Lacy Atzin et al v. Anthem, Inc. et al

Filing 63

ORDER GRANTING MOTION FOR CLASS CERTIFICATION. The Court appoints Plaintiff Mark Andersen as Class Representative, and Gianelli & Morris and Doyle Law, APC as Class Counsel 55 by Judge Otis D. Wright, II . (lc). Modified on 5/6/2020 (lc).

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United States District Court
Central District of California

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LACY ATZIN; MARK ANDERSON, on
behalf of themselves and all others
similarly situated,

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Plaintiffs,

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Case № 2:17-cv-06816-ODW (PLAx)
ORDER GRANTING MOTION FOR
CLASS CERTIFICATION [55]

v.
ANTHEM, INC.; ANTHEM UM
SERVICES, INC.,
Defendants.

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I.

INTRODUCTION

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Plaintiffs Lacy Atzin and Mark Andersen bring this putative class action against

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Defendants Anthem, Inc. and Anthem UM Services (collectively, “Defendants”).

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Plaintiffs argue that Defendants utilize erroneous coverage guidelines to deny requests

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for microprocessor controlled foot-ankle protheses. Plaintiffs now move, unopposed,

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for class certification under Federal Rules of Civil Procedure (“Rule”) 23(b)(1) and

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23(b)(2). (Unopposed Mot. for Class Certification (“Mot.”) 1, ECF No. 55.) For the

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reasons that follow, the Court GRANTS Plaintiffs’ Motion.1

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Having carefully considered the papers filed in connection with the Motion, the Court deemed the
matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.

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II.

BACKGROUND

Plaintiff Mark Andersen underwent bilateral below the knee amputations

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following a boating accident in 2000.

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subsequently fitted with below the knee prosthetic devices. (Compl. ¶ 32.) In 2015, a

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certified prosthetist determined that Andersen needed below the knee prostheses with

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microprocessor controlled foot-ankle systems and submitted a request for coverage.

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(Compl. ¶ 33.) Defendants denied the request and Andersen’s subsequent appeals on

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the grounds that the requested prostheses “are considered investigational . . . based . . .

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on the health plan medical policy, Microprocessor Controlled Lower Limb Prosthesis

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(Compl. ¶ 32, ECF No. 1.)

He was

(OR-PR.00003).” (Compl. ¶¶ 34–35.)

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On September 25, 2017, Plaintiffs initiated this putative class action asserting

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that Defendants have a practice of wrongfully denying coverage for microprocessor

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controlled lower limb prostheses, including foot-ankle prostheses,2 based on the

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coverage guideline OR-PR.00003.

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administer claims under Anthem plans according to medical policies developed to

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govern coverage positions. (Compl. ¶¶ 16–18.) One such policy is OR-PR.00003,

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which states that “[t]he use of a microprocessor controlled foot-ankle prosthesis (for

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example, Proprio Foot of the PowerFoot Biom) is considered investigational and not

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medically necessary for all indications.”3

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OR-PR.00003’s position that microprocessor controlled foot-ankle protheses are

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investigational is erroneous. (Compl. ¶ 25.) Thus, Plaintiffs assert Defendants have

(Compl. ¶ 3.)

Plaintiffs allege Defendants

(Compl. ¶ 23.)

Plaintiffs claim

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Plaintiffs’ Complaint also includes allegations relating to microprocessor controlled knee
prostheses. (Compl. ¶ 3.) However, in October 2019, the parties reached a settlement subject to
court approval as to that portion of the case. (Stip., ECF No. 53.) Accordingly, Plaintiffs’ Motion
and this Order address only those claims concerning microprocessor controlled foot-ankle
prostheses.
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During the time period at issue in this action, Defendants utilized two versions of OR-PR.00003.
(See Mot 4; Decl. Robert S. Gianelli (“Gianelli Decl.”) ¶¶ 3, 4, Ex. 2 at 11 (Anthem Medical Policy
for Microprocessor Controlled Lower Limb Prosthesis (OR-PR.00003) (publish date Jan. 1, 2013),
Ex. 3 at 25–26 (publish date Aug. 29, 2019), ECF Nos. 55-1, 55-3.) Both versions include this
challenged directive.

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“wrongly denied coverage for all requests for microprocessor controlled foot-ankle

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prostheses pursuant to [the] directive in OR-PR.00003.” (Compl. ¶¶ 23, 36.)

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Plaintiffs move for class certification of the following class:

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All persons covered under Anthem plans, governed by ERISA,
self-funded or fully insured, whose requests for microprocessor
controlled foot-ankle prostheses have been denied during the applicable
statute of limitations period pursuant to Anthem’s Medical Policy on
Microprocessor Controlled Lower Limb Prosthesis, Policy
No. OR-PR.00003

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(Mot. 6; Notice of Non-Opp’n 1, ECF No. 58.) Plaintiffs also seek appointment of

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Plaintiff Andersen as Class Representative and Plaintiffs’ counsel, Gianelli & Morris

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and Doyle Law, APC, as Class Counsel. (Mot. 11–12, 16.) Defendants do not oppose

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certification of the identified class.

