Opinion
23 Civ. 04748 (GHW) (GS)
11-20-2023
M.R., individually and on behalf of J.S., a minor, Plaintiff, v. UNITED HEALTHCARE INSURANCE COMPANY, UNITED BEHAVIORAL HEALTH, PFIZER INC., and the PFIZER HEALTH and WELFARE BENEFIT PLAN, Defendants.
REPORT & RECOMMENDATION
GARY STEIN, United States Magistrate Judge
Plaintiff M.R., suing individually and on behalf of her minor stepdaughter, J.S., brings this action asserting claims under Section 502 of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1332, arising from the denial of health insurance benefits for J.S.'s treatment at a wilderness therapy program in 2020. Specifically, Plaintiff asserts claims (1) for recovery of benefits under ERISA (Count I); (2) for a violation of the Mental Health Parity and Addiction Equity Act of 2008 (“Parity Act”) incorporated into ERISA (Count II); and (3) for statutory penalties under ERISA (Count III).
Before the undersigned for Report and Recommendation is Defendants' motion to dismiss this action in its entirety based on a contractual limitations period in the relevant healthcare plan, or, in the alternative, to dismiss Counts II and III of the Complaint for failure to state a claim. (See Dkt. No. 26 (“Motion” or “Mot.”)). For the reasons set forth below, the undersigned respectfully recommends: (1) denying Defendants' motion to dismiss based on the contractual limitations period; (2) denying Defendants' motion to dismiss Count II; and (3) denying Defendants' motion to dismiss Count III, except insofar as Plaintiff's allegations could be construed as asserting a claim for statutory penalties against any party other than the plan administrator, Pfizer Inc. (“Pfizer”).
BACKGROUND
A. The Plan
At all times relevant to the Complaint, M.R. was a participant in, and her stepdaughter J.S. was a beneficiary of, the Pfizer Health and Welfare Benefit Plan (the “Plan”).(Dkt. No. 1 (“Compl.”) ¶ 6).The Plan is a self-funded employee welfare benefits plan governed by ERISA. (Id.; Plan at 18). Pfizer is the designated Plan Administrator as well as the Plan Sponsor. (Compl. at 1 and ¶ 5; Plan at 100).
The Plan is annexed as United Exhibit 1 to the Declaration of Shari Jackson submitted in support of Defendants' motion to dismiss. (Dkt. No. 34).
The Plan explicitly covers “step-children” of participants. (Plan at 8).
United Healthcare Insurance Company (“UHIC”) is the relevant third-party Claims Administrator under the Plan. (Compl. ¶ 2). United Behavioral Health (“UBH” and, together with UHIC, “United”) is UHIC's mental health arm responsible for making benefit coverage determinations for mental health disorders. (Compl. ¶ 3; Dkt. No. 28-3). As Claims Administrator, United has the authority to apply the Plan's provisions when making a benefit determination. (Plan at 18).
The Claims Administrator for behavioral health and substance use claims listed in the Plan is named Optum, which Plaintiff alleges is a United “brand name.” (Compl. ¶ 8; Plan at 101).
Under “What's Covered,” the Plan defines a “covered health service” as “one that generally is”:
Provided to prevent, diagnose or treat a sickness, injury, disease, behavioral illness, substance use or its symptoms;
Supported by national medical standards of practice;
Provided in accordance and consistent with the conclusions of prevailing medical research (based on well-conducted, randomized, controlled trials or well-conducted cohort studies);
Provided according to each Claims Administrator's medical policy determination guidelines;
The most cost-effective method and yields a similar outcome to other available alternatives; and
Not otherwise excluded by the Plan, including experimental, investigational or unproven services.(Id. at 36). In the same section, the Plan provides that, for “Behavioral Health and Substance Use Treatment,” it covers, as relevant here:
Inpatient or intermediate care based in a hospital or an alternate facility that provides behavioral health or substance use treatment;
Inpatient hospital stays; [and]
Stays in a residential or day treatment facility[.](Id. at 37).
On the other hand, under “What's Not Covered,” the Plan excludes from coverage, among numerous other items, “[s]ervices, therapies, and/or treatments” that are “[c]onsidered experimental or unproved by your Claims Administrator's medical policy” or “[do] not meet the definition of a covered health service.” (Id. at 50). The Plan does not specifically refer to wilderness therapy anywhere.
The Plan also sets forth detailed procedures for how to make a claim for benefits and how to challenge the denial of a claim. (Id. at 84-94). If a claim is denied, the participant may first request a “Level One Appeal” by the Claims Administrator. (Id. at 91). If still dissatisfied, the participant may request a second review known as a “Level Two Appeal,” which “follows the same process as the first level of appeal.” (Id.) If the Claims Administrator denies a claim on internal appeal, it is tasked with providing “written notification” which includes, inter alia, “a statement regarding the right to bring an action under Section 502(a) of ERISA.” (Id. at 92). A few paragraphs below, the Plan states in pertinent part:
You cannot bring a lawsuit to recover benefits under this plan until you have exhausted the administrative process described in this section. No action can be brought at all unless brought no later than one year following a final decision on your claim for benefits or on applicable external review determination, if later. Effective for claims for benefits filed after January 1, 2018, the venue for any lawsuit shall be the Southern District of New York. (Id. at 93 (emphasis added)).
The relevant terms and conditions of the Plan became effective on January 1, 2018. (Id. at 1).
B. J.S.'s Treatment and Plaintiff's Benefits Claim
J.S. was admitted to Evoke at Entrada (“Evoke”) on August 20, 2020 “in an attempt to treat symptoms which included: depression, anxiety, suicidal ideation, disordered eating, poor academic performance, limited insight into her behaviors, and negative self-image.” (Compl. ¶¶ 7, 13). J.S. was enrolled in an outdoor behavioral health treatment program at Evoke that the parties refer to as a “wilderness therapy” program. (Id. ¶¶ 19, 24; Dkt. No. 26 at 1). J.S.'s treatment at Evoke occurred over a span of about three months and ended on November 16, 2020. (Compl. ¶ 7).
Evoke is a “licensed treatment facility located in Washington County[,] Utah, which provides sub-acute inpatient treatment to adolescents with mental health, behavioral, and/or substance abuse problems.” (Id. ¶ 7). According to the Complaint, Evoke is “duly licensed by the state of Utah to provide intermediate level outdoor behavioral health treatment and [is] also accredited by the Association for Experiential Education.” (Id. ¶ 17). Plaintiff further alleges that the organization responsible for issuing insurance billing codes, the National Uniform Billing Committee (“NUBC”), has assigned wilderness programs their own billing code. (Id. ¶¶ 21, 56).
On October 20, 2020, while J.S. was still in Evoke's care, United initially denied payment for her treatment on the basis that such treatment was “unproven or experimental.” (Id. ¶ 14). On December 18, 2020, about a month after J.S.'s treatment concluded, Plaintiff submitted a Level One appeal of United's denial of the claim. (Id. ¶ 15). As part of this appeal, Plaintiff, inter alia, asserted that United's denial violated the Parity Act and provided documentation supporting her position that wilderness therapy for mental health and behavioral conditions is not “experimental,” but instead is “effective and well proven.” (See id. ¶¶ 16-24).
Plaintiff also asked that, if her appeal were denied, United provide her with “a copy of all documents under which the Plan was operated,” including several specific categories of documents. (Id. ¶ 26).
In a letter dated January 22, 2021, United upheld its initial denial of Plaintiff's claim. (Id. ¶ 28). The reviewer's letter pointed to the Plan's language excluding coverage for services, therapies, and/or treatments that are “considered experimental or unapproved by your Claims Administrator's medical policy.” (Id.) Payment for J.S.'s treatment at Evoke was unavailable, the letter stated, because such treatment was “Unproven or Experimental.” (Id.) United did not provide any of the Plan documents Plaintiff requested. (See id. ¶¶ 30, 65).
Subsequently, Plaintiff submitted a Level Two appeal asserting, inter alia, that the January 22, 2021 letter “made no effort to address any of the arguments she raised,” including her contention that United's denial violated the Parity Act, and that the individual who reviewed her initial appeal was not “qualified.” (Id. ¶ 29). Plaintiff again asked United to provide the same Plan documents that she had requested in her initial appeal. (Id. ¶ 30). In a March 29, 2021 letter, a different United reviewer upheld the denial of her claim, repeating the previous justifications “verbatim,” and without providing any of the requested Plan documents. (Id. ¶ 31). The March 29, 2021 letter stated that it was a “Final Adverse Determination of [Plaintiff's] internal appeal” and that “[a]ll internal appeals through UBH have been exhausted.” (Dkt No. 28-3).
Following this second denial on appeal, Plaintiff, in a September 6, 2022 letter addressed to Pfizer on which United was copied, made “one last request” to procure the documentation to which she claimed she was entitled under ERISA. (Id. ¶ 32; Dkt. No. 28-1). This letter requested ten specific categories of documents relating to Plaintiff's benefits claim, the denial of the claim, the medical necessity criteria utilized under the Plan, Plan documents and related agreements, factors used to determine that the Evoke treatment was experimental, as well as the Plan and United's compliance with the Parity Act. (Id.)
On October 3, 2022, the “Plan Admin”, i.e., Pfizer, “partially complied” with Plaintiff's request by providing the Plan and a Summary Plan description. (Compl. ¶ 33). On October 28, 2022, United also “partially complied” by providing additional documents (unspecified in the Complaint) and a “thorough” point-by-point response to Plaintiff's request. (Id. ¶¶ 34-35). Plaintiff nonetheless alleges that United's response was still “deficient in some regards” and that, while she has been provided with “much of the documentation” requested, neither Pfizer nor United have fully complied with her document request. (Id. ¶¶ 35-36).
