MAYER et al v. AETNA INC. et al

Filing 241

REDACTED OPINION filed. Signed by Judge Brian R. Martinotti on 3/29/2018. (jem)

Case 3:15-cv-02595-ZNQ-TJB Document 241 Filed 02/21/23 Page 1 of 36 PageID: 21224

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
____________________________________
:
LUTZ SURGICAL PARTNERS PLLC,
:
et al.,
:
:
Plaintiffs,
:
:
Civil Action No. 15-2595-BRM-TJB
v.
:
:
AETNA, INC., et al.,
:
OPINION
:
TEMPORARILY FILED
Defendants.
:
UNDER SEAL
____________________________________:
MARTINOTTI, DISTRICT JUDGE
Before this Court is Plaintiffs Lutz Surgical Partners PLLC (“Lutz”) and NYC Corrective
Chiropractic Care, P.C.’s (“NYC Chiro”) (collectively, “Plaintiffs”) Motion for Class Certification
pursuant to Federal Rules of Civil Procedure 23. (ECF No. 116.) Also before this Court is
Defendants Aetna, Inc. and Aetna Life Insurance Company’s (together, “Aetna”) Motion to Strike
Plaintiffs’ Rebuttal Expert Reports (ECF No. 130) filed in further support of their Motion for Class
Certification (ECF Nos. 127-7 and 127-10). All motions are opposed. (ECF Nos. 122 and 134.) 1
Pursuant to Federal Rule of Civil Procedure 78(a), the Court heard oral argument on August 29,
2017, reserved its decision, and permitted supplemental briefing post-argument. (ECF Nos. 141,

1

The parties’ briefs were submitted pursuant to several extended scheduling orders. (ECF Nos.
100, 114, 118, 120, 123.) After Plaintiffs filed their reply (ECF No. 127), both parties filed notices
of supplemental authority for this Court’s review (ECF Nos. 124 and 129). Additionally, Aetna
submitted a request to file a sur-reply, with the proposed brief attached. (ECF No. 132.) In light of
this decision, oral argument, and the supplemental briefings, Aetna’s request to file a sur-reply is
moot.

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145, 147, 148.) For reasons set forth below, Plaintiffs’ Motion for Class Certification is DENIED
and Aetna’s Motion to Strike is DENIED.
I.

BACKGROUND 2
Plaintiffs are healthcare providers that provide in-patient surgical services in Lutz, Florida.

(ECF No. 116 at 4.) Plaintiffs do not have a contractual relationship with Aetna and are therefore
considered out-of-network (“ONET”) providers. (Id.) Aetna is a healthcare insurer and
administrator of various fully-insured and self-insured health benefit plans. (Id.) For fully-insured
plans, Aetna pays for claims out of their own fund and collects a premium from the plan’s sponsor. 3
(ECF No. 122 at 5-6.) For self-insured plans, Aetna also pays for claims out of their own fund, but
collects an administrative fee and is reimbursed for claim payments from the plan’s sponsor. (Id.
at 6, 9.)
When processing claims, Aetna uses one of two systems:

2

The parties dispute the method by which Aetna processes its claims and offsets its payments.
Because the Court may address the merits of the case and look beyond the pleadings on a motion
for class certification, In re Hydrogen Peroxide, 552 F.3d 305, 310 (3d Cir. 2008) (citing Amchem
Prods., Inc. v. Windsor, 521 U.S. 591, 630 (1997)), below is a comprehensive summary of the
facts based on a reading of the papers submitted in connection with this motion. See Newton v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 166 (“It may be necessary for the court
to probe behind the pleadings before coming to rest on the certification question.”). Any factual
findings are made for the purpose of this motion only.
3

Plan sponsors are employers contracting with Aetna for a health benefit plan. (ECF No. 122 at
5-6.)

2

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Because a high volume of claims is processed every day, Aetna contends it consequently
and occasionally overpays healthcare providers for services rendered in treating patients. (ECF
No. 122 at 6.)
) When overpayments are identified, Aetna notifies the appropriate provider by letter and
requests a refund for the overpaid amount. (ECF No. 122 at 6.) The letter states: “If [Aetna] do[es]
not receive confirmation concerning a payment or receive a refund check, [Aetna] may deduct [the
overpayment amount] from your next claim payment.” (Aetna Repayment Demand Letter (ECF
No. 116-13) at 3.) If the provider does not dispute the overpayment, Aetna offsets the overpaid
amount by reducing a future payment issued to the provider. (ECF No. 122 at 7.)
Plaintiffs challenge Aetna’s recovery policy. (ECF No. 116 at 2.) According to Plaintiffs,
Aetna’s recovery policy permits “cross-plan” offsets by withholding “amounts allegedly overpaid
[to] providers on behalf of [] Plan A[ 4] (for services rendered to Plan A insureds) from payments
due [to] providers of Plan B benefits (for services provided to Plan B insureds).” (Id. at 11.) By
way of example, Plaintiffs allege, on June 5, 2014, Aetna paid NYC Chiro $270.00 for treating a
patient insured with the Amtrak’s insurance plan (“Plan A”). (ECF No. 116 at 8.) Aetna allegedly
overpaid NYC Chiro and requested a refund, which NYC Chiro never issued. (Id.) Thereafter,
NYC Chiro treated a different patient with a different insurance plan—the M&M insurance plan
(“Plan B”)—and submitted a claim for $423.00. (Id.) Rather than issue payment in full, Aetna paid
NYC Chiro only $153.00, which was the difference between the reimbursed amount for treatment

4

“Plan A” and “Plan B” etc. are used throughout to distinguish, generally and by way of example,
different employer-sponsored plans.

3

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of the second patient and the overpaid amount for treatment of the first patient. (Id.) Aetna’s
then credited $270.00, the amount overpaid and recovered through Plan B, to Plan A. 5 (Id. at 8-9.)
According to Aetna, however, offsets are processed with thousands of rules affecting
validation and recovery for overpayments, and vary plan-to-plan, provider-to-provider, and
claim-to-claim. (ECF No. 122 at 7-8.) By way of example, in the

the plan language

regarding offsets

In the
Plan, the plan language regarding offsets

In
th

Plan, however, the plan language

Nevertheless, Aetna emphasizes the “offsets do not impact
the benefits provided to members, nor do they involve the commingling or diversion of the assets
of different plans”; the offsets occur at the payment level and are unrelated to the plans’ benefits.
(ECF No. 122 at 2, 25.)
Plaintiffs

Aetna’s
allege “cross-plan” offsets violate § 502(a)(1)(B) of the Employee

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), and constitute a
wrongful denial of benefits because healthcare providers treating patients with Plan B benefits

5

EOBs are issued to both the provider and the plan’s sponsor to explain what services were
rendered and how much was paid for those services. (ECF No. 116 at 2, 9.) Plaintiffs allege “the
common evidence is that post-offset EOBs sent to providers are different from post-offset EOBs
sent to [patients insured by Aetna].” (Id. at 9.)

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never actually receive full payment from the Plan B policy. 6 (ECF No. 116 at 11.) Plaintiffs seek
injunctive and declaratory relief under § 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), asking this
Court to: (1) enjoin Aetna from continuing “cross-plan” offsets; (2) declare the action illegal; and
(3) grant other appropriate equitable relief. (Id. at 12.)
II.

PROPOSED CLASS
Plaintiffs seek to certify a single class pursuant to Federal Rule of Civil Procedure

23(b)(1)(A), (b)(2), or (b)(3) based on the following proposed class definition:
All persons who sought a health insurance benefit payment from an
Aetna health insurance plan governed by ERISA, for covered
services rendered by an ONET provider, but Aetna withheld all or a
portion of such benefit payment in order to recover a prior alleged
overpayment made to the same ONET provider for covered services
rendered to a different patient insured under a different plan.
(Id. at 12.)
III.

