     Case: 17-20646    Document: 00514817556     Page: 1   Date Filed: 01/31/2019




         IN THE UNITED STATES COURT OF APPEALS
                  FOR THE FIFTH CIRCUIT


                                  No. 17-20646               United States Court of Appeals
                                                                      Fifth Circuit

                                                                    FILED
                                                              January 31, 2019
KAREN A. RITTINGER,
                                                               Lyle W. Cayce
              Plaintiff–Appellee Cross–Appellant,                   Clerk


v.

HEALTHY ALLIANCE LIFE INSURANCE COMPANY, doing business as
Anthem Blue Cross and Blue Shield; ANTHEM UM SERVICES,
INCORPORATED,

              Defendants–Appellants Cross–Appellees.


                 Appeals from the United States District Court
                      for the Southern District of Texas


Before HIGGINBOTHAM, GRAVES, and WILLETT, Circuit Judges.
PER CURIAM:
        This case involves a bariatric surgery gone wrong and the ensuing clash
over insurance coverage. Given our highly deferential standard of review, we
cannot say that Anthem, the plan administrator, abused its discretion in either
the first or second internal appeal. Because we agree with Anthem, Rittinger’s
cross-appeal (to determine the exact dollar amount of damages she is owed) is
moot.
                                        I
        Karen Rittinger was the beneficiary of an ERISA-covered plan. Healthy
Alliance Life Insurance Company offered the plan and Anthem Blue Cross
Blue Shield (Anthem) administered it.
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                                  No. 17-20646
      In October 2014, Rittinger underwent bariatric surgery. Complications
arose requiring follow-up surgery and intensive care. Anthem denied
preauthorization for both the bariatric surgery and the follow-up surgery,
writing, “We cannot approve coverage for weight loss surgery (bariatric
surgery) or hospital care after this surgery. Bariatric or weight loss surgery is
an exclusion in your health plan contract.”
      Pertinently, Paragraph 33 of the Health Certificate of Coverage
(Certificate) deals with bariatric surgery:
      [The plan does not cover] bariatric surgery, regardless of the
      purpose it is proposed or performed. This includes but is not
      limited to Roux-en-Y (RNY), Laparoscopic gastric bypass surgery
      or other gastric bypass surgery . . . . Complications directly related
      to bariatric surgery that result in an Inpatient stay or an extended
      Inpatient stay for the bariatric surgery, as determined by Us, are
      not covered.

      Crucially, there is an exception at the end of Paragraph 33: “This
exclusion does not apply to conditions including but not limited to . . . excessive
nausea/vomiting.” Since none of Rittinger’s preauthorization information
mentioned “excessive nausea/vomiting,” Anthem cited Paragraph 33’s
exclusion and denied coverage.
      The next month, Rittinger’s husband emailed Anthem. He explained
that he had “Medical Power of Attorney . . . to speak on behalf of [his] wife[,]
Karen Rittinger.” He stated that he “would like to file an appeal for her
hospitalizations which began on 10/15/2014.” Anthem treated this as an official
first-level appeal. After gathering more information from Rittinger and her
surgeons and obtaining an independent peer review, Anthem again denied
coverage.
      In April 2015, Rittinger hired counsel and filed a second-level internal
appeal. She submitted materials about her medical history and the surgery.

