Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_17-cv-04260/USCOURTS-cand-5_17-cv-04260-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1132 E.R.I.S.A.

---

1

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

COUNTY OF MONTEREY DBA 

NATIVIDAD MEDICAL CENTER,

Plaintiff,

v.

BLUE CROSS OF CALIFORNIA DBA 

ANTHEM BLUE CROSS, et al.,

Defendants.

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO 

DISMISS FIRST AMENDED 

COMPLAINT

Re: Dkt. No. 58

Before the Court is a motion to dismiss filed by Defendants Blue Cross of California dba 

Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company (collectively, 

“Anthem”) seeking to dismiss the sole claim in Plaintiff County of Monterey dba Natividad 

Medical Center’s (“Natividad”) first amended complaint (“FAC”). See ECF No. 58 (“Mot.”). 

Having considered the parties’ briefs, the relevant law, and the record in this case, the Court 

DENIES Anthem’s motion to dismiss the FAC.

I. BACKGROUND

A. Factual Background

Natividad is a 172-bed acute care hospital owned and operated by the County of Monterey. 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 1 of 20
2

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

ECF No. 57 (“FAC”) ¶ 3. On August 1, 2012, Anthem and Natividad entered into a Facility 

Agreement pursuant to which Natividad agreed to provide certain healthcare services to Anthem 

members and Anthem agreed to pay Natividad certain rates for those services. Id. ¶ 14. 

The Facility Agreement governs not only claims for Anthem’s insureds, but also services 

claims for members of “Other Payors” for whom Anthem provides claims processing services and 

to whom Anthem has sold, leased, transferred or conveyed its “Managed Care Network.” Id. ¶ 14. 

Natividad alleges that these “Other Payors” include 32 ERISA Plans that Natividad has identified

in its FAC. Id. ¶¶ 7, 15. The FAC alleges that these ERISA Plans entered into contracts with 

Anthem that required the ERISA Plans to comply with the terms of Anthem’s contracts with 

providers in Anthem’s Managed Care Network, including the Facility Agreement between 

Anthem and Natividad. Id. ¶ 18. Natividad also alleges that Anthem functions as the de facto plan 

administrator for the ERISA Plans because Anthem has, inter alia, (i) drafted and provided plan 

members with plan documents; (ii) operated a centralized verification and authorization telephone 

number which handled calls for members of the ERISA Plans; (iii) authorized Natividad to 

provide medical services to beneficiaries of the ERISA Plans; (iv) received and processed 

electronic bills from Natividad for claims for members of the ERISA Plans, including plans that 

are not named as defendants in the FAC; (v) communicated with Natividad on behalf of the 

ERISA Plans regarding authorization of surgical procedures; (vi) interpreted ERISA Plan 

language; (vii) issued remittance advices and EOBS; (viii) priced claims for the ERISA Plans; (ix) 

communicated with Natividad with respect to the processing of claims on behalf of the ERISA 

Plans; (x) processed appeals, and sent appeal response letters; and (xi) issued payment to 

Natividad. Id. ¶ 10.

At the time Natividad and Anthem entered into the Facility Agreement, Natividad did not 

have its certification to provide trauma services. Id. ¶ 19. Therefore, the parties did not agree upon 

trauma rates. Id. Instead, the Facility Agreement contemplated that the parties would negotiate 

new trauma rates once Natividad obtained its certification. Id. On January 5, 2015, Natividad 

received its certification to provide trauma services and began providing trauma services. Id. ¶ 21. 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 2 of 20
3

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

However, Natividad alleges that the parties’ attempts to negotiate trauma rates after that date were 

unsuccessful. Id. ¶ 22. As a result, the FAC alleges that Anthem, on behalf of the ERISA Plans,

has been improperly pricing trauma rates at the lower rates for emergency services in the Facility 

Agreement. Id. ¶¶ 22–24, 29–32. Specifically, the FAC alleges that “Natividad is informed and 

believes that Anthem has recommended and/or instructed the ERISA Plans to pay Natividad’s 

trauma claims at the emergency services rates, and that the ERISA Plans are relying on and using 

Anthem’s processing and pricing of the trauma claims at the emergency services rate to underpay 

the trauma claims.” Id. ¶ 29. The FAC alleges that the difference between Natividad’s billed 

charges and the amounts that the ERISA Plans are paying for the trauma claims exceeds $18 

million. Id. In many cases, Anthem has held Natividad’s claims submissions in limbo without 

allowing or denying the claims. Id. ¶ 30. By paying the claims at the emergency services rate, the 

FAC alleges that Natividad is informed and believes that Anthem has improperly interpreted the 

ERISA Plan documents. Id. ¶ 31.

Natividad alleges that it is an assignee of its patients’ benefits under the ERISA Plans 

because “[a]s a condition of admission, every patient treated at Natividad signed an Assignment of 

Benefits form agreeing to, inter alia, assign his or her health insurance benefits to Natividad.” Id. 

¶ 25. The assignment of insurance benefits provision states as follows:

I assign and authorize direct payment to the hospital of all insurance benefits payable 

for this hospitalization or for these outpatient services. I agree that the insurance 

company’s payment to the hospital pursuant to this authorization shall discharge the 

insurance company’s obligations to the extent of such payment. I understand that I 

am financially responsible for charges not paid according to this assignment.

