directed the district court in the earlier case to follow harlech and the district court complied with that to the extent that it entered a summary judgment in favor of the plaintiffs in this case the family on the basis that blue shield improperly did not cover to residential treatment center but the district court denied the second holding of harlech and that's an important fact it's can you tell us exactly what it is you want us to do at the end of your brief it says reverse the district courts class certification decision but much of your brief is talking about factors and classes that were proposed in evidence that weren't part of the papers before the district court when it denied class certification so are you really contending that the district court at step one when it denied classification or are you really saying what you really want is us to say this wasn't a motion for reconsideration and it should be sent back to the district court for some sort of a determination about whether to allow you to file a renewed motion for classification at which you want us to direct the district court to consider your new proposed class and the thirty six transcript i think the best and easiest way to reach a decision that makes the most sense and does the most justice in this reviews class certification decisions for an abuse of discretion there's been no exercise of discretion by the district court with respect to that specific class that you want us to certify because the court refused to consider that so how would it make sense for our result in this case to be to certify the class that you want certified because this court in the first instance isn't in the business of making a regional certification decision here's why because you've got the same arguments in front of you that we presented to the district court the record is the same the arguments are the same you are in a position to make that evaluation that if you feel that there are facts that need to be fleshed out i think that every man and direction to the district court to consider the renewed motion to certify course we argue as you know that the district court erred in treating that as a not as something other than a motion to certify which it should have treated as reconsideration is not the proper vehicle for analyzing that second motion to certify that we made but you've got the information in front of you right now that allow you to comfortably certify the class the ninth circuit's done that before labor is a good example of it we think that especially because this is the second go around that it would be more appropriate for a clear direction from this court to the district court and so for that reason we think that lee was a good model to the for this court to follow and that's the problem once again turn to the moon is a question i don't think we need to address that feels like elephant in the room i'm sorry or the mood is question yes i'm sorry thank you we did get word from the clerk of the court that that was something that this court was concerned about campion is that case it's a subtle issue what we had at issue and campaign rather is settlement agreement we don't have a settlement agreement in this case we don't have even off an offer of judgment that was except is there anything more of that your client but daniel f can get out of this case oh yes absolutely what else is looking well one of the things that has been referred to in other cases is the incentive payments that are available through for successful claimants for clit succession successful class action claimants when they are successful in having the class certified that's something that a family's interested in but as as this court noted input pits versus terrible hurts you have two separate and distinct matters ways in which class claimants can pursue class actions one is on their own behalf as you pointed out judge by the that's excellent reason for individuals to pursue class oftentimes is their first and foremost concern to their own self interest but secondly and important as a separate and distinct recognized angle for a way in which a class claimant can pursue a class action to have standing to do so is in their capacity as a class representative and the court has noticed that again the pits case noticed that and of course was relying on supreme court case law roper garrity vs us commission versus garrity those cases so it's a very well established and consistent principle that you can have individuals whose claims have been even offered to be satisfied as blue shield has done in this case through both the offer of judgement and entry of judgment in favor of the claimants and have them continue to be able to maintain standing to pursue their status as a class action claimant and the status as a class action for the entire case and that's true here the che vs all state is a case that we referred to in our supplemental letter that we center earlier this week is a class action said that a class action becomes moot when a plaintiff actually receives complete relief on that claim not merely when that relief is offered or tendered so you're right in that but that that's and that's pets that we're we've had and an offer of settlement you've got you've got full you've got everything that you asked for if not collected a dime in this case your honor not collected a dime there's not  relief whatever monetary claims the plant has by refusing to execute on the judgment that prevents this well we don't have to deal with that because we do have these other because we're not even if we execute on the judgment wouldn't be paid the money that  family's entitle to be bait as a successful claimant representing an entire class and that's been recognized by itself as a base if that's that's correct doesn't that suggest that our prior cases are wrong no not at all and these were these other also class actions and we always incentive payments that we did yes and this court that's true your honor and this court has recognized that those incentive payments in and of themselves may form the basis for standing i'm looking i thinking of i believe it's n ruse that talks about that yes enhancement fees are discussed in the neighboring case i'm sorry i don't know that this is cited you asked for citations of supple momentarily this is the they were versus charter communications case  your argument make our opinion campeon wrong well because campion dealt with it was a narrow fact circumstance that dealt with a settlement agreement that point yes but they reserve