Penwell et al v. Providence Health & Services

Filing 31

ORDER granting 26 MOTION to Dismiss Plaintiffs' Amended Complaint signed by Judge Richard A. Jones. Defendant's motion is GRANTED and Plaintiffs' complaint is DISMISSED without prejudice. Within fourteen (14) days from the date of this Order, Plaintiffs may file an amended complaint addressing the deficiencies described above. If Plaintiffs do not file an amended complaint within that time, the Court may dismiss this action with prejudice. (VE)

The Honorable Richard A. Jones
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UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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JUSTIN PENWELL; GEORGIA BAKKETULL; JORDAN ENYEART; and
CASE NO. 2:19-cv-01786-RAJ
MILDRED UZOMA,

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Plaintiffs,

ORDER

v.
PROVIDENCE HEALTH & SERVICES,

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Defendant.

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This matter comes before the Court on Defendant’s motion to dismiss Plaintiffs’

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amended complaint. Dkt. # 26. Having considered the submissions of the parties, the

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relevant portions of the record, and the applicable law, the Court finds that oral argument

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is unnecessary. For the reasons below, Defendant’s motion to dismiss is GRANTED.

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I.

BACKGROUND

Plaintiffs Jordan Enyeart, Georgia Bakke-Tull, and Mildred Uzoma (“Plaintiffs”)

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are employees of Providence Health & Services (“Providence” or “Defendant”) and

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participants in the Swedish Health Services Employee Benefits Plan (“Swedish Welfare

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ORDER - 1

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Plan”) or the Providence Health & Services Employee Benefits Plan (“Providence
Welfare Plan”) (collectively, the “Plans”). Dkt. # 24 at 2-4. Plaintiffs “are required to
pay deductibles, co-pays, co-insurance, facility fees, pharmacy co-pays and co-insurance,
and other payments while utilizing the Plans.” Dkt. # 24 ¶ 9. Plaintiff Justin Penwell is
no longer an employee or participant in a Providence plan. Id. ¶ 3. However, he remains
a Plaintiff in this action. Id. Plaintiffs allege that Providence is the plan administrator for
both Plans. 1 Id. ¶¶ 14, 23.

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In early 2019, after noticing an increase in premiums, Plaintiffs requested
information about network pricing from Defendant. Id. ¶ 38. The request included
several categories of documents including (1) “the annual renewal document for 2017,
2018, and 2019,” (2) “a complete schedule or set of schedules of the negotiated payment
rates applicable to each of the Plans’ participating network providers (‘Network
Providers’) for goods and services provided to participants that are covered by the Plans,”
(3) “a complete set of each of the contracts or agreements between the Plans and each
Network Provider,” (4) “all documents specifying the methodology by which actual
payment amounts to plan providers are determined, as well as the underlying data and
information by which such payment rates are determined,” and (5) “any other documents
under which the Plans are maintained or administered.” Id. ¶ 39. Plaintiffs based these
requests on ERISA section 104(b) which requires a plan administrator “upon written
request of any participant or beneficiary” to “furnish a copy of the latest updated
summary plan description, and the latest annual report, any terminal report, the
bargaining agreement, trust agreement, contract, or other instruments under which the

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As noted in the Court’s prior order, Providence refutes that it is the plan administrator
for either Plan but argues that the Plaintiffs’ Amended Complaint fails as a matter of law
even if Defendant were the plan administrator. The Court need not, therefore, resolve
this factual matter at this juncture. Dkt. # 26 at 6, n.6.

ORDER - 2

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plan is established or operated.” 29 U.S.C. § 1024(b)(4); Id. ¶ 41.
At the end of January 2019, Providence responded to Plaintiffs’ initial request by
“providing the Health and Wellness Benefit Plan Document, with amendments; a
summary plan description; and open enrollment information for the 2017, 2018, and 2019
plan years.” Id. ¶ 49. Plaintiffs allege that Providence informed them that “it did not
possess documents that would be responsive to the remainder of the requests, such as
schedules of negotiated payment rates.” Dkt. # 24 ¶ 50; see Dkt. # 13-2 at 2. About a
month later, Plaintiffs made a second request for the same documents. Dkt. # 24 ¶ 54. In
a letter dated April 12, 2019, Providence informed Plaintiffs that “the documents
requested are either nonexistent or not in our possession” and “ERISA does not require a
plan administrator to create documents or produce documents it does not have.” Dkt.
# 24 ¶¶ 56-57; Dkt. # 13-4 at 2-5. In response, Plaintiffs submitted a third and final
request for the same information, noting that “ERISA [requires] a plan administrator to
create and produce documents that it does not have, when such documents are required to
be furnished.” Dkt. # 24 ¶¶ 58-59. Providence did not respond to Plaintiffs’ final
request. Id. ¶ 61.
Plaintiffs filed a complaint in this Court on November 4, 2019, seeking specific
performance and civil penalties based on Providence’s alleged failure to provide the
requested documents and information under 29 U.S.C. § 1024(b). See generally Dkt. # 1.
Defendant moved to dismiss the complaint for failure to state a claim under Rule 12(b)(6)
on December 20, 2019. See generally Dkt. # 12. On June 5, 2020, the Court granted
Defendant’s motion with leave to amend. Dkt. # 23 at 7. Plaintiffs timely filed an
amended complaint on June 19, 2020. See generally Dkt. # 24. Defendant now moves to
dismiss Plaintiffs’ amended complaint under Federal Rule of Civil Procedure 12(b)(6).
Dkt. # 26 at 5, 13.

