R.C. et al v. Blue Cross and Blue Shield of Louisiana et al

Filing 35

RULING : The 29 Motion to Dismiss for Failure to State a Claim is DENIED. Signed by Chief Judge Shelly D. Dick on 08/30/2024. (ELW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

R.C. and C.A.

CIVIL ACTION

VERSUS

23-564-SDD-SDJ

LOUISIANA HEALTH SERVICES &
INDEMNITY COMPANY d/b/a BLUE
CROSS AND BLUE SHIELD OF
LOUISIANA, and NEW DIRECTIONS
BEHAVIORAL HEALTH, LLC.
RULING
This matter is before the Court on the Motion to Dismiss the Second Cause of
Action in Plaintiffs’ Amended Complaint1 filed by Defendants, Louisiana Health Service &
Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana (“BCBSLA”) and New
Directions Behavioral Health, LLC (“New Directions”) (collectively, “Defendants”).
Plaintiffs, R.C. and C.A. (collectively, “Plaintiffs”), filed an Opposition,2 to which
Defendants filed a Reply.3 For the reasons that follow, the motion will be denied.
I.

BACKGROUND4
This case arises from Defendants’ denial of Plaintiffs’ claims for insurance benefits

for the costs of medical treatment. R.C. was a participant in a fully insured employee
welfare benefits plan (the “Plan”) under the Employee Retirement Income Security Act of

1

Rec. Doc. 29.
Rec. Doc. 31.
3
Rec. Doc. 32.
4
The following facts are drawn from the Amended Complaint, (Rec. Doc. 15), and are assumed to be true
for purposes of this motion. See e.g., Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.
2000) (citing Campbell v. Wells Fargo Bank, 781 F.2d 440, 442 (5th Cir. 1986)).
2

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1974 (“ERISA”).5 R.C.’s stepson, C.A., was the beneficiary of the Plan.6 BCBSLA was the
claims administrator, and New Directions was BCBSLA’s agent.7
C.A. struggled with self-esteem issues from a young age and began abusing drugs
in high school.8 C.A.’s drug abuse later escalated into other conduct including theft, sale
of controlled substances, and association with “violent gangsters.”9 Due to the
persistence of these issues, C.A.’s parents sought mental health treatment for C.A.10 In
February of 2021, C.A. was admitted to Elements Wilderness Program (“Elements”) for
medical care and treatment.11 Elements is an “outdoor behavioral health program located
in Huntington, Utah,”12 which “provides sub-acute inpatient treatment to adolescents with
mental health, behavioral, and/or substance abuse problems.”13 C.A. finished his
treatment at Elements on May 5, 2021, and was admitted to Crossroads Academy
(“Crossroads”) the next day.14 Crossroads is located in Ogden, Utah and, like Elements,
“provides sub-acute inpatient treatment to adolescents with mental health, behavioral,
and/or substance abuse problems.”15 C.A. attended the Crossroads program through
September 13, 2021.16
Plaintiffs submitted separate claims under the Plan for coverage of the treatment
C.A. received at both Elements and Crossroads.17 Defendants denied both claims, taking

5

Rec. Doc. 15, ¶¶ 3–5.
Id. at ¶ 5.
7
Id. at ¶¶ 3, 12.
8
Id. at ¶¶ 18–24.
9
Id.
10
Id. at ¶ 25.
11
Id. at ¶¶ 7, 26.
12
Id. at ¶ 8.
13
Id. at ¶ 9.
14
Id. at ¶ 7.
15
Id. at ¶¶ 10, 11.
16
Id. at ¶ 7.
17
Id. at ¶ 12.
6

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the position that the treatment was not covered and/or was not medically necessary under
the terms of the Plan and that certain conditions for coverage had not been satisfied.18
Plaintiffs appealed both denials twice, but the denials were upheld.19
Following the denials and unsuccessful appeals, Plaintiffs filed this lawsuit
asserting two causes of action.20 The Amended Complaint labels the First Cause of Action
as a “Claim for Recovery of Benefits Under 29 U.S.C. §1132(a)(1)(B).”21 The Second
Cause of Action is labeled as a “Claim for Violation of MHPAEA Under 29 U.S.C.
§1132(a)(3).”22 Defendants move to dismiss the Second Cause of Action under Rule
12(b)(6). In short, Defendants argue that the Second Cause of Action is duplicative of the
First Cause of Action and that “Plaintiffs fail to plead separate and discernable injuries
under section 1132(a)(3).”23
II.

LAW AND ANALYSIS
A. Motion to Dismiss under Rule 12(b)(6)
When deciding a Rule 12(b)(6) motion to dismiss, “[t]he ‘court accepts all well-

pleaded facts as true, viewing them in the light most favorable to the plaintiff.’”24 The Court
may consider “the complaint, its proper attachments, documents incorporated into the
complaint by reference, and matters of which a court may take judicial notice.”25 “To

18

Id. at ¶¶ 32, 41.
Id. at ¶¶ 29–36, 42–53.
20
Plaintiffs originally filed suit in the District of Utah (see Rec. Doc. 1). The case was transferred to this
Court pursuant to a stipulated motion to change venue (see Rec. Docs. 16, 17).
21
Rec. Doc. 15, p. 8.
22
Id. at 10.
23
Rec. Doc. 29-1, p. 1.
24
In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin v. Eby Constr.
Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)).
25
Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (internal citations omitted).
19

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survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to state
a claim to relief that is plausible on its face.’”26
In Bell Atlantic Corp. v. Twombly, the United States Supreme Court set forth the
basic criteria necessary for a complaint to survive a Rule 12(b)(6) motion to dismiss:
“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief
requires more than labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.”27 A complaint is also insufficient if it merely “tenders ‘naked
assertion[s]’ devoid of ‘further factual enhancement.’”28 However, “[a] claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.”29 In order
to satisfy the plausibility standard, the plaintiff must show “more than a sheer possibility
that the defendant has acted unlawfully.”30 “Furthermore, while the court must accept wellpleaded facts as true, it will not ‘strain to find inferences favorable to the plaintiff.’”31 On a
motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as
a factual allegation.”32