they reserve their rights they reserve the going to be able to explain this to my colleague the critic i designed disagree with the critical point is that campion does not disallow or doesn't rule out the idea that this incentive payment idea is referred to in a ruse without anything else creates standing to go in controversy under article three that keeps this case alive so i think that that's for whatever reason campion doesn't cite it but the neighbors case so i think that it's important to note that just because if if we had a situation where just because a tender is made and the attenders accepted that was sufficient to knock out the claim that class claimants then you'd have an abuse of the class action mechanism by individuals who want to pick off the class claimants on  basis which we have been warned and cautioned against the of the thing that's important is that harlech on that second aspect of harlech which said you can't raise new defenses this isn't just a case that might be a good idea to apply or maybe it's analogous this is not this case specifically but it really pretty much is this case here is well points on her linked in the court saying when it said the general rule that it was concerned about insurance companies holding back when they ha information is there any indication that that's what happened here well what we've got here is a situation where they did know that these claims were being presented these residential treatment claims and in harlech your honor what we had as blue shield coming to the court saying well we want to talk about medical necessity the same exact argument that's being made in this case by blue shield and that the lower court in this case accepted as a basis to create lack of commonality was rejected in heart another argument here the blue cross blue shield is saying as i understand it not only do we want to discuss medical necessity but we want to look at each particular bill to see if a particular claimed cost is available and harlick there's a district court decision in this circuit called martina's that draws a distinction in how harlech applies it says even if can't raise a new claim as raise a new basis for denying a claim flat out that doesn't mean that the insured after allowing a claim writ large that doesn't mean that insurer forfeits the right to look at the particular charges or so talking about whether the particular day was for the covered treatment whether the person was at home those sorts of things why is that is not a put that's not allowable under harlock and this is what harlock dealt with the same insurer blue shield the same type of treatment residential treatment the same reason for denial it's categorical exclusion for residential treatment and they tried to do exactly what they're talking about doing here in the court struck them down and part of why because they said these things were known or the spined x case this circuit from seven seventy f third twelve eighty two expanded a little bit on harlock and said if you have an insurer who has a known or a reasonably knowable reason for denial they are precluded from raising it for the first time in lit and that's what we've got here now that's not to say that there are some non common issues there are and where you draw the line as to when blue shield should be able to raise issues that weren't raised before and when they weren't i think that's a challenging question quite honestly would acknowledge for example co pays co insurance and deduct what can raise them on the court below but when you're talking about medical necessity harlech is very clear in saying they can't raise that why because it was either known or reasonably knowable at the time the claim was initially presented to retain a continued financial interest in the advancement of the class claims because he was to receive and then handsome and free of twenty thousand dollars were the court to approve the settlement now there's something in the record here that shows that agreement between the parties sure nothing in the record no but also a very common tactic well in class actions for incentive payments to be paid i know that's point but what you're saying is that just because it's a common practice  that once you get on the slippery slope of saying the defendants have the ability to unilaterally dictate when they can stipulate and dictate that the plaintiff class rep is satisfied and quote for their individual claims then you get into this whole slippery slope of capable of repetition yet evading review and it basically guts rule twenty three i'll say you know we don't have that here right because blue cross is now no longer if that in some other case might apply and give standing isn't the record here clear the blue cross isn't any longer denying claims under the basis that it was denied here that's what they said your honor and in fact after harlech came down in two thousand and twelve because it was against blue shield what you've got is we believe that they did carry that practice on for some period time based on their own independent review of facts but i think it's true that they're not doing it today as campion held in the ruse there was actually a settlement agreement that specifically gave the campion plaintiff a right to receive an incentive payment there's no such agreement here any incentive for the would be purely discretionary and i think the court what why does that matter i mean that as i understand the plainest position here they intend to seek that fee the question isn't whether they are guaranteed the fee the question is do they have a financial interest in the case today  so the plaintiffs tell us that if this class is certified we're going to get up in the batter's box and take our best swing and so we still have real skin in the game why isn't that enough though if that were the it's because the potential interest or the possibility of getting incentive is is too contingent it's not something guaranteed and as i think the court has indicated in the questioning earlier if that were the touchstone the possibility of getting an incentive if that were sufficient then all of these cases would have been decided  differently campeon would have been decided differently the court would not have struggled this court and the supreme court would not have struggled over the last number of years to identify those specific factors that would cause the personal stake were common to be relaxed in certain situations such as transitory claims such as involuntary situations and the courts have