
USCA1 Opinion

	




                           UNITED STATES COURT OF APPEALS                                 FOR THE FIRST CIRCUIT                                 ____________________        No. 97-1253                      RONALD J. TURNER, AS ADMINISTRATOR OF THE                   ESTATE OF CHARLOTTE M. TURNER, AND INDIVIDUALLY,                                Plaintiff, Appellant,                                          v.                         FALLON COMMUNITY HEALTH PLAN, INC.,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Nathaniel M. Gorton, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                             Hill,* Senior Circuit Judge,                                    ____________________                         and Pollak,** Senior District Judge.                                       _____________________                                 ____________________            Burton  Chandler with  whom  Seder &  Chandler  was on  brief  for            ________________             _________________        appellant.            Daly D.E. Temchine with  whom Thomas I. Elkind and Epstein  Becker            __________________            ________________     _______________        & Green, P.C. were on brief for appellee.        _____________                                 ____________________                                   October 20, 1997                                 ____________________                                    ____________________        *Of the Eleventh Circuit, sitting by designation.        **Of the Eastern District of Pennsylvania, sitting by designation.                 BOUDIN,  Circuit Judge.   Ronald  Turner,  on behalf  of                          _____________            himself and  as administrator of  the estate of  his deceased            wife,  Charlotte Turner, brought  this suit  in Massachusetts            state  court  against  Fallon  Community  Health  Plan,  Inc.            ("Fallon").   The gravamen  was Fallon's  refusal to  provide            coverage  for a treatment regime proposed by Charlotte Turner            and her  doctor to  address her  metastasized breast  cancer.            After  the case  was removed  to federal district  court, the            district  court  granted  summary  judgment for  Fallon,  and            Ronald Turner appealed.                 The  pertinent facts are  largely undisputed.   In 1991,            Charlotte  Turner  was  diagnosed with  breast  cancer.   The            disease was  at first  treated by  surgery, chemotherapy  and            radiation.   In May  1993, tests showed  that the  cancer had            metastasized, was beyond  control by conventional  therapies,            and  threatened Charlotte Turner  with death within  12 to 18            months.   Ronald Turner was  employed by General  Motors, and            Charlotte  Turner was  covered by  the  health coverage  that            Fallon  provided  for   family  members  of   General  Motors            employees.                 Fallon  is  a   health  maintenance  organization   that            provides  or reimburses  health care  for its  members.   Its            "Member  Handbook," which  is  presented  as  "part  of  [the            member's]  contract with [Fallon],"  describes in  detail the            various   medical   costs   that   Fallon   will   cover  for                                         -2-                                         -2-            beneficiaries.  Among the express exclusions set forth in the                                              __________            handbook was "bone  marrow transplant for treatment  of solid            tumors  . .  . ."    Dr. Ronald  Hochman, Charlotte  Turner's            oncologist at  Fallon, nevertheless concluded  that Charlotte            Turner's  only hope was an autologous bone marrow transplant,            a  procedure  by which  the  patient's  own  bone  marrow  is            extracted,  stored and  then reintroduced  after the  patient            receives high dosage chemotherapy.   Marrow is the source  of            vital white blood cells needed to fight infection and without            the transplant procedure, the high dosage  chemotherapy would            impair the bone marrow's ability to continue to produce white            blood cells.                 In May  1993, Fallon approved Charlotte Turner's request            that she  be evaluated by  Dana Farber  Cancer Institute  for            possible participation in its bone marrow transplant program.            Fallon continued to assert that a bone  marrow transplant was            not a covered procedure for  solid tumor cancer but said that            if the treatment was recommended by  Dana Farber, the request            for   coverage   would  be   reviewed   further  by   Fallon.            Ultimately, Dana Farber concluded  that Charlotte Turner  was            not  eligible for  the Dana  Farber  protocol because  cancer            cells  had already been  detected in Charlotte  Turner's bone            marrow.                 Charlotte   Turner  then  asked   Fallon  to  cover  her            examination  for   eligibility  to  enter   a  program  being                                         -3-                                         -3-            conducted by  the Duke  University Medical Center.   In  this            program,   Duke   not   only   removed    bone   marrow   for            reimplantation,  in aid of high dosage chemotherapy, but also            employed procedures to  attempt to "purge" the  marrow of its            cancer cells.  