PAGE 1 – OPINION AND ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

A.F., by and through his parents and 

guardians, Brenna Legaard and Scott 

Fournier; A.P., by and through his parents 

and guardians, Lucia Alonso and Luis 

Partida; S.W., by and through his parents 

and guardians, Kody Whipple and Jamie 

Whipple; S.S., by and through his parents 

and guardians, David Smith and Brooke 

Kennelley; I.F., by and through his parents 

and guardians, Bryan Fowler and Susan 

Rogers Fowler; and on behalf of similarly 

situated individuals,

Plaintiffs,

v.

Providence Health Plan,

Defendant.

Case No. 3:13-cv-00776-SI

OPINION AND ORDER

Keith S. Dubanevich, Joshua L. Ross, and Nadine A. Gartner, STOLL STOLL BERNE LOKTING &

SCHLACHTER P.C., 209 S.W. Oak Street, Fifth Floor, Portland, OR 97204; Megan E. Glor, 

MEGAN E. GLOR ATTORNEYS AT LAW, 621 S.W. Morrison Street, Suite 900, Portland, OR 97205. 

Of Attorneys for Plaintiffs.

William F. Gary, Arden J. Olson, J. Aaron Landau, and Jens Schmidt, HARRANG LONG GARY 

RUDNICK P.C., 360 E. Tenth Avenue, Suite 300, Eugene, OR 97401. Of Attorneys for Defendant.

Case 3:13-cv-00776-SI Document 147 Filed 03/24/16 Page 1 of 35
PAGE 2 – OPINION AND ORDER

Michael H. Simon, District Judge.

Plaintiffs A.F., A.P., S.W., S.S., and I.F. (collectively, “Plaintiffs”) bring this action 

against Defendant Providence Health Plan (“Providence”) alleging claims under the Employee 

Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq. Before the Court is 

Plaintiffs’ Motion to Compel pursuant to Federal Rule of Civil Procedure 37(a). For the reasons 

stated below, Plaintiffs’ motion is granted in part.

STANDARDS

Federal Rule of Civil Procedure 26(b)(1) provides in relevant part as follows:

Parties may obtain discovery regarding any nonprivileged matter 

that is relevant to any party’s claim or defense and proportional to 

the needs of the case, considering the importance of the issues at 

stake in the action, the amount in controversy, the parties’ relative 

access to relevant information, the parties’ resources, the 

importance of the discovery in resolving the issues, and whether 

the burden or expense of the proposed discovery outweighs its 

likely benefit. Information within this scope of discovery need not 

be admissible in evidence to be discoverable.

Federal Rule of Civil Procedure 37(a) provides that a party may move for an order compelling 

discovery if the movant, in good faith, has “conferred or attempted to confer with the person or 

party failing to make disclosure or discovery in an effort to obtain it without court action.”

BACKGROUND

A. The Parties

Plaintiffs are insured as dependent-beneficiaries under group health plans in Oregon 

issued by Providence. Plaintiffs have been diagnosed with Autism Spectrum Disorder and 

prescribed Applied Behavioral Analysis (“ABA therapy”) by their treating physicians. Autism 

Spectrum Disorder is a pervasive developmental disorder that begins to appear during early 

childhood and is characterized by impairments in communication and social skills, severely 

restricted interests, and repetitive behavior. ABA therapy is an intensive behavior therapy that, 

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among other things, measures and evaluates observable behaviors. Evidence shows that ABA 

therapy may help autistic children with cognitive function, language skills, and adaptive 

behavior. Evidence also suggests that the benefits of ABA are significantly greater with early 

intervention for young autistic children.

Between January 2007 and January 2014, Providence denied requests for coverage for 

ABA therapy on the basis that its Plans exclude mental health services “related to developmental 

disabilities, developmental delays, or learning disabilities” from coverage (the “Developmental 

Disability Exclusion”). Providence did so regardless of whether the member sought 

reimbursement for payments for ABA therapy or pre-authorization of coverage. Until 2014, 

Providence also denied Plan beneficiaries ABA therapy coverage on the basis that it was 

experimental and investigational (the “Experimental Exclusion”). These Exclusions are listed in 

the member handbook given to all members that describe the governing terms of their Plans.

B. Procedural History

On May 8, 2013, A.F. and A.P. filed this class action lawsuit alleging that Providence’s 

denial of ABA therapy coverage violated federal and state law. A.F. and A.P. moved to certify 

an injunctive class, which the Court granted. On August 8, 2014, the Court held that 

Providence’s use of the Developmental Disability Exclusion violated the Paul Wellstone and 

Pete Domenici Mental Health Parity and Addiction Equity Act (the “Federal Parity Act”), 

29 U.S.C. § 1185a; the Oregon Mental Health Parity Act, Or. Rev. Stat. (“ORS”) § 743A.168; 

and the Oregon Mandatory Coverage for Minors with Pervasive Developmental Disorders Act, 

ORS § 743A.190; and was therefore prohibited under 29 U.S.C. § 1132(a)(3) 

(“Section 1132(a)(3)”) of ERISA.1

 

1

The Federal Parity Act requires that for group health plans, financial requirements and 

treatment limitations to mental health benefits must be “no more restrictive” than the 

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On June 29, 2015, A.F. and A.P. filed a second amended class action complaint, naming 

S.W., S.S., and I.F. as additional plaintiffs. Plaintiffs’ second amended class action complaint 

alleges three claims under ERISA: (1) injunctive relief under Section 1132(a)(3), prohibiting 

Providence from continuing to process and pay claims under its insured Plans in a manner that is 

inconsistent with the Federal Parity Act and Oregon law and requiring Providence to provide the 

class with corrective notice and information, on behalf of all named Plaintiffs and all members of 

the class (“First Claim”); (2) equitable relief under Section 1132(a)(3) sufficient to redress 

Providence’s violations of its fiduciary duties, on behalf of all named Plaintiffs (“Second 

Claim”); and (3) recovery of benefits due and declaration of future benefits under 29 U.S.C. 

§ 1132(a)(1)(B) (“Section 1132(a)(1)(B)”) on behalf of named Plaintiffs A.F., A.P., S.W., 

and I.F. (“Third Claim”).2

In the second amended class action complaint, Plaintiffs allege that Providence 

established and carried out a deliberate company-wide policy to deny all claims for ABA 

treatment in violation of federal and state law, thus dissuading parents from seeking treatment for 

their children. Dkt. 102 ¶¶ 8-9. Plaintiffs assert that Providence has advertised and represented 

that its health Plans include coverage for mental health services and that autism is a covered 

mental health diagnosis under the Plans. Id. ¶¶ 58-63. Additionally, Providence represented that 

its Plans “will cover medical services necessitated by autism.” Id. ¶ 61 (quotation marks 

 

predominant requirements or limitations applied to substantially all medical and surgical 

benefits. 29 U.S.C. § 1185a(a)(3)(A)(ii). The Oregon Mental Health Parity Act requires parity 

among the services and treatment covered for medical conditions and the services and treatment 

covered for mental health and chemical dependency related conditions. ORS § 743A.168. The 

Oregon Mandatory Coverage for Minors with Pervasive Developmental Disorders Act requires 

health benefit plans to cover treatment of pervasive developmental disorders for children. ORS 

§ 743A.190.

2 Named Plaintiff S.S. does not join in Plaintiffs’ Third Claim because S.S. did not incur 

any out-of-pocket expenses for ABA therapy.

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omitted). Plaintiffs assert that by denying coverage for ABA therapy, “Providence systemically 

and uniformly failed properly to process claims and administer the Plans it insured and 

administered.” Id. ¶ 7. Thus, Plaintiffs allege that the Plans “fail[ed] to receive all of the benefits 

of the coverage which has been purchased from Providence for the purpose of providing benefits 

to the beneficiaries, and the beneficiaries [did] not receive the benefits they [were] entitled to 

under the Plans.” Id.