Id. Natividad informed Anthem it was operating as an assignee of the patients in two ways. First, 

every claim submission to Anthem included a UB04 form, which indicates on Box 54 that the 

provider, Natividad, had an assignment of benefits from the member. Id. ¶ 26. Second, Natividad 

sent Anthem ERISA appeal letters which stated in the first paragraph: “With this appeal letter, we 

have included an Assignment of Benefits and Appointment of Authorized Representative from 

your Member to Natividad Medical Center.” Id. ¶ 27.

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 3 of 20
4

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

The FAC alleges that after receiving the improper emergency services rate for the trauma 

claims, Natividad would send Anthem two appeal letters. Id. ¶ 38. The first appeal letter was sent 

directly to Anthem. Id. The first appeal letter informed Anthem that the arbitrator had found 

Natividad is owed 80% of its billed charges for all trauma claims and requested that Anthem reprice and re-process the claims at 80% of billed charges. Id. The FAC alleges that Anthem either 

failed to respond to these first appeal letters or improperly denied them. Id. Natividad would then 

send a second appeal letter to Anthem, but the letter would note that the appeal was made pursuant 

to ERISA based on an assignment of benefits that Natividad received from each member. Id. The

second appeal letter specifically asked Anthem, in all capital letters, bolded and underlined, to 

provide the hospital with the ERISA Plan document for the plan at issue. Id. Natividad did not 

receive any plan documents from Anthem and only rarely received responses from the ERISA

Plans themselves. Id. Natividad never received a response setting forth the specific plan provisions 

on which the determination was based. Id. 

In its capacity as an assignee of its patients’ benefits, and based on the above described 

allegations, Natividad asserts one claim against Anthem for failure to pay plan benefits under the 

Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B). Id. ¶¶ 

183–194. Specifically, Natividad “believes that ERISA Plans at issue in this case required Anthem 

and the ERISA Plans to pay Natividad customary and reasonable rates for the inpatient and 

outpatient trauma services that Natividad has provided to the ERISA Plan members.” Id. ¶ 192. 

Therefore, Natividad seeks compensatory damages and declaratory relief. Id. at 39.

Specifically, Natividad seeks a declaration that it is “entitled to be paid a reasonable and 

customary amount for the trauma services it has provided, and is providing to the ERISA Plans,” 

and that Anthem’s “practice of pricing, processing, and paying Natividad’s trauma claims at the 

emergency services rate in the Facility Agreement is improper.” Id. 

B. Procedural History

Natividad filed its initial complaint on July 27, 2017. See ECF No. 1. On November 11, 

2017, the Court stayed the case pending the parties’ arbitration, which concerned the issue of the 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 4 of 20
5

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

reasonable value of trauma services Natividad provided to Anthem members. ECF No. 29; FAC 

¶¶ 33–35. However, because the arbitration concerned only Anthem’s fully-insured members, it 

did not encompass the ERISA Plan claims at issue in this litigation. FAC ¶ 34.

On August 10, 2018, the arbitrator issued the Final Arbitration award, which found that: 

(1) the parties did not agree that Natividad’s claims were to be reimbursed at either the emergency 

services rate or Other Services rate; (2) having failed to agree on any rate to apply to Natividad’s 

trauma services, the parties impliedly agreed that such services would be reimbursed at a 

reasonable value, which is fair market value; and (3) Natividad is awarded declaratory relief that 

the reasonable value of its trauma services provided to Anthem members is 80% of Natividad’s 

billed charges. Id. ¶ 36. Anthem has since paid all trauma claims for its fully-insured members 

with dates of service through April 2018 at 80% of billed charges. Id. ¶ 37. 

On October 8, 2018, Anthem filed a motion to dismiss the initial complaint. ECF No. 37. 

Natividad opposed on October 22, 2018. ECF No. 41. Anthem replied on October 29, 2018. ECF 

No. 42.

On January 24, 2019, at the initial case management conference, the Court lifted the stay 

and directed the Clerk to reopen the case file. ECF No. 50.

On January 28, 2019, the Court granted Anthem’s motion to dismiss the initial complaint 

without prejudice. ECF No. 52 (“January 28, 2019 Order”). Specifically, the Court found that 

Natividad’s complaint failed to plead factual allegations with specificity and that factual 

allegations were missing from the complaint, “including the specific claims, dates, explanations of 

benefits, and the ERISA Plan provisions at issue.” Id. at 8. The Court further requested that “the 

parties meet and confer to assess whether claim numbers, patients numbers, or some other claim or 

patient identifiers could be used in public filings that would protect patient privacy, but enable the 

parties to identify the relevant claim or patient without sealing” and that “[u]sing such identifiers 

would minimize the sealing burdens on the parties and the Court in this case.” Id. at 9. The Court 

also found that Natividad’s complaint insufficiently alleged standing and that Natividad needed to 

allege the specific language of the assignment of benefits. Id. at 9–11. In its motion to dismiss

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 5 of 20
6

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

briefing, Natividad did not contest its failure and instead argued that it could “easily cure any 

deficiency by quoting the language of its assignment of benefits and/or attaching a sample 

assignment of benefits to any amended complaint.” Id. at 11. Finally, the Court found that 

Natividad’s complaint failed to sufficiently allege that Anthem is a de facto plan administrator 

because Natividad did not specifically identify the ERISA Plans or claims at issue, and thus “the 

related allegations about how Anthem controlled or managed these ERISA Plans [were] 

necessarily vague and conclusory.” Id. at 11–13. The Court granted Natividad leave to amend to 

cure these deficiencies. Id. at 13–14. 

