Erica B. v. California Physicians Service

Opinion

ERICA B., Case No. 25-cv-03179-HSG

Plaintiff, ORDER DETERMINING STANDARD OF REVIEW v. Re: Dkt. Nos. 25, 26 Defendant.

Pending before the Court are Plaintiff and Defendant’s letter briefs addressing the standard of review that the Court should apply in this ERISA action. Dkt. No. 26 (“Pl.’s Br.”); Dkt. No. 25 (“Def.’s Br.”). Plaintiff brought suit under ERISA on behalf of herself and her daughter, alleging that Defendant improperly denied her daughter’s covered mental health claims for services provided between June 17, 2021, and June 16, 2022. Dkt. No. 1 ¶¶ 44–46; Pl.’s Br. at 1. Both parties agree that the de novo standard of review applies to all claims for dates of service on or after October 1, 2021 “due to California’s ban on discretionary clauses, which became effective on January 1, 2021 and applies to all plans issued, renewed, or amended on or after January 1, 2021.” Pl.’s Br. at 1 (citing Cal. Health & Safety Code § 1367.045(a)); see also Def.’s Br. at 2 (same). But the parties disagree about what standard applies for claims before October 1, 2021.1 Plaintiff argues that the de novo standard also applies to her claims between June 17, 2021, and September 30, 2021. Pl’s. Br. at 1. Defendant argues that the abuse of discretion standard applies for those 1 California’s ban does not clearly apply to the relevant claims before October 1, 2021, since the 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. Health & Safety Code § 1367.045(a); see also Def.’s Br. at 4 (“Section 1367.045 has no claims. Def.’s Br. at 2. A denial of ERISA benefits “is to be reviewed under a de novo standard 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); see also Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc) (“De novo is the default standard of review.”). However, “if the plan does confer discretionary authority as a matter of contractual agreement, then the standard of review shifts to abuse of discretion.” Abatie, 458 F.3d at 963 (citing Firestone, 489 U.S. at 115) (emphasis in original). Such discretion must be conferred “unambiguously.” Kearney v. Standard Ins. Co., 175 F.3d 1084, 1090 (9th Cir. 1999). As the Ninth Circuit has cautioned, “[n]either the parties nor the courts should have to divine whether discretion is conferred.” See Sandy v. Reliance Standard Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir. 2000); see also Ingram v. Martin Marietta Long Term Disability Income Plan, 244 F.3d 1109, 1113 (9th Cir. 2001) (“If an insurance company seeking to sell and administer an ERISA plan wants to have discretion in making claims decisions, it should say so.”). In any event, “[t]o assess the applicable standard of review, the starting point is the wording of the plan.” Abatie, 458 F.3d at 962–63. Defendant argues that the October 1, 2020 “Group Health Service Contract” between Defendant Blue Shield and contract-holder Equation Technologies Inc. is the plan document that governs the claims between June and September 2021. Def.’s Br. at 2–3.2 That contract was effective between October 1, 2020, and September 30, 2021. Dkt. No. 25-1 (“Barcena Decl.”) ¶ 2; Barcena Decl., Ex. A (“2020 Group Health Service Contract”) at PLAN 00004. The contract states that “Blue Shield of California . . . will provide or arrange for the provision of services to eligible Subscribers and Dependents of the Contractholder in accordance with the terms, conditions, limitations, and exclusions of this Group Health Service Contract.” Id. at PLAN 00007. Plaintiff does not directly dispute that this is a governing plan document or explain what alternative document this Court should look to for the relevant period. Instead, Plaintiff argues that “these Contract Policies do not appear in the administrative record, and are unsigned.” Pl.’s Br. at 3.3 The Court must typically “review only the administrative record when considering whether the plan administrator abused its discretion, but may admit additional evidence on de novo review.” Abatie, 458 F.3d at 970. But this does not limit the evidence the Court may consider in determining which standard of review applies in the first place, and Plaintiff does not cite any authority stating that the Court must confine itself to the administrative record at this stage. Moreover, Plaintiff does not explain why the fact that this document is unsigned means that the Court should ignore Defendant’s sworn declaration that this contract was in effect during the relevant period. The Court finds that this document unambiguously confers discretion on Defendant Blue Shield. The 2020 Group Health Service Contract states that “[t]he [Evidence of Coverage (“EOC”)] is included and made part of this contract.” Id. at PLAN 00007. The included EOC states that “Blue Shield shall have the power and authority to construe and interpret the provisions of this Plan, to determine the Benefits of this Plan and determine eligibility to receive Benefits under this Plan. Blue Shield shall exercise this authority for the benefit of all Members entitled to receive Benefits under this Plan.” Id. at 00144. This language clearly and unambiguously gives discretion to Blue Shield as claims administrator and fiduciary. Brian H. v. Blue Shield of Cal., No. 17-CV-03095-MMC, 2018 WL 5778318, at *1 (N.D. Cal. Nov. 1, 2018) (analyzing substantially similar language from Blue Shield); Escalante v. Cal. Physicians’ Serv., 2016 WL 4086765, at *2 (C.D. Cal. July 29, 2016) (applying abuse of discretion in nearly identical circumstance where EOC language was incorporated into group contract). Plaintiff argues that the “standard of review analysis begins with the original plan document – from the employer,” and “unless the Equation Technologies Inc. health plan document reserves discretionary authority over claims such as are at issue herein to itself, there is nothing for