Plaintiffs allege that Providence initially denied claims for ABA therapy in bad faith on 

the basis that ABA is experimental or investigative “despite a multitude of studies showing the 

efficacy of ABA treatment, [and] despite repeated rulings by State Insurance Commissioners that 

ABA is a reasonable, safe, necessary, and mainstream treatment for children with autism. . . .” 

Id. ¶ 130. Additionally, Providence continued to deny ABA therapy coverage under the 

Experimental Exclusion even after a January 5, 2010 decision by a court in this District that held 

“‘that the weight of the evidence demonstrates that ABA therapy is firmly supported by decades 

of research and application and is a well-established treatment modality of autism . . . . It is not 

an experimental or investigational procedure.’” Id. ¶ 39 (quoting McHenry v. PacificSource 

Health Plans, 679 F. Supp. 2d 1226, 1237 (D. Or. 2010)). 

Plaintiffs allege that Providence “failed to provide any unbiased explanation or evidence 

in support of its claim that ABA treatment is experimental or investigative.” Id. ¶ 131. Instead, in 

finding that ABA therapy is experimental or investigational, Plaintiffs assert, Providence 

wrongfully relied upon a 2010 report from an independent organization called Hayes, even 

though the report contains a disclaimer stating that it “is intended to provide research assistance 

and general information only. It is not intended to be used as the sole basis for determining 

coverage policy.” Id. (quotation marks omitted).

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After medical doctors conducting Internal Review Organization (“IRO”) reviews ruled 

that ABA therapy was not experimental or investigative, Providence began to deny claims based 

upon the Developmental Disability Exclusion. Id. ¶¶ 132, 154. Plaintiffs assert that Providence 

knew that autistic children’s parents would no longer be entitled to IRO review and would 

instead have to hire an attorney to litigate the Developmental Disability Exclusion. Id. ¶ 132. 

Plaintiffs allege that Providence followed this course of conduct in order to discourage parents 

from pursuing their claims. Id. Plaintiffs assert that Providence additionally knew that litigating 

the Developmental Disability Exclusion would be a slow process and that any judicial order

would come long after an IRO would have issued a decision, thereby shortening the time period 

for which Providence would have to provide coverage for the treatment. Id.

Plaintiffs also allege that in October 2013, Providence decided that because A.F. and 

A.P.’s parents had initiated litigation, Providence would resort to using the Experimental 

Exclusion in conjunction with the Developmental Disability Exclusion in a deliberate move to 

again trigger IRO review. Id. ¶ 137. At about this same time, Providence’s medical staff 

evaluated the literature regarding the efficacy of ABA therapy and concluded that ABA was not 

experimental or investigational. Id. ¶ 138. Plaintiffs allege that despite coming to this conclusion 

in fall 2013, Providence continued to deny ABA therapy coverage on the basis that it was 

experimental and investigational until January 2014. Providence did not notify Plaintiffs that it 

would approve coverage for ABA therapy until February 2014.

Plaintiffs assert that they have been forced to pay out-of-pocket for treatment and forego 

necessary care because they and their Plans have not received all of the benefits owed to them by 

Providence. Id. ¶ 122. Plaintiffs state that because ABA therapy is especially helpful for children 

who receive early intervention and the positive benefits of ABA therapy are less likely to occur if 

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a child does not receive early intervention, they have suffered permanent and irreparable harm by 

not receiving ABA therapy at a time when it would have been most beneficial to them. Id.

¶¶ 30-32. Plaintiffs additionally allege that Providence wrongfully and inequitably retained and 

reinvested funds that it should have paid for ABA therapy coverage and thus profited by denying 

Plaintiffs the care they needed and were lawfully entitled to under their Plans. Id. ¶ 156.

On January 7, 2016, the Court granted in part and denied in part Plaintiffs’ motion for 

summary judgment on their Third Claim under Section 1132(a)(1)(B). Section 1132(a)(1)(B) 

provides that a participant or beneficiary may bring a civil action “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.” Under Section 1132(a)(1)(B), a beneficiary 

may seek reimbursement for out-of-pocket expenses for medical treatment following a wrongful 

claim denial. See Aetna Health, Inc. v. Davila, 542 U.S. 200, 211-12 (2004). Plaintiffs argued 

that they are entitled to reimbursement for out-of-pocket expenses for ABA therapy because of 

this Court’s prior ruling that Providence’s Developmental Disability Exclusion violated the 

Federal Parity Act, Oregon law, and ERISA. S.W. and I.F. additionally argued that they are 

entitled to reimbursement for out-of-pocket expenses because Providence reversed its denial of 

ABA therapy coverage on the basis of the Experimental Exclusion in their cases. The Court held

that Plaintiffs are entitled to reimbursement to the extent that Plaintiffs provided evidence that 

Providence timely received their claims for ABA therapy.

Also on January 7, 2016, the Court denied Providence’s motion to dismiss Plaintiffs’ 

Second Claim under Section 1132(a)(3). Section 1132(a)(3) provides that a participant or 

beneficiary may “enjoin any act or practice which violates any provision of this subchapter or the 

terms of the plan, or . . . to obtain other appropriate equitable relief . . . to redress such violations 

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or . . . to enforce any provisions of this subchapter or the terms of the plan[.]” Plaintiffs’ Second 

Claim seeks “appropriate equitable relief” under Section 1132(a)(3) including, but not limited to, 

restoration of funds allegedly improperly in Providence’s possession as a result of Providence’s 

wrongful denial of ABA therapy coverage, unjust enrichment, disgorgement, restitution, 

reparation, surcharge, and estoppel. In the alternative, Plaintiffs seek an amount equal to the 

amount that Providence should have paid for ABA therapy. Plaintiffs allege that they have 

suffered permanent harm because of Providence’s unlawful application of the Developmental 

Disability Exclusion and arbitrary and bad faith use of the Experimental Exclusion that is not 

remediable solely through their Third Claim for reimbursement for out-of-pocket expenses. 

Plaintiffs assert that they received only a fraction of the treatment that they needed—and S.S. did 

not receive any treatment at all—because of Providence’s unlawful and bad faith denial of ABA 

therapy coverage, which resulted in Providence’s unjust enrichment. 

Section 1132(a)(3) is “a ‘catchall’ or ‘safety net’ designed to ‘offer[] appropriate 

equitable relief for injuries caused by violations that [Section 1132] does not elsewhere 

adequately remedy.’” Wise v. Verizon Commc’n Inc., 600 F.3d 1180, 1190 (9th Cir. 2010) 

(quoting Varity Corp. v. Howe, 516 U.S. 489, 512 (1996)). The Court denied Providence’s 

motion to dismiss Plaintiffs’ Second Claim, holding that Plaintiffs sufficiently pled that 

reimbursement under Section 1132(a)(1)(B) does not provide them with “adequate relief” to 

remedy Providence’s unlawful use of the Developmental Disability Exclusion and alleged breach 

of its fiduciary duties. See Varity, 516 U.S. at 515.

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C. Discovery

Plaintiffs’ counsel deposed Providence’s Senior Director of Service Operations, Mark 

Jensen (“Jensen”), on August 29, 2013.3 Dkt. 135-2 at 1-10. Jensen refused to answer questions 

regarding Providence’s use of the Developmental Disability Exclusion during the deposition. 

Dkt. 135-2 at 4-5. Although he referenced conversations with counsel about the Developmental 

Disability Exclusion, he did not reveal the substance of those conversations. Id.

On September 18, 2014, Plaintiffs served Providence with their Third Request for 

Production of Documents for Electronically Stored Information. Dkt. 135 ¶ 10. Plaintiffs 

requested, among other information, documents relating to Providence’s decision to draft, 

implement, and apply the Developmental Disability Exclusion and Providence’s decision to 

cease denying coverage for ABA therapy on the basis of the Experimental Exclusion. Dkt. 135-

4. In Providence’s January 19, 2015 response to these requests, Providence stated: “There are 

certain minutes of meetings between Providence executives and their legal counsel in which . . . 

