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

3:17-cv-00183-VC 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

Karen A. Braje (SBN 193900) 

Email: kbraje@reedsmith.com 

REED SMITH LLP

101 Second Street, Suite 1800 

San Francisco, CA 94105-3659 

Telephone: +1 415 543 8700 

Facsimile: +1 415 391 8269 

Martin J. Bishop (admitted pro hac vice) 

Email: mbishop@reedsmith.com 

Rebecca R. Hanson (admitted pro hac vice) 

Email: rhanson@reedsmith.com 

REED SMITH LLP

10 South Wacker Drive, 40th Floor 

Chicago, IL 60606 

Telephone: +1 312 207 1000 

Facsimile: +1 312 207 6400 

Attorneys for Defendants UnitedHealth Group 

Inc., UnitedHealthcare, Inc., UnitedHealthcare 

Insurance Company, United Healthcare 

Services, Inc., and UMR, Inc. 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

RACHEL CONDRY, JANCE HOY, 

CHRISTINE ENDICOTT, LAURA BISHOP, 

FELICITY BARBER, and RACHEL CARROLL, 

on behalf of themselves and all others similarly 

situated, 

Plaintiffs, 

vs. 

UNITEDHEALTH GROUP INC., 

UNITEDHEALTHCARE, INC., 

UNITEDHEALTHCARE INSURANCE 

COMPANY, UNITED HEALTHCARE 

SERVICES, INC., and UMR, INC., 

Defendants. 

Case No.: 3:17-cv-00183-VC 

DEFENDANTS UNITEDHEALTH GROUP 

INC., UNITEDHEALTHCARE, INC., 

UNITEDHEALTHCARE INSURANCE 

COMPANY, UNITED HEALTHCARE 

SERVICES, INC., AND UMR, INC.’S 

NOTICE OF MOTION AND MOTION TO 

DISMISS PLAINTIFFS’ AMENDED 

COMPLAINT; MEMORANDUM OF 

POINTS AND AUTHORITIES IN 

SUPPORT THEREOF 

Date: July 27, 2017 

Time: 10:00 a.m. 

Place: Courtroom 4 

Compl. Filed: Jan. 13, 2017 

 

Honorable Vincent Chhabria 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 1 of 28
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

3:17-cv-00183-VC 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

PLEASE TAKE NOTICE that on July 27, 2017 at 10:00 a.m. in Courtroom 4 of the above 

captioned court, located at 450 Golden Gate Avenue, San Francisco, CA 94102, Defendants 

UnitedHealth Group Inc., UnitedHealthcare, Inc., UnitedHealthcare Insurance Company, United 

Healthcare Services, Inc., and UMR, Inc. will, and hereby do, move the Court for an order granting 

the instant Motion to Dismiss and dismissing the claims against them. This Motion relies upon this 

Notice of Motion, the attached Memorandum of Points and Authorities, and the arguments of 

counsel at the hearing on this Motion. 

DATED: April 14, 2017 

REED SMITH LLP

By: /s/ Karen A. Braje 

Karen A. Braje 

Martin J. Bishop (admitted pro hac vice) 

Rebecca R. Hanson (admitted pro hac vice) 

Attorneys for Defendants UnitedHealth Group Inc., 

UnitedHealthcare, Inc., UnitedHealthcare 

Insurance Company, United 

Healthcare Services, Inc., and UMR, Inc. 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 2 of 28
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

3:17-cv-00183-VC – i – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

TABLE OF CONTENTS 

Page 

I. INTRODUCTION ................................................................................................................... 1 

II. BACKGROUND ..................................................................................................................... 1 

A. ACA Requires Coverage For Lactation Counseling Without Cost-Sharing. .............. 1 

B. Defendants Are Claims Administrators, Not The Plan Or Plan 

Administrator. .............................................................................................................. 2

C. Plaintiffs’ Plans Specify Procedures For Filing Claims And Appealing 

Denials. ........................................................................................................................ 3 

D. Plaintiffs Received Lactation Counseling Services From Out-Of-Network 

Providers Even Though Services Were Available From In-Network 

Providers. ..................................................................................................................... 3 

1. Condry 3 

2. Hoy 4 

3. Endicott 5 

4. Bishop 6 

5. Barber 6 

6. Carroll 7 

E. Plaintiffs Filed The Present Lawsuit. ........................................................................... 7 

III. LEGAL STANDARD .............................................................................................................. 8 

IV. ARGUMENT ........................................................................................................................... 9 

A. Plaintiffs Have Not Alleged A Plausible Violation of ACA In Counts II–

VI. ................................................................................................................................ 9 

1. ACA Does Not Require Defendants To Create A Separate 

Network Of Lactation Counseling Providers, And Plaintiffs Admit 

That Defendants Have In-Network Providers Who Offer Lactation 

Counseling Services. 10 

2. ACA Does Not Require Defendants To Maintain A Separate List 

Of In-Network Lactation Counseling Providers. 11 

B. Plaintiffs Do Not State a Viable Claim In Count I. ................................................... 14 

1. Defendants Complied With Claims Procedures In The Plan 

Documents. 14 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 3 of 28
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

3:17-cv-00183-VC – ii – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

2. Section 503 Of ERISA Does Not Apply To Defendants. 15 

C. Count III Does Not State a Claim. ............................................................................. 16 

1. Plaintiffs Have Not Alleged That Defendants Are Fiduciaries Of 

“The Same Plan” Or Adequately Pled Their Co-Fiduciary Claim. 16 

2. Non-Fiduciary Participation Liability Is Inapplicable Here. 17 

D. Count IV Should Be Dismissed Because Plaintiffs Fail To Allege That 

Defendants’ Coverage Decisions Were Based On Plaintiffs’ Sex. ............................ 18 

E. ERISA Preempts Breach Of Contract And Unjust Enrichments Claims 

Asserted By Plaintiffs Condry, Hoy, Endicott, Bishop, And Barber In 

Counts V And VI. ...................................................................................................... 19 

F. Counts V And VI Are Solely Based On ACA And Must Be Dismissed. .................. 20 

V. CONCLUSION ...................................................................................................................... 20 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 4 of 28
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

3:17-cv-00183-VC – iii – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

TABLE OF AUTHORITIES 

 Page(s) 

Cases 

Aetna Health Inc. v. Davila, 

542 U.S. 200 (2004) .......................................................................................................................19 

Alexander v. Sandoval, 

532 U.S. 275 (2001) .......................................................................................................................18 

Ashcroft v. Iqbal, 

556 U.S. 662 (2009) .........................................................................................................................8 

Bell Atl. Corp. v. Twombly, 

550 U.S. 544 (2007) .............................................................................................................8, 15, 17 

Botsford v. BCBS of Mont., Inc., 

314 F.3d 390 (9th Cir. 2002) .........................................................................................................19 

Cascades Computer Innovation LLC v. RPX Corp., 

No. 12-cv-01143 YGR, 2013 WL 316023 (N.D. Cal. Jan. 24, 2013) .....................................11, 14 

Christensen v. Harris County, 

529 U.S. 576 (2000) .......................................................................................................................12 

Cleghorn v. Blue Shield of Cal., 

408 F.3d 1222 (9th Cir. 2005) .......................................................................................................19 

Conservation Force v. Salazar, 

646 F.3d 1240 (9th Cir. 2011) ...............................................................................................8, 9, 14 

Doe v. Regents of Univ. of Cal., 

No. 2:15-cv-02478-SVW-JEM, 2016 WL 5515711 (C.D. Cal. July 25, 2016) ......................18, 19 

Escobar v. Lynch, 

846 F.3d 1019 (9th Cir. 2017) .................................................................................................12, 13 

Gates v. United Health Group Inc., 

No. 11 Civ. 3487(KBF), 2012 WL 2953050 (S.D.N.Y. July 16, 2012) ........................................16 

Gonzales v. Or., 

546 U.S. 243 (2006) .......................................................................................................................12 

Great-West Life & Annuity Ins. Co. v. Knudson, 

534 U.S. 204 (2002) .......................................................................................................................11 

Griggs v. E.I. DuPont de Nemours & Co., 

237 F.3d 371 (4th Cir. 2001) .........................................................................................................10 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 5 of 28
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

3:17-cv-00183-VC – iv – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

Grochowski v. Phoenix Constr., 

318 F.3d 80 (2d Cir. 2003).............................................................................................................20 

Groves v. Kaiser Found. Health Plan Inc., 

32 F. Supp. 3d 1074 (N.D. Cal. 2014) ...........................................................................................19 

Harris Trust & Sav. Bank v. Salomon Smith Barney, Inc., 

530 U.S. 238 (2000) .......................................................................................................................17 

Horn v. Provident Life & Acc. Ins. Co., 

351 F. Supp. 2d 954 (N.D. Cal. 2004) .....................................................................................12, 13 

