Doe v. United Behavioral Health, Case No. 4:19-cv-07316-YGR

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
PartiesJANE DOE, Plaintiff, v. UNITED BEHAVIORAL HEALTH, ET AL., Defendants.
Docket NumberCase No. 4:19-cv-07316-YGR
Decision Date05 March 2021

JANE DOE, Plaintiff,

Case No. 4:19-cv-07316-YGR


March 5, 2021


Re: Dkt. Nos. 48, 53

Plaintiff Jane Doe, proceeding under a pseudonym and as a representative for her minor son, John Doe, brings this action against defendants United Behavioral Health and United Healthcare Services, Inc. (collectively "United Health"). Doe maintains two causes of action for breach of fiduciary duty under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. section 1132(a)(3), against United Health in its role as a third-party administrator and claims administrator of an employer-funded health plan.

Now before the Court are the following motions: (1) Doe's motion for partial summary judgment (Dkt. No. 48); and (2) United Health's motion for partial summary judgment. (Dkt. No. 53.) The motions are fully briefed. (See also Dkt. Nos. 58, 60.) Having carefully reviewed the pleadings, the papers submitted on each motion, the parties' oral arguments, and for the reasons set forth more fully below, the Court: GRANTS Doe's motion for partial summary judgment, and GRANTS IN PART and DENIES IN PART United Health's motion for partial summary judgment.

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The dispute in this litigation concerns an exclusion under a plan, the Wipro Limited Health Benefit Plan (the "Wipro Plan" or the "Plan"). The facts underlying the parties' cross motions for summary judgment are not generally or materially in dispute. Importantly, for these motions, the Plan explicitly excludes coverage for Applied Behavior Analysis ("ABA") and Intensive Behavioral Therapies ("IBT") that would otherwise assist children with Autism Spectrum Disorder ("Autism" or "ASD"). The facts relevant to the instant motions are as follows:

The Wipro Plan is sponsored and funded by Wipro Limited ("Wipro"), John Doe's father's former employer and a non-party. Wipro serves as both the Sponsor and Plan Administrator of the Wipro Plan. Wipro was and is solely responsible for deciding the terms of its Plan and for funding the Plan and benefits thereunder. Wipro alone under the terms of the Wipro Plan retains the right to modify, change, revise, amend or terminate the Wipro Plan at any time, for any reason, and without prior notice. The Wipro Plan is governed under ERISA. Defendant United Health is a third-party administrator for health benefit plans and serves as the claims administrator for the Wipro Plan.

From 2017 through the end of 2019, John Doe, plaintiff's son, was a beneficiary of the Wipro Plan, which is a self-funded large group, non-grandfathered commercial policy sponsored by Wipro. Although the Plan expressly covered Autism and ASD, from 2017 through 2019, it explicitly excluded coverage for "Intensive Behavioral Therapies such as Applied Behavior Analysis for Autism Spectrum Disorders" (the ABA/IBT exclusion).

John Doe was diagnosed with autism, and plaintiff sought recovery for ABA costs spent on

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his treatment. United Health denied these expenses under the ABA/IBT exclusion in 2016, and, more recently, in 2019. In response, plaintiff filed her initial complaint on November 7, 2019 on behalf of John Doe and a then proposed putative class.

Effective January 1, 2020, the Wipro Plan no longer included the ABA/IBT exclusion and began covering these treatments. United Health filed a motion to dismiss the complaint on January 20, 2020. On February 4, 2020, John Doe's benefits under the Wipro Plan terminated as his father was no longer employed by Wipro. Plaintiff then filed the operative first amended complaint on February 20, 2020. The Court later denied the then-pending motion to dismiss as moot in light of the filing of the first amended complaint.


Summary judgment is appropriate when no genuine dispute as to any material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion, and of identifying those portions of the pleadings, depositions, discovery responses, and affidavits that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Material facts are those that might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Id. at 247-48 (dispute as to a material fact is "genuine" if sufficient evidence exists for a reasonable jury to return a verdict for the non-moving party) (emphases in original). When deciding a summary judgment motion, a court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Anderson, 477 U.S. at 255; Hunt v. City of Los Angeles, 638 F.3d 703, 709 (9th Cir. 2011).

