Wit et al v. UnitedHealthcare Insurance Company et al

Filing 181

ORDER by Judge Joseph C. Spero denying 177 Motion for Leave to File Motion for Reconsideration and Denying Alternative Request to Certify Interlocutory Appeal. (jcslc1S, COURT STAFF) (Filed on 10/12/2016)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DAVID WIT, et al., Plaintiffs, Case No. 14-cv-02346 JCS Related Case No. 14-cv-05337 JCS 8 v. 9 10 UNITED BEHAVIORAL HEALTH, Defendant. United States District Court Northern District of California 11 12 GARY ALEXANDER, et al., ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OR FOR AN ORDER CERTIFYING THE COURT’S ORDER GRANTING CLASS CERTIFICATION FOR INTERLOCUTORY APPEAL 13 Plaintiffs, 14 v. Docket No. 177 (Case No. 14-cv-02346 JCS) Docket No. 137 (Case No. 14-cv-05337 JCS) 15 16 UNITED BEHAVIORAL HEALTH, Defendant. 17 18 19 20 I. INTRODUCTION On September 19, 2016, the Court issued an Order granting Plaintiffs‟ motion for class 21 certification (“the September 19, 2016 Order” or “Order”)). On September 30, 2016, Defendant 22 United Behavioral Health (“UBH”) filed a request for leave to file a motion for reconsideration of 23 the Court‟s Order and in the alternative, asking the Court to certify an interlocutory appeal of the 24 Order under 28 U.S.C. § 1292(b). See Motion for Leave to File Motion for Reconsideration or, in 25 the Alternative, for an Order Certifying the Court‟s Order Granting Class Certification for 26 Interlocutory Appeal [Docket No. 177 in Case No. 14-cv-02346 JCS) and Docket No. 137 in Case 27 28 1 No. 14-cv-05337 JCS] (“Motion”). Plaintiffs have filed a response opposing UBH‟s request. 2 Having considered the parties‟ briefs, the Court DENIES the Motion in its entirety.1 3 II. 4 ANALYSIS A. 5 Whether the Court Should Reconsider its September 19, 2016 Order Granting Class Certification Pursuant to Civil Local Rule 7-9(a), a party may bring a motion for reconsideration of any 6 7 8 interlocutory order “[b]efore the entry of a judgment adjudicating all of the claims and the rights and liabilities of all the parties in a case” if the court grants leave to bring such a motion. Rule 79(b) provides that in a motion for leave to file a motion for reconsideration, “the moving party 9 must show reasonable diligence in bringing the motion, and one of the following: 10 (1) That at the time of the motion for leave, material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or United States District Court Northern District of California 11 12 13 14 (2) The emergence of new material facts or a change of law occurring after the time of such order; or 15 (3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order. 16 17 18 Civ. L.R. 7-9(b). “No motion for leave to file a motion for reconsideration may repeat any oral or 19 written argument made by the applying party in support of or in opposition to the interlocutory 20 order which the party . . . seeks to have reconsidered. Civ. L.R. 7-9(c). 21 UBH contends the Court should reconsider its Order because UBH has acted with 22 reasonable diligence and has satisfied the requirements of subsections (1) and (3) of Local Rule 7- 23 9(b). In particular, it contends Plaintiffs “recast” their claims and narrowed their theory of 24 recovery in their Reply brief and at oral argument, thereby depriving UBH of the opportunity to 25 respond to Plaintiffs‟ “new” theory of the case, with the result that the Court failed to consider 26 27 28 1 The parties in these related cases have consented to the jurisdiction of a United States magistrate judge pursuant to 28 U.S.C. § 636(c). 2 1 “material facts and dispositive legal arguments” in its Order. Motion at 9-10. UBH points to 2 Plaintiffs‟ stipulation at oral argument that they would drop certain theories of liability that were 3 not common to the class, including the individual bases for the denial of individual class 4 members‟ benefits, and the clarification in their Reply brief that they were no longer seeking to 5 use their out-of-pocket costs as a basis for the surcharge remedy that they request. See Motion at 6 3-4; Order at 10 n. 10, 11. The Court rejects UBH‟s contentions that these stipulations resulted in 7 significant changes in Plaintiffs‟ theory of the case or that UBH could not have addressed 8 Plaintiff‟s theory before the Court issued its Order if it had acted with reasonable diligence. 9 First, it was clear in Plaintiffs‟ class certification motion that they were requesting only that the Court certify the proposed classes based on the theory that UBH abused its discretion by 11 United States District Court Northern District of California 10 adjudicating class members‟ claims using flawed Guidelines. Plaintiffs‟ stated that they 12 “challenge[d] UBH‟s use of a claims-determination methodology that was arbitrary and capricious 13 because it employed a set of clinical criteria (i.e. its Guidelines) that violated plan terms.” Class 14 Certification Motion at 5-7. They also spelled out the elements of such a claim, which 15 conspicuously did not reference the individualized allegations as to which Plaintiffs stipulated at 16 oral argument they were not seeking class certification. Id. The Court finds UBH‟s suggestion 17 that it did not understand from the class certification motion that Plaintiffs were seeking to certify 18 classes only to pursue process claims is unpersuasive. 