On February 26, 2019, the Court granted the parties’ stipulation to extend Natividad’s 

deadline to file its FAC. ECF No. 54. The Court also explained that the number of claims and 

ERISA Plans that Natividad intended to add to the FAC would be unmanageable. Id. Thus, the 

Court required the parties to elect 10 claims––five chosen by Natividad and five chosen by 

Anthem—to be litigated through trial. Id. 

On March 13, 2019, Natividad filed its FAC. See FAC. In its FAC, Natividad listed the 10 

claims chosen by the parties, which included: (1) J.F. Reference #45 (Natividad Claim 1); (2) R.G. 

Reference #49 (Natividad Claim 2); (3) H.L. Reference #75 (Natividad Claim 3); (4) R.M. 

Reference #92 (Natividad Claim 4); (5) M.M. Reference #105 (Natividad Claim 5); (6) B.C. 

Reference #12 (Anthem Claim 1); (7) A.L. Reference #83 (Anthem Claim 2); (8) S.R. Reference 

#124 (Anthem Claim 3); (9) O.R. Reference #131 (Anthem Claim 4); and (10) J.R. Reference 

#136 (Anthem Claim 5). Id. ¶¶ 44–182. 

On March 27, 2019, Anthem filed the instant motion to dismiss the FAC. See Mot. Anthem 

also filed a request for judicial notice in support of its motion. ECF No. 59 (“Anthem RJN”). On 

April 10, 2019, Natividad opposed. ECF No. 61 (“Opp’n”). Anthem replied on April 17, 2019. 

ECF No. 64 (“Reply”). On June 24, 2019, Natividad filed a motion for leave to file a sur-reply in 

opposition to Anthem’s motion to dismiss the FAC. ECF No. 79 (“Sur-Reply”). 

II. LEGAL STANDARD

A. Motion to Dismiss

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 6 of 20
7

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a 

short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint 

that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 

12(b)(6). The United States Supreme Court has held that Rule 8(a) requires a plaintiff to plead 

“enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. 

Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads 

factual content that allows the court to draw the reasonable inference that the defendant is liable 

for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility 

standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a 

defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling on 

a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and 

construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St.

Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 

The Court, however, need not accept as true allegations contradicted by judicially 

noticeable facts, see Schwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it “may look 

beyond the plaintiff’s complaint to matters of public record” without converting the Rule 12(b)(6) 

motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 

1995). Nor must the Court “assume the truth of legal conclusions merely because they are cast in 

the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per 

curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and unwarranted 

inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 

(9th Cir. 2004).

B. Leave to Amend

If the Court determines that a complaint should be dismissed, it must then decide whether 

to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend 

“shall be freely given when justice so requires,” bearing in mind “the underlying purpose of Rule 

15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 7 of 20
8

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks 

omitted). When dismissing a complaint for failure to state a claim, “a district court should grant 

leave to amend even if no request to amend the pleading was made, unless it determines that the 

pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal 

quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing 

amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the 

moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 

(9th Cir. 2008).

III. DISCUSSION

Anthem argues that Natividad’s FAC should be dismissed for three reasons. First, Anthem 

argues that Natividad’s ERISA claim fails because Natividad fails to allege sufficient facts to 

show that Anthem is a de facto plan administrator or otherwise a proper defendant. Second, 

Anthem argues that Natividad lacks derivative standing to pursue a claim under 29 U.S.C. §

1132(a)(1)(B) as a purported assignee of Natividad’s patients’ ERISA benefits. Third, Anthem 

argues that Natividad fails to allege facts sufficient to show that Natividad exhausted its 

administrative remedies as an ERISA claimant prior to bringing suit in federal court. The Court 

discusses each of Anthem’s arguments in turn. 

A. De Facto Plan Administrator

Anthem argues that Natividad’s ERISA claim fails because Natividad fails to allege 

sufficient facts to show that Anthem is a de facto plan administrator or otherwise a proper 

defendant. Mot. at 7–15; Reply at 3–6.

The Ninth Circuit has explained that “proper defendants under § 1132(a)(1)(B) for 

improper denial of benefits at least include ERISA plans, formally designated plan administrators, 

insurers or other entities responsible for payment of benefits, and de facto plan administrators that 

improperly deny or cause improper denials of benefits.” Spinedex Physical Therapy USA Inc. v. 

United Healthcare of Ariz., Inc., 770 F.3d 1282, 1297 (9th Cir. 2014), cert denied, United 

Healthcare of Ariz., Inc., 136 S. Ct. 317 (2015) (emphasis added); see also Cyr v. Reliance 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 8 of 20
9

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Standard Life Ins. Co., 642 F.3d 1202, 1204, 1207 (9th Cir. 2011) (“[A]n entity other than the plan 

itself or the plan administrator may be sued under that statute in appropriate circumstances. . . . 

