Medina v. Anthem Life Ins. Co. ( 1993 )

1 IN THE UNITED STATES COURT OF APPEALS
2 FOR THE FIFTH CIRCUIT
3 _______________
4 No. 92-1147
5 _______________
6 CRYSTAL CAMMACK MEDINA,
7 Plaintiff-Appellant,
8 VERSUS
9 ANTHEM LIFE INSURANCE COMPANY,
10 f/k/a American General Group Insurance Co.,
11 Defendant-Appellee.
12 _________________________
13 Appeal from the United States District Court
14 for the Northern District of Texas
15 _________________________
16 (January 28, 1993)
17 Before GOLDBERG, SMITH, and EMILIO M. GARZA, Circuit Judges.
18 JERRY E. SMITH, Circuit Judge:
19 Crystal Cammack Medina sought to amend her complaint to add
20 claims for recovery of extracontractual and punitive damages from
21 her insurance carrier, Anthem Life Insurance Company ("Anthem"),
22 under section 502(a)(1)(B) of the Employee Retirement Income
23 Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B). She
24 also sought recovery from Anthem of certain payments she had made
25 to one of her doctors. The district court refused to find that
26 section 502(a)(1)(B) allows extracontractual and punitive relief
27 and also refused to grant Medina recovery of other payments because
28 she failed to exhaust administrative remedies. We affirm.
29 I.
30 Medina works for Credit Finance Corporation, which is insured
31 by Anthem, which presently insures Medina. In January 1988, Medina
32 began a course of dental treatments during which her doctor
33 submitted a request to Anthem for predetermination of a dental
34 procedure. Anthem's claim committee reviewed the request,
35 concluded that sufficient evidence did not exist to prove the
36 medical necessity of the procedure, and refused to pay any benefit.
37 Medina's doctor submitted the request again in 1990; Anthem's claim
38 committee further reviewed the request and once again reached the
39 same conclusion.
40 In April 1990, Medina sought a second opinion from another
41 doctor, who recommended a different procedure. Anthem's claim
42 committee still determined that it would not cover the procedure.
43 In June, Medina's attorney wrote to Anthem seeking to convince
44 Anthem to approve the new procedure. Anthem sent Medina's records
45 to the Medical Review Institute of America for an independent
46 evaluation. When the institute recommended going forward with the
47 procedure, Anthem approved the procedure on August 16, 1990.
48 The next day, Medina brought suit against Anthem in state
49 court, seeking $10,035 as the cost of treatment, $50,000 for pain
50 and suffering and mental anguish, and $500,000 in punitive damages.
51 Anthem removed the case to federal court.
52 Medina then filed an amended complaint that acknowledged that
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53 ERISA preempts her state law remedies. She requested that the
54 court clarify her rights to future benefits, enjoin Anthem's "acts
55 and practices," and award her costs and attorneys' fees.
56 On October 16, 1991, Medina sought leave to file a second
57 amended complaint to add a claim for extracontractual and punitive
58 damages based upon Anthem's handling of her claims. The magistrate
59 judge refused to allow Medina to amend her complaint, finding that
60 ERISA precludes the award of extracontractual and punitive relief.
61 On November 18, 1991, Anthem moved to dismiss the complaint
62 for failure to exhaust administrative remedies. Anthem argued that
63 it had paid all claims that Medina had submitted in accordance with
64 its policy. All that remained was a disputed $1,363.20 that Medina
65 averred to have paid her doctor for the latest procedure she had
66 undergone. Anthem asserted that Medina never submitted proper
67 documentation to Anthem's claims department, so Anthem had no
68 obligation to reimburse Medina. The magistrate judge agreed and
69 dismissed Medina's complaint for failure to exhaust administrative
70 remedies.
71 II.
72 We turn first to Medina's contention that the magistrate judge
73 erred in refusing to allow Medina to amend her complaint to add a
74 claim for extracontractual and punitive damages. Medina urges us
75 to develop a body of federal common law to supplement the express
76 provisions of ERISA, which include no mechanism for awarding
77 extracontractual or punitive damages. Joining the Seventh and
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78 Eleventh Circuits, we decline this invitation.
79 ERISA section 502(a) is the civil enforcement provision of the
80 statute. It provides that
81 [a] civil action may be brought ))
82 (1) by a participant or beneficiary ))
83 . . .
84 (B) to recover benefits due to him under the terms
85 of his plan, to enforce his rights under the
86 terms of the plan, or to clarify his rights to
87 future benefits to under the terms of the plan
88 . . . .
89 The plain language of this statute does not mention recovery of
90 extracontractual or punitive damages. Nothing in the statute
91 instructs us to fashion a federal common law remedy to grant
92 plaintiffs the right to recover punitive or extracontractual
93 damages. Nevertheless, Medina asks us to do just that.