19 Second, with respect to Plaintiffs‟ theory on the surcharge remedy, Plaintiffs expressly 20 stated in their Reply brief that they were not seeking a surcharge based on class members‟ out-of- 21 pocket costs. UBH was not required to request leave to respond to this clarification prior to oral 22 argument (though it could have done so). It had four months after the Reply brief was filed to 23 prepare for oral argument, however, and could have presented the arguments in the Motion to the 24 Court at oral argument, or at least requested an opportunity to file a supplemental brief on the 25 basis that new arguments were raised in the Reply brief. UBH did not present its arguments or 26 make such a request at oral argument. Instead, UBH waited until after the Court had issued its 27 Order to raise these arguments for the first time. 28 The Court concludes that UBH has not demonstrated that it acted with reasonable 3 1 diligence, which is a prerequisite for bringing a motion for reconsideration under Civil Local Rule 2 7-9(b). On that basis alone, denial of the request for leave to file a motion for reconsideration is 3 warranted. The Court further finds that UBH has not pointed to any “material difference in fact or 4 law exists from that which was presented to the Court before entry of the interlocutory order” or 5 established that there was “[a] manifest failure by the Court to consider material facts or 6 dispositive legal arguments which were presented to the Court before such interlocutory order.” 7 Civ.L.R. 7-9(b). Accordingly, the Court DENIES UBH‟s request for leave to file a motion for 8 reconsideration. 9 10 United States District Court Northern District of California 11 B. Whether the Court Should Certify an Interlocutory Appeal Under 28 U.S.C. § 1292(b) Under Section 1292(b), a district court may certify an order for interlocutory review where 12 the order involves (1) a “controlling question of law,” (2) as to which there are “substantial 13 grounds for difference of opinion,” and (3) an immediate appeal may “materially advance the 14 ultimate termination of the litigation.” 28 U.S.C. § 1292(b). “The precedent in this circuit has 15 recognized the congressional directive that section 1292(b) is to be applied sparingly and only in 16 exceptional cases . . . .” In re Cement Antitrust Litig. (MDL No. 296), 673 F.2d 1020, 1027 (9th 17 Cir. 1981) cause dismissed sub nom. Arizona v. U.S. Dist. Court for the Dist. of Arizona, 459 U.S. 18 961 (1982) and aff‟d sub nom. Arizona v. Ash Grove Cement Co., 459 U.S. 1190 (1983). Thus, 19 “an interlocutory appeal should be certified only when doing so „would avoid protracted and 20 expensive litigation.‟” Sullivan v. Kelly Servs., Inc., No. C 08-3893 CW, 2010 WL 1445683, at *1 21 (N.D. Cal. Apr. 7, 2010) (quoting In re Cement, 673 F.2d at 1026; Mateo v. M/S Kiso, 805 22 F.Supp. 792, 800 (N.D.Cal.1992)). “If, in contrast, an interlocutory appeal would delay 23 resolution of the litigation, it should not be certified.” Id. (citing Shurance v. Planning Control 24 Int’l, Inc., 839 F.2d 1347, 1348 (9th Cir.1988)). 25 UBH has not met the requirements for invoking Section 1292(b). It points to the 26 substantive arguments it seeks to raise in a motion for reconsideration as involving controlling 27 questions of law as to which there are substantial grounds for differences of opinion, but these 28 issues were not timely raised and were not addressed in the Court‟s order. Moreover, the Court 4 1 2 concludes that this is not the sort of “exceptional” situation that warrants interlocutory review. First, UBH‟s argument that the alleged narrowing of Plaintiffs‟ claims will result in 3 manifest injustice to absent class members is unpersuasive given that under the doctrine of res 4 judicata adjudication of claims that are common to a class does not preclude subsequent litigation 5 of individual claims that were not pursued by the class. See Akootchook v. United States, 271 F.3d 6 1160, 1164 (9th Cir. 2001) (holding that adjudication of class claims did not preclude class 7 members from subsequently pursuing individual claims and noting that a contrary result “would 8 destroy the purpose of class actions under Rule 23(b)(2) [because] [i]f all class members had to 9 bring their own individual claims in addition to the common class claims, it would destroy the 10 United States District Court Northern District of California 11 efficiency of having class actions and reduce the benefit of joining such a suit.”). Nor is the Court persuaded by UBH‟s contention that the Class Certification Order violates 12 the Rules Enabling Act by allowing Plaintiffs to “so narrow their ERISA claims for denial of 13 benefits . . . that they no longer contend the necessary elements of those claims.” See Motion at 14 10-11. UBH‟s position is premised on the assumption that ERISA provides a remedy only for a 15 wrongful denial of benefits. Yet ERISA provides broader rights and remedies to plan members 16 and beneficiaries. See ERISA 29 U.S.C. § 1132(a)(1) & (3) (allowing an ERISA plan beneficiary 17 or participant to bring a civil action to “recover benefits due to him under the terms of his plan, to 18 enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the 19 terms of the plan” or “to enjoin any act or practice which violates any provision of this subchapter 20 or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such 21 violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.”). 22 Therefore, the Court does not find that the questions now (untimely) raised by UBH with respect 23 to the Rules Enabling Act are serious enough to warrant certification of the Court‟s Order for 24 interlocutory review under Section 1292(b). 25 26 27 28 5 1 III. CONCLUSION 2 For the reasons stated above, the Motion is DENIED. 3 IT IS SO ORDERED. 4 5 Dated: October 12, 2016 6 7 8 9 ______________________________________ JOSEPH C. SPERO Chief Magistrate Judge 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?