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Clark v. K-Mart Corp.


filed: May 22, 1992.


On Appeal from the United States District Court for the Western District of Pennsylvania. (D.C. Civil No. 91-1431)

Before: Greenberg and Scirica, Circuit Judges, and Debevoise, District Judge*fn*

Author: Debevoise


DEBEVOISE, District Judge.

Appellant, K-Mart Corporation ("K-Mart"), appeals from an order of the district court enjoining it from denying medical benefits to appellee, Susan Clark, for a procedure known as high dose chemotherapy with autologous bone marrow transplant ("HDCT/ABMT"). K-Mart also appeals from an order fixing the bond in the amount of $1,000. The jurisdiction of the district court was based upon the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA"). This Court has jurisdiction pursuant to 28 U.S.C. § 1292(a)(1).

We conclude that the order granting preliminary injunctive relief constituted an abuse of discretion and must be reversed. In light of this determination the appeal from the order setting the bond is moot and will be dismissed.


Appellee, a 35-year old mother of two children, was employed by K-Mart at all times relevant to this action. Her husband is employed at a metal fabrication plant.

In January 1988 appellee underwent a right modified radical mastectomy. Thereafter she was treated for six months with chemotherapy and radiation. In the summer of 1990 she noted hip pain, and tests revealed bone metastases. She was treated with additional chemotherapy and radiation, but in February 1991 her pain recurred.

On June 19, 1991, at the request of appellee's physician, Jeffrey E. Shogan, M.D., Director, Bone Marrow Transplant Program of the Allegheny General Hospital in Pittsburgh, evaluated appellee's condition. He confirmed the diagnosis of metastatic breast cancer and concluded that conventional therapy held out little hope for appellee to secure prolonged disease-free survival. He further concluded that HDCT/ABMT was an appropriate treatment and that appellee was a suitable candidate for the treatment, which he proposed to perform at Allegheny General Hospital.

Until that time K-Mart's self-funded Comprehensive Health Care Plan (the "Plan") had paid appellee's medical and surgical expenses. K-Mart, through its Director of Employee Benefits, is the administrator of the Plan, but, as provided in the Plan, it has entered into an Administrative Services Contract with Blue Cross and Blue Shield of Michigan ("Blue Cross"). Among Blue Cross' responsibilities is the administration of claims for health benefits. The Plan provides that claims for payment or reimbursement be submitted to Blue Cross. If a claim is denied there is provision for an appeal to Blue Cross, and if a claimant is unsuccessful on appeal there is provision for further appeal to K-Mart's Director of Employee Benefits.

The Plan pays for certain transplants "as well as accepted bone marrow procedures" (emphasis added). The Plan excludes from coverage certain medical procedures. Critical to this case, among the excluded procedures are those which are "experimental or investigational."*fn1 The Plan assigns to Blue Cross a major role in the administration of the exclusion provisions. The Plan Summary instructs a beneficiary that "if you receive or plan to receive services not listed above and are doubtful of coverage, submit a claim to [Blue Cross] for a determination of benefits." With respect to the exclusion at issue in this case, it is defined as "any procedure . . . considered by the claims administrator to be experimental or investigational" (emphasis added).

HDCT/ABMT is a procedure of relatively recent origin whereby a patient is given extremely high, lethal doses of chemotherapy, far more than the patient could tolerate during conventional chemotherapy. The patient must first undergo an initial procedure wherein bone marrow cells are removed from and stored outside the body. In some circumstances the bone marrow is purged while it is outside the body in an effort to destroy microscopic residual cancer cells. The bone marrow cells are later reinjected into the patient after the course of massive dose chemotherapy has been completed.

While HDCT/ABMT may be effective for some forms of cancer, it may not be effective for others. A multitude of factors must be considered and a wide variety of procedures have to be tried, tested and evaluated before HDCT/ABMT becomes an accepted mode of treatment for a particular cancer condition. It is now generally accepted in medical circles that HDCT/ABMT is no longer in its experimental stage as a treatment for Hodgkin's disease, lymphoma, neuroblastoma and acute leukemia.

Dr. Shogan, who proposed to treat appellee with HDCT/ABMT, is board certified in internal medicine and oncology. He has held teaching positions in the past and is currently an Assistant Professor of Medicine at the University of Pennsylvania. Since 1989 when he became Director of the Allegheny General Hospital's Bone Marrow Transplant Program he has performed 50 transplants, of which 30 were for metastatic breast cancer. In Dr. Shogan's opinion the procedure as applied to metastatic breast cancer is no longer experimental or investigational.