[T]he plan administrator can be an entity that has no authority to resolve benefit claims or any 

responsibility to pay them,” and therefore, there may be other “logical defendant[s] for an action 

by [plaintiff] to recover benefits due to her under the terms of the plan and to enforce her rights 

under the terms of the plan, which is precisely the civil action authorized by § 1132(a)(1)(B).”). 

“Suits under § 1132(a)(1)(B) to recover benefits may be brought against the plan as an entity and 

against the fiduciary of the plan.” Spinedex, 770 F.3d at 1297 (quotation marks, citation and 

emphasis omitted). A fiduciary of an ERISA plan is any entity that: (i) “exercises any 

discretionary authority or discretionary control respecting management of such plan or exercises 

any authority or control respecting management or disposition of its assets;” (ii) “renders 

investment advice for a fee or other compensation, direct or indirect, with respect to any moneys 

or other property of such plan, or has authority or responsibility to do so;” or (iii) “has any 

discretionary authority or discretionary responsibility in the administration of such plan.” Id. at 

1298; see also 29 U.S.C. § 1002(21)(A). The relevant question is whether the defendant 

“effectively controlled the decision whether to honor or to deny a claim.” Cyr, 642 F.3d at 1204. 

In the January 28, 2019 Order, the Court found insufficient Natividad’s allegations in the 

initial complaint that Anthem acted as a de facto plan administrator because “Natividad’s 

complaint does not identify the specific underlying claims and dates or other details related to 

those claims” and “[i]nstead, the complaint just broadly suggests that the ERISA Plans are relying 

on Anthem and are underpaying the trauma claims by pricing them at the emergency services 

rate.” January 28, 2019 Order at 13. The Court held that “the complaint does not identify exactly 

which ERISA Plans are at issue” and that “because Natividad does not specifically identify the 

ERISA Plans or claims at issue, the related allegations about how Anthem controlled or managed 

these ERISA Plans are necessarily vague and conclusory.” Id. 

In the instant motion to dismiss the FAC, Anthem asserts that Natividad again fails to 

allege sufficient facts to support a claim against Anthem as a de facto plan administrator. Anthem 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 9 of 20
10

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

also asserts that the administrative service agreements between Anthem and several of the selffunded ERISA Plans that Anthem attaches in support of its motion to dismiss demonstrate that 

Anthem is not a de facto plan administrator. In opposition, Natividad asserts that its allegations are 

sufficient and challenges Anthem’s reliance on the agreements. Natividad also filed a motion for 

leave to file a sur-reply and attached documents to support its allegations. The Court first 

discusses Natividad’s allegations before briefly discussing the documents that the parties attached

in support of their briefing for the instant motion. 

1. Natividad’s Complaint Sufficiently Alleges a De Facto Plan Administrator

The Court finds that Natividad’s FAC sufficiently alleges that Anthem is a de facto 

administrator because Natividad alleges that Anthem effectively controlled or managed the 

decision of how much to reimburse Natividad. Spinedex, 770 F.3d at 1297; Cyr, 642 F.3d at 1204 

(The relevant question is whether the defendant “effectively controlled the decision whether to 

honor or to deny a claim”). 

First, Natividad identifies the 32 ERISA Plans at issue, and alleges that Anthem functions 

as the de facto plan administrator for the 32 ERISA Plans at issue in the complaint. FAC ¶ 7.

Specifically, Natividad alleges that Anthem controlled every aspect of the decision of whether and 

how much to pay Natividad for the trauma services that it provided to the ERISA Plan members 

because Anthem has, inter alia, (i) drafted and provided plan members with plan documents; (ii) 

operated a centralized verification and authorization telephone number which handled calls for 

members of the ERISA Plans; (iii) authorized Natividad to provide medical services to 

beneficiaries of the ERISA Plans; (iv) received and processed electronic bills from Natividad for 

claims for members of the ERISA Plans, including plans that are not named as defendants in the 

FAC; (v) communicated with Natividad on behalf of the ERISA Plans regarding authorization of 

surgical procedures; (vi) interpreted ERISA Plan language; (vii) issued remittance advices and 

EOBS; (viii) priced claims for the ERISA Plans; (ix) communicated with Natividad with respect 

to the processing of claims on behalf of the ERISA Plans; (x) processed appeals, and sent appeal 

response letters; and (xi) issued payment to Natividad. Id. ¶¶ 10, 13. These allegations support a 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 10 of 20
11

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

finding that Anthem “effectively controlled the decision whether to honor or to deny a claim.”

Cyr, 642 F.3d at 1204. 

In addition, as to the 10 selected claims at issue, Natividad alleges that Natividad only 

dealt with Anthem and not the named plan administrators. Id. ¶¶ 45–128. Natividad also alleges

that Anthem effectively controlled the decision of how much to reimburse Natividad through 

either (1) pricing the claims at the emergency services rate in the Facility Agreement, see

Natividad Claims 1, 3, 4, and 5 and Anthem Claims 1, 3, 4, and 5 (FAC ¶¶ 47, 81, 99, 115, 131, 

150, 159, 176); or (2) paying no amount on the claims, see Natividad Claim 2 and Anthem Claim 

2 (FAC ¶¶ 63, 143). Further, Natividad alleges that Anthem exercised control over Natividad’s 

appeals and refused to provide Natividad with applicable plan documents, including the specific 

provisions of the ERISA Plans that constituted the reason for the adverse benefit determinations. 

