Physicians Multispecialty Group v. Horton Homes, 371 F.3d 1291 (11th Cir. 2004) – decided June 3, 2004 – United States Court of Appeals for the Eleventh Circuit – Robert E. Hoskins
I represented PMG. Of the very many ERISA cases I have handled, this case is, far and away, the most disappointing of my career. The reason is that the United States Court of Appeals for the Eleventh Circuit never considered my primary argument and, instead, ruled against my client based upon an issue that had never been directly addressed in the lower court and which, in my opinion, was irrelevant in light of my client’s primary argument. Obviously, my opinion does not matter though and that of the Eleventh Circuit Court of Appeals does. In Physicians Multispecialty Group, I represented a medical provider against an ERISA governed health benefits plan. The medical provider treated a very unfortunate young woman incurring significant medical bills. The facts of the claim are inconsequential to understanding the legal holding so I will not go into detail regarding those facts here. Suffice it to say that the medical provider incurred claims and submitted those claims to its patient’s ERISA governed medical plan. The plan denied the claims asserting that the patient was not eligible to participate in the plan. My client, the medical provider, appealed that claim denial through the plan’s appeal process. My client asserted that it had standing to pursue the claim, in place of the patient/plan participant, for two reasons. First, I argued that the medical provider was a “beneficiary” as defined by ERISA 29 U.S.C. § 1002(8) and under the terms of the plan. Also, I asserted that not only did my client have direct standing to pursue the claim, but, also, derivative standing as an assignee of the patient who claimed to be a participant in the plan. Accordingly, my client claimed standing to bring the suit via two completely different theories. The parties argued the case in the United States District Court for the Southern District of Georgia. The issue of my client’s standing was only mentioned in passing in the District Court and was never even truly at issue. The District Court ruled for my client on the substantive merits of the underlying claim. (To view the District Court opinion, click here).
The plan appealed to the United States Court of Appeals for the Eleventh Circuit which sits in Atlanta, Georgia. In briefing the issue for the Eleventh Circuit, the defendant raised standing as an issue, although it had never been in the lower court. (Standing is a jurisdictional issue that can be raised any time either by the parties or by the court itself.) After oral argument it became apparent that the Eleventh Circuit panel was focused on the standing issue. The court issued a published opinion reversing the District Court and holding that my client, the medical provider, lacked standing, as an assignee, because the Horton Homes’ benefit plan document contained an anti-assignment provision. While I do not know if I agree with the court’s ruling on the applicability of the anti-assignment provision, what is particularly frustrating to me, as an attorney and advocate, is that the court never even addressed and wholly failed to rule upon my client’s primary argument that it had direct standing to sue under the relevant provisions of ERISA and the terms of the plan. Therefore, whether there was derivative standing or not was completely irrelevant. We filed a petition for certiorari with the US Supreme Court which was denied on November 29, 2004. Accordingly, the decision remains good law in the Eleventh Circuit. The case has been cited over fifteen times including by the United States Court of Appeals for the Fifth Circuit. It also remains the most frustrating and disappointing experience which I have ever had as a lawyer. To this day, I cannot understand why the court wholly ignored my client’s primary argument. To view the Eleventh Circuit’s opinion, click here. To view the petition for writ of certiorari to the US Supreme Court, click here.
