United States District Court, W.D. Washington, Seattle
A.H. by and through G.H. and L.C., both individually, and on behalf of the MICROSOFT CORPORATION WELFARE PLAN, and on behalf of similarly situated individuals and plans, Plaintiff,
MICROSOFT CORPORATION WELFARE PLAN and MICROSOFT CORPORATION, et al., Defendants.
C. COUGHENOUR UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Defendants' motion to
dismiss (Dkt. No. 26). Having thoroughly considered the
parties' briefing and the relevant record, the Court
finds oral argument unnecessary and hereby GRANTS in part and
DENIES in part the motion for the reasons explained herein.
A.H. brings this putative class action against Defendants
Microsoft Corporation and the Microsoft Corporation Welfare
Plan (the “Plan”) for violations of the Employee
Retirement Income Security Act of 1974, as amended, 29 U.S.C.
§ 1001 et seq. (“ERISA”), the
Federal Mental Health Parity and Addiction Equity Act (the
“Parity Act”), PL 110-343, 122 Stat 3765,
codified at 29 U.S.C. § 1185a, and its implementing
regulations, and the Affordable Care Act (“ACA”).
(Dkt. No. 25 at 14-22.)
A.H. is 16 and suffers from a mental illness and substance
abuse disorder. (Id. at 1-3.) He is a beneficiary of
the Plan based on his mother's employment at Microsoft.
(Id. at 5.) On February 2, 2016, after conventional
treatment had failed, Plaintiff entered Wingate Wilderness
Therapy (“Wingate”), which is a wilderness
therapy program located in Utah. (Id.) Wingate has a
state license to provide “Outdoor Youth Treatment for
80 Youth Clients Ages 13 to 17.” (Dkt. No. 25-1 at
111.) Plaintiff received behavioral, substance abuse, and
mental health services while residing at Wingate from
February 2, 2016 to April 11, 2016. (Id. at 6.)
submitted bi-monthly claims to the Plan's claims
administrator, Premera Blue Cross (“Premera”), to
cover the cost of Plaintiff's attendance. (Dkt. No. 25-1 at
207-212.) Premera determined that the cost of attending
Wingate was not covered by the Plan and denied Plaintiff
benefits. (Id. at 113-123.) Plaintiff internally
appealed Premera's decision. (Id. at 124- 130.)
Premera denied the appeal, concluding that “wilderness
programs are excluded by the plan.” (Id. at
214-215.) Plaintiff subsequently filed this lawsuit,
challenging Premera's denial of benefits under the Plan.
Legal Standard for Motion to Dismiss
Rule 12(b)(6), a complaint should be dismissed if it
“fails to state a claim upon which relief can be
granted.” To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to
state a claim for relief that is plausible on its face.
Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). 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. Id. at 678. Although the Court must accept
as true a complaint's well-pleaded facts, conclusory
allegations of law and unwarranted inferences will not defeat
an otherwise proper Rule 12(b)(6) motion. Vasquez v. L.A.
Cty., 487 F.3d 1246, 1249 (9th Cir. 2007); Sprewell
v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.
2001). The Court may also consider documents incorporated
into the complaint by reference and matters of which it can
take judicial notice. Tellabs, Inc. v. Makor Issues &
Rights, Ltd., 551 U.S. 308, 322 (2007).
deciding Defendants' motion to dismiss, the Court will
consider all of the documents attached to Plaintiff's
amended complaint. See Parks Sch. of Bus., Inc. v.
Symington, 51 F.3d 1480, 1484 (9th Cir. 1995)
(“When a plaintiff has attached various exhibits to the
complaint, those exhibits may be considered in determining
whether dismissal was proper without converting the motion to
one for summary judgment.”) Plaintiff attached excerpts
from the 2016 Summary Plan Description (“SPD”),
as well as documents regarding his appeal of Defendants'
denial of coverage. (See generally Dkt. No. 25-1.)
Defendants included with their motion to dismiss a complete
version of the 2016 SPD, which the Court references
throughout this order. (See Dkt. No. 27.)
ERISA Standard of Review
29 U.S.C. § 1132(a)(1)(B), provides an employee a cause
of action for the improper denial of benefits under an
employee welfare plan. Moyle v. Liberty Mut. Ret. Ben.
Plan, 823 F.3d 948, 956 (9th Cir. 2016). To state a
claim for benefits under ERISA, plan participants and
beneficiaries must plead facts making it plausible that a
provider owes benefits under the plan. See 29 U.S.C.
§ 1132(a)(1)(B); Iqbal, 556 U.S. at 677.
