Ninth Circuit Holds Kaiser Not Liable for Out-of-Network Mental Health Treatment Benefits

By Elizabeth Hopkins on April 15, 2020

Posted in Life Insurance and AD&D Benefit Claims, Medical Benefit Claims

This week’s first notable decision, Meyers v. Kaiser Found. Health Plan, Inc., No. 19-15051, __F.App’x__, 2020 WL 1673078 (9th Cir. Apr. 6, 2020), is a cautionary tale for claimants seeking out-of-network treatment under a Kaiser health plan. Meyers brought the action on behalf of her teenage daughter, A.M., a covered dependent under the Kaiser medical plan. Meyers sought reimbursement of medical expense for A.M.’s treatment at Elevations residential treatment center for approximately four months in 2016.

District Court Judge Lucy Koh granted judgment for Kaiser following a bench trial. Meyers appealed.

While the parties disputed the standard of review, the Ninth Circuit agreed with the district court— even under de novo review, Kaiser’s denial was proper.

The Kaiser plan does not provide for out-of-network care, but Meyers pointed to two exceptions. First, Meyers argued that A.M. received “Emergency Services” for treatment of an “Emergency Medical Condition” at Elevations, citing an exception within the plan’s prior authorization requirement for “Emergency Services.” The Ninth Circuit disagreed, finding that A.M.’s treatment did not meet the plan definition of “Emergency Services.” The Ninth Circuit pointed to the district court’s factual findings that Meyers planned to have A.M. admitted to Elevations even before her hospitalization. The Ninth Circuit also found that the Elevation services were not required to stabilize the patient, i.e. to assure that no material deterioration was likely to result due to transfer from the hospital. The Ninth Circuit concluded that A.M. was stabilized when she was released from the hospital.

Second, Meyers argued that the Plan provided coverage because Kaiser did not have in-network facilities available. The Ninth Circuit disagreed, finding that even if there were no in-network facilities that could have treated A.M., the Plan required Meyers to obtain Kaiser’s approval before A.M. began treatment at Elevations. Ninth Circuit concluded that the out-of-network exception did not apply because Meyers did not receive Kaiser’s prior approval.

Finally, the Ninth Circuit found the district court properly rejected Meyers’ argument that Kaiser discriminated against medically necessary healthcare because this new theory was not asserted in the complaint and Meyers first raised the theory in her opening trial brief. The Ninth Circuit affirmed the district court decision.

This notable decision summary was prepared by Kantor & Kantor health attorney, Elizabeth Green.

Now switching gears, another noteworthy decision in the realm of claim denials is Wightman v. Securian Life Ins. Co., No. CV 18-11285-DJC, 2020 WL 1703772 (D. Mass. Apr. 8, 2020), a case involving autoerotic asphyxiation and life insurance benefits. Plaintiff Anne Wightman sued Securian Life Insurance Company after it denied the accidental death benefit claim filed as a result of her husband, Dr. Colin Wightman. This policy expressly excluded death when caused directly or indirectly by, among other things, “suicide or attempted suicide, whether sane or insane . . . intentionally self-inflicted injury or attempt at self-inflected injury, while sane insane” and “bodily or mental infirmity, illness or disease.”

Dr. Wightman had been in therapy since the late 1990s for his interest in sexual asphyxia. Dr. Wightman told his wife about his interest in “sex-related strangulation” in 2007 after he engaged in a sexual encounter that led to a complaint to the police and Dr. Wightman losing his job. Dr. Wightman sought mental health treatment as a result from June 2007 through April 2010. He also was prescribed medication to help treat his addiction, which he took through 2015. The court noted that records from his mental health treatment highlighted Dr. Wightman as having “high risk sexual behavior [that] has led to possibility of charges for sexual assault.”

Dr. Wightman was found dead by his wife, naked and unmoving in their bathroom with a belt looped around his neck that was suspended over the top of the bathroom door. When Ms. Wightman opened the bathroom door, Dr. Wightman fell to the floor.

Securian denied Ms. Wightman’s initial claim based on the policy’s exclusion for intentional self-inflicted injury or attempt as self-inflected injury, and because the death “in this manner would not be deemed unintended, unexpected and unforeseen.”