C. Procedural History
Plaintiff filed her Complaint on January 27, 2023, asserting three ERISA-related claims. Count I alleges that United and the Plan breached their fiduciary duties under 29 U.S.C. § 1332(a)(1)(B) by dually failing to act in J.S.'s interests and to provide coverage for J.S.'s treatment in violation of the Plan. (Id. ¶¶ 39-46).
Plaintiff alleges that J.S.'s treatment cost her “an amount totaling over $50,000.” (Id. ¶ 38).
Count II alleges that United and the Plan violated the Parity Act and, consequently, their fiduciary duties under 29 U.S.C. § 1332(a)(3) by imposing more stringent restrictions on coverage for mental health or substance use treatment than for analogous medical treatment. (Id. ¶¶ 47-63). Count III alleges that Plaintiff is entitled to statutory penalties under 29 U.S.C. § 1332(a)(1)(A) and (c) based on the failure of the Plan Administrator and United, as its agent, to provide her all the documentation she requested. (Id. ¶¶ 64-70).
Plaintiff initially filed this action in the District of Utah. She alleged that Utah was the appropriate venue to resolve her claims because (1) United has an extensive business presence in Utah and processed her claims for benefits and appeals in Salt Lake City; and (2) J.S.'s wilderness therapy treatment at Evoke took place in Utah. (Id. ¶ 10).
However, on June 2, 2023, the parties submitted a Stipulated Motion to Change Venue to this District in view of the Plan's mandatory forum selection clause which, as noted above, provides that “any lawsuit” must be brought in the Southern District of New York. (Dkt. No. 10 at 2; Plan at 93). After Magistrate Judge Dustin B. Pead granted the parties' stipulated motion, the case was transferred to this District and assigned to the Honorable Gregory H. Woods on June 6, 2023. (See Dkt. Nos. 11, 12; Docket Entry, dated June 6, 2023). That same day, Judge Woods referred the action to Magistrate Judge Gabriel W. Gorenstein for General Pretrial matters as well as Dispositive Motions requiring a Report and Recommendation. (Dkt. No. 13).
On July 21, 2023, Defendants (all of whom are represented by the same counsel) filed the instant motion to dismiss along with a supporting memorandum of law and exhibits. (Dkt Nos. 26-27, 34). Plaintiff filed her opposition on August 18, 2023 (Dkt. No. 28 (“Opposition” or “Opp.”)), and Defendants replied on September 12, 2023 (Dkt. No. 29 (“Reply”)). One week later, the Order of Reference in this case was reassigned to the undersigned. (See Docket Entry, dated Sept. 19, 2023).
LEGAL STANDARD
A complaint may be dismissed for “failure to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6). In considering a motion to dismiss under Rule 12(b)(6), the Court must “‘accept[] all factual allegations in the complaint as true'” and “‘draw[] all reasonable inferences in the plaintiff's favor.'” Palin v. New York Times Co., 940 F.3d 804, 809 (2d Cir. 2019) (quoting Elias v. Rolling Stone LLC, 872 F.3d 97, 104 (2d Cir. 2017)).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 566 U.S. at 678. Although Rule 8's pleading standard “does not require ‘detailed factual statements,'” id. (quoting Twombly, 550 U.S. at 555); see Fed.R.Civ.P. 8(a)(2), “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. Determining whether a plausible claim has been pled is “a context-specific task” that requires the court “to draw on its judicial experience and common sense.” Id. at 679; Herrera v. Comme des Garcons, Ltd., 84 F.4th 110, 113 (2d Cir. 2023).
“In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). Further, “[w]here a document is not incorporated by reference, the court may [still] consider it where the complaint ‘relies heavily upon its terms and effect,' thereby rendering the document ‘integral' to the complaint.” Id. (quoting Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006)). In ERISA cases where, as here, “the Plan is directly referenced in the complaint and is the basis of [the] action, the Court may consider the Plan in deciding the motion to dismiss.” Faber v. Metro. Life Ins. Co., No. 08 Civ. 10588 (HB), 2009 WL 3415369, at *1 n.1 (S.D.N.Y. Oct. 23, 2009) (cleaned up).
The parties' motion papers also include several of the letters between the parties described in the Complaint. As neither side has lodged any objection, the Court has considered these letters, as well as the Plan, in this Report and Recommendation.
DISCUSSION
Defendants' motion to dismiss advances three separate arguments pursuant to Fed.R.Civ.P. 12(b)(6). First, Defendants argue that Plaintiff's entire Complaint is time-barred under the Plan's contractual limitation on suits brought more than one year “following a final decision” on a claim for benefits. (See Plan at 93). In the alternative, Defendants also assert that (1) Plaintiff has not pled a plausible claim under the Parity Act and (2) Plaintiff has not adequately pled a claim for statutory penalties under ERISA. The Court addresses each argument in turn.
A. The Plan's Contractual Limitations Period Is Unenforceable Because Notice of It Was Not Included in the Denial Letters
Courts generally must enforce an ERISA-governed health plan's stated limitations period for filing suit unless it is “unreasonably short” or a “controlling statute” prevents the provision from taking effect. Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99, 105, 109 (2013). As the Supreme Court noted in Heimeshoff: “The principle that contractual limitations provisions ordinarily should be enforced as written is especially appropriate when enforcing an ERISA plan,” as the plan “is at the center of ERISA.” Id. at 108 (cleaned up).
In this case, Plaintiff does not dispute the reasonableness of the one-year limitation period provided for in the Plan, nor does she contend that a statute supersedes operation of the provision. It is likewise undisputed that the final decision on Plaintiff's claims for benefits took place on March 29, 2021 and that Plaintiff did not file this action until more than a year later, on January 27, 2023, outside the contractual limitations period. (See Mot. at 8-10; Opp. at 9-11).
That is unsurprising. Since Heimeshoff, courts in this District have repeatedly found contractual limitation periods of a year or even less to be reasonable. See, e.g., Fitzsimons v. N.Y.C. Dist. Council of Carpenters & Joiners of Am., No. 21 Civ. 11151 (AT), 2023 WL 3061852, at *4 (S.D.N.Y. Apr. 24, 2023) (365 days); Park Ave. Aesthetic Surgery, P.C. v. Empire Blue Cross Blue Shield, No. 19 Civ. 9761 (JGK), 2021 WL 665045, at *7 (S.D.N.Y. Feb. 19, 2021) (nearly ten months); Tuminello v. Aetna Life Ins. Co., No. 13 Civ. 938 (KBF), 2014 WL 572367, at *2-3 (S.D.N.Y. Feb. 14, 2014) (nine months).
Instead, Plaintiff contends that the one-year limitations period does not apply at all, because United failed to provide written notice of the limitations period in its claims denial letters to Plaintiff, as it was required to do under 29 C.F.R. § 2560.503-1(g)(1)(iv). According to Plaintiff, the appropriate remedy for Defendants' alleged violation of this regulation is to find that the contractual limitations period has been waived. (Opp. at 9-11).
Defendants counter that Plaintiff misreads 29 C.F.R. § 2560.503-1(g)(1)(iv) and that the regulation did not, in fact, require United to provide notice of the contractual limitations period in its denial letters. (Reply at 2-3). In addition, Defendants contend Plaintiff's argument fails because, in her December 18, 2020 letter initiating her Level One appeal, Plaintiff acknowledged that she had obtained a copy of the Plan. This means, according to Defendants, that Plaintiff had “actual knowledge” of the contractual limitations period more than a year before she filed suit and therefore is not entitled to “equitable tolling” of the limitations period. (Id. at 3-5).
As described below, the parties' competing arguments raise important issues of law that are unresolved in the Second Circuit.
1. 29 C.F.R. § 2560.503-1(g)(1)(iv) Required United to Provide Written Notice of the Contractual Limitations Period in Its Denial Letters
The question whether United was required to provide written notice of the contractual limitations period turns on the proper interpretation of 29 C.F.R. § 2560.503-1(g)(1)(iv). This provision is part of a regulation promulgated by the U.S. Department of Labor (“DOL”) under the authority of Sections 503 and 505 of ERISA, 29 U.S.C. §§ 1133 and 1135. The regulation prescribes “minimum requirements for employee benefit plan procedures pertaining to claims for benefits by participants and beneficiaries.” 29 C.F.R. § 2560.503-1(a). These requirements “apply to every employee benefit plan” governed by ERISA. Id.
Section 2560.503-1(g), entitled “Manner and content of notification of benefit determination,” provides that “the plan administrator shall provide a claimant with written or electronic notification of any adverse benefit determination.” Id. § 2560.503-1(g)(1). It goes on to provide, in pertinent part:
The notification shall set forth, in a manner calculated to be understood by the claimant- ....
(iv) A description of the plan's review procedures and the time limits applicable to such procedures, including a
statement of the claimant's right to bring a civil action under section 502(a) of the Act following an adverse benefits determination on review.Id. § 2560.503-1(g)(1)(iv).
In support of her position that Section 2560.503-1(g)(1)(iv) requires notification of an ERISA plan's contractual limitations period, Plaintiff principally relies on Novick v. Metro Life Ins. Co., 764 F.Supp.2d 653, 660-64 (S.D.N.Y. 2011). At the time Novick was decided, the court could find “no case directly addressing this very question.” Id. at 661. Focusing on the plain language of the regulation, the court found that “the word ‘including' modifies the word ‘description' and requires that the description of review procedures include a description of the right to bring a civil action.” Id. For this and other reasons, the Novick court concluded that “properly read, the applicable regulations and the Plan itself make a claimant's ability to seek judicial review part of such procedures; and, therefore, that disclosure of the applicable time limit is required.” Id.