ERISA
Section 502(a) serves as the civil enforcement provision to assert a private right of action

under ERISA. 29 U.S.C. § 1132(a). Under Section 502(a) of ERISA, a plan “participant” or
“beneficiary” has standing 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.” Pascack Valley Hosp. v. Local 464A UFCW Welfare Reimbursement
Plan, 388 F.3d 393, 400 (3d Cir. 2004) (quoting 29 U.S.C. § 1132(a)(1)(B)). A plan “participant”
is defined as “any employee or former employee of an employer . . . who is or may become eligible
to receive a benefit of any type from an employee benefit plan.” 29 U.S.C. § 1002(7). A
“beneficiary” is defined as “a person designated by a participant, or by the terms of an employee

6

Under § 502(a)(1)(B) of ERISA, a civil action may be brought “to recover benefits due to
[participants or beneficiaries] under the terms of [their] plan, to enforce [their] rights under the
terms of the plan, or to clarify [their] rights to future benefits under the terms of the plan.”

5

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benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8). The
right to bring a civil action under ERISA extends to healthcare providers who “obtain derivative
standing by assignment from a plan participant or beneficiary.” N. Jersey Brain & Spine Ctr. v.
Aetna, Inc., 801 F.3d 369, 372 (3d Cir. 2015) (citing CardioNet, Inc. v. Cigna Health Corp., 751
F.3d 165, 176 n.10 (3d Cir. 2014)). “[A]s a matter of federal common law, when a patient assigns
payment of insurance benefits to a healthcare provider, that provider gains standing to sue for that
payment under ERISA [Section] 502(a).” Id. at 372. 7
In order to prevail on a Section 502(a)(1)(B) claim, a plaintiff must establish his or her
“right to benefits that is legally enforceable against the plan, and that the plan administrator
improperly denied those benefits.” Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d Cir. 2012)
(citation omitted). To determine whether claims were improperly denied, the court reviews the
benefit denial using an “arbitrary and capricious” standard. Id. at 120-21. “An administrator’s
decision is arbitrary and capricious if it is without reason, unsupported by substantial evidence or
erroneous as a matter of law.” Id. at 121 (quoting Miller v. Am. Airlines, Inc., 632 F.3d 837, 845
(3d Cir. 2011).
Under Section 502(a)(3) of ERISA, a civil action may be brought
by a participant, beneficiary, or fiduciary (A) to enjoin any act or
practice which violates any provision of this subchapter or the terms
7

Aetna challenges whether Plaintiffs and the provider class members have standing to bring an
ERISA claim. (ECF No. 122 at 14-17.) Aetna argues “Plaintiffs are providers, and they have
standing to sue only if they received valid assignments, and only for claims actually assigned.”
(Id. at 14 (emphasis omitted).) Specifically, Aetna argues assignments raise a number of
individualized issues, including: (1) whether plan participants have an ERISA claim against Aetna;
(2) whether each provider can produce a valid assignment; (3) whether each assignment covers the
claims and legal theories brought against Aetna; and (4) whether the plan participants’ benefit
plans include an anti-assignment clause. (Id. at 14-17.) While the Court is cognizant of the issues
and reviewed the parties’ arguments with respect thereto, ultimately, the Count need not reach the
issue because certification is denied on other dispositive grounds. To the extent relevant, the
contested individualized issues will be discussed in the Rule 23 analysis, infra.

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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.
29 U.S.C. § 1132(a)(3). This section provides for equitable relief for injuries not otherwise
remedied under Section 502. Varity Corp. v. Howe, 516 U.S. 489, 512 (1996).
IV.

MOTION TO STRIKE
Aetna argues Plaintiffs’ rebuttal expert reports, filed with its Reply Brief in further support

of its Motion for Class Certification, should be stricken because Plaintiffs’ rebuttal expert reports:
(1) do not rebut Aetna’s expert; and (2) introduce new theories of damages unrelated to Aetna’s
expert and not previously disclosed during discovery. (ECF No. 130 at 12-17.) Plaintiffs argue
their experts’ opinions: (1) offer a proper rebuttal to Aetna’s expert; and (2) provide adequate
theories of relief that never mislead Aetna. (ECF No. 134 at 10-19.)
Federal Rule of Civil Procedure 26(e) states, in pertinent part:
A party who has made a disclosure under Rule 26(a)—or who has
responded to an interrogatory, request for production or request for
admission—must supplement or correct its disclosure response . . .
in a timely manner if the party learns that in some material respect
the disclosure or response is incomplete or incorrect, and if the
additional or corrective information has not otherwise been made
known to the other parties during the discovery process or in writing
....
“A court may exclude evidence where a party has failed to provide information as required
by Rule 26 ‘unless the failure was substantially justified or is harmless.’” Steele v. Aramark Corp.,
535 F. App’x 137, 143 (3d Cir. 2013) (quoting Fed. R. Civ. P. 37(c)(1)). “The exclusion of critical
evidence is an extreme sanction, not normally to be imposed absent a showing of willful deception
or flagrant disregard of a court order by the proponent of the evidence.” In re Paoli R.R. Yard PCB
Litig., 35 F.3d 717, 791-92 (3d Cir. 1994).

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The Court has reviewed the expert reports and finds, for the purpose of this motion, any
alleged failure to disclose is harmless. The challenged reports were not relied on in reaching this
decision, and therefore, the extreme sanction of excluding evidence is not warranted. Nothing
contained therein would have led this Court to a different decision. See Steele, 535 F. App’x at 143
(noting a court may exclude evidence unless the failure to disclose under Rule 26 was harmless).
Accordingly, Aetna’s Motion to Strike is DENIED.
V.

MOTION FOR CLASS CERTIFICATION
A.

Legal Standard

The Third Circuit has consistently observed that “Rule 23 is designed to assure that courts
will identify the common interests of class members and evaluate the named plaintiffs’ and
counsel’s ability to fairly and adequately protect class interests.” In re Comm. Bank of N. Va., 622
F.3d 275, 291 (3d Cir. 2010) (quoting In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods.
Liab. Litig., 55 F.3d 768, 799 (3d Cir. 1995) (alterations omitted). Class certification is only
appropriate “if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23
are met.” In re Hydrogen Peroxide, 552 F.3d 305, 309 (3d Cir. 2008) (quotation omitted). Rule 23
contains two sets of requirements. First, a party seeking class certification must demonstrate the
class satisfies the requirements of Rule 23(a):
(1) the class is so numerous that joinder of all members is
impracticable [(numerosity)]; (2) there are questions of law or fact
common to the classes [(commonality)]; (3) the claims or defenses
of the representative parties are typical of the claims or defenses of
the class [(typicality)]; and (4) the representative parties will fairly
and adequately protect the interests of the class [(adequacy)].
The court will only certify a class when all four requirements are met. In re Hydrogen Peroxide¸
552 F.3d at 310. Significantly, a plaintiff carries the burden to “affirmatively demonstrate his
compliance” with Rule 23(a). Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013). Additionally,