“Depending upon the language of an ERISA plan, a
district court reviews a plan administrator's decision to
deny benefits either de novo or for abuse of
discretion.” Ingram v. Martin Marietta Long
Term Disability Income Plan, 244 F.3d 1109,
1112 (9th Cir. 2001) The de novo standard is
appropriate “unless the benefit plan gives the
administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms
of the plan.” Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989). The burden is on the
party seeking discretionary review to establish that such
power exists under the plan. See Ingram, 244 F.3d at
argue that the Court should review Premera's
interpretation of the Plan for an abuse of discretion because
the Plan confers discretionary authority on its claims
administrator. (Dkt. No. 26 at 17.) Plaintiff asks the Court
to conduct a de novo review because the Plan only
confers discretionary authority on Microsoft, not Premera.
(Dkt. No. 31 at 10.) The Plan grants Microsoft
“complete discretion to interpret and construe the
provisions of the plan options, programs, and policies
described in this [Plan], to determine eligibility for
participation and for benefits . . . .” (Dkt. No. 27 at
336.) The Plan also grants Microsoft authority to delegate
this discretion to third-parties. (Id.)
this language, the record does not demonstrate that the Plan
confers discretionary authority on Premera, or that Microsoft
has delegated its authority. The Plan lists Microsoft, not
Premera, as the Plan administrator. (Dkt. No. 27 at 335.) It
is undisputed that Premera, not Microsoft, denied
Plaintiff's request for benefits. (See Dkt. No.
25-1 at 214-15.) The Ninth Circuit has held that:
where (1) the ERISA plan expressly gives the administrator or
fiduciary discretionary authority to determine eligibility
for benefits or to construe the terms of the plan and (2)
pursuant to ERISA, 29 U.S.C. § 1105(c)(1) (1988), a
named fiduciary properly designates another fiduciary,
delegating its discretionary authority, the ‘arbitrary
and capricious' standard of review for ERISA claims
brought under § 1132(a)(1)(B) applies to the designated
ERISA-fiduciary as to the named fiduciary.
Madden v. ITT Long Term Disability Plan for Salaried
Employees, 914 F.2d 1279, 1283-84 (9th Cir. 1990);
see also Jebian v. Hewlett-Packard Co. Employee Benefits
Org., 349 F.3d 1098, 1105 (9th Cir. 2003) (noting that
deferential review not required where fiduciary has not
delegated discretionary authority to the body rendering the
decision at issue).
because the Plan confers discretion on Microsoft does not
mean that discretion automatically passes to Premera. See
Shane v. Albertson's Inc. Employees' Disability
Plan, 381 F.Supp.2d 1196, 1203 (C.D. Cal. 2005)
(“While the Trustees did have the power to delegate
their discretionary authority, nothing presented to the Court
indicates that such authority was properly
delegated.”). Defendants merely point to the Plan
language that confers discretion on Microsoft and allows
Microsoft to delegate its discretion to third parties. (Dkt.
Nos. 26 at 17, 33 at 8.) On this record, Defendant has not
met its burden to demonstrate the Plan conferred discretion
on Premera regarding benefit determinations such that the
Court should apply an abuse of discretion standard.
Therefore, the Court reviews Premera's interpretation of
the Plan de novo.
Wilderness Program Exclusion
alleges that Defendants' denial of the costs of attending
Wingate was improper on the terms of the Plan (first claim)
and represented a breach of Defendants' fiduciary duties
(second claim), both of which violate ERISA. (Dkt. No. 24 at
Plan covers medically necessary treatment for “mental
health such as, but not limited to the diagnosis and
treatment of psychiatric disorders . . . [and] chemical
dependency such as substance abuse and alcoholism, ” so
long as the treatment is “furnished by an eligible
provider.”(Dkt. No. 27 at 62.) Under the Plan, an
“eligible provider” of mental health or chemical
dependency treatment includes any “provider or facility
who is licensed or certified by the state in which the care
is rendered and who is providing care within the scope of
their license or certification.” (Dkt. No. 27 at 63.)
Plaintiff asserts that Wingate meets the Plan's generic
definition of an “eligible provider” and
therefore is not subject to the Plan's wilderness program
exclusion. (Dkt. No. 31 at 14-15.) Defendants argue that
Plaintiff's suggested interpretation contradicts the
plain terms of the Plan and would vitiate the wilderness
program exclusion. (Dkt. No. 26 at 13.)
undisputed that Wingate is a wilderness therapy program
licensed by the State of Utah to provide “outdoor youth
treatment.” (Dkt. No. 25-1 at 111.) Plaintiff alleges
in his amended complaint that Wingate is statutorily
authorized to provide “behavioral, substance abuse, or
mental health services to minors.” (Dkt. No. 25 at 5)
(citing UT § 62A-2-101(40)). Plaintiff further alleges
that he received a psychiatric assessment when he arrived at
Wingate as well as substance abuse and mental health services
while attending the program. (Id. at 5-6.) Based on
these allegations, Wingate meets the Plan's generic
definition of an “eligible ...