339 F. Supp. 3d 248
S.D. Ill.2018Background
- Plaintiff William Gallagher sought coverage under his employer-sponsored ERISA health plan (administered by Empire HealthChoice Assurance, Inc.) for his daughter J.G.’s wilderness therapy; Empire denied coverage as an excluded service and denied the appeal.
- The Plan covers inpatient/outpatient mental health and lists certain behavioral health services (e.g., ECT, psychotherapy, designated eating-disorder centers, inpatient residential treatment) but does not expressly mention wilderness therapy. Empire is the claims administrator; the Plan contemplates review by a separate Plan Administrator and possible external review.
- Plaintiff sued under ERISA § 502: (1) claim to recover/enforce benefits under § 1132(a)(1)(B) and (2) a claim for breach of fiduciary duty under § 1132(a)(3); he also alleged the denial violates the Mental Health Parity and Addiction Equity Act (Parity Act).
- Empire moved to dismiss the § 1132(a)(1)(B) claim (arguing it is not a proper defendant), moved to dismiss the Parity Act-based claim, and moved to strike the jury demand.
- The district court dismissed Count 1 (§ 1132(a)(1)(B) against Empire) but denied dismissal of Count 2 (Parity Act / breach of fiduciary duty), and granted Empire’s motion to strike the jury demand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Empire is a proper defendant under § 1132(a)(1)(B) | Empire exercised the functional authority to make final, binding benefits decisions and thus can be sued under New York State Psychiatric Ass'n | Empire is only a claims administrator without total control; plan permits review by a separate Plan Administrator and external review | Dismissed: Empire not a proper defendant for § 1132(a)(1)(B) because it lacks "total control"/final decision authority |
| Whether the categorical wilderness-therapy exclusion violates the Parity Act | The exclusion is a separate nonquantitative treatment limitation applied only to mental health; analogous medical settings (skilled nursing/rehab) are covered, so parity is violated | The Plan does not show a disparity; no support that medical/surgical wilderness-type services are covered | Denied dismissal: Plaintiff plausibly alleged a Parity Act violation based on a categorical exclusion of wilderness therapy |
| Whether breach of fiduciary duty claim (ERISA § 1132(a)(3)) survives | That claim follows from the Parity Act violation and Empire’s administration of benefits | Empire argued dismissal of underlying Parity claim defeats fiduciary claim | Denied dismissal: fiduciary-duty claim survives tied to alleged Parity Act violation |
| Whether plaintiff is entitled to a jury trial | Plaintiff demanded jury for ERISA benefit/fiduciary claims | Empire argued ERISA benefit actions are equitable with no jury right | Granted for Empire: jury demand stricken—no right to jury on ERISA benefits claim |
Key Cases Cited
- New York State Psychiatric Ass'n, Inc. v. UnitedHealth Grp., 798 F.3d 125 (2d Cir. 2015) (claims administrator with sole, final authority may be sued under § 1132(a)(1)(B))
- American Psychiatric Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352 (2d Cir. 2016) (Parity Act purpose: end coverage discrimination between mental-health and medical/surgical benefits)
- Danny P. v. Catholic Health Initiatives, 891 F.3d 1155 (9th Cir. 2018) (Parity Act prohibits covering room-and-board at skilled nursing facilities for medical patients but denying analogous coverage at residential treatment centers for mental-health patients)
- Leonelli v. Pennwalt Corp., 887 F.2d 1195 (2d Cir. 1989) (historical rule that only plan administrators/trustees were proper defendants under § 1132(a)(1)(B))
- DeFelice v. American International Life Assurance Co. of New York, 112 F.3d 61 (2d Cir. 1997) (ERISA benefit actions are equitable; no right to jury trial)