Defendants respond that Novick should not be followed in light of Heimeshoff v. Hartford Life & Accident Ins. Co., No. 3:10 Civ. 1813 (JBA), 2012 WL 171325 (D. Conn. Jan. 20, 2012) (“Heimeshoff I”), aff'd, 496 Fed.Appx. 129 (2d Cir. Sep. 13, 2012) (summary order) (“Heimeshoff II”), aff'd, 571 U.S. 99 (2013). In enforcing a contractual limitations period to bar plaintiff's ERISA claim, the Heimeshoff I court explicitly disagreed with Novick's interpretation of Section 2560.503-1(g)(1)(iv). Id. at *6-7. The court emphasized that the regulation's notification requirement speaks of “the claimant's right to bring a civil action,” Id. at *6 (citation omitted; emphasis in original), as distinct from the time within which the action must be brought. In the view of Heimeshoff I: “That the regulation requires notification of time limits for plan review procedures but says nothing about time limits with respect to civil actions suggests that the DOL did not intend to require such a time limit notification in the benefit determination.” Id.
On appeal, the plaintiff in Heimeshoff I relied on Novick to argue that Section 2560.503-1(g)(1)(iv) requires notice of the contractual limitations period and further contended that the insurer's failure to provide such notice entitled her to “equitable tolling” of her claim. Heimeshoff II, 496 Fed.Appx. at 130. In its summary order, the Second Circuit did “not address th[e] issue” of whether “the regulation in question requires notice.” Id. Instead, the court found that because plaintiff's counsel had conceded that he had received a copy of the plan containing its limitations period long before that period had expired, plaintiff's actual knowledge of the limitations period prevented her from relying on the equitable tolling doctrine. Id. at 130-31. On this basis, the court affirmed dismissal of the complaint. Id.
Although the Second Circuit has yet to resolve the conflict between Novick and Heimeshoff I as to the proper interpretation of Section 2560.503-1(g)(1)(iv), numerous other courts have addressed this issue in the ensuing eleven years. The overwhelming weight of authority-including decisions by the First, Third and Sixth Circuits; by the Eastern and Western Districts of New York and, most recently, another judge in this District; and by several district courts in other circuits-favors the Novick court's construction and holds that the regulation requires plan administrators to inform claimants of plan-imposed time limits for bringing civil actions in adverse benefit determination letters. SantanaDaz v. Metro. Life Ins. Co., 816 F.3d 172 (1st Cir. 2016); Mirza v. Ins. Adm'r of Am., Inc., 800 F.3d 129 (3d Cir. 2015); Moyer v. Metro. Life Ins. Co., 762 F.3d 503 (6th Cir. 2014); Li Neuroscience Specialists v. Blue Cross Blue Shield of Mass., No. 17 Civ. 06572, 2019 WL 121673, at *3-4 (E.D.N.Y. Jan. 7, 2019); Bell v. Xerox Corp., 52 F.Supp.3d 498, 508-10 (W.D.N.Y. 2014); Popovchak v. UnitedHealth Grp. Inc., No. 22 Civ. 10756 (VEC), 2023 WL 6125540, at *7 n.17 (S.D.N.Y. Sep. 19, 2023).
For illustrative district court decisions in the Fourth, Seventh, Ninth and Tenth Circuits agreeing with the interpretation adopted by Novick and the First, Third and Sixth Circuits, see, e.g., Zink v. St. Luke's Health System, Ltd., No. 22 Civ. 00359 (AKB), 2023 WL 5748158, at *3-6 (D. Idaho Sep. 6, 2023); Hatch v. Wolters Klwer United States, Inc. Health Plan, No. 20 C 7168, 2023 WL 4930286, at *10-11 (N.D. Ill. Aug. 1, 2023); Hamilton v. Schlumberger Tech. Corp. Pension Plan, No. 8:22-00733 (HMH), 2022 WL 1540459, at *5-7 (D.S.C. May 16, 2022); E.F. v. United Healthcare Ins. Co., No. 2:21 Civ. 190 (JNP) (DBP), 2022 WL 957200, at *6 (D. Utah Mar. 30, 2022); Gregoire v. United Healthcare Servs., Inc., No. C 18-04764, 2019 WL 174555, at *2-4 (N.D. Cal. Jan. 10, 2019); and Weiss v. Banner Health, No. 17 Civ. 00443 (WYD) (NYW), 2017 WL 11648436, at *3-4 (D. Colo. Dec. 20, 2017). District court decisions that follow Heimeshoff I's reasoning are comparatively sparse and generally pre-date the rulings by the First, Third and Sixth Circuits on this issue. Examples include Soares v. United of Omaha Life Ins. Co., 157 F.Supp.3d 164, 171-72 (D. Conn. 2016); Fontenot v. Intel Corp. Long Term Disability Plan, No. 3:14 Civ. 00153 (AA), 2014 WL 2871371, at *5-8 (D. Or. June 24, 2014); and Freeman v. American Airlines, Inc. Long Term Disability Plan, No. 13 Civ. 05161 (RSWL) (AJW), 2014 WL 690207, at *5 (C.D. Cal. Feb. 20, 2014).
This Court concurs with the now-prevailing view, for several reasons.
First and foremost is the text of Section 2560.503-1(g)(1)(iv). See Olagues v. Perceptive Advisors LLC, 902 F.3d 121, 129 (2d Cir. 2018) (“we . . . begin with the text of the regulation”). The principal interpretive question is whether the phrase “the plan's review procedures and the time limits applicable to such procedures” encompasses civil actions under Section 502, as Novick held, or is instead limited to the insurer's internal review of benefits claims, per Heimeshoff I. The Court agrees that under the provision's plain language, judicial actions are included. As the Third Circuit persuasively reasoned in Mirza:
For purposes of interpretation, the most important word in the sentence is “including.” “[I]ncluding” modifies the word “description,” which is followed by a prepositional phrase explaining what must be described-the plan's review procedures and applicable time limits for those procedures. If the description of the review procedures must “includ[e]” a statement concerning civil actions, then civil actions are logically one of the review procedures envisioned by the Department of Labor. And as with any other review procedure, the administrator must disclose the plan's applicable time limits.800 F.3d at 134; see also Santana-Diaz, 816 F.3d at 180 (“[W]e think the term ‘including' indicates that an ERISA action is considered one of the ‘review procedures' and thus notice of the time limit must be provided.”) (citation omitted); Moyer, 762 F.3d at 505 (“The claimant's right to bring a civil action is expressly included as a part of those procedures for which applicable time limits must be provided.”).
The alternative reading adopted in Heimeshoff I artificially separates subsection (g)(1)(iv)'s reference to “civil action[s]” from the “review procedures” described earlier in the sentence, despite the word “including” that connects the former to the latter. As the First Circuit explained, “interpreting the regulation that way-as imposing two unrelated requirements-would require us effectively to erase the word ‘including' from the sentence and to replace it with ‘and,'” in contravention of the regulation's text. Santana-Diaz, 816 F.3d at 180; see also Mirza, 800 F.3d at 134-35 (“The argument that the language [of Section 2560.503-1(g)(1)(iv)] speaks to time limits for plan procedures but is silent as to time limits for civil actions reads the word ‘including' out of the regulation.”); Popovchak, 2023 WL 6125540, at *7 n.17 (noting that the phrase “the plan's review procedures” must encompass judicial actions, as “the word ‘including' would otherwise lose its meaning”).
In addition to honoring the regulation's text, requiring notice of a contractual limitations period promotes the regulation's animating statutory purpose: to provide “adequate notice in writing” of claim denials and afford claimants the opportunity for a “full and fair review” of their claim. 29 U.S.C. § 1133(1), (2). “[T]he purpose of ERISA's notice requirement is to provide claimants with enough information to prepare adequately for further administrative review or an appeal to the federal courts.” Hobson v. Metro. Life Ins. Co., 574 F.3d 75, 87 (2d Cir. 2009) (cleaned up) (emphasis added). Inasmuch as “part of the purpose of § 1133 is to ensure effective judicial review,” allowing claims administrators to omit “judicial review time limits from the adverse benefits determination letter [would be] inconsistent with ensuring a fair opportunity for review” and frustrate the statutory goal. Moyer, 762 F.3d at 507; see also Santana-Diaz, 816 F.3d at 181 (“Our reading of the regulation is furthermore in keeping with 29 U.S.C. § 1133's purpose of ensuring a fair opportunity for judicial review, and with ERISA's overall purpose as a remedial statute.”); Popovchak, 2023 WL 6125540, at *7 n.17 (agreeing that such a reading “upholds the full and fair review contemplated by 29 U.S.C. § 1133 and the DOL regulations”) (citation omitted).
“[P]ractical considerations” furnish additional support for this interpretation. Mirza, 800 F.3d at 135. If Defendants' construction were to be followed, “plan administrators could easily hide the ball and obstruct access to the courts.” Id. In this case, for example, the one-year contractual limitations period for bringing a civil action challenging a denial of benefits was contained in a single sentence on page 93 of the 103-page Plan. As the First Circuit reasoned, “[c]laimants are obviously more likely to read information stated in the final denial letter, as opposed to included (or possibly buried) somewhere in the plan documents,” and, thus, “[w]e think it clear that the [DOL] has included the plan-imposed time limit for filing suit” among the information required to be disclosed by Section 2560.503-1(g)(1)(iv). Santana-Diaz, 816 F.3d at 181; see also id. at 184 (noting that “the requirement to include such information in their denial letters imposes upon [plan administrators] the most minimal of burdens”).
