D. v. Group Health Cooperative et al
Filing
78
ORDER granting in part pltfs' 42 Motion to Certify Class by Judge Robert S. Lasnik.(RS)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
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Z.D., by and through her parents and
guardians, J.D. and T.D., individually, on
behalf of THE TECHNOLOGY ACCESS
FOUNDATION HEALTH BENEFIT
PLAN, and on behalf of similarly situated
individuals,
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ORDER GRANTING IN PART
PLAINTIFFS’ MOTION FOR
CLASS CERTIFICATION
Plaintiffs,
v.
GROUP HEALTH COOPERATIVE, et.
al.,
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No. C11-1119RSL
Defendants.
This matter comes before the Court on “Plaintiffs’ Motion for Class
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Certification” (Dkt. # 42). Plaintiffs ask the Court to certify two classes: one comprised
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of current and future beneficiaries who seek declaratory and injunctive relief precluding
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Defendant Group Health from denying neurodevelopmental therapy coverage for
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qualifying mental health conditions simply because an individual is over the age of six,
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and one comprised of current and past beneficiaries seeking monetary damages on
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account of Group Health’s past denials of neurodevelopmental therapy coverage for
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qualifying mental health conditions simply because they were over the age of six. See
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id. at 2–3.
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ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 1
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The Court GRANTS the motion as to the first proposed class. It finds however
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that Plaintiffs have not shown that class proceedings would be “superior to other
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available methods for fairly and efficiently adjudicating the controversy” as to the
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second proposed class, and thus DENIES the motion as to that proposed class.
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I. BACKGROUND
The Court extensively detailed the facts underpinning this case in its recent Order
granting Plaintiffs’ “Motion for Summary Judgment re: Exhaustion of Administrative
Remedies” (Dkt. # 43) and “Motion for Partial Summary Judgment re: Clarification of
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Rights to Benefits and Injunctive Relief under ERISA” (Dkt. # 44). Order (Dkt. # 77).
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In that Order, the Court found as a matter of law that Plaintiffs had exhausted
their administrative remedies and that both Defendants’ policies and its practices
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violated Washington’s Mental Health Parity Act, RCW 48.46.291. Id. The Court
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awarded Plaintiffs declaratory and injunctive relief, ordering Defendants to immediately
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cease denying coverage for medically necessary neurodevelopmental therapy to treat
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insureds with DSM-IV-TR mental health conditions simply because an insured is over
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six years old. It also ordered Defendants to immediately cease denying such coverage
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on the basis of any treatment limitations not generally “imposed on coverage for medical
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and surgical services,” RCW 48.46.291(2)(c)(i). Id.
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II. DISCUSSION
“Class certification is governed by Federal Rule of Civil Procedure 23.”
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2548 (2011). Under Rule 23(a), the
party seeking certification must demonstrate, first, that:
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(1) the class is so numerous that joinder of all members is
impracticable;
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(2) there are questions of law or fact common to the class;
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(3) the claims or defenses of the representative parties are typical of
the claims or defenses of the class; and
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ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 2
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(4) the representative parties will fairly and adequately protect the
interests of the class.
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Id. “Second, the proposed class must satisfy at least one of the three requirements listed
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in Rule 23(b).” Id. Plaintiffs contend that certification of their first class is appropriate
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under Rule 23(b)(1) and (2). They rely on Rule 23(b)(3) to support their second class.
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Notably, in resolving Plaintiffs’ request, the Court recognizes that “Rule 23 does
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not set forth a mere pleading standard.” Dukes, 131 S. Ct. at 2551. “[C]ertification is
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proper only if ‘the trial court is satisfied, after a rigorous analysis, that the prerequisites
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of Rule 23(a) have been satisfied.’” Id. (citation omitted) (“A party seeking class
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certification must affirmatively demonstrate his compliance with the Rule—that is, he
must be prepared to prove that there are in fact sufficiently numerous parties, common
questions of law or fact, etc.”). Moreover, because “class determination generally
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involves considerations that are enmeshed in the factual and legal issues comprising the
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plaintiff’s cause of action,” the required “rigorous analysis” will itself frequently “entail
some overlap with the merits of the plaintiff’s underlying claim.” Id. at 2551–52.
Fortunately, the Court has already resolved many of the factual and legal issues
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comprising Plaintiffs’ claims. See Order (Dkt. # 77). It applies these findings to resolve
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the certification issues.
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A. First Proposed Class
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Plaintiffs define their first proposed subclass to include:
All individuals who:
(1) are, or will be, beneficiaries under an ERISA-governed health
plan that has been or will be delivered, issued for delivery, or
renewed on or after January 1, 2006, by Group Health; and (2)
require, or are expected to require, neurodevelopmental therapy
for the treatment of a qualified mental health condition.
