UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA HONORABLE PERCY ANDERSON, JUDGE PRESIDING. Plaintiff, ) ) ) ) Vs. Defendant.
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1 CENTRAL DISTRICT OF CALIFORNIA HONORABLE PERCY ANDERSON, JUDGE PRESIDING 0 TODD KIMSEY, Plaintiff, Vs. BLUE CROSS BLUE SHIELD OF TEXAS, Defendant. No. CV - PA REPORTER'S TRANSCRIPT OF STATUS CONFERENCE LOS ANGELES, CALIFORNIA MONDAY, OCTOBER, ; :0 A.M. LEANDRA AMBER, CSR 00, RPR OFFICIAL U.S. DISTRICT COURT REPORTER NORTH SPRING STREET, # 0 LOS ANGELES, CALIFORNIA 00 ( -0
2 A P P E A R A N C E S 0 IN BEHALF OF THE PLAINTIFF, TODD KIMSEY: IN BEHALF OF THE DEFENDANT, BLUE CROSS BLUE SHIELD OF TEXAS: ALSO APPEARING: KANTOR & KANTOR, LLP BY: GLENN R. KANTOR, ESQ. PARTHENIA STREET NORTHRIDGE, CA ( - gkantor@kantorlaw.net FOLEY AND LARDNER LLP BY: EILEEN RIDLEY, ESQ. CALIFORNIA STREET SUITE 00 SAN FRANCISCO, CA 0 ( - eridley@foley.com
3 I N D E X PAGE HEARING: STATUS CONFERENCE 0
4 LOS ANGELES, CALIFORNIA; MONDAY, OCTOBER, ; :0 A.M. -o0o- 00:00:-0 00:00: 00:00: 00:0: 00:0: 0 THE CLERK: Calling item four CV - PA, Todd Kimsey versus Blue Cross Blue Shield of Texas. Counsel, please approach and state your appearance for the record. MR. RIDLEY: Good morning, your Honor. Eileen Ridley on behalf of the defendant Blue Cross Blue Shield of Texas. MR. KANTOR: Good morning, your Honor. Glenn Kantor for the plaintiff. THE COURT: Let me see if I understand this case. The plaintiff is diagnosed with cancer. He undergoes treatment incurs a bill, I guess, in -- what? -- January of of some $0,000 for stem cell transplant, which was preapproved. And subsequently I guess three or four months later they -- the insurance company finds out that his employer had not been paying the bill, and then they retroactively terminate his benefits? MR. RIDLEY: Not exactly, your Honor. I think -- THE COURT: Tell me exactly. MR. RIDLEY: I believe that there was notice of
5 00:0: 00:0: 00:0: 00:0: 00:0: 0 premium issues that in fact Blue Cross Blue Shield of Texas had notified the employer of these premium issues. THE COURT: Uh-huh. MR. RIDLEY: Something like seven different notices and -- in that timeframe. And then ultimately when there's no cure, no resolution, there was a cancellation, all of the notices warning the issue about what would happen if in fact the premium had not been paid. THE COURT: Well, and then he appeals; correct? MR. RIDLEY: He does appeal. THE COURT: Okay. And at some point they tell you that there are insurance laws both in Texas and California that say that in essence the insurance has to continue if somebody is disabled. And there's no dispute that he's disabled by virtue of the cancer and the treatment he receives; correct? MR. RIDLEY: I don't think there's any dispute about that. However, I would note that my client didn't get notice of that that in fact -- THE COURT: What difference does that make if in fact he is disabled and California law provides that you can't terminate somebody's insurance who is disabled. MR. RIDLEY: The difference is that he was identified as an active employee that there wasn't a notification that the disability --
6 00:0:0 00:0: 00:0: 00:0:0 00:0: 0 THE COURT: But at some point during the appellate process, they let you know that in fact he's disabled, and they cite you to the law; correct? MR. RIDLEY: They do notify us and cite to both the California statute and the Texas status. I'll also note though, however, that there's an issue between this -- both statutes refer to termination. This was a cancellation as a result of a basically precondition to any insurance with regard to the -- THE COURT: Did you address the -- did the insurance company on either appeal address the applicability of these laws in California and Texas? MR. RIDLEY: They did not -- they did not go into a legal discussion with regard to the laws per se in the appeal other than to note that based on both the terms of the policy and the facts of the case that in fact the premium hadn't been paid and therefore there was a cancellation. THE COURT: In other words, when they said in their papers that the insurance company hadn't addressed whether these laws were applicable in this case, that's true. MR. RIDLEY: (No audible response. THE COURT: And your appellate -- in your appellate decision you never address the applicability of the law in California that says you can't terminate or cancel somebody's insurance when they're disabled.