[those subjects were] discussed; a privilege log of those documents is being prepared.” Id.

On January 22, 2015, Providence submitted a privilege log to Plaintiffs that claimed the 

attorney-client privilege for meeting minutes of Providence’s Ethics & Risk Management 

Committee (“ERMC”). Dkt. 135-5. The log also claimed lack of relevance as a reason for 

refusing to produce the documents. On April 23, 2015, Providence submitted an amended 

privilege log which provided more detail about the contents of the documents. Dkt. 135-1 at 1-5.

On June 2, 2015, Plaintiffs’ counsel again deposed Jensen. Dkt. 135-2 at 11-20. During 

the second deposition, Jensen mentioned several discussions that he and other Providence 

 

3

Jensen testified under Federal Rule of Civil Procedure 30(b)(6) on behalf of Providence 

in this action, and his testimony is that of Providence’s. See Dkt. 135-2 at 1, 2 (August 29, 2013 

Jensen Deposition); id. at 11-12 (June 2, 2015 Jensen Deposition).

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employees had with Providence’s counsel regarding Providence’s use of the Developmental 

Disability Exclusion. Id. at 13-15, 18-20. According to Plaintiffs, Plaintiffs’ counsel did not ask 

for details about these discussions because prior to the June 2, 2015 deposition, Providence’s 

counsel stated that it considered the discussions to be protected by the attorney-client privilege. 

Dkt. 135 ¶ 11.

In July and August 2015, Providence produced additional documents to Plaintiffs in 

response to Plaintiffs’ requests for production. Id. ¶ 6. Many of these documents were email 

strings among Providence, its counsel, and Optum. Dkt. 135-3. Providence outsources behavioral 

health and mental health services to Optum, and Optum processes behavioral and mental health 

claims on behalf of Providence. Dkt. 135-2 at 17 (June 2, 2015 Jensen Deposition). Providence 

redacted portions of the email strings, citing attorney-client privilege. Dkt. 135-3. On August 13, 

2015, Providence produced a privilege log of only emails, again citing attorney-client privilege

as the reason for not disclosing the documents. Dkt. 135-1 at 6-29. 

DISCUSSION

Plaintiffs move the Court pursuant to Federal Rule of Civil Procedure 37(a) for an Order 

compelling Providence to produce the following:

Request Number One: Documents listed in Providence’s April 23, 

2015 Amended Privilege Log, and documents listed in Providence’s

August 13, 2015 Emails Privilege Log, with exceptions for documents 

described as “AF Lawsuit Discussion” and “Lawsuit RFPs;”4

Request Number Two: Documents and communications of any type 

relating to Providence’s conversations with counsel about 

Providence’s use of the Developmental Disability Exclusion not 

 

4

In Providence’s response to Plaintiffs’ motion to compel, Providence states that its 

assertion of the attorney-client privilege as to the following documents was in error: 

PHP007513-26, PHP007531-38, PHP007541-47, PHP007554-55, PHP007559-61, and 

PHP007566-71. Dkt. 139 at 17 n.4. Provides states that it has provided these documents to 

Plaintiffs. Id.

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related to litigation, as referred to in the August 29, 2013, and June 2, 

2015, Jensen depositions;

Request Number Three: Testimony from deponents, including 

Jensen and witnesses whom Plaintiffs plan to depose after the Court 

rules on this Motion, relating to Providence’s conversations with 

counsel about Providence’s use of the Developmental Disability 

Exclusion not related to litigation; and

Request Number Four: Redacted portions of email strings previously 

produced by Providence and Bates labeled PHP005857, PHP005859, 

PHP005861, PHP005862, PHP006316, PHP006342-44, PHP006374, 

PHP006378, PHP006387, PHP006896-8, PHP006906, PHP006919, 

PHP006923, PHP006927, PHP006929, PHP007725, PHP007799-800, 

PHP7806-09, PHP007814-15, PHP007820-23, PHP007828, 

PHP007834-36, PHP007846-49, PHP007859-62, PHP007867, 

PHP007871-73, PHP007878-80, PHP007884-85, PHP007889, 

PHP007893-94, PHP007899-901, PHP007906-08, PHP007919-20, 

and PHP007924.

Providence refuses to produce the requested documents and testimony. Providence asserts that 

the documents and testimony are not discoverable for two alternative and independent reasons: 

(1) they are not relevant to any claim nor calculated to lead to the discovery of relevant evidence; 

and (2) they are protected under the attorney-client privilege.

Plaintiffs argue that the documents and testimony are relevant to the resolution of their 

Second Claim, and that documents and testimony are discoverable because they fall within the 

fiduciary exception to attorney-client privilege. Under the fiduciary exception, one “acting in the 

capacity of ERISA fiduciary is disabled from asserting the attorney-client privilege against plan 

beneficiaries on matters of plan administration.” United States v. Mett, 178 F.3d 1058, 1063 

(9th Cir. 1999). Plaintiffs assert that the requested documents and testimony relate to plan 

administration because they concern Providence’s consideration and use of the Developmental 

Disability Exclusion and the Experimental Exclusion to deny coverage for ABA therapy. 

Plaintiffs alternatively argue that Providence has waived the attorney-client privilege with 

respect to the requested documents and testimony because Providence shared its written 

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communications with counsel regarding the Developmental Disability Exclusion and the 

Experimental Exclusion with Optum, a third party. See Weil v. Inv./Indicators, Research & 

Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981) (stating that “it has been widely held that voluntary 

disclosure of the content of a privileged attorney communication constitutes waiver of the 

privilege as to all other such communications on the same subject.”).

First, the Court considers whether the documents and testimony Plaintiffs seek are 

relevant to their Second Claim. Second, the Court considers whether the fiduciary exception to 

attorney-client privilege applies to the requested documents and testimony. Third, the Court 

considers whether Providence waived the attorney-client privilege with respect to the requested 

documents and testimony.

A. Whether the Requested Documents and Testimony Are Relevant

1. The Parties’ Arguments

Plaintiffs argue that the requested discovery is relevant to determining the following 

issues central to resolution of their Second Claim:

1. Did Providence breach its fiduciary duty to Plaintiffs?

2. Are Plaintiffs entitled to “other appropriate equitable relief” under 

Section 1132(a)(3)?

3. If Plaintiffs are entitled to “other appropriate equitable relief” 

under Section 1132(a)(3), which specific remedies are they entitled 

to and what are the possible monetary values of those remedies?

Plaintiffs argue that in determining what, if any, “other appropriate equitable relief” should be 

awarded, the Court will have to examine the actions and decisions made by Providence relating 

to its consideration and use of the Developmental Disability and Experimental Exclusions.

Providence argues that to the extent that any questions of fact still remain at issue on 

Plaintiffs’ Second Claim for relief, the discovery Plaintiffs request is neither relevant to those 

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questions nor calculated to lead to the discovery of relevant evidence. Providence asserts that the 

documents and testimony Plaintiffs seek bear on Providence’s motive, which is irrelevant in an 

ERISA claim for breach of fiduciary duty because the duties that ERISA imposes on plan 

administrators are judged under an objective standard. In support of this assertion, Providence 

cites Washington v. Bert Bell/Pete Rozelle NFL Retirement Plan, 504 F.3d 818 (9th Cir. 2007), 

in which the Ninth Circuit discussed the duty of loyalty as “one of the common law trust 

principles that apply to ERISA fiduciaries . . . [and that] encompasses a duty to disclose.” Id.

at 823 (citation omitted). Under the duty of disclosure, “[t]rustees must ‘deal fairly’ and 

‘communicate to the beneficiary all material facts the trustee knows or should know in 

connection with the transaction.” Id. (quoting Peralta v. Hispanic Bus., Inc., 419 F.3d 1064, 

1070 n.7 (9th Cir. 2005)). The Ninth Circuit described the test of whether a fiduciary violates the 

duty of loyalty as “objective.” Id. at 824. Thus, Providence argues, the duties imposed upon 

fiduciaries under ERISA concern plan administrators’ objective conduct and not their subject 

motives.