Ms. Wightman appealed the decision with expert reports explaining that autoerotic asphyxiation is performed for the purpose of sexual pleasure, and not to harm oneself and that Dr. Wightman was psychologically healthy without any tendency for self-harming activities.

Securian upheld the denial on appeal, this time denying the claim based on the self-inflicted injury exclusion and the exclusion based on injury caused by “mental infirmity, illness or disease.” The denial letter explained that although Dr. Wightman may not have meant to kill himself, he should have expected that death was “not unforeseen,” and that the injury did not occur directly and independently of all other causes.

The court concluded on de novo review that 1) the accident was not a covered loss, and 2) the self-inflicted injury exclusion precludes coverage even if the loss was covered. In deciding the accident was not a covered loss, the court found that “[t]his Circuit has rejected statistical arguments about the reasonableness of the insured’s expectation of survival when they deliberately engaged in mortally risky behavior.” The court likened Plaintiff’s argument that there is a less than 1 in one million chance of dying from autoerotic asphyxiation to a similar “statistical likelihood” of not dying from playing Russian roulette. Because death was possible, it cannot be said to have resulted from an “accidental bodily injury which was unintended, unexpected and unforeseen.”

In deciding that the self-inflicted injury exclusion applied, the court rejected the distinction adopted by other circuits between initial strangulation for pleasure from that which causes death, finding the former a covered loss. Even if this were not the case, the court noted that Dr. Wightman’s expectation that he would not suffer any injury beyond the initial strangulation was unreasonable.

This summary was prepared by Kantor & Kantor disability and life attorney, Andrew Kantor.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Attorneys’ Fees

Second Circuit

S.B. v. Oxford Health Insurance, Inc., No. 3:17-CV-1485 (MPS), 2020 WL 1702223 (D. Conn. Apr. 8, 2020) (Judge Michael P. Shea). The court previously granted in part and denied in part Plaintiff’s motion for summary judgment and remanded the matter to Oxford for further consideration of Plaintiff’s claims to coverage for residential mental health treatment. The court granted in part Plaintiff’s motion for attorneys’ fees. The court found that the remand order was sufficient success on the merits to warrant a fee award. In addressing Defendant’s objections, the court agreed that the fee award should be limited to hourly rates that would be reasonable in this district (ranging from $400-$450); Plaintiff may collect fees related to the fee motion; the fee award should exclude time spent on the remand motion which the court found unnecessary; and the award should exclude any pre-litigation time not clearly related to the litigation, such as drafting the complaint. The court ordered Oxford to pay Plaintiff $42,580.55 in attorneys’ fees and costs.

Breach of Fiduciary Duty

Fifth Circuit

Mars v. Mississippi Exp. R.R. Co., No. 1:19-CV-290-KS-RHW, 2020 WL 1668843 (S.D. Miss. Apr. 3, 2020) (Judge Keith Starrett). Plaintiff was employed by Defendant Mississippi Export Railroad Company (“MERC”) for over thirty years, and in November 2018 MERC terminated his employment. Plaintiff filed suit alleging, inter alia, that MERC and UnitedHealthcare Insurance Co. (“United”) breached their fiduciary duties by failing to notify him of availability of COBRA coverage. The court granted United’s motion to dismiss Plaintiff’s COBRA complaint and motion to dismiss MERC’s crossclaim alleging United breached its fiduciary duty to MERC by failing to provide a notice of COBRA availability to Plaintiff. The court explained that a COBRA claim is only viable against the plan sponsor or administrator, and United was neither. In addition, United owed no fiduciary duty to MERC to provide COBRA notice to Plaintiff because United was neither the plan sponsor nor administrator. Furthermore, any state law claim MERC could have asserted against United would have been preempted by ERISA.

