C.C. & L.C. v. Baylor Scott & White Health
| Decision Date | 23 November 2020 |
| Docket Number | Civil No. 4:18-CV-828-SDJ |
| Citation | 502 F.Supp.3d 1146 |
| Parties | C.C. & L.C., individually and as next friends to L.L.C., et al. v. BAYLOR SCOTT & WHITE HEALTH, et al. |
| Court | U.S. District Court — Eastern District of Texas |
Austin Hinds England, The Harris Firm PC, Dallas, TX, Kimberly Marie Mack Rosenberg, Jodi Felice Bouer-Josephson, Bouer Law LLC, Princeton, NJ, for C.C., L.C., D.C., H.C., C.S., S.M.
Jodi Felice Bouer-Josephson, Kimberly Marie Mack Rosenberg, Bouer Law LLC, Princeton, NJ, for C.S.
Jeffery A. Cody, Christian Celeste Nisttahuz, James Vincent Leito, IV, Nicholas Jay Hendrix, Norton Rose Fulbright US LLP, Dallas, TX, for Baylor Scott & White Health, Baylor Scott & White Holdings, Baylor Scott and White Health and Welfare Benefits Plan.
Jeffery A. Cody, Christian Celeste Nisttahuz, James Vincent Leito, IV, Norton Rose Fulbright US LLP, Dallas, TX, for Scott and White Health Plan.
Before the Court is Defendant Scott & White Health Plan's ("S&W") Motion to Dismiss. (Dkt. #30). Plaintiffs1 allege violations of the Mental Health Parity and Addiction Equity Act of 2008 (the "Parity Act"), 29 U.S.C. § 1185a, as incorporated by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132.2 (Dkt. #26). S&W moved to dismiss all claims against it, (Dkt. #30), and Plaintiffs responded, (Dkt. #49). S&W filed a reply, (Dkt. #57), and Plaintiffs filed a sur-reply, (Dkt. #58).
Having reviewed the motion, the parties’ briefing, and the applicable law, the Court concludes that S&W's Motion to Dismiss should be DENIED .
The Parity Act prohibits discrimination in the provision of insurance coverage for mental health conditions as compared to coverage for medical and surgical conditions in employer-sponsored group health plans. Am. Psychiatric Ass'n v. Anthem Health Plans, Inc. , 821 F.3d 352, 356 (2d Cir. 2016). The Act thus requires group health plans that provide mental-health or substance-abuse disorder benefits, in addition to medical and surgical benefits, to ensure that "the treatment limitations applicable to such mental health or substance abuse disorder benefits are no more restrictive than" the treatment limitations applied to medical or surgical benefits. 29 U.S.C. § 1185a(a)(3)(A)(ii).3 There is no private right of action under the Parity Act, but portions of the Act are incorporated into ERISA and may be enforced using the civil enforcement provisions in ERISA Section 1132. Am. Psychiatric Ass'n v. Anthem Health Plans, Inc. , 50 F.Supp.3d 157, 161 (D. Conn. 2014), aff'd , 821 F.3d 352 (2d Cir. 2016).
Plaintiffs C.C., D.C., C.S., and S.M. are all current or former employees of Defendant Baylor Scott & White Health ("BSW"). Plaintiffs C.C., D.C., C.S., and S.M., along with their spouses and children (together, the "Plaintiffs"), are or were enrolled in an ERISA-governed employee health-benefit plan—the Baylor Scott & White Health and Welfare Benefits Plan (the "BSW Plan"). Defendant Baylor Scott & White Holdings ("BSW Holdings") is the plan administrator for the BSW Plan. BSW Holdings outsources the claims-benefit process to a separate entity: S&W. Plaintiffs allege that S&W also acts as the claims administrator for other self-funded health plans subject to ERISA (the "Unnamed Plans"). (Dkt. #26 ¶ 50).
C.C., D.C., C.S., and S.M. each have children who have been diagnosed with Autism
Spectrum Disorder ("ASD"). These children receive some combination of Applied Behavioral Analysis ("ABA") therapy, speech therapy, physical therapy, and occupational therapy. In addition to covering medical and surgical benefits for plan participants and beneficiaries, the BSW Plan covers these forms of ASD therapy.
