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Perkins v. U.S. Airways Inc.

United States District Court, D. South Carolina, Greenville Division

August 10, 2016

Jennifer Perkins, Plaintiff,
US Airways, Inc.; U.S. Airways Group; American Airlines Group, successor by merger with U.S. Airways, Inc.; and U.S. Airways Health Benefit Plan, Defendants.


          Bruce Howe Hendricks United States District Judge

         This matter is before the Court on Plaintiff’s Motion to Alter or Amend (ECF No. 40). For the reasons set forth herein, the Motion is denied.


         The Court assumes familiarity with the facts and procedural history of this case, which are set forth in detail in the Court’s September 30, 2015 Order (ECF No. 36) granting in part and denying in part Defendants’ Motion to Dismiss the Complaint for failure to state a claim upon which relief can be granted. On October 28, 2015, Plaintiff filed a Motion to Alter or Amend, moving the Court to reconsider its dismissal of Plaintiff’s first, second, and fourth causes of action. (ECF No. 40 at 1.) Defendants responded on November 16, 2015 (ECF No. 43), and Plaintiff replied on November 30, 2015 (ECF No. 47). The Court has thoroughly reviewed the briefing and the relevant legal authorities on this matter, and now issues the following ruling.


         The Court’s Order granting in part and denying in part Defendant’s Renewed Motion to Dismiss is an interlocutory order under Fed.R.Civ.P. 54(b). “Motions for reconsideration of interlocutory orders are not subject to the strict standards applicable to motions for reconsideration of a final judgment.” Am. Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505, 514 (4th Cir. 2003) (citation omitted). “This is because a district court retains the power to reconsider and modify its interlocutory judgments . . . at any time prior to final judgment when such is warranted.” Id. at 514-15 (citing Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1469 (4th Cir.1991)); see also United States v. Duke Energy Corp., 218 F.R.D. 468, 473-74 (M.D. N.C. 2003) (“A court may revisit interlocutory orders at any time prior to final judgment under Fed.R.Civ.P. 54(b) or its inherent authority.”).

         The Fourth Circuit Court of Appeals has not specifically articulated the standard for evaluating a motion for reconsideration filed under Rule 54(b). Long v. O’Reilly’s Auto. Stores, Inc., C/A No. 6:12-901-MGL, 2014 WL 2864589, at *2 (D.S.C. June 23, 2014). Although the strict standards applicable to motions for reconsideration brought pursuant to Fed.R.Civ.P. 59 do not apply, “District courts in the Fourth Circuit look to the standards of motions under [Rule 59] for guidance.” Id. (citing R.E. Goodson Constr. Co., Inc. v. Int’l Paper Co., C/A No. 4:02-4184-RBH, 2006 WL 1677136, at *1 (D.S.C. June 14, 2006); Akeva L.L.C. v. Adidas Am., Inc., 385 F.Supp.2d 559, 565-66 (M.D. N.C. 2005)); see also Pure Fishing, Inc. v. Normark Corp., C/A No. 3:10-2140-CMC, 2012 WL 4009628, at *1 (D.S.C. Sept. 12, 2012) aff’d, 564 F. App’x 601 (Fed. Cir. 2014) (“This court finds the standard applicable to reconsideration of final orders useful, though non-binding.”). As with a motion under Rule 59, “appropriate reasons for granting reconsideration under Rule 54 are: (1) to follow an intervening change in controlling law; (2) on account of new evidence; or (3) to correct a clear error of law or prevent manifest injustice.” Long, 2014 WL 2864589 at *2. “The ultimate responsibility of the federal courts, at all levels, is to reach the correct judgment under law.” Am. Canoe Ass’n, 326 F.3d at 515.