Mot. (Dkt. # 42) at 8–9. They state that the purpose of this class is to pursue
“declaratory and injunctive relief” under ERISA § 502(a)(1)(B), (a)(2), and (a)(3). The
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 3
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claim is that Defendants may not deny them, insureds with qualifying mental health
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conditions, coverage for medically necessary neurodevelopmental therapy simply
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because they are over the age of six.
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In response, Defendants argue first that the defined class is overbroad—that it
“would include those who have not been harmed by the alleged wrongdoing or may
never be so harmed.” Opp. (Dkt. # 55) at 9. In short, they argue that the proposed class
lacks standing because there is no likelihood that Group Health would deny them
coverage in the future. The Court disagrees. For the reasons explained in the Court’s
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prior Order (Dkt. # 77), the Court will not leave beneficiaries at the mercy of Group
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Health’s arbitrary application of its own terms. ERISA requires Group Health to apply
its Plan’s terms, 29 U.S.C. § 1104(a)(1)(D), and, as Defendants concede, those terms
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deny non-rehabilitative neurodevelopmental therapy coverage to all beneficiaries over
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the age of six. Accordingly, each of the proposed class members is at risk of being
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denied coverage to which they are entitled and presents the ideal case for 29 U.S.C. §
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1132(a)(1)(B) relief.
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Defendants’ remaining contentions are addressed in greater detail below.
Ultimately, the Court grants Plaintiffs’ request to certify this class.
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1. Rule 23(a)
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The Court finds that the proposed class satisfies each of the Rule 23(a) concerns.
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a. Numerosity
“The numerosity requirement requires examination of the specific facts of each
case and imposes no absolute limitations.” Gen. Tel. Co. of the Nw., Inc. v. EEOC, 446
U.S. 318, 330 (1980) (citing cases). All that is required is that the potential class be “so
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numerous that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1). In
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general, courts find the requirement satisfied when a class includes at least 40 members.
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In the present case, Defendants represent that, as of October 2011, Group Health
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had nearly 200,000 beneficiaries enrolled in its Plans. Dkt. # 46 at 18. Accordingly,
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relying on statistical data regarding the number of beneficiaries potentially in need of
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neurodevelopmental therapies, Plaintiffs calculate a proposed class of several thousand
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individuals. Id. at 3–4 ¶ 9. Defendants do not contest this calculation. Id. at 18; Opp.
(Dkt. # 55) at 13–19. The Court thus concludes that proposed class satisfies the
numerosity requirement.
b. Commonality
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As the Supreme Court recently emphasized in Dukes, “commonality requires that
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the class members’ claims ‘depend upon a common contention’ such that ‘determination
of its truth or falsity will resolve an issue that is central to the validity of each [claim] in
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one stroke.’” Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012)
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(quoting Dukes, 131 S. Ct. at 2551). “What matters . . . is not the raising of common
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‘questions’—even in droves—but, rather the capacity of a classwide proceeding to
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generate common answers apt to drive the resolution of the litigation.” Dukes, 131 S.
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Ct. at 2551 (citation omitted); Mazza, 666 F.3d at 589 (“But commonality only requires
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a single significant question of law or fact.” (citing Dukes, 131 S. Ct. at 2556)).
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The proposed class satisfies this standard. Each of the class members share a
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common question: whether Group Health may deny them coverage for
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neurodevelopmental services strictly on the basis of their age. More importantly, each is
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deserving of a common answer: no, Group Health may not deny them coverage for
neurodevelopmental services strictly on the basis of their age. And, frankly, that answer
is dispositive as to the entirety of the request of this proposed class,1 which seeks
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Defendants main argument against commonality is that it does not dispose of the
crucial question of liability. Opp. (Dkt. # 55) at 13–14. To the extent they rely on their
inconsistent policies and practices, that contention is utterly unpersuasive for the reasons
described at length in the Court’s prior Order (Dkt. # 77). To the extent they assert that
individual questions relevant to liability remain, those questions are relevant (if at all) only to
ORDER GRANTING IN PART PLAINTIFFS’
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nothing more than an order and judgment precluding Group Health from continuing to
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apply its age-based limitation to non-rehabilitative neurodevelopmental therapy claims.
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c. Typicality
“The purpose of the typicality requirement is to assure that the interest of the
named representative aligns with the interests of the class.” Hanon v. Dataproducts
Corp., 976 F.2d 497, 508 (9th Cir. 1992). “The test of typicality ‘is whether other
members have the same or similar injury, whether the action is based on conduct which
is not unique to the named plaintiffs, and whether other class members have been
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injured by the same course of conduct.’” Ellis v. Costco Wholesale Corp., 657 F.3d
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970, 984 (9th Cir. 2011) (quoting Hanon, 976 F.2d at 508). It “‘refers to the nature of
the claim or defense of the class representative, and not to the specific facts from which
it arose or the relief sought.’” Id. (quoting Hanon, 976 F.2d at 508).