2. Analysis

Plaintiffs’ Second Claim seeks “appropriate equitable relief” under Section 1132(a)(3) 

including, but not limited to, restoration of funds allegedly improperly in Providence’s 

possession as a result of Providence’s improper denial of claims for ABA therapy, unjust 

enrichment, disgorgement, restitution, reparation, surcharge, and estoppel. Under 

Section 1132(a)(3), a plaintiff must prove “both: (1) that there is a remediable wrong, i.e., that 

the plaintiff seeks relief to redress a violation of ERISA or the terms of a plan;” and “(2) that the 

relief sought is ‘appropriate equitable relief.’” Gabriel v. Ala. Pension Fund, 773 F.3d 945, 954 

(9th Cir. 2014) (citing Mertens v. Hewitt Assocs., 508 U.S. 248, 254 (1993), and quoting 

29 U.S.C. § 1132(a)(3)(B)). 

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The Court has already held, on cross-motions for summary judgment on Plaintiff’s First 

Claim, that Providence’s use of the Developmental Disability Exclusion violated the Federal 

Parity Act and Oregon law and is thus prohibited under Section 1132(a)(3). The Court has not 

yet ruled, however, on what, if any, remediable wrong Plaintiffs have established under their 

Second Claim. Although this wrong may include Providence’s unlawful application of the 

Developmental Disability Exclusion, Plaintiffs allege additional violations of Providence’s 

fiduciary duties relating to Providence’s consideration and use of the Developmental Disability 

and Experimental Exclusions in their second amended class action complaint, such as 

Providence’s use of the Experimental Exclusion after it knew or should have known that ABA 

therapy is not an experimental or investigative treatment.

ERISA describes the duties of a fiduciary as follows:

(a) Prudent man standard of care

(1) Subject to [other sections of ERISA], a fiduciary shall 

discharge his duties with respect to a plan solely in the 

interests of the participants and beneficiaries and—

(A) for the exclusive purpose of:

(i) providing benefits to participants and 

their beneficiaries; and 

(ii) defraying reasonable expenses of 

administering the plan;

(B) with the care, skill, prudence, and diligence 

under the circumstances then prevailing that a 

prudent man acting in a like capacity and familiar 

with such matters would use in the conduct of an 

enterprise of a like character and with like aims[.]

29 U.S.C. § 1104 (“Section 1104”). Section 1104(a)(1)(A), or the “Exclusive Benefit Rule,” is 

based on the trust law duty of loyalty. Peter J. Wiedenbeck, ERISA in the Courts 155 (Federal 

Judicial Center 2008). As Providence points out, the trust law duty of loyalty is governed by an 

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objective test. See Washington, 504 F.3d at 824. Unlike the trust duty of loyalty, however, the 

Exclusive Benefit Rule looks to the fiduciary’s subjective motivation in determining whether the 

fiduciary is in compliance with the rule. Wiedenbeck, at 156; see also id. at 165 (“In making the 

fiduciary’s ‘exclusive purpose’ the touchstone, ERISA demands assessment of a conflicted 

decisionmaker’s state of mind. Subjective purpose, of course, is necessarily inferred from 

objective facts.”).5Thus, following Wiedenbeck, Providence’s motivation regarding its 

consideration and use of the Developmental Disability Exclusion and the Experimental 

Exclusion is relevant to a determination of whether it breached its fiduciary duties under the 

Exclusive Benefit Rule.

The extent to which Providence may have breached its fiduciary duties or otherwise 

violated ERISA, however, is only the first prong of Plaintiff’s Second Claim. Plaintiffs must also 

establish that they are entitled to “appropriate equitable relief.” The Supreme Court interprets

“appropriate equitable relief” as referring to “those categories of relief that, traditionally 

speaking (i.e., prior to the merger of law and equity) were typically available in equity.” CIGNA 

Corp. v. Amara, 563 U.S. 421, 439 (2011) (emphasis in original) (quotation marks omitted). 

“Equitable relief may take the form of a surcharge, or monetary compensation for loss resulting 

from a fiduciary’s breach of duty or to prevent the fiduciary’s unjust enrichment.” Mullin v. 

Scottsdale Healthcare Corp. Long Term Disability Plan, 2016 WL 107838, at *4 (D. Ariz. 

Jan. 11, 2016) (citing Gabriel, 773 F.3d at 957). “To obtain relief by way of surcharge, a 

beneficiary must show a breach of fiduciary duties by an ERISA trustee, that the violation 

 

5

Providence additionally cites Byrne v. Calastro, 205 Fed. App’x 10 (3d Cir. 2006) 

(unpublished), and Bauer-Ramazani v. Teachers Insurance & Annuity Ass’n of America-College 

Retirement & Equities Fund, 2013 WL 6189802 (D. Vt. Nov. 27, 2013), in support of its 

argument that motive is irrelevant in an ERISA claim for breach of fiduciary duty. In discussing 

the objective standard of care, however, both cases referred to 29 U.S.C. § 1104(a)(1)(B). Byrne, 

205 Fed. App’x at 15; Bauer-Ramazani, 2013 WL 6189802, at *5.

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injured her or him, and that the remedy of surcharge is available for the claimed injury by 

reference to traditional equitable principles.” Monper v. Boeing Co., 104 F. Supp. 3d 1170, 1185 

(W.D. Wash. 2015) (citing Gabriel, 773 F.3d at 958). The Supreme Court explains that an 

ERISA fiduciary “can be surcharged under [Section 1132(a)(3)] only upon a showing of actual 

harm—proved (under the default rule for civil cases) by a preponderance of the evidence.” 

CIGNA, 563 U.S. at 444. 

The Restatement (Third) of Trusts instructs as follows with regard to surcharge:

In determining whether and to what extent to grant a trustee relief 

from surcharge, it would be appropriate for the court to consider all 

circumstances of the breach and of the trustee, such as: . . . the 

sincerity of the trustee’s efforts to understand and perform the 

responsibilities in question; and whether the trustee reasonably 

relied on guidance from legal or other advisers[.]6

Id. § 95 cmt. d (2012). Thus, evidence of the sincerity of Providence’s efforts to understand and 

perform its responsibilities, as well as its actions and decisions, is relevant in determining 

whether and to what extent to award Plaintiffs make-whole relief in the form of surcharge.

The documents and testimony Plaintiffs seek concern the sincerity of Providence’s efforts 

to understand and perform its responsibilities regarding ABA therapy coverage and its 

consideration and use of the Developmental Disability Exclusion and the Experimental 

Exclusion. The requested documents and testimony, therefore, are relevant to determining

whether there is a remediable wrong for which “other appropriate equitable relief” is warranted 

 

6

“Ordinarily, the fiduciary’s good faith is not a defense to a claim of breach of fiduciary 

liability.” Ronald J. Cooke, 2 ERISA Practice and Procedure § 6:79. The Restatement (Third) of 

Trusts suggests, however, that the extent to which the fiduciary reasonably—or, in good faith—

relied on legal or other authoritative guidance may be relevant to fashioning the equitable relief 

of surcharge for a breach of fiduciary duty. See id. § 95 cmt. d. Both the Supreme Court and the 

Ninth Circuit have relied upon the Restatement (Third) of Trusts in interpreting the remedy of 

surcharge under Section 1132(a)(3). CIGNA, 563 U.S. at 441-42; Skinner v. Northrop Grumman 

Ret. Plan B., 673 F.3d 1162, 1167 (9th Cir. 2012).

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PAGE 17 – OPINION AND ORDER

and, if so, what form that relief should take. Thus, the Court finds that the discovery Plaintiffs 

seek is relevant to their Second Claim.