Ninth Circuit

Disability Benefit Claims

Fourth Circuit

Jones v. Aetna Life Ins. Co., No. CV ELH-19-1413, 2020 WL 1675984 (D. Md. Apr. 6, 2020) (District Judge Ellen Lipton Hollander). Pro Se Plaintiff Michelle Jones filed suit against Aetna Life Insurance Company in regard to Aetna’s denial of her long-term disability claim. Plaintiff and Aetna entered into a settlement agreement, Aetna sent Plaintiff the check, which Plaintiff cashed. However, rather than filing the notice of dismissal as agreed, Plaintiff reneged on her end of the agreement, instead declaring that she had changed her mind about the settlement because she learned she would need additional medical treatment. In finding for Defendant, the court concluded that “. . . buyer’s remorse is not a valid basis to set aside the settlement agreement. Plaintiff accepted payment . . . with the knowledge that it was in full satisfaction of her claim. And, under the terms of the Release, which she executed, plaintiff agreed to relinquish any claim based on an unforeseen change in circumstances.”

Ninth Circuit

Nagy v. Hartford Life & Accident Ins. Co., No. 18-16095, __F.App’x__, 2020 WL 1744200 (9th Cir. Apr. 8, 2020) (Before: Gould and Murguia, Circuit Judges, and Feinerman,* District Judge). The court concluded that the district court did not clearly err when it determined, on de novo review, that Plaintiff was disabled under the disability plan’s “any occupation” definition of disability. “The district court’s determination was supported by the fact that neither of Nagy’s own treating physicians certified his disability during the Any Occupation Period, and in fact provided ‘unremarkable accounts’ of Nagy’s condition; Nagy failed to demonstrate a continuing disability, having failed to present any medical treatment records for the first ten months of the Any Occupation Period; Nagy’s contemporaneous medical records suggested that his complaints of disabling fatigue were opportunistic in nature; and three different medical reviews conducted by Hartford, and a fourth by the Social Security Administration, found that Nagy had the capacity to work in a sedentary occupation.”

Discovery

Ninth Circuit

Trustees of U.A. Union Local No. 290 Plumber, Steamfitter & Shipfitter Indus. Pension Tr. v. Puddletown Plumbing LLC, No. 3:19-CV-00487-HZ, 2020 WL 1673326 (D. Or. Apr. 6, 2020) (Judge Marco Hernandez). Plaintiffs sued to enforce their right to obtain payroll records and other documents to determine whether Defendant is adhering to its reporting obligations. Defendant did not respond to the complaint. After not being able to contact Defendant’s registered agent, Plaintiffs moved to compel production of Defendant’s books and records. The court found the motion procedurally deficient since there is no support that Rule 37(a) is the appropriate vehicle for compelling discovery from a party that is not before the court. The court advised that Plaintiffs could move for an entry of default, and once an order of default is entered, Defendant should be treated as a non-party and can be commanded to produce documents pursuant to a properly issued subpoena.

Chacko v. AT&T Umbrella Benefit Plan No. 3, No. 2:19-cv-1837 JAM DB (E.D. Cal. Mar. 13, 2020) (Magistrate Judge Deborah Barnes). In this dispute over long-term disability benefits, the Magistrate Judge granted, in part, Plaintiff’s motion to compel discovery responses. Defendant must respond to discovery requests seeking the complete administrative record. “This action cannot proceed in the absence of a complete administrative record and discovery into the completeness of the administrative record is permissible.” The court denied all conflict-of-interest discovery, finding that there is no conflict of interest where the Plan delegates decision making to Sedgwick, relying on Day v. AT&T Disability Income Plan, 698 F.3d 1091, 1096 (9th Cir. 2012). In rejecting Plaintiff’s reliance on Demer v. IBM Corporation LTD Plan, 835 F.3d 893 (9th Cir. 2016), the court explained: “That is not to say that discovery is never permissible. However, plaintiff has presented nothing to show even the appearance of a conflict of interest which would justify conflict-of-interest discovery.” (Note: The undersigned filed a motion for reconsideration on March 26, 2020).

