United States District Court, D. Utah
KURT W., SANDRA W., and E. W., Plaintiffs,
UNITED HEALTHCARE INSURANCE COMPANY, et al., Defendants.
MEMORANDUM DECISION AND ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO DISMISS
WADDOUPS UNITED STATES DISTRICT JUDGE
the court is Defendants United Healthcare Insurance Company,
Laboratory Corporation of America Holdings, and the
Laboratory Corporation of America Holdings Medical Benefit
Plan's motion to dismiss (ECF No. 8), which seeks to
dismiss, or in the alternative stay, Plaintiffs' action.
The motion has been fully briefed, and Defendants did not
request a hearing on the same. (ECF No. 14). For the reasons
stated herein, Defendants' motion is GRANTED IN
PART AND DENIED IN PART.
E. W. is the child of Plaintiffs Kurt W. and Sandra W.
(Compl., ECF No. 2 at ¶ 1). At all times relevant to
this action, Kurt W. was a participant in the Laboratory
Corporation of America Holdings Medical Benefit Plan (the
“Plan”), a self-funded employee welfare benefits
plan administrated by defendant Laboratory Corporation of
America Holdings (“LabCorp”) and for which
defendant United Healthcare Insurance Company
(“United”) was the third-party claims
administrator. Id. at ¶¶ 2-5. At all times
relevant to this action, E. W. was a beneficiary of the Plan.
Id. at ¶ 5.
is diagnosed with autism spectrum disorder, adjustment
disorder, anxiety, and depression. Id. at ¶ 22.
As E. W. grew into adolescence, he became increasingly
isolated to the point that he stopped attending activities
and school and failed to respond to therapeutic
interventions. Id. at ¶¶11-25. E. W.'s
psychiatrist and educational consultant recommended that he
enroll in a residential treatment facility but that he first
attend an outdoor behavioral health program to ease the
transition into the facility. Id. at ¶25. On
January 22, 2017, E. W. was admitted into Aspiro Academy, an
outdoor behavioral health program. Id. at
¶¶ 6, 25, 26. Thereafter, on March 30, 2017, E. W.
was admitted into Daniels Academy, a residential treatment
facility for mental-health. Id. at ¶¶ 6,
letter dated June 1, 2017, United denied payment of E.
W.'s treatment at Aspiro on the basis that Plaintiffs had
failed to provide requested information. Id. at
¶ 27. Plaintiffs appealed the denial and requested
copies of Plan documents. Id. at ¶¶ 28-29.
United upheld the denial by a January 18, 2018 letter which
stated that the treatment “did not meet the Optum Level
of Care Guideline required to be followed in the member's
behavioral health plan benefits” and that E. W.
“was stable from a medical standpoint, ” as he
was “not suicidal, homicidal, manic, aggressive, or
psychotic, ” was “stable on his medicine, ”
and “did not require 24-hour nursing care.”
Id. at ¶ 30. The letter also stated that
“[w]ilderness therapy is not a covered service under
[E. W.'s] plan.” Id. United did not
provide the Plan documents that Plaintiffs requested.
Plaintiffs again appealed this decision and renewed their
request for Plan documents. Id. at ¶¶
32-35. United upheld the denial of E. W.'s treatment at
Aspiro “based on Optum Level of Care Guidelines for
Residential Treatment of Mental Health Disorders and the
Optum Common Criteria and Clinical Best Practices for All
Levels of Care Guidelines” and because E. W. was
cooperative and “did not want to harm himself [or]
others.” Id. at ¶ 36.
letter dated April 21, 2017, United also denied payment of E.
W.'s treatment at Daniels Academy from April 13, 2017
forward on the basis that E. W. “made progress and that
his condition no longer meets Guidelines for further coverage
of treatment in this setting” and that E. W.
“does not need to be in a 24-hour care setting.”
Id. at ¶ 38. Plaintiffs appealed this denial
and provided statements of E. W.'s providers recommending
that he remain in the level of treatment he was receiving.
Id. at ¶¶ 39-43. Plaintiffs also renewed
their request for a copy of the Plan documents. Id.
at ¶¶ 41, 44. By letter dated March 30, 2018,
United upheld the denial on the basis that E. W.'s
“condition no longer met Guidelines for further
coverage of treatment in this setting” and because he
“did not require 24 (twenty-four) hour nursing
care.” Id. at ¶ 45. Plaintiffs again
appealed this denial, and again requested Plan documents.
Id. at ¶¶ 47-51. United upheld the denial
by a letter dated June 8, 2018 on grounds already provided in
the prior March 30, 2018 letter. Id. at ¶ 45.
Defendants never provided the Plan documents. Id. at
filed this action on April 3, 2019, alleging that Defendants
violated ERISA and the Mental Health Parity Act (“the
Parity Act”) by denying coverage for E. W.'s
treatment. Plaintiffs seek an order requiring Defendants to
pay for the cost of E. W.'s treatment, and statutory
penalties, and varied equitable releif. Kurt W. and Sandra W.
have incurred expenses in excess of $170, 000.00 for E.
W.'s treatment. Id. at ¶ 55.
motion to dismiss asks the court to: 1) dismiss, or in the
alternative stay, Plaintiff's action because E. W. is a
member of a plaintiff class in a pending class action
premised on the same facts and claims; 2) dismiss
Plaintiffs' claim under the Party Act; and 3) dismiss
Kurt W. and Sandra W.'s claims for lack of standing. Each
of these requests will be discussed in turn.
Plaintiffs' participation in the Wit class
action does not require this action to be dismissed or
first argue that Plaintiffs' action should be dismissed,
or in the alternative stayed, because E. W. is a member of
the plaintiff class in a class action lawsuit pending in the
Northern District of California, Wit v. United Behavioral
Health, and “‘members of [a] plaintiff class
in class action cannot bring separate individual action
premised on same grounds as pending class action.'”
Cimino v. Perrill, 153 F.3d 726 (10th Cir. 1998)
(citing Rivarde by Rivarde v. State of Missouri, 930
F.2d 641, 643-45 (8th Cir.1991)). Even if the court accepts
that this principle is “well-established in this
Circuit, ” it does not find that it governs here, as
Plaintiffs' action is not premised on the “same
grounds” as Wit.
Plaintiffs allege that Defendants breached their fiduciary
duty to E. W. in violation of ERISA by denying E. W.'s
care at Aspiro Academy and Daniels Academy; violated the
Parity Act by requiring E. W. to satisfy acute care medical
necessity criteria in order to obtain coverage for
residential treatment at Aspiro Academy and Daniels Academy;
violated the Parity Act by applying processes, strategies,
and etc. to limit coverage for mental health treatment more
stringently than coverage than medical/surgical treatment;
and violated ERISA by failing to produce to them copies of
Plan documents. (See Compl., ECF No. 2 at
¶¶ 59, 65-67, 69-71).
Wit class action, on the other hand, only involves
claims of “alleged wrongful denial of coverage for one
type of provider of substance abuse and mental health
treatment” and “does not reference or contain any
causes of action under the Parity Act” or
“involve any denials of coverage for outdoor behavioral
health programs.” See Michael W. v. ...