schedules used to determine her payment; and (3) an administration agreement between defendants and Healthcare Service Corporation, an ailiate of Blue Cross Blue Shield Association that forwards out-of-network claims to defendants for defendants to adjudicate. 2 Under 29 U.S.C. § 1132(c)(1)(B), defendants were required to mail plaintif the appropriate requested documents within 30 days. hey did not do so. For one patient, plaintif requested the summary plan description, fee schedules, and administration agreement on February 13, 2017. She requested similar documents for two other patients on March 12, 2018, and August 8, 2018. Plaintif received: (1) the summary plan description on August 18, 2017 (187 days after her irst request); (2) the fee schedules on January 29, 2019 (716 days); and (3) the administrative agreement on February 25, 2019 (743 days). DISCUSSION he parties move for summary judgment in both cases. Summary judgment is proper when no material fact is genuinely disputed and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A material fact is genuinely disputed if the evidence would allow a reasonable jury to return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Once the moving party meets its burden, the non-moving party must go beyond the pleadings and set forth speciic facts showing a genuine issue for trial. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). he court draws all justiiable inferences in favor of the non-moving party. Anderson, 477 U.S. at 255. he parties raise three issues: (1) whether plaintif, as an assignee, has standing to sue for statutory penalties; (2) whether plaintif was entitled to the fee schedules or the administration agreement; and (3) whether the court should impose statutory penalties—and if so, the amount. he irst issue determines whether plaintif is entitled to summary judgment. he second and third issues afect penalties. he court holds that plaintif has standing and is thus entitled to summary judgment. As for penalties, the court holds that plaintif was entitled to both documents and imposes a statutory penalty of $3,555. 3 1 Standing Plaintif has standing to sue for statutory penalties. See Griin, 909 F.3d at 846–47 (7th Cir. 2018) (holding that because plaintif needed to know “how Central States determined the usual, reasonable, and customary rate,” she “must be a beneiciary able to sue when she is denied requested information”). Defendants’ argument to the contrary relies on section 11.06 of Central States’ plan: “Any provider of medical or healthcare services . . . seeking to receive[ ] payment from the Fund will, in the absence of evidence to the contrary, be presumed to have claimed a right to do so pursuant to a valid assignment of beneits . . . .” (emphasis added). Defendants argue that the phrase “assignment of beneits” excludes an assignee from claiming statutory penalties. Not so. Under section 11.06, an assignee may become entitled to a beneit. A person who “may become entitled to a beneit” is a “beneiciary.” 29 U.S.C. § 1002(8). A beneiciary “can sue for unpaid beneits under section 1132(a)(1)(B),” so “[i]t follows that Dr. Griin also must be a beneiciary able to sue when she is denied requested information.” Griin, 909 F.3d at 847 (vacating this court’s dismissal of plaintif’s document request claim). Nothing in section 11.06 modiies “assignment of beneits” such that the assignee is no longer a “beneiciary” under 29 U.S.C. § 1002(8)—a beneiciary with standing to sue for penalties. Defendants do not dispute that they were required to send plaintif the summary plan description within thirty days and that they failed to do so. Because plaintif has standing to sue for defendants’ tardiness, she is entitled to summary judgment in both cases. 2 Fee schedules and administration agreement he remaining issues afect penalties. First, defendants argue that they were not required to send plaintif their vendor’s fee schedules or their administration agreement with Blue Cross Blue Shield. he court disagrees. Plan administrators must produce “instruments under which the 4 plan is established or operated.” 29 U.S.C. § 1024(b)(4). he fee schedules and the administration agreement were documents under which defendants’ plan is operated. Defendants were thus required to disclose both. 2.1 Fee schedules In explaining plaintif’s beneits, defendants cited a third-party vendor’s fee schedules. hose fee schedules were “part of the ‘pricing methodology’ that Central States cited in explaining Dr. Griin’s beneits.” Griin, 909 F.3d at 847 (7th Cir. 2018), quoting Mondry v. American Family Mutual Insurance Co., 557 F.3d 781, 800 (7th Cir. 2009). By relying on the fee schedules to explain plaintif’s beneits, defendants gave the schedules “the status of documents that govern the operation of a plan.” Mondry, 557 F.3d at 800. heir disclosure “thus became mandatory under section 1024(b)(4).” Id. 2.2 Administration agreement Defendants were also required to disclose their administration agreement with Blue Cross Blue Shield. hat administration agreement “governs the operation of the plan in that it deines the roles of the plan and claims administrators.” Griin, 909 F.3d at 847. Defendants argue that the agreement is irrelevant to plaintif’s beneits claims. hey point out that “BCBS has a purely mechanical and clerical, non-discretionary function” for out-of-network claims, claims that are merely “sent to BCBS” and “passe[d] . . . to Central States without making an adjudication.” here is no dispute that defendants adjudicate out-of-network claims and that Blue Cross Blue Shield, in contrast, has a limited role. But even when “the administration of a plan is divided . . . the extent of each administrator’s authority is basic information that a plan participant needs to know.” Mondry, 557 F.3d at 796 (7th Cir. 2009) (citation omitted). he court in Mondry rejected precisely the argument defendants press. It reversed the dismissal of a 5 document request claim and remanded with directions to enter summary judgment for the plaintif, holding that the plan administrator needed to disclose an administration agreement— even though that agreement did not “deine what rights or beneits [were] available to the Plan’s participants and beneiciaries.” Id. at 796, 803 (alteration in original). So too here. Even though the administration agreement did not deine plaintif’s rights as a beneiciary, it deined the scope of defendants’ authority against that of Blue Cross Blue Shield. It was thus information about how defendants’ plan operates and subject to disclosure under 29 U.S.C. § 1024(b)(4). 3 Statutory penalties he remaining issue is whether the court should impose a statutory penalty—and if a penalty is imposed, the amount. When a plan administrator fails to respond to a document request within 30 days, a court may impose penalties for each day that the administrator is tardy, up to $110 per day. 29 U.S.C. § 1132(c)(1)(B); 29 C.F.R. § 2575.502c-1. he penalty amount— and whether to impose a penalty at all—is “in the court’s discretion.” Id.; Ames v. American National Can Co., 170 F.3d 751, 759–60 (7th Cir. 1999) (airming a decision not to impose penalties because the district court had found good faith and lack of prejudice). Several factors guide the court’s discretion. he most important is whether a penalty would “induce plan administrators to respond in a timely manner.” Winchester v. Pension Comm. of Michael Reese Health Plan, Inc. Pension Plan, 942 F.2d 1190, 1193 (7th Cir. 1991). Other factors that courts may consider include the number of requests made, the length and reasons for the delay, whether the administrator acted in good faith, and whether the beneiciary was prejudiced. Ziaee v. Vest, 916 F.2d 1204, 1211 (7th Cir. 1990); Krueger Int’l, Inc. v. Blank, 225 F.3d 806, 810 – 11 (7th Cir. 2000); Kleinhans v. Lisle Savings Proit Sharing Trust, 810 F.2d 618, 622 (7th Cir. 1987); Mondry, 557 F.3d at 806 (7th Cir. 2009). 6 None of the parties comes out a clear winner. Plaintif made multiple requests, although the second two requests included the summary plan description that she had already received. he length of the delay was signiicant. Defendants argue that “occasional glitches and delays should not be surprising,” given “the huge number of claims and document requests” they process. hat explanation is unsatisfying. Although defendants may reasonably have thought that the administration agreement was irrelevant and that they could not have easily obtained fee schedules from its vendor, “occasional glitches” do not explain their six-month delay in producing the summary plan description. Nor do defendants explain their delay in producing the fee schedules and administration agreement after the Seventh Circuit rejected their arguments as “meritless,” holding that defendants were “required to produce, as requested, Data iSight’s fee schedules,” and “required to provide” the “contract between Central States and Blue Cross Blue Shield.” Griin, 909 F.3d at 847 (7th Cir. 2018). Yet, plaintif ofers no evidence that she was prejudiced. She received the fee schedules ten days before she accepted defendants’ ofer of judgment but does not argue that those fee schedules improved her bargaining position. Nor could they have done so; defendants ofered, and plaintif accepted, the entire amount of her claimed underpayment, plus interest. As for the administration agreement—which plaintif received months before iling her reply brief— plaintif argues that having it in hand “would have supported additional claim for breaches of iduciary duty and provided insight into how each party conducts its iduciary role during the claim and appeal process.” hat