Exhaustion of Administrative Remedies

Fifth Circuit

Olivares v. Luling Care Ctr. Nursing Operations, LLC, No. 1:18-CV-892-RP, 2020 WL 1677674 (W.D. Tex. Apr. 6, 2020) (J. Robert Pitman). Plaintiff submitted a claim for benefits under an ERISA-governed employee benefit plan, alleging that she was injured in an attack at her workplace that left her unable to return to work. She was then terminated. Her lawyers sought to appeal on her behalf, but the plan was reluctant to provide documentation they requested. Plaintiff filed suit against the plan, alleging claims for relief for plan benefits and retaliation, among others. The plan filed a motion for summary judgment, contending that (1) Plaintiff failed to exhaust her appeals, and (2) Plaintiff’s claim for retaliation should be dismissed. The court found that Plaintiff had requested documents related to the denial of her claim, but the plan “flatly denied access to the majority of the documents” requested, including the claim file, which the plan claimed was “company property and not released upon request.” The court ruled that this was a violation of ERISA regulations, and that Plaintiff therefore did not receive a “full and fair review” as required by ERISA. The court thus denied Defendants’ motion regarding Plaintiff’s alleged failure to exhaust. However, the court granted Defendants’ motion regarding Plaintiff’s retaliation claim, finding that Plaintiff had not specifically alleged that she was “terminated…with any specific discriminatory intent,” and that no such evidence existed in the record.

Seventh Circuit

Emerus Hospital, et al. v. Health Care Service Corporation, et al., Case No. 13 C 8906, 2020 WL 1675665 (N.D. Ill. Apr. 6, 2020) (Judge Robert W. Gettleman). Before the court were second cross-motions for summary judgment and Plaintiffs’ motion seeking reconsideration of the court’s much earlier decision denying Plaintiffs’ motion to remand the case back to the Circuit Court of Cook County, Illinois, from which it had been removed on Dec. 13, 2013. Plaintiffs, out-of-network health care providers and physicians that provided emergency care services to Defendants’ insureds, had originally moved to remand, arguing that they had executed irrevocable waivers of assignment of ERISA benefits prior to commencing the lawsuit. The court denied that motion, applying the 2-part test established in Aetna Health Inc. v. Davila, 542 U.S. 200, 201 (2004). In their current motion, Plaintiffs misleadingly argue that Defendants are now taking the position in the summary judgment motion that the patient assignments, the validity of which formed the basis of the court’s earlier opinion, are invalid by virtue of the irrevocable waivers executed before the lawsuit was filed. The court held that Plaintiffs misconstrued both Defendants’ current position as well as the court’s earlier opinion. The court stated that Plaintiffs had derivative standing to bring ERISA claims from 2009 to 2013 but had originally concluded that the waivers were an attempt by Plaintiffs to artfully plead the complaint by disguising the federal claims. The court clarified that it had never held that those waivers were invalid. Because the waivers are valid, the court held, Plaintiffs cannot now plead a claim under ERISA, which is what Defendants have argued in its motion for summary judgment.

Life Insurance & AD&D Benefit Claims

First Circuit

Wightman v. Securian Life Ins. Co., No. CV 18-11285-DJC, 2020 WL 1703772 (D. Mass. Apr. 8, 2020) (District Judge Denise Casper). See Notable Decision summary above.

Medical Benefit Claims

Ninth Circuit

Meyers v. Kaiser Found. Health Plan, Inc., No. 19-15051, __, F.App’x__, 2020 WL 1673078 (9th Cir. Apr. 6, 2020) (Before Circuit Judges Wallace, Graber, Collins). See Notable Decision summary.