The cost of the procedure is upwards of $150,000. Hospitals are generally unwilling to permit the procedure to be performed unless they are assured in advance of payments and consequently appellee sought advance determination that the Plan would cover the cost. To that end on July 8, 1991 Dr. Shogan wrote to K-Mart to seek a commitment that the Plan would pay for the treatment he proposed to administer to appellee. The letter described appellee's condition and the benefits to be expected from HDCT/ABMT, and the letter set forth the reasons why Dr. Shogan believed that this treatment for metastatic breast cancer should not be considered experimental.

K-Mart sent the letter to Blue Cross for a determination of eligibility. On August 19 or 20, 1991 the letter arrived on the desk of Seymour A. Adelson, M.D. Dr. Adelson is Blue Cross' senior medical consultant in the area of medical policy. He describes himself as the interface between the medical and business world, and among his duties is the application of medical plan documents and collective bargaining agreements to medical benefit claims. In recent years he has devoted considerable attention to the question whether plans which Blue Cross administered covered HDCT/ABMT generally and particularly as applied to metastatic breast cancer.

Upon reviewing Dr. Shogan's letter he concluded that the treatment appellee sought was experimental and thus excluded from coverage under the Plan. This determination was communicated to Glyn Soehner, manager of K-Mart's welfare benefit plans.

Failing to obtain approval of payment, appellee instituted this action on August 27. The complaint sought declaratory and injunctive relief. Prompt action was urgent, because if appellee's condition deteriorated she might no longer be eligible under the protocols established for treatment.

Moving with great dispatch the district court conducted a hearing on the application for a preliminary injunction on September 11. The principal witnesses were Dr. Shogan and Dr. Adelson who each addressed the issue whether the proposed treatment was experimental. Immediately upon the Conclusion of the hearing the court placed an opinion on the record in which it set forth its reasons for issuing an injunction ordering K-Mart to pay for HDCT/ABMT in the event appellee qualified for it and elected to proceed with it. The district court concluded that the Plan gives Blue Cross, the claims administrator, authority to decide whether claims are within the exclusions and that the determination of Blue Cross in this case was arbitrary and capricious. In the alternative the district court held that if it were to apply a de novo standard of review it would hold that HDCT/ABMT for metastatic breast cancer is not experimental.

The district court fixed the bond in the sum of $1000 over K-Mart's objections as to its adequacy.

II. Discussion

We review the district court's granting of injunctive relief for an abuse of discretion. Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 198 (3d Cir. 1990). "An abuse of discretion exists where the district court's decision rests upon a clearly erroneous finding of fact, an errant Conclusion of law, or an improper application of law to fact." International Union, UAW v. Mack Trucks, Inc., 820 F.2d 91, 95 (3d Cir. 1987). The district court's Conclusion that Blue Cross' action was arbitrary and capricious was a finding of fact which we must accept unless clearly erroneous. Universal Minerals, Inc. v. C. A. Hughes & Co., 669 F.2d 98, 103 (3d Cir. 1981).

To be entitled to a preliminary injunction an applicant's initial burden is to establish, among other things, that he/she is reasonably likely to prevail on the merits. See, e.g., Hoxworth, 903 F.2d at 197-98. The present case, as the district court correctly observed, is governed by Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S. Ct. 948, 103 L. Ed. 2d 880 (1989). There the Supreme Court held that the denial of benefits under ERISA "is to be reviewed under the de novo standard of review unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Id. at 115.

However, where the Plan administrator is given discretion to make determinations as to who is eligible to receive benefits and what benefits are covered by the Plan, then the arbitrary and capricious standard must be applied. Stoetzner v. United States Steel Corp., 897 F.2d 115, 119 (3d Cir. 1990) ("The arbitrary and capricious standard does apply because the plan contains provisions which gives [sic] the administrator discretion in making eligibility determinations.") (citing Firestone, 489 U.S. at 111); Kotrostis v. GATX Corp. Non-Contributory Pension Plan for Salaried Employees, 757 F. Supp. 1434, 1453 & n. 5 (E.D. Pa. 1991); Daniels v. Anchor Hocking Group, 758 F. Supp. 326, 331 (W.D. Pa. 1991); Jones v. Laborers Health and Welfare Trust Fund, 906 F.2d 480, 481 (9th Cir. 1990). If the language of a plan confers upon the administrator the authority to interpret the provisions of the plan, there is sufficient discretion to require application of the arbitrary and capricious standard. Jett v. Blue Cross and Blue Shield of Alabama, 890 F.2d 1137, 1138-39 (11th Cir. 1989).