See FAC ¶¶ 49–51, 60 (Natividad Claim 1); id. ¶¶ 66, 78 (Natividad Claim 2); id. ¶¶ 83–84, 96 

(Natividad Claim 3); id. ¶¶ 100–102, 112 (Natividad Claim 4); id. ¶¶ 117–119, 128 (Natividad 

Claim 5); id. ¶¶ 133, 140 (Anthem Claim 1); id. ¶¶ 145, 147 (Anthem Claim 2); id. ¶¶ 152–154, 

156 (Anthem Claim 3); id. ¶¶ 161–163 (Anthem Claim 4); id. ¶¶ 178–180, 182 (Anthem Claim 5). 

These allegations also support a finding that Anthem “effectively controlled the decision whether 

to honor or to deny a claim.” Cyr, 642 F.3d at 1204. 

In sum, the Court finds that Natividad’s FAC sufficiently alleges that Anthem is a de facto 

administrator because Natividad alleges that Anthem effectively controlled or managed the 

decision of how much to reimburse Natividad. Spinedex, 770 F.3d at 1297; Cyr, 642 F.3d at 1204 

(The relevant question is whether the defendant “effectively controlled the decision whether to 

honor or to deny a claim”).

2. The Attached Documents Do Not Undermine Natividad’s Allegations 

In the instant motion to dismiss briefing, the parties effectively attempt to convert the 

motion to dismiss to a motion for summary judgment because both parties attach documents to

prove Anthem’s de facto plan administrator status, or lack thereof. The Court finds the instant 

motion to dismiss an improper vehicle for analyzing these documents. See, e.g., Cusack-Acocella 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 11 of 20
12

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

v. Dual Diagnosis Treatment Ctr., Inc., 2018 WL 6219999, at *3 (C.D. Cal. Sept. 10, 2018) 

(noting that “the Ninth Circuit expressed strong disfavor for defendants using judicial notice and 

other related doctrines to inject non-pleading documents into the motion to dismiss analysis.”

(citing Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir., 2018) (noting the 

“concerning pattern” of parties “exploiting” judicial notice and incorporation by reference “to 

defeat what would otherwise constitute adequately stated claims at the pleading stage”)).

Nonetheless, the Court briefly discusses the documents because the Court believes it demonstrates 

why Natividad’s allegations are sufficient at the motion to dismiss stage.

First, in support of its motion to dismiss, Anthem filed a request for judicial notice asking 

that the Court take judicial notice of nine administrative service agreements between Anthem and 

several of the self-funded ERISA Plans. See Anthem RJN. Anthem cites these agreements to 

support the argument that Anthem is not the ERISA Plan itself nor the plan administrator for the 

self-funded plans. See Mot. at 7–11 (“Indeed, Anthem’s agreements with the self-funded ERISA 

Plans make clear that the self-funding employer groups (defined either as the “Trust” or the 

“Fund”) are the “plan administrators,” “plan sponsor,” and/or “named fiduciary.”).

The Court DENIES AS MOOT Anthem’s request for judicial notice. As an initial matter, 

there is reason to question the authenticity of these agreements. Although Anthem has attached the 

agreements to the declaration of Randy Hendel, the Senior Legal Specialist in the Legal 

Department for Anthem, Inc., the agreements in Exhibits A, B, C, D, F, and H are unexecuted. See 

also Hendel Decl. ¶ 2 (explaining that the agreements are copies of contracts that do not bear 

signatures). Moreover, several of the agreements are incomplete. For example, Exhibit I references 

an “Attachment A,” but Anthem did not include Attachment A. Similarly, Exhibits A, B, C, D, E, 

F, & H reference a “Schedule A,” but Anthem did not include Schedule A of any of the 

agreements. The agreements make clear that Schedule A defines the agreement period and the 

“Claims payment method,” among other unknown terms. Without knowing the agreement period, 

it is unclear whether the agreements were operative during the time in which members received 

treatment at Natividad. Similarly, the “Claims payment method” would clarify the discretion given 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 12 of 20
13

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

to Anthem by the ERISA Plans to determine plan benefits. 

Nonetheless, even if the Court considers the agreements, the agreements do not undermine 

Natividad’s allegations. Although the agreements show that Anthem is not the formally designated

administrator of the ERISA Plans, Natividad never asserted that Anthem was the formally 

designated administrator of the ERISA Plans. Natividad alleges that Anthem is a de facto 

administrator, which is a proper defendant, even in the face of a formally designated plan 

administrator. For instance, in Cyr, CTI was the formally designated plan administrator, not 

Reliance, but CTI had nothing to do with denying Cyr’s claim for increased benefits. Cyr, 642 

F.3d at 1207. The Ninth Circuit held that Reliance was a proper defendant because Reliance acted 

as the de facto plan administrator when Reliance denied Cyr’s request for increased benefits. Id. 

(“We conclude, therefore, that potential liability under 29 U.S.C. § 1132(a)(1)(B) is not limited to 

a benefits plan or the plan administrator. Reliance is a proper defendant in a lawsuit brought by 

Cyr under that statute.”). Similarly, here, it is no matter that Anthem is not the formally designated 

plan administrator so long as Anthem acted as the de facto plan administrator.