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ORDER - 3

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II.

Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a complaint
for failure to state a claim. Fed. R. Civ. P. 12(b)(6). The court must assume the truth of
the complaint’s factual allegations and credit all reasonable inferences arising from those
allegations. Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). A court “need not
accept as true conclusory allegations that are contradicted by documents referred to in the
complaint.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir.
2008). Instead, the plaintiff must point to factual allegations that “state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 (2007). If
the plaintiff succeeds, the complaint avoids dismissal if there is “any set of facts
consistent with the allegations in the complaint” that would entitle the plaintiff to relief.
Twombly, 550 U.S. at 563; Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
On a motion to dismiss, a court typically considers only the contents of the
complaint. However, a court is permitted to take judicial notice of facts that are
incorporated by reference in the complaint. United States v. Ritchie, 342 F.3d 903, 908
(9th Cir. 2003) (“A court may . . . consider certain materials documents attached to the
complaint, documents incorporated by reference in the complaint”); Mir v. Little Co. of
Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988) (“[I]t is proper for the district court to
‘take judicial notice of matters of public record outside the pleadings’ and consider them
for purposes of the motion to dismiss’”). With these principles in mind, the Court turns
to the instant motion.

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LEGAL STANDARD

III.

DISCUSSION

In their amended complaint, Plaintiffs reassert their claim that they are entitled to
the documents they requested based on ERISA Section 104(b)(4), which requires a plan
administrator “upon written request of any participant or beneficiary” to “furnish a copy

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of the latest updated summary plan description, and the latest annual report, any terminal
report, the bargaining agreement, trust agreement, contract, or other instruments under
which the plan is established or operated.” Dkt. # 24 ¶ 41 (citing 29 U.S.C.
§ 1024(b)(4)). In an attempt to cure the deficiencies identified by the Court in their prior
complaint, Dkt. # 23 at 6, Plaintiffs incorporated new factual allegations in explanation of
their requests. Dkt. # 24 ¶¶ 43-47. Specifically, Plaintiffs allege that the requested
documents (1) include information about pricing details and how pricing is determined,
(2) determine out-of-pocket costs for goods and services covered by the Plans, (3) allow
Plaintiffs to determine whether they are receiving the most beneficial network prices, and
(4) provide information about the maintenance and administration of the plans. Dkt. # 24
¶¶ 43-47. Plaintiffs allege that “each of Plaintiffs’ written document requests are made
up of requests specifically associated to network pricing attributed to medical or
prescription coverage, as they relate to and ultimately affect pricing details and Plaintiffs’
out-of-pocket costs.” Dkt. # 29 at 11. Plaintiffs claim that Defendant is required to
produce all requested documents because they are “instruments under which the plan is
established or operated.” Dkt. # 24 ¶ 48 (citing 29 U.S.C. § 1024(b)(4)).
The Court is unconvinced. Plaintiffs’ unaltered request for the same categories of
documents remains incredibly broad and Plaintiffs’ attempt to fit each document in the
catch-all provision of Section 104(b)(4) is unavailing. The Ninth Circuit has adopted a
narrow interpretation of the term “other instruments” as “limited to the class of objects
that specifically precedes it.” Shaver v. Operating Eng’rs Local 428 Pension Trust Fund,
332 F3d. 1198, 1202 (9th Cir. 2003). The Ninth Circuit specifically declined to interpret
the statute to “require general disclosure,” explaining that broad disclosure “is not
supported by either the language of the statute or its legislative history.” Hughes
Salaried Retirees Action Comm. v. Adm’r of Hughes Non-Bargaining Ret. Plan, 72 F.3d