Wise v. MAXIMUS Fed. Servs., Inc., No. 18-CV-07454-LHK, 2020 WL 1701758 (N.D. Cal. Apr. 8, 2020) (Judge Lucy H. Koh). Plaintiff sued United HealthCare Services, Inc., UnitedHealthCare Insurance Co. (together UHC) and MAXIMUS Federal Services, Inc. due to the denial of coverage for durable medical equipment—in this case a myoelectric elbow-wrist-hand orthosis known as the MyoPro Motion G. After UHC denied Plaintiff’s claim, he requested an independent medical review with the California Department of Insurance. That review was performed by MAXIMUS. The court evaluated cross motions for summary judgment on Plaintiff’s 502(a)(1)(B) and (a)(3) claims. For the (a)(1)(B) claim, the court determined if MAXIMUS was a proper defendant. Initially, the court determined MAXIMUS was a functional fiduciary under ERISA. This was because it conducted an independent medical review and exercised discretion to decide whether to approve or deny benefits to a participant in an ERISA-governed plan (its decision was binding on UHC). Because MAXIMUS was a functional fiduciary, it was subject to the Ninth Circuit rule that “suits under § 1132(a)(1)(B) to recover benefits may be brought against the plan as an entity and against the fiduciary of the plan.” The court rejected MAXIMUS’s claim of immunity under California law, Cal. Civ. Code § 43.98 and Cal. Ins. Code § 10169.2(b). Those sections provide some immunity when medical consultants communicate with California’s Department of Managed Health Care. Herein, MAXIMUS only communicated with California’s DOI. With all defendants remaining in the case, the court denied summary judgment to all parties because, under FRCP 56, it was unable to resolve issues of fact or weigh evidence. It noted FRCP 52 was the vehicle for doing so in the future. The material issues of fact concerned the applicability of the plan’s “Unproven Service(s)” exclusion. After noting the exclusion contained potentially material typos, and that UHC had inexplicably, but consistently, misquoted the exclusion’s language, the court held it must resolve any ambiguities in favor of Plaintiff and construe any exclusion in an insurance plan narrowly. The result was UHC and MAXIMUS had the burden to prove the actual existence of evidence showing the ineffectiveness and lack of impact for the MyoPro. Because the court was presented with conflicting evidence on this issue, without the ability to evaluate credibility and weigh the evidence, all MSJ motions were denied as to Plaintiff’s (a)(1)(B) claims. The court did note that UHC was not able to avoid liability because its “Omnibus Codes” dictated the denial of benefits.

Tenth Circuit

Teamsters Local 886 v. Sysco Oklahoma, LLC, Case No. CIV-20-162-R, 2020 WL 1663421 (W.D. Okla. Apr. 3, 2020) (Judge David L. Russell). The court denied Plaintiff’s Third Motion for Issuance of Temporary Restraining Order and Preliminary Injunction stemming from activity conducted by Sysco Oklahoma—allegedly making unilateral changes to the unit members’ terms and conditions of employment by not permitting the Union access to its members and allegedly unlawfully discharging a member of the bargaining unit because of his activities on behalf of the Union—between December 2019 and January 2020 that threatened Sysco’s continued participation in and contributions to the Michigan Conference of Teamsters Welfare Fund (“Welfare Fund”), which provides health benefits to 120 members of the bargaining unit. The court held that Plaintiffs had not demonstrated a likelihood on the merits necessary for injunctive relief and, additionally, Plaintiffs did not show that an irreparable harm would flow from the court not issuing injunctive relief. The court found that the evidence showed that with the Welfare Fund’s demise, employees either opted to obtain insurance via Sysco or in one employee’s case, from Indian Health Services. With this, Plaintiff could not establish that any Union member is currently without insurance coverage because of Sysco’s actions.

Charles W. v. Regence BlueCross BlueShield Of Oregon, No. 2:17-CV-00824-TC, 2020 WL 1812372 (D. Utah Apr. 9, 2020) (Judge Tena Campbell). Following a confidential settlement reached while the case was at the Tenth Circuit, the court granted the parties’ Stipulated Rule 60(a) motion seeking to clarify the district court’s previous summary judgment order. Specifically, the court modified its previous summary judgment order as follows:

1. On page 11 of the Order, the last sentence at the end of the first paragraph should now read: “The court here reaches the same conclusion: the MCG, 18th Edition, ORG: B-902-RES (BHG) – Residential Acute Behavioral Health Level of Care, Child or Adolescent are inapplicable to this situation.”

2. On page 12 of the Order, the first sentence under B.1. should now read: “In any event, even assuming the MCG, 18th Edition, ORG: B-902-RES (BHG) – Residential Acute Behavioral Health Level of Care, Child or Adolescent are applicable and that Dr. Stein’s and Dr. Mark’s opinions are entitled to full consideration, the court concludes these reviewers did not apply those MCG properly under the specific facts of this case.”

3. On page 12 of the Order, the end of the first paragraph should now read: “Plaintiffs have shown that, under H.N., this standard was inapplicable, so Dr. Stein’s and Dr. Marks’s conclusions do not accurately assess medical necessity as that term is defined under the plan. If Dr. Stein and Dr. Marks had used the applicable standard to assess medical necessity as that term is defined under the plan, the court would not have discounted their conclusions.”