8

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the Court must find by a preponderance of the evidence—not by mere assumption of the facts—
that these requirements are met in order to rule in favor of class certification. In re Hydrogen
Peroxide, 552 F.3d at 320.
Moreover, in addition to the Rule 23(a) requirements, class certification is only appropriate
if the putative class qualifies under one of the Rule 23(b) subsections. Id. at 309. Under Rule
23(b)(1), a class action may be maintained if
prosecuting separate actions by or against individual class members
would create a risk of:
(A) inconsistent or varying adjudications with respect to individual
class members that would establish incompatible standards of
conduct for the party opposing the class; or
(B) adjudication with respect to individual class members that, as a
practical matter, would be dispositive of the interests of the other
members not parties to the individual adjudications or would
substantially impair or impede their ability to protect their interests.
“Rule 23(b)(1) defines two related types of class actions, both designed to prevent prejudice to the
parties arising from multiple potential suits involving the same subject matter.” In re Comp. of
Managerial, Prof’l & Tech. Emps. Antitrust Litig., No. 02-2924, 2006 WL 38937, at *4 (D.N.J.
Jan. 5, 2006) (quotation omitted). Specifically, Rule 23(b)(1)(A) “addresses possible prejudice to
the party opposing the class and is intended to eliminate the possibility of separate actions
imposing inconsistent courses of conduct on the defendant.” Beck v. Maximux, Inc., 457 F.3d 291,
301 (3d Cir. 2006). On the other hand, Rule 23(b)(1)(B) “addresses possible prejudice to members
of the proposed class, and applies if individual actions ‘would have the practical if not technical
effect of concluding the interests of the other members as well, or of impairing the ability of the
others to protect their own interests.’” Id. (citation omitted).
Under Rule 23(b)(2), a class action may be maintained if “the party opposing the class has
acted or refused to 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. R. Civ. P.
23(b)(2). The Third Circuit has regularly held certification pursuant to Rule 23(b)(2) requires
cohesiveness of class claims among the class members. Barnes v. Am. Tobacco Co., 161 F.3d 127,
142 (3d Cir. 1998). The Third Circuit articulated the following two reasons for the cohesiveness
requirement. “First, unnamed members with valid individual claims are bound by the action
without the opportunity to withdraw and may be prejudiced by a negative judgment in the class
action.” Id. at 143. Second, “the suit could become unmanageable and little value would be gained
in proceeding as a class action . . . if significant individual issues were to arise consistently.” Id.
In other words, “the court must ensure that significant individual issues do not pervade the entire
action because it would be unjust to bind absent class members to a negative decision where the
class representative[’s] claims present different individual issues than the claims of the absent
members present.” Barnes, 161 F.3d at 143. Therefore, Rule 23(b)(2) is not appropriate where
“significant individual liability or defense issues . . . would require separate hearings for each class
member in order to establish defendants’ liability.” Santiago v. City of Phila., 72 F.R.D. 619, 627
(E.D. Pa. 1976).
Lastly, pursuant to Rule 23(b)(3), a class action may be maintained if:
[T]he court finds that the questions of law or fact common to class
members predominate over any questions affecting only individual
members, and that a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy. The
matters pertinent to these findings include:
(A) the class members’ interests in individually controlling the
prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the
controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation
of the claims in the particular forum; and

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(D) the likely difficulties in managing a class action.
In other words, to maintain a class action under Rule 23(b)(3), the court must find “common
questions of law or fact predominate over questions affecting only individual class members and
the class action is the superior method for the fair and efficient adjudication of the matter.” Elias
v. Ungar’s Food Prods., 252 F.R.D. 233, 245 (D.N.J. 2007). These are known as the predominance
and superiority requirements. In re Constar Int’l Inc. Sec. Litig., 585 F.3d 774, 780 (3d Cir. 2009).
Importantly, the predominance inquiry is especially dependent upon the merits of a plaintiff’s
claim, because “the nature of the evidence that will suffice to resolve a question determines
whether the question is common or individual.” In re Hydrogen Peroxide¸ 552 F.3d at 310-11
(citations omitted). “If proof of the essential elements of the cause of action requires individual
treatment,” then predominance is defeated and a class should not be certified. Id. (quoting Newton,
259 F.3d at 172); see In re Constar, 585 F.3d at 780.
Furthermore, in deciding whether to certify a class, it “may be necessary for the court to
probe behind the pleadings before coming to rest on the certification question.” Newton v. Merrill
Lynch, 259 F.3d 154, 166 (3d Cir. 1998). Indeed, the Third Circuit has set forth “three key aspects
of class certification procedure.” In re Hydrogen Peroxide, 552 F.3d at 307.First, the court’s
decision to certify a class requires factual determinations in support of each Rule 23 requirement
by a preponderance of the evidence, “not merely a ‘threshold showing’ by a party.” Id. “Second,
the court must resolve all factual or legal disputes relevant to class certification, even if they
overlap with the merits—including disputes touching on elements of the cause of action.” Id.
Lastly, “the court’s obligation to consider all relevant evidence and arguments extends to expert
testimony, whether offered by a party seeking class certification or by a party opposing it.” Id.

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B.

Ascertainability

Before determining whether the Rule 23 requirements are met, the Court must first analyze
whether Plaintiffs’ proposed class definition is “readily ascertainable based on objective criteria.”
Agostino v. Quest Diagnostics Inc., 256 F.R.D. 437, 478 (D.N.J. 2009). Aetna argues Plaintiffs
fail to meet the ascertainability requirement to certify a class because “it is impossible to identify
‘cross-plan’ offsets.” (ECF No. 122 at 25.) Specifically, Aetna claims its company database does
not identify “cross-plan” offsets in the manner characterized by Plaintiffs and that “offsets are not
‘taken’ from any particular plan; each plan separately pays all of the benefits it owes and receives
all of the overpayments Aetna recovers on its behalf, and offsets are simply the result of a netting
out that occurs at the payment level.” (Id. at 23-24.)
Plaintiffs, on the other hand, contend: 1) ascertainability is not required for the Rule
23(b)(1) or (b)(2) classes; and 2) the ascertainability requirement is satisfied for the Rule 23(b)(3)
class. (ECF No. 116 at 38-39.) With respect to the second argument, Plaintiffs claim, “Aetna
assiduously tracks data concerning all aspects of its cross-plan offsets, including the identity of
providers denied benefits.” (Id. at 39.)
In order to determine whether a proposed class is ascertainable, the Court must engage in
a two-part analysis. First, the Court must determine whether the defined class specifies “a
particular group that was harmed during a particular time frame, in a particular location, in a
particular way.” Rowe v. E.I. Dupont De Nemours & Co., 262 F.R.D. 451, 455 (D.N.J. 2009).
Second, the Court must be able to ascertain the class’s membership in an objective manner. Id.;
Byrd v. Aaron’s Inc., 784 F.3d 154, 163 (3d Cir. 2015) (finding the Third Circuit has implemented
a two-fold inquiry requiring a plaintiff to show: “(1) the class is defined with reference to objective
criteria; and (2) there is a reliable and administratively feasible mechanism for determining
whether putative class members fall within the class definition”).

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Significantly, in demonstrating ascertainability, a plaintiff need not identify every class
member at the class certification stage; instead, a plaintiff must show that “class members can be
identified.” Byrd, 784 F.3d at 163 (citation omitted) (emphasis omitted). “If class members are
impossible to identify without extensive and individualized fact-finding or ‘mini-trials,’ then a
class action is inappropriate.” Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 593 (3d Cir. 2012).
Plaintiffs are correct that ascertainability is not required for class certification under Rule
23(b)(1) or (2). Shelton v. Bledsoe, 775 F.3d 554, 563 (3d Cir. 2015) (ruling that “ascertainability
is not a requirement for class certification of a (b)(2) class seeking only injunctive or declaratory
relief”); Manual for Complex Litigation (Fourth) § 21.222 (2004) (“Rule 23(b)(3) actions require
a class definition that will permit identification of individual class members, while Rule 23(b)(1)
or (b)(2) actions may not.”). 8 Ascertainability, however, is required to certify a Rule 23(b)(3) class.
See Marcus, 687 F.3d at 592-93 (finding “an essential prerequisite of a class action, at least with
respect to actions under Rule 23(b)(3), is that the class must be currently and readily
ascertainable”).
Here, Plaintiffs have satisfied the ascertainability requirement. The class definition is
comprised of objective criteria and factors, which are capable of being ascertained. However,
Aetna does not base its objection on whether the proposed class members of ONET providers are
identifiable. (ECF No. 122 at 25.) Aetna concedes to subjecting healthcare providers to offsets,
but disputes engaging in the practice of “cross-plan” offsets. (Id. at 24.) This is not relevant in
determining ascertainability. The ascertainability inquiry relies on identifying the potential class
members (the ONET providers subject to offsets), rather than proving the class’s claims (whether

8

While the parties have not identified, nor has the Court found, any binding authority explicitly
discussing whether ascertainability is required to certify a Rule 23(b)(1) class, the issue is not
dispositive for the purposes of this motion.

