N.Y. State Psychiatric Ass'n, Inc. v. Unitedhealth Grp., Uhc Ins. Co., United Health-Care Ins. Co. of N.Y., United Behavioral Health

• Decision Date: 31 October 2013
• Docket Number: No. 13 Civ. 1599 CM.,13 Civ. 1599 CM.
• Citation: 980 F.Supp.2d 527
• Parties: NEW YORK STATE PSYCHIATRIC ASSOCIATION, INC., in a representational capacity on behalf of its members and their patients, Michael A. Kamins, on his own behalf and on behalf of his beneficiary son, and on behalf of all other similarly situated health insurance subscribers, Jonathan Denbo, on his own behalf and on behalf of all other similarly situated health insurance subscribers, Brad Smith, on his own behalf and on behalf of his beneficiary son, and on behalf of all other similarly situated health insurance subscribers, Jordan Olin, on his own behalf and on behalf of his beneficiary son, and on behalf of all other similarly situated health insurance subscribers, and Julie Ann Allender, Ed.D., and Shelly Menolascino, M.D., on their own behalf and in a representational capacity on behalf of their beneficiary patients and on behalf of all other similarly situated providers and their patients, Plaintiffs, v. UNITEDHEALTH GROUP, UHC Insurance Company, United Health–Care Insurance Company of New York, United Behavioral Health, Defendants.
• Court: U.S. District Court — Southern District of New York

980 F.Supp.2d 527

NEW YORK STATE PSYCHIATRIC ASSOCIATION, INC., in a representational capacity on behalf of its members and their patients, Michael A. Kamins, on his own behalf and on behalf of his beneficiary son, and on behalf of all other similarly situated health insurance subscribers, Jonathan Denbo, on his own behalf and on behalf of all other similarly situated health insurance subscribers, Brad Smith, on his own behalf and on behalf of his beneficiary son, and on behalf of all other similarly situated health insurance subscribers, Jordan Olin, on his own behalf and on behalf of his beneficiary son, and on behalf of all other similarly situated health insurance subscribers, and Julie Ann Allender, Ed.D., and Shelly Menolascino, M.D., on their own behalf and in a representational capacity on behalf of their beneficiary patients and on behalf of all other similarly situated providers and their patients, Plaintiffs,

v.UNITEDHEALTH GROUP, UHC Insurance Company, United Health–Care Insurance Company of New York, United Behavioral Health, Defendants.

No. 13 Civ. 1599 CM.

United States District Court, S.D. New York.

Oct. 31, 2013.

Anthony Frank Maul, Donn Brian Hufford, Jason Samuel Cowart, Robert J. Axelrod, Brian Lee Poulter, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, New York, NY, Meiram Bendat, Psych–Appeal, Inc., Pro Hac, Vice, West Hollywood, CA, Heather Michelle–Mason McKeon, Michael Lee Cohen, Cohen McKeon LLP, Los Angeles, CA, for Plaintiffs.

Andrew John Holly, Michelle S. Grant, Stephen Paul Lucke, Dorsey & Whitney, LLP, Minneapolis, MN, Elizabeth Rozon Baksh, Richard Howard Silberberg, Dorsey & Whitney LLP, New York, NY, for Defendants.

DECISION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND DENYING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

McMAHON, District Judge:

PRELIMINARY STATEMENT

This is essentially a denial of benefits case under the Employee Retirement Income Security Act (“ERISA”) (29 U.S.C. § 1001 et. seq ). It is brought by a polyglot group of unrelated plaintiffs who either (1) applied to their employer-sponsored health plans (and in one case, to a non-ERISA plan offered by the State of New York) for reimbursement of the cost of mental health care or substance abuse treatment (plaintiffs Denbo, Smith, Olin, and Kamins), or (2) provided mental health care for which their patients were not fully reimbursed by their employer-sponsored health plans (plaintiffs Allender, Menolascino, and the New York State Psychiatric Association (“NYSPA”)). In each instance, Defendants UnitedHealth Group Incorporated (“UHG”) or one of three subsidiaries, UnitedHealthcare Insurance Company (“UHIC”), UnitedHealthcare Insurance Company of New York (“UHIC–NY”), and United Behavioral Health (“UBH”) (collectively, “United”) had something to do with the denial of benefits sought. Plaintiffs bring a variety of claims against United, alleging violations of ERISA, the Mental Health Parity and Addiction Equity Act (“Parity Act”) (Pub.L. No. 110–343, § 511 et. seq ), the Patient Protection and Affordable Care Act (“ACA”) (Pub.L. No. 111–148), the New York Parity Act (N.Y. Ins. Law § 3221(1)(5), et seq.), the New York Deceptive Trade Practices Act (N.Y.G.B.L. § 349), and the New York Prompt Pay Statute (N.Y. Ins. Law § 3224–a). All of the individual plaintiffs charge that United applies a different standard to requests for reimbursement of the cost of mental health and substance abuse treatment, as opposed to medical or surgical treatment, and that United wrongly denied them or their assignors mental health benefits to which they were entitled under their health plans. Some plaintiffs claim that they were not allowed to take appeals from denials of benefits, or that inadequate procedures were followed in appeals.

