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Brent S. v. Blue Cross Blue Shield of Massachusetts, Inc.

United States District Court, D. Massachusetts

July 19, 2019

BRENT S. and ANGIE S., individually and as representatives of the class of similarly situated individuals, Plaintiffs,



         Plaintiffs Brent S. and Angie S., individually and as class representatives, (collectively, “Plaintiffs”) bring this action against Defendant Blue Cross Blue Shield of Massachusetts, Inc. (“Defendant”) to challenge Defendant's denial of claims for residential treatment of mental health disorders in adolescents where part of the treatment services involved an educational component. [ECF No. 41 (“Amended Complaint” or “Am. Compl.”) ¶ 1]. The Amended Complaint brings two claims under the Employee Retirement Income Security Act of 1974 (“ERISA”): a claim for benefits under 29 U.S.C. § 1132(a)(1)(B) and equitable relief pursuant to 29 U.S.C. § 1132(a)(3). [Id. ¶¶ 53-58]. Pending before the Court is Defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). [ECF No. 60]. For the following reasons, Defendant's motion to dismiss [ECF No. 60] is DENIED.

         I. BACKGROUND

         The following facts are drawn from the Complaint, the well-pleaded allegations of which are taken as true for the purposes of evaluating the motion to dismiss. See Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87, 90 (1st Cir. 2014). Defendant maintains that their policies exclude mental health residential treatment services that have an educational component based on the following language (the “Recreational Exclusion”):

Some examples of services and programs that are not covered by this health plan are: services that are performed in educational . . . settings[.] . . . These types of noncovered programs may be in residential or nonresidential settings. They may include therapeutic elements and/or clinical staff services as well as vocational, educational, problem solving, and/or recreational activities. These programs may have educational accreditation. The staff may include some licensed mental health providers who may provide some therapy. No. benefits are provided for any services furnished along with one of these non-covered programs. For example, no benefits are provided for therapy and/or psychotherapy furnished along with one of these non-covered programs.

[Am. Compl. ¶ 18]. The policies also contain the following exception: “No benefits are provided for exams, evaluations, or services that are performed solely for educational or developmental purposes. The only exceptions are for . . . treatment of mental conditions for enrolled dependents who are under age 19[.]” [Id. ¶ 19].

         Plaintiffs' son, Jake, suffered from mental illness and substance abuse and began receiving treatment for his mental health conditions at Ashcreek Ranch Academy (“Ashcreek Ranch”) when he was 17 years old. [Id. ¶¶ 24-32]. Ashcreek Ranch is a licensed residential treatment program in Washington County, Utah. [Id. ¶ 24]. Defendant denied coverage for Jake's treatment at Ashcreek Ranch because it was “a residential treatment [sic] and boarding school” and thus “not a covered type of provider” under Plaintiffs' plan. [Id. ¶ 37]. Plaintiffs exhausted their ERISA pre-litigation appeal options and paid out of pocket for Jake's treatment. [Id. ¶ 38]. Plaintiffs allege that, on information and belief, more than 100 insured adolescents covered by Defendant's policies have had similar claims improperly denied. [Id. ¶ 42].


         To evaluate a Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court must accept as true all well-pleaded facts, analyze those facts in the light most hospitable to the plaintiff's theory, and draw all reasonable inferences from those facts in favor of the plaintiff. U.S. ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377, 383 (1st Cir. 2011). To avoid dismissal, a complaint must set forth “factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Gagliardi v. Sullivan, 513 F.3d 301, 305 (1st Cir. 2008) (citation omitted). The plaintiff's obligation to articulate the basis of her claims “requires more than labels and conclusions.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). The facts alleged, when taken together, must be sufficient to “state a claim to relief that is plausible on its face.” A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).


         A. Count One: Claim for Benefits under 29 U.S.C. § 1132(a)(1)(B)

         Count One asserts a claim for benefits under 29 U.S.C. § 1132(a)(1)(B) and alleges that Defendant's denial of coverage for Jake's mental health care at Ashcreek Ranch violates the terms of Plaintiffs' ERISA-governed insurance policy.[1] [Am. Compl. ¶¶ 53-56]. Defendant contends that Count One should be dismissed because (i) Plaintiffs do not allege that the room and board charges from Ashcreek Ranch qualify for coverage under the plan; (ii) Plaintiffs fail to allege a violation of ERISA based on the denial of benefits because, even in the absence of the Recreational Exclusion, services at Ashcreek Ranch would not have been covered by the plan; and, (iii) Plaintiffs have not sufficiently alleged a breach of fiduciary duty. [ECF No. 61 at 7]. Plaintiffs respond that each of these arguments “is more appropriately raised in a motion for summary judgment under the standards as implemented for ERISA welfare benefits litigation in this Circuit” because “[w]ithout an agreed upon record for the Court to act, dismissal is premature.” [ECF No. 67 at 3, 7]. Defendant argues in reply that motions to dismiss “are appropriate, and are often granted, in ERISA welfare-benefit cases” and that an ERISA case does not need to reach summary judgment when a plaintiff “fail[s] to state a plausible claim at the pleading stage.” [ECF No. 70 at 6].

         Defendant correctly asserts that ERISA welfare-benefit cases are not outside the scope of Rule 12(b)(6). See [id.]; Fed.R.Civ.P. 12(b)(6). The instant case, however, is not analogous to scenarios in which Rule 12(b)(6) motions have been granted in ERISA welfare-benefit cases in this district. See, e.g., Brenner v. Metro. Life Ins. Co., No. 11-cv-12096-GAO, 2013 WL 1337367, at *2 (D. Mass. Mar. 29, 2013) (overruling objection to recommendation to dismiss claim under § 1132(a)(1)(B) because dismissal was proper where claim sought “extra-contractual relief that is unavailable” under the statute); Thiffault v. Butler Home Prod., Inc., No. 05-cv-40011-FDS, 2006 WL 240189, at *2 (D. Mass. Jan. 5, 2006) (granting employer's motion to dismiss § 1132(a)(1)(B) claim because complaint did not allege that employer administered the ERISA plan); Andrews-Clarke v. Lucent Techs., Inc., 157 F.Supp.2d 93, 99-103 (D. Mass. 2001) (dismissing complaint alleging ERISA claims on the basis of res judicata).

         Defendant has also provided the Court with supplemental authorities, including a recent similar case from this district, Cotten v. Blue Cross & Blue Shield of Massachusetts HMO Blue, Inc., No. 16-cv-12176-RGS, 2018 WL 6416813 (D. Mass. Dec. 6, 2018). [ECF Nos. 71, 71-1]. The lawsuit in Cotten, brought by parents who enrolled their children in “wilderness therapy programs” to address substance abuse and mental health issues and were denied insurance coverage for these programs, concerned the same Recreational Exclusion as is at issue here. See Cotten, 2018 WL 6416813, at *1; see also [ECF No. 71 at 1]. The plaintiffs in Cotten argued that the wilderness programs were improperly excluded from coverage because they were not “custodial care.” Cotten, 2018 WL 6416813, at *2. Judge Stearns disagreed and dismissed the claim under § 1132(a)(1)(B). Id. He ...

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