Berton v. Aetna Inc.

Background

Mara Berton alleged that she and her wife were enrolled in an employer health plan administered by Aetna Inc. and Aetna Life Insurance Company. Berton sought coverage for intrauterine insemination, but alleged that the defendants denied coverage under an infertility policy because she was in a same-sex relationship.

According to the complaint, the policy required coverage for fertility treatment to be preceded by a determination of infertility. Before January 2023, the policy referred to one year of frequent, unprotected heterosexual intercourse or, for a woman without a male partner, at least 12 cycles of donor insemination. The revised policy referred to one year of “egg-sperm contact,” achieved through sexual intercourse or timed sperm insemination. Berton alleged that heterosexual couples could establish infertility without out-of-pocket costs or documentation, while same-sex couples had to undergo costly and intrusive insemination cycles.

Berton filed a one-count complaint alleging discrimination in violation of Section 1557 of the Patient Protection and Affordable Care Act. Defendants moved to dismiss under Federal Rules of Civil Procedure 12(b)(6), for failure to state a claim, and 12(b)(7), for failure to join a required party. Defendants also argued that Aetna Inc. was not a proper defendant and that Encore, identified as the sponsor of the self-funded plan, was an indispensable party.

Section 1557 Claim

The court held that Berton plausibly alleged discrimination under Section 1557. At the motion-to-dismiss stage, the court accepted the complaint’s factual allegations as true and viewed them in Berton’s favor. The court concluded that the alleged policy imposed different and more burdensome requirements on same-sex partners than on heterosexual partners. It also stated that discrimination based on sexual orientation is unlawful under Title IX and Section 1557 because it is discrimination based on sex.

The court rejected defendants’ argument that the policy was not discriminatory because it did not expressly mention heterosexual relationships, same-sex relationships, or LGBTQ people. The court reasoned that the policy’s alleged real-world effect could support a facial-discrimination claim even without those terms. The court therefore denied the motion to dismiss the Section 1557 claim.

Aetna Inc. as a Defendant

Defendants relied on an executive’s declaration asserting that Aetna Inc. was not licensed to sell insurance, did not sell insurance products, and did not administer Aetna health plans. The court declined to consider that declaration in deciding the Rule 12(b)(6) motion because the sufficiency of the complaint generally must be assessed from the pleadings.

The complaint alleged that the plan was marketed, sold, and administered by Aetna Inc. and that both Aetna Inc. and Aetna Life Insurance Company were responsible for the alleged discriminatory policy. The court ruled that the factual dispute over Aetna Inc.’s role could not be resolved at this stage and denied dismissal of Aetna Inc.

Encore and Required-Party Issue

Under Rule 19, a required party is one whose absence could prevent the court from providing complete relief, impair that person’s ability to protect an interest, or expose an existing party to inconsistent obligations. Defendants argued that Encore was required because it sponsored the self-funded plan and retained authority over the plan and its benefits.

The court concluded that Encore was not a required party at the pleading stage. It reasoned that the court could order the current defendants to pay damages based on their own alleged actions, which would provide meaningful relief even without Encore. The court noted that it might revisit the issue after a more complete factual record developed, but denied defendants’ Rule 12(b)(7) motion.

Motions to Seal

The court applied the “compelling reasons” standard, under which a party seeking to seal judicial records must identify specific reasons that outweigh the public’s strong interest in access and must request sealing narrowly.

Defendants sought to seal the entire Master Services Agreement between Encore and Aetna and portions of correspondence concerning Berton’s request for health benefits. The court denied the request to seal the entire agreement because defendants had publicly quoted parts of it and had not explained why the whole agreement needed protection rather than only specifically sensitive information. The court granted the request to redact identified health information and personally identifying information, including information about a medical provider, a home address, and a telephone number. The court therefore granted in part and denied in part defendants’ motion to seal.

Berton sought to seal one sentence in her opposition that quoted the Master Services Agreement. Because the court had found that the agreement should not be filed entirely under seal, it denied Berton’s motion to seal.

Disposition

The court denied defendants’ motion to dismiss under Rules 12(b)(6) and 12(b)(7). It granted in part and denied in part defendants’ motion to seal, denied Berton’s motion to seal, directed the parties to file public versions of documents for which sealing was denied within ten days, and set a telephonic case-management conference for March 19, 2024.

Because the court’s ruling on the motion to dismiss was a gatekeeping ruling about whether the claims could proceed, rather than a final decision on liability, this opinion is classified as a procedural order.