In re McKesson HBOC, Inc. ERISA Litig., 

No. C00-20030RMW, 2002 WL 31431588 (N.D. Cal. Sept. 30, 2002) .......................................17 

In re Syncor ERISA Litig., 

351 F. Supp. 2d 970 (C.D. Cal. 2004) ...........................................................................................17 

Killian v. Concert Health Plan, 

742 F.3d 651 (7th Cir. 2013) .........................................................................................................10 

Korte v. Sibelius, 

735 F.3d 654 (7th Cir. 2013) .........................................................................................................20 

La. Mun. Police Employees’ Ret. Sys. v. Wynn, 

829 F.3d 1048 (9th Cir. 2016) .....................................................................................................4, 9 

Lamie v. U.S. Tr., 

540 U.S. 526 (2004) .......................................................................................................................14 

Landwehr v. DuPree, 

72 F.3d 726 (9th Cir. 1995) .....................................................................................................17, 18 

Lee v. ING Groep, N.V., 

829 F.3d 1158 (9th Cir. 2016) .......................................................................................................15 

Lopez v. Regents of Univ. of Cal., 

5 F. Supp. 3d 1106 (N.D. Cal. 2013) .......................................................................................18, 19 

LoPresti v. Ctigroup, Inc., 

No. 02-cv-6492(SJ), 2005 WL 195521 (E.D.N.Y. Jan. 18, 2005) ..........................................16, 17 

Mertens v. Hewitt Assocs., 

508 U.S. 248 (1993) .......................................................................................................................17 

Mills v. BCBS of Tenn., Inc., 

No. 3:15-cv-552-PLR-HBG, 2017 WL 78488 (E.D. Tenn. Jan. 9, 2017) .....................................20 

Moorestown Twp. Bd. of Educ. v. S.D., 

811 F. Supp. 2d 1057 (D.N.J. 2011) ........................................................................................12, 13 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 6 of 28
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

3:17-cv-00183-VC – v – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

Palmer v. Ill. Farmers Ins. Co., 

666 F.3d 1081 (8th Cir. 2012) .......................................................................................................20 

Premier Health Center, P.C. v. UnitedHealth Group, 

No. 11-425 (ES), 2012 WL 1135608 (D.N.J. Apr. 4, 2012)..........................................................16 

Quan v. Gonzales, 

428 F.3d 883 (9th Cir. 2005) ...........................................................................................................9 

Renfro v. Unisys Corp., 

671 F.3d 314 (3d Cir. 2011).....................................................................................................17, 18 

Rollins v. Dignity Health, 

830 F.3d 900 (9th Cir. 2016), cert. granted on other grounds, 137 S. Ct. 547 .............................12 

Schroeder v. United States, 

793 F.3d 1080 (9th Cir. 2015) .......................................................................................................11 

Se. Pa. Transp. Auth. v. Gilead Scis., Inc., 

102 F. Supp. 3d 688 (E.D. Pa. 2015) .............................................................................................18 

Serpa v. SBC Telecomm., Inc., 

318 F. Supp. 2d 865 (N.D. Cal. 2004) ...........................................................................................19 

Skidmore v. Swift, 

323 U.S. 134 (1944) .......................................................................................................................12 

Soehnlen v. Fleet Owners Ins. Fund, 

844 F.3d 576 (6th Cir. 2016) .........................................................................................................20 

Stewart v. Screen Gems-EMI Music, Inc., 

81 F. Supp. 3d 938 (N.D. Cal. 2015) ...............................................................................................8 

Streit v. Matrix Absence Mgmt., Inc., 

No. 3:12-cv-01797-AC, 2014 WL 667535 (D. Or. Feb. 18, 2014) ...............................................16 

Voss v. C.I.R., 

706 F.3d 1051 (9th Cir. 2015) .......................................................................................................13 

Weisbuch v. City of Los Angeles, 

119 F.3d 778 (9th Cir. 1997) ...................................................................................................11, 14 

Statutes 

29 U.S.C. § 1105(a)(1)–(3) ..................................................................................................................16 

29 U.S.C. § 1133(1) .............................................................................................................................16 

29 U.S.C. §§ 1133(1)–(2) ....................................................................................................................15 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 7 of 28
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

3:17-cv-00183-VC – vi – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

42 U.S.C. § 300gg-13(a)(4) ...................................................................................................2, 9, 10, 13 

42 U.S.C. § 18022(c)(3)(A)(i) ...............................................................................................................2 

42 U.S.C. § 18116(a) ...........................................................................................................................18 

42 U.S.C. § 18116(b) ...........................................................................................................................18 

Rules 

Fed. R. Civ. P. 12(b)(6)..........................................................................................................................8 

Regulations 

26 C.F.R. § 54.9815-2713(a)(1)(iv) .......................................................................................................2 

29 C.F.R. 2590.715-2713 .....................................................................................................................10 

29 C.F.R. 2590.715-2713(a) ..........................................................................................................13, 14 

29 C.F.R. § 2520.102-3(j)(3) ...............................................................................................................12 

29 C.F.R. § 2590.715-2713(a)(1)(iv) .....................................................................................................2 

29 C.F.R. § 2590.715-2713(a)(3)(i) .....................................................................................9, 10, 11, 13 

29 C.F.R. § 2590.715-2713(a)(3)(i)–(ii) ................................................................................................2 

29 C.F.R. § 2590.715-2713(a)(3)(ii) ............................................................................................2, 9, 10 

29 C.F.R. § 2590.715-2715(a)(2)(i)(K) ...............................................................................................12 

45 C.F.R. § 147.130(a)(1)(iv) ................................................................................................................2 

45 C.F.R. § 156.230(b)(2) ....................................................................................................................12 

Other Authorities 

HRSA, Women’s Preventive Services Guidelines (the “HRSA Guidelines”), 

available at https://www.hrsa.gov/womensguidelines/ ...................................................................2 

UnitedHealthcare, https://connect.werally.com .....................................................................3, 4, 5, 6, 7 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 8 of 28
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

3:17-cv-00183-VC – 1 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

I. INTRODUCTION 

 In this putative class action against UnitedHealth Group Inc., United Healthcare, Inc., United 

Healthcare Insurance Company, United Healthcare Services, Inc., and UMR, Inc. (collectively, 

“Defendants”), Plaintiffs Rachel Condry (“Condry”), Jance Hoy (“Hoy”), Christine Endicott 

(“Endicott”), Laura Bishop (“Bishop”), Felicity Barber (“Barber”), and Rachel Carroll (“Carroll”) 

(collectively, “Plaintiffs”) allege that Defendants violated the Patient Protection and Affordable Care 

Act of 2010 (“ACA”) by: (1) failing to create a network of providers who focus on lactation 

counseling (separate from their general provider networks) and, in the absence of a separate network, 

imposing cost-shares on out-of-network services Plaintiffs received; and (2) erecting administrative 

barriers that impaired Plaintiffs’ access to lactation counseling services, such as allegedly declining 

to maintain a separate list of general in-network providers who offer lactation counseling. Plaintiffs’ 

claims, however, misread ACA, and their factual allegations fall short of establishing a right to 

relief. 

 ACA does not require Defendants to create a separate network of providers who focus on 

lactation counseling. ACA permits Defendants to impose cost-shares on out-of-network services if 

they have general in-network providers who offer lactation counseling services – obstetricians, 

pediatricians, and certified nurse midwives. Plaintiffs plead themselves out of court because they 

admit that Defendants’ general provider networks have such providers. Under ACA, then, 

Defendants do not have to cover out-of-network lactation counseling services or could apply costshares if they did cover them. Further, Plaintiffs’ allegations regarding administrative barriers are 

untethered to the statutory and regulatory text, and ACA does not require Defendants to maintain a 

separate list of in-network providers who offer lactation counseling services. In sum, Plaintiffs have 

not pled that Defendants violated ACA, which is the core premise of virtually all of their claims, and 

the remainder of their claims suffer from substantial defects, as detailed below. 

II. BACKGROUND 

A. ACA Requires Coverage For Lactation Counseling Without Cost-Sharing. 

ACA provides that a “group health plan and a health insurance issuer ... shall not impose any 

cost-sharing requirements for ... preventive care . . . [for women] as provided for in comprehensive 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 9 of 28
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

3:17-cv-00183-VC – 2 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

guidelines supported by the Health Resources and Services Administration” (“HRSA”). See 42 

U.S.C. § 300gg-13(a)(4); see also 26 C.F.R. § 54.9815-2713(a)(1)(iv); 29 C.F.R. § 2590.715-

2713(a)(1)(iv); 45 C.F.R. § 147.130(a)(1)(iv). ACA defines “cost sharing” as “deductibles, 

coinsurance, copayments, or similar charges.” See 42 U.S.C. § 18022(c)(3)(A)(i). HRSA’s Women’s 

Preventive Services Guidelines require coverage for “comprehensive lactation support and 

counseling” before and after birth of a child. See HRSA, Women’s Preventive Services Guidelines 

(the “HRSA Guidelines”), available at https://www.hrsa.gov/womensguidelines/; (see also Dkt. 29 

(“Am. Compl.”) ¶ 62.) 

