Kazda v. Aetna Life Insurance Company

Background

Aetna moved for permission to file a motion asking the court to reconsider its interlocutory order granting class certification. The certified class covered people insured under employee-benefit plans governed by the Employee Retirement Income Security Act (ERISA), whether self-funded or fully insured, administered by Aetna, whose claims for liposuction treatment for lipedema had been denied as cosmetic.

Aetna argued that there were practical problems with the requested relief. The relief involved retrospectively reprocessing claims for liposuction treatment that Aetna had denied as cosmetic, and Aetna contended that this process likely would not provide a remedy to class members.

Reconsideration standard and analysis

Under Civil Local Rule 7-9(b), a party seeking permission to request reconsideration of an interlocutory order must show one of three things: a material difference in facts or law that could not reasonably have been known earlier; new material facts or a change in law after the order; or a manifest failure by the court to consider material facts or dispositive legal arguments previously presented.

Judge William H. Orrick concluded that he had already considered Aetna’s concerns when deciding whether to certify the class. He explained that the requested injunctive relief was relevant to Kazda’s standing and to whether she was an adequate and typical class representative. He relied on Ninth Circuit and district court decisions recognizing retrospective claim reprocessing as the usual remedy in similar cases.

The court also explained that reprocessing does not require the court to decide whether benefits should be awarded. Under the cited authority, that decision is left to the plan administrator under a properly interpreted plan. The court therefore concluded that Aetna’s argument about whether retroactive reprocessing would ultimately provide benefits concerned the possible results of the process, not whether class certification was proper.

Proposed revised class definition

Aetna separately asked the court to replace the certified class with a narrower class limited to people whose liposuction requests had been denied as cosmetic and who paid out of pocket for the treatment while they were members of an Aetna-administered ERISA plan. Aetna argued that the revision would address issues involving people who were no longer covered and people who had not undergone surgery.

Judge Orrick denied this request as well. He found that Aetna had known the nature of the relief Kazda sought and had ample opportunity to challenge the proposed class definition when opposing class certification. He also stated that Aetna’s proposed class appeared narrower because it included only people who had paid out of pocket, which could raise new questions about whether the class was large enough for certification. Although a class definition may be amended as a case proceeds, the court found no reason to amend it at that time.

Disposition

Judge William H. Orrick denied Aetna’s motion for leave to file a motion for reconsideration and denied Aetna’s request to revise the class definition.