1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ERICA B., Case No. 25-cv-03179-HSG
8 Plaintiff, ORDER DETERMINING STANDARD OF REVIEW 9 v. Re: Dkt. Nos. 25, 26 10 CALIFORNIA PHYSICIANS SERVICE, 11 Defendant.
12 13 Pending before the Court are Plaintiff and Defendant’s letter briefs addressing the standard 14 of review that the Court should apply in this ERISA action. Dkt. No. 26 (“Pl.’s Br.”); Dkt. No. 25 15 (“Def.’s Br.”). Plaintiff brought suit under ERISA on behalf of herself and her daughter, alleging 16 that Defendant improperly denied her daughter’s covered mental health claims for services 17 provided between June 17, 2021, and June 16, 2022. Dkt. No. 1 ¶¶ 44–46; Pl.’s Br. at 1. Both 18 parties agree that the de novo standard of review applies to all claims for dates of service on or 19 after October 1, 2021 “due to California’s ban on discretionary clauses, which became effective on 20 January 1, 2021 and applies to all plans issued, renewed, or amended on or after January 1, 2021.” 21 Pl.’s Br. at 1 (citing Cal. Health & Safety Code § 1367.045(a)); see also Def.’s Br. at 2 (same). 22 But the parties disagree about what standard applies for claims before October 1, 2021.1 Plaintiff 23 argues that the de novo standard also applies to her claims between June 17, 2021, and September 24 30, 2021. Pl’s. Br. at 1. Defendant argues that the abuse of discretion standard applies for those 25 1 California’s ban does not clearly apply to the relevant claims before October 1, 2021, since the 26 claims for dates of service between June and September of 2021 do not appear to be tied to a plan that was “offered, issued, delivered, amended, or renewed on or after January 1, 2021.” Cal. 27 Health & Safety Code § 1367.045(a); see also Def.’s Br. at 4 (“Section 1367.045 has no 1 claims. Def.’s Br. at 2. 2 A denial of ERISA benefits “is to be reviewed under a de novo standard unless the benefit 3 plan gives the administrator or fiduciary discretionary authority to determine eligibility for 4 benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 5 101, 115 (1989); see also Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) 6 (en banc) (“De novo is the default standard of review.”). However, “if the plan does confer 7 discretionary authority as a matter of contractual agreement, then the standard of review shifts to 8 abuse of discretion.” Abatie, 458 F.3d at 963 (citing Firestone, 489 U.S. at 115) (emphasis in 9 original). Such discretion must be conferred “unambiguously.” Kearney v. Standard Ins. Co., 175 10 F.3d 1084, 1090 (9th Cir. 1999). As the Ninth Circuit has cautioned, “[n]either the parties nor the 11 courts should have to divine whether discretion is conferred.” See Sandy v. Reliance Standard 12 Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir. 2000); see also Ingram v. Martin Marietta Long Term 13 Disability Income Plan, 244 F.3d 1109, 1113 (9th Cir. 2001) (“If an insurance company seeking to 14 sell and administer an ERISA plan wants to have discretion in making claims decisions, it should 15 say so.”). In any event, “[t]o assess the applicable standard of review, the starting point is the 16 wording of the plan.” Abatie, 458 F.3d at 962–63. 17 Defendant argues that the October 1, 2020 “Group Health Service Contract” between 18 Defendant Blue Shield and contract-holder Equation Technologies Inc. is the plan document that 19 governs the claims between June and September 2021. Def.’s Br. at 2–3.2 That contract was 20 effective between October 1, 2020, and September 30, 2021. Dkt. No. 25-1 (“Barcena Decl.”) ¶ 2; 21 Barcena Decl., Ex. A (“2020 Group Health Service Contract”) at PLAN 00004. The contract 22 states that “Blue Shield of California . . . will provide or arrange for the provision of services to 23 eligible Subscribers and Dependents of the Contractholder in accordance with the terms, 24 conditions, limitations, and exclusions of this Group Health Service Contract.” Id. at PLAN 25 00007. 