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                                  No. 17-20646
Emphasizing Paragraph 33’s exception for bariatric surgery where there is
“excessive nausea/vomiting,” Rittinger provided records showing: (1) she
suffered from Gastroesophageal Reflux Disease (GERD) and esophagitis, (2)
GERD/esophagitis is linked to nausea and vomiting, and (3) she underwent
surgery to address these problems.
      Anthem convened a five-person “Grievance Advisory Panel” (GAP) to
evaluate Rittinger’s second-level appeal. The GAP quoted Paragraph 33,
concluded it excluded Rittinger’s bariatric surgery, and affirmed the denial of
coverage.
      Having exhausted her internal remedies, Rittinger sued. Both parties
moved for summary judgment. Since neither side disputed that the plan
properly delegated discretion to Anthem to administer the plan, the district
court correctly reviewed the two internal appeals for abuse of discretion. It held
that Anthem did not abuse its discretion when it treated Mr. Rittinger’s email
as a first-level appeal. But the district court held that Anthem did abuse its
discretion in the second-level appeal. It believed Anthem’s construction of the
plan’s terms directly contradicted their plain meaning. It also thought
Rittinger’s evidence linking GERD/esophagitis to nausea/vomiting deserved
more weight.
                                        II
      The district court had jurisdiction over this case under ERISA, 29
U.S.C. §§ 1001 et seq. We have jurisdiction over Anthem’s appeal under 28
U.S.C. § 1291. Rittinger also filed a cross-appeal, arguing we should state the
exact dollar amount of damages she is owed. But because we hold that Anthem
did not abuse its discretion in either internal appeal, her cross-appeal is moot.




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                                        No. 17-20646
         We review a district court’s grant of summary judgment in an ERISA
case de novo. 1 Here, Anthem had “all the powers necessary or appropriate . . .
to construe the Contract [and] to determine all questions arising under the
Certificate.” Rittinger never challenged the clause’s enforceability in the
district court. Because “[f]ailure to raise an argument before the district court
waives that argument,” 2 Rittinger has forfeited this issue. Anthem’s fiduciary
discretion was valid.
         Rittinger argues that our recent en banc decision in Ariana M. 3 requires
us to review Anthem’s denial de novo instead of for abuse of discretion. But
Ariana M. only governs cases in which a plan does not validly delegate
fiduciary discretion. 4 And even though Texas Insurance Code § 1701.062 bans
insurers’ use of delegation clauses in Texas, Missouri law governs this case. As
Anthem observes (and Rittinger fails to contest), this case involves a plan sold
in Missouri by a Missouri insurer to a Missouri employer. Moreover, the
Certificate of Coverage specifically states that the “laws of the state in which
the Group Contract was issued [Missouri] will apply.” Ariana M., therefore,
does not control.
         Where a plan administrator has discretion, as here, we review the
administrator’s denial of benefits deferentially for abuse of discretion. 5 We
have clarified this standard, saying that a “plan administrator abuses its
discretion where the decision is not based on evidence, even if disputable, that



         1 Schexnayder v. Hartford Life & Accident Ins. Co., 600 F.3d 465, 468 (5th Cir. 2010).
         2 Fruge v. Amerisure Mut. Ins. Co., 663 F.3d 743, 747 (5th Cir. 2011).
         3 Ariana M. v. Humana Health Plan of Tex., Inc., 884 F.3d 246 (5th Cir. 2018) (en

banc).
         Id. at 247 (“When an ERISA plan lawfully delegates discretionary authority to the
         4

plan administrator, a court reviewing the denial of a claim is limited to assessing whether
the administrator abused that discretion.”).
       5 Schexnayder, 600 F.3d at 468 (citing Corry v. Liberty Life Assurance Co. of Bos., 499

F.3d 389, 397 (5th Cir. 2007)).
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                                            No. 17-20646
clearly supports the basis for its denial.” 6 Yet “[i]f the plan fiduciary’s decision
is supported by substantial evidence and is not arbitrary or capricious, it must
prevail.” 7 “Substantial evidence is ‘more than a scintilla, less than a
preponderance, and is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.’” 8
                                                   III
                                                   A
          Rittinger argues that Anthem abused its discretion when it treated her
husband’s email as a formal first-level appeal. The plan prescribes “How To
File a First Level Appeal or Grievance for Review.” But nowhere does it supply
an email address where appeals can be directed. Rittinger contends that, given
its elaborate appeals procedures, Anthem had no wiggle room to interpret
other inquiries as appeals.
          Anthem argues that it had wide discretion in administering the plan.
Moreover, treating this as an appeal did not prejudice Rittinger, nor does she
argue that it did. Anthem says, “[n]o harm, no foul.”
          The district court disagreed with Anthem’s interpretation of plan terms
and procedures. It also rejected Anthem’s “no harm, no foul” argument,
reasoning that a customer whose plan entitles her to two internal appeals is
harmed if she receives one adequate appeal. But the district court also
understood Anthem’s need to “respond quickly to a customer’s request,” and
not “shut out customers who do not dot every ‘i’ and cross every ‘t’ in a complex
submission process.” Plus, it is natural to read Mr. Rittinger’s email—“I would
like to file an appeal”—as a request to appeal.