Moreover, the DOL itself has endorsed the interpretation of Section 2560.503-1(g)(1)(iv) set forth in Novick, Moyer, Mirza, Santana-Diaz, and similar cases. In promulgating amendments to 29 C.F.R. Part 560, the agency stated that it “agrees with the conclusion of those federal courts that have found that the current regulation fairly read requires some basic disclosure of contractual limitations periods in adverse benefit determinations.” Claims Procedure for Plans Providing Disability Benefits, 81 Fed.Reg. 92316, 92331 (Dec. 19, 2016). The DOL further stated, “[i]n fact... the statement of the claimant's right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review would be incomplete and potentially misleading if it failed to include limitations or restrictions in the documents governing the plan on the right to bring such a civil action.” Id.
Thus, to the extent that the text of Section 2560.503-1(g)(1)(iv) could be construed as ambiguous, the DOL's interpretation of its own regulation is yet another factor weighing in favor of Plaintiff's position. See, e.g., Walsh v. Walmart, Inc., 49 F.4th 821, 829 (2d Cir. 2022) (DOL's reasonable interpretation of its own regulation “is entitled to substantial deference”).
In short, the text of Section 2560.503-1(g)(1)(iv), the underlying statutory purpose furthered by the regulation, the issuing agency's own interpretation of the regulation, and the overwhelming weight of case authority all point to the same conclusion: United was required to include in its adverse benefit determination letters not only notice of Plaintiff's right to bring a civil action, but also notice of the Plan's one-year time limit for bringing the action.
2. As a Result of the Regulatory Violation, the Plan's Contractual Limitations Period Is Unenforceable in This Case
The Court's conclusion that United violated Section 2560.503-1(g)(1)(iv) does not end the analysis. As noted above, Defendants further contend that because Plaintiff admits possessing a copy of the Plan more than a year before she filed suit, she cannot rely on the doctrine of “equitable estoppel” to toll the contractual limitations period. (Reply at 3-5). Defendants' contention must be rejected, however, because Plaintiff does not, and need not, rely on “equitable tolling” to bar application of the Plan's contractual limitations period.
Critically, Plaintiff's Opposition does not ask the Court to consider applying equitable tolling. Rather, Plaintiff argues that the remedy for Defendants' regulatory violation is to find a waiver of the contractual limitations period. (See Opp. at 9-11). In the context of a Section 2560.503-1(g)(1) analysis, this is a distinction with a difference. As one court has explained, there are “two potential consequences for a violation of the regulation”: (1) conducting an equitable tolling analysis; and (2) alternatively, finding the plan-imposed time limit unenforceable against the plaintiff. E.F. v. United Healthcare Ins. Co., No. 2:21 Civ. 190 (JNP) (DBP), 2022 WL 957200, at *6 (D. Utah Mar. 30, 2022) (citation omitted).
As the E.F. court noted, the “predominant approach” is to find the contractual limitations period unenforceable. Id. Each of the cases cited above which found a violation of Section 2560.503-1(g)(1)(iv) went on to hold that the contractual limitations period was unenforceable against the plaintiff. See, e.g., Santana-Diaz, 816 F.3d at 184-85 (“as a consequence of MetLife's failure to include the time limit for filing suit in its final denial letter, the limitations period in this case was rendered inapplicable”); Mirza, 800 F.3d at 137-38 (“Because the denial letter . . . did not comply with the regulatory requirements, the one-year deadline for judicial review was not triggered.”); Moyer, 762 F.3d at 507 (appropriate remedy is for plaintiff to “now receive judicial review”); Popovchak, 2023 WL 6125540, at *8 (plan's limitation period “was, therefore, never triggered”); Novick, 764 F.Supp.2d at 664 (“the appropriate result is to disregard the Plan's six-month limitations period”); E.F., 2022 WL 957200, at *6 (“the Court deems the Plan's three-year limitations provision unenforceable”).
Although not cited by Defendants, the Eleventh Circuit, in an unpublished decision in 2015, took the position that, even assuming a violation of Section 2560.503-1(g)(1)(iv), a contractual limitations period is enforceable unless the plaintiff can establish an entitlement to equitable tolling. Wilson v. Standard Ins. Co., 613 Fed.Appx. 841, 844 (11th Cir. 2015); see also Malave v. Life Ins. Co. of N. Am., No. 8:17 Civ. 1583-T-17TBM, 2017 WL 6611322 (M.D. Fla. Oct. 26, 2017) (applying Wilson and dismissing claim based on plaintiff's failure to establish equitable tolling). For the reasons set forth in text, this Court does not follow Wilson's approach, which conflicts with the majority view. See Santana-Diaz, 816 F.3d at 183 n.13 (finding Wilson to have “not . . . much persuasive weight”). To the extent that Wilson suggests it would be unfair to impose the remedy of unenforceability for a plan administrator's mistaken “interpretation of the ambiguous § 2560.503(g)(1)(iv),” 613 Fed.Appx. at 844 n.3, the Court notes that any such fairness concerns have dissipated with the passage of time. By the time United issued its adverse determination letters to Plaintiff in 2021, its interpretation of Section 2560.503(g)(1)(iv) had been rejected by three circuit courts, a decided majority of district courts, and the DOL. United easily could have included in those letters a sentence or two notifying Plaintiff of the Plan's contractual limitations period. It chose not to. The Court perceives no unfairness to United in ruling the limitations period unenforceable under these circumstances.
Because the contractual limitations period is inapplicable, equitable tolling is not “‘an obstacle, or even relevant, to [the plaintiff's] claim.'” Santana-Diaz, 816 F.3d at 183-84 (quoting Mirza, 800 F.3d at 133). It is, therefore, of no moment whether Plaintiff possessed a copy of the Plan more than a year before she filed suit. To employ an equitable tolling analysis, as Defendants urge, instead of deeming the limitations period unenforceable “would render hollow the important disclosure function of § 2560.503-1(g)(1)(iv),” Mirza, 800 F.3d at 137, and allow plan administrators to “dodge this simple regulatory obligation,” effectively rendering it “a dead letter,” Santana-Diaz, 816 F.3d at 184; see also E.F., 2022 WL 957200, at *6.
Defendants' reliance on the Second Circuit's equitable tolling analysis in its summary order in Heimeshoff II (Reply at 4-5) is unavailing. The Second Circuit decision considered only whether equitable tolling was available as a remedy for defendants' alleged noncompliance with Section 2560.503-1(g)(1)(iv). See Heimeshoff II, 496 Fed.Appx. at 130-31. Here, Plaintiff does not argue for the application of equitable tolling. Facing the same circumstances, Judge Caproni recently refused to enforce a contractual limitations period despite the defendants' argument that the plaintiffs were not entitled to equitable tolling because their counsel had possessed a copy of the plan in question. Popovchak, 2023 WL 6125540, at *7-8 & nn.16, 18. “Because the Court finds that the [Plan's] contractual limitations period does not apply, and because Plaintiff[] do[es] not argue that the limitations period should be equitably tolled, the Court need not decide whether equitable tolling applies.” Id. at *8 n.18 (emphasis added).
Any other result would conflict with the Second Circuit's decision in Burke v. Kodak Ret. Income Plan, 336 F.3d 103 (2d Cir. 2003). In Burke, the plan administrator's denial letter failed to sufficiently notify the plaintiff of the plan's time limit for filing an administrative appeal. The Second Circuit, after finding that this failure violated Section 2560.503-1, held that, as a result, the plan's time limit was “not trigger[ed]” and refused to enforce it. Id. at 107 (“A notice that fails to substantially comply with [the requirement to provide the claimant with the time limits applicable to administrative review] does not trigger a time bar contained within the plan.”). Although Burke involved a plan-imposed time limit on administrative review, its logic applies equally in the context of a failure to notify a claimant of a plan-imposed time limit on judicial review. See, e.g., Santana-Diaz, 816 F.3d at 184-85 (citing Burke in support of its holding that limitations period was rendered inapplicable); Moyer, 762 F.3d at 507 (same); Popovchak, 2023 WL 6125540, at *8 (same).
Accordingly, the Court holds that the Plan's one-year limitations period is unenforceable as a result of Defendants' violation of their regulatory obligation under Section 2560.503-1(g)(1)(iv) to include notice of the limitations period in the denial letters sent to Plaintiff.
3. Plaintiff's Claims Are Timely
Because the Plan's contractual limitations period does not apply, the timeliness of Plaintiff's lawsuit is governed by the normal statute of limitations applicable to ERISA claims. Defendants do not argue that Plaintiff's claims are untimely under any of the relevant statutes of limitation. That is for good reason, as the Court's independent review indicates that all three of Plaintiff's claims are timely. See, e.g., Popovchak, 2023 WL 6125540, at *8 & n.19 (assessing whether claim was timely under applicable statute of limitations after determining that contractual limitations period was inapplicable).
Benefits Claim (Count I). In the absence of an applicable plan-specified limitations period, the Court of Appeals has instructed that an ERISA claim for benefits under 29 U.S.C. § 1132(a)(1)(B) is subject to the “‘most nearly analogous . . . limitations statute' of the forum state: the limitations period for breach-of-contract claims.” Id. at *6 (quoting Muto v. CBS Corp., 668 F.3d 53, 57 (2d Cir. 2012)). If the claim is brought by a nonresident plaintiff and accrued outside of New York, the court must “apply the shorter limitations period of either New York or the state in which the cause of action accrued” under New York's borrowing statute. Id. (citing Muto, 668 F.3d at 57); see N.Y. C.P.L.R. § 202.
