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March 13, 1980


The opinion of the court was delivered by: Marovitz, Senior District Judge.


Motion for Summary Judgment

Plaintiff Paul Levin brings this action against Connecticut Blue Cross, Inc. (the "Carrier") and the United States Office of Personnel Management (OPM)*fn1 to recover benefits made available to plaintiff pursuant to the Federal Employee Health Benefits Act (the "Act"),*fn2 5 U.S.C. § 8901-8913. Count I of plaintiff's two-count second amended complaint alleges that the Carrier breached its contractual obligation to plaintiff under the Government-Wide Service Benefit Plan (the "Plan"), created pursuant to the Act, by refusing to pay certain benefits to cover costs incurred by plaintiff's son's hospitalization. Count I seeks recovery of $67,165.55 in damages from the Carrier. Count II alleges that OPM acted arbitrarily and capriciously when it refused to order the Carrier to pay the disputed benefits. Pending before the Court is OPM's motion for summary judgment on Count II of the second amended complaint.

The facts pertinent to the disposition of the instant motion may be briefly stated. Plaintiff at all relevant times was a member of the Plan, which extended coverage to his son, Michael Levin. From November 4, 1975 to December 14, 1977, Michael Levin was an inpatient at the Institute of Living in Hartford, Connecticut for long-term psychiatric treatment. By letter dated April 20, 1976, the Carrier notified plaintiff that benefits covering his son's hospitalization would not be extended beyond April 23, 1976 because the Carrier had determined that as of November 12, 1975 the hospitalization of plaintiff's son was for milieu therapy.*fn3 By letter dated April 29, 1976, the plaintiff requested that the Carrier reconsider its decision. See 5 C.F.R. § 890.106(b). The Carrier allegedly never responded to plaintiff's letter.*fn4

On July 13, 1976, the plaintiff requested by letter that OPM review the Carrier's decision to discontinue paying benefits for plaintiff's son's hospitalization. Pursuant to 5 C.F.R. § 890.106, OPM reviewed the Carrier's decision, and by letter dated December 27, 1976, indicated to plaintiff OPM's refusal to order the Carrier to pay plaintiff's claim.

OPM's duty to review a Carrier's denial of benefits is not an explicit creature of the Act. Rather, 5 C.F.R. § 890.106, promulgated under 5 U.S.C. § 8913, creates this duty and establishes the procedures by which OPM is to conduct its review. This Court has previously ruled that it has jurisdiction to review OPM's decision with respect to plaintiff's claim pursuant to 5 U.S.C. § 8912. Levin v. Connecticut Blue Cross, Inc., Civ.No. 77-2389 (N.D.Ill., June 28, 1979) (granting summary judgment in OPM's favor as to plaintiff's first amended complaint). 5 U.S.C. § 8912 provides:

    The district courts of the United States have
  original jurisdiction, concurrent with the Court
  of Claims, of a civil action or claim against the
  United States founded on this chapter.
  By its terms, therefore, section 8912 appears to authorize the instant action against OPM since it is one founded upon regulations promulgated under the Act. 5 U.S.C. § 8913; 5 C.F.R. § 890.106. In its June 28, 1979 opinion, the Court found jurisdiction over the instant action by relying upon the reasoning of the District of Columbia Circuit Court of Appeals in National Treasury Employees Union v. Campbell, 589 F.2d 669 (D.C. Cir. 1978) (an OPM decision made pursuant to section 8902(i) of the Act is subject to judicial review under section 8912 of the Act). Moreover, this Court's conclusion that OPM decisions made pursuant to 5 C.F.R. § 890.106 are reviewable is supported by a reading of the regulation concerning judicial review, 5 C.F.R. § 890.108, and OPM's own interpretation of 5 C.F.R. § 890.106. 40 Fed.Reg. 25433 (1975). As to the latter, OPM refers to the availability of judicial review of its section 890.106 decisions in the notice implementing that regulation. Id. It is hornbook administrative law that an agency's interpretation of the statute which it is charged to administer or its own regulations is to be accorded great weight by the courts. E.g., United States v. American Trucking Associations, 310 U.S. 534, 549, 60 S.Ct. 1059, 1067, 84 L.Ed. 1345 (1940); Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). Thus, although the question of whether OPM action under 5 C.F.R. § 890.106 is reviewable is apparently one of first impression, cf. National Treasury Employees Union v. Campbell, 589 F.2d 669; Stangl v. United States, Civ.No. 78-135 (N.D.Ill., Apr. 25, 1979); Edward J. Meyer Memorial Hospital v. Stetz, 433 F. Supp. 323 (W.D.N Y 1977), the Court today affirms the correctness of its earlier ruling in this regard.*fn5 Further, the Court finds that the Administrative Procedure Act (the "APA"), 5 U.S.C. § 551-59, 701-06, is applicable to the instant action because OPM action undertaken pursuant to 5 C.F.R. § 890.106 is made reviewable by the Act, 5 U.S.C. § 704, and OPM's section 890.106 decisions do not fit within any of the APA's exceptions. 5 U.S.C. § 701.