Moreover, the language Anthem cites in the agreements does not foreclose a finding that 

Anthem exercises discretion or control because the agreements also specifically state that Anthem 

has been delegated discretionary authority and responsibility. For instance, the Western Growers 

agreement states that the ERISA Plan retains all discretionary authority except as delegated to 

Anthem pursuant to Article 2(k). Ex. A at 6. Article 2(k) gives Anthem authority to conduct 

medical necessity review, utilization review, and case management. Article 2(k) also “delegates to 

Anthem fiduciary authority to determine appeals of any adverse benefit determination made by 

Anthem.” Id. at 4–5. Similarly, the PG&E agreement authorizes Anthem to “determine entitlement 

for Plan benefits” and provides that Anthem will disburse funds in the amount Anthem 

“determines to be proper under the Plan and/or this Agreement.” Ex. I at 7, 8. 

In addition, Natividad filed a motion for leave to file a sur-reply. The Court acknowledges 

that Natividad’s proposed sur-reply casts doubts on the authenticity of the agreements Anthem

submitted in support of the instant motion to dismiss. For example, Natividad’s proposed sur-reply 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 13 of 20
14

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

attaches a redlined version of the administrative services agreement between Western Growers and

Anthem that contradicts the unexecuted and incomplete agreements that Anthem submitted. Tooch 

Decl., Exs. 2 & 3. Nonetheless, sur-replies are disfavored, and because the Court denied as moot 

Anthem’s request for judicial notice, the Court also DENIES Natividad’s motion for leave to file a 

sur-reply.

In sum, the Court finds that Natividad’s FAC sufficiently alleges that Anthem is a de facto 

administrator because Natividad alleges that Anthem effectively controlled or managed the 

decision of how much to reimburse Natividad. Spinedex, 770 F.3d at 1297; Cyr, 642 F.3d at 1204 

(The relevant question is whether the defendant “effectively controlled the decision whether to 

honor or to deny a claim”). Thus, the Court denies Anthem’s motion to dismiss on this ground. 

B. Standing

Anthem argues second that Natividad’s complaint should be dismissed for inadequately 

pleading that Natividad has standing to pursue its ERISA claim. Mot. at 15–19; Reply at 6–9. 

ERISA provides that “[a] civil action may be brought . . . by a participant or beneficiary

. . . to recover benefits due to him under the terms of his plan, to enforce his rights under the terms 

of the plan, or to clarify his rights to future benefits under the terms of the plan. 29 U.S.C. § 

1132(a)(1)(B). The Ninth Circuit has held that healthcare providers are not “beneficiar[ies]” for 

ERISA purposes. DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 852 F.3d 868, 875 

(9th Cir. 2017). Healthcare providers therefore do not have direct authority as beneficiaries to sue 

under ERISA “to recover payments due them for services rendered, or otherwise to enforce the 

statute’s protections.” Id. Thus, Natividad, a medical and healthcare services provider, is not a 

participant or a beneficiary that is authorized to sue under ERISA.

However, “ERISA does not forbid assignment by a beneficiary of his right to 

reimbursement under a health care plan to the health care provider.” Misic v. Bldg. Serv. Emps. 

Health & Welfare Trust, 789 F.2d 1374, 1377 (9th Cir. 1986) (per curiam) (emphasis added); see 

also Spinedex, 770 F.3d at 1289 (“As a non-participant health care provider, Spinedex cannot 

bring claims for benefits on its own behalf. It must do so derivatively, relying on its patients’ 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 14 of 20
15

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

assignments of their benefits claims.”); DB Healthcare, 852 F.3d at 875 (reiterating rule that 

health care providers must bring ERISA claims derivatively by relying on its patients’ assignments 

of their benefits claims). Relying on the above legal authority, Natividad alleges that it has 

standing to pursue this action derivatively as an assignee of its patients’ ERISA benefits. FAC ¶ 

185. Specifically, Natividad alleges that “[a]s a condition of admission, every patient treated at 

Natividad signed an Assignment of Benefits form agreeing to, inter alia, assign his or her health 

insurance benefits to Natividad.” Id. 

In the January 28, 2019 Order, the Court found insufficient Natividad’s allegation that 

Natividad had standing as an assignee of its patients’ benefits. January 28, 2019 Order at 10. The 

Court stated that, “at bare minimum, Natividad should allege the specific language of the 

assignment itself” and that in the initial complaint “Natividad neither quotes from the operative 

assignment language nor does Natividad attach to the complaint a copy of any agreement 

containing the alleged assignment.” Id. at 10–11. Moreover, in the first motion to dismiss briefing, 

Natividad did not contest its failure and instead argued that it could “easily cure any deficiency by 

quoting the language of its assignment of benefits and/or attaching a sample assignment of 

benefits to any amended complaint.” Id. at 11. 