Notwithstanding ACA’s broadly worded requirement that plans cover specified preventive 

services for women without imposing cost-sharing, ACA’s implementing regulations allow plans to 

deny coverage for, or impose cost-sharing requirements with respect to, lactation counseling services 

delivered out-of-network, as long as they have in-network services. See 29 C.F.R. § 2590.715-

2713(a)(3)(i)–(ii) (insurer may deny coverage or impose cost-shares when it has “in its network a 

provider who can provide an item or service”). When an insurer “does not have in its network a 

provider who can” offer lactation counseling, the regulations prohibit cost-shares on out-of-network 

services. See id. § 2590.715-2713(a)(3)(ii). ACA and its supporting regulations do not require that 

lactation counseling be administered by a specific type of provider, such as an International Board 

Certified Lactation Consultant (“IBCLC”). See id. (permitting cost-sharing if the plan has in its 

network “a provider” who can perform lactation counseling services); FAQs About Affordable Care 

Act Implementation (Part XXIX) and Mental Health Parity Implementation at Q.3 (Oct. 23, 2015) 

(hereinafter, “FAQ”) (services can be performed by “another provider type acting within the scope 

of his or her license or certification”). 

B. Defendants Are Claims Administrators, Not The Plan Or Plan Administrator. 

Plaintiffs are members or beneficiaries of health benefit plans sponsored by their or their 

spouses’ employers (collectively, the “Plans”). (Am. Compl. ¶¶ 20–25.) The Plans provide coverage 

in accordance with ACA’s preventive services requirements, including the lactation services 

requirements. (Id. ¶¶ 81–82.) Defendants are the claims administrators for the Plans. (Id. ¶¶ 26–31.) 

Defendants are not, however, the plan or plan administrator. See, e.g., Hoy’s Benefit Booklet, 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 10 of 28
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

3:17-cv-00183-VC – 3 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

attached here as Exhibit A, at 110 (The Santander Holdings USA, Inc. Flexible Benefits Plan is the 

plan and Santander Holdings USA, Inc. is the plan administrator).1

C. Plaintiffs’ Plans Specify Procedures For Filing Claims And Appealing Denials. 

 The Plans contain detailed claims procedures, which explain the process for submitting 

claims and filing an appeal if those claims are denied. (See, e.g., Am. Compl. ¶¶ 112–13 (detailing 

process for Hoy’s plan); see also Ex. B at 51–57 (“Condry’s Benefit Booklet”).) With respect to 

Hoy’s plan, for example, members can appeal Hoy’s plan’s decisions if a claim is denied in whole or 

in part. (Id.) With respect to Condry’s plan, members can file a written appeal if the member 

disagrees with a pre-service request for benefits determination, post-service claim determination, or 

a rescission of coverage determination. (Ex. B (Condry’s Benefit Booklet), at 53.) Condry’s plan 

requires that UHC Insurance respond to appeals within 30 days. (Id. at 54-55.) 

D. Plaintiffs Received Lactation Counseling Services From Out-Of-Network 

Providers Even Though Services Were Available From In-Network Providers. 

Plaintiffs utilized out-of-network providers for the lactation counseling services at issue in 

this case despite the fact that they are aware that Defendants have providers in their networks who 

offer lactation counseling services.2

1. Condry 

After giving birth on February 13, 2015, Condry received lactation consultations from an 

out-of-network provider, Ellen H. Schwerin (“Schwerin”), on three occasions, paying $586 total. 

(Am. Compl. ¶¶ 89-91; see also UnitedHealthcare, https://connect.werally.com (last visited Mar. 31, 

 

1 See also Condry’s Benefit Booklet, attached here as Exhibit B, at XXIII (Insperity Group Health Plan is the 

plan and Insperity Holdings, Inc. is the plan administrator); Endicott’s Benefit Booklet, attached here as 

Exhibit C, at 102 (The Travelers Companies, Inc. Medical Plan is the plan and Travelers Companies, Inc. is 

the plan administrator); Barber’s Benefit Booklet, attached here as Exhibit D, at XXIII (Eventbrite, Inc. 

Welfare Benefit Plan is the plan and Eventbrite, Inc. is the plan administrator); Carroll’s Benefit Booklet, 

attached here as Exhibit E, at 1 (Larimer County Employee Benefit Plan is the plan and plan administrator); 

Bishop’s Benefit Booklet, attached here as Exhibit F, at 53 (“[W]e are not the plan administrator.”) 

2 See, e.g., Am. Compl. ¶¶ 97, 99 (acknowledging that Hoy saw a hospital-based lactation consultant that was 

covered under her plan); ¶ 117 (acknowledging that Endicott located an in-network lactation consultant); 

UnitedHealthcare, https://connect.werally.com (last visited Mar. 31, 2017) (Defendants’ provider finder tool 

indicating that Endicott’s hospital, Hartford Hospital, is in Defendants’ network for her plan). Further, as will 

be established in discovery, the lactation consultant Bishop alleges she saw both in the hospital and on a 

“private patient” basis, Diba Tillery, is associated with an in-network hospital that provides lactation 

counseling services even after discharge. 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 11 of 28
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

3:17-cv-00183-VC – 4 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

2017) (search for Condry’s location (Oakland, CA) and plan indicate Schwerin is not in Defendants’ 

network).) Condry’s claim for this service was denied by UHC Insurance as “not a reimbursable 

service.” (Am. Compl. ¶ 90.) She did not appeal. (See generally, id.) Condry later sought the 

services of the same provider, knowing that the first claim had been denied; she did not even submit 

claims for the second and third consultations because she thought it would be futile based on 

unsuccessful attempts to obtain coverage for unrelated services. (Id. ¶¶ 91-92 (discussing Condry’s 

efforts to obtain coverage for her home birth).) Condry does not allege that she attempted to locate 

an in-network provider of lactation counseling services. (See generally id.) 

Condry also alleges that she received a gap exception for coverage for her home birth, which 

would require UHC Insurance to cover her out-of-network provider at the in-network level of 

benefits. (Id. ¶¶ 93-95.) Condry’s gap exception expired prior to the birth of her child and her 

provider did not properly extend it. (Id. ¶¶ 93-94.) 

2. Hoy 

Hoy saw a hospital-based lactation consultant on September 4, 2015, which was covered. 

(Am. Compl. ¶¶ 97, 99.) Hoy attempted to locate in-network “lactation support services” by 

searching only for “lactation consultant” on Defendants’ provider portal.3

 (Id. ¶ 98; see also Hoy’s 

Letter (Dec. 29, 2015) (“Hoy’s 12/29/15 Letter”), attached here as Exhibit G at p. 15/28 (attaching a 

screenshot of her search which returned zero results for “lactation consultant.”).)4 Hoy also called 

UHC Services and was told that out-of-network services would not be covered. (Id. ¶ 99.) Hoy 

nevertheless received lactation services from an out-of-network provider on three occasions, paying 

$345 total. (Id. ¶ 100.) After receiving the services, Hoy was told by UHC Services that her plan 

covers out-of-network services at 60%, but the UHC representative did not offer any comment on 

Hoy’s specific lactation counseling services claim. (Id. ¶ 101 (noting only that UHC “would cover 

 

3

 In fact, as will be established in discovery, Hoy’s hospital in Abington, Pennsylvania is in Defendants’ 

network and provides breastfeeding support services even after discharge. 

4

 Defendants may attach the December 29, 2015 Letter to their Motion, as Plaintiffs rely on it in their 

Amended Complaint. (Am. Compl. ¶ 104); see La. Mun. Police Employees’ Ret. Sys. v. Wynn, 829 F.3d 1048, 

1063 (9th Cir. 2016). Because the Letter contains protected health information, Defendants have filed a 

motion contemporaneously with this memorandum seeking leave to file the Letter under seal and provided an 

unredacted copy of the exhibit to Plaintiffs. 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 12 of 28
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

3:17-cv-00183-VC – 5 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

out-of-network services at 60%”).) Apparently based on the general representation, Hoy submitted a 

letter – characterizing it as an “appeal” – on October 23, 2015, but UHC Services informed her it did 

“not qualify as an appeal.” (Id. ¶ 103.) Hoy’s plan allows for appeals of denied claims. (See id. 

¶ 113.) 

