JED S. RAKOFF, District Judge.
On September 28, 2010, defendant Oxford Health Plans (N.Y.), Inc. ("Oxford")
The facts as alleged in Biomed's Second Amended Complaint are as follows. Oxford is an insurer that offers employee welfare health plans. 2d Am. Compl. ¶ 6. Oxford's Point-of-Service ("POS") plans allow members, for a higher premium, the choice of going in-network or out-of-network for care. Id. ¶ 7. Oxford has contracted with United Stainless & Alloys/Solutions in Stainless to provide an employee welfare benefit plan (the "Plan") through Oxford's POS option. Id. ¶ 8. The Plan is subject to the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C.A. §§ 1001 et seq. ("ERISA"). Id. Under the Plan, Oxford has discretionary authority to make all benefit determinations and to pay benefits, and is therefore the Plan Administrator. Id. ¶ 9.
The instant dispute concerns a minor Patient (the "Patient") whose father is a Plan participant and who is himself a covered dependent (or beneficiary) under the Plan. Id. ¶ 10. The Plan requires the Patient to pay an annual deductible of $1,000 and 30% coinsurance towards the cost of services rendered by out-of-network providers ("ONPs"). Id. ¶ 11. However, the Patient's coinsurance expenditures for such services are limited to $4,000 per year, and once that maximum is reached, the Plan covers 100% of the allowable cost of covered services. Id. Thus, the Patient's total financial exposure for out-of-network care during a given year is $5,000. Id.
The Patient suffers from hemophilia, a chronic bleeding disorder that requires the regular administration of large doses of a "clotting factor" on short notice. Id. ¶ 13. The Patient previously received medication from a "Prior Pharmacy," an in-network provider with Oxford. Id. ¶ 23. Pursuant to a financial hardship policy, the Prior Pharmacy waived the portion of charges for which the Patient was responsible. Id. When the Prior Pharmacy refused to provide Patient with medication during one life-threatening incident, the Patient requested the assistance of Access Pharmaceuticals, Inc. ("Access"), an ONP. Id. ¶¶ 24-25. After this incident, the Patient used Access as its principal provider. Id.
On October 5, 2007, Access was acquired by Biomed, an ONP of intravenous and injectable medications for patients with chronic medical conditions. Id. ¶¶ 14, 26. After Biomed acquired Access, it learned that Access had granted a financial hardship waiver to the Patient. Id. ¶ 28. Biomed honored the waiver through the end of 2007. Id. Patient requested a similar waiver for 2008, which Biomed evaluated pursuant to its standard evaluation procedure. Id. ¶¶ 29-34. Based on this evaluation, Biomed "waived the Patient's coinsurance and deductible charges—i.e. $5,000, the Patient's maximum out-of-pocket expense under the Plan-for 2008. In other words, because of the Patient's financial hardship, Biomed forgave the $5,000 it was directly owed by the Patient in 2008." Id. ¶ 36. Biomed also granted the Patient financial hardship waivers in 2009 and 2010. Id. ¶ 37. When the Patient received medicine and services from Biomed, rather than pay Biomed first and then collect from Oxford, he assigned "all of [his] rights" under the Plan to Biomed. Id. ¶ 16 (citing Ex. C ¶ 5). However, this assignment did not relieve the Patient from his obligation to pay Biomed for services rendered. Id. ¶ 17. Oxford has dealt directly with Biomed since 2007. Id. ¶ 22.
Biomed was "not adequately notified of this reduction, nor the reasons for Oxford's decision to cut its benefit payments." Id. ¶ 52. When Biomed became aware of the reduction, it contacted Oxford and attempted to reconcile the claims. Id. On July 9, 2009 Biomed filed a written appeal of the claim reduction. Id. By letter dated August 3, 2009, Susan Cervero, an Oxford Claims Project Manager, informed Biomed that as an ONP it had no right to appeal. Id. ¶ 62. Biomed responded by-letter, dated August 25, 2009, informing Oxford that it was appealing as the assignee of the Patient; by letter dated September 25, 2009, Oxford denied Biomed's right to appeal. Id. ¶ 63. However, on September 28, 2009, Rivera requested certain documentation from Biomed concerning the Patient's financial and medical status. Id. ¶ 67. She made a similar request on October 1, 2009. Id. ¶ 68. On April 21, 2010, Oxford's counsel wrote:
Id. ¶ 73 (citing Exhibit D). Consequently, "Oxford reduced its payment for medically necessary services to [the] Patient by at least $1,506,695.87 . . . during the period from April 11, 2008 through April 21, 2010." Id. ¶ 82. Biomed claims it is entitled to the benefits improperly withheld by Oxford under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). Id. ¶ 116.
