United States District Court, N.D. Mississippi, Oxford Division
For Shelby County Health Care Corporation, doing business as Regional Medical Center, Plaintiff: Curtis Henry Goetsch, LEAD ATTORNEY, MCCULLOUGH & MCCULLOUGH, Germantown, TN.
For Genesis Furniture Industries, Inc., Plan Administrator of Genesis Furniture Industries Medical Benefits Plan, Defendants, ThirdParty Plaintiffs: Thad James Mueller, LEAD ATTORNEY, Law Offices of Thad J. Mueller, P.A., New Albany, MS.
Sharion Aycock, UNITED STATES DISTRICT JUDGE.
Plaintiff Shelby County Health Care Corporation (" SCHCC" ) initiated this action under the Employee Retirement Income Security Act (" ERISA" ) to recover payment for services provided to a member of the ERISA Plan of Defendant Genesis Furniture Industries, Inc. Plaintiff has filed a Motion for Summary Judgment on the Administrative Record  against Genesis. Upon consideration of the motion, responses, rules, and authorities, the Court finds as follows:
Factual and Procedural Background
Genesis is the primary administrator of its self-funded Employee Health and Welfare Benefit Plan. Genesis contracts out its administrative duties to a third party, Assurecare Risk Management, Inc. Daniel Clark, whose father is a former Genesis employee, was a beneficiary under the Plan in 2010. That year, Clark received trauma care from SCHCC over the course of three months. On the first day of his treatment, a person identified as Clark's mother signed a document on his behalf, purporting to consent to an assignment of insurance benefits to SCHCC. In 2012, a separate assignment document was executed with regard to the same treatment, signed by both Clark and his father.
In September 2010, Genesis received a claim on behalf of Clark, in which SCHCC requested payment for the services it rendered. According to the administrative records, instead of disbursing payment, the Plan administrator sent several letters to Clark requesting supplemental information regarding his claim. There is no evidence that Clark ever provided the requested information, and as a result, the administrative phone log reflects that the claim was " pending for account information" for more than a year. Ultimately, according to the phone log, the administrator considered Clark's claim " past timely filing" in December of 2011, but there is no evidence that the administrator ever issued a formal denial letter to Clark or to SCHCC.
In October 2013, SCHCC commenced this lawsuit against Genesis. In the pending motion, SCHCC requests that the Court find Genesis liable pursuant to Section 502 of ERISA for benefits Genesis allegedly owes and assess a statutory penalty based on an alleged failure to provide a copy of the Plan description to SCHCC.
Discussion & Analysis
Before proceeding to the merits, the Court must address the jurisdictional issue of SCHCC's standing. See LeTourneau Lifelike Orthotics & Prosthetics, Inc. v. Wal-Mart Stores, 298 F.3d 348, 350-51 (5th Cir. 2002). Under Section 502(a)(1) of ERISA, enumerated parties who are entitled to bring suit to recover benefits are (1) Plan participants and (2) Plan beneficiaries. Yet, the Fifth Circuit has held that a hospital like SCHCC, though not a participant or beneficiary, may nonetheless derive the standing to pursue benefits through a valid assignment from a participant or beneficiary. Tango Transport v. Healthcare Fin. Servs., 322 F.3d 888, 891 (5th Cir. 2003) (citations omitted). This is because, with the exception of pension rights, benefits are freely assignable under ERISA. Id. Thus, if the assignment from Clark, a Plan beneficiary, is valid, then SCHCC will possess the requisite derivative standing. See Hermann Hosp. v. MEBA Med. & Benefits Plan, 959 F.2d 569, 574-75 (5th Cir. 1992), overruled on other grounds by Access Mediquip, LLC v. UnitedHealthcare Ins. Co., 698 F.3d 229 (5th Cir. 2012).
Genesis directs the Court to a non-assignment clause contained in the Plan, which reads:
No covered Employee or Dependent may, at any time, either while covered under the Plan or following termination of coverage, assign his right to sue to recover benefits under the Plan, or enforce rights due under the Plan or any other causes of action which he may have against the Plan or its fiduciaries.
Genesis Plan Doc. 29. The Fifth Circuit has explained that generally, such a non-assignment clause is effective and will operate to render a purported assignment invalid. LeTourneau, 298 F.3d at 352-53. This is premised on the " well-settled principle" that through the passage of ERISA, Congress intended employers and ...