Defendants contend that typicality is absent because (1) “issues of fact exist as to
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whether it would have approved the unsubmitted claims, or would approve medically
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necessary neurodevelopmental therapies in the future,” (2) there exist individual
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questions of exhaustion, (3) Plaintiffs stand in a different position than other class
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members in that “Plaintiff T.D. represented [the Technology Access Foundation] in its
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initial decision to purchase the [Plan] and, until 2004 or 2005, its decision to renew it
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yearly,” and (4) there exist individual questions as to whether individual claims were
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medically necessary. Opp. (Dkt. # 55) at 15–18. The Court finds none of these
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contentions persuasive.
Again, the Court finds that Group Health’s inconsistent adherence to its own
policies is not a valid argument or defense. ERISA requires it to adhere to its policies,
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the second class, which seeks to hold Defendants liable for past denials. And arguably, such
individual questions are not even relevant as to commonality for that proposed class. Cf.
Mazza, 666 F.3d at 589 (“Even assuming arguendo that we were to agree with Honda’s ‘crucial
question’ contention, the individualized issues raised go to preponderance under Rule 23(b)(3),
not to whether there are common issues under Rule 23(a)(2).”).
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29 U.S.C. § 1104(a)(1)(D), and the Court has found that its policies violate the
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requirements of Washington’s Mental Health Parity Act, RCW 48.46.291. Order (Dkt.
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# 77). Also immaterial is Defendants’ contention regarding T.D.’s status. Even
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assuming his role in selecting and renewing the Plan would ever be relevant to a claim
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that Group Health was violating the terms of that Plan (which the Court sincerely
doubts), Defendants concede that he no longer holds such authority. Thus, the Court
cannot fathom how T.D.’s past status distinguishes his claim for declaratory and
injunctive relief to preclude Group Health from applying its age-based policy in the
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future from that of any other members of the proposed class. It is no defense to his
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claim.
Finally, Defendants’ reliance on individual issues is similarly unavailing.
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Admittedly, these individual issues may be relevant to the second proposed class, which
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seeks to recover damages for past denials. Ellis, 657 F.3d at 984–85. However, they
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have no bearing as to Plaintiffs’ or the potential class members’ claims for the
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declaratory and injunctive relief they all seek.
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In addition, the Court has undertaken the required rigorous analysis and finds that
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typicality has been established. Both Plaintiffs and the proposed class “members have
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the same or similar injury”—the likelihood that Group Health’s policy would result in
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the denial of medically necessary neurodevelopmental treatment. Cf. Ellis, 657 F.3d at
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984. “[T]he action is based on conduct which is not unique to the named
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plaintiffs”—Group Health’s failure to amend its policies (or its practices) to comport
with RCW 48.46.291. Cf. id. The injuries would be the same—failure to obtain
necessary treatments. Cf. id. And, there is no “‘danger that absent class members will
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suffer if their representative is preoccupied with defenses unique to it.’” Cf. id. (quoting
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Hanon, 976 F.2d at 508). The Court has already found that Plaintiffs are entitled to the
very same relief that the proposed class seeks. Order (Dkt. # 77).
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Typicality has been established as to the first proposed class.
d. Adequacy of Representation
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Finally, the Court reaches the final Rule 23(a) element: adequacy of
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representation. “To determine whether named plaintiffs will adequately represent a
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class, courts must resolve two questions: ‘(1) do the named plaintiffs and their counsel
have any conflicts of interest with other class members and (2) will the named plaintiffs
and their counsel prosecute the action vigorously on behalf of the class?’” Ellis, 657
F.3d at 985 (quoting Hanlon, 150 F.3d at 1020). “Adequate representation depends on,
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among other factors, an absence of antagonism between representatives and absentees,
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and a sharing of interest between representatives and absentees.” Id.
Defendants’ sole complaint as to adequacy rests on their contention that Plaintiffs
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could have sought “review of a benefits denial by an independent review organization,”
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as permitted by RCW 48.43.535(2). Opp. (Dkt. # 55) at 18–19. They note that
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Washington law requires such organizations to provide a final decision within 45 days.
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Id. (citing RCW 48.43.505(1); RCW 48.43.535(7)). And that the law requires carriers
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to “timely implement the certified independent review organization’s determination”
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and “pay the certified independent review organization’s charges.” RCW 48.43.535(8).
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They thus rely on In re Aqua Dots Products Liability Litigation, 654 F.3d 748, 752 (7th
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Cir. 2011), to contend that Plaintiffs do not have the best interests of the class at heart.
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In response, Plaintiffs argue that the specified review process would not be of any
benefit to them because the statute only permits review to “‘ensure that determinations
are consistent with the scope of covered benefits as outlined in the medical coverage
agreement,’” and their claim is premised on the fact that the agreement itself
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contravenes Washington law. Reply (Dkt. # 61) at 10 (quoting RCW 48.43.535(6)).
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This is a valid contention. While reviewers have limited authority to override a health
plan’s terms, that authority is limited to the plan’s “medical necessity or appropriateness
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standards if the standards are determined upon review to be unreasonable or inconsistent
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with sound, evidence-based medical practice.” RCW 48.43.535(6). Nothing in the
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statute suggests, much less permits, that reviewers would be expected to review a plan
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for conformity with state or federal law.
