Condry v UnitedHealth Group Inc.,et.al

Filing 288

ORDER by Judge Vince Chhabria granting 286 Stipulated final judgment. (vclc2S, COURT STAFF) (Filed on 9/15/2020)

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 1 of 10

1

IN THE UNITED STATES DISTRICT COURT

2

FOR THE NORTHERN DISTRICT OF CALIFORNIA

3

SAN FRANCISCO DIVISION

4

6

RACHEL CONDRY, JANCE HOY, CHRISTINE
ENDICOTT, LAURA BISHOP, FELICITY BARBER,
RACHEL CARROLL on behalf of themselves and all
others similarly situated,

7

Plaintiffs,

5

10

STIPULATED [PROPOSED] FINAL
JUDGMENT AND ORDER

v.

8
9

Case No.: 3:17-cv-00183-VC

UnitedHealth Group Inc.; UnitedHealthcare, Inc.;
Honorable Vince Chhabria
UnitedHealthcare Insurance Company; UnitedHealthcar
Services, Inc.; and UMR, Inc.,
Defendants.

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

– 1 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 2 of 10

1

Plaintiff, Rachel Condry (“Condry”), who was later joined by Plaintiffs, Jance Hoy (“Hoy”),

2

Christine Endicott (“Endicott”), Laura Bishop (“Bishop”), Felicity Barber (“Barber”), and Rachel

3

Carroll (“Carroll”) (collectively with Condry, “Plaintiffs”), first commenced this class action on

4

January 13, 2017, against their respective health benefit plans and/or claims administrators,

5

UnitedHealthcare Group Inc., UnitedHealthcare, Inc., UnitedHealthcare Insurance Company, United

6

Healthcare Services, Inc., and UMR, Inc. (collectively, “Defendants”), alleging they violated the

7

Affordable Care Act (“ACA”) when they denied coverage for, or imposed cost-shares on, Plaintiffs’

8

out-of-network claims for lactation services. In addition, Plaintiffs (except Carroll) alleged that

9

Defendants failed to provide a “full and fair review” as required by ERISA claiming that the reasons

10

Defendants provided to Plaintiffs (except Carroll), about how their claims processed, were not

11

understandable. Based on these allegations, Plaintiffs asserted: breach of fiduciary duty claims under

12

the Employee Retirement Income Security Act of 1974 (“ERISA”) for failing to provide adequate

13

notice when denying their benefit claims (Counts I); breach of fiduciary and co-fiduciary duty claims

14

under ERISA for failing to provide ACA-mandated lactation counseling coverage (Counts II and III);

15

sex discrimination in violation of Section 1557(a) of the ACA (Count IV); and violation of the ACA’s

16

preventive care provisions which were incorporated by reference in non-ERISA health benefit plans

17

(Count V); and, unjust enrichment (Count VI). [Dkt. No. 78.] Defendants denied all of these

18

allegations, asserting that that they cover network lactation services without cost-sharing as required

19

by the ACA and provided a “meaningful dialogue” to Plaintiffs in processing their lactation claims as

20

required by ERISA. [Dkt. Nos. 82 and 104.]

21
22

Plaintiffs and Defendants (collectively, “Parties”), by and through their counsel, stipulate as
follows:

23

WHEREAS, on June 27, 2018, the Court entered summary judgment: (1) in favor of all

24

Plaintiffs on Count I (except for Carroll)1; (2) in favor of Bishop and Hoy for Count II; (3) in favor of

25

Defendants for Count II with respect to Barber and Condry; and (4) in favor of Defendants for Counts

26

27
28

1

Unlike the other Plaintiffs, Carroll was a participant of a non-ERISA health benefit plan and
therefore did not bring any claims under ERISA.

– 2 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 3 of 10

1

IV and VI.

2
3

WHEREAS, on June 27, 2018, the Court denied summary judgment for both sides on: (1)
Count III; (2) Endicott’s Count II claim; and (3) Carroll’s Count V claim. [Dkt. No. 146.]