26 Plaintiff does not directly dispute that this is a governing plan document or explain what 27 1 alternative document this Court should look to for the relevant period. Instead, Plaintiff argues 2 that “these Contract Policies do not appear in the administrative record, and are unsigned.” Pl.’s 3 Br. at 3.3 The Court must typically “review only the administrative record when considering 4 whether the plan administrator abused its discretion, but may admit additional evidence on de 5 novo review.” Abatie, 458 F.3d at 970. But this does not limit the evidence the Court may 6 consider in determining which standard of review applies in the first place, and Plaintiff does not 7 cite any authority stating that the Court must confine itself to the administrative record at this 8 stage. Moreover, Plaintiff does not explain why the fact that this document is unsigned means that 9 the Court should ignore Defendant’s sworn declaration that this contract was in effect during the 10 relevant period. 11 The Court finds that this document unambiguously confers discretion on Defendant Blue 12 Shield. The 2020 Group Health Service Contract states that “[t]he [Evidence of Coverage 13 (“EOC”)] is included and made part of this contract.” Id. at PLAN 00007. The included EOC 14 states that “Blue Shield shall have the power and authority to construe and interpret the provisions 15 of this Plan, to determine the Benefits of this Plan and determine eligibility to receive Benefits 16 under this Plan. Blue Shield shall exercise this authority for the benefit of all Members entitled to 17 receive Benefits under this Plan.” Id. at 00144. This language clearly and unambiguously gives 18 discretion to Blue Shield as claims administrator and fiduciary. Brian H. v. Blue Shield of Cal., 19 No. 17-CV-03095-MMC, 2018 WL 5778318, at *1 (N.D. Cal. Nov. 1, 2018) (analyzing 20 substantially similar language from Blue Shield); Escalante v. Cal. Physicians’ Serv., 2016 WL 21 4086765, at *2 (C.D. Cal. July 29, 2016) (applying abuse of discretion in nearly identical 22 circumstance where EOC language was incorporated into group contract). 23 Plaintiff argues that the “standard of review analysis begins with the original plan 24 document – from the employer,” and “unless the Equation Technologies Inc. health plan document 25 reserves discretionary authority over claims such as are at issue herein to itself, there is nothing for 26
27 3 The Court does not currently have the full administrative record before it, and it has no way to 1 it to delegate to Blue Shield.” Pl.’s Br. at 5. Plaintiff cites no authority supporting this view. 2 Courts have held that group insurance policies such as this one can constitute plan documents, see, 3 e.g., Cinelli v. Sec. Pac. Corp., 61 F.3d 1437, 1441 (9th Cir. 1995) (“[I] is clear that an insurance 4 policy may constitute the ‘written instrument’ of an ERISA plan . . . .”), so it is unclear why the 5 Court could not consider this clear discretionary clause. 6 Plaintiff also argues that an EOC cannot confer discretion, but the Court disagrees. 7 “ERISA does not require a single plan document and the plan document may incorporate other 8 formal or informal documents.” Gilson v. Macy’s, Inc.Long Term Disability Plan, No. C 13- 9 04520 WHA, 2014 WL 2129460, at *4 (N.D. Cal. May 22, 2014) (citing Scott v. Gulf Oil Corp., 10 754 F.2d 1499, 1503 (9th Cir.1985)). As Plaintiff notes, courts have held that summary 11 documents like EOCs do not “themselves constitute the terms of the plan.” See CIGNA Corp. v. 12 Amara, 563 U.S. 421, 438 (2011); Prichard v.
Free access — add to your briefcase to read the full text and ask questions with AI
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ERICA B., Case No. 25-cv-03179-HSG
8 Plaintiff, ORDER DETERMINING STANDARD OF REVIEW 9 v. Re: Dkt. Nos. 25, 26 10 CALIFORNIA PHYSICIANS SERVICE, 11 Defendant.