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Moreover, the Court notes that In re Aqua Dots is not as supportive of
Defendants’ position as they suggest. Cf. 654 F.3d at 752. Unlike in that case,
Plaintiffs do not “want relief that duplicates a remedy that most buyers already have
received, and that remains available to all members of the putative class.” Cf. id. Group
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Health has not offered to change its official policy to reflect the requirements of RCW
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48.46.291 as found by this Court. Order (Dkt. # 30); Order (Dkt. # 36). To the
contrary, Defendants concede that “Group Health’s ‘official policy’” remains to
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terminate “neurodevelopmental therapies at age seven.” Opp. (Dkt. # 53) at 16 (“The
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plain language of the TAF Contract makes this equal treatment clear: the
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Neurodevelopmental Therapies benefit does not distinguish between types of conditions,
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but simply grants coverage for neurodevelopmentally disabled children (regardless of
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whether the neurodevelopmental disability is “mental” or “physical”), subject to
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common treatment limitations (e.g., no coverage after age six).”).
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There is also no indication whatsoever in RCW 48.43.535 that the contemplated
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certified independent review organizations have any authority to award prospective
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injunctive relief. As stated, their power appears limited to making individual case-by-
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case determinations within the confines of the relevant plan. RCW 48.43.535(6). Thus,
unlike the circumstances in In re Aqua Dots, Plaintiffs do not “propose[] that high
transaction costs (notice and attorneys’ fees) be incurred at the class members’ expense
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to obtain a refund that already is on offer.” Cf. 654 F.3d at 752.
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In sum, the Court finds both that the “named plaintiffs and their counsel have
[no] conflicts of interest with other class members” of the first proposed class and that
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“the named plaintiffs and their counsel [will] prosecute the action vigorously on behalf
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of the class.” See Ellis, 657 F.3d at 985. Their interests align in every respect, and the
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proposed class only benefits from the proposed certification.
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2. Rule 23(b)
The Court also finds that Plaintiffs’ first proposed class satisfies the requirements
of both Rule 23(b)(1) and (b)(2).
a. Rule 23(b)(1)
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Rule 23(b)(1) provides:
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A class action may be maintained if Rule 23(a) is satisfied and if:
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(1) prosecuting separate actions by or against individual class
members would create a risk of:
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(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
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(B) adjudications 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;
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Fed. R. Civ. P. 23(b)(1). And as the advisory committee notes state, this subsection is
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particularly appropriate in cases charging breach of trust by a fiduciary against a large
class of fiduciaries. Fed. R. Civ. P. 23 cmt. to 1966 Amendment, subdivision (b)(1),
clause (B).
Nevertheless, Defendants contend that certification under either (b)(1)(A) or
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(b)(1)(B) is inappropriate both because Plaintiffs seek damages and because individual
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questions exist as to individual liability. For reasons previously alluded to, the Court
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disagrees. Plaintiffs request that the Court certify two classes is expressly permitted by
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Federal Rule of Civil Procedure 23(c)(5) (“When appropriate, a class may be divided
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into subclasses that are each treated as a class under this rule.”). See also Beck v.
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Boeing Co., 60 Fed. App’x 38, 39 (9th Cir. 2003) (recognizing that courts may certify
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multiple classes so long as each class satisfies Rule 23’s requirements). And the first
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seeks only declaratory and injunctive relief. It is not concerned with either damages or
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ultimate entitlement to treatment—either past, present, or future. The class seeks only
an order and judgment that precludes Group Health from imposing its unlawful express
Plan limitations when making future benefit determinations.
The Court can envision few better scenarios for certification under (b)(1)(A) or
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(b)(1)(B). As a fiduciary, Group Health is bound to follow the terms of the Plan. 29
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U.S.C. § 1104(a)(1)(D). Moreover, ERISA requires that, “where appropriate,” plan
provisions must be “applied consistently with respect to similarly situated claimants.”
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29 C.F.R. § 2560.503-1(b)(5). Thus, were this Court to find that the Plan requires
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Defendants to act in a certain fashion, ERISA would require Group Health to act in a
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similar fashion toward all beneficiaries—the quintessential (b)(1)(B) scenario. And if
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another court were to interpret the Plan differently, it would trap Defendants “in the
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inescapable legal quagmire of not being able to comply with one such judgment without
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violating the terms of another,” Opp. (Dkt. # 55) at 21 (citation and internal quotation
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marks omitted)—a truly unwinnable position that (b)(1)(A) was enacted to remedy.
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Fed. R. Civ. P. 23 cmt. to 1966 Amendment, subdivision (b)(1), clause (A)
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(“The matter has been stated thus: ‘The felt necessity for a class action is greatest when
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the courts are called upon to order or sanction the alteration of the status quo in
circumstances such that a large number of persons are in a position to call on a single
person to alter the status quo, or to complain if it is altered, and the possibility exists that
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[the] actor might be called upon to act in inconsistent ways.’” (citation omitted)).
