United States District Court, E.D. Louisiana
ORDER AND REASONS
S. VANCE UNITED STATES DISTRICT JUDGE
the Court are defendants' motions to dismiss for failure
to state a claim under Federal Rule of Civil Procedure
12(b)(6). Because plaintiff cannot state a claim
under his various causes of action, the Court grants the
action arises from the denial of insurance benefits.
Christopher Cougle suffers from delusional disorder with
paranoid and grandiose features, a severe psychiatric illness
which interferes with his judgment and perception of
reality. Cougle was insured under three individual
insurance disability policies, two issued by the Berkshire
Life Insurance Company of America and one issued by Ameritas
Life Insurance Company. In December 2016, Cougle made a claim
for long-term disability with both Berkshire and
Ameritas. Both insurance companies accepted
Cougle's claim, and began making payments under the
twenty-four months, in January 2019, both defendants
discontinued payments. When Cougle demanded continued payment,
both companies responded that their respective insurance
policies covered only twenty-four months for Cougle's
psychiatric illness. Ameritas asserts that such twenty-four
month limitations for psychiatric illnesses are commonly used
throughout the country in individual insurance disability
Cougle, the appointed curator of Christopher Cougle, brought
this suit in state court against Berkshire and Ameritas,
arguing that the insurance companies breached the terms of
their policies and violated a number of Louisiana
laws. On April 10, 2019, the insurance companies
removed the suit to federal court. Both insurance companies
then moved to dismiss Cougle's complaint for failure to
state a claim upon which relief may be granted.
considering a motion to dismiss for failure to state a claim
under Rule 12(b)(6), the Court must accept all well-pleaded
facts as true and view the facts in the light most favorable
to the plaintiff. See Baker v. Putnal, 75 F.3d 190,
196 (5th Cir. 1996). The Court must resolve doubts as to the
sufficiency of the claim in plaintiff's favor. Vulcan
Materials Co. v. City of Tehuacana, 238 F.3d 382, 387
(5th Cir. 2001). But to survive a Rule 12(b)(6) motion, a
party must plead “sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible
on its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). The claim must be dismissed if
there are insufficient factual allegations to raise the right
to relief above the speculative level, Twombly, 550
U.S. at 555, or if it is apparent from the face of the
complaint that there is an insuperable bar to relief,
Jones v. Bock, 549 U.S. 199, 215 (2007). The Court
is not bound to accept as true legal conclusions couched as
factual allegations. Iqbal, 556 U.S. at 679.
Rule 12(b)(6) motion, the Court must limit its review to the
contents of the pleadings, including attachments thereto.
Brand Coupon Network, L.L.C. v. Catalina Mktg.
Corp., 748 F.3d 631, 635 (5th Cir. 2014). The Court may
also consider documents attached to a motion to dismiss or an
opposition to that motion when the documents are referred to
in the pleadings and are central to a plaintiff's claims.
claims largely hinge on his allegations that the policies
violate certain provisions of the Louisiana Insurance Code
and therefore should be reformed to conform with those
provisions. Plaintiff also asserts claims under the Louisiana
Human Rights Act and the Louisiana Unfair Trade Practices
Act, as well as a breach of contract claim, in which he
appears to assert that after reformation, the insurance
companies would be in breach. Finally, plaintiff asserts a
declaratory judgment claim, which is contingent on the
viability of his other claims. The Court addresses each claim
initial matter, plaintiff argues that because this case was
removed from a Louisiana state court, Louisiana's
pleading standards-rather than federal pleading
standards-should be used to analyze his claims. But when a
case is removed to federal court, the law is clear that
federal pleading requirements, rather than state pleading
requirements, apply. See Genella v. Renaissance
Media, 115 Fed. App'x 650, 652-53 (5th Cir. 2004)
(“While this case originated in state court and was
later removed to federal court . . . pleadings must
nevertheless conform to federal pleading
requirements.”); see also Fed. R. Civ. P.