Fallon declined to  cover the cost of a "third            opinion."   Charlotte  Turner then  had  herself examined  by            doctors at the  Duke program who concluded that  she might be            eligible to  participate, subject  to further  testing.   The            cost of her  participation in  the program  was estimated  at            $100,000.                 In July  1993, Charlotte  Turner and  Dr. Hochman  asked            Fallon to  pay for  her inclusion in  the Duke  program.   In            August 1993,  Fallon's Transplant  Committee met to  consider            Charlotte Turner's  request and the broader  question whether            coverage should be extended, on a case-by-case basis, to bone            marrow  transplants to treat solid tumor cancers either under            the Dana  Farber protocol or  the Duke program or  both.  Dr.            Hochman supported Charlotte Turner's application for coverage            to the Duke program.                 The  Transplant  Committee  decided  that,  despite  its            handbook  exclusion, it would  in the future  extend coverage            for  the  Dana  Farber  protocol   if  it  concluded  in  the            particular case that  the treatment was critically  necessary            and showed  a strong  likelihood of  success.  It  concluded,            however,  that  the  Duke  program  had  as yet  produced  no                                         -4-                                         -4-            adequate  data  suggesting  a   likelihood  of  success,  and            therefore declined to  extend coverage for the  Duke program.            At Charlotte Turner's  request, Fallon's Grievance  Committee            held a  hearing in September  1993 to review the  decision of            the  Transplant Committee,  but in  early  October 1993,  the            Grievance Committee  upheld the  denial of  coverage for  the            Duke program.                 Immediately after the Grievance Committee's decision  in            October 1993,  Charlotte Turner  underwent conventional  low-            dosage chemotherapy without bone marrow transplantation.  She            died on August 17, 1994.  Ronald  Turner then brought suit in            the Massachusetts superior  court against Fallon  charging it            with breach of  contract, wrongful death and  other state-law            claims.  Fallon removed the case to federal district court on            the ground that state-law claims were preempted under ERISA--            the  Employee  Retirement  Income Security  Act  of  1974, 29            U.S.C.    1001 et seq.   See  Metropolitan Life  Ins. Co.  v.                           ______    ___  ___________________________            Taylor, 481 U.S. 58, 66-67 (1987).             ______                 Ronald Turner  responded by  amending  his complaint  to            delete  the state  claims  and to  substitute  a claim  under            ERISA.    The  amended single-count  complaint  charged  that            Fallon's  denial of  coverage for  the  Duke program  "denied            Charlotte of the rights and benefits due under the policy and            was arbitrary, illegal, capricious, unreasonable and not made            in good faith  and was a breach of  [Fallon's] fiduciary duty                                         -5-                                         -5-            which  it owed to  Charlotte."  The  complaint sought damages            and a trial by jury.                 In  March  1996,  Fallon  moved  for  summary  judgment.            Ronald  Turner opposed  the  motion  and  asked  for  further            discovery, which Fallon in turn opposed.  The  district court            then ruled  that a civil  ERISA action could be  brought by a            plan beneficiary  only  (in the  words  of the  statute)  "to            recover benefits due  to him under the terms of  his plan, to            enforce his rights under the terms of the plan, or to clarify            his rights to  future benefits under the terms  of the plan."            29 U.S.C.    1132(a)(1)(B).  Concluding that  Ronald Turner's            damage action was  not authorized by  ERISA, the court  ruled            that the case had to  be dismissed and that further discovery            would be futile.                 Ronald  Turner  then  sought  reconsideration  and  also            sought  to amend  the complaint  to  reassert the  previously            withdrawn state-law claims.  He argued that if ERISA provided            no federal remedy, it ought not be read to preempt his state-            law  claims.  Alternatively, he urged that if ERISA preempted            the  state-law claims,  then  a federal  remedy  ought to  be            inferred  or created  by  the  court  to permit  damages  for            wrongful withholding of treatment under the employee benefits            plan.  The district court wrote a thoughtful  opinion denying            these requests.                                         -6-                                         -6-                 On this appeal, we begin with Ronald Turner's claim that            ERISA should be read  to confer a claim for damages where, as            charged in  the amended complaint, a beneficiary  of the plan            has  been  denied "the  rights  and  benefits due  under  the            policy" or has suffered "a breach of . . . fiduciary duty" in            the withholding of  those benefits.  