B. Whether the Fiduciary Exception Applies

The party asserting attorney-client privilege bears the burden of proving each element of 

an eight-part test used to determine whether information is covered by the attorney-client 

privilege:

(1) Where legal advice of any kind is sought (2) from a 

professional legal adviser in his capacity as such, (3) the 

communications relating to that purpose, (4) made in confidence 

(5) by the client, (6) are at his insistence permanently protected (7) 

from disclosure by himself or by the legal adviser, (8) unless the 

protection be waived.

United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009) (quoting In re Grand Jury 

Investigation, 974 F.2d 1068, 1071 n.2 (9th Cir. 1992)). In Providence’s response, Providence 

states that Plaintiffs do not dispute that the materials they seek would ordinarily be protected 

from disclosure by attorney-client privilege. The Court has reviewed Plaintiffs’ opening brief

and agrees that Plaintiffs did not challenge the presumptive test of attorney-client privilege. In 

Plaintiffs’ reply, however, Plaintiffs assert that Providence has failed to meet its burden of 

proving that the attorney-client privilege applies to the requested documents and testimony. In 

light of the fact that Plaintiffs did not challenge that the attorney-client privilege applies in their 

opening brief, the Court finds that Providence’s initial burden is satisfied. 

1. The Fiduciary Exception Generally

The Ninth Circuit instructs that “‘the attorney-client privilege is, perhaps, the most sacred 

of all legally recognized privileges.’” Mett, 178 F.3d at 1062 (quoting United States v. Bauer, 

132 F.3d 504, 510 (9th Cir. 1997)). The Supreme Court explains the justification for attorneyclient privilege as follows:

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Its purpose is to encourage full and frank communication between 

attorneys and their clients and thereby promote broader public 

interests in the observance of law and administration of justice. 

The privilege recognizes that sound legal advice or advocacy 

serves public ends and that such advice or advocacy depends upon 

the lawyer’s being fully informed by the client. 

Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege, however, is strictly 

construed “[b]ecause it impedes full and free discovery of the truth.” Weil, 647 F.2d at 24.

The Ninth Circuit recognizes a fiduciary exception to attorney-client privilege. Mett, 

178 F.3d at 1062. “As applied in the ERISA context, the fiduciary exception provides that ‘an 

employer acting in the capacity of ERISA fiduciary is disabled from asserting the attorney-client 

privilege against plan beneficiaries on matters of plan administration.’” Id. at 1063 (quoting 

Becher v. Long Island Lighting Co., 129 F.3d 268, 272 (2d Cir. 1997)). The fiduciary exception 

applies to insurance companies serving as ERISA fiduciaries. Stephan v. Unum Life Ins. Co. of 

Am., 697 F.3d 917, 931-32 (9th Cir. 2012). Cf. Wachtel v. Health Net, Inc., 482 F.3d 225, 236 

(3d Cir. 2007) (stating that “we do not believe that Congress intended to impose upon insurance 

companies doing business with ERISA-regulated plans the same disclosure obligations that have 

been imposed upon trustees at common law”). 

The Ninth Circuit explains that the fiduciary exception has two distinct rationales. First, 

some courts have characterized the exception as derived from an ERISA trustee’s duty to 

disclose all information regarding plan administration to plan beneficiaries. Mett, 178 F.3d 

at 1063. Thus, “the fiduciary exception can be understood as an instance of the attorney-client 

privilege giving way in the face of a competing legal principle.” Id. Second, other courts “have 

focused instead on the role of the trustee and have endorsed the notion that, ‘as a representative 

for the beneficiaries of the trust which he is administering, the trustee is not the real client in the 

sense that he is being personally served.’” Id. (quoting United States v. Evans, 796 F.2d 264, 266 

Case 3:13-cv-00776-SI Document 147 Filed 03/24/16 Page 18 of 35
PAGE 19 – OPINION AND ORDER

(9th Cir. 1986)). Thus, under the second rationale, the exception is not really an exception at 

all—“[r]ather, it merely reflects the fact that, at least as to advice regarding plan administration, a 

trustee is not ‘the real client’ and thus never enjoyed the privilege in the first place.” Id.

The fiduciary exception to attorney-client privilege is limited. The Ninth Circuit explains 

that “while the fiduciary exception does apply to advice on matters of plan administration, the 

attorney-client privilege reasserts itself as to any advice that a fiduciary obtains in an effort to 

protect herself from civil or criminal liability.” Id. at 1066. The Ninth Circuit describes two ends 

of a spectrum:

On the one hand, where an ERISA trustee seeks an attorney’s 

advice on a matter of plan administration and where the advice 

clearly does not implicate the trustee in any personal capacity, the 

trustee cannot invoke the attorney-client privilege against the plan 

beneficiaries. On the other hand, where a plan fiduciary retains 

counsel in order to defend herself against the plan beneficiaries (or 

the government acting in their stead), the attorney-client privilege 

remains intact.

Id. at 1064. A “communication-by-communication” analysis is required to determine where 

discovery falls on this spectrum. Id. at 1065.

Two Ninth Circuit cases, United States v. Mett and Stephan v. Unum Life Insurance Co. 

of America, illustrate the boundaries of the fiduciary exception in the ERISA context. In Mett, 

two criminal defendants, Mett and Wiseman, were officers and directors of Center Art Galleries 

(“CAG”), which established two pension benefit plans for its employees. Id. at 1060. Mett and 

Wiseman served as trustees for the plans, and CAG served as the plans’ administrator. Id. After 

CAG fell upon difficult financial times, Mett and Wiseman withdrew about $1.6 million from the 

pension plans and deposited the money into CAG’s general operating accounts without 

informing their employees of the transactions or disclosing the withdrawals to the IRS. Id.

at 1061. A jury found Mett and Wiseman guilty of embezzling from their employees’ pension 

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benefit plans, among other crimes. Id. Mett and Wiseman argued at trial that they did not possess 

the requisite specific intent when they withdrew the funds from the pension plans, and that they 

intended their actions to benefit their employees. Id.

On Mett and Wiseman’s appeal of their convictions, the Ninth Circuit considered 

whether two legal memoranda that had been admitted at trial should have been excluded in light 

of the attorney-client privilege. Id. The two memoranda, which were prepared before the 

government took any legal action against Mett and Wiseman, related to potential civil and 

criminal consequences of the pension plan withdrawals. Id. at 1062. The memoranda described

the potential civil and criminal exposure that Mett and Wiseman might face in light of the 

withdrawals and the civil and criminal penalties associated with the transactions. Id. The Ninth 

Circuit held that the fiduciary exception did not apply as “[b]oth the text and content of the . . . 

memoranda indicate that they ought to have been treated as privileged matter.” Id. at 1064. The 

Ninth Circuit explained that although the memoranda were prepared before any legal action was 

taken against Mett and Wiseman, “[t]rouble was in the air” and the defendants had “good 

reason” to seek advice concerning potential liabilities arising from the withdrawals. Id.

Additionally, the advice rendered in the memoranda “was not prepared for the benefit of the plan 

or the beneficiaries, nor was it advice regarding administration of the plan.” Id. Rather, the 

memoranda served to advise Mett and Wiseman “regarding their own personal civil and criminal 

exposure in light of undocumented withdrawals that had already occurred.” Id.

On the other end of the spectrum is the Ninth Circuit’s decision in Stephan. In Stephan, 

the plaintiff was insured under his employer’s long-term disability plan. 697 F.3d at 921. The 

defendant was the plan administrator. Id. The plaintiff disputed the defendant’s calculation of his 

pre-disability earnings upon which his disability benefits were based. Id. The district court 

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denied the plaintiff’s motion to compel discovery of a series of internal memoranda created by 

the defendant’s in-house counsel regarding the plaintiff’s claim, holding that the fiduciary 

exception did not apply because “the interests of the plaintiff and defendant had sufficiently 

diverged at the time the disputed memoranda were created.” Id. at 923 (quotation marks 

omitted).