81(c) (“These [Federal Rules of Civil Procedure] apply
to a civil action after it is removed from a state
cases plaintiff cites to are inapposite, as they relate to
the application of the standard only in the fraudulent
joinder context. And in the Fifth Circuit, courts apply
federal pleading standards even when addressing fraudulent
joinder in a case that has been removed. See Int'l
Energy Ventures Mgmt., L.L.C. v. United Energy Grp.,
Ltd., 818 F.3d 193, 207-08 (5th Cir. 2016) (holding that
a federal court must apply the federal pleading standard to
state fraudulent joinder claims). Therefore, the Court will
apply the federal pleading standard in analyzing the
sufficiency of plaintiff's claims.
asks that the Court reform the insurance policies to remedy
alleged violations of Louisiana law. Louisiana law explicitly
allows a court to reform a policy which violates the
Louisiana Insurance Code. The Louisiana Insurance Code states
that “[a]ny insurance policy . . . issued and otherwise
valid, which contains any condition or provision not in
compliance with the requirements of this Code, shall not be
rendered invalid, but shall be construed and applied in
accordance with such conditions and provisions as would have
applied had such policy . . . been in full compliance with
this Code.” La. R.S. 22:880. The Louisiana Supreme
Court has also approved reformations of insurance polices to
make them comply with the Insurance Code. See Rudloff v.
La. Health Servs. & Indem. Co., 385 So.2d 767, 770
(La. 1979) (reforming a policy to comply with the Louisiana
Insurance Code). And the policies at issue here state that to
the extent they violate a state law, the policies are amended
so as to be in conformity with the minimum requirements of
the law. Here, plaintiff requests reformation
based on a variety of statutes, which are addressed in turn
La. R.S. 22:1043
alleges that defendants' policies violate La. R.S.
22:1043, which states: “Any hospital, health, or
medical expense insurance policy . . . shall include benefits
payable for the treatment of severe mental illness under the
same circumstances and conditions or greater as benefits are
paid under those policies . . . for all other diagnoses,
illnesses, or accidents.” La. R.S. 22:1043(A)(1)(a).
This statute is inapplicable here, as the policies at issue
are excluded from this prohibition.
R.S. 22:1043 excludes individual health insurance policies or
contracts like the ones at issue here. The statute states:
“The provisions of this Section shall not apply to
health insurance individual policies or contracts; limited
benefit health insurance policies or contracts; and short
term health insurance policies or contracts.” La. R.S.
22:1043(A)(3)(b). The Berkshire and Ameritas policies are
limited benefit health insurance and individual health
policies, and are therefore excluded from the statute's
prohibition on providing different benefits for mental
argues that the relevant policies are health insurance and
are not “limited benefit health insurance
policies.” But this argument is without merit.
Plaintiff first seems to argue that limited benefit health
insurance policies cannot include disability insurance, and
therefore any disability insurance must be health insurance.
But the statutory definition of limited benefit health
insurance policy specifically includes disability insurance.
See La. R.S. 22:47(2)(c) (defining limited benefit
insurance as a “[h]ealth and accident insurance policy
designed, advertised, and marketed to supplement major
medical insurance that includes . . . disability
simply ignores that La. R.S. 22:1043 also specifically
excludes “health insurance individual policies or
contracts” and is designed to apply only to group
plans. See La. R.S. 22:1043(A)(3)(b) (“The
provisions of this Section shall not apply to health
insurance individual policies or contracts. . .
.”) (emphasis added); see also Id.
22:1043(A)(3)(a) (“The provisions of this section shall
apply only to group, blanket, and association
policies.”). Plaintiff does not contest that the
relevant policies were individual policies. And because the
policies at issue are explicitly excluded under the statute,
Cougle has no claim for reformation under La. R.S. 22:1043.
