F. v. California Physicians' Service

Background

Amy F.’s second amended complaint included a claim under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132, alleging that Blue Shield breached fiduciary duties by failing to follow plan documents and denying coverage for medically necessary treatment. She sought equitable relief, including an injunction and possible disgorgement of profits.

In an earlier order, the court granted in part Blue Shield’s motion to dismiss. It found that Amy F. had not adequately alleged a basis for injunctive relief or relief under section 1132(a)(2), but had sufficiently alleged a basis for other equitable relief under section 1132(a)(3). The court allowed her to amend to allege standing for injunctive relief and a basis for forward-looking relief for herself.

Amy F. then amended her complaint to state that she remained a current plan participant and that Blue Shield continued to administer the plan. Blue Shield filed another motion to dismiss, raising largely the same arguments, including that Amy F. lacked standing to seek forward-looking injunctive relief and retrospective equitable relief such as disgorgement or surcharge.

The Court’s Ruling

The court denied Blue Shield’s challenge to the retrospective relief claims because the earlier order had already denied the motion to dismiss those claims. The court treated this part of the new motion as essentially a request to reconsider the earlier ruling and denied it.

The court also denied the motion to dismiss the claim for injunctive relief. Article III standing is the constitutional requirement that a plaintiff show a concrete, particularized, and actual or imminent injury. The court held that Amy F.’s allegations that Blue Shield had previously denied benefits unfairly, combined with her continued status as a plan beneficiary who might seek health-care coverage in the future, sufficiently alleged a real and immediate threat of similar future harm.

The court also rejected, as without merit, Blue Shield’s argument that Amy F. had not alleged a sufficient causal connection between her injury and Blue Shield’s conduct. The court did not dismiss the second cause of action.

Disposition and Next Steps

The motion to dismiss was DENIED. Blue Shield was ordered to file its answer within 21 days of the order’s issuance. Judge Yvonne Gonzalez Rogers also set a case-management conference for October 26, 2020, at 1:00 p.m., and the order terminated Docket No. 43.