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James v. Group Life and Health Benefits Plan for Employees

United States District Court, D. Oregon, Portland Division

April 25, 2014



JANICE M. STEWART, Magistrate Judge.


Plaintiffs, Jason James ("James") and Teresa James ("Teresa"), allege a claim under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 USC § 1132, seeking payment of medical benefits exceeding $20, 000.00 for services rendered to treat an injury suffered by James's stepson on June 21, 2008. Defendants are the Group Life and Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries ("Plan"), American Airlines, Inc. ("American Airlines"), James's employer and the Plan's sponsor and administrator, and United Healthcare, the Plan's claims administrator for Standard Medical Options.

On March 18, 2011, the Jameses dismissed their claim against United Healthcare without prejudice (docket #12). On April 8, 2014, based on the Jameses' Notice of Dismissal (docket #61), this court also dismissed without prejudice all claims against American Airlines (docket #62). The remaining parties, the Jameses and the Plan, have consented to allow a Magistrate Judge to enter final orders and judgment in this case in accordance with FRCP 73 and 28 USC § 636(c) (docket #63).

This court has jurisdiction under 28 USC § 1331 and 29 USC § 1132(e)(1) and (f). The Plan has filed a Motion for Summary Judgment (docket #20), and the Jameses also have filed a Motion for Summary Judgment (docket #27).[1] For the reasons that follow, the Plan's motion is DENIED, and the Jameses' motion is GRANTED.


I. Plan Documents

The Plan is an employee welfare benefit plan covered under ERISA. Complaint, ¶ 6; Answer, ¶ 6. James has been employed as a pilot for American Airlines since 1998. J. James Decl., ¶ 2. Enrollment in the Plan for himself and his eligible dependents is a benefit of that employment. Id.

The terms and conditions under which medical benefits are available to American Airlines pilots and their eligible dependents are contained in the American Airlines Employee Benefits Guide for Pilots ("EBG"). Jameson Decl., ¶ 3 & Ex. A; Supplemental Ex. 64.[2] The Plan sponsor and administrator is American Airlines. EBG, p. 137. Medical and dental benefits for American Airlines employees and retirees are self-funded through both American Airlines and employee contributions. Id, p. 139. Reviews of benefits decisions under the EBG are handled by American Airlines Human Resources ("Employee Services").

The American Airlines Benefits Strategy Committee oversees the Pension Benefits Administration Committee ("PBAC") which, in turn, is responsible for recommending creation of, maintenance and general governance of employee group benefit plans. Jameson Decl., ¶ 1. The PBAC is the Plan Administrator for purposes of administering Second Level Claim Appeals. EBG, p. 137. The EBG grants to the PBAC "under the authority granted to it by the Board of Directors, through the Chairman, ... the sole authority to interpret, construe, determine claims, and adopt and/or amend benefit plans." Id, p. 138.

Under the Plan, an "eligible dependent" includes a stepchild, if the child lives with the employee, and if the employee, either jointly or individually, claims the stepchild as a dependent on the employee's federal income tax return. Id, pp. 14-15. Pilots and their eligible dependents may enroll in a medical plan pursuant to the terms and conditions set forth in the EBG which states the following regarding Proof of Eligibility ("POE"):

As a reminder, AMR Corporation and its subsidiaries reserve the right to request documented proof of dependent eligibility for benefits at any time. If you do not provide documented proof when requested, or if any of the information you provide is not true and correct, your actions will be considered a violation of the Rules of Conduct and may result in termination of employment, benefit or plan coverage termination, and efforts to recover any unpaid benefits.
Whether you... enroll new dependents as the result of a Life Event, [y]ou must submit to HR Employee Services proof of the dependents' eligibility within 30 days of the date your [ sic ] enroll them. Proof that dependents you enroll qualify as your dependents includes (but is not limited to) official ...

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