In the present case, although the district court expressed some uncertainty whether the plan administrator had discretion, it ultimately concluded that the exclusion clause "arguably gives the claims administrator under the plan the discretion to administer the plan" and applied the arbitrary and capricious standard. In her complaint appellee appears to have accepted that standard, alleging in paragraph 16 that "the invocation by K-Mart of the exclusion at issue is plainly wrong, arbitrary and capricious, and is not supported by substantial evidence." On appeal, however, appellee urges that the de novo standard should be applied.

The case upon which appellee relies for support is distinguishable. Adams v. Blue Cross/Blue Shield of Md., Inc., 757 F. Supp. 661, 666 (D. Md. 1991). The language of the Plan in the instant case unambiguously confers discretion to determine claims eligibility upon the Plan administrator (K-Mart) and the claims administrator (Blue Cross).

The Plan's "Final Word" includes the statement: "Kmart Corporation as plan administrator reserves the right to interpret discretionary matters." The Plan assigns responsibility to exercise initial discretion with respect to medical questions to Blue Cross as claims administrator. For example, Plan beneficiaries are directed to submit questions about coverage to Blue Cross for a determination of benefits. Blue Cross decides if a claim should be paid and hears the first appeal of a denial (with a second appeal going to the Plan administrator). The Plan assigns to Blue Cross responsibility for determining whether a procedure is to be considered experimental or investigational and thus excluded from coverage. It would be difficult to devise language which more clearly confers upon the administrator of a plan discretion to make eligibility determinations.

Thus the district court applied the proper standard of review. However, we conclude that its application of the standard was clearly erroneous.

In cases where it is clearly established that the administrator has discretionary authority to make claim determinations and to interpret the provisions of the Plan, and that the arbitrary and capricious standard of review is to be applied, the administrator's exercise of that discretion is entitled to deference by the court. See Gust v. Coleman Company, Inc., 740 F. Supp. 1544, 1550 (D. Kan. 1990), aff'd, 936 F.2d 583 (10th Cir. 1991); Poole v. Seattle - First National Bank, 741 F. Supp. 837, 843 (E.D. Wash. 1990). That deference means that the administrator's decision must be affirmed unless it is "'without reason, unsupported by substantial evidence or erroneous as a matter of law.'" Daniels, 758 F. Supp. at 331 (citing Adamo v. Anchor Hocking Corp., 720 F. Supp. 491, 500 (W.D. Pa. 1991) and quoting Jung v. FMC Corp., 755 F.2d 708, 711 (9th Cir. 1985)).

The administrator's decision is supported by substantial evidence if there is sufficient evidence for a reasonable person to agree with the decision. Significantly, however, the evidence need not obscure all other possible Conclusions. Our task as a reviewing court is to determine first, whether the administrator considered all the relevant factors, and second, whether the decision constituted a clear error of judgment. . . . Thus unless the decision was not rational, we must uphold the administrator's decision.

Id. at 331 (citations omitted) (emphasis added).

Furthermore, an administrator's decision must not be disturbed as being arbitrary and capricious even if there is evidence that would support a contrary decision. Id.; Jett, 890 F.2d at 1140. Moreover, under an arbitrary and capricious standard of review, a court may not simply substitute its own judgment for that of the administrator. Motor Vehicle Mfrs' Ass'n v. State Farm Mutual Auto Ins. Co., 463 U.S. 29, 43, 103 S. Ct. 2856, 77 L. Ed. 2d 443 (1983).

The evidence in the case relating to the status of HDCT/ABMT for metastatic breast cancer consisted of the testimony of Dr. Shogan and of Dr. Adelson and a number of articles, studies and reports. There was nothing which reflected adversely upon the integrity, truthfulness or professional competence of either witness. Dr. Shogan testified from the perspective of a highly trained, relatively new Board Certified oncologist and internist in charge of a recently instituted bone marrow transplant program. Dr. Adelson testified from the perspective of an experienced physician, Board Certified in internal medicine and in allergy and immunology, who, since 1987, among other duties, has been researching medical procedures, including HDCT/ABMT, to determine whether they have developed beyond the experimental stage.