12 13 Pending before the Court are Plaintiff and Defendant’s letter briefs addressing the standard 14 of review that the Court should apply in this ERISA action. Dkt. No. 26 (“Pl.’s Br.”); Dkt. No. 25 15 (“Def.’s Br.”). Plaintiff brought suit under ERISA on behalf of herself and her daughter, alleging 16 that Defendant improperly denied her daughter’s covered mental health claims for services 17 provided between June 17, 2021, and June 16, 2022. Dkt. No. 1 ¶¶ 44–46; Pl.’s Br. at 1. Both 18 parties agree that the de novo standard of review applies to all claims for dates of service on or 19 after October 1, 2021 “due to California’s ban on discretionary clauses, which became effective on 20 January 1, 2021 and applies to all plans issued, renewed, or amended on or after January 1, 2021.” 21 Pl.’s Br. at 1 (citing Cal. Health & Safety Code § 1367.045(a)); see also Def.’s Br. at 2 (same). 22 But the parties disagree about what standard applies for claims before October 1, 2021.1 Plaintiff 23 argues that the de novo standard also applies to her claims between June 17, 2021, and September 24 30, 2021. Pl’s. Br. at 1. Defendant argues that the abuse of discretion standard applies for those 25 1 California’s ban does not clearly apply to the relevant claims before October 1, 2021, since the 26 claims for dates of service between June and September of 2021 do not appear to be tied to a plan that was “offered, issued, delivered, amended, or renewed on or after January 1, 2021.” Cal. 27 Health & Safety Code § 1367.045(a); see also Def.’s Br. at 4 (“Section 1367.045 has no 1 claims. Def.’s Br. at 2. 2 A denial of ERISA benefits “is to be reviewed under a de novo standard unless the benefit 3 plan gives the administrator or fiduciary discretionary authority to determine eligibility for 4 benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 5 101, 115 (1989); see also Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) 6 (en banc) (“De novo is the default standard of review.”). However, “if the plan does confer 7 discretionary authority as a matter of contractual agreement, then the standard of review shifts to 8 abuse of discretion.” Abatie, 458 F.3d at 963 (citing Firestone, 489 U.S. at 115) (emphasis in 9 original). Such discretion must be conferred “unambiguously.” Kearney v. Standard Ins. Co., 175 10 F.3d 1084, 1090 (9th Cir. 1999). As the Ninth Circuit has cautioned, “[n]either the parties nor the 11 courts should have to divine whether discretion is conferred.” See Sandy v. Reliance Standard 12 Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir. 2000); see also Ingram v. Martin Marietta Long Term 13 Disability Income Plan, 244 F.3d 1109, 1113 (9th Cir. 2001) (“If an insurance company seeking to 14 sell and administer an ERISA plan wants to have discretion in making claims decisions, it should 15 say so.”). In any event, “[t]o assess the applicable standard of review, the starting point is the 16 wording of the plan.” Abatie, 458 F.3d at 962–63. 17 Defendant argues that the October 1, 2020 “Group Health Service Contract” between 18 Defendant Blue Shield and contract-holder Equation Technologies Inc. is the plan document that 19 governs the claims between June and September 2021. Def.’s Br. at 2–3.2 That contract was 20 effective between October 1, 2020, and September 30, 2021. Dkt. No. 25-1 (“Barcena Decl.”) ¶ 2; 21 Barcena Decl., Ex. A (“2020 Group Health Service Contract”) at PLAN 00004. The contract 22 states that “Blue Shield of California . . . will provide or arrange for the provision of services to 23 eligible Subscribers and Dependents of the Contractholder in accordance with the terms, 24 conditions, limitations, and exclusions of this Group Health Service Contract.” Id. at PLAN 25 00007. 26 Plaintiff does not directly dispute that this is a governing plan document or explain what 27 1 alternative document this Court should look to for the relevant period. Instead, Plaintiff argues 2 that “these Contract Policies do not appear in the administrative record, and are unsigned.” Pl.’s 3 Br. at 3.3 The Court must typically “review only the administrative record when considering 4 whether the plan administrator abused its discretion, but may admit additional evidence on de 5 novo review.” Abatie, 458 F.3d at 970. But this does not limit the evidence the Court may 6 consider in determining which standard of review applies in the first place, and Plaintiff does not 7 cite any authority stating that the Court must confine itself to the administrative record at this 8 stage. Moreover, Plaintiff does not explain why the fact that this document is unsigned means that 9 the Court should ignore Defendant’s sworn declaration that this contract was in effect during the 10 relevant period. 