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In sum, the Court finds that the class is certifiable under either Rule 23(b)(1)(A)
or (b)(1)(B).
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b. Rule 23(b)(2)
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Alternatively, the Court finds the class certifiable under Rule 23(b)(2). It
provides:
A class action may be maintained if Rule 23(a) is satisfied and if:
(2) 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; or
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Fed. R. Civ. P. 23(b)(2). As the Court explained, “[t]he key to the (b)(2) class is ‘the
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indivisible nature of the injunctive or declaratory remedy warranted—the notion that the
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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.’” Dukes, 131 S. Ct. at 2557 (citation omitted).
The present case fits this bill to a “T.” Again, the first proposed class does not
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contemplate or require the resolution of individual issues. It requires only that the Court
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determine the requirements of Washington law as applied to the Plan as a whole.
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Moreover, given ERISA’s requirements, the request is such that Defendants’
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conduct—their application of their official written Plan policy—“can be enjoined or
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declared unlawful only as to all of the class members or as to none of them.”
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In sum, after rigorous inquiry, the Court finds that Plaintiffs have demonstrated
that their first proposed class is appropriate for certification to the extent they seek
“declaratory and injunctive relief” under ERISA § 502(a)(1)(B), (a)(2), and (a)(3).
Moreover, the Court appoints the law firm of Sirianni Youtz Spoonemore as
class counsel. These lawyers have done significant work “in identifying or investigating
potential claims in the action”; they have significant experience in handling class
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actions in this area, Dkt. # 48 at ¶¶ 3–7; they are plainly knowledgeable of the
applicable law, id. at ¶ 2; and, they will commit suitable resources to the case, id. at ¶ 1.
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Fed. R. Civ. P. 23(g)(1)(A). The Court has no doubt that they will “fairly and
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adequately represent the interests of the class.” Fed. R. Civ. P. 23(g)(4).
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Finally, for all of the reasons described in the Court’s prior Order (Dkt. # 77), the
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Court finds that the first proposed class is entitled to the relief it seeks. § 1132(a)(1)(B),
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(a)(3). As it found in regard to the individual Plaintiffs, id., the Court finds that
Defendants’ official policy of denying coverage for medically necessary
neurodevelopmental therapy to treat insureds with DSM-IV-TR mental health
conditions simply because an insured is over the age of six violates the plain
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requirements of RCW 48.46.291. It thus ORDERS Defendants to immediately cease
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denying coverage for medically necessary neurodevelopmental therapy for qualifying
mental health conditions on the basis of a claimant’s age or any other treatment
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limitations not generally “imposed on coverage for medical and surgical services.”
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RCW 48.46.291(2)(c)(i). Pursuant to Rule 23(c)(2)(A), Defendants are ORDERED to
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notify each of their beneficiaries of this Court’s Order. Defendants are to submit to the
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Court within 21 days of this Order a copy of their proposed notice for the Court’s
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approval. Plaintiffs may file a notice setting forth any complaints about the proposed
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language with the Court within 7 days of Defendants’ filing.
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B. Second Proposed Class
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Next, the Court considers Plaintiffs’ request to certify a second class (or
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subclass) for the purpose of seeking monetary relief under ERISA § 502(a)(1)(B) and
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(a)(3). Originally, they defined their proposed class as follows:
All individuals who:
(1) are, or have been, beneficiaries under an ERISAgoverned
health plan that was delivered, issued for delivery,
or renewed on or after January 1, 2006, by Group Health;
and (2) have received or required neurodevelopmental
therapy for the treatment of a qualified mental health
condition.
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Mot. (Dkt. # 42) at 9. They subsequently revised the proposed class to include only
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those individuals who:
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(1) are, or have been, beneficiaries under an ERISA-governed health
plan that was delivered, issued for delivery, or renewed on or after
January 1, 2006, by Group Health; and (2) when over the age of six,
(a) received neurodevelopmental therapy for the treatment of a
qualified mental health condition where the cost of such treatment
was not reimbursed by Group Health, or (b) required such treatment
but did not receive it due to Group Health’s exclusion of such
therapy.
Reply (Dkt. # 61) at 7.
As a threshold matter, the Court again considers Defendants’ contention that the
proposed class “would include those who have not been harmed by the alleged
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wrongdoing or may never be so harmed.” Opp. (Dkt. # 55) at 9. The Court again
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disagrees. Fairly construed, the proposed class is limited to two groups of beneficiaries:
one that received treatment and filed a claim but did not receive coverage for the
treatment of a qualified mental health condition “due to Group Health’s exclusion of
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such therapy” and one that did not receive necessary treatment for a qualified mental
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health condition “due to Group Health’s exclusion of such therapy.” Reply (Dkt. # 61)
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at 7. The Court thinks it plain that both have standing.
