[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
_________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
September 10, 2004
No. 03-16287
THOMAS K. KAHN
_________________________ CLERK
D.C. Docket No. 00-01334-MD-FAM
STATE OF CONNECTICUT,
Plaintiff -Appellant,
versus
HEALTH NET, INC.,
f.k.a. Foundation Health,
HEALTH NET OF CONNECTICUT, INC., f.k.a.
Physicians Health Services of Connecticut, Inc., et al.,
Defendants-Appellees.
_______________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(September 10, 2004)
Before ANDERSON and BIRCH, Circuit Judges, and LAND*, District Judge.
*Honorable Clay D. Land, United States District Judge for the Middle District of
Georgia, sitting by designation.
LAND, District Judge:
This appeal presents an issue of first impression in this Circuit: whether a
state, after obtaining assignments from some of its citizens for claims that those
citizens have under the Employee Retirement Income Security Act of 1974, 29
U.S.C. §§ 1001-1461 (ERISA), has standing to assert those claims on behalf of its
citizens in federal court. We conclude that Appellant, the State of Connecticut
(“Connecticut”), in its capacity as assignee, has failed to demonstrate that it has
suffered or will suffer an actual or imminent invasion of a legally protected
interest that is concrete and particularized. Therefore, Connecticut does not have
standing to pursue its claims, as an assignee, under Article III of the United States
Constitution. We also hold that Connecticut does not have statutory standing
under ERISA to pursue the claims of its citizens in its capacity as parens patriae.
Accordingly, we affirm the judgment of the district court dismissing Connecticut’s
Complaint.
BACKGROUND
Connecticut, on behalf of its citizens, sued eight managed health care
companies alleging violations of ERISA. Specifically, Connecticut contends that
the companies violated ERISA by using inappropriate and arbitrary guidelines as
the basis of coverage denials; by employing prescription drug formularies in a
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manner that obstructs enrollee access to medically necessary prescription drugs;
by failing to make timely payments to providers; by failing to respond to enrollee
letters and phone calls; and by failing to disclose to enrollees essential information
about the health insurance plans upon which the enrollees rely. Prior to filing suit,
Connecticut obtained assignments from four of its citizens who were enrollees in
the managed care companies’ ERISA plans. Connecticut brings the present
action in its capacity as assignee of the individual rights of these four enrollees
and in its capacity as parens patriae. The district court dismissed Connecticut’s
Complaint for lack of standing and alternatively for lack of prosecution.1
Prior to filing the lawsuit giving rise to the present appeal, Connecticut
filed a separate lawsuit against a managed care company claiming that its handling
of certain prescription drug claims violated ERISA. Although the claims were
slightly different and only one managed health care company was involved,
Connecticut asserted the same bases for standing in that lawsuit as in the present
one—as an assignee of its citizens’ ERISA rights and as parens patriae. In the
previous case, the United States District Court for the District of Connecticut
dismissed Connecticut’s lawsuit, finding that Connecticut lacked standing to
1
In addition to finding a lack of standing, the district court found that Connecticut’s
failure to attend a docket call authorized dismissal for failure to prosecute. Connecticut contends
it never received notice of the docket call.
3
pursue its claims. Connecticut v. Physicians Health Servs. of Conn., Inc., 103 F.
Supp. 2d 495 (D. Conn. 2000). Connecticut appealed that decision. While its
appeal was pending in the Second Circuit, Connecticut filed in the Connecticut
district court the lawsuit that is the subject of the present appeal to this Court. The
Connecticut district court stayed the proceedings in the present action pending the
Second Circuit Court of Appeals’ resolution of the appeal in the previous action.
While Connecticut’s appeal to the Second Circuit remained pending, the
Judicial Panel on Multidistrict Litigation transferred this case to the United States
District Court for the Southern District of Florida for coordinated pretrial
management in the pending multidistrict litigation against various health
management companies. See In re Managed Care Litigation, No. 00-1334-MD
(S.D. Fla. filed Apr. 17, 2000). Subsequent to the transfer of this case to multi-
district litigation, the Second Circuit affirmed the Connecticut district court’s
determination in the previous case, finding that Connecticut lacked standing to
bring suit under ERISA either as an assignee or in parens patriae. Connecticut v.
Physicians Health Servs. of Conn., Inc., 287 F.3d 110, 115-21 (2d Cir. 2002), cert.
denied, 537 U.S. 878 (2002) (herein referred to as PHS). Relying in part upon
the Second Circuit’s decision, the Southern District of Florida subsequently
dismissed the present case for lack of standing and lack of prosecution.
4
Connecticut now appeals that dismissal. We concur with the reasoning of the
Second Circuit in Connecticut v. Physicians Health Services of Connecticut, Inc.,
287 F.3d 110, and adopt its reasoning as our own. Accordingly, we affirm the
district court’s dismissal of Connecticut’s Complaint for lack of standing.
DISCUSSION
The district court’s dismissal of Connecticut’s Complaint for lack of
standing is reviewed de novo. Freeman v. First Union Nat’l, 329 F.3d 1231, 1234
(11th Cir. 2003).
