Fallick v. Nationwide Mut. Ins. Co.

Fallick v. Nationwide Mut. Ins. Co.

Opinion

 [***2]  [*411]   OPINION 

MERRITT, Circuit Judge. Plaintiff-Appellant Arthur Fallick has been an employee of Nationwide Mutual Insurance Company, a subsidiary of Nationwide Life Insurance Company, for more than 25 years. As a Nationwide employee, Fallick was and is both a "participant" and a "beneficiary" of the Nationwide Insurance Companies and Affiliates Employee Health Care Plan, an employee medical benefit plan governed by the Employment Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1001 et seq. Nationwide was the fiduciary of that Plan, which was part of a group plan covering employees of other Nationwide entities. Nationwide also acted as the administrator or provided medical benefits through insurance contracts to other ERISA-governed plans of which Fallick is not a member.

Since 1992, Fallick has been on permanent disability leave due to health problems, including a heart condition, which  [***3]  require frequent medical attention, and therefore frequent claims for reimbursement from his medical benefits plan.

Since at least 1990, the Nationwide Plan has included [**3]  a standard coverage exclusion limiting medical coverage to reimbursement for charges for a given service at a "reasonable and customary" rate. Such a standard is common among medical benefits plans governed by ERISA. On November 22, 1995, Fallick filed a complaint in the Franklin County (Ohio) Court of Common Pleas, alleging in part that Nationwide had breached its insurance contracts by applying the "reasonable and customary" limitations in a manner inconsistent with its contracts. Pursuant to 28 U.S.C. § 1441, Nationwide successfully petitioned to remove the action to the U.S. District Court for the Southern District of Ohio, claiming that Fallick's state court claims necessarily required inquiry into the terms of the employee benefits plan and therefore presented federal questions. See 29 U.S.C. § 1132(a).

Once in federal district court, Nationwide filed a Motion to Dismiss Fallick's complaint for lack of jurisdiction, arguing that ERISA preempted his common law claims. On February 6, 1996, the district court held this motion to be moot, however, because Fallick filed an Amended Complaint alleging multiple causes of action [**4]  under ERISA. First, under ERISA § 502(a), 29 U.S.C. § 1132(a), Fallick maintains that Nationwide improperly  [*412]  denied benefits to him and others by implementing a methodology for computing reasonable and customary limitations that is at odds with the provisions of the Nationwide Plan itself. Second, Fallick further contends that in approving and implementing this reimbursement methodology, Nationwide violated its fiduciary duties under ERISA § 409, 29 U.S.C. § 1109. Plaintiff seeks injunctive, declaratory and other relief on behalf of himself and a purported class of beneficiaries and participants in ERISA plans covering employees of entities which are not affiliated with Nationwide but whose plans are administered or insured by Nationwide.

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