Bruce v. Azar
Bruce v. Azar
Opinion of the Court
Pending before the Court are three motions to dismiss, filed separately by Defendant California Physicians' Service d/b/a Blue Shield of California ("Blue Shield"), Dkt. No. 36; Defendant Envision Insurance Company ("Envision"), Dkt. No. 40; and Defendant Alex M. Azar II, Secretary of the United States Department of Health and Human Services ("DHHS"), Dkt. No. 39. DHHS also filed a motion to file the administrative record under seal, Dkt. No. 64, and Plaintiff Steven Bruce filed two motions to supplement the administrative record, Dkt. Nos. 24, 70. For the reasons articulated below, the Court GRANTS the motions to dismiss without leave to amend. The Court also GRANTS DHHS's motion to file the administrative record under seal, and DENIES Plaintiff's motions to supplement the administrative record.
I. BACKGROUND
Plaintiff brought this action against Defendants on August 16, 2018, seeking judicial review of the final decision by the Medicare Appeals Council ("MAC") denying Plaintiff coverage for the drug Serostim. Dkt. No. 1. Plaintiff is a Medicare beneficiary enrolled in the Part D prescription drug plan, administered by Envision in 2016 and Blue Shield in 2017. Dkt. No. 19 ("FAC") ¶¶ 1, 11, 23. In early 2016, Plaintiff was diagnosed with lipodystrophy, an auto-immune disease, and wasting syndrome. Id. ¶ 12. To treat his conditions, his primary care physician prescribed the drug Serostim. Id. ¶ 13. Both Envision and Blue Shield denied coverage for Serostim in 2016 and 2017, respectively, because Serostim was not prescribed to Plaintiff for a use approved by the Food and Drug Administration ("FDA") or supported by a Medicare-approved drug compendium. Id. ¶¶ 14, 24.
Plaintiff appealed both Envision and Blue Shield's denials of coverage. Id. ¶¶ 15-21, 25-30. The appeals went through timely reconsideration requests with the Independent Review Entity and hearings in front of Administrative Law Judges ("ALJs") Myles and Gulin. Id. Both ALJs denied coverage, and Plaintiff appealed those decisions to the MAC. Id. ¶¶ 17-21, 27-30. The MAC related and consolidated both appeals and issued a final decision on July 12, 2018, denying coverage of Serostim. Id. ¶ 30.
Plaintiff now brings this action against his insurers, Blue Shield and Envision, and DHHS, to "appeal a final decision of the DHHS that denied coverage for Serostim." Id. ¶ 8. In the FAC, Plaintiff alleges the following four claims against Defendants:
*720(1) "Defendants' decisions denying Plaintiff's claim for Medicare coverage of Serostim is [sic] not supported by substantial evidence and is [sic] incorrect as a matter of law," id. ¶ 35; (2) Defendants violated Plaintiff's due process rights "by refusing to provide coverage," id. ¶¶ 36-41; (3) Defendants, "[b]y providing coverage for Serostim only to individuals who have HIV," denied Plaintiff benefits in violation of Section 504 of the Rehabilitation Act of 1973, id. ¶¶ 42-51; and (4) Defendants Envision and Blue Shield, in refusing to provide coverage, discriminated against Plaintiff due to "his HIV-negative status," in violation of Title III of the Americans with Disabilities Act, id. ¶¶ 52-55.
II. MOTIONS TO DISMISS
Defendants Envision and Blue Shield move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Dkt. Nos. 36, 40. Specifically, Envision and Blue Shield assert that they are not the proper defendants in this action, and even if they are, Plaintiff has not alleged sufficient facts to state a claim upon which relief can be granted. Id. DHHS moves to dismiss Plaintiff's second and third causes of action for lack of subject matter jurisdiction under Rule 12(b)(1), and, alternatively, for failure to state a claim under Rule 12(b)(6). Dkt. No. 39.
A. Legal Standards
i. Rule 12(b)(1)
A defendant may move for dismissal on grounds that the court lacks subject matter jurisdiction over the action. Fed. R. Civ. P. 12(b)(1). Federal district courts are courts of limited jurisdiction, and "[n]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." DaimlerChrysler Corp. v. Cuno ,
ii. Rule 12(b)(6)
Federal Rule of Civil Procedure 8(a) requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). "Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory."
*721Mendiondo v. Centinela Hosp. Med. Ctr. ,
In reviewing the plausibility of a complaint, courts "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co. ,
If dismissal is appropriate under Rule 12(b)(6), a court "should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith ,
B. Discussion
i. Envision and Blue Shield Are Not Proper Defendants
Plaintiff's first cause of action against Envision and Blue Shield is an administrative challenge to "Defendants' decisions denying Plaintiff's claim for Medicare coverage of Serostim." FAC ¶¶ 34-35. Blue Shield and Envision maintain that they are not proper defendants for such a claim, because under the statutory review process, the only proper defendant in an appeal of the agency's decision is the Secretary of DHHS. Dkt. No. 36 at 3-4; Dkt. No. 40 at 3.