Hoy’s 12/29/15 Letter constituted Hoy’s next attempt to appeal, but UHC informed Hoy that 

it did not qualify as such. (Am. Compl. ¶¶ 105, 108.) Hoy also filed a complaint with the 

Pennsylvania Insurance Department (the “PA DOI”), “describing her experience with the appeals 

process,” but the PA DOI indicated that it was “unable to assist her because . . . Hoy never appealed 

her claim denials internally and/or UHC Services never formally denied her appeal.” (Id.) 

3. Endicott 

Endicott admits UHC Services has in-network lactation counseling services. (Id. ¶ 117 (she 

contacted a lactation consultant at Hartford Hospital, as suggested in her plan documents); see supra 

at n.2 (Hartford Hospital is in-network).) The in-network provider told Endicott that her condition 

did not require care, and based on that, Endicott sought the services of an out-of-network provider5

without any apparent further effort to find an in-network provider. (Id. ¶¶ 117-18, 121.) Endicott 

submitted a claim for the services in October 2015 and UHC Services responded with a request for 

additional information. (Id. ¶ 119-20.) Endicott received an explanation of benefits (“EOB”) on 

February 12, 2016 noting the claims processed under her out-of-network benefits. (Id. ¶ 121.) 

Endicott then contacted UHC Services by phone, but never appealed. (Id. ¶¶ 122-23.) 

Even before receiving the EOB and having never appealed to UHC Services, Endicott 

submitted a complaint to the State of Connecticut Insurance Department on February 1, 2016, which 

Endicott alleges prompted UHC Services to reprocess her claim. (Id. ¶ 124.) UHC Services informed 

Endicott that the “eligible expense amount” of her claims (totaling $213) would be applied to her 

out-of-network deductible and that she may be billed by the provider for “any difference between the 

providers[’] billed charges and the eligible expenses.” (Id.) 

 

5 See UnitedHealthcare, https://connect.werally.com (last visited March 31, 2017) (search for Endicott’s 

location (Glastonbury, CT) and plan shows Lori Atkins is not a network provider). 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 13 of 28
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

3:17-cv-00183-VC – 6 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

4. Bishop 

Bishop received lactation counseling services from Diba Tillery (“Tillery”), an IBCLC 

located in Bishop’s hospital, which presumably was covered by UHC Services.6 (Id. ¶ 126.) Bishop 

tried to see Tillery after discharge, but she was not available. (Id. ¶ 127.) Bishop later attempted to 

locate an “in-network lactation provider” using UHC Services’ “online portal” but did not find any. 

(Id. ¶ 129.) Bishop contacted Tillery “who agreed to see [Bishop] on a private-patient basis because 

neither [Bishop’s] nor her son’s conditions warranted admission to the hospital.” (Id. ¶ 130.) 

Bishop submitted a claim for Tillary’s “private-patient” services on August 5, 2015 for $130. 

(Id. ¶¶ 130–31.) UHC Services denied the claim on September 28, 2015 as “not a reimbursable 

service” and noting that “[t]here may be a more appropriate CPT or HCPCS code that describes this 

service and/or the use of the modified or modifier combination is inappropriate.” (Id. ¶ 131.) Tillery 

sent a letter to UHC Services on October 19, 2015 with additional information. (Id. ¶ 132.) Bishop 

also submitted an appeal, but does not indicate the date of the appeal. (Id.) UHC Services responded 

that Tillery must indicate that her 10/19/15 letter was a “corrected claim.” (Id.) Bishop resubmitted 

the claim and received a new EOB that denied the claim, but for reasons that were different than the 

reasons given for the original claim. (Id. ¶ 133.) Bishop did not appeal this denial. (See generally id.) 

5. Barber 

After giving birth in February 2016, Barber used an out-of-network IBCLC7

 for lactation 

counseling and does not allege that she made any attempt to locate in-network services. (Id. ¶ 136.) 

Barber had two consultations for which she paid $590. (Id. ¶ 137.) Barber submitted a claim, which 

UHC Insurance denied on April 29, 2016. (Id. ¶ 138.) Nearly a year later, in February 2017, Barber 

appealed the denial, which UHC Insurance responded to, noting the claim had processed properly. 

(Id. ¶ 139.) Barber did not take a further appeal. (See general id.) 

 

6

 Bishop complains only about $130 paid out-of-pocket for post-hospital services. (Am. Compl. ¶¶ 130, 135.) 

 

7 See UnitedHealthcare, https://connect.werally.com (last visited Mar. 31, 2017) (search for Barber’s plan and 

location (San Francisco, CA) demonstrates Caroline Kerherve is not in Defendants’ network). 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 14 of 28
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

3:17-cv-00183-VC – 7 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

6. Carroll 

Like Barber, Carroll sought the services of an out-of-network IBCLC8 without indicating 

whether she made any attempt to locate in-network services. (Id. ¶ 141.) Carroll submitted claims for 

two consultations she had on September 16 and 19, 2015, for which she paid $105 and UMR sent an 

EOB for the September 16, 2015 service indicating that the claim processed at the “out-of-network” 

level of benefits and that the charges exceeded “the usual, reasonable, and customary fees” for such 

services. (Id. ¶ 142.) The allowed amount was applied to Carroll’s deductible, leaving her 

responsible for $65. (Id.) Carroll received another EOB on December 29, 2015 for the September 19, 

2015 claim indicating that it had been denied as excluded from her health plan. (Id.) A customer 

service representative told Carroll that the claims were applied to her out-of-network deductible. (Id. 

¶ 143.) Carroll sought services of another out-of-network provider in November 2015.9

 (Id. ¶ 144.) 

She received an EOB denying claims for those services as “excluded by [her] health plan.” (Id. ¶ 

145.) Carroll did not appeal either claim. (Id. ¶¶ 143, 145.) 

E. Plaintiffs Filed The Present Lawsuit. 

The central allegation of Plaintiffs’ Amended Complaint is that Defendants violated ACA’s 

preventive services requirements when handling Plaintiffs’ claims. (See, e.g., id. ¶ 2 (“Defendants 

have wrongfully denied . . . Plaintiffs . . . access to and coverage for . . . breastfeeding support . . . 

which . . . is mandated by [ACA].”).) Specifically, Plaintiffs assert Defendants violated ACA by: 

(1) “failing to establish a network of lactation consultants” or providers who mainly 

provide lactation counseling services (see id. ¶¶ 84(A), 85), and, in the absence of 

such a network, imposing cost-shares on lactation counseling services Plaintiffs 

received from out-of-network providers;10 and 

(2) “imposing major administrative barriers to insureds seeking to receive information 

 

8 See UnitedHealthcare, https://connect.werally.com (last visited Mar. 31, 2017) (search for Carroll’s plan and 

location (Fort Collins, CO) indicates that Virginia Martin and A Nurtured Path, LLC are not in Defendants’ 

network). 

9 See UnitedHealthcare, https://connect.werally.com (last visited on Mar. 31, 2017) (noting that Cara Munson 

is not an in-network provider for Carroll’s plan). 

10 See id. ¶ 86 (“Defendants have ... improperly shifted costs to the insured by failing to establish networks of 

providers of Comprehensive Lactation Benefits”)); see also id. at 5 n.2 (alleging that Defendants “have not 

established networks of [lactation counseling] providers ... thereby circumventing ...ACA[]”); id. ¶ 11(A) 

(Defendants “have not established networks of trained providers of” lactation counseling services). 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 15 of 28
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

3:17-cv-00183-VC – 8 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

about and access to” lactation counseling services, such as failing to create a 

separate list of providers in Defendants’ general provider networks who provide 

such services11 (id. ¶¶ 84(D)–(E)).12

Plaintiffs assert causes of action for breach of fiduciary duty under, and violation of § 503 of, the 

Employee Retirement Income Security Act of 1974 (“ERISA”) (Counts I and II); co-fiduciary 

liability under ERISA (Count III); sex discrimination under ACA’s nondiscrimination provision 

(Count IV); breach of contract (Count V); and unjust enrichment (Count VI). (Id. ¶¶ 187–226.) 

III. LEGAL STANDARD 

 Federal Rule of Civil Procedure 12(b)(6) requires dismissal when a plaintiff’s complaint fails 

to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). To survive a motion 

to dismiss, the complaint must plead “enough facts to state a claim to relief that is plausible on its 

face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009); Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011). Facts that are 

“merely consistent with” liability are insufficient, see Iqbal, 556 U.S. at 678, and pleadings that offer 

mere “‘labels and conclusions’ or a ‘formulaic recitation of the elements of a cause of action’” are 

insufficient to withstand Rule 12(b)(6) scrutiny. See Stewart v. Screen Gems-EMI Music, Inc., 81 F. 