The trial court expressed no question about the competence of Dr. Adelson. It stated, "we have listened to the medical witnesses carefully and have a high regard for both of them." It further stated, "we appreciate the seriousness with which K-Mart has considered this and the fact that they have referred it to a consultant [Dr. Adelson] and the lengthy consideration he has apparently given to the decision he made to advise the plan administrator that coverage should not be afforded."

Dr. Shogan testified that studies have shown dramatically increased complete response rates and increased disease-free survival rates as compared to standard low-dose therapy. For example, according to him, patients who undergo the HDCT/ABMT treatment have about a 55% chance of immediate remission, as opposed to 5% for low-dose standard chemotherapy. Furthermore, according to Dr. Shogan, a patient who undergoes HDCT/ABMT has a 25-35% chance of being disease-free 2-3 years after treatment, as opposed to a 0-2% chance with low-dose standard treatment. Moreover, HDCT/ABMT patients enjoy a much better quality of life during that 2-3 year period.

Although it can be rationally argued that Dr. Shogan's testimony would support a finding that HDCT/ABMT for metastatic breast cancer is no longer experimental or investigational, there is very substantial evidence supporting K-Mart's determination. It is sufficient here merely to cite examples of the data upon which Dr. Adelson and, through him, K-Mart relied.

In connection with his work with Blue Cross Dr. Adelson had for several years reviewed and studied developments in the HDCT/ABMT field. He had assembled a vast body of medical information on the subject; he had been in almost weekly contact with institutions providing such treatment; he had attended and participated in panels on the subject.

One work on which Dr. Adelson relied was a comprehensive paper (Exh. D-H) prepared by David Eddy, M.D., Ph.D. of Duke University. The Blue Cross/Blue Shield Association, which is an organization of Blue Cross/Blue Shield programs throughout the country, retained Dr. Eddy in 1990 to review all the then available literature and studies concerning HDCT/ABMT for the treatment of metastatic breast cancer. Its ultimate Conclusion was:

High-dose chemotherapy with ABMT has a higher treatment mortality and morbidity than conventional dose chemotherapy. The available evidence indicates that high-dose chemotherapy with ABMT delivers higher complete response and overall response rates than does conventional dose chemotherapy. However, there is no evidence that these superior response rates imply longer survival, or a higher probability of a cure.

Not only are there no controlled trials that address this question, but a comparison of clinical series does not indicate that median disease-free survival, median overall survival, or actual survival is superior with high-dose chemotherapy and ABMT versus conventional dose chemotherapy.

The best that can be said with the available evidence is that the effect on survival of high-dose chemotherapy with ABMT, compared with conventional dose chemotherapy is unknown. This is the essential of [sic] criterion for determining if a treatment is "investigational"; the available evidence does not permit Conclusions about the effectiveness of the treatment compared with its alternative. Additional research from well controlled clinical trials will be required to determine if high-dose chemotherapy with ABMT is superior to, equal to or worse than conventional dose chemotherapy.

Dr. Shogan disagreed with a number of Dr. Eddy's Conclusions, and appellee's brief advances arguments why the report should be rejected.*fn2 However, the report was a serious study; it was distributed to major research centers and facilities for comments and suggestions; it was evidence which Dr. Adelson was entitled to consider.

There were other materials upon which Dr. Adelson relied. A 1991 article by Dr. I. Craig Henderson of the Dana Farber Institute of Harvard University expressed the opinion that the procedure is experimental. Dr. Canellos, Editor-in-Chief of the Journal of Clinical Oncology, expressed a similar view. In December 1990 John H. Burrows, M.D., President of the Michigan Society of Hematology and Oncology, wrote to Blue Cross, stating:

I am aware of some of the questions arising surrounding the use of high dose chemotherapy and bone marrow transplants for treatment of breast cancer. In the view of most oncology physicians, this remains an investigational therapy which has not yet been proven in documented randomized prospective controlled trials to be beneficial in breast cancer.

I know there are requests for reimbursement in this regard and I am aware of even court challenges to you on this matter. Whereas we feel that these therapies are proven to be beneficial in lymphoma and certain other malignancies, the panel in my opinion will come to the Conclusion that it is not established yet for breast cancer.