26

In re Katrina Canal Breaches Litigation, 495 F.3d at 205 (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)).
27
Twombly, 550 U.S. at 555 (2007) (internal citations and brackets omitted).
28
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted).
29
Id.
30
Id.
31
Taha v. William Marsh Rice Univ., 2012 WL 1576099, at *2 (S.D. Tex. 2012) (quoting Southland Sec.
Corp. v. Inspire Ins. Solutions, Inc., 365 F.3d 353, 361 (5th Cir. 2004)).
32
Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

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B. Summary of Parties’ Arguments
As noted above, Defendants seek dismissal of Plaintiffs’ Second Cause of Action,
arguing it is duplicative of the First Cause of Action.33 Under the First Cause of Action in
the Amended Complaint, Plaintiffs allege that Defendants’ denial of their claims was “a
violation of the terms of the Plan and its medical necessity criteria,” giving rise to a claim
under 29 U.S.C. § 1132(a)(1)(B).34 In the Second Cause of Action, Plaintiffs allege that
“BCBSLA places more stringent limitations on coverage for treatment in outdoor
behavioral health and residential treatment settings for mental health and substance use
disorders than it places on medical/surgical treatment at skilled nursing, inpatient
rehabilitation, and inpatient hospice facilities.”35 Plaintiffs argue this higher level of
stringency violates the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”
or the “Parity Act”).36 According to Plaintiffs, the relevant portion of MHPAEA “prohibits
ERISA plans from imposing treatment limitations on mental health or substance use
disorder benefits that are more restrictive than the predominant treatment limitations
applied to substantially all medical and surgical benefits and makes illegal separate
treatment limitations that are applicable only with respect to mental health or substance
use disorder benefits.”37
While Plaintiffs do not explicitly state the precise relief they seek under the First
Cause of Action, they apparently seek a money judgment to compensate for C.A.’s
treatment at Elements and Crossroads.38 Under the Second Cause of Action, Plaintiffs

33

Rec. Doc. 29-1, p. 1.
Rec. Doc. 15, ¶¶ 57–67.
35
Id. at ¶ 87.
36
Id. at ¶ 88.
37
Id. at ¶ 70 (citing 29 U.S.C.§1185a(a)(3)(A)(ii)).
38
See Id. at p. 15.
34

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specify that they seek “appropriate equitable remedies as provided under 29 U.S.C.
§1132(a)(3) including, but not limited to:
(a) A declaration that the actions of the Defendants violate MHPAEA;
(b) An injunction ordering the Defendants to cease violating MHPAEA
and requiring compliance with the statute;
(c) An order requiring the reformation of the terms of the Plan and
the medical necessity criteria utilized by the Defendants to interpret
and apply the terms of the Plan to ensure compliance with MHPAEA;
(d) An order requiring disgorgement of funds obtained by or retained
by the Defendants as a result of their violations of MHPAEA;
(e) An order requiring an accounting by the Defendants of the funds
wrongly withheld by each Defendant from participants and
beneficiaries of the Plan as a result of the Defendants’ violations of
MHPAEA;
(f) An order based on the equitable remedy of surcharge requiring
the Defendants to provide payment to the Plaintiffs as make-whole
relief for their loss;
(g) An order equitably estopping the Defendants from denying the
Plaintiffs’ claims in violation of MHPAEA; and
(h) An order providing restitution from the Defendants to the Plaintiffs
for their loss arising out of the Defendants’ violation of MHPAEA.”39
Defendants contend the Second Cause of Action is duplicative of the first because
“the thrust of the Second Cause of Action is to recover benefits allegedly owed to Plaintiffs
by forcing the ‘Defendants’ to disgorge funds they failed to pay out as benefits, to account
for the funds withheld, to ‘provide payment to the Plaintiffs as make whole relief,’ and to
provide ‘restitution . . . to the Plaintiffs for their loss.’”40 In other words, Defendants argue
that the “essence” of Plaintiffs’ lawsuit “demands recovery of plan benefits allegedly due,”

39
40

Id. at ¶ 91.
Rec. Doc. 29-1, p. 4.

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and that the Second Cause of Action merely “outlines several equitable theories to reach
the same result – recovery of benefits.”41 Defendants argue that because Section
1132(a)(1)(B) provides Plaintiffs an “adequate remedy,” the Second Cause of Action
under Section 1132(a)(3) must be dismissed as duplicative.42
In opposition, Plaintiffs argue their claims are not duplicative because “ERISA and
MHPAEA address different injuries and protect different interests.”43 Plaintiffs contend that
their MHPAEA claim “is an alternative, rather than duplicative, cause of action.”44 Plaintiffs
explain:
In contrast to the relief sought under Plaintiffs’ (a)(1)(B) and
statutory penalties claims, the equitable relief Plaintiffs seek
in their MHPAEA cause of action is directed at addressing
violations of the Parity Act to ensure individuals will have
access to coverage for mental health and substance use
disorder treatment in the way Congress intended when it
originally passed MHPAEA in 2008 and amended that statute
as recently as 2020.45
Plaintiffs further contend that, contrary to Defendants’ arguments, recovery of
benefits owed under Section 1132(a)(1)(B) does not provide an adequate remedy in this
case.46 In sum, Plaintiffs maintain that the Second Cause of Action sets forth “a distinct
injury with a distinct remedy.”47 For example, Plaintiffs focus specifically on the contract
reformation remedy sought under the Second Cause of Action, arguing that “[r]eformation
of discriminatory plan terms is not relief that can be afforded under any portion of §1132
other than §1132(a)(3) via a Parity Act claim.”48 Additionally, Plaintiffs contend it would be

41

Id. at 6.
Id. at 7–10.
43
Rec. Doc. 31, p. 4.
44
Id. at 4.
45
Id.
46
Id. at 5.
47
Id. at 7.
48
Id. at 11.
42

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inappropriate to deem the Second Cause of Action duplicative at this time because “at
the motion to dismiss stage the Court lacks substantial evidence to evaluate these
potential remedies and it would be premature to determine whether Plaintiffs’ (a)(1)(B)
claim would provide adequate relief.”49
C. Analysis of Applicable Law
i.

