- Filing. Published in U.S. District Court for the Eastern District of Texas on November 23, 2020 (Case no. 4:18-CV-828-SDJ).
- Background. Plaintiffs filed a class action lawsuit asserting an ERISA actions §1132(a)(1)(B) recovery of benefits and §1132(a)(3) parity act violation for autism services. Plaintiffs assert that Defendants health plan/TPA inappropriately limited treatment for ABA, speech and physical therapy (typically 60 days). The denials were upheld on appeal. Plaintiffs allege that TPA also acts as the claims administrator for other self-funded health plans subject to ERISA (aka unnamed plans). Among other alleged facts, Plaintiffs note that the voluntary second appeal was submitted to the plan administrative committee, which Defendant never responded to. Defendants filed a motion to dismiss Parity Act claim.
- Holding. Judge Sean D. Jordan denied Defendants motion to dismiss. In addition, the Court ruled that Plaintiffs have alleged an ascertainable class for both plans at this stage of the proceedings, thereby meeting Rule 23(a)’s requirements including commonality.
- Analysis. The Court evaluated whether the TPA had “control” of the administration of the plan and decided that the TPA (S&W) does have discretion to interpret the terms of the plan. When reflecting on the actions against the unnamed plan, Judge Jordan noted:
Plaintiffs have further asserted that they are unable to provide more specific information concerning S&W’s duties and authority in administering the Unnamed Plans because S&W has refused to respond to discovery requests seeking to obtain this information. S&W does not dispute that it has refused to respond to discovery from Plaintiffs concerning the Unnamed Plans.
Under these circumstances Plaintiffs find themselves in a “Catch-22.” S&W has argued that Plaintiffs’ allegations as to the Unnamed Plans are fatally vague because they “contain no reference to the terms of any Unidentified Plan,” …., but more specific information on S&W’s role in administering the Unnamed Plans is in S&W’s possession and S&W apparently refuses to respond to discovery from Plaintiffs requesting this information.
In terms of the class action, the Judge notes that Plaintiffs’ proposed class definition is not as precise as may ultimately be necessary down the road.