7 00:0: 00:0: 00:0: 00:0: 00:0: 0 MR. RIDLEY: Well, first of all, your Honor, neither statute says "terminate" or "cancelled." Both refer to "termination." There is a difference. And in fact the appeal at response -- THE COURT: Did you make that -- did you -- did you -- did you cite that answer in -- does the insurance company rely on that in its appellate decision? MR. RIDLEY: The insurance company says that in fact that the basis of the denial was in fact the cancellation due to the failure to pay premium. THE COURT: I don't think that's the answer to that question. Are you sure you don't want me to remand this case so you guys can go back and address that issue? MR. RIDLEY: We would be happy to address that issue and have you remand it for that purpose. THE COURT: Uh-huh. You might want to really sort of think about whether or not you want to come back here after you have a chance to look at the law and see what the law is in California. Because I don't care what the standard of review is here, I think you guys are on pretty slim ground. And nothing you have said here this morning convinces me otherwise. So it might behoove you -- if you want, you might want to have a chance to go back and take a hard look at what the law is because I'm not sure that you
8 00:0: 00:0: 00:0: 00:0:0 00:0: 0 are really going to have -- that that's going to work and I'm -- considering what the facts are in this case and what the law is in California and Texas. So if you guys want me to -- you want me to remand it so you can address the applicability. MR. RIDLEY: We would be happy for you to remand it to do that, your Honor. THE COURT: All right. What's the plaintiff's position? MR. KANTOR: Absolutely not, your Honor. At least that's my position. I understand the Court will do what the Court will do. The purpose of the prelitigation administration process is to give the plaintiff the chance to put their position forward to the insurance company. In Harlick v. Blue Shield, the Ninth Circuit said they get one chance to state all of their reasons for denial. We very specifically told them why the claim was payable, and they very specifically chose to ignore us. The remand process just gives them another bite at the apple. This case would be de novo. Why -- I understand how busy the Court is, but the Court has expressed its opinion. Why does the defendant get a remand to go back and consider this? This is a legal issue. They should be able to decide this in tens days. They should be able to decide this in one day because he have they have no defense.
9 00:0: 00:0: 00:0: 00:0: 00:0: 0 In the meet and confer process, we again and again and again ask them what is your defense to this statute? And the response is because we're right and you're wrong. And we said, well, fine. We're willing to listen. Tell us why we're wrong. So why are they entitled to a remand when they refuse -- are they then going to come back and give us a different reason for denial? According to Harlick they can't do that. The only thing they said in their denial was we were not told before January st,, that this man was disabled. Well, neither statute mandates that they be told. It doesn't say anything about it. And we gave them evidence from the California State Disability program that he was being paid as a totally disabled individual. Moreover, they had approved the stem cell transplant because he's dying of cancer. So their position is well we didn't know. Well, they have medical records with $0,000 in bills. So while -- I understand that the Court would like to get it off its docket because of how busy the Court is -- I'm not criticizing. I am just saying that I don't think they're entitled to it. I could get a motion on file in a week, and I would like see their opposition.