ERISA and MHPAEA

ERISA’s civil enforcement provisions are found in Section 502(a) of the statute
(codified at 29 U.S.C. § 1132(a)). Section 502(a)(1)(B) of ERISA (implicated under
Plaintiffs’ First Cause of Action) allows a participant or beneficiary to bring a civil action
“to recover benefits due to him under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits under the terms of the plan.”
Additionally, Section 502(a)(3) (implicated under Plaintiffs’ Second Cause of Action)
provides for a civil action “by a participant, beneficiary, or fiduciary (A) to enjoin any act
or practice which violates any provision of this subchapter or the terms of the plan, or (B)
to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce
any provisions of this subchapter or the terms of the plan.”
MHPAEA (or “the Parity Act”), an amendment to ERISA, is codified at 29 U.S.C. §
1185a. The Parity Act provides that an insurance plan “that provides both medical and
surgical benefits and mental health or substance use disorder benefits” cannot impose
stricter coverage limitations on the mental health or substance use disorder coverage
than it imposes on the medical and surgical coverage.50 In other words, the Parity Act
essentially “prohibits discrimination in the provision of insurance coverage for mental

49
50

Id. at 8.
29 U.S.C. § 1185a(a)(3)(A).

Page 8 of 25

health conditions as compared to coverage for medical and surgical conditions in
employer-sponsored group health plans.”51 Specifically, the applicable provision of the
Parity Act requires that
the treatment limitations applicable to such mental health or
substance use disorder benefits are no more restrictive than
the predominant treatment limitations applied to substantially
all medical and surgical benefits covered by the plan (or
coverage) and there are no separate treatment limitations that
are applicable only with respect to mental health or substance
use disorder benefits.52
Although the Parity Act does not itself create a private right of action, courts
recognize that it “may be enforced using the civil enforcement provisions in ERISA
Section [502].”53
ii.

Plaintiffs’ Simultaneous ERISA Claims

Several courts have addressed the ability of a plaintiff to bring simultaneous claims
under Section 502(a)(1)(B) and Section 502(a)(3), but the decisions are not uniform and
vary with context. In Varity Corporation v. Howe,54 the Supreme Court discussed the
relationship between claims brought under these provisions. The Court described Section
502(a)(1)(B) as addressing “wrongful denial of benefits and information,” whereas Section
502(a)(3) is a “catchall” provision which acts “as a safety net, offering appropriate
equitable relief for injuries caused by violations that § 502 does not elsewhere adequately
remedy.”55 This distinction was drawn to avoid the concern that a claimant may

51

C.C. v. Baylor Scott & White Health, 502 F. Supp. 3d 1146, 1150 (E.D. Tex. 2020) (citing Am. Psychiatric
Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352, 356 (2d Cir. 2016)).
52
29 U.S.C. § 1185a(a)(3)(A)(ii).
53
C.C. v. Baylor Scott & White Health, 502 F. Supp. 3d at 1150. See also, e.g., Joseph F. v. Sinclair Servs.
Co., 158 F. Supp. 3d 1239, 1259 n. 118 (D. Utah 2016) (“Congress enacted the Parity Act as an amendment
to ERISA, making it enforceable through a cause of action under 29 U.S.C. § 1132(a)(3) as a violation of a
‘provision of this subchapter.’”).
54
516 U.S. 489 (1996).
55
Id. at 512.

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“repackage his or her ‘denial of benefits’ claim as a claim for ‘breach of fiduciary duty,’”
and that “lawyers will complicate ordinary benefit claims by dressing them up in ‘fiduciary
duty’ clothing.”56 The Court was concerned that by repackaging claims and bringing
actions under Section 502(a)(3) instead of Section 502(a)(1)(B), a plaintiff could avoid the
“arbitrary and capricious” standard of review applicable to denial of benefits claims and
instead enjoy the less deferential “rigid level of conduct” standard applicable to
fiduciaries.57 The Court stated the following regarding the interplay between the two
provisions: “we should expect that where Congress elsewhere provided adequate relief
for a beneficiary's injury, there will likely be no need for further equitable relief, in which
case such relief normally would not be ‘appropriate.’”58
Defendants argue that the reasoning in Varity requires dismissal of Plaintiffs’
Second Cause of Action. Defendants also find support in the Fifth Circuit’s decision in
Innova Hosp. San Antonio, L.P. v. Blue Cross & Blue Shield of Ga., Inc.59 In Innova Hosp.,
the plaintiff asserted claims pursuant to Section 502(a)(1)(B) for denial of benefits and
claims pursuant to Section 502(a)(3) for breach of fiduciary duty. In short, the plaintiff
alleged that the defendant, its insurer, “failed to pay at all under various health-insurance
plans or reduced the payment significantly.”60 Under its Section 502(a)(3) claim, the
plaintiff sought “equitable relief by way of surcharge.”61 The court noted that “a
‘surcharge’—a type of monetary remedy against a trustee—is a potential § 1132(a)(3)
remedy under our precedent.”62 Although a surcharge only entails monetary relief, it is
56

Id. at 513–514.
Id.
58
Id. at 515.
59
892 F.3d 719 (5th Cir. 2018).
60
Id. at 724.
61
Id. at 733.
62
Id.
57

