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Tony M. v. United Healthcare Insurance Co.

United States District Court, D. Utah

October 9, 2019

TONY M. AND A.M., Plaintiffs,
v.
UNITED HEALTHCARE INSURANCE COMPANY, and the EMC CORPORATION EMPLOYEE WELFARE BENEFITS PLAN, Defendants.

          MEMORANDUM DECISION AND ORDER

          DEE BENSON UNITED STATES DISTRICT JUDGE.

         Before the court is Defendants' Motion to Dismiss or, in the alternative, to stay the proceedings. Dkt. No. 15. The motion has been fully briefed by both parties, and the court has considered the facts and arguments set forth in those filings. Pursuant to civil rule 7-1(f) of the United States District Court for the District of Utah Rules of Practice, the court elects to determine the motion on the basis of the written memoranda and finds that oral argument would not be helpful or necessary. DUCivR 7-1(f).

         FACTUAL BACKGROUND

         The following facts are taken from Plaintiffs' complaint. They are accepted as true and viewed in the light most favorable to the plaintiff as the non-moving party. GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997).

         Plaintiff Tony M. is a participant in the EMC Corporation Employee Welfare Benefits Plan (“the Plan”), which is administered by United Healthcare Insurance Company (“United”). Id. ¶¶ 2-3. Plaintiff A.M. is a beneficiary of the Plan. Id. ¶ 3. Tony adopted A. when he was seven years old, after A. had endured years of poverty, neglect, and abuse in El Salvador. Dkt. No. 2 ¶¶ 9-10. In the years following his adoption, A. suffered from numerous psychological conditions and displayed exceptionally violent behavior. Id. ¶¶ 11-15. After A. seriously injured Tony, he was placed in juvenile detention where he exhibited traits indicative of psychotic personality disorders. Id. ¶ 16. On the recommendation of detention center staff, he was enrolled in a treatment facility for six months and then sent to Sunnycrest Youth Ranch for an additional 18 months. Id. ¶ 17. After returning home and initially reacclimating well, A. started once again to exhibit violent and sexually aggressive behavior. Id. ¶ 18. On the recommendation of his psychiatrist, he was admitted to Elk River Treatment Program on April 24, 2016. Id. ¶¶ 18-20.

         In a letter dated August 15, 2016, United denied payment for A.'s treatment at Elk River. Id. ¶ 21. The letter stated, “According to [A.'s] insurance guidelines his treatment is considered to be custodial at this time and custodial care is not a covered benefit.” Id. The letter continued, “Based on our Level of Care Guideline for Mental Health Residential Rehabilitation Level of Care, it is my determination that no further authorization [for treatment at Elk River] can be provided from 08/09/2016.” Id. It then informed Tony of his right to appeal the adverse decision. Id.

         On February 8, 2017, about six months after receiving the notice, Tony appealed the denial of payment, arguing that United had violated his ERISA rights and A.'s treatment was medically necessary. Id. ¶¶ 22-24. In response, he received a letter dated March 9 upholding the denial of payment. Id. ¶ 27. That letter stated that Tony had “exhausted all available internal appeal/grievance options, ” but informed him that he could request an independent external review. Id. ¶ 27. It contained no additional justifications for upholding the denial of payment. Id. The following month, Tony submitted a “level two appeal, ” in which he wrote that he had contacted United over the phone and had been told that his “level one appeal” was never processed “because it had been mistakenly classified as a provider appeal.” Id. ¶ 28. Tony reiterated many of his arguments from the “level one appeal, ” and maintained that A.'s treatment at Elk River was medically necessary, submitting several letters in support of that contention. Id. ¶¶ 29-31.

         On May 10, 2017, about two weeks after Tony submitted his “level two appeal, ” United sent Tony a letter from external reviewer MCMC upholding the denial of payment. Id. ¶ 32. That letter included the following language: “The independent Board Certified Physician determined that the services at this level of care are not medically necessary . . . . In this case, the Residential Treatment Program level of care is not medically necessary and is considered to be custodial care.” Id. The Plaintiffs then filed this action in the United States District Court for the District of Utah on March 8, 2019, and Defendants filed a Motion Dismiss on June 21, 2019. Dkt. No. 15.

         MOTION TO DISMISS STANDARD

         In considering a motion to dismiss, all well-pleaded factual allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the light most favorable to the non-moving party. GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). Plaintiff must provide “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This court's role “is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient.” Miller v. Glanz, 948 F.2d 1526, 1565 (10th Cir. 1991).

         DISCUSSION

         1) Pending Class Action

         Defendants first move for dismissal of all claims based on A.'s membership in a certified plaintiff class in the pending class action captioned Wit v. United Behavioral Health, 3:14-cv-2346-JCS (N.D. Cal. May 21, 2014). Dkt. No. 15 at 11. In opposition, Plaintiffs contend that because only United and the Plan (and not United Behavioral Health) are named as defendants in this action, Plaintiff does not belong to the class in Wit. Dkt. No. 20 at 5-6. The fact that Plaintiffs chose not to name United Behavioral Health (“UBH”) as a defendant does not itself exclude them from the certified class in Wit. The relevant certified class is defined as follows:

Any member of a health benefit plan governed by ERISA whose request for coverage of residential treatment services for a mental illness or substance abuse disorder was denied by United, in whole or in part, on or after May 22, 2011, based upon United's Level of ...

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