Turning then to the merits of the instant motion, the Court begins by noting that a summary judgment is not to be granted unless there are no genuine issues as to any material facts and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). As to the first prong of this standard, the Court finds that there are no genuine factual issues herein that are material to the Court's review of OPM's decision in this matter.

Having determined that the Administrative Procedure Act is applicable to plaintiff's claim against OPM, the applicable standard of review is whether OPM's decision to not order the Carrier to pay plaintiff the disputed benefits was an arbitrary or capricious act. 5 U.S.C. § 706(2)(A). Thus, the Court arrives at the only significant area of dispute between plaintiff and OPM, other than the fundamental question of this action of whether OPM acted arbitrarily or capriciously. Namely, OPM contends that the Court's review of OPM's decision must be confined to a review of its letter, dated December 27, 1976, to plaintiff, while plaintiff urges the Court to examine all of the materials which OPM had before it when it made its decision.

OPM argues that Dunlop v. Bachowski, 421 U.S. 560, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975) is instructive on this point. The Court agrees. In Dunlop the Supreme Court reversed the finding of the Third Circuit that, pursuant to 5 U.S.C. § 706(2)(A), courts should conduct a trial type inquiry into the Secretary of Labor's decisions under 29 U.S.C. § 482 to not institute an action to set aside a challenged union election. Id. at 566, 95 S.Ct. at 1857. Arguably, the Third Circuit's position, and the position of the plaintiff in this action, is supported by the last sentence of 5 U.S.C. § 706, which reads "[i]n making the foregoing determinations [i.e., whether an agency's decision was arbitrary and capricious], the court shall review the whole record . . ."

After first conducting an inquiry into the policies involved in Congress's concern with labor elections, the Supreme Court in Dunlop concluded that a court reviewing a decision of the Secretary is not to substitute its judgment for that reached by the Secretary. Id. at 571, 95 S.Ct. at 1859. This finding, the Court reasoned, compelled the further conclusion that Congress's policies would be best served by limiting judicial review to the Secretary's letter setting forth his decision, provided the letter explained the reasons underlying the Secretary's decision.*fn6 Id. at 572-73, 95 S.Ct. at 1860-1861.

Although Dunlop obviously was concerned with different facts and policies than obtain in the instant case, similar considerations lead this Court to find that it is not to substitute its judgment for that of OPM. See National Treasury Employees Union v. Campbell, 589 F.2d at 678-79. Of course, since OPM's review of Carrier decisions to not pay benefits was created pursuant to regulation, it can hardly be said that Congress in any manner considered what policies were to be served by such review. However, since Congress presumably left it in OPM's discretion to create such a right to review, it follows that OPM is permitted to exercise considerable discretion in making the determinations required by 5 C.F.R. § 108.106. See id.; see also Vermont Yankee Nuclear Power Corp. v. National Resources Defense Council, Inc., 435 U.S. 519, 525, 98 S.Ct. 1197, 1202, 55 L.Ed.2d 460 (1978). Therefore, the Court concludes that when it reviews such OPM decisions it is not to substitute its judgment for that arrived at by OPM. Consequently, again guided by considerations analogous to those present in Dunlop, the Court further holds that the question of whether OPM acted arbitrarily or capriciously must be answered solely by an examination of its letter dated December 27, 1976.

In this connection, plaintiff argues that the Dunlop approach to judicial review of administrative action is an exception to general principles with respect to the reviewability of administrative action. Perhaps Dunlop is such an exception; however, the Court finds that judicial review of OPM's action pursuant to 5 C.F.R. ยง 890.106 should fall within any such type of exception carved out by Dunlop. Further, plaintiff's citation to cases involving agency action undertaken pursuant to the requirements of the National Environmental Protection Act (NEPA) is clearly inappropriate in view of ...

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