struggled specifically to identify those particular situations where the personal stake requirement can be relaxed and they are confined to very specific instances and a whole has evolved around that specifically because the general rule is that if the plaintiff has extinguished his or her individual claims and or financial stake in the litigation there is no continuing  there is no continuing injury or or stake sufficient let me ask this question would it be a fair reading of a campaign to say well in that case you know the possibility of an incentive recognized took great pains to distinguish than a ruse situation from the situation of barn camp and the reality is that the court would know that it is an issue a rule of law that age but capping to nothing about you interest because it was a contractual right to receive and send a fee as compared to the situation in campion where there was no such as in camp in the situation it was as it is here and in fact camp in this case are for legal purposes in indistinguishable what camp and what you think is the rule that comes out of camp you know roots if you're trying to trying to thread that needle what do you think the rule is in the ninth circuit now the if you specifically reserve the incentive payments than that that's what's required if you fail to reserve them then then the matter is moot in campion as here the court specifically said the plaintive had specifically reserved in the settlement agreements the right to present to appeal class and to maintain a classification in the court in camp in this court said that that was irrelevant so the rule that can be divined from campion is that if we are in just the normal situation that you would have an any class action where's the where there is the possibility of discretionary possibility down the road of an incentive feat that is not enough that is not enough of a financial stake to to defeat mootness if you have some other circumstance if there is some kind of contractual guarantee as you had in a ruse then that might as as  the court said in camp and that would be sufficient to give a concrete interest but this case is no different than any other case that has been before this court in the supreme court and if that were the rule that a discretionary possibility of incentive feel were enough then you wouldn't then the courts would not have needed to develop doctrines like the relation back doctrine or the transitory council looks like both parties were aware of the potential for moodiness in this case and that and that both sides were trying to be careful to dance around that and appears that even  that was raised before the district court was race the time of the just record still had before it the question of the attorneys fees and if the attorneys fees matter had were still open this might be a very different question for us right what was just a court decided all the attorneys fees and all of the all the other costs it doesn't look like there's anything left to be decided there is not there is nothing left to be decided and in that in that in that situation it this case is identical to campaigning campaign you had a voluntary settlement agreement here you had the plaintiff after s fees or the or the reduction attorney's fees or the cost issue that conceivably that would be a different case i don't know whether that would be sufficient but we don't have that here would we have here there w be at least an argument when there would be at least an argument in that instance what you have here is a voluntary decision by the plaintiffs after bringing summary judgment after receiving judgment a voluntary decision to extinguish all remaining interest individual interest that that the  that that jeffrey's family had in this case and that that's why we're in camp in this is not a situation of blue shield is attempting to pick off a name plaintive this is not a situation where you have claims that inherently are transitory in nature this this in in camp in in the gomez case the courts have struggled really hard to attempt to sort of relax in a sense the personal stake requirement or practicality requires it and the courts have articulated maybe three different situations where they've been willing to do that in a sense it's a difficult issue for the court because it really is a relaxation but but they've been very these situations have been very limited and in fact in camp in  this court limited the garrity case and said the garrity case applies only in situations where you have a truly involuntary extinguishment as compared to here where the plaintiffs chose to give up any additional stake that they had in this case can you be mushmouth when you say chose to give up what do you mean they didn't appeal claiming that the damage award was too low and they didn't appeal challenging tourney fees is that what you mean by voluntarily gave up yet you have the summary judgment seatings they got all of the quote damages in a recent case not really damage could have been a continuing individual stake in the continuation of this litigation and none of those issues have been briefed on appeal as as as appellate issues the only issues that have been appealed here are the class issues so that was in a sense your honor that was a voluntary not for the questions there are three issues that i want to raise beyond this and that is the first individual issue and i'm going out to predominance of both predominance but it's also sort of manageability as well but the first issue is any particular putative plaintiff would need to show that he or she had a claim that was indeed governed by the parity act the parity act as the court knows applies to ten individual medical conditions does not apply to to any condition at all their brief but that is an issue that was waived because that's an element of the claim that each individual class member need to show so if we were not in a class action situation any particular claimant coming to blue shield to say under harlech i'm entitled to have my residential care paid they would need to show that in fact they were treated for parity a condition these are significant issues a person may believe that they had a parity a condition a person may say you know what i had i had mia and i believe i was treated for believe me but the medical records may ultimately show the plaintive or that that particular person went in for treatment for another eating disorder that was not believe me or that they did not meet the criteria sometimes people have multiple conditions  person may