I. The State’s Standing as Assignee
Four Connecticut residents assigned their rights under ERISA to the State of
Connecticut. However, no evidence exists in the record to suggest that this
assignment was supported by any consideration or that the State of Connecticut
has suffered, or will suffer, any type of injury as a result of the practices it claims
violate ERISA. It simply seeks to assert these claims on behalf of its citizens and
for their sole benefit.
It is axiomatic that the jurisdiction of the federal courts is limited by the
United States Constitution. Specifically, Article III, Section 2, of the Constitution
restricts federal courts to deciding “Cases” and “Controversies.” U.S. Const. art.
III, § 2. The doctrine of constitutional standing has emerged from the Supreme
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Court’s interpretation of the meaning of these two terms—“Cases” and
“Controversies.” “Whether a party has a sufficient stake in an otherwise
justiciable controversy to obtain judicial resolution of that controversy is what has
traditionally been referred to as the question of standing to sue.” Sierra Club v.
Morton, 405 U.S. 727, 731-32, 92 S. Ct. 1361, 1364, 31 L. Ed. 2d 636 (1972).
At an “irreducible constitutional minimum,” Article III standing requires
that the plaintiff “must have suffered an injury in fact—an invasion of a legally
protected interest which is (a) concrete and particularized; and (b) actual or
imminent, not conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504
U.S. 555, 560, 112 S. Ct. 2130, 2136, 119 L. Ed. 2d 351 (1992) (internal quotation
marks, citations, and footnote omitted). Generally, the plaintiff “must assert his
own legal rights and interests, and cannot rest his claim to relief on the legal rights
or interests of third parties.” Warth v. Seldin, 422 U.S. 490, 499, 95 S. Ct. 2197,
2205, 45 L. Ed. 2d 343 (1975).
In the present appeal, Connecticut does not contend that it has suffered any
specific injury to itself. The assignments in this case are virtually identical to
those at issue in PHS; they do not “confer actual rights or benefits under ERISA
on the State .... The right to recover benefits or to seek money damages remains
with the assignors.” PHS, 287 F.3d at 115. For the reasons set out in Part II of the
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Second Circuit opinion in PHS, 287 F.3d at 115-19, we hold in this case that
Connecticut, in its capacity as assignee, has failed to allege an actual or imminent
invasion of a legally protected interest that is “concrete and particularized.”2
Accordingly, the district court properly concluded that Connecticut, in its capacity
as assignee, lacked Article III standing.
II. The State’s Claims as Parens Patriae
Connecticut also contends that it has standing to bring claims for violation
of ERISA in its parens patriae capacity. Parens patriae is a common law doctrine
that permits states to sue under certain limited circumstances to enforce what the
Supreme Court has called “quasi sovereign” interests. Alfred L. Snapp & Son,
Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592, 603-04, 102 S.Ct. 3260, 3266-67,
73 L.Ed. 995, 1005-06 (1982).
Like the Second Circuit, we decline to address the issue of Article III
parens patriae standing, see PHS, 287 F.3d at 119-20, because we hold that
Connecticut lacks statutory standing to sue in parens patriae to enforce the
2
The facts giving rise to the present appeal are distinguishable from those cases in which
this Court has recognized the standing of certain health care provider-assignees who assert
ERISA claims under 29 U.S.C. § 1132(a). Unlike Connecticut, the provider-assignees in those
cases were able to assert separate injuries sufficient to satisfy the requirements for Article III
standing. See HCA Health Servs. of Ga., Inc. v. Employers Health Ins. Co., 240 F.3d 982, 991
(11th Cir. 2001) (recognizing standing of health care provider-assignee to sue for recovery of
benefits where assignments were not prohibited under the plan in question); Cagle v. Bruner, 112
F.3d 1510, 1514-15 (11th Cir. 1997) (per curiam) (same).
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alleged ERISA violations in this case. When a state sues in parens patriae to
enforce a federal statute, it must demonstrate that, in enacting the statute, Congress
clearly intended that the states be able to bring actions in that capacity. See
Hawaii v. Standard Oil Co., 405 U.S. 251, 260-66, 92 S.Ct. 885, 890-93, 31 L.Ed.
184, 191-95 (1972). No such intention can be derived from a plain reading of
ERISA. The specific section upon which Connecticut relies, Section 502(a)(3) of
ERISA, provides that only “a participant, beneficiary or fiduciary” may bring suit.
29 U.S.C. § 1132(a)(3). Nothing in this statutory provision suggests that a state
may bring lawsuits on behalf of its citizens to enforce ERISA. In fact, the plain
language of the statute supports the conclusion that Congress had no such
intention. Accordingly, following the Second Circuit in PHS, see 287 F.3d at 120-
22, we find that Connecticut lacks statutory standing to proceed in parens
patriae.3
3
Connecticut attempts to bootstrap its assignment argument with its parens patriae claim,
contending that by permitting assignment of ERISA claims under certain circumstances Congress
has evidenced its intent to permit states to proceed parens patriae upon obtaining assignments
from its citizens. The Court rejects this contention, finding that if Congress truly intended for the
states to be able to proceed parens patriae to enforce ERISA it could have plainly said so.
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CONCLUSION
Based on the foregoing, the judgment of the district court is AFFIRMED.4
4
In light of our conclusion that Connecticut lacks standing to pursue its claims, we find it
unnecessary to determine whether its Complaint should also be dismissed for lack of prosecution
or based upon principles of res judicata and collateral estoppel.
9