94 Medina points to legislative history that indicates a
95 willingness on the part of Congress to allow federal courts to mold
96 a federal common law of ERISA. The Conference Report describing
97 ERISA section 502(a) states that a plan beneficiary may bring a
98 civil action
99 to recover benefits under the plan which do not involve
100 application of the title I provisions . . . [and suits]
101 may be brought not only in U.S. district courts but also
102 in State courts of competent jurisdiction. All such
103 actions in Federal or State courts are to be regarded as
104 arising under the laws of the United States in similar
105 fashion to those brought under section 301 of the Labor-
106 Management Relations Act of 1947.
107 H.R. Conf. Rep. No. 1280, 93d Cong., 2d Sess. 327, reprinted in
108 1974 U.S.C.C.A.N. 4639, 5107. As late as 1989, the House Budget
109 Committee "reaffirmed the authority of the federal courts to shape
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110 legal remedies to fit the facts and circumstances of the cases
111 before them, even though those remedies may not be specifically
112 mentioned in ERISA itself." Report of the Comm. on the Budget,
113 House of Rep., 101st Cong., 1st Sess. 55-56 (1989).
114 Unfortunately for Medina, Congress has had almost two decades
115 to enact its putative intent into law and has not done so. Had
116 Congress intended to develop ERISA remedies additional to the ones
117 it specifically crafted, it has had ample opportunity to enact such
118 legislation. Since Congress has not translated its intent into
119 law, we are loathe to take this initiative on our own.
120 In Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 52 (1987), the
121 Court considered whether Congress meant for the civil enforcement
122 provisions of section 502(a) to be the exclusive remedy for
123 beneficiaries. While the Court directed its opinion to the
124 question of whether ERISA preempts a state law claim for improper
125 processing of disability benefits, and decided that ERISA did
126 preempt, it also noted that the text of the statute argues
127 "strongly for the conclusion that ERISA's civil enforcement
128 remedies were intended to be exclusive." Id. at 54. The Court
129 concluded that the "`carefully integrated civil enforcement
130 provisions found in § 502(a) of the statute as finally
131 enacted . . . provide strong evidence that Congress did not intend
132 to authorize other remedies that it simply forgot to incorporate
133 expressly.'" Id. (quoting Massachusetts Mut. Life Ins. Co. v.
134 Russell, 473 U.S. 134, 146 (1983)).
135 In Russell, 473 U.S. at 144, the Court also addressed section
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136 502(a)(1)(B). Although the issue at bar in that case was whether
137 a fiduciary to a plan may be held liable for extracontractual or
138 punitive damages under ERISA section 409(a), the Court turned to
139 section 502(a)(1)(B) for insight by analogy. Id. It noted that
140 since that section "says nothing about the recovery of
141 extracontractual damages . . . there really is nothing at all in
142 the statutory text to support the conclusion" that the statute
143 intended to give "rise to a private right of action for
144 compensatory or punitive relief." Id. The Court held that
145 Congress did not intend for section 409(a) to include any relief
146 outside of that expressly authorized by the statute. Id.
147 Medina points out that the Court more recently has addressed
148 this issue in Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111
149 S. Ct. 478, 486 (1990). In a case once more holding that ERISA
150 preempts state law claims for damages for wrongful discharge, the
151 Court mentioned in dicta that "there is no basis in § 502(a)'s
152 language for limiting ERISA actions to those which seek `pension
153 benefits.' It is clear that the relief requested here
154 [compensatory and punitive damages] is well within the power of
155 federal courts to provide." Id.
156 Both the Seventh and Eleventh Circuits have considered
157 Ingersoll-Rand and nevertheless have refused to fashion an
158 extracontractual or punitive remedy under section 502(a). In McRae
159 v. Seafarers' Welfare Plan, 920 F.2d 819, 821 n.7 (11th Cir. 1991),
160 Judge Wisdom, sitting by designation, explained the Ingersoll-Rand
161 dicta as follows:
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162 We do not interpret these statements to mean that the
163 remedies which the plaintiff in Ingersoll-Rand was
164 seeking )) future lost wages, mental anguish and punitive
165 damages )) are necessarily available under ERISA
166 § 502(a). The Supreme Court was stating that federal law
167 provides relief for ERISA actions other than those that
168 seek to recover pension benefits, such as the plaintiff's
169 cause of action for wrongful termination. The Supreme
170 Court is not holding that the specific remedies this
171 plaintiff had sought under state law are necessarily the
172 remedies that will be afforded him should he be granted
173 relief under ERISA § 502.
174 The court then went on to rely upon the reasoning in Russell to
175 hold that section 502(a)(3) precludes extracontractual remedies.