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Aetna engaged in “cross-plan” offsets). See Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 359 (3d
Cir. 2013) (“[T]he ascertainability requirement focuses on whether individuals fitting the class
definition may be identified without resort to mini-trials, whereas the predominance requirement
focuses on whether essential elements of the class’s claims can be proven at trial.”). To dispute
ascertainability of a proposed class, Aetna must challenge class membership, rather than Plaintiffs’
legal theories. See Carrera v. Bayer Corp., 727 F.3d 300, 308 (3d Cir. 2013) (“[T]he plaintiff must
demonstrate his purported method for ascertaining class members is reliable and administratively
feasible, and permits a defendant to challenge the evidence used to prove class membership.”).
Because Plaintiffs’ proposed class encompasses ONET providers who rendered and sought
payment for covered services, “but Aetna withheld all or a portion of such benefit payment in order
to recover a prior alleged overpayment” (ECF No. 116 at 12), the ascertainability requirement is
satisfied if there is a reliable and administratively feasible mechanism to identify ONET providers
harmed by Aetna’s offset recovery policy. See Byrd, 784 F.3d at 163.
Indeed, Plaintiffs have proposed a reliable and administratively feasible mechanism to
identify ONET providers who were subject to offsets. (Pls.’ Reply Br. (ECF No. 127) at 23 n.23.)
Aetna’s Director of Recovery Operations, Christopher Sikorski (“Sikorski”), testified
(Sikorski Dep. (ECF No. 116-2), Tr. 159:514.) According to Sikorski, Aetna hires overpayment analysts and works with several third-party
vendors “who are responsible for identifying and recovering overpayments.” (Sikorski Dec. (ECF
No. 122-2) ¶ 5.) Further, according to Amy Saraco, Aetna’s Director of Financial Statement
Development and Operations, Aetna’s

(Saraco Dec. (ECF

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No. 122-4) ¶ 9.) Because ONET providers subject to offsets are capable of being identified through
, Plaintiffs have demonstrated the proposed class members
are ascertainable through a reliable and administratively feasible mechanism.
C.

Rule 23(a) Inquiry
1.

Numerosity

Under Rule 23(a)(1), numerosity is satisfied when the class is “so numerous that joinder of
all members is impracticable.” Fed. R. Civ. P. 23(a)(1). In seeking to certify a class, enumeration
of the class size is not necessary to satisfy the numerosity requirement. In re Lucent Techs., Inc.,
Sec. Litig., 307 F. Supp. 2d 633, 640 (D.N.J. 2004). “No minimum number of plaintiffs is required
to maintain a suit as a class action, but generally if the named plaintiff demonstrates that the
potential number of plaintiffs exceeds 40, the first prong of Rule 23(a) has been met.” Stewart v.
Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001) (citing 5 James Wm. Moore et al., Moore’s Federal
Practice § 23.22[3][a] (Matthew Bender 3d ed. 1999)). Plaintiff, however, must present evidence
for the court to make a factual determination on whether the Rule 23(a)(1) requirement was met.
In re Hydrogen Peroxide, 552 F.3d at 307. “[I]n the absence of direct evidence, a plaintiff must
show sufficient circumstantial evidence specific to the products, problems, parties, and geographic
areas actually covered by the class definition to allow a district court to make a factual finding.”
Marcus, 687 F. 3d at 596 (3d Cir. 2012).
Here, Plaintiffs allege Aetna recovers “more than thousands” of offsets every year against
“a large number” of providers. (Sikorski Dep., (ECF No. 116-2) Tr. 45:21-48:23) Aetna does not
contest the satisfaction of the numerosity requirement under Rule 23(a)(1). (ECF No. 122 at 2531.) Accordingly, the numerosity requirement is satisfied.

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2.

Commonality

Under Rule 23(a)(2), commonality is satisfied when “there are questions of law or fact
common to the class.” The threshold for establishing “[t]he commonality requirement will be
satisfied if the named plaintiffs share at least one question of fact or law with the grievances of the
prospective class.” In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 596-97 (3d Cir. 2009)
(quoting Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir. 1994)). “It is well established that only one
question of law or fact in common is necessary to satisfy the commonality requirement, despite
the use of the plural ‘questions’ in the language of Rule 23(a)(2).” In re Schering Plough, 589 F.3d
at 97 n.10. Consequently, there is a low threshold for satisfying this requirement. Newton, 259
F.3d at 183; In re Sch. Asbestos Litig., 789 F.2d 996, 1010 (3d Cir. 1986).
Moreover, putative class members need not share identical claims, see Hassine v. Jeffes,
846 F.2d 169, 176-77 (3d Cir. 1988), and “factual differences among the claims of the putative
class members do not defeat certification.” Baby Neal, 43 F.3d at 56. Rather, to satisfy
commonality, a plaintiff must demonstrate the class members suffered the same injury, so that a
class action would “generate common answers apt to drive the resolution of the litigation.” Bright
v. Asset Acceptance, Inc., 292 F.R.D. 190, 201 (D.N.J. 2013) (quoting Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 350 (2011)). “Even where individual facts and circumstances do become
important to the resolution, class treatment is not precluded.” Baby Neal, 43 F.3d at 56.
Here, Plaintiffs argue several questions of law and fact are common to all class members.
(ECF No. 116 at 6-26.) Specifically, Plaintiffs assert the following common questions of law and
fact: (1) whether “cross-plan” offsets are a denial of plan benefits (id. at 16-17); (2) whether Aetna
can engage in “cross-plan” offsets without authority from a member’s plan (id. at 18-20); (3)
whether “cross-plan” offsets violate ERISA’s duty of loyalty mandate (id. at 20-22); (4) whether

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“cross-plan” offsets are prohibited self-dealing transactions (id. at 229-24); and (5) whether “crossplan” offsets satisfy the common law requirements for “setoffs” (id. at 24-26). In response, Aetna
contends the alleged common issues require individualized, fact-sensitive inquiries into each
insured member’s plan documents. (ECF No. 122 at 26-31.) Specifically, Aetna argues the “plan
language regarding offsets is varied and robust,” and therefore Plaintiffs’ common issues are
incapable of being resolved through a single action. (Id. at 26, 28.) However, “[e]ven where
individual facts and circumstances do become important to the resolution, class treatment is not
precluded.” Baby Neal, 43 F.3d at 56. Rather, “[f]or purpose of Rule 23(a)(2), even a single
common question will do” to satisfy the commonality requirement. Marcus, 687 F.3d at 597
(quotation omitted). Accordingly, Plaintiffs satisfy the commonality requirement because they
share at least one common question of law or fact with the proposed class members—whether
Aetna’s offset practice violates ERISA. In re Schering Plough Corp. ERISA Litig., 589 F.3d at
596-97.
In sum, the “glue” holding the class together is whether Aetna violated ERISA through
alleged “cross-plan” offsets. As articulated in Dukes, generating common answers—not merely
raising common questions—will warrant class certification. 564 U.S. at 350. The common answer
to the factual question of whether Aetna violated ERISA by allegedly engaging in “cross-plan”
offsets is sufficient—at least for this low-threshold requirement 9—to advance the resolution of the
entire class. Accordingly, the commonality requirement under Rule 23(a)(2) is satisfied.

9

Contra Section IV(C)(3) discussing the disparities in the proposed common questions as they
pertain to the predominance requirement for Rule 23(b)(3).

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3.

Typicality

Under Rule 23(a)(3), typicality is satisfied when “the claims or defenses of the
representative parties are typical of the claims or defenses of the class.” The named plaintiff’s
claims must arise from the same event or practice or course of conduct and must be based on the
same legal theory as the claims of the class members. Brosious v. Children’s Place Retail Stores,
189 F.R.D. 138, 146 (D.N.J. 1999). Despite their similarity, commonality—like numerosity—
evaluates the sufficiency of the class itself, whereas typicality—like adequacy of representation—
evaluates the sufficiency of the named plaintiff. See Hassine, 846 F.2d at 177 n.4; Weiss v. York
Hosp., 745 F.2d 786, 810 (3d Cir. 1984).
The Third Circuit articulated a three-prong analysis in assessing the typicality requirement,
consisting of three distinct, yet related, concerns:
(1) the claims of the class representatives must be generally the same
as those of the class in terms of both (a) the legal theory advanced
and (b) the factual circumstances underlying that theory;
(2) the class representatives must not be subject to a defense that is
both inapplicable to many members of the class and likely to become
a major focus of the litigation; and
(3) the interests and incentives of the representative must be
sufficiently aligned with those of the class.
Marcus, 687 F. 3d at 598 (quoting In re Schering Plough Corp., 589 F.3d at 598-99). In other
words, the named plaintiff is required to be “sufficiently similar” to the class “in terms of their
legal claims, factual circumstances, and stake in the litigation.” In re Schering Plough Corp., 589
F.3d at 597. Typicality bars certification only when “the legal theories of the named representatives
potentially conflict with those of the absentees.” Georgine v. Amchem Prods., 83 F.3d 610, 631
(3d Cir. 1996); Newton, 259 F.3d 183. “It is well-established that a proposed class representative
is not ‘typical’ under Rule 23(a) if the representative is subject to a unique defense that is likely to

