E.S. v. Regence BlueShield
2:17-cv-01609
| W.D. Wash. | Mar 16, 2023Background
- Plaintiffs are Regence BlueShield insureds who suffer hearing loss and allege they paid out-of-pocket for medically necessary hearing aids and related services because their plans exclude hearing aids and "Routine Hearing Examination."
- Regence plan language excludes "hearing aids (externally worn or surgically implanted) and other hearing devices" but expressly covers cochlear implants.
- Plaintiffs brought a Second Amended Complaint asserting claims under the Affordable Care Act § 1557 (discriminatory benefit design: proxy, intentional, disparate impact), the Washington Law Against Discrimination (WLAD), the Washington Consumer Protection Act (CPA), and seeking declaratory and injunctive relief.
- The Complaint follows earlier pleadings and a prior dismissal; Defendants moved to dismiss the SAC under Rule 12(b)(6).
- The Court found the SAC failed to plausibly allege proxy discrimination, intentional discrimination, or disparate impact under § 1557, and also found Plaintiffs’ WLAD and CPA theories deficient.
- The Court granted Defendants’ motion to dismiss without prejudice and gave Plaintiffs 21 days to file an amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Regence’s exclusion violates ACA § 1557 as proxy discrimination | Exclusion is a facially neutral proxy that predominantly affects/targets disabled people (hearing-disabled) | Exclusion affects a larger non-disabled population; fit between hearing loss and disability not sufficiently close | Dismissed — proxy fit not sufficiently close; allegations inadequate for intentional or disparate-impact theories |
| Whether Regence acted with discriminatory intent under § 1557 | Regence intentionally forwent review and arbitrarily imposed a blanket exclusion | No plausible facts showing deliberate indifference or animus; coverage of cochlear implants undermines intent theory | Dismissed — plaintiffs failed to plead facts showing discriminatory intent |
| Whether WLAD/RCW claims (via RCW 48.43.0128 and RCW 48.30.300) state a claim | Violation of RCW 48.43.0128 constitutes unfair discrimination under RCW 48.30.300 | Coverage does not turn exclusively on disability; no plausible allegation of disability animus | Dismissed — plaintiffs did not plausibly show coverage keyed to disability or invidious motivation |
| Whether exclusion violates Washington CPA | Exclusion is an unlawful discriminatory benefit design and thus a deceptive/unfair practice affecting the public interest | Underlying discrimination claims fail, so CPA claim fails | Dismissed — CPA claim depends on defective discrimination theory |
Key Cases Cited
- Schmitt v. Kaiser Found. Health Plan of Wash., 965 F.3d 945 (9th Cir. 2020) (framework for § 1557 discriminatory benefit-design claims, including proxy-discrimination analysis)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must plead facts plausibly showing entitlement to relief)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions insufficient; pleading must contain factual content making claim plausible)
- Sanders v. Brown, 504 F.3d 903 (9th Cir. 2007) (12(b)(6) standard and crediting reasonable inferences)
- Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (9th Cir. 2008) (court need not accept conclusory allegations contradicted by referenced documents)
- Marder v. Lopez, 450 F.3d 445 (9th Cir. 2006) (limits on considering materials beyond the complaint)
- Hangman Ridge Training Stables v. Safeco Title Ins. Co., 105 Wash.2d 778 (Wash. 1986) (elements required to state a Washington CPA claim)