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still considered within “the category of traditionally equitable relief.”63 However, the court
noted that in analyzing whether the recovery of benefits under Section 502a(1)(B)
provides “adequate relief,” it “‘must focus on the substance of the relief sought and the
allegations pleaded, not on the label used.’”64 The Fifth Circuit upheld the district court’s
dismissal of the Section 502(a)(3) claims, finding that the plaintiff’s requests for a
surcharge were “essentially claims for benefits denied.”65 Importantly, the court found that
the fiduciary duty claims under Section 502a(3) were “indistinguishable” from the Section
502a(1)(B) claim for recovery of benefits, and that the “essence” of the plaintiff’s case
was that the insurer failed to reimburse under the terms of the plans.66 In other words,
although the plaintiff sought relief through both payment of benefits and assessment of a
“surcharge,” the underlying injury was the same: the insurer failed to adequately pay
benefits. For this reason, the plaintiff had an adequate mechanism for redress under
Section 502(a)(1)(B) and therefore could not simultaneously plead the claim under
Section 502(a)(3).67
Thus, Varity and Innova Hosp. indicate that a breach of fiduciary duty claim under
Section 502(a)(3) is unavailable in some circumstances if the plaintiff has an “adequate
remedy” under Section 502(a)(1)(B). Defendants argue Varity and Innova Hosp. compel
dismissal of the Second Cause of Action here because the underlying injury is the same:
“the ‘essence’ of this Complaint demands recovery of plan benefits allegedly due.”68 Thus,
Defendants say that the First Cause of Action under Section 502(a)(1)(B) provides

63

Id. (quoting CIGNA Corp. v. Amara, 563 U.S. 421, 441 (2011)).
Id. (quoting Gearlds v. Entergy Servs., Inc., 709 F.3d 448, 452 (5th Cir. 2013)).
65
Id.
66
Id.
67
Id. at 733–734.
68
Rec. Doc. 29-1, p. 6.
64

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Plaintiffs with an adequate remedy, and the Second Cause of Action under Section
502(a)(3) is therefore barred.
Plaintiffs counter that Defendants mischaracterize their Second Cause of Action:
Defendants seek to impose a reading of Plaintiffs’ Complaint
on the court that the Parity Act claim is merely a breach of
fiduciary duty claim, and that the “thrust” of this claim is “to
recover benefits.” This could not be further from the truth. The
thrust of Plaintiffs’ MHPAEA claim is an effort to make
Defendants to comply with that law.69
Plaintiffs add: “The ongoing right to have claims evaluated in compliance with the Parity
Act is distinct from Plaintiffs’ singular claim for benefits, and has an ongoing effect on the
administration of the Plan.”70
In Innova Hosp., the plaintiff sought only monetary relief in both its Section
502(a)(1)(B) claim (recovery of benefits) and its Section 502(a)(3) claim (surcharge),
which contributed to the Fifth Circuit’s finding that the claims were “indistinguishable.”71
Notably, the court in Innova Hosp. did not address the situation presented in this case,
where Plaintiffs’ Section 502(a)(3) claim includes requests for non-monetary equitable
relief for alleged violations of the Parity Act. Here, unlike Plaintiffs’ Section 502(a)(1)(B)
claim, the Section 502(a)(3) claim seeks equitable remedies including reformation,
estoppel, and injunctions, which are distinct from a monetary claim for recovery of
benefits. Moreover, unlike in Innova Hosp., Plaintiffs here allege separate injuries: denial
of benefits on the one hand, and being subject to a plan that violates the Parity Act on the
other hand. In this respect, the Court finds that Plaintiffs’ claims in the Second Cause of

69

Rec. Doc. 31, p. 9.
Id. at 10.
71
Innova Hosp., 892 F.3d at 732–743.
70

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Action are distinguishable from the claim for recovery of benefits in the First Cause of
Action.
Plaintiffs cite another Supreme Court case, CIGNA Corp. v. Amara,72 to further
support their argument that the two causes of action are distinct. In Amara, the district
court granted the plaintiffs’ requested relief of having the terms of a plan reformed under
Section 502(a)(1)(B). The Supreme Court reversed, finding that Section 502(a)(1)(B)
does not authorize reformation of plan terms as a remedy: “The statutory language
speaks of ‘enforc[ing]’ the ‘terms of the plan,’ not of changing them.”73 However, the Court
also found that nearby Section 502(a)(3) does provide for reformation of plan terms, as
well as other avenues of relief that are “traditionally considered equitable remedies,”74
such as injunctions, estoppel, and restitution.75 The Supreme Court remanded the case
for the district court to examine the reformation claim under Section 502(a)(3).76 Plaintiffs
in this case argue that, “[f]unctionally, Amara permitted the plaintiffs to pursue claims
under both (a)(1)(B) and (a)(3), and after considering the merits of the plaintiffs’ (a)(1)(B)
claim, permitted the lower court to examine whether equitable relief under (a)(3) was
appropriate.”77
In the Court’s view, Varity, Amara, and Innova Hosp. read together do not support
a blanket rule prohibiting a plaintiff’s ability to plead claims under both Section
502(a)(1)(B) and Section 502(a)(3) simultaneously. Instead, the Court agrees with the
following interpretation of this issue by the District of Utah:

72

563 U.S. 421 (2011).
Id. at 436 (quoting 29 U.S.C. § 1132(a)(1)(B)) (emphasis in original).
74
Id. at 440.
75
Id. at 439–442.
76
Id. at 445.
77
Rec. Doc. 31, p. 6.
73

