United States District Court, D. Utah
D.K., K.K. and A.K., Plaintiffs,
UNITED BEHAVIORAL HEALTH and ALCATEL-LUCENT MEDICAL EXPENSE PLAN FOR ACTIVE MANAGEMENT EMPLOYEES, Defendants.
MEMORANDUM DECISION AND ORDER
A. KIMBALL, UNITED STATES DISTRICT JUDGE
United Behavioral Health (“UBH”) and Nokia
Medical Expense Plan for Management Employees move the court
for an order dismissing Plaintiffs' D.K., K.K. and
A.K.'s (Plaintiffs') claims on the grounds of
improper venue, or in the alternative to transfer this action
to the United States District Court for the District of New
Jersey pursuant to 28 U.S.C. § 1404(a). On October 15,
2018, the court held a hearing on the motion. At the hearing,
the Plaintiffs were represented by Brian King. Defendants
were represented by Scott Peterson. The court took the motion
under advisement. Based on the briefing filed by the parties
and the law and facts relevant to the pending motion, the
court issues the following Memorandum Decision and Order
DENYING the Defendants' Motion in its entirety.
brought this action seeking an award of benefits under an
employee welfare benefit plan governed by the Employee
Retirement Income Security Act of 1974, 29 U.S.C. §1001.
Plaintiffs, who are residents of Texas, allege that
Defendants wrongfully denied Plaintiffs' claim for
benefits under the Plan in connection with Plaintiff
A.K.'s treatment at a Utah residential treatment
A.K. received medical care and treatment in Utah at Discovery
Ranch for Girls (“Discovery”), which provides
residential treatment for adolescent girls with mental health
conditions. A.K. was admitted to Discovery on November 4,
2013. Defendants paid Plaintiffs' claims for benefits in
connection with A.K.'s treatment at Discovery through
February 8, 2014 and denied Plaintiffs' claims for
benefits from February 9, 2014 forward.
exhaustion of the available internal administrative appeals,
Plaintiffs requested and obtained an external review of their
claim for benefits. The external reviewer upheld
Defendants' denial of coverage under the Plan for
A.K.'s treatment at Discovery from February 9, 2014
forward, finding that A.K.'s treatment was not medically
necessary under the terms of the Plan. Plaintiffs brought
this action pursuant to ERISA §502(a)(1)(B), 29 U.S.C.
§1132(a)(1)(B), seeking an order awarding them benefits
under the Plan in an amount exceeding $87, 000, as well as
interest, attorneys' fees and costs. Plaintiffs also
allege claims for violations of the Mental Health Parity and
Addiction Equity Act and the Patient Protection and
Affordable Care Act and the Patient Protection and Affordable
Care Act under ERISA §502(a)(3), 29 U.S.C.
§1132(a)(3), based on Defendants' denial of
Plaintiffs' claim for benefits under the Plan.
brought this motion to transfer venue arguing that it has
insufficient contacts to Utah to establish venue in the
state. The only connections to Utah in this case are that
A.K.'s treatment was provided in Utah, and UBH has a Utah
P.O. Box where it directed Plaintiffs to submit their claims.
Plaintiffs are residents of Texas and UBH is a resident of
California. The Plan is located and administered in New
makes two arguments in its motion. UBH argues that it has
insufficient contacts to the State of Utah to satisfy the
Fifth Amendments due process requirements. Alternatively, it
argues that even if venue is proper, the court should
transfer this case to New Jersey because it is a more
Venue is Proper in Utah Because UBH Can Be Found in the
venue provision, ERISA §502(e)(2), 29 U.S.C.
§1132(e)(2), expressly limits where a claimant may file
an action seeking benefits under ERISA §502. Those
sections provide that an action seeking benefits “may
be brought in the district where the plan is administered,
where the breach took place, or where the defendant resides
or may be found, and process may be served in any other
district where a defendant resides or may be found.”
is administered in the district where it is
“managed.” IHC Health Servs. v. Eskaton
props., No. 2:16-cv-3-DN, *10 (D. Utah 2016). Here, the
Plan was located and managed in New Jersey.
also well-established that “the breach occurs at the
place where the policy holder resides and would have received
benefits.” Jon N. v. Blue Cross Blue Shield of
Mass., Inc., No. 1:07-cv-137-DAK, 2008 U.S. Dist. LEXIS
35464, *8 (D. Utah 2008). Here, Plaintiff D.K., who was a
Plan participant, was a resident of Texas, as well as
Plaintiffs K.K. and A.K. Therefore, any purported breach
occurred in Texas and not in Utah.
U.S.C. §1132(e)(2) also allows jurisdiction “in
any district where a defendant resides or may be found, and
process may be served in any other district where a defendant
resides or may be found.” The 10th Circuit held in
Peay v. BellSouth Medical Assistance Plan, that
“the last clause of §1132(e)(2) authorizes
nationwide service of process. When a federal statute
provides nationwide service of process, it becomes the
statutory basis for personal jurisdiction.” 205 F.3d
1206, 1210 (10th 2000). The 10th Circuit reasoned ...