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Certainly, as alleged, each member of each group suffered the harm of a
18
fiduciary breach—that the Plan was not managed and implemented in a manner that
19
ensured that each received the benefits to which he or she was entitled. Accordingly,
20
each suffered at least some monetary detriment related to the devaluation of the Plan’s
21
worth to them as a result of Defendants’ alleged miscues. Moreover, each also suffered
22
23
24
additional individual harms. The first group was forced to pay for treatment out of
pocket that should have been covered. And the second was precluded from even
obtaining treatment as a result of Defendants’ actions. Nothing more is needed. See
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992).
25
26
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 14
1
2
3
4
5
6
7
The Court thus moves to the requirements of Rule 23.
1. Rule 23(a)
The Court finds that the second proposed class satisfies each of the four Rule
23(a) concerns.
a. Numerosity
Again, Defendants do not contest that the proposed subclass remains numerous
enough “that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1).
Accordingly, for the reasons set forth previously, the Court finds that the proposed class
8
satisfies the numerosity requirement.
9
10
b. Commonality
Even understanding that the proposed subclass is narrower to some degree, the
11
Court also finds that commonality is still demonstrated. Class proceedings will still
12
generate at least “a single significant question of law or fact,” Mazza, 666 F.3d at 589,
13
“apt to drive the resolution of the litigation”: namely, whether Group Health violated
14
the RCW 48.46.291 by denying claims based on claimants’ ages. Dukes, 131 S. Ct. at
15
2551 (citation omitted); cf. Opp. (Dkt. # 53) at 17 (asserting that Group Health altered
16
its practices beginning in January 2011). Nothing more is required. See Mazza, 666
17
F.3d at 589 (“Even assuming arguendo that we were to agree with Honda’s ‘crucial
18
question’ contention, the individualized issues raised go to preponderance under Rule
19
23(b)(3), not to whether there are common issues under Rule 23(a)(2).”).
20
21
c. Typicality
In its previous discussion of the typicality requirement, the Court dismissed out
of hand Defendants’ contention that typicality was not demonstrated because (1) “issues
22
of fact exist as to whether it would have approved the unsubmitted claims, or would
23
24
approve medically necessary neurodevelopmental therapies in the future,” and (3)
Plaintiffs stand in a different position than other class members in that “Plaintiff T.D.
25
26
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 15
1
represented [the Technology Access Foundation] in its initial decision to purchase the
2
[Plan] and, until 2004 or 2005, its decision to renew it yearly.” Opp. (Dkt. # 55) at
3
15–18. For the reasons stated, the Court remains convinced that neither of those
4
contentions has any merit.
5
6
7
Defendants remaining contentions—that there exist individual questions of
exhaustion and medical necessity, see id.—have greater merit, however. Unlike with
the previous class, Plaintiffs now seek to recover monetary damages based on allegedly
unlawful treatment denials. Accordingly, whether individual class members exhausted
8
their claims or would otherwise have been entitled to the treatment they requested even
9
10
if not for Group Health’s age-based limitation raise valid individual questions. Still, the
Court recognizes that “[t]ypicality refers to the nature of the claim or defense of the
11
class representative, and not to the specific facts from which it arose or the relief
12
sought.” Ellis, 657 F.3d at 984 (quoting Hanon, 976 F.2d at 508 (internal citation and
13
quotation marks omitted)). The concern is simply whether “‘there is a danger that
14
absent class members will suffer if their representative is preoccupied with defenses
15
unique to it.’” Id. (quoting Hanon, 976 F.2d at 508). To overcome this concern and
16
“demonstrate typicality, Plaintiffs must [simply] show that the named parties’ claims are
17
typical of the class.” Id.
18
19
20
21
The Court finds that Plaintiffs have met this burden. Importantly, while there
may in fact be individual questions, that is not enough to overcome certification. See
Walters v. Reno, 145 F.3d 1032, 1046 (9th Cir. 1998) (“Differences among the class
members with respect to the merits of their actual document fraud cases, however, are
simply insufficient to defeat the propriety of class certification. What makes the
22
plaintiffs’ claims suitable for a class action is the common allegation that the INS’s
23
24
procedures provide insufficient notice.”); Dukes, 131 S. Ct. at 2551 n.5 (“We have
previously stated in this context that ‘[t]he commonality and typicality requirements of
25
26
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 16
1
Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the
2
particular circumstances maintenance of a class action is economical and whether the
3
named plaintiff’s claim and the class claims are so interrelated that the interests of the
4
class members will be fairly and adequately protected in their absence.’” (quoting Gen.
5
6
7
Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 157–158 n.13 (1982))). The named Plaintiffs
share each of these concerns with the remainder of the proposed class. There is
therefore every reason to believe that the class’s interests would “be fairly and
adequately protected in their absence.” See Dukes, 131 S. Ct. at 2551 n.5 (citation
8
omitted).