have for example panic disorder which is a parody condition but they may also have substance abuse they may say i believe that harley complies and that the exclusions invalid because i was treated for panic disorder but if one were to look at the medical and have the experts examine the medical records you may see that in fact there were treated for substance abuse and not panic disorder and so the exclusion would be a valid exclusion because blue shield would not be required to pay residential care for someone being treated for for  that an individual that can't be taken care proper definition of glass now because if the class were defined to even if the class were defined in this class is not so defined but even if the class were defined to say all individuals who were treated for a parity a condition an individual may claim and perfectly honestly believing that he or she had been treated for parity econd ition let's say my example of the person who had a panic disorder and substance abuse might say you know i went in for six months worth of treatment but the medical records may ultimately show blue shield would be entitled to two two to look at the exam of the medical records in the context of litigation and prove that in fact the person did not receive treatment for for the parody i can dish it but instead went in for substance abuse which is not a parity a condition these are facts that are individual facts relating to any particular class member and there is no amount there is no common proof that would indicate whether any particular person at any particular time was treated for parity at condition another individual issue that that the appellant's do not contend was waived and i'll get to the waiver issue in just a second is for example whether their claim is a question of fact and there have been entire litigations over whether the particular conditions that are needed to establish in a recent plan were present for example did the employer make contributions into the plan was partition was participation in the plan voluntary there's been entire cases about whether that occurred and remember this is not a case where this is not a class action where you're dealing with one plan and multiple beneficiaries this is that this is a case where you're dealing with multiple plans and the question that any particular claimant would recipe and such that they would be covered by this particular class definition i do want to get to harlech and the medical necessity issue because that's a really important issue and it's important because the appellant's have misconstrued harlock in a way that is very dangerous and would have tremendous implications for the for the industry and that is under harlech harlick was a case where if you look through harlech holic was a case where the court court saw the blue shield in that specific case and it was not a class action or like in that specific case blue shield had the medical records and in fact there was hardly discusses the fact that two blue shield medical directors had in fact raised the issue potential benteke necessity the medical necessity had been raised in an early communication to the harlech but then ultimately was not cited when one blue shield does harling accept grassley say in the opinion that blue shield had the medical records or are you implying that because there's a statement there that somebody raised medical necessity blue shield must have had the medical records a very good question i've read harlech about one hundred times harlech discusses the fact that blue shield medical directors had raised medical necessity as an issue and then ultimately medical necessity was not asserted in that case i read the case for the exact same reason i had to say it is higher like a case that turns on blue shield in fact having the medical records and the court just didn't expressly say one way or the other right it did not expressly say but if you read as you have your honor if you read harley carefully harley gets all about determinations that are issues that were raised medical says he being raised initially but then never assert ultimately and harley can this is this is critical harley quotes the standard and what harlock says is that where planet and i'm quoting that where plan administrator is have available sufficient information to assert a basis for of benefits but choose to hold that basis in reserve that is where waiver kind of can apply harlech cites to the mitchell case which in which insurance cites to a first circuit case english stuff and that's the year genesis of this language and english glister was a case where they had the medical records were to doctors this is unum were to unum doctors looked at the medical records discussed whether the treatment exclusion versus the symptoms exclusion should apply ultimately only asserted one of those bases and withheld the other that was the closest a case where the where the plan had reviewed the insurer in that case had reviewed the medical records in their possession and this is the critical point is that because  because this took place in our case in the context of a coverage exclusion it would be an individual question of fact in every case number one as to whether blue shield even asserted a medical necessity in the knowledge that would be an individual issue for each for particular class member but more importantly it would be an individualized question as to whether blue shield even had the medical records at all because a blue shield didn't have the medical records it would have no basis it would have no basis for asserting a medical necessity exclusion which specifically says that you waive it only where you have available sufficient information but choose not not to assert it it is there in case that where a federal court has declined to find waiver on the ground that exactly you're saying that the insurer didn't have the records in other words applying the rule that you say is the rule maybe i can't i can't think of it right now your honor but it may well be the case one last point because i my my my time is up and that is it and that it would not be a workable rule in the industry to say to health plans  that in situations where you have a coverage exclusion we don't cover acupuncture ok that in situations where there's a coverage exclusion that a plan in every instance then instead of just asserting that that denial that exclusion needs to say stop i'm going to go out i'm going to go to the doctor that the providers i'm going to at their expense or my expense get