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Richard T.B. v. United Healthcare Insurance Co.

United States District Court, D. Utah

January 9, 2019

RICHARD T.B., AMY B., and T. SEBASTIAN B., Plaintiffs,



         This matter comes before the court on Defendants' Motion to Dismiss or, in the Alternative, to Transfer Venue filed on April 26, 2018. (ECF No. 14). Plaintiffs filed an opposition on May 24, 2018, (ECF No. 20), to which defendants replied on June 7, 2018, (ECF No. 22). Plaintiffs also filed a notice of supplemental authority. (ECF No. 21).

         I. BACKGROUND

         Richard T.B., Amy B., and T. Sebastian B., residents of Pennsylvania, are beneficiaries of a fully-insured group health benefit plan (the “Plan”) governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan-sponsored by Richard T.B.'s employer-is located and administered in Pennsylvania, its group policy delivered in Pennsylvania, and its benefits received in Pennsylvania. (ECF No. 20 at 2). Defendant United Healthcare Insurance Company (“UHC”), an insurance company incorporated in Connecticut, is the issuer of the Plan's group policy. Defendant United Behavioral Health (“UBH”), a distinct entity incorporated in California, is tasked with processing mental health claims submitted under the Plan's group policy.

         T. Sebastian B., the son of Richard T.B. and Amy B., received mental health treatment from two Utah providers during the period of October of 2014 to May of 2016-first at a wilderness treatment program followed by a lengthy stay in a residential facility. UHC denied all claims submitted in connection with this care, and despite numerous appeals, the initial determinations were sustained. Having exhausted the Plan's mandatory appeals, plaintiffs filed this lawsuit on January 22, 2018, seeking recovery of benefits due under 29 U.S.C. § 1132(a)(1)(B). (ECF No. 2).

         Defendants seek dismissal of the action under Rule 12(b)(3) of the Federal Rules of Civil Procedure, arguing that venue in this district is improper. Alternatively, defendants request a venue transfer under 28 U.S.C. § 1404(a). For the reasons below, defendants' motion to dismiss for improper venue is denied, but the case will be transferred to the district court for the Western District of Pennsylvania.

         II. ANALYSIS

         A. Venue is Proper in the District of Utah

         Under 29 U.S.C. § 1132(e)(2), 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[.]” The parties agree that the plan is administered and was breached, if at all, in Pennsylvania. Plaintiffs argue, however, that venue is proper in the District of Utah because defendants “reside” in this district.

         The Tenth Circuit holds that under § 1132(e)(2), “a corporation resides wherever personal jurisdiction is proper.” Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1210 n.3 (10th Cir. 2000). Thus, to determine whether venue is proper, the court must analyze whether it may properly exercise personal jurisdiction over the defendant corporations despite the fact that they have raised no challenge to the propriety of personal jurisdiction.

         When, as with ERISA, a federal statute “provides for nationwide service of process, it becomes the statutory basis for personal jurisdiction.” Id. at 1210 (quoting Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 942 (11th Cir. 1997)). “‘[I]n a federal question case where jurisdiction is invoked based on nationwide service of process[, ]'” courts apply a different jurisdictional standard than the familiar minimum contacts analysis. Klein v. Cornelius, 786 F.3d 1310, 1318 (10th Cir. 2015) (quoting Peay, 205 F.3d at 1212). The relevant standard in this context, emanating from the Fifth Amendment's Due Process Clause, “requires the plaintiff's choice of forum to be fair and reasonable to the defendant.” Peay, 205 F.3d at 1212. “In other words, the Fifth Amendment protects individual litigants against the burdens of litigation in an unduly inconvenient forum.” Id. (internal quotation marks omitted).

         “To establish that jurisdiction does not comport with Fifth Amendment due process principles, a defendant must first demonstrate that his liberty interests actually have been infringed.” Id. (internal quotation marks omitted). “The burden is on the defendant to show that the exercise of jurisdiction in the chosen forum will make litigation so gravely difficult and inconvenient that he unfairly is at a severe disadvantage in comparison to his opponent.” Id. (internal brackets and quotation marks omitted).

         Importantly, in this context, the Tenth Circuit instructs that “in this age of instant communication and modern transportation, the burdens of litigating in a distant forum have lessened” such “that it is only in highly unusual cases that inconvenience will rise to a level of constitutional concern.” Id. (internal brackets, citations, and quotation marks omitted).

         Applying “the broad standard” announced by the Tenth Circuit, defendants have not adequately shown that this forum is so unfair or unreasonable as to amount to a deprivation of their liberty interests. See Id. at 1213. It is undisputed that UBH has a claims-processing center in this district through which at least some of the claim submissions-or subsequent appeals-in this case were processed, and defendants have not set forth any facts to suggest that their liberty interests will be infringed by litigating in this forum. Thus, the inconvenience defendants articulate does not rise to a level of ...

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