United States District Court, D. New Jersey
UNIVERSITY SPINE CENTER, on assignment of Fernando F., Plaintiff,
HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY and PSEG SERVICES CORPORATION, Defendants.
D. WIGENTON United States District Judge
this Court is Defendants Horizon Blue Cross Blue Shield of
New Jersey (“Horizon”) and PSEG Services
Corporation's (“PSEG”) (collectively,
“Defendants”) Motion for Attorney's Fees
pursuant to 29 U.S.C. § 1132(g)(1) and Federal Rule of
Civil Procedure 54 (“Rule 54”). This Court has
jurisdiction over this action pursuant to 28 U.S.C. §
1331. Venue is proper pursuant to 28 U.S.C. § 1391. This
motion is decided without oral argument pursuant to Federal
Rule of Civil Procedure 78. For the reasons discussed below,
Defendants' Motion for Attorney's Fees is
BACKGROUND AND PROCEDURAL HISTORY
2015, two surgeons affiliated with Plaintiff University Spine
Center (“Plaintiff”), a healthcare provider
located in Passaic County, New Jersey, performed in-patient,
non-emergency spinal surgery on Fernando F.
(“Patient”). Univ. Spine Ctr. v. Horizon Blue
Cross Blue Shield of N.J., Civ. No. 16-8021, 2018 WL
1169126, at *1 (D.N.J. Mar. 6, 2018). Patient was insured by
a PSEG Direct Access PPO Option self-funded employee health
benefit plan (the “Plan”), for which Horizon
acted as the claims administrator, and under which Patient
had validly assigned his rights to Plaintiff. Id.
Plaintiff and one of the surgeons who performed Patient's
surgery are out-of-network providers under the Plan.
to his surgery, Horizon advised Patient and his wife that,
under the terms of the Plan, as set out in a Summary Plan
Description (“SPD”), Plaintiff would be paid 70%
of the Plan's contract rate and Patient would be
responsible for the difference between any covered charges
and what the out-of-network surgeon might bill. Id.
Plaintiff ultimately billed $195, 550.00 for Patient's
surgery, of which Defendant paid less than $9,
000.00. Id. Plaintiff appealed as to the
amount of the reimbursement, but Defendant refused to make
additional payment. Id.
September 29, 2016, Plaintiff filed suit in the Superior
Court of New Jersey, Law Division, Passaic County and
Defendants removed to this Court. Id. at 2.
Plaintiff later amended the Complaint, alleging breach of
contract, failure to make payments pursuant to Patient's
Plan, breach of fiduciary duty, and failure to
establish/maintain reasonable claim procedures. Id.
The magistrate judge in this matter subsequently held two
separate settlement conferences. (Dkt. Nos. 14, 30.) At the
second of these conferences, Defendants offered Plaintiff a
monetary settlement, which Plaintiff refused. (Dkt. No. 41-1
moved for summary judgment on January 8, 2018. (Dkt. No. 35.)
This Court granted Defendants' motion, (Dkt. Nos. 39,
40), finding that the Plan language was clear, that Patient
had been properly advised as to the scope of the Plan's
coverage, and that Defendants had properly reimbursed
Plaintiff pursuant to the Plan's terms. See
University Spine, 2018 WL 1169126 at *3. Defendants
filed the instant Motion for Attorney's Fees on March 22,
2018. (Dkt. No. 41.) Plaintiff filed its timely opposition on
April 20, 2018, and Defendants replied on April 26, 2018.
(Dkt. Nos. 46, 47.)
§ 502(g)(1) provides that in an “action brought by
a participant, beneficiary, or fiduciary, a ‘district
court in its discretion may allow a reasonable attorney's
fee and costs of action to either party.'” Atl.
Plastic & Hand Surgery, PA v. Anthem Blue Cross Life
& Health Ins. Co., Civ. No. 17-4600, 2018 WL
1420496, at *15 (D.N.J. Mar. 22, 2018). Although “the
statutory provision itself does not dictate that a party must
prevail in order to be awarded attorney's fees, courts
have interpreted the statute as requiring the party to
prevail before fees will be awarded.” Id.
(citing Local 827 Int'l Bhd. of Elec. Workers,
AFL-CIO v. Verizon N.J. Inc., Civ. No. 02-1019, 2006 WL
2246369, at *2 (D.N.J. Aug. 3, 2006)); see also Hardt v.
Reliance Std. Life Ins. Co., 560 U.S. 242, 245 (2010).