176 Id. at 822. It refused to "create a federal common law of remedies
177 for the benefit of the plaintiff on the sole authority of the House
178 Committee Report." Id. at 823.
179 Similarly, in Harsch v. Eisenberg, 956 F.2d 651, 660 (7th
180 Cir.), cert. denied, 113 S. Ct. 61 (1992), the court dealt with the
181 Ingersoll-Rand dicta by declaring,
182 We are not rash enough to believe that the Court intended
183 to overrule settled law in most of the circuits, as well
184 as narrowly limit )) if not overrule )) its own decision
185 in Russell in such an off-hand manner . . . . We will
186 continue to doubt the availability of extracontractual
187 damages under ERISA until a more plausible signal reaches
188 us from above.
189 The court held that neither extracontractual nor punitive damages
190 were available under section 502(a)(1)(B). Id. at 660-61.1
191 We join the other circuits that have held that section
192 502(a)(1)(B) does not allow the recovery of extracontractual or
193 punitive damages. Like the court in Harsch, we are reluctant to
1
See also Reinking v. Philadelphia Life Ins. Co., 910 F.2d 1210, 1219
(4th Cir. 1990) (denying claim for extracontractual damages for emotional
distress).
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194 believe that the Supreme Court intended us to create a body of
195 federal common law based upon an off-hand statement in Ingersoll-
196 Rand. The more direct language in Pilot Life, 481 U.S. at 54, and
197 Russell, 473 U.S. at 144, shows that the Court felt that the
198 statutory enforcement scheme Congress crafted for ERISA in section
199 502(a) did not include a private remedy for extracontractual and
200 punitive damages. Without explicit instructions from Congress, we
201 are bound to the plain language of the statute that limits suits to
202 the terms of the plan at issue, rather than arbitrarily extending
203 its scope to include suits for extracontractual and punitive
204 damages. The magistrate judge correctly refused to allow Medina to
205 amend her complaint to include a claim for extracontractual and
206 punitive damages under section 502(a)(1)(B).
207 III.
208 We turn next to the issue of whether the magistrate judge
209 properly dismissed Medina's claim for failure to exhaust
210 administrative remedies. We first note that Medina's brief admits
211 that Anthem has paid all benefits due her in full. The only
212 possible claim that might remain is the disputed bill for
213 $1,363.20.
214 On July 11, 1991, Medina answered interrogatories put to her
215 by Anthem. In answer to Interrogatory No. 11, Medina claimed that
216 Anthem owed her $1,363.20 for a medical bill that Medina had paid
217 and for which Anthem had not reimbursed her.
218 In its motion to dismiss for failure to exhaust administrative
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219 remedies, Anthem responds that it refused to reimburse Medina
220 because she never filed any documentation with Anthem's claims
221 department showing that she had paid the bill. Anthem asserts that
222 it cannot process a claim unless it has received that claim and
223 that it maintains a reasonable claim submission policy that Medina
224 has ignored. Anthem assures us that if Medina takes the initial
225 step of submitting a claim, it will calculate her benefits
226 accordingly.
227 As the magistrate judge noted, we have fully endorsed the
228 prerequisite of exhaustion of administrative remedies in the ERISA
229 context.2 One of the policies underlying the exhaustion
230 requirement was Congress's desire that ERISA trustees, not federal
231 courts, be responsible for their actions so that not every ERISA
232 action becomes a federal case. Denton, 765 F.2d at 1300.
233 We find that Medina has not exhausted her administrative
234 remedies regarding the unpaid $1,363.20 bill. Medina has never
235 filed a claim for the disputed sum. She obviously knows how
236 Anthem's claims procedure operates, as she previously has filed
237 claims for which Anthem reimbursed her. Medina may not make her
238 first claim for the unpaid $1,363.20 in this lawsuit but must
239 follow proper procedures in filing a claim with Anthem. Since she
240 has not exhausted her administrative remedies, the magistrate judge
2
See Simmons v. Willcox, 911 F.2d 1077, 1081 (5th Cir. 1990) (ERISA
claimant who failed to file claim with insurance company failed to exhaust
administrative remedies, so no cause of action existed); Meza v. General
Battery Corp., 908 F.2d 1262, 1279 (5th Cir. 1990) (plaintiff may not make
initial claim for benefits in a lawsuit); Denton v. First Nat'l Bank, 765 F.2d
1295, 1303 (5th Cir. 1985) (Congress intended ERISA claimants to exhaust
administrative remedies before resorting to federal courts).
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241 correctly dismissed her complaint.
242 IV.
243 In summary, we refuse to fashion federal common law that would
244 allow recovery of extracontractual and punitive damages under ERISA
245 section 502(a)(1)(B). We also find that Medina failed to exhaust
246 her administrative remedies by failing to file a claim with Anthem
247 for the disputed $1,363.20. Consequently, we AFFIRM the judgment
248 of dismissal.
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