Under Section 1852 of the Social Security Act, codified in
Plaintiff's first cause of action seeks review of the final decision of the MAC. See FAC ¶¶ 34-35. By the plain language of
The Court therefore DISMISSES Plaintiff's action against Defendants Envision and Blue Shield without leave to amend.
ii. With Respect to DHHS, the Court Does Not Have Subject Matter Jurisdiction Over the Second and Third Causes of Action
DHHS does not seek to dismiss Plaintiff's first cause of action in its motion, but only moves to dismiss Plaintiff's second and third causes of action on the basis that the Court, under
The findings and decision of the Commissioner of Social Security after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Commissioner of Social Security shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.
The Supreme Court's holding in Shalala is dispositive. There, plaintiffs sued DHHS, asserting that certain Medicare-related regulations violated their statutory and constitutional rights. Shalala ,
This case falls squarely within the "typical [ ] Medicare benefits case" the Shalala Court described as not subject to judicial review. See
Plaintiff argues that his claims are "not essentially a claim for benefits," but rather a challenge to an "arbitrary classification" that denies him "meaningful access" to Serostim. Dkt. No. 47 at 2-3. According to Plaintiff, his claims are related to "plan design [to save money], not to a precise level of care."
[c]laims for money, claims for other benefits, claims of program eligibility, and claims that contest a sanction or remedy may all similarly rest upon individual fact-related circumstances, may all similarly dispute agency policy determinations, or may all similarly involve the application, interpretation, or constitutionality of interrelated regulations or statutory provisions. There is no reason to distinguish among them in terms of the language or in terms of the purposes of § 405(h).
Plaintiff's reliance on J.L. v. Soc. Sec. Admin. ,
Since the determination that it lacks jurisdiction over Plaintiff's second and third claims is dispositive, the Court need not address DHHS's alternative argument that the claims should be dismissed under Rule 12(b)(6). See Dkt. No. 39 at 9-16. Plaintiff's second and third causes of action are DISMISSED without leave to amend.
III. MOTIONS TO SUPPLEMENT THE ADMINISTRATIVE RECORD
On October 25, 2018, Plaintiff filed a motion to supplement the administrative record ("AR"), alleging that the AR did not include the FDA label for Serostim and the American-Hospital Formulary Service Drug Information ("AHFS-DI") compendium for Serostim. Dkt. No. 24 at 2. DHHS opposed the motion as premature and subsequently lodged the administrative record with the Court on February 5, 2019, including the FDA label for Serostim. Dkt. No. 34 at 3-4; Dkt. No. 61; Dkt. No. 64 (AR). While DHHS had agreed to supplement the AR with the AHFS-DI compendium for Serostim, DHHS avers that the compendium did not contain Serostim, so it did not include it. Dkt. No. 64-6 ¶ 2. Nonetheless, Plaintiff, in a statement to the court on February 6, 2019, affirmed that he still sought inclusion of the AHFS-DI compendium for Serostim. Dkt. No. 65. He also alleged that DHHS is compelled to provide two additional documents that were not identified before the Court in Plaintiff's initial motion: (1) the AHFS-DI compendium for "somatotropin," which Plaintiff posits is the generic compound of Serostim, and (2) the introductory portions of the AHFS-DI compendium. Dkt. No. 65.
Because the scope of Plaintiff's original motion had changed considerably, the Court directed Plaintiff to file a new motion, addressing the most current documents at issue. Dkt. No. 69. Plaintiff filed *725his second motion to supplement the administrative record on February 20, 2019.
A. Legal Standard
Judicial review of an agency decision is limited to "the administrative record already in existence, not some new record made initially in the reviewing court." Camp v. Pitts ,
The administrative record before the agency, however, does not include "every scrap of paper that could or might have been created." Pinnacle Armor, Inc. v. United States ,
A court generally may not consider extra-record evidence, although the Ninth Circuit has recognized certain exceptions to that rule. San Luis & Delta-Mendota Water Auth. v. Locke ,
B. Discussion
Plaintiff has not presented any "clear evidence" to overcome the applicable presumption of deference to the agency's judgment that the AR is complete. See In re United States ,
Plaintiff completely misses the mark. These conclusory pronouncements come nowhere close to showing "clear evidence" that any of the documents should be in the AR. The record reflects that the agency considered DRUGDEX, another Medicare-approved compendium, to determine what the non FDA-approved (or "off-label") use for Serostim is. AR at 0055, 0726. Plaintiff does not dispute that DRUGDEX is in the administrative record. Dkt. No. 70 at 5 n.3. The ALJs, in their opinions, also stated that the AHFS-DI compendium did not include any additional off-label uses for Serostim. AR at 0055, 0726. The record does not reflect any reference to "somatotropin," and Plaintiff presents no evidence that the agency relied on information about this drug. Plaintiff does not present any evidence, let alone "clear evidence," that the agency considered any of the materials whose inclusion he seeks to compel.