4

WHEREAS, on May 23, 2019, the Court denied without prejudice Plaintiffs’ Motion for Class

5

Certification. [Dkt. No. 213.] Among other things, the May 23, 2019 Order held that “[i]t does not

6

appear that the named plaintiffs have standing to seek prospective relief because they are no longer

7

UHC plan participants.” [Id. at 4.] On December 19, 2019, the Court denied Plaintiffs’ Motion to

8

Grant Request for Intervention [Dkt. No. 259], which sought to add as a named plaintiff Teresa Harris,

9

a UHC insured, who asserted a claim under Count II, as set forth in the proposed amended complaint

10

(id.), with respect to the denial of her lactation claim, finding generally that Plaintiffs waited too long

11

to seek intervention of a new plaintiff. (Id.)

12

WHEREAS, on December 23, 2019, the Court granted in part and denied in part Plaintiffs’

13

renewed motion for class certification. [Dkt. No. 262.] The Court certified a Federal Rule of Civil

14

Procedure Rule 23(b)(2) class of ERISA plan participants who received the same denial letters for

15

lactation claims as Condry, Hoy, Endicott, Bishop, and Barber (“Denial Letter Class”), which the

16

Court had previously found violated ERISA under Count I when entering summary judgment in favor

17

of Condry, Hoy, Endicott, Bishop, and Barber on that issue. The Court denied certification of a

18

proposed class of members of Defendants’ health benefit plans who were denied coverage or had cost-

19

shares imposed for out-of-network lactation services, which pertained to Counts II, III and V, finding

20

that Plaintiffs did not meet their burden under Federal Rule of Civil Procedure 23. [Dkt. No. 262.]

21

WHEREAS, with respect to the Denial Letter Class the Court ordered Defendants to send a

22

follow-up letter to each member of the Denial Letter Class, “that explain[s] the basis for denial in a

23

comprehensible fashion (which would, in turn, allow participants to meaningfully assess whether to

24

contest the denial)”, and “that is worded so as to emphasize that if a participant believes her dispute

25

with the company was mooted by activity or communications subsequent to the initial denial letter,

26

she need not take further action in response to the new letter.” [Dkt. No. 262.]

27

WHEREAS, both sides moved for interlocutory appeal of the Court’s class certification

28

– 3 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 4 of 10

1

decision, which the Ninth Circuit Court of Appeals denied on March 2, 2020.

2

WHEREAS, the remaining claims are: (i) Endicott’s individual lactation counseling coverage

3

claim under ERISA (Counts II and III); and, (ii) Carroll’s individual lactation counseling coverage

4

claim under the ACA’s preventive care provisions which were incorporated by reference in her non-

5

ERISA health benefit plan (Count V). In the interest of efficiency and judicial economy, and solely

6

to resolve the claims that are remaining in the wake of the Court’s previous fully litigated and contested

7

rulings, the Parties agree to the dismissal of the foregoing remaining claims.

8

WHEREAS, Plaintiffs’ (except Carroll) claim under Count III alleging that Defendants should

9

be held jointly liable under ERISA is derivative of Plaintiffs’ claim under Count II, pursuant to the

10

Court’s order granting in part and denying in part the parties’ cross-motions for summary judgment,

11

the Parties stipulate that judgment be entered under Count III for Bishop and Hoy and against Condry

12

and Barber. This stipulation does not reflect any settlement or concession relating to the issues

13

litigated on the cross-motions for summary judgment but instead is only intended to resolve the claims

14

asserted in Count III.

15
16

WHEREAS, upon entry of this Stipulated [Proposed] Final Judgment and Order, Plaintiffs and
Defendants both intend to file timely notices of appeal.

17

WHEREAS, the parties, by and through respective counsel, agree to the entry of this Stipulated

18

[Proposed] Final Judgment and Order, subject to reservations of right to appeal.

19

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED:

20
21

1.

This Court has jurisdiction over the Parties and over the subject matter in issue, and

venue is proper in this District.

22

2.

In the interest of efficiency and judicial economy, Plaintiffs and Defendants agree to

23

stipulate to entry of a final judgment, and the relief awarded herein is expressly conditioned on the

24

Parties’ reservations of their rights of appeal as set forth below in paragraph 3.

