United States District Court, D. Utah
K.H.B. by and through his father, K.D.B., individually, and on behalf of similarly situated individuals, Plaintiff,
UNITEDHEALTHCARE INSURANCE COMPANY, Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO TRANSFER AND
DENYING MOTION TO STAY PROCEEDINGS
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE
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
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).[*]
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).
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).
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
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.
Venue Would have Been Proper in Utah.
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).
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).
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