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The court understands the core lesson of Varity and Amara to
be that if the plaintiff may obtain an adequate, make-whole
remedy for her injury by pursuing a claim for monetary relief
under Section 502(a)(1)(B), she may not also seek additional
equitable relief under Section 502(a)(3) for the same injury.
Rather than establishing a categorical bar, this rule prompts
two antecedent and related questions: (1) Has the plaintiff
alleged alternative theories of liability or suffered distinct
injuries to justify pursuing simultaneous causes of action
under both Section 502(a)(1)(B) and Section 502(a)(3)? (2)
Do the monetary damages available for causes of action
under Section 502(a)(1)(B) provide “adequate relief” such that
the prevailing plaintiff can be made whole and completely
remedy her injury or injuries without resorting to equitable
relief? In other words, the proper inquiry is whether the
plaintiff's simultaneous ERISA claims are actually duplicative,
meaning they seek to remedy the same injury with
“repackaged” causes of action. If they are duplicative, Varity
dictates that the plaintiff must pursue her claims under Section
502(a)(1)(B). The court must also determine if the plaintiff's
injury or injuries are adequately remedied by her Section
502(a)(1)(B) cause of action. If the plaintiff's injury or injuries
are adequately remedied by an award of money damages
under Section 502(a)(1)(B), then she may not also recover
equitable relief under Section 502(a)(3).78
The Court will address these two inquiries in turn.
Alternative Theories or Distinct Injuries
The Court finds that Plaintiffs’ First and Second Causes of Action are not
duplicative. Nothing in Varity prohibited pleading both of these claims; as the Eighth
Circuit has stated, “Varity does not limit the number of ways a party can initially seek relief
at the motion to dismiss stage.”79 As noted above, the Varity Court expressed concern
that by using Section 502(a)(3), “lawyers will complicate ordinary benefit claims by
dressing them up in ‘fiduciary duty’ clothing.”80 However, that concern is not implicated in

78

Christine S. v. Blue Cross Blue Shield of N.M., 428 F. Supp. 3d 1209, 1226–1227 (D. Utah 2019).
Silva v. Metro. Life Ins. Co., 762 F.3d 711, 726 (8th Cir. 2014).
80
Varity, 516 U.S. at 513–514.
79

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this case. Plaintiffs’ Second Cause of Action does not repackage an ordinary benefits
claim; instead, Plaintiffs assert their rights under the Parity Act, which requires that
treatment limitations applicable to mental health and substance use disorder benefits be
“no more restrictive than the predominant treatment limitations applied to substantially all
medical and surgical benefits covered by the plan.”81 Thus, the “repackaging” concern in
Varity does not apply because “Plaintiffs may enforce their Parity Act rights only through
Section 502(a)(3) and have no ability to duplicate these claims under a Section
502(a)(1)(B) cause of action.”82 Therefore, the Parity Act claim is not an “ordinary benefit
claim” in disguise, and it is not duplicative of the claim for recovery of benefits.
In Innova Hosp., the court quoted the Fourth Circuit to explain that “the great
majority of circuit courts have interpreted Varity to hold that a claimant whose injury
creates a cause of action under § 1132(a)(1)(B) may not proceed with a claim under §
1132(a)(3).”83 Interpreting this notion in a later case, the Fifth Circuit clarified that a
Section 502(a)(3) claim is not necessarily duplicative if it presents a different injury: “By
looking at the underlying alleged injury, it is possible to determine whether a given claim
is duplicative of a claim that could have been brought under ERISA § 502(a)(1)(B).”84 The
Sixth Circuit has likewise recognized that the simultaneous pleading of claims under
Section 502(a)(1)(B) and Section 502 (a)(3) is permissible “where the breach of fiduciary
duty claim is based on an injury separate and distinct from the denial of benefits or where

81

29 U.S.C.A. § 1185a(a)(3)(A)(ii).
Christine S., 428 F. Supp. 3d at 1229.
83
Innova Hosp., 892 F.3d at 733 (quoting Korotynska v. Metro. Life Ins. Co., 474 F.3d 101, 106 (4th Cir.
2006)) (emphasis added).
84
Manuel v. Turner Indus. Grp., L.L.C., 905 F.3d 859, 865 (5th Cir. 2018) (emphasis added).
82

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the remedy afforded by Congress under § 502(a)(1)(B) is otherwise shown to be
inadequate.”85
Here, the Parity Act claim alleges an injury distinct from that of the claim for denial
of benefits. The Court disagrees with Defendants’ assertion that the essence of Plaintiffs’
whole lawsuit is merely a demand for recovery of benefits. While the First Cause of Action
does seek payment of benefits, the Second Cause of Action is different. As Plaintiffs
explain, under their Second Cause of Action,
Plaintiffs seek a remedy forcing Defendants to evaluate
coverage of mental health and substance use disorder care
at parity with analogous medical/surgical claims. Plaintiffs
also continue to be beneficiaries of the Plan at issue, and may
in the future seek benefits under this Plan. They have a
distinct right to have their claims, present and future,
evaluated by a plan compliant with MHPAEA. … An analysis
of whether a claim has been incorrectly denied under ERISA
plan terms is, by definition, different from an analysis of
whether a claims administrator has violated MHPAEA. 86
In the Amended Complaint, Plaintiffs make specific allegations that the “program and
facility eligibility criteria” and the “medical necessity criteria” that BCBSLA applies to
mental health treatment “are more stringent or restrictive” than the criteria applied to
“analogous intermediate levels of medical or surgical benefits.”87
Thus, the causes of action seek to remedy separate injuries: the wrongful denial
of benefits under the First Cause of Action and “the present and future injury precipitated
by the Defendants' failure to administer the Plan in compliance with the Parity Act, upon

85

Rochow v. Life Ins. Co. of N. Am., 780 F.3d 364, 372 (6th Cir. 2015) (citing Gore v. El Paso Energy Corp.
Long Term Disability Plan, 477 F.3d 833, 840–42 (6th Cir. 2007)) (emphasis in original).
86
Rec. Doc. 31, pp. 9–10.
87
Rec. Doc. 15, ¶¶ 72, 73.

