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Gordon v. New West Health Services

United States District Court, D. Montana, Great Falls Division

January 25, 2017

NEW WEST HEALTH SERVICES, and its related affiliates, subsidiaries, and successors, Defendants.


          Brian Morris, United States District Court Judge


         New West has filed a Motion to Deny Class Certification before the close of class discovery[1] and before Plaintiffs affirmatively moved to certify a class. (Doc. 49.) New West has also filed a Motion to Strike Plaintiff's Supplemental Briefing. (Doc. 66.) Gordon has filed a Motion for Class Certification. (Doc. 79.)


         Plaintiff Roni A. Gordon works as an employee of the Billings Clinic and Lance and Roni Gordon were insured for health care under New West Health Services Billings Clinic plan in 2010 and 2011. (Doc. 35 at 2; Doc. 50 at 8.) The policy under which the Gordons were insured remained in effect at the time that they made a claim to New West on behalf of their minor son. (Doc. 35 at 3-4.) The policy provides criteria for what it considers to be medically necessary treatment. (Doc. 35 at 4.) The Gordons' attending physician recommended inpatient detoxification therapy, but New West denied the claim based upon its determination that inpatient detoxification was not medically necessary. Id.

         Plaintiffs admitted their minor son to Rocky Mountain Treatment Center on May 6, 2010, for inpatient treatment. Plaintiffs' son continued with inpatient treatment until discharge on June 4, 2010. Id. at 5. Plaintiffs asked for reconsideration of the denial. New West refused. Plaintiffs exhausted all administrative remedies available to them through the Billings Clinic Plan. Id. at 6. Plaintiffs filed their Second Amended Complaint on September 18, 2015. (Doc. 35.) Plaintiffs' Second Amended Complaint contains three counts: (1) Request for Declaratory Relief, (2) Civil Enforcement Claims under 29 U.S.C. § 1132(a)(1)(B) and § 1132(a)(3), and (3) Class Action. (Id.)


         Rule 23 of the Federal Rules of Civil Procedure governs class actions. A party seeking to certify a class action must meet the four requirements of Rule 23(a) and at least one of the subsections of Rule 23(b). Rule 23 provides more than “a mere pleading standard, ” and the plaintiff “must be prepared to prove” that it can satisfy each of the Rule 23 requirements. Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011). District courts have broad discretion to determine whether a class should be certified. A.F. ex rel. Legaard v. Providence Health Plan, 300 F.R.D. 474, 479 (2013).


         Plaintiffs attempt to bring this action, in Count III of their Second Amended Complaint, pursuant to the provisions of Federal Rule of Civil Procedure 23(a) and 23(b)(2), as a class action for themselves and as representatives of, and on behalf of, all other persons similarly situated. (Doc. 35 at 15.) Plaintiffs allege that New West follows a common policy and practice of systematically denying substance abuse and mental health treatment in violation of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“the Federal Parity Act”) and Montana State Parity laws. 42 U.S.C.A. § 300gg-26 (West); Mont. Code Ann. § 33-22-701, et seq. (West). Plaintiffs allege further that New West uniformly employs the use of impermissible criteria for treating addiction cases in violation of state and federal parity laws.

         Plaintiffs request that this Court declare that New West wrongfully has engaged in an unlawful pattern and practice of denying the class of Alcohol, Mental Illness, and Drug Addiction benefits. Plaintiffs seek an injunction from this Court that would order New West to reopen and properly adjust the class members' claims for Alcohol, Mental Illness, and Drug Addiction benefits using criteria that pass muster under the Federal Parity Act. (Doc. 35 at 16-20.) Plaintiffs further request that the Court order New West to reimburse the members of the class for the money that they paid for such benefits that New West should have paid, and to disgorge any money that New West earned from the profits that it obtained from its unlawful conduct. Id.

         a. The Putative Class

         The Gordons originally proposed the following class for injunctive relief:

All beneficiaries as such term is used under the provisions of 29 U.S.C. §1002(8) of “ERISA plans” as that term is defined under the provisions of 29 U.S.C. §1002(1) for which Defendant provided insurance services known as “New West Health Plan” for such ERISA Plans in which beneficiaries have made application for treatment for mental health, alcohol, chemical, and/or drug abuse and/or addiction; who were in need of alcohol and/or drug treatment; and, who were denied said benefits by Defendant on the grounds that said treatment was not medically necessary.

(Doc. 35 at 15-16.) The Gordons defined the class more specifically after further discovery.

         They have identified a uniform policy applied by New West-the use of the Milliman guidelines in determining medical necessity-that they allege lends a common factual and legal issue to the class. (Doc. 80 at 19-21.) The putative class contains all New West insurees who submitted and were denied claims for substance abuse treatment on the basis of the Milliman guidelines. Plaintiffs claim that only the ASAM guidelines can be used for this purpose under Montana law, to the exclusion of the Milliman guidelines. Id.

         The Gordons' putative class contains 37 members. (Doc. 80 at 16.) New West denied benefits completely to some of these class members and partially denied benefits to some (e.g. approved for a shorter duration residential or inpatient program than was claimed). (Doc. 85 at 13.) Only a portion of the 37 putative members submitted a claim for the type of residential treatment that the Gordons claim on behalf of their son. Id. The remainder of the class submitted claims for either detox treatment or inpatient treatment. Id.

         b. Class Action Requirements

         A court may certify a class when certification would conserve the resources of the court and the parties by permitting a common issue to be litigated in an economical fashion under Rule 23. Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 155 (1982) (quoting Califano v. Yamasaki, 442 U.S. 682, 701 (1979)).

         A party seeking to certify a class action must meet the four requirements of Federal Rule of Civil Procedure 23(a): (1) the class must prove so numerous that joinder of all members would be impracticable; (2) there must exist questions of law or fact common to the class; (3) the claims or defenses of the representative party must prove typical of those of the class; and (4) the representative party must fairly and adequately protect the interests of the class. Courts generally refer to these requirements as numerosity, commonality, ...

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