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stipulated to certain facts relevant to and for the purpose of class certification

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(“Stipulated Facts”). (Stip. Facts 2–4, ECF No. 56.)

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III.

(Notice of Non-Opp’n.)

The Parties have

LEGAL STANDARD

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Whether to grant class certification is within the discretion of the court.

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Montgomery v. Rumsfeld, 572 F.2d 250, 255 (9th Cir. 1978). A cause of action may

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proceed as a class action if a plaintiff meets the threshold requirements of Federal

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Rule of Civil Procedure (“Rule”) 23(a): numerosity, commonality, typicality, and

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adequacy of representation. Fed. R. Civ. P. 23(a); Mazza v. Am. Honda Motor Co.,

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666 F.3d 581, 588 (9th Cir. 2012). In addition, a party seeking class certification must

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meet one of the three criteria listed in Rule 23(b). Wal–Mart Stores, Inc. v. Dukes,

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564 U.S. 338, 345 (2011). “There is no separate ‘ascertainability’ requirement.”

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Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1124 n.4 (9th Cir. 2017) (discussing

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that “ascertainability” issues are addressed through Rule 23’s listed requirements.)

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“Rule 23 does not set forth a mere pleading standard. A party seeking class

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certification must affirmatively demonstrate his compliance with the Rule.” Dukes,

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564 U.S. at 350. This showing is not onerous: “a district court need only consider

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material sufficient to form a reasonable judgment on each Rule 23(a) requirement.”

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Sali v. Corona Reg’l Med. Ctr., 909 F.3d 996, 1005 (9th Cir. 2018) (internal quotation

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marks omitted). Still, courts may certify a class only if they are “satisfied, after a

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rigorous analysis,” that Rule 23 prerequisites have been met. Gen. Tel. Co. v. Falcon,

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457 U.S. 147, 161 (1982). “Frequently that ‘rigorous analysis’ will entail some

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overlap with the merits of the plaintiff’s underlying claim,” which “cannot be helped.”

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Dukes, 564 U.S. at 351. However, examination of the merits is limited to determining

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whether certification is proper and “not to determine whether class members could

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actually prevail on the merits of their claims.” Ellis v. Costco Wholesale Corp., 657

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F.3d 970, 983 n.8 (9th Cir. 2011).

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IV.

DISCUSSION

The Court first considers whether Plaintiffs have met the requirements of

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Rule 23(a) before turning to the criteria for certification under Rule 23(b).

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A.

Rule 23(a)

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Plaintiffs establish that the proposed class meets the requirements of Rule 23(a).

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1.

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A class action may proceed only if “the class is so numerous that joinder of all

Numerosity

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members is impracticable.” Fed. R. Civ. P. 23(a)(1).

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requirement is not tied to any numerical threshold, courts generally “find the

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numerosity requirement satisfied when a class includes at least 40 members.” Rannis

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v. Recchia, 380 F. App’x 646, 650–51 (9th Cir. 2010) (finding district court did not

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abuse its discretion in determining that a class of 20 satisfied the numerosity

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requirement). “The Ninth Circuit has not offered a precise numerical standard; other

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District Courts have, however, enacted presumptions that the numerosity requirement

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is satisfied by a showing of 25–30 members.” Slaven v. BP Am., Inc., 190 F.R.D. 649,

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654 (C.D. Cal. 2000) (citing cases). “When a class size is small, courts consider

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factors such as ‘the geographical diversity of class members, the ability of individual

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claimants to institute separate suits, and whether injunctive or declaratory relief is

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Although the numerosity

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sought.’” Ogbuehi v. Comcast of Cal./Colo./Fla./Or., Inc., 303 F.R.D. 337, 345 (E.D.

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Cal. 2014) (citing Jordan v. Cty. of Los Angeles, 669 F.2d 1311, 1319 (9th Cir. 1982),

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vacated on other grounds, 459 U.S. 810 (1982)).

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The parties disagree whether a three- or four-year limitation period applies.

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(See Stip. Facts 3 n.2; Notice of Non-Opp’n 1.) Nevertheless, Defendants searched

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their data systems for individuals who meet the class definition and identified

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38 foot-ankle members in the three-year limitation period, and 44 foot-ankle members

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in the four-year limitation period. (Stip. Facts No. 7.)

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The Court finds numerosity is met by either figure under the facts presented.

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Plaintiffs primarily seek declaratory and injunctive relief compelling Defendants to

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reform the practice of denying claims for microprocessor controlled foot-ankle

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prostheses based on erroneous guidelines.