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become a major focus of the litigation.’” In re Schering Plough, 589 F.3d at 598 (quoting Beck v.
Maximus, Inc., 457 F.3d 291, 301 (3d Cir. 2006)). Thus, “the challenge presented by a defense
unique to a class representative [is that] the representative’s interests might not be aligned with
those of the class, and the representative might devote time and effort to the defense at the expense
of issues that are common and controlling for the class.” Beck, 457 F.3d at 297.
Here, Plaintiffs argue their claims are typical because the “cross-plan” offsets arose “from
the same event or practice or course of conduct” affecting all members of the class. (ECF No. 116
at 27.) Specifically, Plaintiffs claim the “cross-plan” offset for the initial overpayment followed by
a reduced future payment to recover the overpaid amount is not “materially different from crossplan offsets Aetna took against other members in the [c]lass.” (Id.)
Aetna does not specifically address the typicality requirement, but advances some related
arguments. (ECF No. 122 at 25-31.) Aetna contends “[e]ach provider class member’s right to
recover from Aetna depends on whether the initial overpayment determination was correct.” (Id.
at 13.) If the overpayment determination was correct, then the provider has not suffered an injury
through an offset. (Id.)
Plaintiffs’ claims concern the withholding of monies under Plan B, not whether the initial
overpayment was correct. In other words, even if services rendered to patients with Plan A benefits
were in fact overpaid, Plaintiffs’ claim to damages concerns the wrongful denial on Plan B benefits
for services rendered. It is not necessary to decide the merit behind this legal theory at this stage,
but instead determine whether Plaintiffs’ and the class members’ claims arise out of the same
course of conduct and are based on the same legal theory. See Hoxworth v. Blinder, Robinson &
Co., 980 F.2d 912, 923 (3d Cir. 1992) (holding typicality requires that the claims of the named
plaintiff and the class members arise out of the same course of conduct and are based on the same

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legal theory); In re Schering Plough Corp., 589 F.3d at 597 (requiring the named representative to
be “sufficiently similar” to the class “in terms of their legal claims, factual circumstances, and
stake in the litigation”). The Court finds, for the purpose of this Motion, the claims arise out of the
same course of conduct and are based on the same legal theory. Accordingly, the typicality
requirement under Rule 23(a)(3) is satisfied.
4.

Adequacy

Under Rule 23(a)(4), a class may not be certified unless the representative class members
“will fairly and adequately protect the interests of the class.” “Rule 23(a)’s adequacy of
representation requirement ‘serves to uncover conflicts of interest between named parties and the
class they seek to represent.’” In re Pet Food Prod. Liab. Litig., 629 F.3d 333, 343 (3d Cir. 2010)
(quoting Amchem, 521 U.S. at 625). Class representatives “must be part of the class and possess
the same interest and suffer the same injury as the class members.” Id. (citation omitted).
This requirement has traditionally entailed a two-pronged inquiry: first, the named
plaintiff’s interests must be sufficiently aligned with the interests of the absentees; and second, the
plaintiff’s counsel must be qualified to represent the class. Gen. Motors, 55 F.3d at 800. A named
plaintiff is “adequate” if his interests do not conflict with those of the class. In re Prudential Ins.
Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 312 (3d Cir. 1998). Pursuant to Rule
23(g), adequacy of class counsel is considered separately from the determination of the adequacy
of the class representatives.
Here, both prongs of the adequacy requirement are satisfied. First, Plaintiffs assert their
“interests . . . are fully aligned with those of the proposed [c]lass.” (ECF No. 116 at 28.) Second,
Plaintiffs assert “proposed Class counsel consists of experienced class action attorneys from two

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law firms.” (Id.) Aetna does not contest the adequacy of Plaintiffs or class counsel. (ECF No. 122
at 25-31.) Accordingly, the adequacy requirement under Rule 23(a)(4) is satisfied.
D.

Rule 23(b) Class Types

After meeting the threshold requirements of Rule 23(a), a plaintiff must establish the
proposed class action fits within one of the Rule 23(b) class action types. Here, Plaintiffs argue
class certification would be appropriate under Rule 23(b)(1)(A), (b)(2), or (b)(3), and therefore,
the Court will address each in turn.
1.

Rule 23(b)(1)(A)

Plaintiffs contend class certification under Rule 23(b)(1)(A) is necessary to avoid
inconsistent or varying results regarding Aetna’s alleged “cross-plan” offsets practice. (ECF No.
116 at 30.) Specifically, Plaintiffs argue “[o]nly through class certification of Plaintiffs’ claims can
Aetna . . . be assured of a single legal rule endorsing or rejecting Aetna’s theory that [“cross-plan”
offsets] can lawfully operate free of [p]lan or ERISA constraints.” (ECF No. 116 at 31.) In
response, Aetna argues a Rule 23(b)(1)(A) class is not appropriate because administering plans
according to varying plan documents raises individualized issues. (ECF No. 122 at 37, 39.) Further,
Aetna argues adjudication of separate lawsuits would not yield inconsistent results, as Plaintiffs
contend, because, “[e]ven if one plaintiff obtained an injunction prohibiting ‘cross-plan’ offsets,
there is no reasonable possibility that a court would enter a conflicting order in another case
requiring Aetna to use ‘cross-plan’ offsets.” (Id. at 38 (emphasis omitted).)
Under Rule 23(b)(1)(A), a class qualifies for certification if “inconsistent or varying
adjudications with respect to individual class members [] would establish incompatible standards
of conduct for the party opposing the class.” “Rule 23(b)(1)(A) ‘takes in cases where the party is
obliged by law to treat the members of the class alike . . . or where the party must treat all alike as

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a matter of practical necessity . . . .’” Amchem Prods., 521 U.S. at 614 (citation omitted).
Certification is justified when “individual adjudication would be impossible or unworkable.”
Dukes, 564 U.S. at 362.
Moreover, Rule 23(b)(1)(A) “addresses possible prejudice to the party opposing the class
and is intended to eliminate the possibility of separate actions imposing inconsistent courses of
conduct on the defendant.” Beck, 457 F.3d at 301. To certify a class under Rule 23(b)(1)(A), the
Court must determine whether varying adjudications of duplicative lawsuits would establish
incompatible standards. In re Merck & Co., No. 05-1151, 2009 WL 331426, at *11 (D.N.J. Feb.
10, 2009) (finding Rule 23(b)(1)(A) “only requires that varying adjudication would establish
incompatible standards”). Incompatible standards of conduct refer to “the situation in which
different results in separate actions would impair the opposing party’s ability to pursue a uniform
continuing course of conduct.” Wright, Miller, Kane, et al., 7AA Fed. Prac. & Proc. Civ. § 1773
(3d ed.).
The record does not support a finding that separate lawsuits would result in incompatible
standards of conduct for Aetna. Therefore, Plaintiffs have not met their burden in demonstrating
certification under Rule 23(b)(1)(A) is appropriate. See Byrd, 784 F.3d at 163 (“[T]he party
proposing class-action certification bears the burden of affirmatively demonstrating by a
preponderance of the evidence her compliance with the requirements of Rule 23.”); Parsons v.
Philadelphia Parking Auth., Civ. A. No. 13-0955, 2016 WL 538215, at *2 (E.D. Pa. Feb. 11, 2016)
(denying certification under Rule 23(b)(1)(A) because “plaintiff [did] not me[e]t her burden to
show that the prosecution of separate actions would create a risk of multiple actions that would
establish incompatible standards of conduct or that the denial of class certification would
substantially impair or impede the ability of other putative class members to protect their