Thus Dr. Adelson based his determination that appellee's proposed treatment was experimental in nature upon numerous meetings, seminars and conferences he had attended, Dr. Eddy's report, numerous medical articles, and Discussions he had had with physicians and medical facilities conducting HDCT/ABMT procedures.*fn3 Much of the documentary data was in evidence in this case. The district court did not articulate any reason for concluding that Dr. Adelson was acting arbitrarily and capriciously for relying on that material rather than accepting the contrary opinion and the data set forth or referred to in Dr. Shogan's July 8, 1991 letter. The court simply stated, "we have listened to the medical witnesses carefully and have a high regard for both of them. But we accept the testimony of Dr. Shogan that the autologous bone marrow transplantation technique is no longer experimental."

There was very substantial evidence supporting Dr. Adelson's and K-Mart's determination. Thus the district court's finding that the determination was arbitrary or capricious was clearly erroneous.*fn4

For the foregoing reasons we have concluded that appellee did not establish that she is likely to prevail on the merits and therefore was not entitled to preliminary injunctive relief.

III. Conclusion

The order of the district court ordering preliminary injunctive relief will be reversed. In view of that determination K-Mart's appeal of the order setting the bond amount at $1,000 is moot and will be dismissed. The matter will be remanded for further proceedings consistent with this opinion.

Each side shall pay its own costs.



SCIRICA, Circuit Judge, Dissenting.

I agree with the majority that under Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the district court should have reversed the Plan administrator's denial of coverage only if it was arbitrary and capricious. However, because I believe the district court did not abuse its discretion in determining that the denial of coverage was arbitrary and capricious, I respectfully Dissent.

The decision whether to enter a preliminary injunction is committed to the sound discretion of the trial court, and will be reversed "only if the court abused its discretion, committed an obvious error in applying the law, or made a serious mistake in considering the proof." Loretangeli v. Critelli, 853 F.2d 186, 193 (3d Cir. 1988). Therefore, our review is limited to the question whether the district court "abused its discretion, committed an obvious error in applying the law, or made a serious mistake in considering the proof," when it determined that the claims administrator's denial of benefits was arbitrary and capricious.

In the context of a court's review of agency action under the Administrative Procedure Act, the Supreme Court has stated:

The scope of review under the "arbitrary and capricious" standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a "rational connection between the facts found and the choice made." In reviewing that explanation, we must "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Normally, an agency rule would be arbitrary and capricious if the agency has . . . entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (emphasis added). Several courts of appeals have applied this formulation of the arbitrary and capricious standard in the ERISA context. See, e.g., Smart v. State Farm Ins. Co., 868 F.2d 929, 936 (7th Cir. 1989); Hancock v. Montgomery Ward Long Term Disability Trust, 787 F.2d 1302, 1307 (9th Cir. 1986).*fn1 But see Brown v. Blue Cross & Blue Shield of Ala., 898 F.2d 1556, 1564 n.7 (11th Cir. 1990), cert. denied, 111 S. Ct. 712 (1991) (expressing caution regarding "wholesale importation of administrative agency concepts into the review of ERISA fiduciary decisions," because "use of the administrative agency analogy may, ironically, give too much deference to ERISA fiduciaries").

"If a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a 'factor in determining whether there is an abuse of discretion.'" Firestone, 489 U.S. at 115 (quoting Restatement (Second) of Trusts § 187, comment d (1959)). See also Nazay v. Miller, 949 F.2d 1323, 1335 n.16 (3d Cir. 1991) (conflict of interest "significant" in determining appropriate standard of review of ERISA benefit determinations); Brown, 898 F.2d at 1569 (district court erred in failing to consider plan administrator's conflict of interest, which demanded "closer scrutiny" in deciding whether denial of benefits was arbitrary and capricious). In such cases, our application of the arbitrary and capricious standard should be somewhat less deferential. See Nazay, 949 F.2d at 1335 n.16; Brown, 898 F.2d at 1569.