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which the Plaintiffs seek to redress [their] loss flowing from the Defendants' failure and
prevent [Defendants'] … future violations,”88 under the Second Cause of Action.
Defendants argue that “Plaintiffs recognize that the Plan as currently written would
provide coverage for Plaintiffs’ treatment at Elements and Crossroads, and therefore, if
Plaintiffs prevail in this case (they should not), this Court could award benefits under the
Plan with no need to reform its terms.”89 But this argument implies that the award of
benefits is the only injury Plaintiffs seek to remedy. On the contrary, Plaintiffs specifically
allege violations of the Parity Act in the Second Cause of Action. The injury caused by the
violation of the Parity Act does not merely entail the past failure to pay benefits; rather, it
includes Plaintiffs’ continual subjection to the non-compliant Plan which allegedly limits
mental health benefits more restrictively than other medical benefits. And the mere
payment of past benefits cannot remedy the present and future injuries caused by the
alleged Parity Act violation; only the equitable relief (e.g., reformation, injunctions, and
disgorgement of funds related to the alleged violation of the Parity Act) can address those
injuries.90 Therefore, the possibility that benefits could be awarded under the terms of the
Plan without reformation does not render Plaintiffs’ Second Cause of Action duplicative.
Moreover, Plaintiffs argue that Defendants’ position would “forc[e] Plaintiffs to elect
a remedy at the motion to dismiss stage” and “would preclude any MHPAEA claim brought

88

Christine S., 428 F. Supp. 3d at 1230 (internal quotations and citation omitted) (emphasis added).
Rec. Doc. 32, p. 5.
90
See Christine S. (428 F. Supp. 3d at 1231) (“This second injury is distinct from the alleged wrongful denial
of benefits because Plaintiffs contend they were also deprived of their statutory entitlement to an insurance
plan that complies with the Parity Act, even if a compliant plan would nonetheless still result in a denial of
benefits for T.A.'s treatment at Elevations and Cherry Gulch. Accordingly, Plaintiffs' Section 502(a)(3) claim
seeks to rectify past injury and prevent future recurrence by obtaining, among other relief, an injunction,
surcharge, and disgorgement remedies related to the Defendants' financial benefit obtained from violating
the Parity Act.”). See also New York State Psychiatric Ass'n, Inc. v. UnitedHealth Grp., 798 F.3d 125, 135
(2d Cir. 2015) (characterizing injunctive relief under the Parity Act as prohibiting future violations).
89

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by a participant or beneficiary when benefits have been denied.”91 This point is well-taken;
adopting a rule that outright prohibits simultaneously pleading Section 502(a)(1)(B) claims
and MHPAEA claims under Section 502(a)(3) would “effectively negat[e] the Parity Act in
every case where the plaintiff also plausibly alleges that they were wrongfully denied
benefits.”92 Such a rule would also be at odds with the Federal Rules of Civil Procedure,
which allow the pleading of alternative or different theories of liability.93 Further, as the
Eighth Circuit plainly stated in Silva v. Metropolitan Life Ins. Co., “Varity only bars duplicate
recovery and does not address pleading alternate theories of liability.”94
In short, the denial of benefits claim and the MHPAEA claim address two separate
injuries, “and providing a remedy for one does not resolve the other.”95 Therefore, the
claims are not duplicative.
Whether Monetary Damages under Section 1132(a)(1)(B) Provide
“Adequate Relief”
As noted above, the Supreme Court stated in Varity that “where Congress
elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need
for further equitable relief, in which case such relief normally would not be ‘appropriate.’”96
Defendants cite Varity for the broader proposition that “Section 1132(a)(3) offers only
equitable relief should there be no relief found elsewhere in the statute.”97 In the Court’s
91

Rec. Doc. 31, p. 10.
Christine S., 428 F. Supp. 3d at 1234.
93
See Fed. R. Civ. P. 8(a)(3) (“A pleading that states a claim for relief must contain ... a demand for the
relief sought, which may include relief in the alternative or different types of relief.”); Fed. R. Civ. P. 8(d)(2)
(“A party may set out 2 or more statements of a claim or defense alternatively or hypothetically, either in a
single count or defense or in separate ones.”); see also Fed. R. Civ. P. 18 (“A party asserting a claim ... may
join, as independent or alternative claims, as many claims as it has against an opposing party.”).
94
Silva, 762 F.3d at 727 (8th Cir. 2014). See also Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76,
89 (2d Cir.2001) (“Varity Corp. did not eliminate a private cause of action for breach of fiduciary duty when
another potential remedy is available.”).
95
Christine S., 428 F. Supp. 3d at 1231.
96
Varity, 516 U.S. at 515 (emphasis added).
97
Rec. Doc. 29-1, p. 5.
92

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view, this is an overstatement. Varity only suggested that further equitable relief would
(“likely”) be unnecessary when other sections of the statute provided “adequate relief.”98
This does not necessarily mean, as Defendants suggest, that a claim under Section
502(a)(3) is only available in cases where a Section 502(a)(1)(B) claim is completely
unavailable, particularly when the claims seek to address different injuries.99 In other
words, recovery under those two subsections is not necessarily mutually exclusive if the
monetary relief under Section 502(a)(1)(B) is not an “adequate remedy” for the injuries
alleged.
In Bennett v. Louisiana Health Serv. & Indem Co., this Court adopted the following
approach articulated by the Southern District of New York: “if ‘it is not clear’ at the pleading
stage whether ‘monetary benefits under § 502(a)(1)(B) alone will provide [the plaintiff] a
sufficient remedy,’ a district court should not dismiss a Section 502(a)(3) claim as
duplicative on a motion to dismiss.”100 Thus, as this Court elaborated in Bennett:
This Court agrees with the more expansive approach taken
by many courts, which allows plaintiffs, at this stage of
litigation, to simultaneously plead claims under several
subsections of Section 502(a). This rule allows Plaintiffs time
for discovery, to develop their trial strategy, and to preserve
alternative grounds for relief until a later stage in the litigation.
Indeed, in the event that Plaintiffs' 502(a)(1)(B) claims prove
not to be viable, they should be permitted to rely on their
502(a)(2)&(3) claims as a “safety net, offering appropriate
equitable relief for injuries caused by violations that Section
502 does not elsewhere adequately remedy.” The Court finds
that it is premature to dismiss Plaintiffs' 502(a)(2)&(3) claims
at this early stage of the litigation, based on Plaintiffs' original
Complaint, without the benefit of some discovery, and based
98