Upon review, the Ninth Circuit reversed, holding that the fiduciary exception did apply 

because “[u]nlike the memoranda in Mett, the disputed documents offer advice solely on how the 

Plan ought to be interpreted. They do not address any potential civil or criminal liability [the 

defendant] might face, nor is there any indication that they were prepared with such liability in 

mind.” Id. at 932. Rather, “the documents here were prepared to advise [the defendant’s] claims 

analysts about how best to interpret the Plan, and were communicated to the analysts before any 

final determination of [the plaintiff’s] claim had been made.” Id. at 933. The Ninth Circuit 

rejected the defendant’s argument that the fiduciary exception should not apply because the 

documents were created after the defendant had been contacted by the plaintiff’s counsel, and 

therefore “after there was an indication that the parties may become adverse.” Id. at 932-33 

(quotation marks omitted). The Ninth Circuit explained that the communications occurred in 

advance of the defendant’s decision on the plaintiff’s benefits appeal and that “[m]ost courts 

have held that it is not until after the final determination—that is, after the final administrative 

appeal—that the interests of the Plan fiduciary and the beneficiary diverge for purposes of 

application of the fiduciary exception,” and that the Ninth Circuit agreed “with the weight of 

authority.” Id. at 933. The Ninth Circuit concluded that the fiduciary exception applied to the 

documents because “advice on the amount of benefits [the plaintiff] was owed under the Plan, 

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given before [the defendant] had made any final determination on his claim, constitutes advice 

on plan administration.” Id.

2. The Parties’ Arguments

Plaintiffs argue that the attorney-client privilege does not protect the requested 

documents and testimony because the fiduciary exception applies. Providence responds that the 

fiduciary exception does not apply because most of the discovery Plaintiffs seek does not fall 

within the limited time periods during which Providence acted as a fiduciary with respect to each 

Plaintiff. Providence also asserts that to the extent that any of the discovery Plaintiffs seek falls

within the relevant time periods, as defined by Providence, the materials contain no information 

concerning the administration of Plaintiffs’ Plans.

Providence argues that unless and until a claim is made under an employer’s benefit Plan, 

Providence’s fiduciary duty to a particular individual is not triggered. According to Providence, 

this is because each of five ERISA Plans at issue in this lawsuit purchased health insurance from 

Providence under a one-year contract. Before each purchase, Providence created group health 

coverage products available for purchase. Providence asserts that when it created these products, 

it was acting solely on its own behalf and not on behalf of any employer-sponsored Plan because 

its product had not yet been purchased. Thus, Providence argues, attorney-client communications 

regarding benefit design and limitations are undertaken to further Providence’s business interests 

and not to fulfill a fiduciary duty. 

Providence argues that to the extent that it sought to protect its own interests as the 

insurer, as opposed to acting purely as a trustee for the interest of the beneficiaries, the basis for 

any fiduciary exception is absent. Providence cites to Wachtel v. Health Net, Inc., in support of 

this argument. In Wachtel, the Third Circuit held that the fiduciary exception does not apply to 

insurance companies making benefits determinations in part because “an insurer which sells 

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PAGE 23 – OPINION AND ORDER

insurance contracts to ERISA-regulated benefit plans is itself the sole and direct client of counsel 

retained by the insurer, not the mere representative of client-beneficiaries, and not a joint client 

with its beneficiaries.” 482 F.3d at 235. Notably, the Ninth Circuit reached the opposite 

conclusion in Stephan, holding that the fiduciary exception does apply to insurance companies 

making benefits determinations. 697 F.3d at 931-32. The Ninth Circuit noted that ERISA has 

broad disclosure requirements and that neither ERISA nor its implementing regulations “provide 

any reason why the disclosure of information is any less important where an insurer, rather than 

a trustee or other ERISA fiduciary, is the decisionmaker.” Id. at 932 (explaining that ERISA 

requires that “upon request, a claimant be provided all ‘information relevant to the claimant’s 

claim for benefits,’ 29 C.F.R. § 2560.503-1(h)(2)(iii)”). The Ninth Circuit concluded that there is 

“no principled basis for excluding insurers from the fiduciary exception” because “the obligation 

that an ERISA fiduciary act in the interest of the plan beneficiary does not differ depending on 

whether that fiduciary is a trustee or an insurer.” Id.

Plaintiffs argue that Providence was acting as a fiduciary to all Plaintiffs when it created 

the documents in question and held discussions about its policies regarding ABA therapy

coverage. Accordingly, Plaintiffs state that Providence’s fiduciary duties to each Plaintiff are not 

limited in scope and subject matter in the manner that Providence describes. The Court agrees. 

ERISA describes a “fiduciary” as follows:

[A] person is a fiduciary with respect to a plan to the extent (i) he 

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) he 

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 any authority or responsibility to do so, or (iii) he has 

any discretionary authority or discretionary responsibility in the 

administration of such plan.

29 U.S.C. § 1002(21)(A). The Plans applicable to each Plaintiff state in relevant part:

Case 3:13-cv-00776-SI Document 147 Filed 03/24/16 Page 23 of 35
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To the extent this Group Contract relates to an employee benefit 

plan that is governed by the Employee Retirement Income Security 

Act of 1974 (ERISA), as amended, the Employer’s responsibilities 

and Providence Health Plan responsibilities include the following:

 The Employer is responsible for furnishing summary plan 

descriptions, annual reports and summary annual reports to 

plan participants and to the government as required by 

ERISA.

 The Employer and not Providence Health Plan is the “Plan 

Administrator” as defined in ERISA. . . .

 The Employer gives Providence Health Plan, acting for the 

“Plan Administrator,” the discretionary authority to 

interpret the terms of the related ERISA plan, to make 

factual determinations relevant to benefit determinations 

and to otherwise decide all questions regarding eligibility 

for benefits under the plan.

Benefits shall be payable to a Member under the ERISA plan and 

this Group Contract only if Providence Health Plan, in its 

discretion, determines that such benefits are payable. 

Dkts. 114, 114-1. In addition, Providence has admitted that when carrying out its delegated 

authority, it has the responsibilities of a fiduciary under ERISA. Dkt. 144 ¶ 5 (Answer to Second 

Amended Complaint); see also Dkt. 143-2 at 6 (August 29, 2013 Jensen Deposition) (testifying

that Providence serves a fiduciary to beneficiaries, and that Plan members are beneficiaries).

The evidence in this case reveals that Providence’s decisions regarding ABA therapy 

coverage were made on a company-wide basis and not on an individual Plan beneficiary basis. 

First, the governing documents for Plaintiff’s individual Plans are identical in all material 

respects. All of Providence’s Oregon member handbooks and group contracts contain identical 

provisions regarding Mental Health Services, including the definition of Mental Health; and 

identical Exclusions specific to Mental Health Services, including the Developmental Disability 

Exclusion and Experimental Exclusion. Dkt. 143-3 at 4-7. 

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Second, Jensen repeatedly testified on behalf of Providence that Providence made 

decisions regarding plan administration and ABA benefits determinations on a company-wide 

basis. See, e.g., Dkt. 143-2 at 7-8 (August 29, 2013 Jensen Deposition) (testifying that 

Providence doesn’t administer ERISA and non-ERISA Plans differently); id. at 9-10 (testifying

that Providence has an obligation to apply Plan exclusions uniformly to all Plan members); 

Dkt. 143-4 at 9 (June 2, 2015 Jensen Deposition) (testifying that Providence made a companywide decision to cover ABA therapy beginning January 2014).