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interests”), appeal dismissed (Apr. 5, 2016). Indeed, Plaintiffs only advance a conclusory claim
that uniform adjudication is required because Aetna is engaged in a “uniform” practice of “crossplan” offsets. (ECF No. 116 at 30; ECF No. 127 at 12.) However, the relevant inquiry to certify a
Rule 23(b)(1)(A) class does not hinge solely on the risk of varying adjudication against a defendant
for an alleged uniform practice, but rather on whether varying adjudication regarding that uniform
practice would result in incompatible standards of conduct. See Bennet v. Corr. Med. Servs., No.
02-4993, 2008 WL 2064202, at *14 (D.N.J. May 14, 2008) (“The fact that some plaintiffs may be
successful in their suits against a defendant while others may not is clearly not a ground for
invoking Rule 23(b)(1)(A).” (citation omitted)). Based on the record before the Court, it is unlikely
Aetna would be required to adopt incompatible standards of conduct regarding its alleged “crossplan” offset practice.
Class certification under Rule 23(b)(1)(A) is also not suitable because Aetna’s duties differ
from plan to plan. As a fiduciary on an ERISA plan, the “plan document rule” requires Aetna to
discharge its duties “in accordance with the documents and instruments governing the plan.” 29
U.S.C. § 1104(a)(1)(D); see also Egelhoff v. Egelhoff, 532 U.S. 141, 147 (2001). Therefore, to
determine whether this ERISA provision was violated, the Court must scrutinize each members’
plan documents. See Kennedy v. Plan Admin. for DuPont Sav. & Inv. Plan, 555 U.S. 285 (2009)
(finding a party’s claim “stands or falls by the ‘terms of the plan’”). While class certification is
appropriate where “individual adjudication would be impossible or unworkable,” the Court is not
faced with that situation here. Dukes, 564 U.S. at 362. Individual adjudication in this case is not
only possible and workable, but required.
Moreover, the underlying facts in each class member’s claim—denial of benefits through
“cross-plan” offsets—is particularized to the individual and would require a determination of each

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benefit plan’s documents. Thus, any injunction that might be issued would be limited to the
characteristics of the plan documents in the particular lawsuit. For the reasons discussed, Plaintiffs’
conclusory arguments do not meet their burden of establishing the appropriateness of class
certification under Rule 23(b)(1)(A). Accordingly, Plaintiffs’ Motion to Certify a Class under a
Rule 23(b)(1)(A) is DENIED.
2.

Rule 23(b)(2)

Plaintiffs contend class certification is proper under Rule 23(b)(2). (ECF No. 116 at 31.)
Specifically, Plaintiffs argue Aetna’s “cross-plan” offset practice is uniform, and a single
injunction can remedy the class-wide denial of plan benefits. (Id. at 32; ECF No. 127 at 14-15.) In
response, Aetna argues a Rule 23(b)(2) class is not appropriate because: (1) various individualized
issues, including language of plan documents, provider’s standing to sue, and applicable state laws
preclude a class-wide injunction; and (2) individualized claims for monetary relief preclude
certification under Rule 23(b)(2). (ECF No. 122 at 35-36.)
Under Rule 23(b)(2), the Court must find “the party opposing the class has acted or refused
to act on grounds that apply generally to the class, so that final injunctive relief or corresponding
declaratory relief is appropriate respecting the class as a whole.” The Supreme Court has held the
“key to the (b)(2) class is the indivisible nature of the injunctive or declaratory remedy warranted—
the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the
class members or as to none of them.” Id. at 374. In other words, certifying a Rule 23(b)(2) class
“applies only when a single injunction or declaratory judgment would provide relief to each
member of the class.” Id. at 360. Thus, “[c]laims for individualized relief may not be certified
under 23(b)(2), nor may claims for monetary relief that are ‘not incidental to the injunctive or

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declaratory relief.’” Lipstein v. UnitedHealth Grp., 296 F.R.D. 279, 291 (D.N.J. 2013) (quoting
Dukes, 564 U.S. at 360).
In addition, under Rule 23(b)(2) a plaintiff must show the class claims are cohesive among
the class members. See Gates v. Rohm & Haas Co., 665 F.3d 255, 263-64 (3d Cir. 2011).
Cohesiveness is a primary requirement “because in a (b)(2) action, unnamed members are bound
by the action without the opportunity to opt out.” Barnes, 161 F.3d at 142-43. Certification under
Rule 23(b)(2) is not appropriate when “disparate factual circumstances of class members” fail to
meet the cohesiveness requirement. Id. at 265 (citing Carter v. Butz, 479 F.2d 1084, 1089 (3d Cir.
1973)). “Accordingly, our Circuit has held that district courts have the discretion to deny
certification under (b)(2) when a given case presents ‘disparate factual circumstances,’ or a
prevalence of individualized issues.” In re Ford Motor Co. E-350 Van Prods. Liab. Litig., No. 034558, 2012 WL 379944, at *38 (D.N.J. Feb. 6, 2012) (quoting Barnes, 161 F.3d at 143).
Here, Plaintiffs do not seek monetary claims, but rather a single injunction ordering Aetna
to reprocess previously denied claims without subjecting the claims to “cross-plan” offsets. (ECF
No. 127 at 14.) Plaintiffs rely on the holding in DeMaria, where the court found an order to
reprocess claims was an appropriate remedy for an alleged ERISA violation. 2015 WL 3460997,
at *7. The court in DeMaria, however, granted the reprocessing remedy under Rule 23(b)(3). Id.
Therefore, Plaintiffs’ argument is misplaced.
Plaintiffs’ demand to reprocess claims is more akin to the ruling in Premier Health Ctr.,
P.C., v. UnitedHealth Grp., 292 F.R.D. 204, 228 (D.N.J. 2013), where the court found the ERISA
recoupment class failed to satisfy the requirements for Rule 23(b)(2) because the class sought
“injunctive relief based on inadequate notice of and opportunity to appeal [the defendant’s]
overpayment determination under ERISA, not a finding that [the defendant’s] overpayment

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determination were themselves arbitrary and capricious.” 10 Likewise, Plaintiffs seek injunctive
relief and a determination that “Aetna’s cross-plan offsets[,] taken without regard to [p]lan terms[,]
are illegal,” but do not contend Aetna’s overpayment determinations were themselves arbitrary
and capricious. (ECF No. 116 at 12.) Indeed, Plaintiffs argue “cross-plan” offsets are unlawful
“regardless of the merits of Aetna’s overpayment claims.” (ECF No. 127 at 15 (emphasis omitted).)
However, reprocessing previously recovered benefits Aetna overpaid would “amount to effecting
equitable restitution without showing that those benefits rightly belong to the class members.”
Premier Health, 292 F.R.D. at 228. Because equitable restitution is only appropriate “where money
. . . belong[s] in good conscience to the plaintiff,” Great-West Life & Annuity Ins. Co. v. Knudson,
534 U.S. 204, 213 (2002), and Plaintiffs here do not dispute the merits of the overpayment decision,
reprocessing previously denied claims would not be a proper remedy in this case.
Plaintiffs also seek to enjoin Aetna from continuing its alleged “cross-plan” offset practice.
(ECF No. 116 at 12.) Notwithstanding the request to reprocess claims as an equitable remedy, class
certification under Rule 23(b)(2) also fails because enjoining Aetna’s offset practice would not
provide generally applicable class-wide relief. Plaintiffs’ claims revolve around whether Aetna can
take “cross-plan” offsets without regard to the plan documents’ written terms. (ECF No. 116 at 1.)
Plaintiffs’ claims, however, raise a number of individualized issues, subject to various standards
of review and provision formulations that could yield different results concerning the legality of
Aetna’s offset practice. See Lipstein, 296 F.R.D. at 292; Santiago, 72 F.R.D. at 627 (finding Rule
23(b)(2) is not appropriate where “significant individual liability or defense issues . . . would

10

The Court recognizes certification was ultimately granted in Premier Health Ctr. v.
UnitedHealth Grp., No. 11-425, 2014 WL 4271970, at *2 (D.N.J. Aug. 28, 2014), but only after
plaintiffs “cure[d] the defect noted by the [c]ourt in its prior opinion.” Id. at *29. Presently,
Plaintiffs’ proposed class is more analogous to that of the 2013 Premier Health decision.