          6   Id. (quoting Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, 246 (5th Cir. 2009)).
          7   Id. (quoting Ellis v. Liberty Life Assurance Co. of Bos., 394 F.3d 262, 273 (5th Cir.
2004)).
        Ellis, 394 F.3d at 273 (quoting Deters v. Sec’y of Health, Educ. & Welfare, 789 F.2d
          8

1181, 1185 (5th 1986)).
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                                      No. 17-20646
       We agree. Given the email’s wording, it was reasonable to think Mr.
Rittinger was appealing. Thus, Anthem did not abuse its discretion when it
treated Mr. Rittinger’s email as a first-level appeal.
                                             B
       Was the GAP’s denial of coverage in the second-level appeal an abuse of
discretion? Rittinger contends it was. She claims the GAP ignored her relevant
evidence and failed to analyze Paragraph 33’s “excessive nausea/vomiting”
exception. Anthem responds that the administrative record contained more
than a scintilla of evidence that Rittinger’s surgery was for weight loss
purposes and that she had no vomiting or nausea.
       The district court rightly observed that assessing the second-level appeal
breaks down into: (1) “an interpretive dispute” and (2) a “factual dispute.” But
the district court was wrong to hold that Anthem abused its discretion at either
the interpretive or factual level.
                                             1
       On appeal, Rittinger challenges Anthem’s application of the plan terms,
but not Anthem’s interpretation. (Her brief does not discuss the interpretive
issue at all.) “It is a well worn principle that the failure to raise an issue on
appeal constitutes waiver of that argument.” 9 So she has forfeited her ability
to defend the district court’s ruling on the plan-interpretation issue.
       The district court reasoned that Anthem’s distinction between
GERD/esophagitis and nausea/vomiting was “sophistic” and rendered
Paragraph 33’s exclusion “meaningless.” And a construction that renders
terms superfluous is “contrary to the provision’s plain meaning.”




       United States v. Griffith, 522 F.3d 607, 610 (5th Cir. 2008) (citing United States v.
       9

Thibodeaux, 211 F.3d 910, 912 (5th Cir. 2000)).
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                                       No. 17-20646
       Anthem challenges this reading, arguing that GERD/esophagitis and
nausea/vomiting are not coterminous: Distinguishing between them does not
render Paragraph 33’s exception an empty set. Paragraph 33 specifically
contemplates particular exceptions to its exclusion of bariatric and weight loss
surgeries. It is wrong for a court to rewrite Paragraph 33 and insert a new
exception for GERD/esophagitis—expressio unius est exclusio alterius. 10
       Anthem’s construction makes sense. It fits with the plan’s plain
language. We ordinarily think of GERD/esophagitis and nausea/vomiting as
two different things. In fairness, the district court had a point too: These could
be partially overlapping categories. Imagine someone tells you, “I exclude pie
from my diet, but I make an exception for holidays.” Eating pie on
Thanksgiving falls within that exception even though “Thanksgiving” and
“holidays” are not coterminous categories. That is because the categories,
Thanksgiving and holidays, have some overlap.
       Perhaps Paragraph 33 is best interpreted like Thanksgiving and
holidays—as creating a Venn diagram of categories where GERD/esophagitis
and excessive nausea/vomiting have some overlap. But we are not asking what
is the best construction of Paragraph 33. We are asking whether Anthem’s
construction was so egregiously wrong that it flouts the plan’s plain language
and constitutes an abuse of discretion. We cannot say that Anthem’s
interpretation of Paragraph 33 was so off-kilter as to be an abuse of discretion.
                                               2
       Where, as here, fiduciary discretion has been validly granted to the
administrator, we review a “denial of ERISA benefits for abuse of discretion.” 11


