- Filing. Published in U.S. District Court for the District of Utah, Central Division on June 19, 2020 (Case no. 2:18-cv-00818 JNP-DAO).
- Background. Plaintiffs filed two actions, an ERISA breach of fiduciary duty claim and a Parity Act violation claim, due to the failure of Defendants Wells Fargo (the health plan) and United Behavioral Health (the TPA) to pay for treatment at a wilderness therapy center and residential treatment facility. United denied payment for the wilderness therapy and covered the first out of five months at the residential treatment facility. Plaintiffs now seek leave to conduct discovery on their Parity Act violation claim. Defendants oppose the motion to allow more discovery because the “claims are ultimately one of recovery of benefits under ERISA, and as such, discovery should be limited to the production of the administrative record.”
- Holding. Judge Daphne A. Oberg ruled in favor of the Plaintiff’s motion to permit additional discovery on the Parity Act violation claim.
- Analysis. The Plaintiffs argued that they should be able to conduct discovery on the Parity Act claim because: 1) the claim is separate from the other ERISA claim; 2) discovery is permitted and necessary under the Parity Act to prove an “as applied” violation; and 3) the discovery request satisfies Federal Civil Procedure Rule 26(b)(1). To these points, the Court noted:
- The legal and factual distinctions between the Plaintiffs’ two causes of action undercut the Defendants’ argument that the Parity Act claim is just a repackaged ERISA claim for benefits. Whether the Plaintiffs will ultimately prevail on both claims is not relevant to deciding whether discovery is allowable on the Parity Act violation claim.
- Limiting discovery to the plan documents and prelitigation appeal record, as UBH and the Plan propose, will improperly hamstring the Plaintiffs’ ability to prove a violation of the Parity Act as applied. …[P]laintiffs often must plead ‘as-applied’ challenges to enforce their Parity Act rights when a disparity in benefits criteria does not exist on the face of the plan. By their nature, documents and information about the “processes, strategies . . . and other factors used to apply” nonquantitative limits could reasonably be expected to exist outside of the plan documents, as the Plaintiffs assert and seek.
- The Plaintiffs’ proposed discovery is limited in number to seven interrogatories, seven requests for production, and seven requests for admission. …The proposed discovery is limited in topic to the nonquantitative limits UBH and the Plan use for medical/surgical benefits as compared to the nonquantitative limits they use in evaluating the medical necessity of residential treatment for mental health and substance use disorders.
(Note: Quotes slightly modified from the opinion)