10 0 00:0: 00:0:0 00:0: 00:0: 00:0: 0 THE COURT: Well, I think the answer is it's not the Court's function to apply the correct standard in the first instance. And so -- and that function is reserved to the plan administrator. MR. KANTOR: Yes, but when the plan administrator fails to do it, then it does, with all due respect, become the Court's responsibility because how many times do they get to say, no, we're not going to decide the issue of law. And the other question is having issued a decision as an appellate decision that the reason they were denying it is because they weren't put on notice. Do they get to now come back and give a different reason. Under the Ninth Circuit decision in Harlick, the answer would be, no, they get one chance. THE COURT: But they do get -- they hadn't addressed -- and that's why I kept asking. Are they -- they hadn't addressed -- and you state in your papers -- they hadn't addressed the applicability of California law in this case. And in the first instance I think they ought to have a chance to do that. And quite frankly I think once they do do that -- I think you're right. I think they're going to see that -- well, we'll see what they want to do. MR. KANTOR: Your Honor, well, one of us wears the robe, and it's not me. But they did have --
11 THE COURT: You want to trade paychecks, by the way? 00:0: 00:0: 00:: 00:: 00:: 0 MR. KANTOR: No, your Honor. I take the power but not the paycheck. THE COURT: They suckered me on that too. MR. KANTOR: Still paying three college tuitions. I couldn't do it. The point is we said to them very distinctly: Tell us why those two statutes don't apply in the appellate. And it's not that they don't have the opportunity. They chose not to. So why do they get another chance? I just don't understand, to be honest with you, why -- having been asked the question, why do these two statutes not apply? And they say we're not going to tell you. They just don't. That now the Court says well you didn't do it right the first time. I'm going to give you another chance. If my client had failed to submit an appeal on a timely basis and we submit it late, the law says: Sorry, plaintiff. You had -- the rules say you do this. You didn't do this. You are now out of court. Not okay. We'll give you another chance. Why does the entity, a billion dollar entity such as Blue Cross Blue Shield of Texas, be given that extra chance to do what they were supposed to do in the first place? And my client would have been out of -- just out of
12 00::0 00:: 00:: 00::0 0 luck because he didn't do it timely. They had the chance to do it timely. They had lawyers. This cases has been on file for four or five months, and do they need to be told to go back to the administrator? The lawyers can't say to them, "Excuse me. You don't have a cases here." I mean, or if it's going to be remanded, could I ask the Court to direct them to make a decision in two weeks because I don't know why they need the 0 days. My client is being harassed on a daily basis by debt collectors. He's trying to survive, and they're trying to get their bill paid. THE COURT: How much time do you think you're going to need? MR. RIDLEY: I would ask for no less than 0 days. I don't think we need the 0. THE COURT: All right. Here's what I'm going to do. I'll consider everybody's arguments. We'll send out an order today. I don't think they need -- if I decide to remand it, I don't think they need full 0 days either. And if not, I'll go ahead and give you your dates. MR. KANTOR: Thank you, your Honor. MR. RIDLEY: Thank you, your Honor. THE COURT: All right. Thank you very much. (Whereupon, at : a.m., the proceeding concluded.
13 CERTIFICATE OF REPORTER COUNTY OF LOS ANGELES ss. STATE OF CALIFORNIA 0 I, LEANDRA AMBER, OFFICIAL FEDERAL COURT REPORTER, REGISTERED PROFESSIONAL REPORTER, IN AND FOR THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, DO HEREBY CERTIFY THAT PURSUANT TO SECTION, TITLE, UNITED STATES CODE, THE FOREGOING IS A TRUE AND CORRECT TRANSCRIPT OF THE STENOGRAPHICALLY REPORTED PROCEEDINGS HELD IN THE ABOVE-ENTITLED MATTER AND THAT THE TRANSCRIPT PAGE FORMAT IS IN CONFORMANCE WITH THE REGULATIONS OF THE JUDICIAL CONFERENCE OF THE UNITED STATES. DATE: /s/ LEANDRA AMBER, CSR 00, RPR FEDERAL OFFICIAL COURT REPORTER
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