John Doe v. Personnel Management, Office of

Background

The plaintiff alleged that the Office of Personnel Management (OPM) improperly denied essential Federal Employee Health Benefits and subjected him to disability discrimination, harassment, retaliation, and a violation of the Fifth Amendment. The Second Amended Complaint asserted seven counts: unlawful denial of health benefits; violations of Sections 501 and 504 of the Rehabilitation Act; a Title VII claim; harassment and a hostile work environment; retaliation for protected activity; and a Fifth Amendment claim.

OPM moved to dismiss part of the health-benefits claim and all of the other claims for failure to state a claim. The court’s order assumed familiarity with the case’s facts, legal standards, and arguments.

Health-Benefits Claim

The court dismissed Count I to the extent it relied on the x3003 and x6002 appeals for lack of subject-matter jurisdiction. The dispute over the x3003 appeal was moot because OPM approved the request for benefits at Kentfield, and the plaintiff did not allege a later denial of Kentfield coverage for which OPM was responsible. The court found no ripe controversy concerning the x6002 appeal because the appeal had resulted in zero patient liability, but the bill had not been finalized.

The court also dismissed Count I for failure to exhaust administrative remedies to the extent it relied on appeals other than x7002 and x6001. The court explained that the administrative review process for these benefits claims is mandatory. For several denials, the plaintiff had not appealed to Blue Cross Blue Shield. For three others, he alleged that he appealed to Blue Cross Blue Shield but did not then appeal to OPM after receiving no response. The court found that the plaintiff had not shown that further administrative review would have been futile.

The dismissals were without leave to amend, except as to the x0004 appeal. Because the plaintiff received notice of OPM’s denial of that appeal after filing the Second Amended Complaint, the court allowed him to add allegations about it. The x7002 and x6001 portions of Count I were the only portions identified as surviving.

Other Claims

The court granted the motion to dismiss Count II, the Section 501 Rehabilitation Act claim, because the plaintiff alleged only conclusory statements and did not provide specific facts supporting an inference that the benefit denials occurred because of his disability.

The court granted the motion to dismiss Count III, the Section 504 Rehabilitation Act claim, because Section 504 does not provide a private cause of action for disability discrimination by a federal employee against a federal employer in this context. The court stated that Section 501 is the exclusive remedy for that type of claim.

The court granted the motion to dismiss Count IV, the Title VII claim, because the plaintiff did not allege enough facts to plausibly show that an identified policy caused a race-based disparate impact. The court specifically noted the lack of specific facts about Blue Cross Blue Shield’s medical-necessity policy for scleroderma, comparisons with policies for similar conditions, or an OPM policy that caused the challenged policy.

The court granted the motion to dismiss Count V, the racial harassment and hostile-work-environment claim. Although the plaintiff alleged denial and delay of health benefits, he did not allege verbal or physical conduct of a racial nature or conduct sufficiently severe or pervasive to alter the conditions of employment.

The court granted the motion to dismiss Count VI, the retaliation claim. The plaintiff alleged that a Blue Cross Blue Shield case manager changed a benefits determination after the plaintiff filed a discrimination complaint, but he did not allege that the case manager knew about the complaint, that the change was connected to it, or that OPM was responsible for the change.

The court granted the motion to dismiss Count VII, the Fifth Amendment claim. The court concluded that the plaintiff had not alleged that he was denied notice and an opportunity to be heard concerning the claimed benefits. For unexhausted denials, the regulations provided an opportunity to appeal to OPM. For the x7002 and x6001 appeals, judicial review was still part of the review process. The court also stated that the plaintiff had not adequately alleged what process he was entitled to, how he was deprived of it, or how OPM was responsible.

Disposition

The court granted OPM’s partial motion to dismiss. The plaintiff’s sole remaining claim was Count I insofar as it relied on the x7002 and x6001 appeals. The plaintiff could file an amended complaint adding information about the x0004 appeal by May 2, 2025. The amendment could not add new claims or parties or otherwise change the allegations without court permission or the parties’ stipulation.

The plaintiff also requested leave to add unknown claims against Blue Cross Blue Shield as a defendant. The court denied that request without prejudice to filing a noticed motion for leave to amend that included the proposed pleading and explained why the defendant had not been added earlier. The court did not reach OPM’s remaining dismissal arguments.