11 The Court finds that this document unambiguously confers discretion on Defendant Blue 12 Shield. The 2020 Group Health Service Contract states that “[t]he [Evidence of Coverage 13 (“EOC”)] is included and made part of this contract.” Id. at PLAN 00007. The included EOC 14 states that “Blue Shield shall have the power and authority to construe and interpret the provisions 15 of this Plan, to determine the Benefits of this Plan and determine eligibility to receive Benefits 16 under this Plan. Blue Shield shall exercise this authority for the benefit of all Members entitled to 17 receive Benefits under this Plan.” Id. at 00144. This language clearly and unambiguously gives 18 discretion to Blue Shield as claims administrator and fiduciary. Brian H. v. Blue Shield of Cal., 19 No. 17-CV-03095-MMC, 2018 WL 5778318, at *1 (N.D. Cal. Nov. 1, 2018) (analyzing 20 substantially similar language from Blue Shield); Escalante v. Cal. Physicians’ Serv., 2016 WL 21 4086765, at *2 (C.D. Cal. July 29, 2016) (applying abuse of discretion in nearly identical 22 circumstance where EOC language was incorporated into group contract). 23 Plaintiff argues that the “standard of review analysis begins with the original plan 24 document – from the employer,” and “unless the Equation Technologies Inc. health plan document 25 reserves discretionary authority over claims such as are at issue herein to itself, there is nothing for 26
27 3 The Court does not currently have the full administrative record before it, and it has no way to 1 it to delegate to Blue Shield.” Pl.’s Br. at 5. Plaintiff cites no authority supporting this view. 2 Courts have held that group insurance policies such as this one can constitute plan documents, see, 3 e.g., Cinelli v. Sec. Pac. Corp., 61 F.3d 1437, 1441 (9th Cir. 1995) (“[I] is clear that an insurance 4 policy may constitute the ‘written instrument’ of an ERISA plan . . . .”), so it is unclear why the 5 Court could not consider this clear discretionary clause. 6 Plaintiff also argues that an EOC cannot confer discretion, but the Court disagrees. 7 “ERISA does not require a single plan document and the plan document may incorporate other 8 formal or informal documents.” Gilson v. Macy’s, Inc.Long Term Disability Plan, No. C 13- 9 04520 WHA, 2014 WL 2129460, at *4 (N.D. Cal. May 22, 2014) (citing Scott v. Gulf Oil Corp., 10 754 F.2d 1499, 1503 (9th Cir.1985)). As Plaintiff notes, courts have held that summary 11 documents like EOCs do not “themselves constitute the terms of the plan.” See CIGNA Corp. v. 12 Amara, 563 U.S. 421, 438 (2011); Prichard v. MetLife, 783 F.3d 1166, 1170 (9th Cir. 2015); Jill 13 T. v. Cal. Physicians Serv., 755 F. Supp. 3d 1228, 1238–39 (N.D. Cal. 2024). But none of those 14 cases involved an EOC or summary document that was incorporated by reference into another 15 plan document. Compare Prichard, 783 F.3d at 1171 (noting that the summary document was 16 “not part of the Plan’s ‘written instrument’”), and Jill T., 755 F. Supp. 3d at 1239 (noting that 17 “some health plans are consolidated such that the plan document and the summary take the form 18 of a single document” but “Blue Shield has not produced evidence that this is the situation here”), 19 with Cromwell v. Kaiser Found. Health Plan, No. 18-CV-06187-EMC, 2019 WL 4601527, at *1 20 n.2 (N.D. Cal. Sept. 23, 2019) (rejecting argument that incorporated EOC could not be 21 considered). 22 Finally, Plaintiff argues that one court has held that delegation of discretion is not clear and 23 unambiguous when it comes from confidential documents that plan participants did not see. Pl.’s 24 Br. at 4 (quoting Steven M. v. United Behav. Health, 2021 WL 1238302, at *2 (N.D. Cal. Apr. 2, 25 2021)). That case only held that delegation would not be clear and unambiguous if it could only 26 be “discerned through careful assessment of at least two confidential documents withheld from 27 plan participants.” Steven M., 2021 WL 1238302, at *2. Here, the language is clear and does not 1 confidential. 2 For these reasons, the Court determines that the abuse of discretion standard applies for 3 claims with dates of service before October 1, 2021, and the de novo standard applies to claims on 4 or after that date. 5 6 IT IS SO ORDERED. 7 || Dated: 12/9/2025 | | | 8 HAYWOOD S. GILLIAM, JR. 9 United States District Judge 10 ll a 12
15 16 € = 17 6 Zz 18 19 20 21 22 23 24 25 26 27 28