United States District Court, D. Columbia.
DOUGLAS B. HURON, et al., Plaintiffs,
JOHN BERRY, et al., Defendants
For DOUGLAS B. HURON, UNITED STATES SOCIETY FOR AUGMENTATIVE AND ALTERNATIVE COMMUNICATION, Plaintiffs: Jeffrey S. Gutman, LEAD ATTORNEY, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL, Community Legal Clinics, Washington, DC; Lewis Alan Golinker, PRO HAC VICE, LAW OFFICES OF LEWIS GOLINKER, ESQ., Ithaca, NY.
For JOHN BERRY, IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, Defendants: Jeremy S. Simon, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Washington, DC.
AMY BERMAN JACKSON, United States District Judge.
Plaintiffs Douglas B. Huron (" Huron" ) and the United States Society for Augmentative and Alternative Communication (" USSAAC" ) have brought this action against the Office of Personnel Management (" OPM" ) and former OPM director John Berry,  in his official capacity, under the Administrative Procedure Act (" APA" ), 5 U.S.C. § 706 (2012). Compl. ¶ ¶ 9, 13, 17-18 [Dkt. # 1]. Plaintiffs challenge defendants' approval of health benefits plans for federal employees that exclude or limit coverage of speech generating devices (" SGDs" ), which are items of medical equipment that assist communication-impaired individuals with daily communication needs. Id. ¶ ¶ 1, 4. Plaintiffs assert that defendants' acts and omissions regarding SGD coverage are arbitrary, capricious, an abuse of discretion, and contrary to law, id. ¶ 71, and they seek declaratory and injunctive relief from the Court. Id., Prayer for Relief, ¶ ¶ 1-9.
Defendants moved to dismiss plaintiffs' complaint for lack of standing or, in the alternative, for failure to state a claim upon which relief may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6). Defs.' Mem. in Supp. of Mot. to Dismiss Compl. (" Defs.' Mot." ) at 2 [Dkt. # 13]. For the reasons stated below, the Court will grant defendants' motion to dismiss because plaintiffs do not have standing to bring this case.
I. Statutory Background
In 1959, Congress enacted the Federal Employee Health Benefits Act (" FEHBA" ), 5 U.S.C. § § 8901-8914, to provide a subsidized health benefits program for federal employees. Federal Employee Health Benefits Act of 1959, Pub. L. No. 86-382, 73 Stat. 708.
Under FEHBA, OPM has broad authority to administer the Federal Employee Health Benefits Program (" FEHBP" ), Bolden v. Blue Cross & Blue Shield Ass'n, 848 F.2d 201, 203, 270 U.S. App. D.C. 144 (D.C. Cir. 1988), and " may contract for or approve" various types of health benefits plans offered by private insurance carriers. 5 U.S.C. § § 8903-8903a. In exchange for premiums paid by the employees and government, carriers provide, pay for, or reimburse certain healthcare costs of FEHBP enrollees. Id. § 8901(7); OAO Healthcare Solutions, Inc. v. Nat'l Alliance of Postal & Fed. Emps., 394 F.Supp.2d 16, 19 (D.D.C. 2005).
Each health benefits contract must contain a detailed statement of included benefits, and rates must " reasonably and equitably reflect the cost of the benefits provided." 5 U.S.C. § 8902(d), (i). Each year, OPM may renegotiate coverage and rates " based on past experience and benefit adjustments," but rate adjustments must be consistent with insurance industry practice. Id. § 8902(i). During a four-week " open season" each year, employees may transfer plans or cancel their FEHBP enrollment. 5 U.S.C. § 8905(g); 5 C.F.R. § 890.301(f) (2013).
II. Factual Background
USSAAC is " an organization dedicated to supporting the needs and desires of people who use" augmentative and alternative communication. USSAAC's Vision, USSAAC, http://ussaac.org/our-vision.cfm (last visited Dec. 23, 2013). Its members include individuals with severe communication impairments, some of whom are enrolled in FEHBP, as well as family members, speech-language pathologists, disability educators and advocates, and augmentative and alternative communication device manufacturers. Compl. ¶ ¶ 1, 13. To secure and protect the rights of its members, USSAAC advocates " for the broadest scope of SGD coverage by all funding programs and sources" and aims to influence public policy related to SGD coverage. Id. ¶ 14. SGDs are augmentative and alternative communication devices that assist communication-impaired individuals by speaking typed messages out loud, and each SGD costs approximately $5000 without insurance. See id. ¶ ¶ 9-10, 23; see also id. ¶ 29 (indicating that most SGD users acquire funding from health benefits systems).
Huron is a member of USSAAC who lives in the District of Columbia and relies on an SGD to communicate with family, friends, and colleagues. Id. ¶ 9. He obtained his current SGD through private insurance but needs a replacement as his current one no longer functions. Id. ¶ 10. In early 2009, Huron switched from his private-sector insurance policy to join his wife's FEHBP plan, which is provided by the Government Employees Health Association (" GEHA" ). Id. He also receives benefits from Medicare. Id. The GEHA plan expressly excludes SGDs from coverage, id. ¶ 11; GEHA Benefit Plan, Ex. 2 to Reply Mem. in Supp. of Mot. to Dismiss Compl., at 5 [Dkt. # 17-2] (indicating that " [c]omputer devices to assist with communications" are not covered), and Medicare will only reimburse Huron for 80% of the cost of a new SGD. Pls.' Mem. of Law in Opp. to Defs.' Mot. to Dismiss the Compl. (" Pls.' Opp." ) at 19 n.11 [Dkt. # 15]. Pending resolution of this case, and in order to participate in this action, Huron is currently borrowing an SGD from SGD manufacturer DynaVox, which he must return at the close of litigation.  Pls.' Opp. at 20.
Although Huron's GEHA plan excludes SGD coverage, SGD coverage has been available through several FEHBP plans since 2009. Compl. ¶ ¶ 44, 49. Prior to 2009, nationwide plan sponsors denied SGD coverage requests using an exclusion that did not mention SGDs specifically. Id. ¶ ¶ 37-39. In 2008, OPM directed plan sponsors to specify the extent of SGD coverage they would provide moving forward, prompting the first FEHBP plan sponsors to offer SGD coverage in 2009. Id. ¶ ¶ 41, 54; Mar. 11, 2008 FEHB Program Carrier Letter, Ex. A to Defs.' Mot., at 4 [Dkt. # 13-2]. At that time, four nationwide plan sponsors proposed to offer SGD coverage of up to $1000, and a fifth sponsor added the same coverage the following year. Compl. ¶ ¶ 41, 43. Since 2009, three local plan sponsors, who offer plans available only to District of Columbia residents, have also added SGD coverage. Id. ¶ 48.
As of today, five of ten FEHBP nationwide plan sponsors and three of five FEHBP local plan sponsors cover SGDs to some extent. Id. ¶ ¶ 22, 44-45, 49. Of the five nationwide plan sponsors with SGD coverage, two offer plans open to all federal workers while three offer plans only open to select groups of federal workers. Id. ¶ 45. All of these plans limit SGD coverage to between $500 and $1250 - limitations that do not apply to other covered items in the durable medical equipment category. Id. ¶ ¶ ...