In the instant motion to dismiss the FAC, Anthem asserts that Natividad again fails to 

adequately plead that Natividad has standing to pursue its ERISA claim. Specifically, Anthem 

argues first that Natividad failed to submit with its amended pleading the “Assignment of 

Benefits” form associated with the 10 selected claims at issue. Anthem argues second that the

agreements between Anthem and several of the self-funded ERISA Plans that Anthem attaches in 

support of its motion to dismiss demonstrate that Natividad does not have standing because the 

agreements contain anti-assignment clauses. In opposition, Natividad asserts that its allegations 

regarding the assignment are now sufficient and challenges Anthem’s reliance on the agreements. 

The court discusses both disagreements in turn.

First, the Court finds that Natividad has cured the standing deficiencies of its initial

complaint because Natividad has alleged the specific language of the assignment of benefits. 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 15 of 20
16

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Specifically, Natividad’s FAC alleges that “[a]s a condition of admission, every patient treated at 

Natividad signed an Assignment of Benefits form agreeing to, inter alia, assign his or her health 

insurance benefits to Natividad.” FAC ¶ 25. The assignment of insurance benefits provision states 

as follows:

I assign and authorize direct payment to the hospital of all insurance benefits payable 

for this hospitalization or for these outpatient services. I agree that the insurance 

company’s payment to the hospital pursuant to this authorization shall discharge the 

insurance company’s obligations to the extent of such payment. I understand that I 

am financially responsible for charges not paid according to this assignment.

Id. Thus, under Ninth Circuit law, Natividad has sufficiently alleged standing because Natividad 

has alleged a valid assignment of benefits. See Misic, 789 F.2d at 1377 (“[A] valid assignment 

confers upon the assignee standing to sue in place of the assignor.”); DB Healthcare, 852 F.3d at 

875 (reiterating rule that health care providers must bring ERISA claims derivatively by relying on 

its patients’ assignments of their benefits claims). Moreover, “[a]n assignment of the right to 

payment [of ERISA benefits] logically entails the right to sue for non-payment.” N. Jersey Brain 

& Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 372 (3d Cir. 2015); Misic, 789 F.2d at 1379 (“We 

conclude Dr. Misic, as assignee of beneficiaries pursuant to assignments valid under ERISA, has 

standing to assert the claims of his assignor.”).

It is of no matter, as Anthem suggests, that Natividad quoted the language instead of 

attaching the actual form. The case that Anthem cites, Creative Care, Inc. v. Conn. Gen. Life Ins. 

Co., found the plaintiff’s complaint insufficient because it neither “quote[d] from the purpose 

assignment’s language” nor “attach[ed] a copy of any agreement containing the alleged 

assignment.” 2017 WL 5635015, *3 (C.D. Cal. July 5, 2017). Here, Natividad has sufficiently 

quoted from the assignment language. See also Progressive Spine & Orthopaedics, LLC v. Empire 

Blue Cross Blue Shield, 2017 WL 751851, at *5 (D.N.J. Feb. 27, 2017) (“[A] plaintiff may include 

in its complaint the particular language of the assignment or ‘include the assignment of benefit 

document itself.’”). Moreover, Natividad has linked the assignment language to the 10 selected 

claims at issue because Natividad’s FAC alleges that “[a]s a condition of admission, every patient 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 16 of 20
17

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

treated at Natividad signed an Assignment of Benefits form agreement to, inter alia, assign his or 

her health insurance benefits to Natividad.” FAC ¶ 25. 

Second, Anthem again references the administrative service agreements between Anthem 

and several of the self-funded ERISA Plans, this time to argue that the agreements contain antiassignment clauses that defeat the assignment of benefits. The Court rejects Anthem’s arguments. 

As previously discussed, the agreements are suspect because they are incomplete and unexecuted. 

Moreover, the agreements do not defeat the assignment of benefits. The Ninth Circuit has 

previously held that anti-assignment clauses in “[t]he governing employee benefit plans” override 

any purported assignments. DB Healthcare, 852 F.3d at 876 (emphasis added); see also Spinedex, 

770 F.3d at 1296 (stating that anti-assignment clauses in ERISA plans are valid and enforceable). 

Moreover, Anthem does not cite to any plan documents containing an anti-assignment clause; 

Anthem only cites administrative service agreements, which are not the plan documents.

In sum, the Court finds that Natividad has sufficiently alleged an assignment of benefits 

and thus has sufficiently plead that Natividad has standing to pursue its ERISA claim. Therefore, 

the Court denies Anthem’s motion to dismiss on this ground. 

C. Exhaustion of Administrative Remedies

Finally, Anthem argues that Natividad fails to allege facts sufficient to show that Natividad 

exhausted its administrative remedies as an ERISA claimant prior to bringing suit in federal court. 

Mot. at 19–21; Reply at 9–11. The Court did not previously consider this argument in the January 

28, 2019 Order because the Court found that Anthem had waived this argument by raising it for 

the first time in its reply brief. January 28, 2019 Order at 7 n.1.

“As a general rule, an ERISA claimant must exhaust available administrative remedies 

before bringing a claim in federal court.” Spinedex, 770 F.3d at 1298 (quoting Barboza v. Cal. 