Supp. 3d 938, 950 (N.D. Cal. 2015) (quoting Iqbal, 556 U.S. at 678). Dismissal at the pleading stage 

is required when a complaint lacks plausible factual allegations or a cognizable legal theory. See 

 

11 Plaintiffs draw a distinction between providers who primarily provide lactation counseling services, such as 

lactation consultants (whose primary service is lactation counseling services) and providers who can perform 

lactation counseling services, but who perform numerous other services as well (pediatricians, obstetricians, 

and nurses). Plaintiffs assert that prior to ACA, lactation counseling services were not mandated and 

Defendants had no “established networks of trained providers,” and that Defendants failed to establish 

“networks of trained providers in the wake of ACA’s mandate.” (See Am. Compl. at 5 n.2.) Plaintiffs allege 

that Defendants are obliged to create a specific network of lactation consultants. (See e.g., id. ¶ 84(A).) 

Separately, Plaintiffs allege that Defendants violate ACA because Defendants do not have a separate list of 

the general providers who were already in Defendants’ network who provide lactation counseling services. 

(Id. ¶ 85.) As demonstrated in Section IV.A, Defendants are not required to create a separate network of 

specific lactation counseling providers or a list of those general in-network providers who provide lactation 

counseling services. 

12 See also id. (Defendants failed to provide list that delineates which in-network providers provide lactation 

counseling services); id. ¶¶ 84(B)–(C) (alleging Defendants provided inaccurate information to insureds, 

processed claims using out-of-network benefits, etc.). 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 16 of 28
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

3:17-cv-00183-VC – 9 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

Conservation Force, 646 F.3d at 1242.13

IV. ARGUMENT 

A. Plaintiffs Have Not Alleged A Plausible Violation Of ACA In Counts II–VI. 

For Plaintiffs to establish the premise necessary to Counts II through VI, they must plausibly 

plead that Defendants violated ACA.14 Under ACA, Defendants must cover comprehensive lactation 

counseling services without cost sharing if they have in-network lactation counseling providers and a 

member receives in-network services. See 42 U.S.C. § 300gg-13(a)(4); 29 C.F.R. § 2590.715-

2713(a)(3)(ii). Further, if Defendants have in-network lactation counseling providers, they may deny 

coverage, or impose cost-sharing requirements for, services received out-of-network. See 29 C.F.R. 

§ 2590.715-2713(a)(3)(i-) (denial of coverage or cost-sharing permitted when an insurer has “in its 

network a provider who can provide [the] service”). If, however, Defendants do not have in-network 

lactation counseling providers, they may not deny coverage or impose cost-sharing requirements for 

services received out-of-network. See 29 C.F.R. § 2590.715-2713(a)(3)(ii) (“If a plan or issuer does 

not have in its network a provider who can provide an item or service, ... the plan or issuer must 

cover the item or service ... [without] cost sharing.”). 

 Here, Plaintiffs assert that Defendants violate ACA by: (1) not creating a separate network of 

lactation counseling providers yet nevertheless imposing cost-shares on out-of-network services; and 

(2) erecting administrative barriers to access to lactation counseling services, such as failing to 

maintain a separate list of providers in Defendants’ general provider networks who offer such 

services. (See Section II.E, supra (detailing allegations in the Complaint).) But Plaintiffs’ own 

allegations demonstrate that Defendants comply with ACA, and, therefore, Plaintiffs have not 

plausibly pled an ACA violation and their Complaint must be dismissed. 

 

13 The facts are drawn from legal authorities, the Amended Complaint, documents referenced in the Amended 

Complaint that are central to Plaintiffs’ claims, and materials subject to judicial notice, such as publicly 

available websites. See La. Municipal Police Emps’ Ret. Sys., 829 F.3d at 1063 (on a motion to dismiss, a 

court may consider the complaint, “documents incorporated into the complaint by reference, and matters of 

which a court may take judicial notice”); Quan v. Gonzales, 428 F.3d 883, 888 n.5 (9th Cir. 2005) (taking 

judicial notice of information found on publicly available website). Defendants reserve the right to challenge 

Plaintiffs’ factual assertions at the appropriate time. 

14 Each of Plaintiffs’ claims in Counts II - VI is premised on alleged breach of ACA. See, e.g., Am. Compl. 

¶ 198 (Count II); id. ¶ 202 (Count III); id. ¶ 213 (Count IV); id. ¶ 220 (Count V); id. ¶ 223 (Count VI). 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 17 of 28
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

3:17-cv-00183-VC – 10 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

1. ACA Does Not Require Defendants To Create A Separate Network Of 

Lactation Counseling Providers, And Plaintiffs Admit That Defendants 

Have In-Network Providers Who Offer Lactation Counseling Services. 

 Plaintiffs allege that Defendants violated ACA by imposing cost-shares on Plaintiffs’ out-ofnetwork services because they failed to create a separate network of providers who mainly provide 

lactation counseling services, such as lactation consultants. (See, e.g., Am. Compl. ¶¶ 84–86.) Under 

ACA, however, Defendants are not required to create a separate network of lactation counseling 

providers. See 42 U.S.C. §300gg-13(a)(4) (containing no such requirement); see also 29 C.F.R. 

2590.715-2713 (same); FAQ at Q.3 (lactation counseling can be performed by “another provider 

type acting within the scope of his or her license or certification (for example, a registered nurse)”). 

Rather, as explained above, ACA only prohibits cost-sharing if a plan does not have lactation 

counseling providers in its general provider network. See 29 C.F.R. § 2590.715-2713(a)(3)(ii) 

(coverage without cost-sharing is required “[i]f a plan or issuer does not have [an in-network 

provider] who can provide a[] ... service”). 

 Plaintiffs admit that Defendants have providers in their general provider networks who offer 

lactation counseling services, among other services. (See, e.g., Am. Compl. ¶¶ 97, 99 

(acknowledging that Hoy received covered lactation counseling services from a hospital-based 

lactation consultant); id. ¶ 117 & n. 2, supra (admitting that Endicott located a lactation consultant 

through Hartford Hospital).) And several Plaintiffs did not even attempt to find an in-network 

provider of lactation counseling services. (See Am. Compl. ¶ 89 (Condry accepted a referral to an 

out-of-network lactation consultant, making no effort to locate an in-network provider); ¶ 136 

(Barber, similar); ¶ 141 (Carroll, similar).) 

 Plaintiffs’ personal choices to obtain out-of-network lactation services do not constitute ACA 

violations. See, e.g., 29 C.F.R. § 2590.715-2713(a)(3)(i-) (cost-sharing permitted if an insurer has an 

in-network “provider”); see also Griggs v. E.I. DuPont de Nemours & Co., 237 F.3d 371, 381 (4th 

Cir. 2001) (even ERISA fiduciaries do not have an obligation “to ascertain on an individual basis 

whether each beneficiary understands the collateral consequences of his or her particular election”); 

Killian v. Concert Health Plan, 742 F.3d 651, 701 (7th Cir. 2013) (Manion, J., concurring in part 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 18 of 28
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

3:17-cv-00183-VC – 11 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

and dissenting in part) (“[T]he defendants did not have a fiduciary duty to remind [the plaintiffs] ... 

that payment reimbursement rates depend ... on the provider’s status as in-network or out-ofnetwork”). Because Defendants offer in-network lactation counseling services, they have not 

violated ACA by denying or imposing cost-sharing on Plaintiffs’ out-of-network claims. See 29 

C.F.R. § 2590.715-2713(a)(3)(i-). Plaintiffs admit this and, accordingly, have pled themselves out of 

court. See Weisbuch v. City of Los Angeles, 119 F.3d 778, 783 (9th Cir. 1997) (“[A] plaintiff may 

plead herself out of court.” (alteration in original)); Cascades Computer Innovation LLC v. RPX 

Corp., No. 12-cv-01143 YGR, 2013 WL 316023, at *7-8 (N.D. Cal. Jan. 24, 2013) (plaintiff pled 

itself out of court by admitting facts that were fatal to its claims). 

2. ACA Does Not Require Defendants To Maintain A Separate List Of InNetwork Lactation Counseling Providers.

Plaintiffs next argue that Defendants erected “significant administrative barriers” to 

accessing lactation counseling services, chiefly by failing to provide a separate list of Defendants’ 

in-network providers who offer such services. (Am. Compl. ¶ 85.) As a threshold matter, the 

“administrative barriers” Plaintiffs allege are not addressed by ACA’s detailed requirements. Thus, 

even if Plaintiffs’ allegations were true (they are not), Plaintiffs’ appeal to the spirit of the law falls 

short of stating a viable claim. See Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 

220 (2002) (“[V]ague notions of a statute’s basic purpose are ... inadequate to overcome the words 

of its text.” (internal quotation marks and emphasis omitted)); Schroeder v. United States, 793 F.3d 

1080, 1083 (9th Cir. 2015) (same). 

