Zavislak v. Netflix, Inc.

Background

Mark Zavislak sued Netflix under the Employee Retirement Income Security Act, a federal law governing employee benefit plans. Zavislak is a beneficiary of Netflix’s Health and Welfare Benefits Plan through his spouse, who is a Netflix employee. He requested documents governing the plan’s operation, including plan documents, insurance contracts, and third-party administration agreements.

Netflix provided seven documents, including the 2020 Wrap Plan Document and several 2020 and 2021 plan summaries. Zavislak then requested additional documents because the materials referred to contracts and insurance policies. Netflix said that some referenced policies were outdated or no longer existed and that it had provided all documents required by law. Zavislak filed three claims: a claim for monetary damages based on the alleged failure to provide required information, a claim for an injunction requiring production of documents, and a claim for an injunction requiring Netflix to maintain the plan according to a written instrument.

Preliminary Injunction

Zavislak sought a preliminary injunction requiring Netflix to produce third-party claims-administration agreements involving Delta Dental, VSP, Collective Health, and Anthem. A preliminary injunction is an order issued before final judgment. The court explained that Zavislak had to show, among other things, a likelihood of success on the merits and likely irreparable harm.

The court held that Zavislak had not shown a likelihood of success. It explained that Ninth Circuit authority takes a narrow approach to the documents that must be disclosed under 29 U.S.C. § 1024(b)(4), focusing on documents that tell participants what benefits they may receive, what could prevent them from receiving benefits, and what procedures they must follow. The court said the Ninth Circuit had not definitively decided whether third-party claims-administration agreements must always be disclosed and that the existing cases did not favor Zavislak’s position regardless of the agreements’ contents.

The court also rejected Zavislak’s argument that the agreements had to be produced because they were incorporated into the Wrap Plan Document. It found that argument appeared to confuse the claims-administration agreements with insurance policies listed in an appendix. The court further found that Netflix’s sworn statements supported its position that the documents already provided were the documents it used to interpret and administer the plan. The court concluded that Zavislak had not shown the required likelihood of success and denied the motion for a preliminary injunction.

Motion to Dismiss

Netflix moved to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legally recognized claim. The court found that Zavislak had adequately pleaded his first claim because he alleged that Netflix was the plan administrator, that he made a written document request, that Netflix did not provide documents until February 24, 2021, and that Netflix refused to provide additional documents referenced in the materials it supplied.

The court also found that Zavislak adequately pleaded his second claim for injunctive relief because it was based on the same alleged failure to provide documents. As to the third claim, the court found that Zavislak plausibly alleged that Netflix was not operating the plan under the current written plan documents. The allegations included references to insurance policies in the Wrap Plan Document that Netflix said were outdated and no longer existed, including a policy number also referenced in a VSP coverage document.

The court said Netflix’s arguments largely presented reasons why Zavislak might ultimately lose rather than reasons his complaint was inadequately pleaded. It therefore denied Netflix’s motion to dismiss.

Summary Judgment

Netflix alternatively sought summary judgment, which is judgment without a trial when the evidence shows there is no genuine dispute about a fact that could affect the result. Netflix argued that the claims-administration agreements concerned only logistical procedures and did not affect Zavislak’s rights and responsibilities under the plan.

The court noted that the agreements themselves were not in the evidentiary record. Without reviewing their terms, the court could not determine whether they concerned Zavislak’s rights and responsibilities and therefore had to be produced under § 1024(b)(4). Because a genuine dispute of material fact remained, the court denied Netflix’s motion for summary judgment.

Discovery Stay and Disposition

Netflix moved to stay, or pause, discovery while its dismissal and summary-judgment motion was pending. Because the court had ruled on that dispositive motion, it denied as moot the motion to stay discovery.

The final order denied Zavislak’s motion for a preliminary injunction, denied Netflix’s motion to dismiss or alternatively for summary judgment, and denied as moot Netflix’s motion to stay discovery. The parties were directed to submit a proposed case schedule by August 30, 2021. Judge Edward J. Davila signed the order.