is entirely conclusory. Despite now having the administration agreement, plaintif does not explain the nature of those “additional claim[s] for breaches of iduciary duty.” Nor does she explain how the agreement would otherwise have been relevant: 7 she ofers no evidence to dispute that Blue Cross Blue Shield lacks authority to adjudicate outof-network claims. Plaintif also argues that stif penalties are needed because “court records have proven that Central States is a repeat ofender”—those “court records” being her own cases before this court—and that defendants’ “underhanded tactics” harm “solo providers like Dr. Griin, that barely keep business operations moving forward.” Yet plaintif ofers no evidence that defendants have withheld documents in other cases. Nor does she ofer evidence that they did so in bad faith, in this case or in any other. Nor does plaintif ofer any evidence that she runs her medical practice on a shoestring budget—or even that she is a solo provider. Plaintif cannot rest on her complaint’s allegations: the point of summary judgment is “to pierce the pleadings and to assess the proof . . . to see whether there is a genuine need for trial.” Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis added; citation and quotation marks omitted). Given defendants’ inadequate explanation for their substantial delay—and plaintif’s inadequate explanation for how she was prejudiced—the court cannot ind that defendants acted in bad faith, nor can the court ind that plaintif was in any way prejudiced. he penalty thus turns on whether a penalty would “induce plan administrators to respond in a timely manner.” Winchester, 942 F.2d at 1193 (7th Cir. 1991). he court concludes that a modest penalty of ive dollars per day (along with the costs and burdens of having had to defend these suits) is enough to encourage defendants to more promptly respond to requests from beneiciaries. Some courts in comparable situations have declined to impose penalties; others have imposed penalties across the spectrum, from two to seventy-ive dollars a day. See Jackson v. E.J. Brach Corp., 937 F. Supp. 735, 742 (N.D. Ill. 8 1996) (collecting statutory penalty cases in which the plaintif “established little or no prejudice”); Jones v. UOP, 16 F.3d 141, 145 (7th Cir. 1994) (airming a twenty-dollar daily penalty because, in part, the plaintif “was unable to show any harm from the delays”); Fenster v. Tepfer & Spitz, Ltd., 301 F.3d 851, 858 (7th Cir. 2002) (holding that the district court “reasonably determined that no penalty was required” because the plan’s “failure to comply with the statute” caused no “material[ ] prejudice”). he parties ofer no argument and no authority about whether to multiply that ive-dollar daily penalty per document. If a beneiciary requests ten documents, and the plan administrator produces all ten documents on the thirty-irst day, and a court imposes a penalty of $100 per day, must the plan pay $100, or $1,000? See Ziaee v. Vest, 916 F.2d 1204, 1210–11 (7th Cir. 1990) (discussing but not deciding whether penalties may be imposed per “document day”). Nor do the parties discuss whether to multiply the daily penalty per request. See id. (discussing but not deciding whether penalties may be imposed per request). he court assumes without deciding that multiplying the daily penalty per document or per request might sometimes be proper. he court need not do so, however, to arrive at a fair penalty in this case. See Mondry v. American Family Mutual Insurance Co., 497 F. App’x 603, 610–11 (7th Cir. 2012) (“Like the district judge, we assume without deciding that stacking might be appropriate in some cases; but we detect no abuse of discretion in the judge’s conclusion that this was not such a case.”). he ive-dollar daily penalty runs from March 16, 2017 (the thirty-irst day after plaintif irst requested documents on February 13, 2017), to February 24, 2019 (the day before defendants sent plaintif the administration agreement), which is 711 days. Defendants must pay plaintif a penalty of ive dollars per day for 711 days: $3,555. 9 CONCLUSION In 18 CV 1772, plaintif W.A. Griin, M.D.’s motion for summary judgment (Doc. 30) is denied as moot on Count I and granted on Count III. he court denies the consolidated summary judgment motion (Doc. 42) iled by defendants TeamCare, a Central States Health Plan, and Trustees of the Central States, Southeast and Southwest Areas Health and Welfare Fund. In 18 CV 8297, plaintif’s motion for summary judgment (Doc. 38) is granted. he court, having considered the facts of both cases and exercising its discretion under 29 U.S.C. § 1132(c)(1), imposes a statutory penalty of $3,555. ENTER: September 27, 2019 __________________________________________ Robert W. Gettleman United States District Judge 10

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