the medical records are going to wait for them to copy them i'm going to bring it back i'm now going to hire a medical director to review those medical records determine whether the service which is excluded is nevertheless also not medically necessary before then denying the claim on the basis of medical necessity in addition to coverage exclusion it wouldn't work it would burden providers it would take a tremendous amount of time then in order for plans to be able to respond to members instead of giving them a quick answer that your service isn't covered and it wouldn't work for one last reason and that reason is that that in california as well when a medical necessity determination is made that kicks into certain requirements under state law which which would be saved from preemption here and those requirements are that when a medical necessity terminations made an individual a beneficiary has the right to seek independent medical review from the state and that they only have that right for six months after the determination otherwise they lose it and then once the state provides independent medical review if they review if they rule in the in the claimants favor than the plan has to pay that amount within five days so the problem with  medical necessity when in fact medical necessity is really not a primary basis because the it's an excluded coverage is that it puts into play not only does it create a burden issues for providers and time issues but it if i could have the amount of time that my compatriot had total i'd appreciate that i want to start with where blue shield ended off though whether they get the medical records is purely up to them they are the ones who when they were see the claim make an initial decision about it like isn't he right that it would be almost nonsensical to say if they get a claim that on its face is not covered they are obligated to do run down every  rabbit hole this is exactly the issue that this court decided in are like and they want to relive again harlech and the fact is this a risk itself not the regulations the language of the statute requires blue cross blue shield to provide to us my client the reasons for denial now we talked earlier in my opening about where that line is drawn and i would say that it's not necessary for them to present it as a reason for denial in their opening t now their co pays and deductibles that apply but certainly medical necessity is in fact under the express holding of harlech something that they're obligated to raise and the reason for that is they know when the claim is presented whether that's an issue in their own mind and they have to make a choice do we want to order more medical records you raise a great point judge lightman that doesn't this were put a big burden on the insurance companies yes it does the alternative though the alternative is to put on the the burden on the claimants to be subjected to multiple series of denials and that's where we're succumbs in the language of ricin the intent of congress and harlock was very clear on this saying the intent of congress is to put in place a appeal process to benefit the federal judiciary primarily so that you're not swap with cases that deal with garden variety insurance claims basically and we have insurance companies dealing with something in an expeditious efficient manner and that's what we're hoping for here and that's what we want and har recognize if you don't require these insurers to live up to this book this explicit language of the statute that requires them to present the reasons plural for denial when they initially deny the claim you're asking for trouble you're asking for of claimants and you're asking for a lot more work for the federal judiciary yes it's a burden and that's an important thing for them to comply with they should be required to do it i want to go back you know there are some disparate issues obviously we're not claiming that there aren't but we don't think that they predominate over the issues that are common to the class harlech does not create disparate issues harlech creates common issues and if anything harvick moves us in the direction of making it easier for the district court and this court to certify a class i want to go back to the campion case one of the things you asked to judge by the well look we've got to reconcile campeon you can't just leave me here saying that campion says what it says here's the way i would reconcile campeon and they ruse and the evan case they're all dealing with settlement agreements they're all dealing with efforts made by the parties to resolve the disputes between them and the problem that you have in campion is campion for whatever reason maybe they just didn't think of it the claimant never sought to reserve never stuck in that settlement agreement there's something else that we want to achieve with that we can achieve you know counsel and i am somewhat sympathetic but the argument that you're making seems to be judge owens argument which was a dissent in gambia well i think all i can say your honor is that if you go down the road that says that it's pretty clear counsel that you were trying to resolve the issues here you submitted your attorney's fees you submitted your costs the district court went through everything very very carefully and then went through in again a great deal of detail and so you were not surprised that all of these issues were going to be resolved and we were but i i but but we there's nothing in the record your honor that says we had the intent or the desire to settle the case in the same way that you had in campion and in there was there is no subtle non agreement you haven't can't be and they reserve the right to appeal t he class action now i understand very clear they thought there was a piece of this that was still alive and that the district court i mean i'm sorry the majority in campion specifically addresses the question of incentive payments well as that and then that's it is not sufficient then they address it by looking at the terms of settlement agreement there's no doubt settlement agreement there wasn't any because there wasn't any reservation here on that on that point well we have never conceded that the only money that so the daniella family or that they would receive if they get this claim was are reversed here is the money that was awarded by the district court we can get we should get more if you reverse and we will thank you ok thank mr king we thank you both counsel for the for the argument you were very well prepared gentlem