       10 ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF
LEGAL TEXTS 107 (2012) (“The expression of one thing implies the exclusion of others.”).
       11 Corry, 499 F.3d at 397 (quoting Vega v. Nat’l Life Ins. Serv., Inc., 188 F.3d 287, 295

(5th Cir. 1999)). Again, Ariana M., 884 F.3d 246 is inoperative because it deals with
situations where Texas Insurance Code § 1701.062 renders a delegation clause invalid.
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                                       No. 17-20646
If “substantial evidence” supports Anthem’s decision, then there was no abuse
of discretion. 12 “Substantial evidence is more than a scintilla, less than a
preponderance, and is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” 13 Abuse of discretion review “is
the functional equivalent of arbitrary and capricious review.” 14 “A decision is
arbitrary if it is made without a rational connection between the known facts
and the decision.” 15 This review is deferential: We only need “assurance that
the    administrator’s      decision     falls       somewhere      on   a   continuum      of
reasonableness—even if on the low end.” 16
       Anthem argues that there was “more than a scintilla” of evidence to
support the GAP’s decision. Paragraph 33 explicitly excludes bariatric
surgeries like Rittinger’s. Thus, for Rittinger to have coverage, Paragraph 33’s
“excessive nausea/vomiting” exception must kick in. Davis Clinic’s intake
report from September 15—one month before Rittinger’s surgery—notes that
Rittinger’s “chief complaint[s]” were “morbid obesity and abdominal pain.” And
that same report noted “no vomiting” and “no nausea.” Rittinger’s medical
records up to the time of her surgery—records Rittinger herself attached to her
preauthorization evaluation—do not reflect treatment for nausea and
vomiting. Moreover, Rittinger’s preauthorization documentation requests
treatment for “morbid obesity” and was coded for obesity “due to excess
calories,” but does not indicate any excessive nausea or vomiting.
       References to nausea and vomiting do not appear in the administrative
record until after this coverage dispute began. And even when those terms turn
up, two of Rittinger’s prior medical providers do not mention nausea or


       12 Id. at 397–98 (quoting Ellis, 394 F.3d at 273).
       13 Id.
       14 Anderson v. Cytec Indus., Inc., 619 F.3d 505, 512 (5th Cir. 2010).
       15 Id. (cleaned up).
       16 Burell v. Prudential Ins. Co. of Am., 820 F.3d 132, 140 (5th Cir. 2016) (cleaned up).

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                                       No. 17-20646
vomiting per se but rather GERD and esophagitis. Claims that Rittinger has
submitted to Anthem since early 2014—part of the GAP’s administrative
record—do not reflect treatment for nausea or vomiting.
      Finally, Anthem argues that the GAP did not have to credit or give
dispositive weight to Rittinger’s evidence. Anthem recognizes that in the
second-level appeal Rittinger submitted affidavits to the GAP from herself and
two friends stating she had perpetually suffered from nausea and vomiting.
She also submitted a doctor’s letter from December 2014 (after the surgery)
stating she had “severe persistent gastro-esophageal reflux with nausea and
vomiting.” Anthem contends that it recognized, but did not credit the after-the-
fact, self-serving affidavits. Moreover, as plan administrator, Anthem was not
duty-bound to defer to shifting medical opinions. Rittinger responds that
Anthem did not just weigh evidence, it ignored her evidence altogether. As she
sees it, Anthem’s failure to even acknowledge her evidence deprived her of a
“full and fair review.” 17
      Candidly, it is hard to evaluate the GAP’s decision because it does not
elaborate its reasons for denial. There is no section where it discusses the
evidence in the administrative record, the arguments the parties have made,
or why it finds some evidence persuasive and some evidence not persuasive. It
simply describes who was on the panel (five people who were not previously
involved in assessing Rittinger’s claim), states the panelists’ qualifications,
explains that Rittinger’s surgery was bariatric, notes that this surgery falls
squarely within Paragraph 33’s exclusion, and recites Paragraph 33—
including the excessive nausea/vomiting exception. We know what evidence
was in the administrative record the GAP examined. But we do not know how
it balanced and weighed that evidence.