Here, the potentially relevant state statutes of limitations are those of New York (the forum state and where Pfizer is located, see Dkt. No. 10 at 2), North Carolina (where Plaintiff resides and the injury was felt, see id.), and Utah (where J.S.'s treatment and the denial of Plaintiff's benefits claims occurred, see Compl. ¶¶ 7, 10, 28, 31). Both New York and Utah have a six-year statute of limitations for breach of contract claims. N.Y. C.P.L.R. § 213(2); Utah Code Ann. § 78B-2-309. In North Carolina, the relevant limitations period is three years. N.C. Gen. Stat. § 152(1). Under any of these potentially applicable limitations periods, Plaintiff's claim for benefits, which arises from Defendants' refusal to cover J.S.'s wilderness therapy beginning in late 2020, is timely.
Under N.Y. C.P.L.R. § 202, “a cause of action ‘accrued' at the time where, and the place where, the plaintiff is injured.” Vincent v. Money Store, 915 F.Supp.2d 553, 568 (S.D.N.Y. 2012) (citing Global Fin. Corp. v. Triarc Corp., 93 N.Y. 525, 528 (1999)). When a loss is “purely economic,” the cause of action accrues in the plaintiff's state of residence, rather than where a defendant's “wrongful acts” occurred. Id. (citations omitted). Given the analysis in text, the Court need not decide where Plaintiff's claim accrued under this test.
Parity Act Claim (Count II). Although the Parity Act does not itself contain a private right of action, Congress incorporated parts of the Act into ERISA and, therefore, the Act “may be enforced using the civil enforcement provisions in ERISA.” Munnelly v. Fordham Univ. Fac., 316 F.Supp.3d 714, 728 (S.D.N.Y. 2018) (citation omitted); see 29 U.S.C. § 1185a. Here, Plaintiff has brought her Parity Act claim under ERISA's so-called catch-all provision, 29 U.S.C. § 1132(a)(3), which enables plaintiffs to seek “appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy.” Varity Corp v. Howe, 516 U.S. 489, 512 (1996). Claims under Section 1132(a)(3) are subject to ERISA's statute of limitations for breaches of fiduciary duty and must be brought within six years of the date of the last action which constituted a part of the breach or three years after the date on which the plaintiff had actual notice of the breach, whichever is earlier. 29 U.S.C. § 1113. Whether the six-year or the three-year period governs, Plaintiff's Parity Act claim is timely.
Statutory Penalties Claim (Count III). Plaintiff's claim for statutory penalties under 29 U.S.C. § 1132(c) requires an additional “most nearly analogous” statute analysis. Muto, 668 F.3d at 57. In the Second Circuit, “the most closely analogous statute, for purposes of implying a limitations period for Section 1132(c)(1), is the period applicable to statutory penalties.” Kowalchyn v. Lewis, No. 16 Civ. 7284 (RJS), 2018 WL 2081858, at *5 (S.D.N.Y. Mar. 28, 2018) (citing Brown v. Rawlings Fin. Servs., LLC, 868 F.3d 126 (2d Cir. 2017), and applying New York's statute for an action “to recover upon a liability, penalty, or forfeiture,” N.Y. C.P.L.R. § 214(2)).
Here, New York has a three-year statute of limitations for statutory penalties. See N.Y. C.P.L.R. § 214(2). Both North Carolina and Utah have a one-year statute of limitations for statutory penalties. See N.C. Gen. Stat. § 1-54(2); Utah Code Ann. § 78B-2-302(2). Claims for statutory penalties under ERISA accrue on the date of Plaintiff's “last request for information.” Harless v. Research Inst. of Am., 1 F.Supp.2d 235, 240 (S.D.N.Y. 1998); accord Kowalchyn, 2018 WL 2081858, at *5. The Complaint alleges that Plaintiff's last request for documents was sent on September 6, 2022. (Compl. ¶¶ 32, 66). As such, Plaintiff's filing of the instant suit nearly five months later falls well within the one-year or three-year potentially applicable limitations period.
B. The Complaint States a Plausible Claim for Relief Under the Parity Act
In recent years there has been a spate of ERISA lawsuits challenging the denial of health insurance claims for wilderness programs, which, as noted above, is a form of outdoor behavioral therapy used to treat mental health and behavioral issues. As here, plaintiffs in such cases commonly assert a claim for violation of the Parity Act, and defendants frequently move to dismiss that claim. Assessing the Complaint's allegations in view of the governing legal standards and case law in this District, the Court concludes that Plaintiff has plausibly pled a Parity Act claim.
See generally Thomas J. Sullivan & Cathryn Johns, Lessons About the Parity Act from Wilderness Therapy Cases, 13 J. HEALTH & LIFE SCI. 70 (2021).
1. Relevant Legal Principles
The Parity Act aims to “end discrimination in the provision of insurance coverage for mental health and substance use disorders as compared to coverage for medical and surgical conditions in employer-sponsored group health plans.” Am. Psychiatric Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352, 356 (2d Cir. 2016). In simpler terms, “the Parity Act requires ERISA plans to treat sicknesses of the mind in the same way that they would a broken bone.” Munnelly, 316 F.Supp.3d at 728 (cleaned up).
As relevant to Plaintiff's claim, the Parity Act provides that
[i]n the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that--...
(ii) the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.29 U.S.C. § 1185a(a)(3)(A)(ii). The statute goes on to define “treatment limitation” to include “limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.” Id. § 1185a(a)(3)(B)(iii).
The DOL's implementing regulations for the Parity Act distinguish between those treatment limitations that are “quantitative” (“QTLs”) and those that are “nonquantitative” (“NQTLs”). 29 C.F.R. § 2590.712(a). QTLs are “expressed numerically (such as 50 outpatient visits a year).” Id. NQTLs “limit the scope or duration of benefits for treatment.” Id. Examples of NQTLs include “[r]estrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided.” Id. § 2590.712(c)(4)(ii)(H).
The DOL's regulations forbid a plan from “impos[ing] a nonquantitative treatment limitation with respect to mental health . . . benefits in any classification” unless, “under the terms of the plan . . . as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the nonquantitative treatment limitation to mental health . . . benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other facts used in applying the limitation with respect to medical/surgical benefits in the same classification.” Id. § 2590.712(c)(4)(i).
There are six classifications listed in the Parity Act regulations: (1) inpatient, in-network; (2) inpatient, out-of-network; (3) outpatient, in-network; (4) outpatient, out-of-network; (5) emergency care; and (6) prescriptions drugs. 29 C.F.R. § 2590.712(c)(2)(iii)(A).
With these statutory and regulatory provisions in mind, courts in this District have articulated a standard for stating a Parity Act claim sufficient to survive a motion to dismiss. A Complaint must plead that:
(1) the insurance plan is of the type covered by the Parity Act; (2) the insurance plan provides both medical benefits and mental-health benefits; (3) the plan has a treatment limitation-either quantitative or nonquantitative-for one of those benefits that is more restrictive for mentalhealth treatment than it is for medical treatment; and (4)
the mental-health treatment is in the same classification as the medical treatment to which it is being compared.Gallagher v. Empire HealthChoice Assur., Inc., 339 F.Supp.3d 248, 256 (S.D.N.Y. 2018) (quoting Bushell v. UnitedHealth Grp., Inc., No. 17 Civ. 2021 (JPO), 2018 WL 1578167, at *5 (S.D.N.Y. Mar. 27, 2018)); accord Richard K. v. United Behavioral Health, No. 18 Civ. 6318 (GHW) (BCM), 2019 WL 3083019, at *11 (S.D.N.Y. June 28, 2019), report and recommendation adopted, 2019 WL 3080849 (S.D.N.Y. July 15, 2019).
Although the third prong of this test speaks of a more restrictive treatment limitation in “the plan,” the limitation need not appear on the face of the plan itself. If a plan administrator applies a plan's limitations in a manner that discriminates against mental health treatment, this too may run afoul of the Parity Act. See, e.g., Colin D. v. Morgan Stanley Med. Plan, No. 20 Civ. 9120 (LTS) (GWG), 2023 WL 6849130, at *14 (S.D.N.Y. Oct. 17, 2023) (“a Parity Act violation may occur based not only on the plan's plain language, but also based on the plan's application”); Bushell, 2018 WL 1578167, at *7 (complaint adequately alleged that “United applied an NQTL more stringently to mental-health benefits than to medical benefits”); T.E. v. Anthem Blue & Blue Shield, No. 3:22 Civ. 202 (DJH) (LLK), 2023 WL 2634059, at *3 (W.D. Ky. Mar. 24, 2023) (“A plaintiff may pursue two kinds of claims under the Parity Act: a facial challenge or an as-applied challenge.”); see also 29 C.F.R. § 2590.712(c)(4)(i) (impermissible treatment limitation may arise under plan “as written and in operation”) (emphasis added).
2. Application
Plaintiff contends that under the Plan's “experimental or investigational” exclusion, Defendants “categorically exclude” coverage for wilderness programs, a form of sub-acute inpatient mental health treatment, even though wilderness programs have been issued a NUBC billing code and Evoke is a licensed and accredited medical health treatment provider. (Opp. at 5, 14-15; see Compl. ¶¶ 7, 17-18, 21). By contrast, Plaintiff alleges, Defendants do not apply the Plan's “experimental or investigational” exclusion to “categorically exclude” coverage for analogous forms of sub-acute inpatient medical/surgical treatment settings that are licensed and accredited and have been issued a NUBC billing code. (Opp. at 5-6, 14; see Compl. ¶¶ 52, 57, 59). This disparity, according to Plaintiff, amounts to a more restrictive NQTL for sub-acute inpatient mental health treatment and hence violates the Parity Act. (Opp. at 16).