Plaintiffs’ theory that Defendants are required to maintain a separate list of in-network 

lactation counseling providers is based solely on a terse and informal agency pronouncement in an 

FAQ document jointly issued by the Departments of Health and Human Services, Labor, and the 

Treasury. That FAQ affirmatively states that “plans and issuers [are] required to provide a list of the 

lactation counseling providers within the network,” (Am. Compl. ¶ 73; FAQ at Q.1), but even the 

agencies that adopted the informal FAQ acknowledged that ACA requires no such list. (See FAQ at 

Q.1 (“the preventive services requirements ... do not include specific disclosure requirements”).) 

 Agency interpretations contained in informal materials such as FAQs, opinion letters, policy 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 19 of 28
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

3:17-cv-00183-VC – 12 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

statements, and agency manuals – unlike those arrived at after “formal adjudication or notice-andcomment rulemaking” – are entitled to deference “only to the extent that [they] have the ‘power to 

persuade.’” Christensen v. Harris County, 529 U.S. 576, 587 (2000) (quoting Skidmore v. Swift, 323 

U.S. 134, 140 (1944)); Rollins v. Dignity Health, 830 F.3d 900, 909 (9th Cir. 2016) (same), cert. 

granted on other grounds, 137 S. Ct. 547 (Mem.); Moorestown Twp. Bd. of Educ. v. S.D., 811 F. 

Supp. 2d 1057, 1075 (D.N.J. 2011) (FAQs properly analyzed under “power to persuade” 

framework). In other words, the weight assigned to the agency’s interpretation depends upon “the 

thoroughness evident in its consideration” and “the validity of its reasoning.” Gonzales v. Or., 546 

U.S. 243, 268 (2006); see also Escobar v. Lynch, 846 F.3d 1019, 1025 (9th Cir. 2017) (same). 

 Here, the Court should accord no deference to the FAQ, as the reasoning underlying its 

position is flawed and unpersuasive. In particular, the regulations relied upon by the agencies merely 

provide that specified insurers must: (A) “provide a written summary of benefits and coverage 

(SBC)” that includes “an Internet address (or similar contact information) for obtaining a list of 

network providers,” see, e.g., 29 C.F.R. § 2590.715-2715(a)(2)(i)(K); (B) include in a “summary 

plan description ... provisions governing the use of network providers, the composition of the 

provider network, and whether, and under what circumstances, coverage is provided for out-ofnetwork services,” see 29 C.F.R. § 2520.102-3(j)(3); and (C) “publish an up-to-date, accurate, and 

complete provider directory, including information on which providers are accepting new patients, 

the provider’s location, contact information, specialty, medical group, and any institutional 

affiliations,” see 45 C.F.R. § 156.230(b)(2). But none of these provisions remotely supports the 

conclusion that ACA requires insurers to have a separate list of lactation counseling providers, 

separate and apart from a standard provider directory (which, notably, Plaintiffs admit Defendants 

maintain). (See Am. Compl. ¶¶ 98, 109 (acknowledging that Defendants have an online portal to 

locate in-network providers).). 

 Significantly, the FAQ seeks to add a requirement to ACA without grounding the addition in 

the statute itself, which courts have consistently found to be a hallmark of unpersuasive reasoning. 

See, e.g., Rollins, 830 F.3d at 910 (rejecting agency interpretation that was based on a “misreading of 

the statutory text”); Horn v. Provident Life & Acc. Ins. Co., 351 F. Supp. 2d 954, 962–64 & n.4 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 20 of 28
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

3:17-cv-00183-VC – 13 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

(N.D. Cal. 2004) (same when the statutory section cited by the agency in support of its position 

“sa[id] nothing” about the matter under consideration). Accordingly, the agencies’ guidance is 

unsupported. See Escobar, 846 F.3d 1019, 1025–26 (declining deference to agency decision when 

sources it cited in support of its position did not corroborate its conclusion); Voss v. C.I.R., 706 F.3d 

1051, 1066–67 (9th Cir. 2015) (same for informal memorandum that “d[id] not grapple” with the 

statutory scheme at issue); see also Moorestown Twp. Bd. of Educ., 811 F. Supp. 2d at 1075 (same). 

 A court in this district faced a similar situation in Horn, where the beneficiary of a salary 

protection insurance plan filed suit against the plan administrator, challenging the administrator’s 

calculation of disability benefits. Horn, 351 F. Supp. 2d at 954-55. There, the plaintiff relied on an 

opinion letter issued by the California Insurance Commissioner to argue that a “discretionary clause” 

in the plan – purporting to give the plan administrator discretionary authority to interpret plan terms 

– was invalid. Id. at 959. In rejecting the interpretation that such clauses were “fraudulent and 

unsound,” id. at 955, the court found the pronouncement lacked the power to persuade, because the 

section of the Insurance Code cited by the Commissioner “sa[id] nothing about the substantive 

allocation of authority between insurer and insured.” Id. at 962. The court concluded that “[w]here 

an agency makes an argument that has no reasoned basis in the governing law ... its opinion is due 

no respect whatsoever.” Id. at 964 & n.4. Likewise, here, the FAQ’s interpretation is due no 

deference because it attempts to add requirements to ACA without any support in the underlying 

statutory scheme.15

 Plaintiffs suggest that a separate list of in-network providers is required to alleviate the 

burden on new mothers of finding an in-network provider of lactation counseling services. (See Am. 

Compl. ¶¶ 84-86.) But this “burden” does not justify departing from the plain language of the statute. 

See supra. Indeed, ACA only requires Defendants to provide lactation counseling services at nocost-share. See 42 U.S.C. §300gg-13(a)(4); 29 C.F.R. 2590.715-2713(a). While Congress placed an 

 

15 By contrast, the Court should accord deference to the agencies’ statement in the same FAQ that lactation 

counseling services need not be provided by an IBCLC/lactation consultant, and instead can be performed “by 

another provider type acting within the scope of his or her license or certification.” See FAQ at Q.3; see also 

supra pp. 4, 6, 9, 11 (citing same). Indeed, the agencies’ answer to Q.3 has the “power to persuade,” because 

it is consistent with the generic use of the word “provider” in ACA’s implementing regulations. See 29 C.F.R. 

§ 2590.715-2713(a)(3)(i) (making no reference to a specific type of provider and noting that cost-sharing is 

permitted so long as the plan has in its network “a provider” who can perform lactation counseling services). 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 21 of 28
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

3:17-cv-00183-VC – 14 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

economic burden on plans and insurers by requiring the coverage of cost-shares, it did not place the 

burden on Defendants to do the traditional work of the patient and doctors – to link appropriate 

service providers to specific provider treatments (here, lactation counseling services). Id.; see Lamie 

v. U.S. Tr., 540 U.S. 526, 542 (2004) (courts cannot rewrite statutes). 

* * * 

 As demonstrated by the above analysis, Counts II through VI are undermined by Plaintiffs’ 

own allegations, which establish that Defendants comply with ACA’s requirements. Indeed, ACA 

does not require Defendants to create a separate network of specialized lactation counseling 

providers or to maintain a separate list of in-network providers who offer such services. Further, 

Plaintiffs have not plausibly alleged that Defendants lack in-network providers who offer lactation 

counseling services, such that Defendants violated ACA when they denied coverage or imposed 

cost-shares for Plaintiffs’ out-of-network services. In fact, Plaintiffs admit that Defendants have such 

providers. Thus, Plaintiffs fall short of stating a claim and have pled themselves out of court. See 

Weisbuch, 119 F.3d at 783; Cascades Computer Innovation, 2013 WL 316023, at *7-8. Dismissal of 

Counts II through VI is warranted. 

B. Plaintiffs Do Not State A Viable Claim In Count I. 

 In Count I, Plaintiffs contend that Defendants violated (i) the terms of Plaintiffs’ plan 

documents and (ii) § 503 of ERISA, when they “fail[ed] to provide timely and substantive responses 

to requests for out-of-network benefits and/or appeals to denials of [such] requests.” (Am. Compl. 

¶¶ 192–93.) Both allegations fall short of stating a claim. 

1. Defendants Complied With Claims Procedures In The Plan Documents. 

 As a threshold matter, only Hoy’s and Condry’s allegations are implicated by Plaintiffs’ 

broad allegation that Defendants violated their fiduciary duties by failing to timely respond to 

“requests for out-of-network benefits and/or appeals to denials of [such] requests.” (Id.)

16 Plaintiffs’ 

assertion that UHC mischaracterized Hoy’s alleged appeals is without support, because Hoy has not 

 

16 Indeed, Carroll is not named as a Plaintiff in Count I, and Endicott, Bishop, and Barber acknowledge that 

Defendants promptly contacted them after they submitted their claims. (Id. ¶¶ 119, 131–32, 138–39.) Further, 

Plaintiffs do not plead any information about the terms of the Plans for Plaintiffs other than Hoy, precluding 

Plaintiffs from plausibly pleading that Defendants violated such terms. See Conservation Force, 646 F.3d at 

1242 (a plaintiff must “state a facially plausible claim to relief”).