According to Plaintiffs, for the 2016 through 2018 plan years, the BSW Plan limited coverage to: (1) only sixty lifetime visits for ABA therapy; (2) ABA therapy only where preauthorized, meaning that approval for treatment is required before services; (3) sixty annual visits for speech therapy; and (4) a combined sixty-visit annual limit for physical and/or occupational therapy. (Dkt. #26 ¶ 36).4 Plaintiffs allege that the Unnamed Plans also provide coverage for ASD therapy but place similar limits on treatment. (Dkt. #26 ¶¶ 50–51). Plaintiffs further allege that the BSW Plan and the Unnamed Plans do not place the same limitations on medical or surgical treatments—only on ASD therapy. (Dkt. #26 ¶¶ 38, 50).
Plaintiffs claim that S&W's denial of coverage for ASD therapy based on lifetime or annual visit limitations, when similar limits have not been placed on medical and surgical benefits, violates 29 U.S.C. §§ 1132(a) and 1185a. Plaintiffs bring this class action on behalf of participants and beneficiaries of both the BSW Plan and the Unnamed Plans who allegedly have been denied coverage by S&W for ASD therapy.
S&W moves to dismiss Plaintiffs’ claims for failure to state a claim for which relief can be granted. S&W asserts several arguments in favor of dismissal. First, S&W argues that all claims against it should be dismissed because S&W lacks "actual control" over the BSW Plan and the Unnamed Plans. Second, S&W argues that the Court should dismiss Plaintiffs’ claims relating to the Unnamed Plans because Plaintiffs have failed to plead a lack of parity between mental health benefits and medical and surgical benefits for the Unnamed Plans. Third, S&W argues that Plaintiffs’ Rule 23 class allegations are so facially defective as to warrant dismissal.
Federal Rule of Civil Procedure 12(b)(6) allows a party to move for dismissal of a complaint when the plaintiff has failed to state a claim upon which relief can be granted. Under Rule 8(a)(2), a complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ "
Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is plausible when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Although a probability that the defendant is liable is not required, the plausibility standard demands "more than a sheer possibility." Id.
In assessing a motion to dismiss under Rule 12(b)(6), the "court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff." In re Katrina Canal Breaches Litig. , 495 F.3d 191, 205 (5th Cir. 2007). Legal conclusions "must be supported by factual allegations." Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. To determine whether plaintiffs have pleaded enough to "nudge[ ] their claims across the line from conceivable to plausible," a court draws on its own "judicial experience and common sense." Id. at 679–80, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). This threshold is met if the court determines that the plaintiff pleaded "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ).
When considering a Rule 12(b)(6) motion, review is limited to the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint. Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC , 594 F.3d 383, 387 (5th Cir. 2010).
S&W argues that it should be dismissed as to all claims asserted by Plaintiffs because it does not exercise "actual control" over the BSW Plan (or the Unnamed Plans) such that it is a proper defendant. Plaintiffs maintain that, under controlling Fifth Circuit precedent, S&W exercises sufficient control over both the BSW Plan and the Unnamed Plans that it may be held liable for the alleged Parity Act violations and that therefore S&W's dismissal motion fails.
Section 1132(a)(1)(B) empowers "a participant or beneficiary ... 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 ...." 29 U.S.C. § 1132(a)(1)(B).
Plaintiffs allege that the BSW Plan violates Section 1185a(a)(3)(A)(ii) of the Parity Act by imposing annual and lifetime visit limits on ASD treatments, which are more restrictive than the limits applied to medical or surgical treatments under the BSW Plan. (Dkt. #26 ¶¶ 101–02).5 S&W counters that, regardless of the merits of Plaintiffs’ contentions concerning the BSW Plan's alleged violation of the Parity Act, S&W cannot be liable for any such violation because S&W has "no control" over the BSW Plan. (Dkt. #30 at 10–11).
The parties agree that the issue of whether S&W exercises sufficient control over the BSW Plan to be a proper defendant is governed by the Fifth Circuit's decision in LifeCare Mgmt. Servs. LLC v. Ins. Mgmt. Adm'rs, Inc. , 703 F.3d 835 (5th Cir. 2013). In LifeCare , the Fifth Circuit considered an issue of first impression: whether an ERISA claimant may bring suit under Section 1132(a)(1)(B) against a third-party administrator. Id. at 843 n.7. The court began by observing that the plain language of Section 1132(a)(1)(B) "does not limit the scope of defendants that a claimant may bring a lawsuit against" and that several sister circuits had held that "entities other than the benefits plan or the employer plan administrators may be held liable under § 1132(a)(1)(B)." Id. at 843. The court...
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