Caldwell v. UnitedHealthcare Insurance Company

Background

Mary Caldwell brought this putative class action against UnitedHealthcare Insurance Company and United HealthCare Services Inc., which the opinion refers to together as “United.” She alleged that United categorically denied requests for specialized liposuction to treat lipedema as “unproven” and “not medically necessary,” in violation of the Employee Retirement Income Security Act (ERISA).

Caldwell’s health plan, provided through her husband’s employer, excluded services United determined were unproven. Caldwell alleged that specialized liposuction was not unproven and was the only available therapy for lipedema. Her own requests for coverage, made in 2017 and 2019 after she was diagnosed with Stage 3 lipedema, were denied based on United’s research and coverage determinations. She did not request a second internal appeal or an external review.

United had an express policy beginning January 1, 2020, stating that liposuction for lipedema was unproven and not medically necessary. Before that policy took effect, United’s medical directors relied on recommendations from its Medical Technology Information Service and, according to the opinion, uniformly denied grievances and appeals involving lipedema liposuction on the ground that the procedure was unproven.

Caldwell sought certification of this class:

All persons covered under ERISA health plans, self-funded or fully insured, that are administered by United and whose claims for specialized liposuction for treatment of their lipedema were denied as unproven between January 1, 2015 and December 31, 2019.

Rule 23 requirements

Federal Rule of Civil Procedure 23(a) requires numerosity, commonality, typicality, and adequacy of representation. The court found numerosity satisfied even though United identified twenty-seven unique potential class members, fewer than the number often associated with clear numerosity. The court considered the requested classwide relief, the avoidance of multiple cases, and the fact that United had formalized the challenged practice in an express policy.

The court found commonality because the class claims presented a common question: whether liposuction is effective for treating lipedema and therefore could be denied to all class members as unproven. The court concluded that the alleged harm involved United’s use of an allegedly improper coverage standard, rather than only the outcome of each individual coverage request.

The court also found Caldwell’s claims typical of the proposed class and found no adequacy problem. United’s arguments that Caldwell differed from people whose claims were denied under the 2020 omnibus policy did not persuade the court because the court viewed that policy as a continuation of the earlier practice. The court also concluded that Caldwell’s failure to pursue additional appeals did not create a defense likely to become a major focus of the litigation.

Rule 23(b) and ascertainability

Caldwell relied on Rule 23(b)(1) and Rule 23(b)(2). Rule 23(b)(2) permits certification when the opposing party acted or refused to act on grounds generally applicable to the class, making classwide declaratory or injunctive relief appropriate. The court certified the class under Rule 23(b)(2) and did not reach Caldwell’s arguments under Rule 23(b)(1).

The court rejected United’s argument that the class was not ascertainable, meaning that its members could not be identified using objective criteria. The court concluded that United could identify class members by examining its claim data and medical records. The court also held that members whose claims were denied on the “unproven” ground plus other grounds could remain in the injunctive and declaratory relief class.

The court distinguished those members from a damages class. It held that a damages subclass would be created for members whose claims were denied solely because liposuction was deemed unproven. Members whose claims were denied on the “unproven” ground as an alternative to another ground could not receive damages as part of the certified class.

Disposition

The court granted in part Caldwell’s motion for class certification and certified the class for the period from January 1, 2015, through December 31, 2019. The court created the damages subclass, appointed Mary Caldwell as class representative, and appointed Gianelli & Morris as class counsel.

The parties were ordered to submit an agreed notice form and a proposal for distributing the notice and setting the opt-out timeline within twenty-one calendar days after entry of the order. Caldwell was required to bear the notice costs, including first-class mailing costs. The order was signed by William Alsup, United States District Judge.