The Complaint asserted a violation of the Parity Act under two additional theories: (1) a disparate application of acute medical necessity criteria; and (2) limitations on mental health treatment based on geographic location. (Compl. ¶¶ 53-55, 59). In the face of Defendants' motion to dismiss, Plaintiff abandoned those theories in her Opposition. (Opp. at 12 n.33).
Defendants do not dispute the first, second, or fourth elements of the pleading standard set forth above: that the Pfizer Plan is of a type “covered by the Parity Act;” that the Plan “provides both medical and mental-health benefits;” and that Plaintiff is comparing wilderness programs with medical/surgical treatment settings in the “same classification,” i.e., inpatient services. See Gallagher, 339 F.Supp.3d at 256. Defendants do, however, dispute the third element: that Plaintiff has adequately alleged a more restrictive treatment limitation applicable to mentalhealth benefits. See id. Defendants argue that Plaintiff has not properly pled a Parity Act claim because: (1) Plaintiff's claim incorrectly assumes that any difference in NQTLs between mental health and medical/surgical benefits is a Parity Act violation; and (2) the Plan does not provide coverage for any type of wilderness therapy, either for mental health or medical/surgical purposes, and “[n]o [Parity Act] violation claim can stand where wilderness therapy is excluded for both mental health and medical/surgical conditions.” (Mot. at 10-14, 18; Reply at 7-14).
In measuring the strength of these arguments, the Court finds Gallagher to be particularly instructive. As in this case, the plaintiff in Gallagher challenged the defendant claims administrator's denial of mental health benefits for his teenage daughter's wilderness therapy (at an Evoke program in Oregon). See Gallagher, 339 F.Supp.3d at 250, 253. Like the Plan here, the health insurance plan at issue did not “specifically mention wilderness therapy.” Id. at 252. The defendant deemed such services to be outside the scope of the covered mental health treatment services listed in the plan. Id. at 253. Plaintiff alleged that this “blanket exclusion” of wilderness therapy violated the Parity Act because it constituted a “separate treatment limitation applicable only to mental health benefits;” analogous forms of medical/surgical treatment at skilled nursing and rehabilitation facilities, plaintiff alleged, were covered under the plan. Id. at 253, 258.
Rejecting the defendant's arguments to the contrary, the Gallagher court held these allegations to be “sufficient at the pleading stage to establish the third element of a Parity Act violation.” Id. at 258. The court adopted the reasoning of two other decisions that had upheld Parity Act claims predicated on allegations of a “categorical exclusion” of wilderness therapy mental-health treatment from a plan's coverage. Id. at 256-58 (discussing Vorpahl v. Harvard Pilgrim Health Ins. Co., No. 17 Civ. 10844 (DJC), 2018 WL 3518511 (D. Mass. July 20, 2018), and A.Z. v. Regence Blueshield, 333 F.Supp.3d 1069 (W.D. Wash. 2018)). Agreeing with those courts that “it [is] ‘sufficient to allege . . . that a mental-health treatment is categorically excluded while a corresponding medical treatment is not to state a Parity Act claim,'” Id. at 257 (quoting Vorpahl, 2018 WL 3518511, at *6) (cleaned up); see also id. (quoting similar holding in A.Z.), the Gallagher court explained:
At least at the motion to dismiss stage, the relevant comparison is not whether benefits for wilderness therapy are available for medical/surgical patients, but rather whether the Plan has chosen to provide benefits for skilled nursing facilities and rehabilitation centers for medical/surgical patients, but chosen to deny benefits to those with mental health conditions who seek coverage for a residential treatment center offering wilderness therapy.Id. at 258; see also Bushell, 2018 WL 1578167, at *6 (similarly holding, in the context of mental-health nutritional counseling rather than wilderness therapy, that “it is enough to plausibly plead that there is a categorical exclusion for mental health benefits but not for medical benefits”).
Plaintiff's allegations here mirror those in Gallagher. Plaintiff alleges that wilderness therapy, a mental-health treatment, is categorically excluded “as experimental or investigational” while she further alleges that the Plan covers analogous medical/surgical treatment for “sub-acute inpatient treatment settings such as skilled nursing facilities, inpatient hospice care, and rehabilitation facilities.” (Compl. ¶¶ 52, 56; see also Opp. at 15 (“[The] allegations assert a [Parity Act] violation[] because Defendants categorically exclude wilderness programs (which are sub-acute inpatient mental health care treatment settings) when they do not categorically exclude analogous medical/surgical treatment settings.”)). Adding a dimension that the Gallagher complaint lacked, Plaintiff also alleges that (1) the Plan denies coverage for wilderness therapy programs even though such programs now have a NUBC billing code and even though Evoke is licensed and accredited and (2) by contrast, the Plan does not exclude any licensed and accredited sub-acute inpatient medical/surgical treatment settings that have a NUBC billing code. (Compl. ¶¶ 7, 17-18, 21, 56-57; Opp. at 14, 16 & n.53).
As in Gallagher, these allegations, taken as true, suffice to state a plausible claim for relief under the Parity Act. Here, as there, Plaintiff has adequately alleged that “a mental-health treatment is categorically excluded while a corresponding medical treatment is not.” Gallagher, 339 F.Supp.3d at 257.
Defendants assert that Gallagher is inapposite because the alleged NQTL on wilderness therapy programs there was “applicable only to mental health benefits,” Gallagher, 339 F.Supp.3d at 258, whereas here, “no wilderness therapy programs are covered under the Plan - not for any condition, including medical/surgical ones.” (Reply at 14). But the defendant in Gallagher made precisely the same argument, Gallagher, 339 F.Supp.3d at 256-57, and the court squarely rejected it, holding that “the relevant inquiry is “not ‘whether coverage of both types of treatment would be excluded in [a] wilderness program setting.'” Id. at 257 (quoting Vorpahl, 2018 WL 3518511, at *3) (emphasis added); see also id. at 258 (“the relevant comparison is not whether benefits for wilderness therapy are available for medical/surgical benefits”).
In support of their argument, Defendants cite two out-of-circuit district court decisions that have dismissed Parity Act claims where the plaintiff failed to show that an exclusion for wilderness programs applied only to mental-health treatment. (Reply at 14 (citing A.H. v. Microsoft Corp. Welfare Plan, No. C17-1889 (JCC), 2018 WL 2684387, at *5-7 (W.D. Wash. June 5, 2018), and Peter M. v. Aetna Health & Life. Ins. Co., 554 F.Supp.3d 1216, 1227 (D. Utah 2021)). The Gallagher court, however, expressly discussed and “reject[ed] A.H.” Gallagher, 339 F.Supp.3d at 257-58. Peter M., which followed the reasoning of A.H., is no more persuasive authority in this District, and in any event was decided on a motion for summary judgment rather than a motion to dismiss. See Peter M., 554 F.Supp.3d at 1221, 1227-28.
Similarly, neither the fact that the Pfizer Plan contains “no express wilderness therapy program exclusion,” nor the fact that the Plan's exclusion for “unproven or experimental” services on its face “applies equally to mental health and medical/surgical services” (Mot. at 4-5; Reply at 11), is fatal to Plaintiff's claim. The plan in Gallagher likewise did not expressly exclude, or mention, wilderness therapy. Gallagher, 339 F.Supp.3d at 252. And Plaintiff has alleged that the exclusion for “unproven or experimental” services is not-in practice-“applie[d] equally” to mental health and medical/surgical services. She alleges that the exclusion is, instead, applied to categorically deny coverage for even state-licensed wilderness therapy programs but not for analogous forms of inpatient medical/surgical treatment. (See Compl. ¶¶ 7, 52, 56-57). Even if Plaintiff's allegations do not give rise to a valid facial challenge, they suffice to plead a plausible Parity Act claim on an as-applied theory.
Defendants' other arguments are also unavailing. Defendants contend that “Plaintiff must do more than demonstrate that a more stringent limitation is placed on mental health benefits” and must, in addition, demonstrate that the Plan fails to use comparable “processes, strategies, evidentiary standards, or other factors” in applying the NQTL for mental health and medical/surgical benefits or applies the “processes, strategies, evidentiary standards, or other factors” in a more stringent manner to mental health benefits. (Reply at 8-9). But that is what Plaintiff does allege: she claims that the Plan categorically excludes wilderness therapy, even from licensed providers, but not analogous forms of medical/surgery inpatient treatment. As the Gallagher court noted, such allegations sufficiently plead a “form of ‘process'” that runs afoul of 29 C.F.R. § 2590.712(c)(4)(i)'s prohibition on the use of “any processes, strategies, evidentiary standards, or other factors” to apply NQTLs “more stringently” to mental health benefits than to comparable medical/surgical benefits in the same classification. Gallagher, 339 F.Supp.3d at 257 (quoting A.Z., 333 F.Supp.3d at 1082); see also Bushell, 2018 WL 1578167, at *6 (“a categorial exclusion is itself a form of process”) (emphasis in original).
In a footnote, Defendants challenge whether Plaintiff has alleged a genuine “categorical exclusion,” claiming that “[c]ategorical exclusions occur when the Plan excludes an entire category of mental health/substance use disorder benefits.” (Reply at 11-12 n.7). As Defendants define the concept of a “categorical exclusion,” the Plan would have to categorically exclude coverage for all “intermediate level of care treatment for mental health,” not just for wilderness therapy specifically. (Id.) This argument also cannot be reconciled with Gallagher, Vorpahl or A.Z. In each of these cases, the court found an alleged categorical exclusion of wilderness therapy alone sufficient to state a claim. See Gallagher, 339 F.Supp.3d at 257-59; Vorpahl, 2018 WL 3518511, at *3; A.Z., 333 F.Supp.3d at 1082.