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Additionally, allowing a class action is in the interests of judicial economy and would

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avoid duplicative suits brought by other class members demanding the same coverage.

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See Escalante v. Cal. Physicians’ Serv., 309 F.R.D. 612, 618 (C.D. Cal. 2015)

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(finding numerosity met by a class of 19 under similar circumstances); Ogbuehi, 303

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F.R.D. at 345 (citing Harris v. Palm Springs Alpine Estates, Inc., 329 F.2d 909,

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913–14 (9th Cir. 1964) (“[I]mpracticability does not mean impossibility but only the

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difficulty or inconvenience of joining all members of the class.”) (internal quotations

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marks omitted)). Further, Defendants do not oppose and the parties both assert that

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the number of putative class members, whether 38 or 44, is so numerous that joinder

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would be impractical. (Stip. Facts No. 7.) The Court finds numerosity satisfied.

(See Compl. ¶ 60(c); Mot. 13.)

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2.

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Commonality is satisfied if “there are questions of law or fact common to the

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class.” Fed. R. Civ. P. 23(a)(2). “Plaintiffs need not show . . . that every question in

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the case, or even a preponderance of questions, is capable of class wide resolution. So

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long as there is even a single common question, a would-be class can satisfy the

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commonality requirement of Rule 23(a)(2).” Parsons v. Ryan, 754 F.3d 657, 675 (9th

Commonality

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Cir. 2014) (internal quotation marks omitted). What is essential is that “the questions

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must be ones that will ‘generate common answers apt to drive the resolution of the

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litigation.’” Escalante, 309 F.R.D. at 618 (quoting Dukes, 564 U.S. at 350).

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Defendants stipulate that they follow a common practice of denying claims for

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microprocessor controlled foot-ankle prostheses as “investigational and not medically

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necessary for all indications,” applying OR-PR.00003. (Stip. Facts Nos. 1–2, 4.)

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Plaintiff Andersen submits Defendants’ letters denying his claim on this basis, further

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demonstrating application of this common practice.

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(“Andersen Decl.”) ¶¶ 5, 6, ECF No. 55-2; Gianelli Decl. ¶¶ 6, 7, Exs. 4–5 (“Denial

(Decl. of Mark Andersen

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Letters”).)

Plaintiffs argue the prostheses are not investigational and therefore

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OR-PR.00003’s position is erroneous. (Compl. ¶ 25.) Thus, this case raises the

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common significant question of whether microprocessor controlled foot-ankle

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prostheses are properly deemed “investigational” under OR-PR.00003. (See Stip.

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Facts No. 5; Mot. 8.) The “determination of [this question’s] truth or falsity will

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resolve an issue that is central to the validity of [Plaintiffs’ claims] with one stroke.”

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Mazza, 666 F.3d at 588 (quoting Dukes, 564 U.S. at 350). Further, the harm suffered

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from Defendants’ application of the allegedly erroneous guideline is common to all of

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the putative class members. See Des Roches v. Cal. Physicians’ Serv., 320 F.R.D. 486,

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500 (N.D. Cal. 2017) (“The harm alleged by Plaintiffs—the promulgation and

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application of defective guidelines to the putative class members—is common to all of

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the putative class members.”). The Court thus finds commonality satisfied.

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3.

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Under Rule 23(a)(3) a representative party must have claims or defenses that

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are “typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “Under

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the rule’s permissive standards, representative claims are ‘typical’ if they are

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reasonably co-extensive with those of absent class members; they need not be

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substantially identical.” Parsons, 754 F.3d at 685 (quoting Hanlon v. Chrysler Corp.,

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150 F.3d 1011, 1020 (9th Cir. 1998)). The class representative “must be part of the

Typicality

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class and possess the same interest and suffer the same injury as the class members.”

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Gen. Tel. Co., 457 U.S. at 156 (internal quotation marks omitted). “The commonality

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and typicality requirements of Rule 23(a) tend to merge.” Id. at 157 n.13.

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The same facts that support commonality also support typicality. Defendants

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apply OR-PR.00003 uniformly to deny requests for microprocessor controlled

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foot-ankle prostheses. (See Mot. 10–11; Stip. Facts Nos. 1–2.) Defendants denied

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Plaintiff Andersen’s claim for microprocessor controlled foot-ankle prostheses under

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this policy. (Andersen Decl. ¶¶ 5–6; Denial Letters.) Thus, Defendants’ conduct in

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applying OR-PR.00003 to Plaintiff Andersen’s claims is the same as to the putative

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class, and the harm Plaintiff Andersen suffered from application of the allegedly

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erroneous guideline is the same as the harm suffered by the putative class members.

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See Des Roches, 320 F.R.D. at 504 (finding typicality satisfied where the harm alleged

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was that defendants adjudicated plaintiff’s claim under the same challenged coverage

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guidelines as the putative class); Escalante, 309 F.R.D. at 619 (finding typicality

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satisfied where named plaintiff was “challenging an undisputedly uniform practice of

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categorically denying coverage for lumbar [artificial disc replacement] procedures.”)