ERISA is a comprehensive            federal statute that governs not only pension  plans but also            nonpension benefit plans, including the General Motors health            benefits plan at issue in this case.                 ERISA   sets  forth  a   half  dozen  civil  enforcement            provisions.   29  U.S.C.    1132(a).   Under  the first  such            provision, a beneficiary may bring a federal civil action "to            recover  benefits due to him under the  terms of his plan, to            enforce his rights under the terms of the plan, or to clarify            his rights to  future benefits under the terms  of the plan."            Id.    1132(a)(1)(B).   The relief  expressly provided  is to            ___            secure benefits  under the  plan rather  than  damages for  a            breach of the plan.  Here, treatment coverage is no longer of            any significance.                   The other pertinent remedial provision authorizes  civil            action  by   a  beneficiary  "to  obtain   other  appropriate            equitable  relief" to  address  violations  of  ERISA  or  to            enforce the  plan.  29  U.S.C.   1132(a)(3)(B).   The Supreme            Court recently held in  Varity Corp. v. Howe, 116 S. Ct. 1065                                    ____________    ____            (1996),  that  this  provision  may  permit  equitable relief                                         -7-                                         -7-            against  a plan administrator  for breaches of  the fiduciary            duty imposed  on such  administrators by ERISA.   See  id. at                                                              ________            1075-79.     But  this  provision  is  expressly  limited  to            providing equitable relief, and equitable relief is not being            sought in this case.                 Ronald  Turner points  to  no  other  specific  remedial            provision in ERISA that might  arguably be brought into  play            in this case.   In fact, the Supreme Court  has stressed that            ERISA  does  not  create  compensatory   or  punitive  damage            remedies  where an administrator  of a plan  fails to provide            the benefits  due under  that plan.   See  Massachusetts Mut.                                                  ___  __________________            Life  Ins. Co.  v. Russell,  473  U.S. 134  (1985); see  also            ______________     _______                          _________            Drinkwater v. Metropolitan  Life Ins. Co., 846  F.2d 821, 825            __________    ___________________________            (1st Cir.), cert. denied, 488 U.S. 909 (1988).  This is not a                        ____________            minor  technicality:   damage awards  may increase  effective            coverage but  may  also add  significantly  to the  costs  of            coverage.                 The lack of  an express damage  remedy under ERISA  does            not necessarily  end  the story.    The federal  courts  have            regularly  inferred  or  created remedies  in  the  shadow of            federal statutes, although the practice has waned somewhat in            recent  years.    See,  e.g.,  Northwest  Airlines,  Inc.  v.                              __________   __________________________            Transport Workers, 451  U.S. 77, 94 (1981).   But the Supreme            _________________            Court has adamantly ruled that ERISA's express remedies are a            signal to courts not to  create additional remedies of  their                                         -8-                                         -8-            own.   Russell, 473 U.S. at 145-48.   See also Reich v. Rowe,                   _______                        ________ _____    ____            20 F.3d  25, 31-33 (1st  Cir. 1994); Drinkwater, 846  F.2d at                                                 __________            824.                   In  the alternative, Ronald Turner argues that ERISA, if            it provides no  damage remedy of its own  either expressly or            by  implication, should  at least  not be  taken  to preclude            existing  state  remedies.     Absent  preemption,  a  health            benefits plan like Fallon's  could certainly be treated as  a            contract enforceable under state law and subject to the usual            contractual   remedies,   including   compensatory   damages.            Depending on the  jurisdiction, state law might  provide even            more substantial relief, including punitive damages.                   ERISA  contains a  vague but  broadly  worded preemption            provision.   With exceptions  not relevant here,  it provides            that  the pertinent subchapter  of ERISA shall  supersede any            and  all "State  laws insofar  as they  may now  or hereafter            relate to  any employee benefit  plan" covered by ERISA.   29            U.S.C.    1144(a).    However  this  general  language  might            otherwise  have been read, the Supreme Court has construed it            to preclude  state claims  to enforce  rights under  an ERISA            plan or obtain damages for the wrongful withholding of  those            rights, Pilot  Life Ins. Co.  v. Dedeaux, 481 U.S.  41, 52-57                    ____________________     _______            (1987), and this construction has been repeatedly followed.1                                             ____________________                 1See, e.g.,  Ingersoll-Rand Co.  v. McClendon, 498  U.S.                  _________   __________________     _________            133, 144 (1990); Carlo v. Reed Rolled Thread Die Co., 49 F.3d                             _____    __________________________            790, 794 (1st Cir. 1995); Rosario-Cordero v. Crowley Towing &                                      _______________    ________________                                         -9-                                         -9-                 The  Supreme Court has  recently set some  new limits on            preemption  by holding  that  certain  state  laws  were  not            sufficiently "related" to  ERISA to deserve preemption.   See                                                                      ___            De Buono v.  NYSA-ILA Medical & Clinical Servs.  Fund, 117 S.            ________     ________________________________________            Ct.  1747, 1752-53 (1997); California Div. of Labor Standards                                       __________________________________            Enforcement v. Dillingham  Constr., N.A., 117 S. Ct. 832, 842            ___________    _________________________            (1997).    But  neither  of these  cases  involved  a state's            attempt to  provide state remedies  for what is in  essence a            plan  administrator's  refusal  to   pay  allegedly  promised            benefits.  It would be difficult to think of a state law that            "relates" more closely  to an employee benefit  plan than one            that affords  remedies for  the breach  of obligations  under            that plan.                 Ronald  Turner more or less admits that existing Supreme            Court precedent  is  against  him, both  as  to  an  implicit            federal cause of action and  the preemption of state  claims.            But he  says that it  is grossly unjust  to deny  any remedy,            either state or federal, to compensate in damages the victim,            family  or  estate of  one  who  has  been wrongfully  denied            promised  health-care benefits.  Further, he argues that this            gap provides  a cruel  incentive for  plan administrators  to            withhold treatment or delay it as long as possible, since the                                            ____________________            Transp.  Co., 46  F.3d  120,  126 (1st  Cir.  1995); Nash  v.            ____________                                         ____            Trustees of  Boston Univ.,  946 F.2d 960,  964 n.8  (1st Cir.            _________________________            1991); Wickman v. Northwestern Nat'l Ins. Co., 908 F.2d 1077,                   _______    ___________________________            1082 (1st Cir.), cert. denied, 498 U.S. 1013 (1990).                             ____________                                         -10-                                         -10-            claim  for benefits may be mooted by the beneficiary's death.                 There are in reality two quite different problems of law            and policy entangled  in this argument.  The  one that Ronald            Turner  seeks  to  present  is  the  case  of  a  beneficiary            wrongfully  denied promised  benefits.   There  is reason  to            doubt that that is the true problem in this case (a  point to                                                   ____            which we will return), but such cases are easy to imagine and            certain  to occur.   Compensatory damages are  a conventional            and  potent remedy  that might  indeed  deter misconduct  and            mitigate loss,  although the cost  of the plan would  also be            increased.                   On the other hand, some might think it perverse to dwell            on damage remedies, which apply where the patient has died or            already suffered injury,  and might urge instead  that courts            improve access  to equitable  relief.   This remedy,  already                               _________            available  under  ERISA,  can address  a  wrongful  denial of            benefits  while  the  patient is  still  alive  and unharmed.            Although  Ronald Turner  says that  such  judicial relief  is            readily frustrated by exhaustion of remedies rules, a failure            to exhaust is easily forgiven  for good reason, and no reason            is better than an  imminent threat to life or health.   E.g.,                                                                    ____            Portela-Gonzalez v.  Secretary of the  Navy, 109 F.3d  74, 77            ________________     ______________________            (1st  Cir. 1997); see also  DePina v. General Dynamics Corp.,                              ________  ______    ______________________            674 F. Supp. 46, 49 (D. Mass. 1987).                                          -11-                                         -11-                 In all events,  it is certainly a matter  for reasonable            debate whether  a damage  remedy should  be added,  either by            judicial interpolation or by Congress.  But only the  Supreme            Court could alter the existing case law that precludes such a            remedy.  And  whether or not Congress ever  thought about the            impact on  health care  in particular  when it wrote  ERISA's            remedies and preemption provisions, Congress is well equipped            to revisit  the issue and  alter the statutory  language that            now stands as a bar.                 Although   the  question  of  a  damages  remedy  is  an            important one, it likely has  n