Nor do Defendants' cited cases support their definition of a “categorical exclusion.” Richard K. rejected plaintiffs' allegation of a categorical exclusion not because the plan covered some other residential mental health treatment, as Defendants suggest, but because defendants covered plaintiffs' daughter's specific mental health treatment for two and a half months (before denying coverage based on a determination that the therapy was no longer necessary). Richard K., 2019 WL 3083019, at *12. And Bushell found a categorical exclusion to be properly alleged because the plan excluded nutritional counseling for all eating disorders, just as Plaintiff here alleges that the Plan excludes wilderness therapy for all mental health treatment. Bushell, 2018 WL 1578167, at *5-7.
In addition, Defendants dispute whether the type of sub-acute inpatient medical treatment settings identified by Plaintiff (skilled nursing facilities, rehabilitation facilities, and hospice facilities) are truly analogous to mental health treatment in a wilderness program. (Mot. at 12-13). This contention, however, raises an issue of fact that cannot be decided on a motion to dismiss. See Gallagher, 339 F.Supp. at 258 (accepting as sufficient for pleading purposes that “Plaintiff has identified skilled nursing and rehabilitation facilities as the relevant analogue in the medical/surgical context”); T.E., 2023 WL 2634059, at *5 (“District courts have consistently held that ‘sub-acute residential treatment at' a mental health facility . . . ‘is analogous to medical/surgical treatment at a skilled nursing or rehabilitation facility' for purposes of pleading a Parity Act claim.”) (quoting Daniel R. v. UMR, No. 2:19 Civ. 00069, 2020 WL 1188144, at *7 (D. Utah Mar. 12, 2020)).
Defendants also argue that wilderness therapy programs for mental health conditions-if they were not deemed “unproven or experimental”-“arguably” could be covered because the Plan provides coverage for inpatient, intermediate treatment at residential treatment facilities and “alternate facilities.” (Reply at 9). By contrast, Defendants continue, “there is no possibility of coverage for wilderness therapy program services” for medical/surgical conditions under the terms of the Plan, even if someday the services were deemed not to be “unproven or experimental.” (Id. at 9). Theoretical possibilities regarding how future benefit claims might be treated, however, are irrelevant to the issue before the Court. Plaintiff alleges that her real-life claim for benefits in 2020 was denied because Defendants currently categorically exclude wilderness therapy as “unproven” or “experimental.” (Compl. ¶¶ 14, 28, 30, 56-58). That is all that matters at this stage of the litigation.
The question on this motion is not whether Plaintiff will ultimately be able to prove her Parity Act claim, but whether she has pled enough facts to state a claim. As numerous courts in this District and elsewhere have recognized, “the nature of NQTL Parity Act claims counsels against a rigid pleading standard.” Bushell, 2018 WL 1578167, at *6. Because it is difficult for a plaintiff to “find out the process her insurer uses to evaluate analogous medical claims” absent an opportunity for discovery, requiring such details to be pleaded in the Complaint “would likely create a serious obstacle to meritorious Parity Act claims.” Id.; accord, e.g., Gallagher, 339 F.Supp.3d at 258 (quoting Bushell, 2018 WL 1578167, at *6); A.Z., 333 F.Supp.3d at 1082 (“This case should proceed to the discovery phase and A.Z. should be permitted to test the processes Defendants employ in denying coverage for outdoor/wilderness behavioral healthcare programs and whether such disparate application of the ‘Counseling in the Absence of Illness' exclusion in fact exists.”); T.E., 2023 WL 2634059, at *6 (“The trend towards allowing Parity Act claims to proceed to discovery recognizes that information about how insurance companies process treatment limitations will often be in the hands of the insurers alone.”).
The Court finds that Plaintiff has met her pleading burden by alleging sufficient facts, taken as true, to state a Parity Act claim that is “plausible on its face.” Iqbal, 556 U.S. at 678.
C. The Complaint States a Claim for Statutory Penalties Against Pfizer, But Not Against Any Other Defendant
Defendants seek dismissal of Plaintiff's claim for statutory penalties against the Plan Administrator-Pfizer-on two grounds: (1) that Plaintiff sent her September 6, 2022 request for documents to the wrong address; and (2) that United is not the agent of, and its conduct cannot be imputed to, the Plan Administrator. (Mot. at 19-24; Reply 14-19). The Court rejects Defendants' first contention and consequently upholds Plaintiff's claim for statutory penalties against Pfizer. However, the Court agrees that Pfizer cannot be held liable based on United's conduct and further agrees with Defendants (see Mot. at 23-24) that Plaintiff cannot assert a claim for statutory penalties against United itself.
1. Relevant ERISA Provisions
Under ERISA, the “administrator” of an employee benefit plan is required, “upon written request of any participant or beneficiary,” to provide certain documents to plan participants. 29 U.S.C. § 1024(b)(4). These documents include various plan-related documents and agreements and “other instruments under which the plan is established or operated.” Id.
Any “administrator” who fails or refuses to comply with such a request “by mailing the material requested to the last known address of the requesting participant or beneficiary” may be held “personally liable to such participant or beneficiary” for statutory damages. Id. § 1132(c)(1)(B). Such damages may be awarded in the discretion of the court “in the amount of up to $100 a day.” Id. “A participant or beneficiary ‘cannot recover statutory damages' against a defendant who ‘is not a plan “administrator”' under ERISA's definition of the term.” McFarlane v. First Unum Life Ins. Co., 274 F.Supp.3d 150, 164 (S.D.N.Y. 2017) (quoting Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008)).
Under the authority of the Federal Civil Penalties Inflation Adjustment Improvement Act of 2015, the DOL has increased the daily penalty for failing to provide plan information from $100 to $147 for penalties assessed after August of 2016. See 29 C.F.R. § 2575.2(e).
ERISA defines “administrator,” in pertinent part, as “the person specifically so designated by the terms of the instrument under which the plan is operated” or “if an administrator is not so designated, the plan sponsor.” 29 U.S.C. § 1002(16)(A)(i)-(ii); see Gates v. United Health Group Inc., No. 11 Civ. 3487 (KBF), 2012 WL 2953050, at *10 (S.D.N.Y. July 16, 2012). ERISA defines “plan sponsor” to mean “the employer in the case of an employee benefit plan established or maintained by a single employer[.]” 29 U.S.C. § 1002(16)(B)(i).
As relevant to the preceding provisions, ERISA defines a “person” to include “an individual... [or] corporation,” Id. § 1002(9), and an “employer” as “any person acting directly as an employer, or indirectly in the interest of an employer,” Id. § 1002(5).
2. Plaintiff's Document Request Was Submitted to the Plan Administrator
There is no dispute that Plaintiff sent her September 6, 2022 request for documents to Pfizer (Dkt. No. 28-1), and that Pfizer is the designated “administrator” of the Plan under ERISA. (Plan at 100). Nevertheless, Defendants argue that Plaintiff failed to send her request to the “designated Plan Administrator” because she sent it to the “wrong address” at Pfizer. (Mot. at 19, 2223; Reply at 14-15).
Defendants are correct that the September 6, 2022 letter was not sent to the address for the Plan Administrator contained in the Plan. The “Plan Directory” section of the Plan lists the “Plan Administrator” as “Pfizer Inc., Attention: Executive Vice President Worldwide Human Resources and/or the Welfare Benefits Committee, 100 Route 206 North, MS-135, Peapack, N.J. 07977.” (Plan at 100). The Plan Sponsor is listed as “Pfizer Inc., 235 East 42nd Street, New York, NY 100175755.” (Id.) Plaintiff's September 6, 2022 letter was addressed to Pfizer at the New York, NY (i.e., Plan Sponsor) address. (Dkt. No. 28-1). Plaintiff acknowledges as much. (Opp. at 17).
Defendants are entirely incorrect, however, that Plaintiff's use of a mistaken address means that she “failed to submit her request for documents to the Plan Administrator” or that “[statutory] penalties are not available in this scenario.” (Mot. at 22-23; Reply at 14-15). Plaintiff plainly did submit her request to the designated Plan Administrator: Pfizer Inc. Notwithstanding Defendants' suggestion that the Plan Administrator and the Plan Sponsor are separate “entities” (Mot. at 2), they are, in fact, the same entity: Pfizer Inc.
Moreover, Pfizer received Plaintiff's request and, by letter dated October 3, 2022, responded to it in Pfizer's capacity as Plan Administrator. (Dkt. No. 28-2). Far from deeming Plaintiff's request a nullity because it was sent to “the wrong address,” Pfizer's response-sent within the 30-day statutory period and on letterhead with the Peapack, N.J. (i.e., Plan Administrator) address-treated it as an enforceable request under ERISA. The response stated “[w]e are responding to your request for plan documents” and provided Plaintiff with certain documents “that are in our possession and that are subject to being provided upon request under Section 104(b)(4) of ERISA.” (Id.)
Nothing in the relevant ERISA provisions lends support to Defendants' hyper-technical argument. To the contrary, Section 1002(16)(A)(i) defines the “administrator” as “the person specifically so designated” in the Plan as the administrator. Pfizer is that person. The statute does not require the request for documents to be sent to any designated address for the administrator, let alone suggest that a request sent to and received by the “person” that is the Plan Administrator is invalid or cannot form the basis for an award of statutory penalties. The Court is unaware of, and Defendants do not cite to, a single ERISA case since the law's inception which holds that the Plan Administrator and Plan Sponsor, who are the same “person,” should be construed as different “person[s]” solely on the basis of different address listings in the ERISA plan at issue.