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require separate hearings for each class member in order to establish defendants’ liability”).
Indeed, Aetna has multiple plan sponsors and multiple agreements with varying language in the
plan documents. Several plan documents expressly authorize Aetna to offset future payments,
whereas other plans only allow Aetna to recover overpayment. For example, in the UPS Plan, “the
Plan has a right to recover benefits that were paid in error . . . as determined by [Aetna] . . . . [and
b]enefits may be recovered . . . by an offset of future benefits equal to the amount of the
overpayment.” (Ex. 74, (ECF No. 122-10) at 102.) The Home Depot Plan allows for “the right to
recover the amount of the overpayment for any person . . . to which the payment was made.” (Id.,
Ex. 66 at 6.) “Merely answering the question of whether a single injunction could provide classwide relief would require individualized, plan-by-plan determinations, because this case is, at its
heart, a contract dispute.” Lipstein, 296 F.R.D. at 292.
Because ERISA mandates administrators operate in accordance with the plan documents,
the issue of whether Aetna’s offset practice was unauthorized relies heavily on the varying
language and terms in the plan documents for each individualized plan. Due to the multiple plan
sponsors and multiple, varying benefit plan agreements, the factual distinctions among the plans
do not satisfy the cohesiveness requirement under Rule 23(b)(2). See Gates, 655 F.3d at 265
(denying Rule 23(b)(2) certification where individualized issues of members’ “characteristics and
medical histories” made certification inappropriate). Accordingly, Plaintiffs’ Motion to Certify a
Class under a Rule 23(b)(2) is DENIED.
3.

Rule 23(b)(3) – Predominance Requirement

Plaintiffs claim class certification is proper under Rule 23(b)(3). (ECF No. 116 at 32.)
Specifically, Plaintiffs argue Aetna’s “cross-plan” offset practice affecting the payment of plan
benefits under ERISA predominates over individualized issues. (Id. at 34.) In response, Aetna

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argues class certification under Rule 23(b)(3) fails because numerous individualized issues
predominate over Plaintiffs’ alleged common issues. (ECF No. 122 at 31-32.)
To certify a class under Rule 23(b)(3), the Court must find “questions of law or fact
common to the members of the class predominate over any question affecting only individual
members, and that a class action is superior to other available methods for the fair and efficient
adjudication of the controversy.” To satisfy the predominance requirement, the proposed class
must be “sufficiently cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at
624. Thus, “the focus of the predominance inquiry is on whether the defendant’s conduct was
common as to all of the class members, and whether all of the class members were harmed by the
defendant’s conduct.” Sullivan v. DB Investments, Inc., 667 F.3d 273, 298 (3d Cir. 2011). Further,
in determining whether common questions predominate, courts have focused on the claims of
liability against defendants. See Bogosian v. Gulf Oil Corp., 561 F.2d 434, 456 (3d Cir. 1977).
Smith v. Suprema Specialties, Inc., No. 02-168, 2007 WL1217980, at *9 (D.N.J. 2007) (citations
omitted) (“The focus of the predominance inquiry is on liability, not damages.”). The Court will
examine in turn whether the several common issues advanced by Plaintiffs predominate over
individualized issues.
i.

Whether “Cross-Plan” Offsets are a Denial of Plan Benefits

The first proposed common question of law or fact is whether Aetna’s “cross-plan” offsets
constitute a denial of plan benefits. (ECF No. 116 at 7.) Plaintiffs allege Aetna’s EOB letters have
standard language relating to the recovery and payments issued to providers. (Id. at 6.)
Specifically, Plaintiffs state “offsets take place when, pursuant to [a] single [r]ecovery [p]olicy,
Aetna’s [] benefits payment system electronically calculates a payment to a provider.” (Id.) In
response, Aetna argues the offsets occur at the payment level and money is not transferred between

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plans. (ECF No. 122 at 24.) More specifically, Aetna contends any denial of plan benefits would
warrant a fact-specific inquiry, impossible for the Court to categorically adjudicate under ERISA.
(Id. at 26.)
Here, even accepting Plaintiffs’ theory, the issue of whether “cross-plan” offsets constitute
a denial of plan benefits is not a common question of law or fact that predominates over
individualized issues. Contrary to Plaintiffs’ assertions, there is no uniform “recovery policy” to
which Plaintiffs direct the Court. (ECF No. 116 at 33-34.) Rather, Aetna contracts with several
plan sponsors, agreeing to various recovery terms that differ among plans. For example, Aetna’s
recovery agreement in the

(Chorba Dec., Ex.

Plan states:

.) In contrast, the

Plan states if

(Chorba Dec., Ex. 65 (ECF
No. 122-9) at 76.) Where the former plan generally stipulates
the latter specifically stipulates

Because policy agreements among numerous plan sponsors vary considerably in specific
language and terms, determining whether the offset constituted a denial of plan benefits would
require an individual analysis into each plan’s recovery policy. In Franco v. Conn. Gen. Life Ins.
Co., for example, the court denied class certification because “critical liability questions presented
by the ERISA claims depend[ed] on plan language,” which would have required individualized
inquiries. 289 F.R.D. 121, 135 (D.N.J. 2013). Resolving the ERISA claims would have entailed
“an examination of what ONET benefits a plan entitled a participant . . . and what authority a plan

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allowed the administrator.” Id. Thus, the court held “[p]redominance as to factual or legal issues
therefore depends on uniformity or at least substantial similarity in key plan language as to the
entire ERISA [c]lass.” Id. Because the plaintiffs lacked proof of substantial similarity or
“uniformity among plans as to actual plan language,” the court found the predominance
requirement was not satisfied. Id. Plaintiffs’ proposed class action faces the same hurdle here. The
issue of whether benefits among several different plans were wrongfully denied relies on the
individualized plan language. Accordingly, this question of law or fact does not predominate over
individualized issues.
ii.

Whether Aetna May Take “Cross-Plan” Offsets Without Plan
Authority.

The second proposed common question of law or fact is whether Aetna can take “crossplan” offsets without plan authority. (ECF No. 116 at 18-19.) In response, Aetna argues
“individualized inquiries would be necessary to determine what each plan states regarding Aetna’s
latitude in taking offsets.” (ECF No. 122 at 27.)
As set forth above, the “plan document rule” requires a fiduciary on an ERISA plan to
discharge their duties “in accordance with the documents and instruments governing the plan.”
Egelhoff, 532 U.S. at 147. See supra at 18. Therefore, the Court must scrutinize the plan documents
to determine whether this ERISA provision was violated. See Kennedy, 555 U.S. at 286 (finding a
party’s claim “stands or falls by the ‘terms of the plan’”). In Kennedy, the Supreme Court held a
beneficiary’s waiver of plan benefits is ineffective where the waiver is inconsistent with plan
documents. Id. at 303. Significantly, Plaintiffs construe Kennedy to hold benefits are required to
be paid even if the beneficiary consents to waiving those benefits. (ECF No. 116 at 19; ECF No.
127 at 4, 14.) However, the Supreme Court found the beneficiary’s waiver to be ineffective
irrespective of the beneficiary’s consent because the waiver was not part of the plan documents.

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Kennedy, 555 U.S. at 289. The issue in Kennedy did not concern whether a plan member may
relinquish his or her rights, but rather that “ERISA provides no exception to the plan
administrator’s duty to act in accordance with plan documents.” Id. at 286.
Here, Aetna has multiple agreements with multiple plan sponsors governed by
individualized plan documents. Resolving an ERISA claim requires “an examination of . . . what
authority a plan allowed the administrator.” Franco, 289 F.R.D. at 135. As demonstrated in the
examples above, supra at 23, several benefit plans expressly authorize Aetna to offset future
payments, whereas other plans only allow Aetna to recover overpayment. Because ERISA
mandates administrators operate in accordance with the plan documents, the issue of whether
Aetna’s offset practice was unauthorized relies heavily on the varying language and terms in the
plan documents for each individualized plan. Accordingly, this question of law or fact does not
predominate over individualized issues.
iii.