Although nothing in the record indicates that Blue Cross has acted in bad faith or with an improper motive, as a provider of health insurance, Blue Cross would have a pecuniary interest in denying certain claims for health benefits. Its health insurance policies, like K-Mart's Plan, deny coverage to treatments deemed experimental or investigational. See Bucci v. Blue Cross-Blue Shield of Conn., 764 F. Supp. 728, 729 (D. Conn. 1991); Adams, 757 F. Supp. at 662; Pirozzi v. Blue Cross-Blue Shield of Va., 741 F. Supp. 586, 588 (E.D. Va. 1990). Although no improper purpose is ascribed, Blue Cross stands to gain, if only indirectly, by a determination in this case that HDCT-ABMT is experimental or investigational. Therefore, our application of the arbitrary and capricious standard here should be more searching than in a case involving a completely disinterested administrator. Brown, 898 F.2d at 1569; see also Wilson v. Group Hospitalization& Medical Servs., Inc., No. 92-0859, at *10 (D.D.C. May 4, 1992) (citing Brown, 898 F.2d at 1566-68) ("The inherent conflict between the fiduciary responsibilities of the insurance carrier and its own financial interests renders the insurance carrier's interpretation of the plan suspect and requires that the Court scrutinize the carrier's interpretation with great care to determine whether the carrier acted free of self-interest.").

Plaintiff's expert oncologist, Dr. Shogan, testified that the HDCT-ABMT procedure for treating metastatic breast cancer was no longer investigational or experimental, but an "accepted medical procedure." He testified that the procedure was used at four Pittsburgh hospitals, and at major medical centers around the country, including some armed forces hospitals. He stated that the treatment was no longer experimental for three reasons:

First there is known toxicity with treatment. Second there is [known] initial response rates with treatment. The third is that there is reasonable enough follow-up that one can take a group of patients at a point in time later and compare that to patients who had received another therapy.

Dr. Shogan further testified that Ms. Clark's probability of obtaining an immediate remission would be over 50 percent with HDCT-ABMT, as opposed to less than 10 percent with more traditional therapy. Her likelihood of remaining cancer-free for 3 years with HDCT-ABMT would be 25-35 percent, as opposed to 0-2 percent with more traditional therapy. Some early studies show 15 percent of HDCT-ABMT patients cancer-free after 5-7 years. Standard therapy involves continuous treatment, with an attendant increase in time spent in the hospital and decrease in quality of life, whereas HDCT-ABMT does not require continuous treatment.

Unlike Dr. Shogan, defendant's expert, Dr. Adelson, is not an oncologist. Before he retired from private practice and went to work for Blue Cross in 1987, he specialized in internal medicine, allergy, and immunology. Dr. Adelson relied heavily on a review conducted for Blue Cross by Dr. David Eddy of the published literature on HDCT-ABMT treatment for breast cancer.*fn2 Dr. Eddy's report, which was completed in November 1990, determined that the procedure was still "investigational." Its bibliography listed sources dating from 1974 to 1990. In addition to the antiquity of many of Dr. Eddy's sources, at least one court has found Dr. Eddy's report to be "seriously flawed." Adams, 757 F. Supp. at 675. Furthermore, the report was completed over seventeen months ago, and, as the United States Court of Appeals for the Fifth Circuit has stated, "What may one day be experimental may the next be state of the art treatment." Holder v. Prudential Ins. Co., 951 F.2d 89, 91 (5th Cir. 1992).

The district court found that "the autologous bone marrow transplantation technique is no longer experimental," and that K-Mart's denial of coverage was arbitrary and capricious. I agree. The fact that Blue Cross still finds, based on research of questionable validity and despite compelling evidence to the contrary, that the HDCT-ABMT procedure is experimental or investigational should not allow K-Mart to continue to deny benefits to people like Ms. Clark for whom this treatment represents the only real hope for remission. See Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43 (determination is arbitrary and capricious where "there has been a clear error of judgment" and where it "runs counter to the evidence").