Notably, Section 1132(c)(1)(B), which dictates the nature of the plan administrator's response to a request for documents, does specifically require the administrator to mail the documents “to the last known address of the requesting participant or beneficiary.” Thus, when Congress wanted to require that an ERISA communication be sent to a particular address in order to be effective, it knew how to say so. But Congress did not say that a participant or beneficiary must send a request for documents to any particular address for the administrator. The Court rejects Defendants' invitation to create an address requirement for document requests when Congress itself did not see fit to impose one.
Defendants rely on the general principle that Section 1132(c) should be “strictly construed.” (Mot. at 8, 20-21; Reply at 15). But Defendants do not explain what language in Section 1132(c) needs construing, strictly or otherwise. Section 1132(c) says that “[a]ny administrator” may be liable for statutory penalties if it fails to comply with certain requests by a participant or beneficiary for documents. 29 U.S.C. § 1132(c)(1)(B). Plaintiff has alleged (and indeed shown) that Pfizer is the designated “administrator” and that Plaintiff's request for documents was sent to and received by Pfizer. The Court is, moreover, at a loss to understand why it should “strictly construe” Plaintiff's document request as unenforceable against the Plan Administrator when the Plan Administrator itself construed the request as enforceable and responded to it as such.
Nor do the cases cited by Defendants (Mot. at 21; Reply at 15-16) support Defendants' “wrong address” argument. In Giordano v. Thomson, No. 23 Civ. 5672 (JS) (AKT), 2007 WL 1580081 (E.D.N.Y. May 29, 2007), the plaintiff conceded that he had never notified the plan administrator about his document request. Id. at *5. Instead, the request was sent to the administrator's outside counsel, who never forwarded the request to the administrator (and, the court held, had no fiduciary duty to do so). Id. In Kidder v. Aetna Life Ins. Co., No. SA-14-CV-665 (XR), 2016 WL 1241549 (W.D. Tex. Mar. 28, 2016), the plaintiff sent his requests “to the wrong entity and wrong address,” and plaintiff conceded that he did not request documents within the scope of Section 1024(b)(4) and that the plan administrator's failure to respond to his requests did not entitle plaintiff to statutory penalties. Id. at *8-9 (emphasis added). And in Wilcott v. Matlack Inc., 64 F.3d 1458 (10th Cir. 1995), the plaintiff also did not direct his request to the plan administrator and, in any event, the district court “did not deny relief on the legal ground that plaintiff had not made an enforceable request, but because in its judgment a penalty was not warranted.” Id. at 1461-62.
Under these circumstances, if, as Plaintiff alleges, Pfizer's response did not provide all the documents to which she was entitled (a matter on which the Court expresses no opinion), then Pfizer can be held liable under Section 1132(c) even though Plaintiff's September 6, 2022 letter was sent to Pfizer in New York rather than Pfizer in New Jersey. The Court thus finds that the Complaint states a claim for statutory penalties against Pfizer.
3. The Document Requests Sent to United Do Not Give Rise to a Claim for Statutory Penalties
Plaintiff advances an alternative theory for holding Pfizer liable for statutory penalties under Section 1132(c). This theory is based on the document requests Plaintiff sent to United as Claims Administrator. Plaintiff asserts that United acted as Pfizer's “agent” and that her requests “to United, as Pfizer, Inc.'s agent, should have imputed the knowledge of Plaintiff's requests to Pfizer, Inc. in a manner which still conferred liability to statutory penalties.” (Compl. ¶¶ 64, 69; Opp. at 19). Defendants argue that there is no basis for Plaintiff's agency theory of liability. (Mot. at 23-24; Reply at 16-19).
On this issue, the Court agrees with Defendants. The statutory text and Second Circuit law make clear that where there is a designated plan administrator, penalties under Section 1132(c) may be imposed only against that administrator. Krauss v. Oxford United Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008) (“since Oxford is not . . . a plan ‘administrator' within the meaning of ERISA 502(c)(1),” plaintiffs “cannot recover statutory damages . . . for Oxford's nondisclosure of certain information”) (citations omitted); McFarlane, 274 F.Supp.3d at 164; Curran v. Aetna Life Ins. Co., No. 13 Civ. 00289 (NSR), 2013 WL 6049121, at *3-4 (S.D.N.Y. Nov. 15, 2013). The Second Circuit has squarely rejected the so-called “de facto administrator” theory of liability, pursuant to which a claims administrator or other person that performs the function of responding to document requests can face Section 1132 liability. See, e.g., Crocco v. Xerox Corp., 137 F.3d 105, 107-08 (2d Cir. 1998); Lee v. Burkhart, 991 F.2d 1004, 1010 n.5 (2d Cir. 1993) (“Some courts have held that under certain circumstances a party not designated as an administrator may be liable for failing to furnish a plan description. We disagree.”) (citations omitted); McFarlane, 274 F.Supp.3d at 165-66 (“The Second Circuit has expressly rejected this argument.”).
While an agency theory of liability differs from a de facto administrator theory in that the former seeks to hold the plan administrator liable based on another person's conduct, courts in this Circuit and elsewhere have found little daylight, if any, between the two. See Klecher v. Metro Life Ins. Co., No. 01 Civ. 9566 (PKL), 2003 WL 21314033, at *9 (S.D.N.Y. June 6, 2003) (“Plaintiff argues that the Plan is liable for MetLife's failure to inform the Plan of plaintiff's request for Oxford's LTD policies. However, the Court agrees with defendants that this argument is essentially the agency liability argument, which has been rejected by several courts.”); Gore v. El Paso Energy Corp. Long Term Dis. Plan, 477 F.3d 833, 843 (6th Cir. 2007) (describing Sixth Circuit's prior ruling in Hiney Printing Co. v. Brantner, 243 F.3d 956, 960-61 (6th Cir. 2001), which rejected a de facto administrator claim and held that a plan administrator cannot be liable for statutory penalties if the request for information was not directed to it, as “also reject[ing] an agency theory”); David P. v. United Healthcare Ins. Co., No. 2:19 Civ. 225 (JNP) (PMW), 2020 WL 607620, at *20 (D. Utah Feb. 7, 2020) (rejecting agency theory of liability based on claims administrator's conduct and noting that it “bears close[] resemblance” to the de facto theory of liability).
In support of her agency theory, Plaintiff points to dicta in several Tenth Circuit cases. (Opp. at 19). At least one district court within the Tenth Circuit, relying on this dicta, has allowed a Section 1132(c) claim to proceed on an agency theory, see Julian B. v. Regence Blue Cross & Blue Shield of Utah, No. 2:19 Civ. 471 (TC), 2020 WL 1955222, at *6 (D. Utah Apr. 23, 2020), while others have not, see L.L. Anthem Blue Cross Life & Health Ins., No. 2:22 Civ. 208 (DAK), 2023 WL 2480053, at *5 (D. Utah Mar. 13, 2023); David P., 2020 WL 607620, at *20. But Plaintiff cites no cases suggesting the agency theory is viable in the Second Circuit.
Moreover, even if the agency theory could be viable in some cases, this case is not one of them. The Complaint contains only conclusory allegations that United acted as Pfizer's “agent” for purposes of responding to document requests (Compl. ¶¶ 64, 69), which are insufficient to meet Plaintiff's pleading burden. See RSM Prod. Corp. v. Fridman, 643 F.Supp.2d 382, 408 (S.D.N.Y. 2009) (“conclusory allegations regarding [an] agency relationship . . . are not sufficient to survive a motion to dismiss”) (citation omitted); David P., 2020 WL 607620, at *20 (“conclusory allegations” that United was “agent” of plan administrator insufficient to state § 1132(c) claim).
While Plaintiff speculates that the administrative services agreement between United and Pfizer “likely . . . creates an agency relationship between those two parties” (Opp. at 19), she does not specifically allege that United agreed to discharge Pfizer's statutory obligation to respond to document requests on Pfizer's behalf. Any such allegation would, moreover, be implausible in light of the Plan, which instructs participants and beneficiaries to direct requests for Plan Documents to Pfizer as Plan Administrator, rather than to United. (Plan at 98). See, e.g., McFarlane, 274 F.Supp.3d at 165 (“although McFarlane alleges that First Unum ‘exercised authority and control over the payment of benefits,' she does not allege that the plan administrator's ‘disclosure duties were delegated to First Unun'”) (citations omitted; emphasis in original).
For these reasons, Plaintiff has failed to plausibly plead that United's actions should be imputed to Pfizer for Section 1132(c) purposes.
Finally, Defendants ask that Plaintiff's claim for statutory penalties be dismissed insofar as it seeks to hold United itself liable. (Mot. 23-24). Plaintiff disclaims any such intention and represents that Count III “is asserted against Pfizer” and “is not asserted against United.” (Opp. at 18-19). The Complaint itself is not as clear. (See Compl. ¶¶ 64-70). For the avoidance of doubt, Defendants' motion to dismiss Count III is granted to the extent that claim is asserted against any Defendant other than Pfizer Inc.
CONCLUSION
For the foregoing reasons, the undersigned respectfully recommends that the Defendants' motion to dismiss be denied, except insofar as Count III is asserted against any Defendant other than Pfizer Inc.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72(b), the parties shall have fourteen days, inclusive of weekends and holidays, from the date of this Report and Recommendation to file written objections thereto. See also Fed.R.Civ.P. 6(a), (b), and (d). Any such objections shall be filed with the Clerk of Court. The Parties shall deliver courtesy copies to chambers of the Hon. Gregory H. Woods at 500 Pearl Street, New York, New York 10007, and in accordance with Rules 3.B and 3.H of his Individual Rules of Practice in Civil Cases. Any request for an extension of time to file objections must be directed to Judge Woods. A failure to file timely objections will preclude appellate review. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner v. Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).