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ORDER - 5

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686, 691 (9th Cir. 1995). The provision “requires disclosure of only the documents
described with particularity and ‘other instruments’ similar in nature.” Id. Indeed,
disclosure under this provision is limited to “documents that provide individual
participants with information about the plan and benefits.” Dkt. # 23 at 5 (citing Hughes,
72 F.3d at 690). The Ninth Circuit further limited the definition of “other instruments” to
“legal documents that describe the terms of the plan, its financial status and other
documents that restrict or govern the plan’s operation.” Shaver, 332 F3d. at 1201-02.
Plaintiffs fail to show that the documents they request are either legal documents
or relevant to Plaintiffs’ plans and benefits. For example, Plaintiffs’ request for “all
documents specifying the methodology by which actual payment amounts to plan
providers are determined, as well as the underlying data and information by which such
payment rates are determined” fails on both counts. Dkt. # 24 ¶ 39. The Court finds that
“all documents” on payment methodology, calculations, and the “underlying data” are
not limited to legal documents. Shaver, 332 F.3d at 1202 (finding that “other
instruments” should be limited to “legal documents that describe the terms of the plan, its
financial status, and other documents that restrict or govern the plan’s operation”).
Defendant raised this argument in its motion to dismiss. Dkt. # 26 at 8. Plaintiffs failed
to respond. Dkt. # 30 at 2. Plaintiffs nonetheless attempt to justify their request by
noting that such information is relevant to Plaintiff’s determination as to whether they are
receiving the most beneficial network prices. Dkt. # 24 ¶ 46. This request does not,
however, inform Plaintiffs of their benefits under the plan and is therefore beyond the
scope of ERISA Section 104(b)(4). Hughes, 72 F.3d at 690.
Plaintiffs’ request for “a complete schedule or set of schedules of the negotiated
payment rates applicable to each of the Plans’ participating network providers . . . for
goods and services provided to participants that are covered by the Plans,” Dkt. # 24 ¶ 39,

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is similarly untenable. 2 Plaintiffs argue that such documents fall within the “other
instruments” category because they determine out-of-pocket costs for goods and services
covered by the Plans. Id. ¶ 44. Defendant contends that the price a provider has
negotiated for any given service does not inform Plaintiffs about their benefits,
particularly where the requests are not tied to any benefit claim. Dkt. # 26 at 10. The
Court agrees. Moreover, information on pricing, including out-of-pocket limits, co-pays,
deductibles, and other relevant calculations was made available to Plaintiffs through
summary plan descriptions that were provided. Dkt. # 26 at 11; Dkt. # 24 ¶ 49. The
Court finds that the schedules do not govern the operation of the plans and fall outside the
scope of ERISA 104(b)(4).

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Next, Plaintiffs’ request for “a complete set of each of the contracts or agreements
between the Plans and each Network Provider” is, again, overly broad. Dkt. # 24 ¶ 39.
Plaintiffs allege that they are entitled to network provider contracts because they provide
pricing information, Dkt. # 24 ¶ 45, and “directly impact[]” their premiums, deductibles,
co-pays, and co-insurance, among other fees. Id. ¶ 36. However, as Defendant points
out, these contracts could not be used to determine any out-of-pocket expense for any of
the Plaintiffs in the absence of an actual claim. Dkt. # 26 at 11. Moreover, Defendant
argues that “documents relating to generalized network provider agreements for every
network provider for every covered service would require the plan administrator to turn
over information about potential plan expenditures which do not inform Plaintiffs about
their plan benefits.” Dkt. # 26 at 10. This broad request does not inform Plaintiffs of

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Defendant argues that “[w]e do not possess other documents that would be responsive
to [Plaintiffs’] request such as schedules of negotiated payment rates as the Plan
Administrator does not determine payment rates and the Plan does not contract with
‘Network Providers.’” Dkt. # 26 at 3-4 (citing Dkt. # 13-2 at 2-5). The Court considers
whether such documents would fall within the ERISA disclosure requirement as a matter
of law.

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their benefits under the plan and does not fall within the scope of Section 1024(b)(4).
See Hughes, 72 F.3d at 690; Shaver, 332 F.3d at 1202; DeBartolo v. Blue Cross/Blue
Shield of Ill., No. 01 C 5940, 2001 WL 1403012, at *7 (N.D. Ill. Nov. 9, 2001) (finding
that “usual and customary” charges for medical expenses “[did] not inform plan
participants and beneficiaries about their rights under the plan” and thus “[was] not the
type of information an ERISA plan administrator is required to disclose under 29 U.S.C.
§ 1024(b)(4)”).
Plaintiff’s request for “any other documents under which the Plans are maintained
or administered” is neither limited to legal documents nor sufficiently narrow in
accordance with the controlling case law. Dkt. # 24 ¶ 39. Plaintiffs’ allegation that they
are entitled to such documents under Section 1024(b)(4) because the documents provide
them “with information about and explanations on the maintenance and administration of
the [Plan],” Dkt. # 24 ¶ 47, ignores the binding case law that requires narrow
interpretation of “other instruments” and fails to show that such a broad category of
documents is relevant to inform each Plaintiff of his or her own plan or benefits. See
Hughes, 72 F.3d at 690.
Finally, Plaintiffs’ requests for the annual renewal documents for 2017 through
2019 do not pass muster. Dkt. # 24 ¶ 39. Defendant claims that “[a]nnual renewal
documents relate to renewal of insurance policies for insured plans . . . [and] there were
no such documents because the Plans are self-funded.” Dkt. # 26 at 5, n.5 (citing Dkt.
# 13-4 at 2-5). This raises a question of fact that cannot be resolved at this stage.
However, even if such documents did exist, the Court finds they do not fall within
Section 1024(b)(4). Plaintiffs allege that these documents are “other documents” under
the statute because they “include information about and explanations of pricing details
and the procedures under which the pricing details are determined.” Dkt. # 24 ¶ 43.

