Violation Category: There are four named Plaintiffs: Beye, Byram, Drazin and Sedlak. Three of the Plaintiffs’ policies cover treatment for biological based mental illness (BBMI) at parity with other illnesses, as required by the New Jersey Mental Health Parity Law. Three policies also contain limitations for non-BBMIs (Byram, Beye and Drazin). Plaintiffs Beye and Drazin received coverage for the eating disorders as non-BBMIs but exhausted coverage. Plaintiffs Byram and Sedlak’s claims were denied as not medically necessary.
Short Description: The Court first considers whether to abstain from considering Plaintiffs claims pursuant to the holding of Burford v. Sun Oil Co. Relying upon the holding in DeVito v. Aetna, the Court decides that abstention is not appropriate in this case. The Court then considers whether to dismiss the claims of Plaintiff Byram, Beye and Sedlak for failure to appeal their adverse IURO decisions to the appellate division but find that beneficiaries of ERISA plans are not required to appeal an adverse IURO ruling before filing suit. Likewise, non-ERISA plaintiffs are required to appeal adverse IURO rulings before filing suit. Next, the Court considers whether to dismiss all claims brought by Plaintiffs Byram and Sedlak whose claims were deemed not medically necessary. The Court states that the Plaintiffs must demonstrate a connection between the claims and the Defendant’s improper treatment of eating disorders, but that dismissal at this stage is not appropriate. The Court then considers whether ERISA preempts the common law and state claims. The Court holds that based on the language, the ERISA plaintiffs may pursue their contractual claim to benefits but that the Parity Law claims are dismissed and preempted. The Court then moves on to the Plaintiffs Parity Law Claims. The Plaintiffs argue for an implied private cause of action. The Court disagrees and grants Defendant’s motion to dismiss these claims. In so deciding, the Court considers the test for whether a statute provides an implied cause of action, “whether: 1) the Plaintiff is a member of the class for whose special benefit the statute was enacted, 2) there is any evidence that the Legislature intended to create a private right of action under the statute, and 3) it is consistent with the underlying purposes of the legislative scheme to infer the existence of such a remedy.”
Appeal/Disposition: The Defendants motion to dismiss is denied in part and granted in part.