Varity, 516 U.S. at 515 (emphasis added).
See Devlin, 274 F.3d at 89 (“The Supreme Court in Varity Corp. did not eliminate the possibility of a
plaintiff successfully asserting a claim under both § 502(a)(1)(B), to enforce the terms of a plan, and §
502(a)(3) for breach of fiduciary duty.”).
100
450 F. Supp. 3d 686, 698–699 (M.D. La. 2020) (quoting Mohr-Lercara v. Oxford Health Ins., Inc., No. 18
CV 1427 (VB), 2019 WL 1409479, at *9 (S.D.N.Y. Mar. 28, 2019) (quoting, in turn, New York State
Psychiatric Ass'n, Inc., 798 F.3d at 134).
99

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on this Court's finding that Plaintiffs have sufficiently plead a
claim under Section 502(a)(1)(B).101
Accordingly, the Court finds that it is premature at the pleading stage to determine
whether the Section 502(a)(1)(B) claim provides adequate relief for Plaintiffs’ alleged
injuries. In fact, this determination is not even practically possible at the pleading stage
because on the merits, the Court could find that Defendants are liable to Plaintiffs under
both, either, or neither of the two causes of action. As the court in Christine S. put it:
Here, for example, the court could rule on the merits that
Defendants correctly denied benefits to Plaintiffs under the
terms of the Plan, which would require denying recovery
under Section 502(a)(1)(B). But consistent with that ruling, the
court could still find that the terms of the Plan on their face or
as-applied by the insurer violate the Parity Act by imposing
unequal criteria or standards to mental health treatment,
which would require granting equitable relief to the Plaintiffs
under Section 502(a)(3). The inverse is also true: the court
could find that Defendants wrongfully denied Plaintiffs'
benefits based on the terms of the Plan, but deny the Parity
Act claim by finding that Defendants do not apply unequal
criteria to mental health benefits. The court could also find that
Defendants violated Plaintiffs' rights under both theories, or
under neither.102
To this point, the Court also notes that in the Varity and Amara cases, a
determination regarding whether the plaintiffs’ Section 502(a)(1)(B) remedy was
adequate was made only after a trial had taken place. In this way, the cases speak more
to a prevention of duplicative relief than to pleading multiple theories. As the Eighth Circuit
has recognized, “‘Varity Corp. does not hold that when an ERISA plaintiff alleges facts

101

Id. at 699 (quoting Varity, 516 U.S. at 490) (other internal citations omitted). See also Silva, 762 F.3d at
727 (“At the motion to dismiss stage, however, it is difficult for a court to discern the intricacies of the
plaintiff's claims to determine if the claims are indeed duplicative, rather than alternative, and determine if
one or both could provide adequate relief” … “At the pleading stage, it is difficult to determine if relief is
indeed owed under § 1132(a)(1)(B), and requiring the plaintiff to pursue that path may foreclose the plaintiff
from bringing a better case pursuant to § 1132(a)(3).”).
102
Christine S., 428 F. Supp. 3d at 1233.

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supporting both a § 1132(a)(1)(B) and a § 1132(a)(3) claim, a court must or should grant
a defendant's Rule 12(b)(6) motion to dismiss the latter claim. Varity Corp. did not deal
with pleading but rather with relief[.]’”103 The Eighth Circuit went on to explain its view of
Amara as follows: “The Court [in Amara] addressed the issue in terms of available relief
and did not say that plaintiffs would be barred from initially bringing a claim under the §
1132(a)(3) catchall provision simply because they had already brought a claim under the
more specific portion of the statute, § 1132(a)(1)(B).”104
Defendants additionally rely on Swenson v. United of Omaha Life Ins. Co.,105
where the Fifth Circuit upheld the district court’s dismissal of the plaintiff’s Section
502(a)(3) claims for equitable relief, only allowing the Section 502(a)(1)(B) claim to go
forward. The court stated: “Because ERISA's civil enforcement provision provides a direct
mechanism to address the injury for which Swenson seeks equitable relief, she cannot
assert a separate ERISA claim for breach of fiduciary duty.” 106 However, in that case, the
claim for equitable relief under Section 502(a)(3) did not assert a Parity Act violation.107
The district court found that, whether under Section 502(a)(1)(B) or Section 502(a)(3), the
“Plaintiff's fundamental claim in this case is that she was wrongfully denied life insurance

103

Silva, 762 F.3d at 726 (quoting Black v. Long Term Disability Insurance, 373 F.Supp.2d 897, 902–03
(E.D. Wis. 2005) (internal citations omitted)).
104
Id. at 727.
105
876 F.3d 809 (5th Cir. 2017).
106
Id. at 812 (citing Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998)).
107
The Court also notes Defendants’ citation of Tolson v. Avondale Industries, Inc., 141 F.3d 604, 610 (5th
Cir. 1998), where the Fifth Circuit found that “[b]ecause Tolson has adequate relief available for the alleged
improper denial of benefits through his right to sue the Plans directly under section 1132(a)(1), relief through
the application of Section 1132(a)(3) would be inappropriate.” For the same reasons as given with respect
to Swenson, the Court does not read the Tolson decision to dictate a different result here; in both cases,
the court found that the plaintiffs’ overall action, including the “breach of fiduciary duty” claims brought under
Section 502(a)(3), only entailed allegations of improper denial of benefits. Neither case involved the
situation presented here, where Plaintiffs seek particularized non-monetary relief for violations of the Parity
Act.