Additionally, Jensen testified in 2013 that Providence always denies claims for ABA 

therapy on the basis of the Developmental Disability Exclusion. Dkt. 63-1 at 3, 14-15

(August 29, 2013 Jensen Deposition). This was because Providence interpreted Autism Spectrum 

Disorder as a developmental disability or involving developmental delay in all cases in which a

member sought ABA treatment. Id. at 14; see also Dkt. 119-2 at 7-8 (August 29, 2013 Jensen 

Deposition) (testifying that Providence applied the Developmental Disability Exclusion “across 

the board as to all of its members who have autism”); Id. at 10 (testifying that the basis for 

Providence’s denial of coverage for A.F.’s case was exactly the same as the basis for 

Providence’s denial of coverage in A.P.’s case). 

Thus, Providence made decisions “regarding eligibility for benefits” for ABA therapy 

and “interpret[ed] the terms of the [Plans]” relating to ABA therapy coverage and the 

Developmental Disability and Experimental Exclusions not on an individual member or Plan-byPlan basis, but on a company-wide basis. Dkt. 114-1. Accordingly, Providence’s argument that it 

only undertook a fiduciary duty with respect to each Plaintiff when they filed a claim for ABA 

therapy is unavailing. Providence acted as a fiduciary with respect to each Plaintiff’s Plan when 

it made its company-wide decisions regarding ABA therapy coverage. See Firestone Tire &

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PAGE 26 – OPINION AND ORDER

Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989) (emphasis in original) (stating that in the ERISA 

context, “one is a fiduciary to the extent he exercises any discretionary authority or control”). 

3. Application of the Exception to the Requested Discovery

a. Request Number One

In Request Number One, Plaintiffs seek to compel production of documents listed in 

Providence’s April 23, 2015 Amended Privilege Log, and documents listed in Providence’s

August 13, 2015 Emails Privilege Log.

7

The documents listed in Providence’s April 23, 2015 Amended Privilege Log are minutes 

of ERMC meetings dated January 12, 2009 through September 8, 2014. The Amended Privilege 

Log indicates that ABA therapy was discussed at most of the meetings.8Providence asserts that 

the fiduciary exception does not apply to the minutes from the ERMC meetings because the 

ERMC is not an ERISA fiduciary. Dkt. 140 ¶ 5. This argument is unavailing. The ERMC is not 

an entity that is separate from Providence; rather, the ERMC is a committee comprised of 

Providence officers and employees, including Providence’s Chief Operating Officer, Chief 

Executive Officer, and Chief Medical Officer. Dkt. 143-4 at 10-13 (June 2, 2015 Jensen 

Deposition); Dkt. 143-5 at 1. The ERMC engaged in discussions regarding ABA therapy 

coverage for Plan participants, including discussions concerning the use of the Experimental 

Exclusion. Dkt. 143-4 at 15 (June 2, 2015 Jensen Deposition) (testifying that the ERMC 

repeatedly discussed ABA therapy); id. at 5-6 (testifying that the ERMC discussed ending the 

 

7

Plaintiffs do not seek production of documents that the August 13, 2015 Emails 

Privilege Log describes as “AF Lawsuit Discussion” and “Lawsuit RFPs.”

8

Plaintiffs state that to the extent that the topics discussed at the meetings do not relate to 

Autism Spectrum Disorder, ABA therapy, or the Developmental Disability Exclusion, Plaintiffs 

do not object to Providence redacting the minutes. Such redaction is appropriate.

Case 3:13-cv-00776-SI Document 147 Filed 03/24/16 Page 26 of 35
PAGE 27 – OPINION AND ORDER

practice of denying ABA therapy claims on the basis of the Experimental Exclusion in order to 

avoid IRO review).

The Court grants Request Number One in part, as follows: First, Providence must 

produce all requested documents to the extent that they concern plan administration, such as how 

the Plan or Plans ought to be interpreted or applied, and “do not address any potential [or actual] 

civil or criminal liability . . . [or] were prepared with such liability in mind.” Stephan, 697 F.3d 

at 932. Second, this obligation by Providence is not limited to documents that provide advice 

regarding how the Plan or Plans ought to be applied to any specific or named participant or 

claimant, but also include advice regarding how the Plan or Plans are to be interpreted or applied 

in general. Third, the Court notes that the interests of the ERISA fiduciary and the beneficiary 

diverge for purposes of the fiduciary exception after the final administrative appeal, id. at 933, 

and that the earliest date of the final determination of any Plaintiff’s final administrative appeal 

is April 30, 2013.9Thus, Providence need not produce otherwise responsive documents dated 

after April 30, 2013. If there is any uncertainty or continuing dispute regarding whether any 

particular document needs to be produced under this ruling, Providence shall provide such 

document or documents to the Court-Appointed Special Master for in camera review, subject to 

further review, if necessary and upon objection, by the Court. 

 

9

The Court additionally notes that this lawsuit was filed soon afterward, on May 8, 2013. 

The Court recognizes that the final determination of S.W. and I.F.’s claims did not occur until 

February 2014, and that S.W., S.S., and I.F. were not named as Plaintiffs in this action until the 

second amended class action complaint was filed on June 29, 2015. Plaintiffs, however, have not 

provided the Court with any authority or argument regarding how to distinguish between 

Plaintiffs’ interests for purposes of the fiduciary exception. The interests of A.F. and Providence 

diverged on April 30, 2013, when Providence denied A.F.’s second-level appeal. A.F. and the 

rest of the Plaintiffs bring essentially the same claims and seek essentially the same remedies. 

Accordingly, the Court finds no reasoned basis for distinguishing among Plaintiffs’ interests for 

purposes of the fiduciary exception.

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b. Request Number Two

In Request Number Two, Plaintiffs seek to compel production of documents and 

communications of any type relating to Providence’s conversations with counsel about 

Providence’s use of the Developmental Disability Exclusion not related to litigation, as discussed 

in the August 29, 2013, and June 2, 2015, Jensen depositions. 

The Court grants Request Number Two in part, as follows: First, Providence must 

produce all requested documents and communications to the extent that they concern plan 

administration, such as how the Plan or Plans ought to be interpreted or applied, and “do not 

address any potential [or actual] civil or criminal liability . . . [or] were prepared with such 

liability in mind.” Id. at 932. Second, this obligation is not limited to documents or 

communications that provide advice regarding how the Plan or Plans ought to be applied to any 

specific or named participant or claimant, but also include advice regarding how the Plan or 

Plans are to be interpreted or applied in general. Third, the Court notes that the interests of the 

ERISA fiduciary and the beneficiary diverge for purposes of the fiduciary exception after the 

final administrative appeal, id. at 933, and that the earliest date of the final determination of any 

Plaintiff’s final administrative appeal is April 30, 2013. Thus, Providence need not produce 

otherwise responsive documents or communications dated after April 30, 2013. If there is any 

uncertainty or dispute regarding whether any particular document or communication needs to be 

produced under this ruling, Providence shall provide such document or communication to the 

Court-Appointed Special Master for in camera review, subject to further review, if necessary and 

upon objection, by the Court. 

c. Request Number Three

In Request Number Three, Plaintiffs seek to compel production of testimony from 

deponents, including Jensen and witnesses whom Plaintiffs plan to depose after the Court rules 

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PAGE 29 – OPINION AND ORDER

on this Motion, relating to Providence’s conversations with counsel about Providence’s use of 

the Developmental Disability Exclusion not related to litigation.

The Court grants Request Number Three in part, as follows: First, Plaintiffs may depose 

witnesses regarding Providence’s conversations with counsel about Providence’s use of the 

Developmental Disability Exclusion to the extent that counsel offered advice concerning plan 

administration, such as how the Plan or Plans ought to be interpreted or applied, and “d[id] not 

address any potential [or actual] civil or criminal liability . . . .” Id. at 932. Second, this 

obligation is not limited to conversations with counsel that provide advice regarding how the 

Plan or Plans ought to be applied to any specific or named participant or claimant, but also 

include advice regarding how the Plan or Plans are to be interpreted or applied in general. Third, 

the Court notes that the interests of the ERISA fiduciary and the beneficiary diverge for purposes 

of the fiduciary exception after the final administrative appeal, id. at 933, and that the earliest 

date of the final determination of any Plaintiff’s final administrative appeal is April 30, 2013. 