To determine whether an award of fees is appropriate, a court
must consider; “(1) the offending parties'
culpability or bad faith; (2) the ability of the offending
parties to satisfy an award of attorney' fees; (3) the
deterrent effect of an award of attorneys' fees; (4) the
benefit conferred upon members of the pension plan as a
whole; and (5) the relative merits of the parties'
positions.” Fields v. Thompson Printing Co.,
363 F.3d 259, 275 (3d Cir. 2004) (citing Uric v.
Bethlehem Mines, 719 F.2d 670, 673 (3d Cir. 1983));
see also Ctr. for Orthopedics & Sports Med. v. Anthem
Blue Cross Life & Health Ins. Co., Civ. No.
16-08876, 2018 WL 1440325, at *6 (D.N.J. Mar. 22, 2018).
Defendants, having been granted summary judgment, are
prevailing parties to whom attorney's fees are available
under ERISA's fee shifting statute. Therefore, this Court
turns to the five-factor analysis to determine whether they
are entitled to fees.
while there is no overt indication that Plaintiff is acting
in “bad faith, ” where bad faith illustrates
“ulterior motive or sinister purpose, ”
McPherson v. Emps.' Pension Plan of Am. Re-Ins.
Co., 33 F.3d 253, 254 (3d Cir. 1994), its prolific
boilerplate filings in this district suggest a willingness to
litigate without regard to the substantive merits of its
claims. For example, Plaintiff's Complaint and Amended
Complaint both included a claim for breach of contract, even
though it is well-established that claims for breach of
contract are barred where those claims relate to an ERISA
plan. See, e.g., Pilot Life Ins. Co v.
Dedeaux, 481 U.S. 41, 44-45 (1987) (holding that ERISA
preempts state law claims that relate to an employee benefit
plan); Ingersoll-Rand Corp. v. McClendon, 498 U.S.
133 (1990) (noting that state law breach of contract claims
are preempted by ERISA); Pane v. RCA Corp., 868 F.2d
631 (3d Cir. 2001); Jennings v. Delta Air Lines,
Inc., 126 F.Supp.3d 461, 466-67 (D.N.J. 2015);
Menkes v. Prudential Ins. Co. of Am., Civ. No.
12-2880, 2013 WL 12284419, at *6 (D.N.J. Jan. 29,
2013). Further, in granting summary judgment for
Defendants, this Court found that the language of the Plan,
and consequently, Plaintiff's rights to reimbursement as
an out-of-network provider, “could not be more
clear” and Plaintiff “has no right to expect to
be reimbursed more than the Medicare rates allow.”
Univ. Spine, 2018 WL 1169126 at *3. As such, this
Court is satisfied that Plaintiff is culpable for forcing
defense counsel to incur unnecessary costs. See,
e.g., Griffin v. Humana Emp'rs. Health Plan of
Ga., Inc., 167 F.Supp.3d 1337, 1343 (N.D.Ga. 2016)
(granting motion for fees against provider who filed
Plaintiff, a large medical association with multiple
locations in New Jersey and New York, with attorneys on hand
to file dozens upon dozens of claims throughout this
district, is capable of paying defense counsel's fees.
(Seewww.universityspinecenter.com, (last visited May
2, 2018) (identifying locations); Dkt. No. 46 at 9 (admitting
“Plaintiff has the ability to pay attorneys'
fees”)). Indeed, because Plaintiff is represented by
counsel, this Court assumes it was made aware of ERISA's
fee-shifting provision and filed its suit notwithstanding
that risk. In addition, an award of fees may act as a
deterrent against Plaintiff's serial litigation and
discourage Plaintiff from filing claims that lack merit and
which clog this Court's docket.
the fourth factor, it is not clear that an award of fees
would benefit enrollees of the Plan because Horizon has
agreed to assume PSEG's defense in this matter. (Dkt. No.
41-1 at 14.) Were this not the case, an award of fees would
benefit enrollees because in general, when a self-funded
employee health benefit plan has to pay extensive
attorney's fees, it drains funds an employer can dedicate
to health care costs for covered members.
the relative merits of the parties' positions, having
been thoroughly addressed in this Court's summary
judgment opinion, and this Court having balanced all the
factors to be considered when awarding fees to a prevailing
party, an award of fees pursuant to 29 U.S.C. §
1132(g)(1) is appropriate in this case. The affidavit
submitted by Defendants' counsel complies with Local
Civil rules 54.1 and 54.2. Counsel invested a total of 67
hours in this matter, resulting in fees totaling $ 17, 893.59
(at a rate of $280-88/per hour for counsel and $152/per hour
for counsel's paralegal). (Dkt. No. 41-2 ¶¶
8-10 and Ex. B.) Given the facts and nature of this case $
17, 893.59 is reasonable. Defendants' motion will be granted.