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 22 of 28
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

3:17-cv-00183-VC – 15 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

adequately alleged that she filed a proper appeal. Only denied claims can be appealed under Hoy’s 

plan. (See Ex. A (Hoy’s Benefit Booklet) at 71 (appeals may be taken of claims for benefits that are 

denied in whole or in part).) Hoy merely alleges she participated in telephone calls with UHC 

representatives on September 9 (before she even received services) and October 22, in which a 

representative noted that out-of-network lactation counseling claims would not process under innetwork benefits. (Am. Compl. ¶¶ 98, 101.) Hoy acknowledges that she received a letter from the 

PA DOI, relating that she had not complied with her plan’s claims procedures. (See Am. Compl. ¶ 

108.) Regardless, as noted above, ACA does not require Defendants to process out-of-network 

claims for lactation counseling services where Defendants have in-network providers, as Plaintiffs 

admit they do. (See supra Section IV.A.) Thus, even if Hoy’s letters constituted “appeals,” the result 

would be the same. 

 Similarly, Condry has not properly alleged a breach of any duty based on the processing of 

her gap exception. Condry acknowledges that the gap exception expired. (Am. Compl. ¶ 93.) 

Condry’s provider did not properly contact UHC Insurance and thus no extension was granted. (Id. ¶ 

94 (noting provider had problems contacting UHC and that gap exception could not be retroactively 

granted).) Thus, because the gap exception would not be extended, Condry’s home birth claim was 

correctly processed as an out-of-network service, rather than at the in-network level of benefits. As 

with Hoy, therefore, Condry’s allegations do not support a claim based on improper claims 

processing on any of the Defendants’ part and the Amended Complaint fails in this respect, as a 

matter of law. See Twombly, 550 U.S. at 570. 

2. Section 503 Of ERISA Does Not Apply To Defendants. 

 Count I also alleges that Defendants violated § 503 of ERISA, which provides that “every 

employee benefit plan shall ... (1) provide adequate notice in writing to any participant or 

beneficiary whose claim for benefits ... has been denied ... and (2) afford a reasonable opportunity 

to any participant whose claim for benefits has been denied for a full and fair review.” 29 U.S.C. §§ 

1133(1)–(2). Section 503’s plain language, however, only imposes duties on “employee benefit 

plans,” not claims administrators like UHC. See Lee v. ING Groep, N.V., 829 F.3d 1158, 1162 (9th 

Cir. 2016) (§ 503 sets forth “claims procedures imposed on benefit plans,” not third-party 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 23 of 28
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

3:17-cv-00183-VC – 16 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

administrators, who carry “separate definitions under ERISA”). As a result, § 503 does not apply. 

See, e.g., Gates v. United Health Group Inc., No. 11 Civ. 3487(KBF), 2012 WL 2953050, at *10–11 

(S.D.N.Y. July 16, 2012) (dismissing ERISA § 503 claim against claims administrator because that 

section only imposes obligations on the plan); Premier Health Center, P.C. v. UnitedHealth Group, 

No. 11-425 (ES), 2012 WL 1135608, at *13 (D.N.J. Apr. 4, 2012) (lack of § 503 liability for “third 

parties ... who merely process claims for benefits”); see also Streit v. Matrix Absence Mgmt., Inc., 

No. 3:12-cv-01797-AC, 2014 WL 667535, at *6 (D. Or. Feb. 18, 2014) (penalties not available 

under ERISA § 502(c) for plan administrator’s alleged violation of § 503, because § 503 only 

applies to plan). Allegations based on that section must be dismissed with prejudice.17

C. Count III Does Not State a Claim. 

1. Plaintiffs Have Not Alleged That Defendants Are Fiduciaries Of “The 

Same Plan” Or Adequately Pled Their Co-Fiduciary Claim. 

 Count III seeks to impose co-fiduciary liability on Defendants pursuant to § 405 of ERISA. 

(Am. Compl. ¶¶ 200–02.) That provision states that “a fiduciary with respect to a plan shall be liable 

for a breach of fiduciary responsibility of another fiduciary with respect to the same plan” if the 

fiduciary (1) “participates knowingly in, or knowingly undertakes to conceal” another fiduciary’s 

breach of duty; (2) “enable[s] such other fiduciary to commit a breach”; or (3) “has knowledge of a 

breach by such other fiduciary, unless [it] makes reasonable efforts . . . to remedy the breach.” 29 

U.S.C. § 1105(a)(1)–(3). The statute’s plain language reveals that a key component of a claim for cofiduciary liability is that defendants be fiduciaries of “the same plan.” See id. § 1105(a) (“a fiduciary 

with respect to a plan shall be liable for a breach ... of another fiduciary ... with respect to the same 

plan” (emphasis added)); LoPresti v. Ctigroup, Inc., No. 02-cv-6492(SJ), 2005 WL 195521, at *5 

(E.D.N.Y. Jan. 18, 2005) (plaintiff must identify two or more fiduciaries “of the same plan” to state 

claim for co-fiduciary liability). Plaintiffs admit, however, that each is a member of a different plan, 

and nowhere in their Amended Complaint do Plaintiffs allege that more than one Defendant is a 

fiduciary of the same plan. (See Am. Compl. ¶¶ 20–25); LoPresti, 2005 WL 195521, at *5 

 

17 Hoy’s § 503 claim fails for the additional reason that she has not plausibly pled that any claims for benefits 

were denied. (See Section IV.A.1, supra; 29 U.S.C. § 1133(1) (plans must “provide adequate notice in writing 

to any participant or beneficiary whose claim for benefits ... has been denied” (emphasis added)). 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 24 of 28
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

3:17-cv-00183-VC – 17 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

(dismissing co-fiduciary claim for failure to allege defendants were fiduciaries “of the same plan”). 

 Even if Defendants were fiduciaries of “the same plan” for purposes of ERISA § 405, 

Plaintiffs have not alleged facts to support such a claim. To assert a claim for co-fiduciary liability, 

Plaintiffs must allege enough facts “to put each defendant on notice of what it is that he, she, or it 

has done that allegedly gives rise to liability.” See In re McKesson HBOC, Inc. ERISA Litig., No. 

C00-20030RMW, 2002 WL 31431588, at *17 (N.D. Cal. Sept. 30, 2002); see also In re Syncor 

ERISA Litig., 351 F. Supp. 2d 970, 988 (C.D. Cal. 2004) (same). Here, Plaintiffs merely allege that 

“[e]ach Defendant knowingly participated in” the other Defendants’ breaches. (Am. Compl. ¶ 202.) 

But this conclusory allegation lumps Defendants together, parrots the statutory language, and fails to 

give each Defendant “fair notice of what the ... claim is and the grounds upon which it rests.” See 

Twombly, 550 U.S. at 555 (alteration in original); In re Syncor, 351 F. Supp. 2d at 988 (dismissing 

co-fiduciary claim because plaintiffs “provide[d] no facts to support” their conclusory allegations 

that defendants “knew of the breaches, participated in the breaches, or made no effort to remedy 

them”); In re McKesson, 2002 WL 31431588, at *17 (same when plaintiffs merely alleged that 

defendants “either had knowledge of the fiduciary breaches ... or ... concealed relevant 

information”). For this reason, Count III should be dismissed with prejudice. 

2. Non-Fiduciary Participation Liability Is Inapplicable Here. 

 Plaintiffs also allege in Count III that “to the extent Defendants are not deemed fiduciaries or 

co-fiduciaries under ERISA,” they are liable as “non-fiduciar[ies] that knowingly participated in a 

breach of trust.” (Am. Compl. ¶ 206.) A non-fiduciary, however, may not be held liable solely “for 

participating in another’s breach of fiduciary duty.” Landwehr v. DuPree, 72 F.3d 726, 734 (9th Cir. 

1995); see also Mertens v. Hewitt Assocs., 508 U.S. 248, 253-54 (1993) (“no [ERISA] provision 

explicitly requires [nonfiduciaries] to avoid participation ... in a fiduciary’s breach of duty”); Renfro 

v. Unisys Corp., 671 F.3d 314, 325 (3d Cir. 2011) (same). Instead, non-fiduciary liability under 

ERISA is limited to “nonfiduciaries who: (1) are ‘parties’ in interest’ with respect to the plan ... and 

(2) engage in transactions prohibited by [section 406 of ERISA].” Landwehr, 72 F.3d at 733; Harris 

Trust & Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 244-45 (2000). 

