The opinion of the court was delivered by: Bissell, District Judge.
This matter is before this Court on a motion for summary
judgment by defendant, Prudential Insurance Company of America
("Prudential"). Prudential argues that the plaintiff's decedent,
Stanley Harrow, failed to exhaust his administrative remedies
prior to instituting this lawsuit. Plaintiff filed this class
action Complaint on May 21, 1998. The two-count Complaint alleges
wrongful denial of benefits in violation of
29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement Income Security Act of
1974 ("ERISA"), and breach of fiduciary duty in violation of
29 U.S.C. § 1104(a).
The defendant filed a motion to dismiss for failure to exhaust
administrative remedies returnable January 25, 1999. That motion
was denied by this Court without prejudice. Plaintiff also filed
a motion for class certification on May 21, 1998 pursuant to
Fed.R.Civ.P. 23(a) and 23(b)(1), (2) and (3). This motion was
adjourned without date in order for discovery to be undertaken.
Plaintiff filed a renewed motion for class certification on June
10, 1999, and the parties then engaged in a discussion with this
Court regarding whether summary judgment on the issue of
exhaustion of administrative remedies should precede class
certification. This Court finds that it does.
The original named plaintiff in this action, Stanley Harrow,
passed away on June 25, 1999. The plaintiff's motion to
substitute Debra Harrow, Administrator of the Estate of Stanley
Harrow, as the named plaintiff in this action was granted by this
Court on October 28, 1999. This Court has jurisdiction pursuant
to 28 U.S.C. § 1331.
Mr. Harrow was an insured under the Prudential HealthCare HMO
Plan (the "Plan"). (Compl., ¶ 14; Plaintiff's Exh. E, Response
1). Mr. Harrow's estate seeks to represent the following class:
(Compl., ¶ 26). The Complaint alleges that Mr. Harrow filled a
prescription for the drug Viagra at a pharmacy on April 21, 1998
and that Prudential has illegally denied him insurance coverage.
(Id., ¶ 18). The Harrows paid cash for the prescription.
The Prudential HealthCare HMO Plan includes a review procedure
which provides for an initial complaint, then a two-step
grievance procedure, and finally appeal to the Pennsylvania
Department of Health. (Orr Cert., Exh. A). Mr. Harrow and his
wife called Prudential's claims department after his pharmacy
informed them of the rejection of coverage for their Viagra
pills. (Harrow Dep. at 52). The Harrows were told that Prudential
did not cover the cost of the pills because it was a new drug.
(Id., at 53). They were also informed that they should keep the
receipt for their pills, because they could be reimbursed for the
cost if Prudential ever approved it. (Id.) The Harrows did not
pursue any action beyond this initial inquiry to Prudential.
(Id. at 54). They never refilled the prescription for Viagra.
(Id. at 53).
In June 1998, Prudential made public statements that it would
not cover Viagra. (Cave Dep. at 93). Dr. Lisa Head and Anthony
Kotin have been deposed on the issue of Prudential's appeals
process. (Defendant's Exhs. C, D). At Dr. Head's deposition, she
stated that the fact that Prudential's policy was to deny
coverage of Viagra would not mean that all appeals would be
Q: Under those circumstances, would you expect any
appeal to be successful?
A: I would expect that the appeal would go through
the process that we've outlined in previous
testimony and that they would be given a fair
assessment of the information available by that
committee. . . . I would expect that it would go
through the process. I don't know that that would
be upheld in every circumstance.
(Head Dep. at 62, 63, Defendant's Exh. C). However, there is
evidence from internal e-mails within Prudential that perhaps the
policy was more uniform than suggested by Dr.'s Head and Kotin.
For example, one e-mail message stated "I'm carboning others just
to ensure that we are clear that there is no local authority to
approve coverage for Viagra even on a single case exception basis
or for a specific claimant." (Gottsch Decl., Exh. I). Finally,
there is no evidence that any formal appeal from a denial of
Viagra coverage was ever taken by any person who might arguably
be a class member.
Federal Rules of Civil Procedure 56(c) provides that summary
judgment should be granted "if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law." Fed.R.Civ.P. 56(c); see also
Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.)
(en banc), cert. dismissed, 483 U.S. 1052, 108 S.Ct. 26, 97
L.Ed.2d 815 (1987). In deciding a motion for summary judgment, a
court must construe all facts and inferences in the light most
favorable to the nonmoving party. See Boyle v. Allegheny
Pennsylvania, 139 F.3d 386, 393 (3d Cir. ...