Ass’n of Prof’l Firefighters, 651 F.3d 1073, 1076 (9th Cir. 2011)). “[F]ederal courts have the 

authority to enforce the exhaustion requirement in suits under ERISA, and that as a matter of 

sound policy they should usually do so.” Amato v. Bernard, 618 F.2d 559, 568 (9th Cir. 1980); 

Diaz v. United Agr. Employee Welfare Ben. Plan & Tr., 50 F.3d 1478, 1483 (9th Cir. 1995) 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 17 of 20
18

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

(“Although not explicitly set out in the statute, the exhaustion doctrine is consistent with ERISA’s 

background, structure and legislative history and serves several important policy considerations, 

including the reduction of frivolous litigation, the promotion of consistent treatment of claims, the 

provision of a nonadversarial method of claims settlement, the minimization of costs of claim 

settlement and a proper reliance on administrative expertise.”).

In the instant motion to dismiss the FAC, Anthem asserts that Natividad failed to allege 

facts sufficient to show that Natividad exhausted its administrative remedies as an ERISA 

claimant prior to bringing suit in federal court. Specifically, Anthem argues first that Natividad 

failed to allege exhaustion and second that Natividad’s allegations that Natividad is subject to the 

“futility” exception to the exhaustion requirement are insufficient. Natividad responds that 

Natividad properly alleged exhaustion by asserting that Anthem failed to comply with mandatory 

ERISA regulations at issue and that, in the alternative, Natividad alleged futility. Below, the Court 

finds that Natividad has sufficiently pled exhaustion. Thus, the Court need not consider the 

parties’ arguments regarding futility. 

First, as to the 10 selected claims at issue, Natividad alleges that Anthem failed to comply 

with mandatory ERISA regulations in issuing the adverse benefit determinations, which would 

render any applicable administrative remedies exhausted. Specifically, for each of the 10 selected 

claims at issue, Natividad alleges that Anthem issued an explanation of benefits that failed to 

comply with 29 C.F.R. § 2560.503-1(g)(i, ii), which requires Anthem to state “[t]he specific 

reason or reasons for the adverse determination” as well as “[r]eference to the specific plan 

provisions on which the determination is based.” See, e.g., FAC ¶ 60 (alleging that as to Natividad 

Claim 1, Anthem failed to provide the specific reason or reasons for the adverse determination and 

reference to the specific plan provisions on which the determination is based); id. ¶ 78 (alleging 

the same as to Natividad Claim 2); id. ¶ 96 (alleging the same as to Natividad Claim 3); id. ¶ 112 

(alleging the same as to Natividad Claim 4); id. ¶ 128 (alleging the same as to Natividad Claim 5); 

id. ¶ 140 (alleging the same as to Anthem Claim 1); id. ¶ 147 (alleging the same as to Anthem 

Claim 2); id. ¶ 156 (alleging the same as to Anthem Claim 3); id. ¶ 173 (alleging the same as to 

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 18 of 20
19

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Anthem Claim 4); id. ¶ 182 (alleging the same as to Anthem Claim 5). ERISA regulations provide 

that “in the case of the failure of a plan to establish or follow claims procedures consistent with the 

requirements of this section, a claimant shall be deemed to have exhausted the administrative 

remedies available under the plan and shall be entitled to pursue any available remedies under 

section 502(a) of the Act on the basis that the plan has failed to provide a reasonable claims 

procedure that would yield a decision on the merits of the claim.” 29 C.F.R. § 2560.503-1(1)

(emphasis added). Accordingly, because Natividad alleges that Anthem failed to comply with 29 

C.F.R. § 2560.503-1(g)(i, ii) as to the 10 selected claims at issue, Natividad sufficiently alleges

exhaustion based on Anthem’s failure to comply with 29 C.F.R. § 2560.503-1(1). 

Anthem argues in reply that Natividad’s argument is insufficient because the FAC also 

alleges that for some of the claims in the case, Anthem’s explanation of benefits provided the 

claim would not be properly paid because the “CHARGES EXCEED CONTRACT 

AGREEMENT.” Reply at 9 (citing FAC ¶ 189). However, this explanation of benefits is not 

alleged to apply to the 10 selected claims currently at issue. See FAC. As already discussed, 

Natividad’s allegations as to the 10 selected claims at issue are sufficient. Moreover, Natividad’s 

allegations as to this explanation of benefits asserts that the explanation of benefits is not specific 

enough to meet the requirements of 29 C.F.R. § 2560.503-1(g)(i, ii), which requires Anthem to 

state “[t]he specific reason or reasons for the adverse determination” as well as “[r]eference to the 

specific plan provisions on which the determination is based.” Indeed, Natividad further alleges 

that because of this failure, Natividad shall, pursuant to 29 C.F.R. § 2560.503-1(1), “be deemed to 

have exhausted the administrative remedies under the plan.” See FAC ¶ 190. These allegations are 

sufficient at the motion to dismiss stage. See Ashcroft, 556 U.S. at 678 (“A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable 

inference that the defendant is liable for the misconduct alleged.”).

In sum, the Court finds that Natividad has sufficiently alleged exhaustion. Therefore, the 

Court denies Anthem’s motion to dismiss on this ground.

IV. CONCLUSION

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 19 of 20
20

Case No. 17-CV-04260-LHK 

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

For the foregoing reasons, the Court DENIES Anthem’s motion to dismiss the FAC.

IT IS SO ORDERED.

Dated: July 18, 2019

______________________________________

LUCY H. KOH

United States District Judge

Case 5:17-cv-04260-LHK Document 81 Filed 07/18/19 Page 20 of 20