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K.H.B. v. UnitedHealthcare Insurance Co.

United States District Court, D. Utah

October 10, 2018

K.H.B. by and through his father, K.D.B., individually, and on behalf of similarly situated individuals, Plaintiff,




         In this second-filed putative nationwide class action to recover health benefits under an ERISA plan, defendant insurer moves to transfer venue to the District of Utah under either the first-to-file rule or pursuant to 28 U.S.C. § 1404(a). Alternatively, defendant moves to stay this action. The motions present a battle between competing putative nationwide class actions that should be coordinated by a single judge. For the reasons set forth below, the motion to transfer is Granted and the motion to stay is Denied.


         In May 2017, two beneficiaries of a health benefits plan filed a putative nationwide class action lawsuit, Amy G. and Gary G. v. United HealthCare and United Behavioral Health, No. 2:17-cv-00413-DN-EJF, in the United States District Court for the District of Utah before Judge David Nuffer. In Amy G., plaintiffs' minor son received treatment for his mental health condition at a wilderness therapy program, but United Healthcare Insurance Company and United Behavioral Health, which administered the plaintiffs' employer-provided group health benefits plan, denied coverage based on an exclusion from coverage for experimental, investigational, or unproven treatment. The Utah case seeks to pursue a putative nationwide class of ERISA beneficiaries whose claims for payment of mental health services at wilderness programs have been wrongfully denied based on the defendants' systematic and erroneous application of the exclusion for experimental, investigational, or unproven treatment. Class certification discovery concluded on September 14, and the motion for class certification is due on October 12 (Case No. 17-00413, Dkt. No. 2 ¶¶ 2-3, 16, 19-41; Br., Exh. 2 at 2).[*]

         The instant action is a competing proposed nationwide class action brought here in the Northern District of California by a different plaintiff with a different lawyer but also against United Healthcare over the same problem. Plaintiff K.H.B. was enrolled in his parent's employer-sponsored health insurance plan, which UHC underwrote and administered. Like the plaintiffs' son in the Utah action, K.H.B. received mental health treatment at a wilderness therapy program located in Utah. Plaintiff received, opposed, and appealed a denial of coverage letter sent from and to the post office box of UHC's affiliate UBH in Utah. Plaintiff asserts several ERISA claims under the theory that the program provided him with “medically necessary treatment” covered by his plan (Amd. Compl. ¶¶ 1, 4-7, 12-13, Exhs. C, D).

         Plaintiff originally brought these claims on behalf of all wrongfully denied ERISA beneficiaries who had sought coverage for treatment at a wilderness mental healthcare program. But after defendant filed this motion to transfer venue, plaintiff amended his class definition via an amended complaint to bring these claims on behalf of the same putative nationwide class of ERISA beneficiaries, but only those who were not denied coverage on the basis of an exclusion or the “medically necessary” prerequisite (Compl. ¶ 58; Amd. Compl. ¶ 60).

         Defendant UHC now moves to transfer venue to the District of Utah under either the fist-to-file rule or 28 U.S.C. § 1404(a). Alternatively, UHC moves to stay this action. Plaintiff opposes. This order follows briefing, oral argument, and supplemental briefing.


         “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). Courts undertake a two-step analysis to determine whether transfer is proper. First, courts determine whether the action could have been brought in the target district. Hoffman v. Blaski, 363 U.S. 335, 344 (1960). The second step consists of an “individualized, case-by-case consideration of convenience and fairness.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). A district court “has discretion to adjudicate motions for transfer according to an individualized case-by-case consideration of convenience and fairness.” Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (quotations omitted). This order finds sufficient basis to transfer this action to the District of Utah without the need to address whether the principles of the first-to-file rule also provide independent authority to do so.

         1. Venue Would have Been Proper in Utah.

         A forum where the action “might have been brought” is one which would have been proper for both venue and service of process. Hoffman v. Blaski, 363 U.S. 335, 343-44 (1960). An ERISA action may be brought “in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides.” 29 U.S.C. § 1132(e)(2). Service of process is not disputed here. Although the Court of Appeals for the Tenth Circuit has only expressly construed “where a defendant resides” as “broad, ” for purposes of ERISA “courts have followed the broad application of the antitrust and copyright venue provisions where a defendant is deemed to be ‘found' in any district in which personal jurisdiction could be obtained over it.” Palka v. Theodore M. Hylwa, M.D., Inc., No. 85-2480, 1986 WL 22380, at *2 (D. Kan. Sept. 3, 1986) (citing Varsic v. United States Dist. Court, 607 F.2d 245, 247-48 (9th Cir. 1979)); see also IHC Health Servs., Inc. v. Eskaton Props., Inc., No. 16-CV-3-DN, 2016 WL 4769342, at *5 n.70 (D. Utah Sept. 13, 2016) (collecting cases).

         The Tenth Circuit employs a three-part inquiry to determine the propriety of the exercise of specific personal jurisdiction over a non-resident defendant: (1) whether the defendant purposefully availed itself of the privilege of conducting activities or consummating a transaction in the forum state; (2) whether the plaintiff's injury arose from those purposefully directed activities; and (3) whether exercising jurisdiction would offend traditional notions of fair play and substantial justice. Newsome v. Gallacher, 722 F.3d 1257, 1264 (10th Cir. 2013).

         UHC points to sufficient evidence to demonstrate that it would have been subject to specific personal jurisdiction and, thus, venue would have been proper in the District of Utah. First, the services at issue - plaintiff's mental health treatment at Elements Wilderness Program - were performed in Utah. Second, defendant, who availed itself of the forum's post office services, informed plaintiff of its determination that coverage was not available for services performed at wilderness programs in a letter sent by defendant from Salt Lake City, Utah. Third, plaintiff addressed his appeal of that decision to defendant in Salt Lake City. Fourth, defendant sent a letter from Salt Lake City notifying plaintiff that the initial coverage decision was upheld on appeal (Amd. Compl., Exh. C at 2, 6, 15; Exh. D at 2). Thus, defendant's purposeful conduct within the proposed forum was the very same conduct from which this action arises - denial of coverage. When questioned during oral argument whether UHC maintains offices in Utah, defense counsel responded that she did not know. Nonetheless, it does not ...

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