3 The Court does not currently have the full administrative record before it, and it has no way to it to delegate to Blue Shield.” Pl.’s Br. at 5. Plaintiff cites no authority supporting this view. Courts have held that group insurance policies such as this one can constitute plan documents, see, e.g., Cinelli v. Sec. Pac. Corp., 61 F.3d 1437, 1441 (9th Cir. 1995) (“[I] is clear that an insurance policy may constitute the ‘written instrument’ of an ERISA plan . . . .”), so it is unclear why the Court could not consider this clear discretionary clause. Plaintiff also argues that an EOC cannot confer discretion, but the Court disagrees. “ERISA does not require a single plan document and the plan document may incorporate other formal or informal documents.” Gilson v. Macy’s, Inc.Long Term Disability Plan, No. C 13- 04520 WHA, 2014 WL 2129460, at *4 (N.D. Cal. May 22, 2014) (citing Scott v. Gulf Oil Corp., 754 F.2d 1499, 1503 (9th Cir.1985)). As Plaintiff notes, courts have held that summary documents like EOCs do not “themselves constitute the terms of the plan.” See CIGNA Corp. v. Amara, 563 U.S. 421, 438 (2011); Prichard v. MetLife, 783 F.3d 1166, 1170 (9th Cir. 2015); Jill T. v. Cal. Physicians Serv., 755 F. Supp. 3d 1228, 1238–39 (N.D. Cal. 2024). But none of those cases involved an EOC or summary document that was incorporated by reference into another plan document. Compare Prichard, 783 F.3d at 1171 (noting that the summary document was “not part of the Plan’s ‘written instrument’”), and Jill T., 755 F. Supp. 3d at 1239 (noting that “some health plans are consolidated such that the plan document and the summary take the form of a single document” but “Blue Shield has not produced evidence that this is the situation here”), with Cromwell v. Kaiser Found. Health Plan, No. 18-CV-06187-EMC, 2019 WL 4601527, at *1 n.2 (N.D. Cal. Sept. 23, 2019) (rejecting argument that incorporated EOC could not be considered). Finally, Plaintiff argues that one court has held that delegation of discretion is not clear and unambiguous when it comes from confidential documents that plan participants did not see. Pl.’s Br. at 4 (quoting Steven M. v. United Behav. Health, 2021 WL 1238302, at *2 (N.D. Cal. Apr. 2, 2021)). That case only held that delegation would not be clear and unambiguous if it could only be “discerned through careful assessment of at least two confidential documents withheld from 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 7 || Dated: 12/9/2025 | | | 8 HAYWOOD S. GILLIAM, JR. 9 United States District Judge 10 ll a 12

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