The court cautioned “that nothing in this clarification is meant to suggest that doctors can satisfy their obligations under ERISA by simply using magic words such as ‘medical necessity.’ It is not enough to cite an appropriate standard if that standard is not applied rationally.”

Pleading Issues & Procedure

Fifth Circuit

Solutions Shared Services v. Jimenez, et al., No. 5:19-CV-01054-OLG, __F. Supp. 3d __, 2020 WL 1698714 (W.D. Tex. Apr. 6, 2020) (Judge Orlando L. Garcia). ERISA, not RICO, provides the proper vehicle for determining an ERISA plan’s funding status and the funding status’s relation to the interaction of state insurance regulations with ERISA. Plaintiff, the administrator for a medical plan, approved $245k in medical expenses for an injury Defendant suffered. After Defendant recovered almost $4M in a settlement related to his injuries, Plaintiff filed suit seeking to recover the medical plan’s payments under the plan’s reimbursement provisions. Defendant counterclaimed via a RICO action based on alleged fraud. According to Defendant, the plan was not self-funded, but was insured, and the misrepresentation violated RICO. The court disagreed, granting Plaintiff’s motion to dismiss without leave to amend because holding money another felt was owed to them did not constitute the requisite injury to confer standing to assert a civil RICO claim.

Sixth Circuit

Secretary of U.S. Department of Labor v. Kavalec, et al., No. 1:19-CV-00968, 2020 WL 1694560 (N.D. Ohio Apr. 7, 2020) (Judge Pamela A. Barker). The Secretary of Labor (the “Secretary”) moved to strike Defendants’ demands for a jury trial along with several affirmative defenses. Defendants argued the Secretary’s request to claw back Defendants’ wages is not equitable in nature and they are entitled to a jury trial on this issue. The court disagreed finding the Secretary’s requested remedies are considered equitable relief and Defendants do not have a right to a jury trial. The court then analyzed the Secretary’s request to strike certain affirmative defenses. The court first acknowledged the Sixth Circuit has not ruled on whether affirmative defenses are subject to the heightened pleading standard and other circuits are split on the issue. However, a majority of the lower courts have held the heightened pleading standards do not apply to affirmative defenses. The court sided with the majority of the district courts in holding Defendants need only provide fair notice of the nature of the defenses. The court went on to analyze each of the affirmative defenses, striking the defenses of failure to mitigate, laches and premature filing.

Tenth Circuit

GCIU-Employer Ret. Fund v. Coleridge Fine Arts, No. 19-3161, __ F.App’x __, 2020 WL 1672776 (10th Cir. Apr. 6, 2020) (Before Briscoe, Lucero, and McHugh, Circuit Judges). This is the second time this case has been before the Tenth Circuit, both times on the issue of personal jurisdiction. Plaintiff, a multiemployer pension plan governed by ERISA, sued defendants, foreign corporations with controlling interests in an American company that participated in the plan, seeking to collect withdrawal liability payments. The district court initially granted Defendants’ motion to dismiss, finding that personal jurisdiction was not established. The Tenth Circuit reversed and remanded for jurisdictional discovery. On remand, the district court again found no personal jurisdiction, and Plaintiff appealed again. On this second appeal, the court affirmed. The court found that Plaintiff had not established that Defendants had any day-to-day management involvement in the operations of the American subsidiary. Furthermore, Defendants conducted no business in the subsidiary’s home state, and sent no equipment or supplies to the subsidiary. The court further found the case did not satisfy the Supreme Court’s “minimum contacts” test because Defendants did not “purposefully direct” its activities at the forum. Plaintiff’s injuries also did not arise from Defendants’ alleged forum-related activities, which were minimal. The court therefore affirmed the dismissal of the case.