9
10
d. Adequacy of Representation
Finally, the Court reaches for a second time the final Rule 23(a) element:
11
adequacy of representation. For the reasons previously described, it finds that the
12
named Plaintiffs would adequately represent the class’s interests. Moreover, the Court
13
notes that any class members who wish to opt-out of the proposed class proceedings to
14
take advantage of the independent review process permitted by RCW 48.43.535(2) will
15
be free to do so. See Fed. R. Civ. P. 23(c)(2)(B)(v). Accordingly, there remains no
16
concern that class members will be forced to incur “high transaction costs (notice and
17
attorneys’ fees)” to obtain a remedy already available to them at no expense. Cf. In re
18
Aqua Dots, 654 F.3d at 752.
19
20
21
2. Rule 23(b)(3)
The Court next considers whether Plaintiffs’ second proposed class meets the
requirements of Rule 23(b)(3). It finds that it does not.
Rule 23(b)(3) allows a class action to be maintained if “the court finds that the
22
questions of law or fact common to class members predominate over any questions
23
affecting only individual members, and that a class action is superior to other available
24
25
26
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 17
1
methods for fairly and efficiently adjudicating the controversy.” The Rule sets forth
2
four considerations to guide this inquiry:
3
(A) the class members’ interests in individually controlling the
prosecution or defense of separate actions;
4
5
6
7
8
9
10
11
12
(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
(D) the likely difficulties in managing a class action.
Fed. R. Civ. P. 23(b)(3). Importantly, the Ninth Circuit has held that “‘there is clear
justification for handling the dispute on a representative rather than an individual basis’
if ‘common questions present a significant aspect of the case and they can be resolved
for all members of the class in a single adjudication . . . .’” Mazza, 666 F.3d at 588
(quoting Hanlon, 150 F.3d at 1022).
13
14
15
In the present case, the Court finds that common questions predominate. Again,
each of the proposed class members’ claims depends on a single basic common
question: whether Group Health violated RCW 48.46.291 by employing beneficiaries’
16
ages as a coverage limitation for neurodevelopmental services. More importantly, each
17
appears deserving of a common answer: yes, Group Health did violate RCW 48.46.291
18
by employing beneficiaries’ ages as a coverage limitation for neurodevelopmental
19
services. Admittedly, though, the common waters begin to muddy at that point: For
20
Group Health to be liable for damages, Plaintiffs would need to further show that
21
individual class members exhausted their remedies, brought a claim within a year, and
22
would otherwise have been eligible for coverage. See Opp. (Dkt. # 55) at 15–18. And,
23
as Defendants contend these issues appear to be quite individual.
24
25
26
Fortunately, Plaintiffs add some much need clarity by pointing out that these
concerns can be addressed on a class-wide basis. They argue that Defendants’ official
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 18
1
policy would have rendered administrative remedies entirely moot as to any effected
2
beneficiary, Mot. (Dkt. # 43) at 20–28, and that Defendants should not be permitted to
3
impose Group Health’s one-year claim period bar against class members on account of
4
their violations, Reply (Dkt. # 62) at 11–14 (citing CIGNA Corp. v. Amara, 131 S. Ct.
5
6
7
1866 (2011)). The Court agrees that there appear to be common answers to these
common questions and that there is therefore no reason not to resolve each issue in a
single adjudication rather than on an individual basis. Cf. Mazza, 666 F.3d at 588.
Of course, the same cannot be said for the third concern. As Defendants contend,
8
Opp. (Dkt. # 55) at 15–18, and as Plaintiffs concede, see Reply (Dkt. # 61) at 14–16, the
9
10
11
12
13
14
15
16
17
18
19
individual questions of “medical necessity” are not susceptible to common resolution.
Rather, Plaintiffs suggest a method for resolving those question that would minimize the
need for individual judicial determinations:
Step 1: If the court invalidates Group Health’s exclusion, then (a)
Group Health should be required to reprocess all of the claims
it previously denied due to age and (b) should be required to
process new claims that were not submitted due to its
exclusion.
Step 2: If Group Health denies any of the claims processed under
Step 1, then the claim should be sent to an [independent
review organization] for review.
Step 3: The ERISA damages related to benefits claims will equal
the amount approved by Group Health in step 1 plus the
amount approved by the [independent review organization] in
step 2.
Reply (Dkt. # 61) at 16.
20
Frankly, the scope of this remedy is worrisome. It suggests to the Court that
21
while individual issues may not predominate, those that exist are sufficiently distinct
22
and pronounced that a class action may not be “superior to other available methods for
23
fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). For one,
24
the independent review process cannot be instituted at the urging of either Group Health
25
or the Court. RCW 48.43.535(2). Only an “enrollee may seek review by a certified
26
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 19
1
independent review organization of a carrier’s decision to deny, modify, reduce, or
2
terminate coverage of or payment for a health care service.” Id. Thus, to employ
3
Plaintiffs’ own workaround, the Court would need to compel individual class members
4
to submit claims to these organizations, with all of the accompanying inconvenience
5
6
7
that would entail. See RCW 48.43.535(5). This suggests to the Court that “the likely
difficulties in managing [the] class action” would appear to be quite severe. See Fed. R.
