Caldwell v. UnitedHealthcare Insurance Company

Background

Mary Caldwell brought this certified class action under the Employee Retirement Income Security Act (ERISA) to recover health benefits. She alleged that UnitedHealthcare Insurance Company and United HealthCare Services, Inc. improperly denied, on a categorical basis, claims for specialized liposuction to treat lipedema as unproven and not medically necessary.

The certified class consisted of 28 people covered under ERISA health plans administered by United whose claims for specialized liposuction to treat lipedema were denied as unproven between January 1, 2015, and December 31, 2019. The parties had proposed two earlier settlements, both rejected by the court. The third proposed settlement received preliminary approval in July 2023.

Settlement Approval

The court found that the settlement administrator followed the approved notice plan and that notice to the 28 class members was adequate. No class member opted out. One objection was timely, and another was late. A patient advocate also appeared at the final approval hearing on behalf of three class members.

The settlement provides coverage for previously denied liposuction services if the class member had coverage under the relevant plan when the claim was denied, a surgeon verifies that the procedure is medically necessary to treat lipedema, and the procedure is provided in a setting covered by the plan. The agreement also provides for reimbursement of qualifying expenses and does not release claims for which a class member receives no reimbursement or coverage, or future additional requests for lipedema-surgery coverage.

The court concluded that the objections were outside the scope of the certified class or otherwise unavailing. It found the proposed settlement fair, reasonable, and adequate under Federal Rule of Civil Procedure 23(e), including because earlier concerns about collusion and the settlement’s benefits had been addressed. The motion for final approval of the class settlement was GRANTED.

Attorney’s Fees and Costs

Class counsel requested $1,005,170.62 in attorney’s fees and $125,677.96 in costs. Counsel reported 1,909.1 hours of work and calculated a lodestar—the number of reasonable hours multiplied by a reasonable hourly rate—of $1,340,227.50, discounted by 25% to reach the fee request.

The court determined that a further 50% reduction from the lodestar was warranted because the settlement did not provide cash directly to the class, class members still had to submit claims, and the actual benefits depended on reimbursement or approval and completion of surgery. The resulting adjusted fee amount was $670,113.75. Because fees would be awarded only to the extent the settlement conferred a benefit, the court awarded $100,000 in fees at that time and allowed counsel to seek additional fees after reporting how many class members used the settlement.

The court awarded the requested $125,677.96 in costs. The motion for attorney’s fees and costs was GRANTED IN PART AND DENIED IN PART. United was ordered to pay $225,677.96 within 28 days.

Additional Orders

Class counsel was ordered to report by January 31, 2024, on efforts to notify class members about the settlement. Counsel was also ordered to report by November 5, 2024, how many of the 28 class members obtained reimbursement or had surgery approved and scheduled. The parties were ordered to appear in person for a status conference on December 5, 2024. Judgment was to be entered accordingly.