25

3.

The Parties stipulate that they have expressly reserved their rights on appeal to

26

challenge all rulings or orders in this case. If any aspect of a ruling or order is reversed or vacated on

27

appeal, wholly or partially, this Stipulated Final Judgment and Order shall be set aside to the extent

28

– 4 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 5 of 10

1

inconsistent with any such decision on appeal or ruling of this Court on remand.

2

4.

Subject to paragraphs 2-3 above, final judgment is hereby entered in favor of the Denial

3

Letter Class on Count I, finding that Defendants violated ERISA for the reasons set forth in the Court’s

4

summary judgment order. [Dkt. No. 146.] The Denial Letter Class is defined as:

5

All participants and beneficiaries, in one or more of the ERISA employee health benefit plans
administered by Defendants in the United States, which provide benefits for healthcare services
and for which claims administration duties are delegated to one or more of the Defendants,
who received from August 1, 2012 to present, an explanation of benefits for Comprehensive
Lactation Services rendered by an out-of-network provider, that included one or more of the
following denial reasons (the “Remark Codes”):

6
7
8
9

(1) Remark code KM (“This is not a reimbursable service. There may be a more
appropriate CPT or HCPCS code that describes this service and/or the use of the
modifier or modifier combination is inappropriate.”)
(2) Remark code I5 (“This service code is not separately reimbursable in this setting.”)
(3) Remark code 13 (“Your plan does not cover this non-medical service or personal
item.”)
(4) Remark code B5 (“Payment for services is denied. We asked the member for more
information and didn’t receive it on time.”)

10
11
12
13
14

16

Excluded from the Class are Defendants, their subsidiaries or affiliate companies, their legal
representatives, assigns, successors and employees and the Court and all Court personnel
involved in the handling of this case.

17

5.

15

Subject to paragraphs 2-3 above, Barber, Bishop, Condry, Endicott, and Hoy are hereby

18

appointed as Class Representatives of the Denial Letter Class, and Chimicles Schwartz Kriner &

19

Donaldson-Smith LLP and Shepherd, Finkelman, Miller & Shah, LLP are hereby appointed as Co-

20

Lead Class Counsel, and Axler Goldich LLC is hereby appointed as Class Counsel of the Denial Letter

21

Class.
6.

22

Subject to paragraphs 2-3 above, final judgment is hereby entered with respect to the

23

Denial Letter Class, ordering Defendants to send a follow-up letter (“Letter”) to each member of the

24

Denial Letter Class, “that explain[s] the basis for denial of the lactation claim in a comprehensible

25

fashion (which would, in turn, allow participants to meaningfully assess whether to contest the

26

denial),” and that is “worded so as to emphasize that if a participant believes her dispute with the

27

company was mooted by activity or communications subsequent to the initial denial letter, she need

28

– 5 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 6 of 10

1

not take further action in response to the new letter.” [Dkt. No. 262.] However, the Parties agree to

2

stay execution of the order directing Defendants to send the Letter until after the aforementioned

3

appeals are fully resolved.

4

7.

Subject to paragraphs 2-3 above, final judgment is hereby entered in favor of Plaintiff

5

Hoy on Counts II and III in the amount of $345 and $49 in prejudgment interest2, for a total of $394,

6

for the reasons set forth in the Court’s summary judgment order. [Dkt. No. 146.] However, the Parties

7

agree to stay execution of payment of said amount, with no additional accrual of interest of any kind,

8

until after the aforementioned appeals are fully resolved.

9

8.

Subject to paragraphs 2-3 above, final judgment is hereby entered in favor of Plaintiff

10

Bishop on Counts II and III in the amount of $130 and $19.38 in prejudgment interest, for a total of

11

$149.38, for the reasons set forth in the Court’s summary judgment order. [Dkt. No. 146.] However,

12

the Parties agree to stay execution of payment of said amount, with no additional accrual of interest of

13

any kind, until after the aforementioned appeals are fully resolved.
9.

14

Subject to paragraphs 2-3 above, final judgment is hereby entered against Barber and

15

Condry on Counts II and III, for the reasons set forth in the Court’s summary judgment order. [Dkt.