 Here, Plaintiffs do not allege that any of the Defendants is a “party in interest” that engaged 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 25 of 28
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

3:17-cv-00183-VC – 18 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

in a prohibited transaction, and instead merely assert that Defendants “knowingly participated in a 

breach of trust.” (See Am. Compl. ¶ 206; see also id. ¶¶ 187–98 (alleging that Defendants violated 

their obligations under § 404 of ERISA, not § 406).) Count III, consequently, is foreclosed, and 

dismissal is warranted. See Landwehr, 72 F.3d at 733; Renfro, 671 F.3d at 325. 

D. Count IV Should Be Dismissed Because Plaintiffs Fail To Allege That 

Defendants’ Coverage Decisions Were Based On Plaintiffs’ Sex. 

In Count III, Plaintiffs assert a claim for intentional sex discrimination under Section 1557 of 

ACA, which provides that: 

[A]n individual shall not, on the ground prohibited under title VI of the Civil Rights 

Act of 1964 ... title IX of the Education Amendments of 1972 ... the Age 

Discrimination Act of 1975 ... or section 504 of the Rehabilitation Act of 1973 ... 

be excluded from participation in, be denied the benefits of, or be subjected to 

discrimination under, any health program or activity .... 

See 42 U.S.C. § 18116(a). Section 1557 also provides that “[t]he enforcement mechanisms provided 

for and available under . . . title IX” and the other referenced statutes “shall apply.” Id. § 18116(b). 

Thus, analysis of Count III is governed by Title IX’s framework. See Se. Pa. Transp. Auth. v. Gilead 

Scis., Inc., 102 F. Supp. 3d 688, 698-99 (E.D. Pa. 2015). 

 “Title IX prohibits intentional discrimination.” Lopez v. Regents of Univ. of Cal., 5 F. Supp. 

3d 1106, 1120 (N.D. Cal. 2013) (emphasis added); see also Alexander v. Sandoval, 532 U.S. 275, 

280 (2001) (acknowledging same). To state a claim for sex discrimination under Title IX, therefore, 

a plaintiff must allege “that the defendant discriminated against ... her because of sex.” Doe v. 

Regents of Univ. of Cal., No. 2:15-cv-02478-SVW-JEM, 2016 WL 5515711, at *4 (C.D. Cal. July 

25, 2016) (emphasis in original). Where, as here, a plaintiff does not plead facts supporting the 

inference that the plaintiff’s sex “was a substantial or motivating factor for the defendant’s actions,” 

dismissal is required. Id. (internal quotation marks and citations omitted). 

 Plaintiffs allege only that “Plaintiffs and the members of the Class, who are necessarily all 

women, are being excluded from participation in, being denied the benefits of, and being subjected 

to discrimination by Defendants ... on the basis of their sex.” (See Am. Compl. ¶ 211.) Plaintiffs’ 

boilerplate allegation of discrimination – which merely recites statutory language untethered to any 

factual support – does not give rise to a reasonable inference that Plaintiffs’ gender motivated 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 26 of 28
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

3:17-cv-00183-VC – 19 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

Defendants’ coverage decisions. See Doe, 2016 WL 5515711, at *4 (dismissing Title IX claim when 

the complaint “lack[ed] ... factual allegations giving rise to a plausible inference that the [challenged 

conduct] was caused by gender bias”); Lopez, 5 F. Supp. 3d at 1122 (same). Accordingly, because 

Plaintiffs have pled no facts supporting their conclusory allegation that Defendants discriminated 

against them on the basis of sex, dismissal with prejudice is warranted. 

E. ERISA Preempts Breach Of Contract And Unjust Enrichments Claims Asserted 

By Plaintiffs Condry, Hoy, Endicott, Bishop, And Barber In Counts V And VI. 

 In Counts V and VI, Plaintiffs assert claims for breach of contract and unjust enrichment, 

respectively, contending that Defendants (1) breached the Plans by violating ACA, which Plaintiffs 

allege is incorporated by reference, and (2) were unjustly enriched by charging cost-shares to 

Plaintiffs for lactation services. (See Am. Compl. ¶¶ 219–220, 223.) The Court should dismiss these 

Counts as to the ERISA Plaintiffs – Condry, Hoy, Endicott, Bishop, and Barber. 

 ERISA preempts state-law causes of action that fall within ERISA’s “comprehensive scheme 

of civil remedies.” Cleghorn v. Blue Shield of Cal., 408 F.3d 1222, 1225 (9th Cir. 2005). “[A]ny 

state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement 

remedy” is unequivocally barred. Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004); see also 

Groves v. Kaiser Found. Health Plan Inc., 32 F. Supp. 3d 1074, 1086 (N.D. Cal. 2014) (same). 

ERISA demands dismissal of state-law claims that serve as an “alternative enforcement mechanism” 

to ERISA’s remedial framework. Botsford v. BCBS of Mont., Inc., 314 F.3d 390, 398 n.44 (9th Cir. 

2002) (internal quotation marks and citations omitted). Plaintiffs’ breach of contract and unjust 

enrichment claims impermissibly provide an alternative enforcement mechanism to ERISA and even 

mirror Plaintiffs’ allegations in Counts II and III.18 ERISA prohibits Plaintiffs’ efforts to supplement 

its comprehensive enforcement scheme. See Cleghorn, 408 F.3d at 1225-26 (dismissing state-law 

claims supplementing ERISA rights); Serpa v. SBC Telecomm., Inc., 318 F. Supp. 2d 865, 871 (N.D. 

Cal. 2004) (same); Soehnlen v. Fleet Owners Ins. Fund, 844 F.3d 576, 590 (6th Cir. 2016) 

(dismissing ACA-based state-law claim as duplicative of ERISA claims). The Court, therefore, 

 

18 Compare, e.g., Am. Compl. ¶ 202 (alleging Defendants breached their fiduciary duties by “causing 

Plaintiffs ... to wrongfully pay for Comprehensive Lactation Benefits”), with id. ¶ 223 (Defendants have been 

unjustly enriched by “shifting the cost” of ACA-mandated services to Plaintiffs).

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 27 of 28
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

3:17-cv-00183-VC – 20 – 

DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT; 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 

REED SMITH LLP 

A limited liability partnership formed in the State of Delaware 

should dismiss Counts V and VI with prejudice as to Condry, Hoy, Endicott, Bishop, and Barber. 

F. Counts V and VI Are Solely Based On ACA And Must Be Dismissed. 

 Finally, the Court should dismiss Counts V and VI as to all Plaintiffs as impermissible 

attempts to bypass Congressional intent. ACA has no private right of action. See Mills v. BCBS of 

Tenn., Inc., No. 3:15-cv-552-PLR-HBG, 2017 WL 78488, at *6 (E.D. Tenn. Jan. 9, 2017) 

(dismissing ACA claim for lack of private right action). Instead, Congress entrusted enforcement 

authority to the States and Departments of Health and Human Services, Labor, and the Treasury. See 

Korte v. Sibelius, 735 F.3d 654, 669 (7th Cir. 2013). Where, as here, Congress has chosen not to 

enact a private right of action, plaintiffs may not circumvent that decision by styling federal claims 

as state-law causes of action. See Palmer v. Ill. Farmers Ins. Co., 666 F.3d 1081, 1086 (8th Cir. 

2012) (dismissing plaintiffs’ state-law claim as attempt to “create a private right of action when the 

legislature has not”); Grochowski v. Phoenix Constr., 318 F.3d 80, 86 (2d Cir. 2003) (same). 

 Plaintiffs label Count V as “Violation of [ACA] through Incorporation by Reference in 

Defendants’ Plan Documents” and allege that they can seek to enforce ACA because the plans 

reference “the preventive care provisions” of the statute. (See Am. Compl. ¶¶ 219–20.) Similarly, 

Count VI alleges that Defendants have been unjustly enriched by (a) holding money Plaintiffs paid 

for lactation services; (b) blocking Plaintiffs from receiving such services; and “(c) shifting the cost 

of ACA-mandated ... services to Plaintiffs.” (Id. ¶ 223.) Plaintiffs do not identify a non-ACA basis 

for either cause of action and simply repackage alleged ACA violations as state-law claims. 

Accordingly, Counts V and VI are an “impermissible ‘end run’ around” ACA’s lack of a private 

right of action and should be dismissed. See Grochowski, 318 F.3d at 86. 

V. CONCLUSION 

 For the foregoing reasons, Defendants respectfully request that the Court dismiss Plaintiffs’ 

Amended Complaint in its entirety and grant such other relief as the Court deems just and proper. 

DATED: April 14, 2017 Reed Smith LLP

By: /s/ Karen A. Braje 

Karen A. Braje 

Martin J. Bishop (admitted pro hac vice) 

Rebecca R. Hanson (admitted pro hac vice) 

Attorneys for Defendants 

Case 3:17-cv-00183-VC Document 48 Filed 04/14/17 Page 28 of 28