In addition to this claim for benefits, Biomed asserts four other claims. First, Biomed claims that Oxford's review process for out-of-network claims did not meet ERISA standards for a full and fair review; "[i]n fact, Oxford's process did not provide any meaningful review even though Biomed explicitly stated that it was appealing as the Patient's authorized representative." Id. ¶ 100 (emphasis removed). See also id. at ¶¶ 88-100. Specifically, Biomed alleges that Jacqueline Rivera was involved in Oxford's initial decision to audit Biomed's collection practices, its decision to reduce payment to Biomed, and its decision to deny Biomed its right to appeal on behalf of the patient. Id. ¶ 120. Biomed therefore claims that Oxford violated 29 C.F.R. § 2560.503-1(h)(3)(ii) by failing to provide for a review conducted by an appropriate fiduciary of the Plan who is not the same individual who made the initial determination, and for failing to provide a review
Second, Biomed claims that Oxford failed to provide notice of its adverse benefits determination in violation of 29 C.F.R. § 2560.503-1(g). Id. at p. 20; ¶ 124. For example, Biomed alleges that "[b]oth Oxford's Remittance Advices that accompanied payments to Biomed and [Explanation of Benefits ("EOBs")] provided to the Patient failed to provide adequate notice of the specific reason for denying claims; failed to adequately explain the specific reasons for the reduction in payment in a manner calculated to be understood by the claimant; and failed to adequately explain the adjustment codes." Id. ¶ 92.
Third, Biomed claims that Oxford "failed as Plan Administrator because of additional contradictory or inconsistent positions with respect to the Patient's coverage under the Plan—positions that are . . . tailored to benefit Oxford at the expense of the beneficiary." Id. ¶ 83. Specifically, Biomed alleges that on April 11, 2008, Oxford began issuing Remittance Advices indicating that the Patient had no liability for Biomed's services, despite the fact that this assertion contradicted "Oxford's repeated insistence that it was the Patient's failure to personally pay his $5,000 deductible/coinsurance that relieved Oxford of its obligation to pay 100% of Patient's benefit claims." Id. ¶ 84. See also id. ¶¶ 83-87. Biomed also alleges that Oxford has refused to revisit its prior reductions despite its tacit acknowledgment that the reductions were improper, and has treated the Patient differently from similarly situated members. Id. ¶¶ 136, 138. Biomed claims that Oxford's actions violated 29 U.S.C. § 1104(a)(1), which requires fiduciaries to act solely in the interest of participants and beneficiaries. Id. ¶ 130.
Fourth, Biomed alleges Oxford caused it direct injury unrelated to that suffered by the Patient by making "false and defamatory statements of fact" that "have cast negative aspersions on the basic character and integrity of Biomed's business operations, resulting in injury to its reputation, lost revenues from patients and/or potential patients, and to damaged business relationships, including referral sources." Id. ¶¶ 101, 150. For example, Biomed alleges, among other things: (1) that "on or following August 16, 2009," Jacqueline Rivera called the Patient's mother and told her that Biomed was charging more money than any other health care company, id. ¶¶ 102-03; (2) that Oxford subsequently called several of Biomed's patients, and "through the disparagement of Biomed," attempted to convince them to obtain services from in-network providers, id. ¶ 104; (3) that Oxford contacted at least one physician who had referred patients to Biomed and falsely told his office manager that Biomed was not licensed to dispense medication in that state, id. ¶ 106; and (4) that Oxford falsely informed individuals at the New Jersey Department of Banking and Insurance that Biomed was dispensing pharmaceuticals in the state without the required license, id. ¶ 107.
With these allegations in mind, the Court first considers Oxford's motion to dismiss Biomed's three ERISA § 502(a)(3) claims: Counts Two, Three, and Four. For each of these claims, Biomed seeks "declaratory and/or injunctive relief." See 2d Am. Compl. ¶¶ 122, 128, 140. Oxford argues, however, that the assignment provision, which provides Biomed standing to pursue this action as an assignee of the Patient, is limited in scope and does not entitle Biomed to seek such relief. The assignment provision states, in relevant part:
See 2d Am. Compl. Ex. C ¶ 5. While Biomed argues that this provision allows Biomed to enforce "all of [the Patient's] rights" under the Plan, Oxford points out that the right to sue on behalf of the Patient is limited to actions to "recover damages for services rendered by Biomed Pharm Inc." Id. The Court agrees that the language highlighted by Oxford does indeed limit Biomed's right to sue on behalf of the Patient to actions for money damages. Accordingly, the assignment provision does not grant Biomed the right to seek "declaratory and/or injunctive relief," and Counts Two through Four must be dismissed for this reason alone.
Even assuming, contrary to fact, that the assignment provision was ambiguous, the challenged ERISA Counts must be dismissed for independent reasons. Quite apart from certain alleged technical defects (which the Court need not reach), these Counts are all brought pursuant to ERISA § 502(a)(3), which states that "[a] civil action may be brought ... (3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. . . ." 29 U.S.C. § 1132(a)(3) (emphasis supplied).