La. R.S. 22:990
also alleges that defendants violate La. R.S. 22:990. That
statute sets the boundaries for what an insurance policy may
define as “total disability.” As relevant here,
A general definition of total disability in such a policy
shall not be more restrictive than one requiring the
individual to be totally disabled from engaging in any
employment or occupation for which he is, or becomes,
qualified by reason of education, training, or experience and
which provides him with substantially the same earning
capacity as his former earning capacity prior to the start of
La. R.S. 22:990(C). The Berkshire policies' definition of
“Total Disability” reads:
Total Disability means that, because of sickness or injury,
you are not able to perform the material and substantial
duties of your occupation. Your occupation means the regular
occupation (or occupations, if more than one) in which you
are engaged at the time you become disabled. You will be
totally disabled even if you are at work in some other
capacity so long as you are not able to work in your
Ameritas policy reads: “Total Disability . . . means
that, solely due to sickness or injury, you are not able to
perform the material and substantial duties of your
argument does not seem to be that these general definitions
of “total disability” in the policies are
illegally limiting as they are written. Rather, Cougle argues
that the presence of a separate clause in the policies, which
limits benefits for mental or substance abuse disorders to
twenty-four months, acts as a limit on the definition of
“total disability, ” and thus is impermissible
under La. R.S. 22:990.
argument fails. La. R.S. 22:990 is designed to apply to the
general definitions of “Total
Disability” in a policy. And plaintiff does not argue
that those general definitions are insufficently broad. La.
R.S. 22:990 does not speak to other limitations on the
application of the definition of “Total
Disability.” Significantly, as discussed above, another
portion of the Louisiana Insurance Code speaks specifically
to limitations for mental and substance abuse disorders.
See La. R.S. 1043. And that statute specifically
excludes individual disability policies from its prohibition
on limitations on mental health disorder benefits. See
Id. 1043(A)(3)(b). When two statutes on a similar
subject matter conflict “the statute specifically
directed to the matter at issue must prevail as an exception
to the statute more general in character.” Oubre v.
La. Citizens Fair Plan, 79 So.3d 987, 997 (La. 2011).
Here, La. R.S. 1043 directly addresses the distinct treatment
of mental health disorders, while La. R.S. 22:990, if it does
so at all, does so only generally and indirectly. Because it
is more specific, La. R.S. 1043, and its exception regarding
limitations on mental health benefits, must apply.
the exclusion in La. R.S. 1043(A)(3)(b) would be meaningless
if La. R.S. 22:990 forbade individual or limited benefit
insurance policies from providing less beneficial treatment
of mental health disorders than other conditions. And it is
“a cardinal principle of statutory construction that a
statute ought, upon the whole, to be so construed that, if it
can be prevented, no clause, sentence, or word shall be
superfluous, void, or insignificant.” TRW Inc. v.
Andrews, 534 U.S. 19, 31 (2001) (internal quotation
marks omitted) (citing Duncan v. Walker, 533 U.S.
167, 174 (2001)); see also Oubre, 79 So.3d at 987
(“[C]ourts are bound, if possible, to give effect to
all parts of a statute and to construe no sentence, clause,
or word as meaningless and surplusage if a construction
giving force to and preserving all words can legitimately be
found.”). To read La. R.S. 22:990 as broadly as Cougle
requests would render La. R.S. 22:34(A)(3)(b) meaningless,
and therefore violate this “cardinal principle of
statutory construction.” TRW Inc., 534 U.S. at
31. This would be improper under Louisiana law.
case plaintiff cites to argue that the twenty-four-month
limitation necessarily violates La. R.S. 22:990, Scott v.
Unum Life Insurance Company of America, 80 So.3d 740
(La.App. 2 Cir. 2011), does not require the opposite result.
In that case, the Louisiana Court of Appeals for the Second
Circuit affirmed the trial court's decision that the
policy at issue violated La. R.S. 22:990 because the
insurance company had construed the policies to deny that the
plaintiff was totally disabled on the grounds that he could
still perform work in certain alternative occupations, when
these alternative occupations paid less than plaintiff's