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Accordingly, the Court finds typicality satisfied.

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4.

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The representative parties must “fairly and adequately protect the interests of

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the class.” Fed. R. Civ. P. 23(a)(4). “To determine whether the representation meets

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this standard, [courts] ask two questions: (1) Do the representative plaintiffs and their

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counsel have any conflicts of interest with other class members, and (2) will the

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representative plaintiffs and their counsel prosecute the action vigorously on behalf of

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the class?” Staton v. Boeing Co., 327 F.3d 938, 957 (9th Cir. 2003).

Adequacy

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First, no party contends, and nothing suggests, that Plaintiff Andersen or his

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counsel have a conflict with the putative class members’ interests. Plaintiff Andersen

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pledges to prosecute this action on their behalf. (See Mot. 11–12; Andersen Decl. ¶ 7

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(“I will represent the interests of other [class members].”) Thus, the Court has no

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reason to believe a conflict of interest exists or to doubt that Plaintiff Andersen will

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prosecute this case diligently. Second, Plaintiff’s counsel also vows to vigorously

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prosecute this action on behalf of the class and offers evidence of their experience in

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prosecuting insurance class litigation involving claims similar to those at issue here.

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(Mot. 12; see Gianelli Decl. ¶¶ 9–14.) Accordingly, the Court finds the adequacy

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requirement satisfied.

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B.

Rule 23(b)

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Having established that the four requirements of Rule 23(a) are met, Plaintiffs

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must also establish that the class meets one of the three criteria listed in Rule 23(b).

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Dukes, 564 U.S. at 345. Plaintiffs contend certification is proper under Rule 23(b)(1)

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and 23(b)(2).

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Rule 23(b)(2), it does not reach Plaintiffs’ arguments under Rule 23(b)(1).

(Mot. 12–15.)

As the Court finds certification appropriate under

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Rule 23(b)(2) requires that “the party opposing the class has acted or refused to

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act on grounds that apply generally to the class, so that final injunctive relief or

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corresponding declaratory relief is appropriate respecting the class as a whole.” Fed.

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R. Civ. P. 23(b)(2). The key to a Rule 23(b)(2) class is “the indivisible nature of the

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injunctive or declaratory remedy warranted—the notion that the conduct is such that it

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can be enjoined or declared unlawful only as to all of the class members or as to none

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of them.” Dukes, 564 U.S. at 360.

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The parties agree that Defendants have acted in a way that applies uniformly to

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the class because Defendants have applied OR-PR.00003 to deny claims for

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microprocessor controlled foot-ankle prostheses as “investigational and not medical

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necessary for all indications.” (Stip. Facts Nos. 1–4, 11.) This common policy can be

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resolved with respect to the class as a whole through the injunctive relief Plaintiffs

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seek, namely to reevaluate and reprocess claims without using the allegedly erroneous

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criteria. (See Stip. Facts No. 11); Des Roches, 320 F.R.D. at 509, 510 (finding

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“substantial support” that “a ‘reprocessing’ injunction is an appropriate basis for class

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certification under Rule 23(b)(2)”); Wit v. United Behavioral Health, 317 F.R.D. 106,

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136 (N.D. Cal. 2016) (“Plaintiffs’ injury can be remedied for all class members by

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requiring [defendant] to modify its Guidelines and reprocess claims that were denied

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under the allegedly defective guidelines”). Accordingly, the Court finds certification

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under Rule 23(b)(2) appropriate.

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C.

Ascertainability/Administrative Feasibility

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As noted, there is no separate “ascertainability” requirement. Briseno, 844 F.3d

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at 1123, 1124 n.4. Even if there were, the Court would find it met here. Defendants’

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“data systems allow [them] to identify the Putative Class Members” and Defendants

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have identified between 38 and 44 “foot-ankle members,” depending on the limitation

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period. (Stip. Facts Nos. 7–8.) Thus, the proposed class is ascertainable.

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V.

CONCLUSION

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For the reasons discussed above, the Court GRANTS Plaintiffs’ Motion for

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Class Certification. (ECF No. 55.) The Court certifies the following class under

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Rule 23(b)(2):

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All persons covered under Anthem plans governed by ERISA,
self-funded or fully insured, whose requests for microprocessor
controlled foot-ankle prostheses have been denied during the applicable
statute of limitations period pursuant to Anthem’s Medical Policy on
Microprocessor Controlled Lower Limb Prosthesis, Policy
No. OR-PR.00003.

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The Court appoints Plaintiff Mark Andersen as Class Representative, and

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Gianelli & Morris and Doyle Law, APC as Class Counsel.

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IT IS SO ORDERED.

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May 6, 2020

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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