More fundamentally, the Court concludes that these three claims are legal rather than equitable in nature as they may be adequately redressed by money damages. The Supreme Court has held that "where Congress elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief, in which case such relief normally would not be `appropriate.'" Varity Corp. v. Howe, 516 U.S. 489, 515, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). In this case, the Court finds that Biomed's three ERISA § 502(a)(3) claims are in fact entirely duplicative of its claim for benefits under ERISA § 502(a)(1)(B), as the gravamen of all three Counts is that Oxford improperly denied the Patient benefits to which he was entitled under the Plan. See Frommert v. Conkright, 433 F.3d 254, 270 (2d Cir.2006) ("While the plaintiffs seek to expand the nature of their claim by couching it in equitable terms to allow relief under § 502(a)(3), the gravamen of this action remains a claim for monetary compensation and that, above all else, dictates the relief available.").
Second Circuit cases have made clear that Varity did not eliminate the possibility of a plaintiff successfully asserting a claim under both ERISA § 502(a)(1)(B) and ERISA § 502(a)(3), but rather indicated that equitable relief under § 502(a)(3) would not "normally" be appropriate. See Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76, 89 (2d Cir.2001) ("We note that should plaintiffs' claim under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), to enforce their rights under the plan fail, plaintiffs' breach of fiduciary duty claim is their only remaining remedy. Varity Corp. clearly provides that, where a plan participant has no remedy under another section of ERISA, she can assert a claim for breach of fiduciary duty under § 502(a)(3)."). Instructive in this regard is the Second Circuit's opinion in Frommert v. Conkright, 433 F.3d 254 (2d Cir.2006). The plaintiffs in Frommert sought two forms of equitable relief: (1) a declaration that the "phantom account" at issue violated ERISA and an injunction against its future use; and (2) leave to bring a claim for breach of fiduciary duty by the plan administrators. Id. at 269. With respect to the first request, the Second Circuit held that the relief sought fell "comfortably within the scope of § 502(a)(1)(B)." Id. at 270. Accordingly, the Court concluded that "[b]ecause adequate relief is available under this provision, there is no need on the facts of this case to also allow equitable relief under § 502(a)(3)." Id. With respect to the second request, however, the Second Circuit reversed the district court's dismissal of plaintiff's claim for breach of fiduciary duty in part because it "disagree[d] with the district court's conclusion that all of the relief sought by the plaintiffs in their claim for breach of fiduciary duties [could] be adequately addressed by the relief available under § 502(a)(1)(B)." Id. at 272.
Having determined that the three challenged ERISA Counts must be dismissed, the Court turns to Count Five— "Commercial Defamation/ Slander Per Se"—the one state-law claim pled in the Second Amended Complaint. Count Five must be dismissed for at least two related reasons. First, the claim is time-barred by the applicable one-year statute of limitations. See New York's Civil Practice Law and Rules ("CPLR") § 215(3). Count Five identifies only one date—August 16, 2009—on which Oxford allegedly made defamatory statements, see 2d Am. Compl. ¶ 102, a date more than one year prior to the commencement of this action on August 19, 2010. Biomed argues that this defect should be excused because it has alleged that Oxford made defamatory statements "[o]n or following August 16, 2009." 2d. Am. ¶ 102 (emphasis supplied). This argument is without merit. Defamation claims must be pled with some specificity, as explained below, and Biomed cannot satisfy this requirement by vaguely asserting that Oxford made defamatory statements at some unspecified time following a date that itself falls outside the statute of limitations.
Second, Biomed's allegations are otherwise insufficient to survive a motion to dismiss. The elements of a defamation claim under New York law are "a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and it must either cause special harm or constitute defamation per se (Restatement [Second] of Torts § 558)." Dillon v. City of New York, 261 A.D.2d 34, 704 N.Y.S.2d 1, 5 (N.Y.App.Div.1999). "While a complaint for defamation need not be absolutely specific with regard to the statements at issue, it must give a defendant `sufficient notice of the communications complained of to enable [it] to defend [itself].'" Rivers v. Towers, Perrin, Forster & Crosby Inc., No. CV-07-5441, 2009 WL 817852, *6 (E.D.N.Y. March 27, 2009) (quoting Reilly v. Natwest Markets Group Inc., 181 F.3d 253 (2d Cir.1999) (quotation omitted, brackets in original)).
In this case, with the exception of the date that is time-barred by the statute of limitations, Biomed fails to specify when any of the allegedly defamatory remarks were made by Oxford. Similarly, the only Oxford employee Biomed identifies as having made an allegedly defamatory statement, Jacqueline Rivera, is mentioned only in connection with the statement purportedly made on August 16, 2009. Otherwise, Biomed fails to identify which individuals at Oxford made defamatory statements. Additionally, Biomed fails to adequately specify to whom the purported statements were made, alleging only vaguely that they were made to unidentified patients of Biomed, unidentified physicians, and unidentified individuals at the New Jersey Department of Banking and Insurance.
For the foregoing reasons, the Court hereby affirms its April 19, 2011 Order dismissing, with prejudice, all Counts of Biomed's Second Amended Complaint with the exception of Count One.