A.F. v. Providence Health Plan
| Decision Date | 07 January 2016 |
| Docket Number | Case No. 3:13-cv-00776-SI |
| Citation | 157 F.Supp.3d 899 |
| Parties | A.F., by and through his parents and guardians, Brenna Legaard and Scott Fournier; A.P., by and through his parents and guardians, Lucia Alonso and Luis Partida; S.W., by and through his parents and guardians, Kody Whipple and Jamie Whipple; S.S., by and through his parents and guardians, David Smith and Brooke Kennelley; I.F., by and through his parents and guardians, Bryan Fowler and Susan Rogers Fowler; and on behalf of similarly situated individuals, Plaintiffs, v. Providence Health Plan, Defendant. |
| Court | U.S. District Court — District of Oregon |
Keith S. Dubanevich, Joshua L. Ross, and Nadine A. Gartner, STOLL STOLL BERNE LOKTING & SHLACHTER P.C., 209 S.W. Oak Street, Suite 500, Portland, OR 97204; Megan E. Glor, MEGAN E. GLOR ATTORNEYS AT LAW, 621 S.W. Morrison Street, Suite 900, Portland, OR 97205. Of Attorneys for Plaintiffs.
William F. Gary, Arden J. Olson, J. Aaron Landau, and Jens Schmidt, HARRANG LONG GARY RUDNICK P.C., 360 E. 10th Avenue, Suite 300, Eugene, OR 97401. Of Attorneys for Defendant.
Michael H. Simon
Plaintiffs A.F., A.P., S.W., S.S., and I.F (collectively, “Plaintiffs”) bring this civil suit against Defendant Providence Health Plan (“Providence”). Plaintiffs are dependent-beneficiaries under group health insurance plans issued by Providence. Providence denied Plaintiffs ABA therapy coverage based on Providence's Developmental Disability Exclusion and denied S.W. and I.F. coverage on the additional basis of its Experimental Exclusion. On August 8, 2014, this Court ruled on cross-motions for summary judgment that Providence's Developmental Disability Exclusion violates the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (“Federal Parity Act”), 29 U.S.C. § 1185a
, and Oregon law and is therefore prohibited under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq .
Plaintiffs' second amended class action complaint alleges three claims under ERISA: (1) injunctive relief under 29 U.S.C. § 1132(a)(3)
, prohibiting Providence from continuing to process and pay claims under its insured Plans in a manner that is inconsistent with the Federal Parity Act and Oregon law and requiring Providence to provide the class with corrective notice and information, on behalf of all named Plaintiffs and all members of the class (“First Claim”);1 (2) equitable relief under 29 U.S.C. § 1132(a)(3) sufficient to redress Providence's violations of its fiduciary duty, on behalf of all named Plaintiffs (“Second Claim”); and (3) recovery of benefits due and declaration of future benefits under 29 U.S.C. § 1132(a)(1)(B) on behalf of named Plaintiffs A.F., A.P., S.W., and I.F. (“Third Claim”).2 Plaintiffs move for summary judgment on their Third Claim, and Providence moves to dismiss Plaintiffs' Second Claim. The Court considers both motions in this Opinion and Order. For the reasons that follow, Plaintiffs' motion for summary judgment is granted in part and denied in part, and Providence's motion to dismiss is denied.
A party is entitled to summary judgment if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a)
. The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc. , 251 F.3d 1252, 1257 (9th Cir.2001). Although “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient ....” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).
A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc. , 622 F.3d 1035, 1041 (9th Cir.2010)
. In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett
–
Packard Co. , 668 F.3d 1136, 1140 (9th Cir.2012) ; Daniels
–
Hall v. Nat'l Educ. Ass'n , 629 F.3d 992, 998 (9th Cir.2010). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir.2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Sol. , 513 F.3d 1038, 1043 n. 2 (9th Cir.2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal , 556 U.S. 662, 678–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
A complaint must contain sufficient factual allegations to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr , 652 F.3d at 1216
. “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal , 556 U.S. at 663, 129 S.Ct. 1937 (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).
Plaintiffs are insured as dependent-beneficiaries under group health plans in Oregon provided by Providence. Plaintiffs have been diagnosed with Autism
Spectrum Disorder and prescribed ABA therapy by their treating physicians. Autism Spectrum Disorder is a pervasive developmental disorder that begins to appear during early childhood and is characterized by impairments in communication and social skills, severely restricted interests, and repetitive behavior. ABA therapy is an intensive behavior therapy that, among other things, measures and evaluates observable behaviors. Evidence shows that ABA therapy may help autistic children with cognitive function, language skills, and adaptive behavior. Evidence also suggests that the benefits of ABA are significantly greater with early intervention for young autistic children.
Between January 2007 and January 2014, Providence denied requests for coverage for ABA therapy on the basis that its health plans exclude mental health services “related to developmental disabilities, developmental delays, or learning disabilities” from coverage (the “Developmental Disability Exclusion”). Dkt. 41–4 at 8. Providence did so regardless of whether the member sought reimbursement for payments for ABA therapy or pre-authorization of coverage. Providence also denied plan beneficiaries ABA therapy coverage on the basis that it was experimental and investigational (the “Experimental Exclusion”). These Exclusions are listed in the member handbook given to all members that describe the governing terms of their insurance plans.
Providence issues two types of plans: “self-insured” group plans and “insured” group plans. Under a “self-insured” plan, the employer carries the risk of coverage. Under an “insured” plan, Providence carries the risk of coverage. Both the “self-insured” and “insured” plans are subject to Oregon law and ERISA. Plaintiffs and all class members are members of “insured” group plans. Providence is both the administrator of these plans and a fiduciary to all plan members. As such, Providence is obligated to apply exclusions consistently and uniformly.
On May 8, 2013, A.P. and A.F. filed this class action lawsuit alleging that Providence's denial of ABA therapy coverage violated federal and state law. A.F. and A.P. moved to certify an injunctive class, which the Court granted. On August 8, 2014, the Court held that Providence's use of the Developmental Disability Exclusion violated the Federal Parity Act; the Oregon Mental Health Parity Act, Or. Rev. Stat. (“ORS”) § 743A.168
; and the Oregon Mandatory Coverage for Minors with Pervasive Developmental Disorders Act, ORS § 743A.190 ; and was therefore prohibited under ERISA.3
On June 29, 2015, A.F. and A.P. filed a second amended class action complaint, naming S.W., S.S., and I.F. as additional plaintiffs. Plaintiffs A.F., A.P., S.W., and I.F. move for summary judgment on their Third Claim, seeking recovery of benefits due and a declaration of future benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B)
(“Section 1132(a)(1)(B) ”). Providence moves to dismiss Plaintiffs' Second Claim, which seeks equitable relief under ERISA, 29 U.S.C. § 1132(a)(3)
(“Section 1132(a)(3) ”). The Court sets forth the background facts relevant to each motion separately below.
Plaintiffs A.P., A.F., S.W., and I.F. all incurred out-of-pocket expenses for ABA therapy before January 2014.4 In 2012, Providence denied A.P. and A.F.'s requests for ABA therapy coverage. A.P. and A.F. both...
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