Whether Aetna’s “Cross-Plan”
ERISA-Mandated Duty of Loyalty.

Offsets

Violate

Aetna’s

The third proposed common question of law or fact is whether Aetna’s “cross-plan” offset
practice violates the “duty of loyalty” mandate under ERISA. (ECF No. 116 at 20-22.) Plaintiffs
argue the “cross-plan” offsets are inconsistent with ERISA’s duty of loyalty because assets of one
plan cannot be used to resolve another plan’s claim. (Id. at 20-21.) Aetna argues its fiduciary duty
is governed by each individual health plan and each plan differs in the scope of those duties. (ECF
No. 122 at 29; Chorba Dec. (ECF No. 122-5) at 14-15.)
Under § 404(a)(1)(A)(i) of ERISA, “a fiduciary shall discharge his duties with respect to a
plan solely in the interest of the participants and beneficiaries . . . for the exclusive purpose of . . .
providing benefits to participants and their beneficiaries.” Here, even accepting Plaintiffs’
assertions, individualized issues predominate over common questions of law or fact, because

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Aetna’s role as a fiduciary may vary based on the language of the different administrative service
agreements between plan sponsors and Aetna. For example, Aetna’s contract with
a plan sponsor, states:
(Chorba Dec., Ex.

Similarly, the

agreement states, “
However, Aetna’s agreement with

states: “

” (Id.,

.) To determine whether Aetna

breached its ERISA mandated duty of loyalty, a class-wide resolution would require an
examination of each administrative services contract between the plan sponsors and Aetna to
establish the extent of Aetna’s liability and scope of duty as a fiduciary. Accordingly, this question
of law or fact does not predominate over individualized issues.
iv.

Whether Aetna’s “Cross-Plan” Offsets Are Prohibited Self-Dealing
Transactions.

The fourth proposed common question of law or fact is whether Aetna’s “cross-plan”
offsets are prohibited self-dealing transactions. (ECF No. 116 at 22-24.) Plaintiffs allege Aetna
attempts to reduce its own liability by using one plan’s benefits to resolve an overpayment of
another plan’s benefits. (Id. at 23-25.) Aetna argues any potential liability to plan sponsors for
overpayments hinges on a plan-specific analysis. (ECF No. 122 at 30.)
Here, even accepting Plaintiffs’ argument, the variability among contractual agreements
plan sponsors have with Aetna would require an individualized approach to determine whether
Aetna effectuated its recovery policy to avoid liability. Liability hinges on the language and terms
of the plan documents and contracts that plan sponsors enter into with Aetna. For example, Aetna’s
contract with

states: “

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Dec.,

.) Aetna’s contract with

, however, states Aetna

and,

” (Id., Ex.
Further, Aetna’s contract with

” (Id., Ex.

5.)

states: “

.) Determining whether Aetna offsets claims to reduce exposure to

potential liability would require a fact sensitive inquiry into each plan sponsor’s agreement with
Aetna, followed by individual determinations of whether Aetna’s recovery efforts violated those
agreements. Whether “cross-plan” offsets are prohibited self-dealing transactions hinges on
Aetna’s conduct between various plan sponsors and adherence to their contractual obligations.
Accordingly, this question of law or fact does not predominate over individualized issues.
v.

Whether Aetna’s “Cross-Plan” Offsets Satisfy Common Law
Requirements for Setoffs.

The fifth common question of law or fact is whether Aetna’s “cross-plan” offsets satisfy
common law requirements for setoffs. (ECF No. 116 at 24-26.) Plaintiffs argue “cross-plan”
offsets violate the common law setoff requirements. (Id. at 24.) In response, Aetna argues different
plan agreements determine different setoff rights and common law setoff requirements vary in
different states. (ECF No. 122 at 30-31.) The Court finds there is little applicability of how the
common law requirement of setoff applies to this matter. First, “[t]he equitable right of setoff has
long been recognized in bankruptcy.” In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 896
F.2d 54, 57 (3d Cir. 1990). “The rule allows parties that owe mutual debts to state the accounts
between them, subtract one from the other and pay only the balance.” Id. “The right of setoff

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depends on the existence of mutual debts and claims between creditors and debtors.” Id. The Court
finds this doctrine pertains to creditor-debtor relationships in the bankruptcy context. Plaintiffs fail
to cite an authority relating ERISA claims to common law setoff requirements. Accordingly, in
light of the numerous individualized issues that arise from Plaintiffs’ claims, this question of law
or fact does not predominate.
4.

Rule 23(b)(3) – Superiority Requirement

The Court, having reviewed Plaintiffs’ arguments in support of Rule 23(b)(3) class
certification, finds questions of law or fact purported to be common to the members of the class
do not predominate over questions affecting individual members. For similar reasons, the Court
finds a class action would not be a superior manner of resolving the claims. In determining whether
the superiority requirement is met, courts “balance, in terms of fairness and efficiency, the merits
of a class action against those of alternative available methods of adjudication.” In re Prudential
Ins. Co., 148 F.3d at 316 (internal citation omitted). Because a host of individual issues would
surface at trial, supra at 25-30, Plaintiffs will not be able to attain “classwide relief in a cohesive
and manageable manner.” Franco, 289 F.R.D. at 141; see also Sullivan, 667 F.3d at 335 (“A key
question in a litigation class action is manageability – how the case will or can be tried, and whether
there are questions of fact or law that are capable of common proof.”). Thus, Plaintiffs’ class claims
do not constitute “the best available method for the fair and efficient adjudication of the
controversy.” Newtown, 259 F.3d at 191 (citation omitted). Accordingly, Plaintiffs’ Motion to
Certify a Class under a Rule 23(b)(3) is DENIED.
E.

Rule 23(c)(4)

In the alternative to certification under the Rule 23(b) subsections, Plaintiffs argue class
certification is appropriate under Rule 23(c)(4). (ECF No. 116 at 37.) Specifically, Plaintiffs argue

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“the common issues identified . . . can and should be resolved on a class-wide basis even if this
Court determines that Rule 23(b) certification is not warranted.” (ECF No. 116 at 38.) Under Rule
23(c)(4), “an action may be brought or maintained as a class action with respect to particular
issues.” However, “Rule 23(c)(4) is only proper if the other requirements of Rule 23(a) and (b) are
first met.” Rowe, 262 F.R.D. at 467. Plaintiffs maintain, at minimum, the common questions they
identified would be appropriate for limited issue certification under Rule 23(c)(4). (ECF No. 116
at 37-38.)
While Plaintiffs have may satisfied some of the Rule 23(a) requirements, the Court has
found class certification is improper under Rule 23(b)(1), (b)(2), and (b)(3), and in doing so, found
Plaintiffs’ proposed common questions do not warrant a class-wide resolution. See Luppino v.
Mercedes Benz USA, No. 16-3762, 2017 WL 6015698, at *2 (D.N.J. Dec. 5, 2017) (finding
“[f]ailure to meet any Rule 23(a) and (b)’s requirements precludes class certification” (citing In re
LifeUSA Holding, Inc., 242 F.3d 136, 147 (3d Cir. 2001))). Indeed, the five common issues
proposed by Plaintiffs still leave a host of individualized issues to be resolved and, therefore,
certifying a class will not materially advance resolution of the class members’ claims. Gates, 655
F.3d at 272-75 (affirming the lower court’s decision to deny Rule 23(c)(4) class because “an issue
class was not feasible and would not advance the resolution of class members’ claims”); see also
Franco v. Conn. Gen. Life Ins. Co., 299 F.R.D. 417, 433-34 (D.N.J. 2014) (“[I]ssue certification,
as permitted by Rule 23(c)(4), would not advance the resolution of the claims, and thus action does
not warrant exercise of the [c]ourt’s discretion to certify certain issues.”) Accordingly, Plaintiffs’
Motion to Certify a Class under Rule 23(c)(4) is DENIED.

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VI.

CONCLUSION
For the reasons set forth above, Aetna’s Motion to Strike (ECF No. 130) is DENIED, and

Plaintiffs’ Motion to Certify a Class (ECF No. 116) is DENIED. An appropriate order will follow.

Date: March 29, 2018

/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE

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