Because Plaintiff fails to rebut with clear evidence the presumption that the administrative record is complete, or present any evidence that the documents fall under one of the exceptions allowing the Court to consider extra-record evidence, the Court DENIES Plaintiff's second motion to supplement the administrative record.
IV. MOTION TO FILE UNDER SEAL
DHHS filed the entire certified administrative record, approximately 1,500 pages, with the Court, along with a motion requesting to file the record under seal. Dkt. No. 64. Because these records are more than tangentially related to the underlying action, the Court applies the "compelling reasons" standard articulated below.
A. Legal Standard
Courts generally apply a "compelling reasons" standard when considering motions to seal documents. Pintos v. Pac. Creditors Ass'n ,
The Court must "balance[ ] the competing interests of the public and the party who seeks to keep certain judicial records secret. After considering these interests, if the court decides to seal certain judicial records, it must base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture."
B. Discussion
The Court finds that DHHS has shown a compelling interest in sealing the entire administrative record, as it contains Plaintiff's medical records and private information. Courts have found a party's privacy interests in such records to outweigh the public's interest in access. See A.B. v. San Francisco Unified Sch. Dist. , No. C 07-4738 PJH,
V. CONCLUSION
The Court GRANTS all three motions to dismiss without leave to amend. Dkt. Nos. 36, 39, 40. The clerk is DIRECTED to terminate Defendants Envision and Blue Shield from the case. The Court also DENIES AS MOOT Plaintiff's first motion to supplement the administrative record, Dkt. No. 24; DENIES Plaintiff's second motion to supplement the administrative record, Dkt. No. 70; and GRANTS Defendant's motion to file the administrative record under seal, Dkt. No. 64.
The Court further SETS a case management conference for July 23, 2019 at 2:00 p.m., and DIRECTS the parties to file on or before July 16, 2019 a joint case management statement including a proposed case schedule for resolution of the remaining claim against DHHS.
IT IS SO ORDERED.
Plaintiff voluntarily withdrew his Title III claim against Defendants Envision and Blue Shield, see Dkt. No. 48 at 7; Dkt. No. 49 at 6, and the Court therefore GRANTS Defendants' motions to dismiss Plaintiff's fourth cause of action.
Section 1395w-104(h) provides for judicial review of appeals Part D beneficiaries bring. 42 U.S.C. § 1395w-104(h). Although § 405(g) is not expressly listed in that section, § 1395w-104(h) incorporates Part C's judicial review provision, § 1395w-22(g), which in turn provides for judicial review under § 405(g). See
Because the Court finds that Envision and Blue Shield are not proper defendants in an administrative challenge and the remaining claims are derivative, the Court need not reach the merits of Defendants' arguments that the second and third causes of action independently fail to state cognizable claims. See Dkt. No. 36 at 5-9; Dkt. No. 3-5.
The court in Davis stated that J.L. appears "inconsistent with the Supreme Court's subsequent holding in [Shalala ] that legal challenges to agency practices and procedures are subject to the limitations in Section 405(h)." Davis ,
Although Plaintiff moves to "supplement" the record, based on a review of his pleadings, it appears Plaintiff is seeking to compel DHHS to "complete" the record. See Dkt. No. 70 at 4 (alleging that the agency considered and relied on the documents and should have included them in the AR); Dkt. No. 79 at 2 ("The materials and information at issue here is [sic] not extra-record evidence."). "Supplementing" and "completing" the AR are two distinct concepts: "completing the record" refers to including "materials which were actually considered by the agency, yet omitted from the administrative record," whereas "supplementing the record" refers to including "materials which were not considered by the agency, but which are necessary for the court to conduct a substantial inquiry." Ctr. for Native Ecosystems v. Salazar ,
Since the most recent motion to supplement the administrative record supersedes Plaintiff's original motion, the Court DENIES AS MOOT the original motion, Dkt. No. 24.
In his reply, Plaintiff seeks documents for the years 2015-2019. Dkt. No. 79 at 2. Because the years 2015 and 2019 were not raised in his motion, the Court will not consider his request to complete the AR with documents from those years. See Dkt. No. 70.
Reference
- Full Case Name
- Steven BRUCE v. Alex M. AZAR
- Cited By
- 6 cases
- Status
- Published