782 F.Supp.3d 884
C.D. Cal.2025Background
- Plaintiff Clarisol Mejia, a California resident, received health benefits through her employer, Credence Management Solutions, with UnitedHealthcare Insurance administering the ERISA-governed plan.
- Mejia underwent non-emergent out-of-network medical procedures in 2021 and was billed over $100,000 by her medical providers.
- The insurer paid only about $1,600, leaving Mejia responsible for the balance; Defendants refused to negotiate with providers to reduce the bill.
- Mejia and her providers appealed several times without success; Defendants upheld the minimal payment.
- Mejia sued for Recovery of Benefits and Breach of Fiduciary Duty under ERISA, alleging failure to pay and failure to attempt to negotiate on her behalf.
- Defendants moved for judgment on the pleadings, arguing no duty to negotiate and impermissible duplicative relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there a fiduciary duty to attempt negotiation with providers? | Defendants have an ERISA fiduciary obligation to at least attempt a negotiation on Mejia’s behalf, as failing to do so is a breach. | No contractual or fiduciary duty exists to negotiate; Plan allows calculated payment if no negotiated rate is extant. | Defendants have no contractual, but may have a broad fiduciary duty under ERISA to attempt to negotiate where it does not imperil Plan assets. |
| Can Mejia maintain both §1132(a)(1)(B) and §1132(a)(3) claims (monetary/equitable relief)? | May seek both benefits and equitable relief as alternatives, not duplicative claims. | Equitable relief is unavailable; seeking such is duplicative and may lead to double recovery. | Mejia is entitled to seek both monetary and equitable relief as alternative theories at this stage. |
| Is Mejia entitled to full reimbursement of bills under the Plan? | Plan does not preclude payment of full amount; no limiting language prevents this remedy. | Plan does not require full payment; only certain rates apply and windfall should be avoided. | Court previously held Plan language does not bar full payment; no reason to reverse previous finding. |
Key Cases Cited
- Chavez v. United States, 683 F.3d 1102 (9th Cir. 2012) (standard for judgment on the pleadings—accepted allegations as true)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (clarifies plausibility requirement for claims)
- Varity Corp. v. Howe, 516 U.S. 489 (1996) (ERISA fiduciary must act for exclusive benefit of participants/beneficiaries)
- Wright v. Or. Metallurgical Corp., 360 F.3d 1090 (9th Cir. 2004) (fiduciary does not have to resolve all doubts in favor of beneficiary)
- Moyle v. Liberty Mut. Ret. Benefit Plan, 823 F.3d 948 (9th Cir. 2016) (alternatively pleading §1132(a)(1)(B) and §1132(a)(3) claims allowed)