M.S. v. Premera Blue Cross, No. 2:19-CV-00199, 2020 WL 1692820 (D. Utah Apr. 7, 2020) (Judge Robert J. Shelby). In this action seeking mental health benefits for residential treatment, the court denied Defendants’ joint motion for judgment on the pleadings. Defendants argued that Plaintiffs did not adequately plead facts to support their Parity Act claim and even if pled properly, the claim was duplicative of Plaintiffs’ benefits claim. The court concluded that Plaintiffs adequately pleaded their Parity Act claim, pointing to allegations in the complaint that Defendants impose acute symptomology criteria on sub-acute mental health inpatient treatment but do not impose such criteria on sub-acute medical/surgical inpatient criteria. The court found that while Plaintiffs’ Parity Act claim was based on a set of facts shared with the denial of benefits claim, the Parity Act claim seeks relief that is equitable in nature, such as an order requiring an injunction, reformation, disgorgement, surcharge, and estoppel, which are forms of relief unavailable for a denial of benefits claim. The court also envisioned a scenario where Plaintiffs’ Parity Act claim may be undecided regardless of the outcome of the denial of benefits claim. The court rejected Defendant’s attempt to limit the scope of equitable relief at the pleading stage and referred Plaintiffs’ discovery motion to the Magistrate Judge.

Eleventh Circuit

Cousins v. United Healthcare, Inc., No. 19-CV-25061, 2020 WL 1666628 (S.D. Fla. Apr. 3, 2020) (Judge Beth Bloom). Plaintiff, who is not a contracted medical provider with UHC, brought state law claims—breach of contract and violation of Florida Statutes section 641.513—against UHC for failing to pay the proper rate of payment. UHC moved to dismiss under Rule 12(b)(6). The court found that the amended complaint was a shotgun pleading. “To comply with federal pleading requirements in stating an ERISA claim, Plaintiff must, at a minimum, identify each patient, the condition each patient suffered that necessitated treatment, the specific ERISA plan that covered each patient, the term or terms of the plan that UHC allegedly violated, and the date the procedure for each patient was performed. Accordingly, Plaintiff’s claim for breach of contract fails to allege sufficient facts to state a claim under ERISA.” The court also explained that in order to satisfy applicable pleading requirements, Plaintiff must set forth the claims for which he has exhausted his administrative remedies, and how he has done so.

Provider Claims

Eleventh Circuit

GVB MD v. Aetna Health Inc., No. 19-22357-CIV, 2020 WL 1692635 (S.D. Fla. Apr. 7, 2020) (Judge Federico A. Moreno). Earlier in this insurance benefit dispute, the court granted Defendant’s motion to dismiss the initial complaint and then granted leave to Plaintiff GVB MD d/b/a Miami Back to amend its allegations. Miami Back subsequently filed its Amended Complaint and Aetna responded with the underlying Motions to Strike and Motion to Dismiss Count II. In its Motions, Aetna asks the court for four forms of relief: (1) to strike Miami Back’s Amended Complaint in full for violating the parties’ Stipulated Confidentiality Order and HIPAA-Qualified Protective Order, or alternatively sealing or redacting certain confidential business and non-party patient health information; (2) to strike Miami Back’s demand for a jury trial; (3) to dismiss, again for lack of particularity, Miami Back’s claim for declaratory judgment; and (4) to award Aetna costs and attorneys’ fees incurred for bringing its Motions. The court found that Plaintiff did disclose certain confidential information and instructed parties to reach an amicable agreement as to which information can be publicly disclosed in the Amended Complaint, granting Defendant’s motion to dismiss on this issue in full. Because the complaint was dismissed, Plaintiff’s request for a jury trial and declaratory judgment were deemed moot. Defendant’s motion for attorneys’ fees and costs was denied because the court believed Plaintiff made a good-faith attempt to meet its pleading requirements and to comply with the confidentiality order.

Severance Benefit Claims

Fifth Circuit

Gonzales v. ConocoPhillips Co. et. al., No. 19-20285, __F.App’x__, 2020 WL 1672820 (5th Cir. Apr. 3, 2020). Plaintiff Gonzales had been working in Australia when he was convicted of several crimes, including aggravated assault on his wife. After his visa was cancelled by Australia’s Department of Immigration, ConocoPhillips put him on a leave of absence, and on return to the U.S., terminated his employment. Plaintiff sought benefits under the severance plan and was denied. On summary judgment, the district court determined it was not an abuse of discretion for ConocoPhillips to deny benefits because Plaintiff did not suffer a layoff. Rather, Plaintiff was terminated for cause due to his inability to perform his job in Australia after losing his visa. The Fifth Circuit affirmed the district court’s decision in favor of Defendants. It also upheld the district court’s award of attorneys’ fees to Defendants in the amount of $186,000.