A review of the relevant case law also suggests that the procedure is no longer experimental or investigational, and that Blue Cross's determination to the contrary was arbitrary and capricious. Since 1988, there have been eight published federal cases dealing with the question whether HDCT-ABMT treatment for metastatic breast cancer is experimental or investigational. Of those eight cases, three answered that question in the affirmative, and five in the negative. The three cases holding the HDCT-ABMT procedure to be experimental or investigational all addressed treatments proposed or undergone in 1989 or earlier,*fn3 whereas the five cases holding to the contrary all addressed treatments administered after 1989.*fn4 Until today, no published federal decision has held that the procedure was experimental or investigational after 1989.*fn5

In Holder, heretofore the only published federal appellate decision to address this question, the United States Court of Appeals for the Fifth Circuit affirmed the district court's finding that as of late 1987, when plaintiff Holder underwent HDCT-ABMT treatment for metastatic breast cancer, the treatment was experimental. However, the court went on to state:

Of course, it is the nature of medical research that what may one day be experimental may the next be state of the art treatment. Had Mrs. Holder undergone a similar treatment more recently under an accepted protocol, this case may have turned out differently. . . . Several recent studies and the cases in which they have been applied to compel coverage of HDC-ABMT treatment for Stage IV metastatic breast cancer lead to the Conclusion that the treatment, under a different protocol than that administered to Mrs. Holder, may no longer be considered experimental.

951 F.2d at 91 and n.5 (citations omitted). In Sweeney v. Gerber Products Co., the district court, applying the arbitrary and capricious standard, affirmed defendant's denial of coverage for HDCT-ABMT treatment on the grounds that it was experimental and investigational as of late 1989. The court stated that it would also have affirmed under a de novo standard. 728 F. Supp. at 597. In Thomas v. Gulf Health Plan, Inc., the plaintiff conceded that HDCT-ABMT treatment for breast cancer was experimental or investigational as of February 1988, 688 F. Supp. at 593, but contended that defendant should be estopped from denying coverage. Id. at 595. Applying the arbitrary and capricious standard of review, the district court upheld the plan administrator's denial of benefits. Id. at 596.

Conversely, in Kulakowski v. Rochester Hospital Service Corp., the court reversed as arbitrary and capricious the plan administrator's denial of coverage for HDCT-ABMT treatment on the ground that it was experimental. The court also found that plaintiff had satisfied the requirements for preliminary injunctive relief, and granted plaintiff's motion for a preliminary injunction. 779 F. Supp. at 717. Similarly, in White v. Caterpillar, Inc., the court held that the plan administrator's denial of coverage for HDCT-ABMT treatment as investigational was arbitrary and capricious, and granted plaintiff's motion for a preliminary injunction. 765 F. Supp. at 1423-24. In Bucci v. Blue Cross-Blue Shield of Connecticut, after a trial on the merits, the court held that the plan administrator's determination that HDCT-ABMT treatment was experimental or investigational was arbitrary and capricious, and entered judgment for plaintiff. 764 F. Supp. at 733. In Adams v. Blue Cross/Blue Shield of Maryland, Inc., the court, applying a de novo standard, reversed the plan administrator's denial of coverage on the ground that HDCT-ABMT treatment was experimental. 757 F. Supp. at 676. The court further stated that even if the arbitrary and capricious standard applied, "Blue Cross' decision to deny coverage was indeed 'arbitrary and capricious.'" Id. In Adams, as here, defendant relied heavily on the opinion of Dr. Eddy that HDCT-ABMT was still experimental. However, the Adams court appeared to credit testimony that "Dr. Eddy's review of the scientific literature was seriously flawed." Id. at 675. Finally, in Pirozzi v. Blue Cross-Blue Shield of Virginia, the court reviewed de novo the plan administrator's denial of coverage on the ground that HDCT-ABMT treatment was experimental. After an expedited bench trial, the court reversed the denial of coverage, and entered a declaratory judgment for plaintiff. 741 F. Supp. at 594-95. The court stated, "HDCT-ABMT treatment is currently in use at most major medical centers. . . . This is convincing evidence that the treatment has 'scientifically proven value' and is 'in accordance with generally accepted standards of medical practice.'" Id. at 591. Similarly, in light of the evidence in this case, I cannot say the district court abused its discretion in finding that the denial of coverage to Ms. Clark was arbitrary and capricious.

To be entitled to a preliminary injunction, the plaintiff must show: (1) a reasonable likelihood of success on the merits; (2) that it will suffer irreparable harm in the absence of an injunction; (3) that issuance of the injunction will not result in greater harm to the non-moving party; and (4) that the public interest supports granting the injunction. Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186, 197-98 (3d Cir. 1990). I do not think the district court "abused its discretion, committed an obvious error in applying the law, or made a serious mistake in considering the proof" in finding these requirements were met. See Loretangeli, 853 F.2d at 193. Therefore, I would affirm the district court's grant of a preliminary injunction.

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