Civ. P. 23(b)(3)(D).
Moreover, because Group Health would be bound by the result of such review in
8
any case, RCW 48.43.535(7), it does not appear that the class framework adds anything
9
10
to the process. The Court sees no reason why the class should not simply be certified
under Rule 23(b)(1) or (b)(2) for the purpose of obtaining declaratory relief as to the
11
scope of Group Health’s obligations under the Plan, as amended to comport with RCW
12
48.46.291. And then, Court order in hand, those beneficiaries who believe themselves
13
aggrieved could pursue that relief that best addresses their independent needs.
14
Certainly, the large sums at stake, and the availability of statutory attorney’s fees, 29
15
U.S.C. § 1132(g), suggests that class members would have a significant interest “in
16
individually controlling the prosecution or defense of separate actions,” Fed. R. Civ. P.
17
23(b)(3)(A), especially if apprised as part of some declaratory relief of a fiduciary
18
violation on the part of Group Health.
19
20
21
In fact, of the four considerations, only one would seem to weigh in favor of
class treatment: “the extent and nature of any litigation concerning the controversy
already begun by or against class members.” Fed. R. Civ. P. 23(b)(3)(B). But even this
factor barely tips the scale. Assuming that the Court resolves the common threshold
22
issues via a declaratory order, the only questions that remain would be unique to
23
individual beneficiaries and thus a poor reason to certify the class.
24
25
26
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 20
1
In sum, the Court finds that, as defined, the second proposed class would not be
2
“superior to other available methods for fairly and efficiently adjudicating the
3
controversy,” given the difficulty in ascertaining which class members would otherwise
4
have been entitled to treatment if not for the age limitation. Perhaps Plaintiffs can
5
6
7
suggest an alternative class definition that addresses the identified issues, e.g., a class
comprised solely of those individuals actually denied coverage solely on the basis of
their age. Or perhaps Plaintiffs will simply seek to certify a class that seeks declaratory
relief as to the identified issues. That remains to be seen. The Court simply finds that
8
the proposed class is deficient.
9
10
11
12
13
III. CONCLUSION
For all of the foregoing reasons, the Court GRANTS IN PART Plaintiffs’
“Plaintiffs’ Motion for Class Certification” (Dkt. # 42).
It certifies as a class for the purpose of seeking “declaratory and injunctive relief”
under ERISA § 502(a)(1)(B), (a)(2), and (a)(3):
14
All individuals who:
(1) are, or will be, beneficiaries under an ERISA-governed health
plan that has been or will delivered, issued for delivery, or
renewed on or after January 1, 2006, by Group Health; and (2)
require, or are expected to require, neurodevelopmental therapy
for the treatment of a qualified mental health condition.
15
16
17
18
Mot. (Dkt. # 42) at 8–9. The class claim is that Defendants may not deny them,
19
insureds with qualifying mental health conditions, coverage for medically necessary
20
21
22
non-rehabilitative neurodevelopmental therapy simply because they are over the age of
six. And the Court appoints the law firm of Sirianni Youtz Spoonemore as class
counsel.
23
24
25
26
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 21
1
Moreover, for all of the reasons described in the Court’s prior Order (Dkt. # 77),
2
the Court finds that this class is entitled to the relief it seeks.2 Defendants’ official
3
policy of denying coverage for medically necessary, non-rehabilitative
4
neurodevelopmental therapy for insureds with DSM-IV-TR mental health conditions
5
6
7
simply because an insured is over the age of six violates the plain requirements of RCW
48.46.291. Accordingly, the Court ORDERS Defendants to immediately cease denying
coverage for medically necessary neurodevelopmental therapy for qualifying mental
health conditions on the basis of a claimant’s age or any other treatment limitations not
8
generally “imposed on coverage for medical and surgical services.” RCW
9
10
48.46.291(2)(c)(i). The Court FURTHER ORDERS Defendants to notify their
beneficiaries of the Court’s finding as discussed herein.
11
12
DATED this 1st day of June, 2012.
13
A
14
Robert S. Lasnik
United States District Judge
15
16
17
18
19
20
21
22
2
23
24
25
26
The Court notes that Plaintiffs’ motion for summary judgment was brought on behalf
of both the individual Plaintiffs and the proposed class. See Mot. (Dkt. # 44) at 7 (“In order to
require Group Health to immediately change its policy of exclusion, plaintiff Z.D., and
a class seeking prospective relief, if certified, seek remedies under ERISA to immediately force
Group Health to change both its policy and practice.”). Procedurally speaking, it is therefore
appropriate to award summary judgment to the class.
ORDER GRANTING IN PART PLAINTIFFS’
MOTION FOR CLASS CERTIFICATION - 22
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