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Charles W. v. United Behavioral Health

United States District Court, D. Utah, Central Division

December 18, 2019

CHARLES W., CATHY W., and T.W., Plaintiffs,
v.
UNITED BEHAVIORAL HEALTH, and the WELLS FARGO & COMPANY HEALTH PLAN, Defendants.

          ORDER AND MEMORANDUM DECISION

          TENA CAMPBELL, U.S. DISTRICT COURT JUDGE

         Plaintiffs Charles W. and Cathy W. are the parents of Plaintiff T.W. Charles is a participant in the Defendant Wells Fargo & Company Health Plan (the Plan). The Plan is a self-funded employee welfare benefits plan and Defendant United Behavioral Health (UBH) was the third party claims administrator for the Plan during the relevant time.

         From January 4, 2017, until January 19, 2018, T.W. received inpatient mental health treatment at Chrysalis, “a licensed and accredited therapeutic boarding school that provides residential treatment for girls between the ages of 13 and 18.” (Compl. at ¶ 4, ECF No. 2.)

         On April 17, 2017, UBH sent Charles and Cathy a letter denying payment for T.W.'s treatment at Chrysalis. In the letter, UBH justified its denial on the grounds that T.W. did not need the level of care given at Chrysalis. (Id. ¶ 16.)

         Charles and Cathy appealed the decision, arguing that UBH had made a number of errors in its denial letter and so had violated ERISA. But UBH sent Plaintiffs a second letter upholding its initial denial of payment. In this second letter, UBH gave a number of reasons why, in UBH's view, T.W. did not meet the criteria for the level of care given at a residential treatment center. Once again, Plaintiffs unsuccessfully appealed the denial of payment.

         Plaintiffs have now filed this lawsuit claiming that the denial of benefits caused Charles and Cathy to incur $149, 000 in medical expenses that should have been paid by the Plan. They assert two causes of action: the first for recovery of benefits under 29 U.S.C. § 1132(a)(1)(B); the second for violation of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA or “Parity Act”).

         Defendants responded to the lawsuit by filing a motion to dismiss, arguing that: (1) the court must dismiss the lawsuit in its entirety because T.W. is a member of a pending class action against UHB; (2) Plaintiffs' second claim must be dismissed because they failed to plead the required elements of a Parity Act claim; and (3) Charles and Cathy do not have standing to assert individual causes of action. (Defs.' Mot. Dismiss, ECF No. 7.)

         I. 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). The 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).

         II. ANALYSIS

         A. Standing

         Defendants contend that T.W.'s parents, Charles and Cathy, do not have the requisite statutory and constitutional standing to assert the claims alleged in the Complaint. Because the court is dismissing the MHPAEA claim, the court limits its discussion to standing to seek recovery of benefits for T.W.'s treatment. In addition, because Plaintiffs, at the hearing, agreed to remove Cathy W. from the case, the court only addresses Charles W.'s standing to bring a claim under ERISA.

         ERISA grants statutory standing to a participant or beneficiary seeking to “recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). According to Defendants, Charles W. lacks statutory standing because “the allegations in the Complaint relate exclusively to T.W.'s treatment and her claim for benefits” and Charles does not allege that he was denied benefits relating to his treatment. (Mot. Dismiss at 20, ECF No. 7.) At best, they say, Charles “can only seek to enforce [his] daughter T.W.'s alleged right to benefits under the Plan” in his role as her guardian. (Mot. at 20.) They raise the concern that Charles' effort to enforce T.W.'s rights under the Plan as her guardian “would result in duplicative and unnecessary claims because T.W. is already seeking relief for denial of her alleged right to benefits.” (Mot. Dismiss at 20.) And they maintain that Charles is essentially bringing a claim for compensatory damages because he paid the money for T.W.'s treatment. Compensatory damages, which traditionally offer legal, rather than equitable relief, are not available under ERISA. See Mertens v. Hewitt Assocs., 508 U.S. 248, 255 (1993); Kidneigh v. UNUM Life Ins. Co. of Am., 345 F.3d 1182, 1185 (“‘Nowhere does [ERISA] allow consequential or punitive damages. Damages are limited to the recovery of ‘benefits due … under the terms of the plan.'”) (quoting Conover v. Aetna U.S. Health Care, Inc., 320 F.3d 1076, 1080 (10th Cir. 2003)).

         Charles is the Plan participant. He designated his minor child, T.W., as a beneficiary of his Plan benefits. And of course he incurred costs that he contends should have been paid by UBH because T.W.'s treatment (treatment she received when she was a minor) was covered by the Plan. Under the statute he has standing to “enforce his rights under the terms of the plan[.]” ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). That includes enforcing his right under the Plan to obtain coverage for his minor child's medical bills. That is sufficient to establish statutory standing.

         Defendants also assert that Charles does not have constitutional standing because he “ha[s] not (and cannot) allege an injury-in-fact to [himself] stemming from the alleged improper denial of benefits to T.W.” (Mot. Dismiss at 21.) The court disagrees.

         To establish constitutional standing, a plaintiff must show three things: (1) he suffered an “injury in fact, ” defined as “an invasion of a legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical”; (2) a “causal connection between the injury and the conduct complained of, ” which means the injury is fairly traceable to the defendant; and (3) it is “likely, as opposed to merely speculative, that the injury will be ...


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