"[W]hen parties submit cross-motions for summary judgment, each motion must be considered on its own merits." Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (alteration and internal quotation marks omitted). Thus, "[t]he court must rule on each party's motion on an individual and separate basis, determining, for each

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side, whether a judgment may be entered in accordance with the Rule 56 standard." Id. (quoting Wright, et al., Federal Practice and Procedure § 2720, at 335-36 (3d ed. 1998)). If, however, the cross-motions are before the court at the same time, the court must consider the evidence proffered by both sets of motions before ruling on either one. Id. at 1135-36.


United Health asserts two bases for summary judgment: First, it argues that both claims brought under section 1132(a)(3) fail because United Health was not a fiduciary given that it was not exercising a discretionary action in applying the plain language of the ABA/IBT exclusion. Second, United Health asserts that the ABA/IBT exclusion is not a "treatment limitation" under the Mental Health Parity and Addiction Equity Act (the "Parity Act"). See 29 U.S.C. § 1185a. With respect to this second ground, Doe brings a cross motion for partial summary judgment arguing that the ABA/IBT exclusion does violate the Parity Act. The Court addresses each in turn.2

A. Whether United Health is a Fiduciary

United Health avers that summary judgment is appropriate because the enforcement of the ABA/IBT exclusion was not a discretionary act as would be required for claims for breaches of fiduciary duty under ERISA. More specifically, United Health argues it was not a fiduciary as to the enforcement of the exclusion. Said differently, as the claims administrator, not the Plan sponsor, United Health had no discretion but to enforce the plain written terms of the Wipro Plan, which explicitly excluded both ABA and IBT. Doe urges the opposite, namely that United Health's enforcement of the terms of the Plan was a discretionary act, and that the Plan itself explicitly gives United Health discretion.

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In general, "[i]n every case charging breach of ERISA fiduciary duty . . . the threshold question is not whether the actions of some person employed to provide services under a plan adversely affected a plan beneficiary's interest, but whether that person was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to the complaint." Pegram v. Herdich, 530 U.S. 211, 226 (2000). Above all, "[f]iduciary status under ERISA is not an 'all-or-nothing concept,' and 'a court must ask whether a person is a fiduciary with respect to the particular activity at issue.'" In re JDS Uniphase Corp. Erisa Litig., No. C 03- 04743 CW (WWS), 2005 WL 1662131, at *2 (N.D. Cal. July 14, 2005) (emphasis in original) (citation omitted). Courts consequently recognize that a party may be a fiduciary for certain discretionary conduct related to a plan, but not for other non-discretionary conduct alleged to violate ERISA. See, e.g., Wilson v. Bank of Am. Pension Plan for Legacy Companies, No. 18-CV- 07755-TSH, 2019 WL 4479677, at *8 (N.D. Cal. Sept. 18, 2019) (dismissing breach of fiduciary duty claim because "even if" the third-party administrator defendant "was acting as a fiduciary when it did other things, it was not acting as a fiduciary" when it engaged in the specific act underlying the breach of fiduciary duty claim).

Under Ninth Circuit authority, a court determines whether a party is a fiduciary with respect to actions performed under an ERISA plan in one of two ways. First, the plan instrument can identify the party as the "named fiduciary" for that purpose. See Depot, Inc. v. Caring for Montanans, Inc., 915 F.3d 643, 653-54 (9th Cir. 2019) (citing 29 U.S.C. § 1102(a)(2)). Here, the Wipro Plan does not identify either United Health defendant as a fiduciary, and thus, it is not a fiduciary under this test.

Under the second test, a party may be a "functional" fiduciary with respect to a plan to the extent it (i) "exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets" or (ii) "has discretionary authority or discretionary responsibility in the administration" of the plan. Id. (quoting § 1002(21)(A)) (affirming dismissal of breach of fiduciary duty claim where defendants were not exercising discretion when taking the action subject to the complaint); see also Parker v. Bain, 68 F.3d 1131, 1139-40 (9th Cir. 1995) ("ERISA's definition of 'fiduciary' is

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functional rather than formal....

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