B. v. Anthem Blue Cross Life and Health Insurance Company

Background

Lawrence B. sued Anthem Blue Cross Life and Health Insurance Company and other defendants under the Employee Retirement Income Security Act of 1974 (ERISA). He sought recovery of plan benefits under 29 U.S.C. § 1132(a)(1)(B) and equitable relief for breach of fiduciary duty under § 1132(a)(2) and (3).

Lawrence B.’s daughter, C.B., was a beneficiary of the Otsuka America, Inc. Health and Welfare Plan. The plan provided mental-health benefits administered by Anthem. After C.B. received treatment at Cascade Academy, Lawrence B. submitted claims for benefits. The defendants first denied the claims on the ground that the treatment was not a covered benefit and later denied appeals on the ground that the treatment was not medically necessary. Anthem relied on MCG Behavioral Health Guidelines for residential behavioral-health treatment for children or adolescents.

The second cause of action alleged that the defendants breached fiduciary duties by using internal medical-necessity guidelines that did not match the plan’s definition of medical necessity and by denying medically necessary claims. The defendants moved to dismiss that claim under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. They also asked the court to strike the claim under Rule 12(f).

Failure to State a Claim

The court held that the complaint adequately alleged the fiduciary element of the claim. The defendants were alleged to be fiduciaries, and the parties did not dispute that they applied the MCG guidelines when denying mental-health benefits for lack of medical necessity.

The court nevertheless found that the complaint did not plausibly allege a breach. The plan defined medically necessary treatment as treatment “[w]ithin standards of good medical practice within the organized medical community.” The complaint alleged that the MCG guidelines were more restrictive than generally accepted professional standards, but it did not provide the relevant content of those guidelines or specific facts showing how they conflicted with the plan. Without those facts, the court could not reasonably infer that the defendants’ use of the guidelines violated the plan or reflected a broader, systematic breach of fiduciary duties.

The court therefore concluded that Lawrence B. failed to state a claim for breach of fiduciary duty. It granted the defendants’ motion to dismiss that cause of action with leave to amend.

Whether the Claim Was Duplicative

The defendants also argued that the fiduciary-duty claim sought to remedy the same injury and obtain the same relief as the claim for benefits. The court rejected dismissal on that ground at the pleading stage.

The court explained that ERISA allows a beneficiary to seek equitable relief when other ERISA remedies do not adequately address the injury. A plaintiff may plead benefits and equitable claims in the alternative, as long as the plaintiff does not obtain a double recovery. Here, the benefits claim was based on an alleged violation of the plan’s definition of medical necessity, while the fiduciary-duty claim was based on the defendants’ alleged wrongful administration and continued use of the MCG guidelines. The court found enough difference between those theories to conclude that the fiduciary-duty claim was not duplicative as a matter of law.

The court also stated that it was premature to decide whether particular requested remedies—such as declaratory relief, an injunction, or an equitable surcharge—would ultimately duplicate relief available under the benefits claim.

Disposition

Judge Jacqueline Scott Corley granted the defendants’ motion to dismiss with leave to amend. An amended complaint had to be filed by May 30, 2024. The order stated that it disposed of Docket No. 13. The opinion does not separately state a disposition for the Rule 12(f) request to strike.