United States District Court, E.D. Michigan, Southern Division
The Grand Traverse Band of Ottawa and Chippewa Indians, and Its Employee Welfare Plan, Plaintiffs,
Blue Cross and Blue Shield of Michigan, Defendant.
Judge Mona K. Majzoub
ORDER DENYING MOTION FOR RECONSIDERATION  AND
DENYING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
E. LEVY United States District Judge
have twice asserted that defendant Blue Cross and Blue Shield
of Michigan violated the Employee Retirement Income Security
Act (“ERISA”) by breaching their fiduciary duty
with respect to the payment of certain claims at
Medicare-Like Rates (“MLR”). Twice, the Court has
dismissed the claim.
Court first dismissed plaintiffs' ERISA claim regarding
MLR because it was a restatement of their state-law breach of
contract claim regarding a non-ERISA contract, seeking the
same damages as the state-law claims. (Dkt. 73 at 11-12.)
Plaintiffs then filed a motion for reconsideration of that
order, arguing that they were asserting a variety of ERISA
claims outside of the non-ERISA contract. (Dkt. 74.) The
Court denied the motion for reconsideration on substantive
grounds, but granted it in part by granting plaintiffs leave
to file a motion to amend the complaint. (Dkt. 76.) On
January 23, 2017, the Court granted the motion to amend the
complaint, and on January 24, 2017, plaintiffs filed their
amended complaint. (Dkt. 90.)
February 23, 2017, defendant Blue Cross and Blue Shield of
Michigan (“BCBSM”) filed a motion to dismiss the
first amended complaint, arguing in relevant part that the
restated ERISA claim related to MLR payment rates was barred
by the three-year statute of limitations applicable to ERISA
claims. (Dkt. 94.) The Court held oral argument on the motion
on June 7, 2017, and on July 21, 2017, issued an opinion and
order granting the motion to dismiss and dismissing the
repleaded ERISA claim for the second time, now as barred
under the applicable statute of limitations. (Dkt. 99.)
August 4, 2017, plaintiffs filed a motion for reconsideration
and a motion for leave to file a second amended complaint.
(Dkts. 101, 102.) Both motions are now fully briefed. The
Court determines that oral argument is not necessary pursuant
to E.D. Mich. Local R. 7.1(f)(2), and apologizes to the
parties for the delay in adjudicating these motions.
prevail on a motion for reconsideration under Local Rule 7.1,
a movant must “not only demonstrate a palpable defect
by which the court and the parties and other persons entitled
to be heard on the motion have been misled but also show that
correcting the defect will result in a different disposition
of the case.” E.D. Mich. LR 7.1(h)(3). “A
palpable defect is a defect that is obvious, clear,
unmistakable, manifest or plain.” Witzke v.
Hiller, 972 F.Supp. 426, 427 (E.D. Mich. 1997). The
“palpable defect” standard is consistent with the
standard for amending or altering a judgment under
Fed.R.Civ.P. 59(e). Henderson v. Walled Lake Consol.
Schs., 469 F.3d 479, 496 (6th Cir. 2006). Motions for
reconsideration should not be granted if they “merely
present the same issues ruled upon by the court, either
expressly or by reasonable implication.” E.D. Mich. LR
7.1(h)(3). But “parties cannot use a motion for
reconsideration to raise new legal arguments that could have
been raised before a judgment was issued.” Roger
Miller Music, Inc. v. Sony/ATV Publ'g, 477 F.3d 383,
395 (6th Cir. 2007).
seeking to amend a complaint for a second or successive time
may do so “only with the opposing party's written
consent or the court's leave. The court should freely
give leave when justice so requires.” Fed.R.Civ.P.
15(a)(2). Leave should be denied where the amendment
demonstrates defects “such as undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the
amendment, futility of amendment, etc.” Foman v.
Davis, 371 U.S. 178, 182 (1962).
factual background of this case has been repeated multiple
times in multiple orders, and the Court adopts the most
recently stated background for the purposes of this opinion.
(Dkt. 99 at 2-6.)
Motion for Reconsideration
motion for reconsideration argues that the Court improperly
framed plaintiffs' ERISA claim, and improperly found that
BCBSM did not commit fraud or concealment in relation to the
opinion and order granting BCBSM's motion to dismiss, the
Court held that the complaint “[did] not assert a
fiduciary duty to obtain MLR, but instead a fiduciary duty
to, among other things, preserve plan assets and make
decisions with the care of a prudent person, which, as set
forth above, are established fiduciary duties.” (Dkt.
99 at 9.) The Court then determined that the ERISA fiduciary
duty claim was time-barred because the basis of the fiduciary
duty asserted was actually to achieve MLR, and plaintiffs
were aware that BCBSM was not obtaining MLR for ...