Subrogation/Reimbursement Claims

Ninth Circuit

Colorescience, Inc. v. Bouche, et al., No. 20CV595-GPC(AGS), 2020 WL 1812221 (S.D. Cal. Apr. 9, 2020) (Judge Gonzalo P. Curiel). Plaintiff, as Plan Administrator of the Colorescience Welfare Benefit Plan, filed a motion seeking a Temporary Restraining Order (“TRO”) against Defendants, an employee of Colorescience and her adult son, preventing them from disbursing settlement proceeds received or to be received by the son in a personal injury action pending in Texas state court. Plaintiff claims that Defendants must reimburse the Plan $477,093.98 in medical benefits it paid on the son’s behalf. The court denied the motion because Plaintiff has failed to demonstrate a likelihood of success on the merits where there is a contested issue as to whether the son was a plan participant. Additionally, Plaintiff has failed to show irreparable harm as no proceeds have been paid and the settlement agreement contractually requires Defendants to hold the amount of Plaintiff’s claim in trust until the entitlement to such funds is resolved by settlement or final judgment.

Venue

Third Circuit

Osborne v. Employee Benefits Admin. Bd. of Kraft Heinz, No. 2:19-CV-00307, 2020 WL 1808270 (W.D. Pa. Apr. 9, 2020) (Judge Mark R. Hornek). Kraft Heinz executives allegedly breached their fiduciary duties to employees by investing retirement funds into artificially inflated company stock. The issue with the stock, and other misdeeds, was discovered through an investigation by the SEC. When this information became public, twelve lawsuits were filed against Kraft Heinz in four different courts. This court had one ERISA putative class-action and several shareholder derivative lawsuits. Heinz Kraft filed a motion to transfer the cases from Pennsylvania to the Northern District of Illinois, where similar cases, which had been filed before the Pennsylvania lawsuits, were proceeding. Because discovery had not begun and the court had not reached any of the merits in the cases before it, the court decided to transfer the Pennsylvania cases to Illinois to save time and resources.

Withdrawal Liability & Unpaid Contributions

Third Circuit

Trustees of International Union of Painters and Allied Trades District Council 711 Health & Welfare Fund; et al. v. Sky High Management, LLC, No. 19CV14638KSHCLW, 2020 WL 1698784 (D.N.J. Apr. 7, 2020) (Judge Katharine S. Hayden). “For the foregoing reasons, the Court will grant the motion for default judgment and permit defendants to recover of Sky High $138,038.72, less payments received, which is inclusive of interest, liquidated damages, and attorneys’ fees and costs.”

Fourth Circuit

Tr. of Nat’l Automatic Sprinkler Indus. Welfare Fund v. Victory Fire Prot., LLC, No. 8:19-CV-02287-PX, 2020 WL 1663343 (D. Md. Apr. 3, 2020) (Judge Paula Xinis). In this dispute over unpaid benefit contributions, the court granted Plaintiffs’ motion for default judgment and request for attorneys’ fees in the amount of $1,330.75 and costs of $595.

Ninth Circuit

Carpenters Health and Security Trust of Western Washington et al. v. Gifford Industries Inc., No. C19-0258-JCC, 2020 WL 1689737 (W.D. Wash. Apr. 7, 2020) (Judge John C. Coughenour). The court denied Defendant’s motion for reconsideration and granted Plaintiffs’ request for attorneys’ fees. “Defendant shall pay Plaintiffs $24,745.00 in attorney fees, as allowed under ERISA, 29 U.S.C. § 1132(g), and Defendant shall reimburse Plaintiffs $519.00 for costs.”

Your ERISA Watch is made possible by the collaboration of the following Kantor & Kantor attorneys: Brent Dorian Brehm, Beth Davis, Sarah Demers, Elizabeth Green, Andrew Kantor, Monica Lienke, Susan Meter, Michelle Roberts, Tim Rozelle, Peter Sessions, and Zoya Yarnykh.