Plaintiffs seek money damages and an injunction requiring United to treat mental health or substance abuse benefits no less favorably than it treats medical or surgical benefits when it assesses whether claims are reimbursable under various employer-sponsored health plans.

United moves to dismiss all the claims asserted against it pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1). Defendants argue that every plaintiff fails to state a claim against it, and that the NYSPA lacks standing to pursue any claim. Plaintiffs cross-move for a preliminary injunction under Rule 65(a) seeking to enjoin United's practices that allegedly violate mental health parity laws.

As to all claims, the motion to dismiss is granted. In view of the outcome of the motion to dismiss, the motion for preliminary injunction is denied as moot.

Standard of Review

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the Court must liberally construe all claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41, 44 (2d Cir.2003); see also Roth v. Jennings, 489 F.3d 499, 510 (2d Cir.2007).

However, to survive a motion to dismiss, “a complaint must contain sufficient factual matter ... to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 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 has facial plausibility 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. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal quotations, citations, and alterations omitted). Thus, unless a plaintiff's well-pleaded allegations have “nudged [its] claims across the line from conceivable to plausible, [the plaintiff's] complaint must be dismissed.” Id. at 570, 127 S.Ct. 1955;see also Iqbal, 129 S.Ct. at 1950–51.

On a motion to dismiss, the well-pleaded allegations of the complaint are presumed true. See id. at 1949–50. Conclusory allegations of fact and allegations of law are not. See id. Additionally, any document that is pleaded or relied upon by a plaintiff in a complaint is deemed incorporated into that complaint—even if it is not physically appended to the complaint—and the entire text of that document may be considered on the motion to dismiss without converting the motion to a motion for summary judgment. See Rothman v. Gregor, 220 F.3d 81, 88–89 (2d Cir.2000) (citing Cortec Indus. Inc. v. Sum Holding L.P., 949 F.2d 42, 47–48 (2d Cir.1991)); San Leandro Emergency Med. Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 808 (2d Cir.1996).

To survive a motion to dismiss for lack of subject-matter jurisdiction based on standing pursuant to Rule 12(b)(1), the plaintiff “must allege facts that affirmatively and plausibly suggest that it has standing to sue.” Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir.2011). If the defendants challenge only the legal sufficiency of the jurisdictional allegations, “the court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff.” Robinson v. Gov't of Malaysia, 269 F.3d 133, 140 (2d Cir.2001). Where the defendants place jurisdictional facts in dispute, however, the court may properly consider “evidence relevant to the jurisdictional question [that] is before the court.” Robinson, 269 F.3d at 140;see also Amidax, 671 F.3d at 145.

CONCLUSIONS OF LAW

This is really seven different lawsuits amalgamated (inappropriately) in a single caption. In order to assess the merits of the motion to dismiss, the case must be broken into its component parts, each of which must be analyzed separately.

A. The Claims of Plaintiffs Denbo, Smith, and Olin Are Dismissed.

1. The Plaintiffs

Denbo: Plaintiff Jonathan Denbo is an employee of CBS Sports Network (“CBS”) and receives health insurance through the CBS Medical Plan (“CBS Plan”). See FAC ¶ 19. The CBS Plan covers outpatient mental health services, subject to retrospective reviews, which are reviews that occur after treatment has been provided to determine whether it was medically necessary and thus covered by the plan. See id. ¶¶ 20, 100–01. The CBS Plan is a self-insured plan, which means that CBS itself pays all the benefits due to plan participants under the terms of the plan; CBS does not purchase insurance, from United or anyone else, in order to cover the cost of benefits owed to employees. See Pennington Decl. Ex. A at 150–52.

According to the Plan Document, the “Plan Administrator” for the CBS Plan is a CBS-related entity—the CBS Retirement Committee. See id. at 151. “Administrator” is a term of art under ERISA. It is defined as “the person specifically so designated by the terms of the instrument under which the plan is operated” or “if an administrator is not so designated, the plan sponsor.” 29 U.S.C. § 1002(16)(A).

The FAC alleges that Defendant UHIC is the “Claims Administrator” of the CBS Plan. See FAC ¶ 35. The Plan Document states that a Claims Administrator has “exclusive authority and sole and absolute discretion to interpret and to apply the rules of the Plan to determine claims for Plan benefits.” See Pennington Decl. Ex. A at 152. It further states that the Claims Administrator “determines whether [a beneficiary has] incurred a covered expense for which benefits are payable from the Plan and determines the amount of, and administers the payment of, any such benefits based on information contained in the written claim.” See id.

The FAC alleges that Denbo obtained medically necessary mental health...