      17   See 29 C.F.R. § 2560.503–1(h)(2).
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                                      No. 17-20646
      The district court faulted Anthem for failing to submit more evidence to
the GAP. It then reviewed the second-level-appeal evidence “[t]aken together,”
finding some “persuasive” and some “not persuasive.” This was error. The
district court was only supposed to review for abuse of discretion—i.e., did
Anthem have more than a scintilla of evidence to support its decision? The
district court was not supposed to weigh and balance the evidence.
      Anthem did not need to supply original evidence or expert witnesses: It
only needed to clear the low, more-than-a-scintilla threshold. 18 The five GAP
members reviewed the evidence and determined Rittinger’s initial surgery was
“for weight loss and acid reflux,” and not “excessive nausea/vomiting.” It is
rational, therefore, that Paragraph 33’s exception did not apply.
      We have said that, when faced with two competing medical views, a plan
administrator may exercise discretion and choose one of them. 19 We routinely
recognize that plan administrators deserve substantial discretion in their
decisions. 20 And when a district court substitutes its own judgment for the plan
administrator’s, we reverse. 21
      Gothard is instructive here. There, a legal secretary suffered a
permanent back injury in a car crash. 22 MetLife terminated her benefits
because it found she could still perform sedentary work. The district court held
this was arbitrary and capricious, but we reversed. 23 As Judge Higginbotham
put it: “MetLife’s decision may not be correct, but we cannot say that it was
arbitrary.” 24




      18 Corry, 499 F.3d at 398.
      19 Gothard v. Metro. Life Ins. Co., 491 F.3d 246, 249–50 (5th Cir. 2007).
      20 See, e.g., Burell, 820 F.3d at 136–40.
      21 See, e.g., Gothard, 491 F.3d at 247; see also Holland, 576 F.3d at 250–51.
      22 Gothard, 491 F.3d at 247.
      23 Id. at 247, 249–50.
      24 Id. at 250.

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                                    No. 17-20646
      Holland provides another helpful guidepost. 25 There, the plan
administrator considered all the evidence Holland submitted. 26 But the “Plan
Administrator was not legally obligated to weigh any specific physician’s
opinion more than another’s and did not abuse its discretion by crediting” some
more than others. 27 Given Holland, Anthem did not have to credit Rittinger’s
post-surgery letters over her pre-authorization documentation and Anthem’s
consulting physician’s opinion.
      Multiple “scintillas” of evidence—Rittinger’s medical record, her
preauthorization report, Anthem’s consulting physician’s review, and the
coding of Rittinger’s other claims to Anthem—support the GAP’s decision, even
if other evidence is stronger or more “persuasive.” Anthem did not abuse its
discretion in the second-level appeal.
                                         IV
      To sum up, Anthem did not abuse its discretion in either the first- or
second-level appeal. Although not the paragon of procedural propriety, Anthem
satisfied the very low, very deferential abuse-of-discretion standard. We thus
AFFIRM the district court’s assessment of the first-level appeal and REVERSE
the district court’s assessment of the second-level appeal. Rittinger is not
entitled to any damages, so we DISMISS her cross-appeal as moot.




      25 Holland, 576 F.3d at 250–51.
      26 Id. at 250.
      27 Id.

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