Page 21 of 25

benefits.”108 By contrast, in this case, Plaintiffs’ Section 502(a)(3) claim specifically
addresses a separate problem (namely, Defendants’ alleged violations of the Parity Act)
and seeks equitable remedies which Section 502(a)(1)(B) simply does not provide.109
Defendants further rely on a district court case within the Fifth Circuit where an
MHPAEA claim brought under Section 502(a)(3) was dismissed as duplicative of a
Section 502(a)(1)(B) claim. In William J. v. BlueCross BlueShield of Texas, the plaintiffs
sought recovery of benefits under Section 502(a)(1)(B) as well as equitable remedies
including reformation of plan terms, injunctive relief, and surcharge under Section
502(a)(3) for alleged MHPAEA violations.110 The Texas district court found the MHPAEA
claims duplicative, reasoning that,
[w]hichever way the plaintiffs frame their allegations, whether
as a breach of fiduciary duty, breach of contract, failing to
properly administer benefits, applying exclusion criteria that
the plan does not contain, or applying more restrictive
standards to JJ's treatment than for other forms of treatment,
all of the plaintiffs' allegations boil down to one issue: whether
the defendants improperly denied covering JJ's treatment and
withheld benefits from the plaintiffs.111
For this reason, the court found that “section 1132(a)(1)(B) provides the plaintiffs with an
adequate avenue for the remedies that they seek through section 1132(a)(3).”112
The Court respectfully disagrees with the conclusion in William J. Absent from that
decision is a discussion of why the recovery of benefits under Section 502(a)(1)(B) alone
provides an adequate remedy for the plaintiffs’ Section 502(a)(3) claim which includes a

108

Swenson v. Eldorado Casino Shreveport Joint Venture, No. 15-CV-2042, 2017 WL 1334307, at *6 (W.D.
La. Apr. 7, 2017).
109
See Amara, 563 U.S. 421, 435–436 (explaining that Section 502(a)(1)(B) does not provide for alteration
of plan terms).
110
William J. v. BlueCross BlueShield of Texas, No. 3:22-CV-1919-G, 2023 WL 3635640, at *2–3 (N.D. Tex.
May 24, 2023).
111
Id. at *8.
112
Id. at *9.

Page 22 of 25

request for reformation of the terms of a plan which was allegedly noncompliant with the
dictates of the Parity Act.113 As the Supreme Court found in Amara, a plaintiff cannot
pursue reformation of plan terms under Section 502(a)(1)(B).114 It follows that recovery of
benefits under Section 502(a)(1)(B) does not necessarily provide adequate relief when a
plaintiff also alleges Parity Act violations and seeks to force a defendant to comply. And,
again, the Court finds that it is too early at the pleading stage to make this kind of
determination.
iii.

Defendants’ Additional Arguments

Defendants also suggest that there are two required elements of a claim for
reformation of plan terms: “for reformation to be available, (1) the terms of the disputed
contract must be the source of the injury and (2) they must show that the only way they
could receive benefits would be to change the terms of the plan.”115 Defendants only cite
a North Carolina district court case, L.L. v. Medcost Benefit Servs.,116 for this proposition.
However, the Court finds that L.L. is distinguishable, and the case does not purport to lay
out the elements of a reformation claim. The court in L.L. specifically noted that “the
Plaintiffs here have failed to identify what equitable relief they seek and whether such
relief is unavailable under § 1132(a)(1)(B).”117 Because the plaintiffs in L.L. did not specify
an injury distinct from the defendants’ denial of benefits, nor a remedy distinct from the
payment of those benefits, the court found the plaintiffs’ equitable claims duplicative of
the Section 502(a)(1)(B) claim:

113

As discussed in detail, the Court also finds that this is a separate and distinct injury from the denial of
benefits.
114
Amara, 563 U.S. 421, 435–436.
115
Rec. Doc. 32, p. 4.
116
No. 1:21-CV-00265-MR, 2023 WL 4375663 (W.D.N.C. July 5, 2023).
117
Id. at *3.

Page 23 of 25

The MHPAEA claim asserted by the Plaintiffs is not an
equitable claim for reformation as found in Christine S. The
relief the Plaintiffs seek would not require reformation of the
plan or any other conceivable equitable remedy because, they
maintain, the benefits they were denied were due under the
plan's terms as written. Thus, no relief sought by the Plaintiffs
is unavailable under § 1132(a)(1)(B) and their second cause
of action is impermissibly duplicative.118
Accordingly, the situation in the L.L. case is distinguishable from the present one because
here, as in Christine S., Plaintiffs specifically seek reformation of the plan’s terms on the
MHPAEA claim. Thus, it is plainly not the case here that “no relief sought by the Plaintiffs
is unavailable under § 1132(a)(1)(B),”119 as the court stated in L.L.
Moreover, the second requirement suggested by Defendants, requiring Plaintiffs
to “show that the only way they could receive benefits would be to change the terms of
the plan,”120 incorrectly implies that recovery of benefits is the single underlying item of
relief that Plaintiffs seek. The same can be said about Defendants’ statement that
Plaintiffs failed to “point to any Plan term that would need to be changed for them to be
awarded benefits here.”121 As discussed in detail above, Plaintiffs’ request for reformation
is a distinct remedy in itself, and Plaintiffs purport to use that remedy to address a distinct
injury by bringing the terms of the Plan into compliance with the Parity Act.
For all of these reasons, the Court finds that Plaintiffs’ simultaneous pleading of
claims under Section 502(a)(1)(B) and Section 502(a)(3) is permissible. If Plaintiffs

118

Id. at *4.
Id.
120
Rec. Doc. 32, p. 4.
121
Id.
119

Page 24 of 25

ultimately succeed on both claims, then Plaintiffs’ “remedy is limited to such equitable
relief as is considered appropriate.”122
III.

CONCLUSION
For the reasons set forth above, the Motion to Dismiss the Second Cause of Action

in Plaintiffs’ Amended Complaint123 filed by Defendants, Louisiana Health Service &
Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana (“BCBSLA”) and New
Directions Behavioral Health, LLC (“New Directions”) is DENIED.
IT IS SO ORDERED.
Baton Rouge, Louisiana, this 30th
___ day of _______________,
2024.
August

S

________________________________
SHELLY D. DICK
CHIEF DISTRICT JUDGE
MIDDLE DISTRICT OF LOUISIANA

122

New York State Psychiatric Ass'n, Inc., 798 F.3d at 134 (quoting Devlin, 274 F.3d at 89) (emphasis in
original).
123
Rec. Doc. 29.

Page 25 of 25