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However, Defendant argues that “[g]eneralized network pricing information requests
unrelated to any benefit claim . . . are neither legal documents under which the Plans are
operated nor . . . set out a participant’s rights and duties under the Plans.” Dkt. # 26 at 7
(citing DeBartolo, 2001 WL 1403012 at *7). The Court finds that these documents are
not documents under which the plan is established or operated.
Plaintiffs assert that they are entitled to the documents despite the narrow
definition established by the Ninth Circuit because the documents they requested provide
individual participants with information about the plan and benefits. Dkt. # 29 at 10.
Plaintiffs rely primarily on Eden Surgical Center v. Budco Group, Inc. to support their
assertion. Id. at 12 (citing 2010 WL 2180360 (C.D. Cal. May 27, 2010)). However, the
requested documents at issue in Eden Surgical Center involved a fee schedule and
methodology for calculating costs related to a particular claim, or documents “relevant to
the processing and re-pricing of the subject adverse benefit determinations.” 2010 WL
2180360, at *1 (emphasis added). The court noted that disclosure of such documents
“gives full effect to the purpose of the statute, which is to let the individual participant
[to] know[ ] exactly where he stands with respect to the plan.” Id. at *7 (internal
quotations and citation omitted). The court ruled that the plaintiff was entitled to the
documents used in reaching the adverse benefit determination of the individual with the
claim at issue and information used to calculate benefits with respect to the pertinent
claim. Id. at *10.
Plaintiffs’ broad requests here exceed the purpose and scope of the statute as they
are not limited to information on where each Plaintiff “stands with respect to the plan.”
Instead their requests encompass a tremendous amount of information that is wholly
unrelated and irrelevant to where they stand and what their rights are under the plan. The
Court finds that such a distinction between the requested documents renders Eden

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ORDER - 9

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Surgical Center unpersuasive in the matter at hand. Plaintiffs point to two similarly
distinguishable cases. In one, the court found that former employees were entitled to
documents in connection with a claim for vested benefits where the employees “alleged
that their vested benefits were improperly computed.” Werner v. Morgan Equip. Co.,
No. C-92-0393-JPV, 1992 WL 453355, at *3 (N.D. Cal. Aug. 5, 1992). In the second
case, the court found that employees’ request for “an administration manual that
contained charts essential to the calculation of retirement benefits” was permissible as it
was an instrument that governed the plan. Lee v. Dayton Power & Light Co., 604 F.
Supp. 987, 1002 (S.D. Ohio 1985). Unlike the present case, the requested documents in
Werner and Lee were essential to the determination of benefits.
Similarly, the Court is unconvinced by Plaintiffs’ reliance on nonbinding
Department of Labor guidance. Patelco Credit Union v. Sahni, 262 F.3d 897, 908 (9th
Cir. 2001) (finding that a Department of Labor advisory opinion is not binding
authority). The Court also finds that the Executive Order referred to by Plaintiffs is
inapplicable because it refers to hospitals, as opposed to plan administrators. Exec.
Order No. 13877, 84 Fed. Reg. 30849 (June 24, 2019).
The Court finds that Plaintiffs’ amendments are insufficient to remedy the
deficiency identified by this Court in its prior complaint. Dkt. # 23 at 6. Plaintiffs
continue to recite the statutory elements in conclusory fashion and fail to point to factual
allegations that “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at
568. Based on this conclusion, the Court need not address subsequent arguments relating
to control of the requested documents, clear notice, standing, and civil penalties. Dkt.
# 29 at 8, 21, 23-24. For this reason, the motion to dismiss is GRANTED.

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IV.

CONCLUSION

For the reasons stated above, the Court finds that Plaintiffs’ complaint fails to state

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a claim for relief under Rule 12(b)(6). Defendant’s motion is GRANTED and Plaintiffs’
complaint is DISMISSED without prejudice. Within fourteen (14) days from the date
of this Order, Plaintiffs may file an amended complaint addressing the deficiencies
described above. If Plaintiffs do not file an amended complaint within that time, the
Court may dismiss this action with prejudice.

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DATED this 31st day of March, 2021.

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A

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The Honorable Richard A. Jones
United States District Judge

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