16

No. 146.]
10.

17
18

Subject to paragraphs 2-3 above, final judgment is hereby entered against the Plaintiffs

on Count IV, for the reasons set forth in the Court’s summary judgment order. [Dkt. No. 146.]
11.

19

Subject to paragraphs 2-3 above, Counts II and III are dismissed with prejudice as to

20

Endicott as the result of a partial settlement, which settled only the portion of Endicott’s individual

21

claims that was not decided by previous order of this Court, but which did not settle her class claims

22

and the portions of her claims that this Court previously decided and which remain contested and

23

subject to further appeals.

24

25
26
27
28

2

The Parties stipulate and agree to Pre-judgment interest at the rate of 3% per annum,
calculated from the date of when Defendants first notified the plaintiff that it would not cover the
lactation claim to the date of the entry of this Judgment, and, therefore, stipulate and agree to the prejudgment interest calculations, depending on the date judgment is entered for Hoy and Bishop, set
forth in Appendix A.
– 6 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 7 of 10

1

12.

Subject to paragraphs 2-3 above, Count V is dismissed with prejudice as to Carroll as

2

the result of a partial settlement, which settled only the portion of Carroll’s claim that was not decided

3

by previous order of this Court, but which did not settle her class claims and the portions of her claims

4

that this Court previously decided and which remain contested and subject to further appeals.

5

13.

Except with respect to Endicott’s and Carroll’s individual claims that are the subject of

6

the partial settlements, the Parties reserve the right under this Stipulated Final Judgment and Order to

7

move for an award of reasonable attorneys’ fees and/or costs, including pursuant to 29 U.S.C. §

8

1132(g), and each Party reserves the right to object to the others’ motion. The Parties agree to wait

9

until appellate issues are resolved before briefing such issues.

10

14.

This Court shall retain continuing jurisdiction over the Parties to this Stipulated Final

11

Judgment and Order and over the subject matter of this action for the purposes of interpreting and

12

enforcing the terms of this Stipulated Final Judgment and Order, subject to the Parties’ right of appeal

13

as set forth in paragraphs 2-3 above.

14
15

DATED: September 4, 2020

REED SMITH LLP

16
By: /s/Rebecca R. Hanson
Martin J. Bishop (pro hac vice)
Rebecca R. Hanson (pro hac vice)
[e-mail]
[e-mail]
[e-mail]
Telephone: [phone]
Facsimile: [phone]

17
18
19
20
21

Attorneys for Defendants UnitedHealth Group
Inc., UnitedHealthcare, Inc., UnitedHealthcare
Insurance Company, and United
Healthcare Services, Inc.

22
23
24
25
26
27
28

– 7 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 8 of 10

1
2

CHIMICLES SCHWARTZ KRINER &
DONALDSON-SMITH LLP

3
4

By: /s/ Kimberly M. Donaldson-Smith
Nicholas E. Chimicles (pro hac vice)
Kimberly M. Donaldson-Smith (pro hac vice)
Stephanie E. Saunders (pro hac vice)
361 W. Lancaster Avenue
Haverford, PA 19041
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]

5
6
7
8
9
10

Annick Marie Persinger
Sabita J. Soneji
TYCKO & ZAVAREEI LLP
The Tower Building
1970 Broadway, Suite 1070
Oakland, CA 94612
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

11
12
13
14
15
16

Marc A. Goldich (admitted pro hac vice)
Noah Axler (admitted pro hac vice)
AXLER GOLDICH LLC
1520 Locust Street
Suite 301
Philadelphia, PA 19102
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

17
18
19
20
21
22
23

James E. Miller (CA Bar No. 262553)
Laurie Rubinow
SHEPHERD, FINKELMAN, MILLER &
SHAH, LLP
65 Main Street
Chester, CT 06412
Telephone: [phone]
Facsimile: [phone]
– 8 – 
STIPULATED [PROPOSED] FINAL JUDGMENT AND ORDER

24
25
26
27
28

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 9 of 10

Case 3:17-cv-00183-VC Document 288 Filed 09/15/20 Page 10 of 10