         I. Definition of “Current Employment Status”

         Plaintiff first argues that the Court erroneously relied on an inapplicable definition of “current employment status” in finding that Plaintiff had failed to state a claim under the Medicare as Secondary Payer (“MSP”) statute, as codified in 42 U.S.C. § 1395y. (ECF No. 40-1 at 10.) Plaintiff asserts that the Court committed a clear error of law by applying the definition of “current employment status” in the regulations instead of the definition provided in the MSP statute itself. (Id.) Plaintiff cites the U.S. Supreme Court ruling in Stenberg v. Carhart, 530 U.S. 914 (2000), for the proposition that where Congress has provided a definition in a statute for a particular word or phrase, courts must follow that definition in giving effect to Congress’ intent. Id. at 942 (“When a statute includes an explicit definition, [an interpreting court] must follow that definition, even if it varies from that term’s ordinary meaning.” (citing Meese v. Keene, 481 U.S. 465, 484-485 (1987)). Plaintiff further cites dicta from an out-of-circuit district court decision for the proposition that, “‘[T]he Congress intended that the term ‘current employment status’ be given the broadest possible application.’” Santana v. Deluxe Corp, 12 F.Supp.2d 162, 172 (D. Mass. 1998) (quoting 60 Fed. Reg. 45344-01, 45356 (Aug. 31, 1995)).

         The definition of “current employment status” set forth by Congress in the MSP statute, 42 U.S.C. § 1395y(b)(1)(E)(ii), is as follows: “An individual has ‘current employment status’ with an employer if the individual is an employee, is the employer, or is associated with the employer in a business relationship.” Id. Plaintiff argues that this definition of “current employment status” trumps the definition of the same phrase set forth in the applicable regulation, which reads in pertinent part: “An individual has current employment status if . . . [t]he individual is actively working as an employee . . . or . . . [t]he individual is not actively working and . . . [i]s receiving disability benefits from an employer for up to 6 months . . . .” 42 C.F.R. § 411.104 (emphasis added).

         The Court disagrees with Plaintiff that it committed a clear error of law by following the applicable definition of “current employment status” in the regulation promulgated by the U.S. Department of Health and Human Services’ Health Care Financing Administration (“HCFA”), which retains regulatory authority to enforce the mandates of the MSP statute. See Health Ins. Ass’n of Am., Inc. v. Shalala, 23 F.3d 412, 415 (D.C. Cir. 1994). Plaintiff’s arguments on this point are unconvincing to show that HCFA’s regulatory definition constitutes anything more than proper guidance on the application of the Congressional language under particular circumstances. Such regulations are to be upheld unless they “contradict[] ‘the unambiguously expressed intent of Congress’ or [are] not a ‘reasonable interpretation’ of an ambiguous statutory provision.” See Id. (quoting Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 842-43 (1984)). The regulatory definition in question does neither, and is therefore entitled to deference. Moreover, the HCFA’s instruction to construe broadly the term “current employment status” applies to the breadth of business relationships Congress intended to capture; in other words, the term “encompasses not only individuals who are actively working but also individuals under contract with the employer whether or not they actually perform services for the employer, such as attorneys on retainer, tradesmen and insurance agents.” 60 Fed. Reg. 45, 344-01, 45, 356 (Aug. 31, 1995); see Santana, 12 F.Supp.2d at 172 (declining to extend the MSP’s statutory protection for active individuals and those with current employment status to a disabled former employee receiving health benefits and granting summary judgment to the defendant employer on MSP claim). Therefore, the Court declines to reconsider its prior ruling on the MSP claim on this basis.[1]

         The remainder of Plaintiff’s arguments regarding dismissal of the MSP claim (Fourth Cause of Action, ECF No. 1 ¶¶ 74-79) either rehash arguments raised in her Opposition to the Motion to Dismiss or fail to raise colorable assertions that the Court committed a clear error of law. Consequently, the Court will not address them here. As fully set forth in the Court’s prior Order, Plaintiff’s MSP claim fails to plausibly allege a violation of the MSP statute, and the Court’s dismissal of that claim will remain undisturbed.

         II. The Health Plan Provisions’ Viability ...

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