Thus, Providence’s witnesses need not answer otherwise responsive questions regarding 

Providence’s conversations with counsel that occurred after April 30, 2013. If there is any 

uncertainty or dispute regarding whether any particular deposition question needs to be answered

under this ruling, Providence shall provide the question and the presumptive answer to the 

Court-Appointed Special Master for in camera review, subject to further review, if necessary and 

upon objection, by the Court. 

d. Request Number Four

In Request Number Four, Plaintiffs seek to compel production of redacted portions of 

email strings previously produced by Providence and Bates labeled PHP005857, PHP005859, 

PHP005861, PHP005862, PHP006316, PHP006342-44, PHP006374, PHP006378, PHP006387, 

PHP006896-8, PHP006906, PHP006919, PHP006923, PHP006927, PHP006929, PHP007725, 

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PAGE 30 – OPINION AND ORDER

PHP007799-800, PHP7806-09, PHP007814-15, PHP007820-23, PHP007828, PHP007834-36, 

PHP007846-49, PHP007859-62, PHP007867, PHP007871-73, PHP007878-80, PHP007884-85, 

PHP007889, PHP007893-94, PHP007899-901, PHP007906-08, PHP007919-20, and 

PHP007924.

The Court grants Request Number Four in part, as follows: First, Providence must 

produce the redacted portions of the specified emails to the extent that they concern plan 

administration, such as how the Plan or Plans ought to be interpreted or applied, and “do not 

address any potential [or actual] civil or criminal liability . . . [or] were prepared with such 

liability in mind.” Id. at 932. Second, this obligation is not limited to redactions that provide 

advice regarding how the Plan or Plans ought to be applied to any specific or named participant 

or claimant, but also include advice regarding how the Plan or Plans are to be interpreted or 

applied in general. Third, the Court notes that the interests of the ERISA fiduciary and the 

beneficiary diverge for purposes of the fiduciary exception after the final administrative appeal, 

id. at 933, and that the earliest date of the final determination of any Plaintiff’s final 

administrative appeal is April 30, 2013. Thus, Providence need not produce the redacted portions 

of otherwise responsive emails dated after April 30, 2013. If there is any uncertainty or dispute 

regarding whether any particular document (or portion of a document) needs to be produced 

under this ruling, Providence shall provide such document or documents (or relevant portions 

thereof) to the Court-Appointed Special Master for in camera review, subject to further review, 

if necessary and upon objection, by the Court.

C. Whether Providence Waived the Attorney-Client Privilege

Plaintiffs alternatively argue that Providence waived the attorney-client privilege with 

respect to the requested documents on the grounds that Providence voluntarily disclosed its 

communications with counsel to Optum, a third-party corporate entity. A party may waive 

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PAGE 31 – OPINION AND ORDER

attorney-client privilege by voluntary disclosure. United States v. Plache, 913 F.2d 1375, 1379 

(9th Cir. 1990); see also Weil, 647 F.2d at 24 (stating that “it has been widely held that voluntary 

disclosure of the content of a privileged attorney communication constitutes waiver of the 

privilege as to all other such communications on the same subject.”). Voluntary disclosure of a 

privileged attorney communication waives the privilege on all other communications on the 

same subject. Plache, 913 F.2d at 1380 (citing Weil, 647 F.2d at 25); see also Paul R. Rice, 

2 Attorney-Client Privilege in the United States § 9:32 (“The voluntary disclosure of a privileged 

communication not only waives the privilege protection for that communication, it may also 

destroy the privilege that protects other communications relating to the same subject matter.”).

The party asserting attorney-client privilege bears the burden of proving that the privilege applies 

and that the privilege has not been waived. See Ruehle, 583 F.3d at 607-08.

Plaintiffs identify an email dated July 19, 2012, in which Jensen forwarded his 

communications with counsel to Optum. The email from Jensen to Optum reads as follows:

Jack & Lisa—I need your help in changing the denial language in 

your letters for members who are seeking ABA services. 

Today PBH denies them as being “experimental/investigational”. 

Our position on this has not changed, however when we deny them 

this way it makes them eligible for IRO (who is overturning them).

We are no longer allowing them to go to the IRO, but need to have 

the language changed in your letter.

How quickly can this be done?

Mark

Dkt. 135-3 at 19-20 (Bates Numbers PHP006315-16). Below this text was the forwarded email 

from Providence’s counsel, which Providence redacted when it produced the email string to 

Plaintiffs. Plaintiffs argue that by voluntarily disclosing the contents of counsel’s email to 

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PAGE 32 – OPINION AND ORDER

Optum, Providence waives attorney-client privilege “as to all other such communications on the 

same subject.” See Weil, 647 F.2d at 24.

Plaintiffs also identify an email dated October 25, 2013 from Jensen to Optum in which 

Jensen describes this lawsuit and requests that Optum start denying ABA therapy coverage based 

on both the Developmental Disability Exclusion and the Experimental Exclusion. Dkt. 135-3 at 8

(Bates Number PHP006244). Jensen copied Providence’s counsel in the October 25, 2013 email.

Providence responds that it did not waive the attorney-client privilege with respect to the 

requested documents and testimony by sending these two emails to Optum because the 

information Providence shared with Optum was not privileged attorney-client communication.

“The disclosure of nonprivileged communications . . . does not affect the status of other related 

privileged communications.” Rice, § 9:29 (emphasis in original). The October 25, 2013 email is 

not privileged. In addition, Providence already disclosed the entire email, without redactions, to 

Plaintiffs. Providence did not waive the attorney-client privilege with respected to the requested 

documents and testimony by sending the October 25, 2013 email to Optum or to Plaintiffs 

because this email was a nonprivileged communication.

Providence, however, asserts the attorney-client privilege with regard to the attachment to 

the email dated July 19, 2012, that Providence sent to Optum. Providence redacted the entirety of 

the forwarded message from counsel, citing the attorney-client privilege, when it disclosed the 

document to Plaintiffs. Dkt. 135-3 at 20 (Bates Number PHP006316). Thus, Providence 

voluntarily disclosed a privileged attorney-client communication when it forwarded an email 

from its counsel to Optum on July 19, 2012.

Providence argues that this voluntary disclosure does not result in waiver of the attorneyclient privilege because Optum is Providence’s agent and thus operates within the scope of 

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Providence’s attorney-client privilege. In support of this argument, Providence cites In re Bieter 

Co., 16 F.3d 929 (8th Cir. 1994), where the Eighth Circuit held that communications between 

corporate counsel and the corporation’s independent consultant were covered by attorney-client 

privilege. Id. at 937-38. The Eighth Circuit discussed John E. Sexton’s article A Post-Upjohn 

Consideration of the Corporate Attorney-Client Privilege and Sexton’s theory that, following 

Upjohn,

10 the attorney-client privilege extends to “‘an employee, agent, or independent 

contractor with a significant relationship to the corporation and the corporation’s involvement in 

the transaction that is the subject of legal services.’” Id. at 937 (quoting John E. Sexton, A PostUpjohn Consideration of the Corporate Attorney-Client Privilege, 57 N.Y.U. L. Rev. 443, 487 

(1982)); see also Rice, § 9:29 (stating that waiver by voluntary disclosure does not apply to 

“agents of either the attorney or the client”).

The Eighth Circuit reasoned that “too narrow a definition of ‘representative of the client’ 

will lead to attorneys not being able to confer confidentially with nonemployees who, due to 

their relationship to the client, possess the very sort of information that the privilege envisions 

flowing most freely.” Id. at 937-38. The independent consultant in Bieter was involved on a daily 

basis with the development company and was the company’s “sole representative at meetings 

with potential tenants and local officials.” Id. at 938. The Eighth Circuit explained that “his 

involvement in the subject of the litigation makes him precisely the sort of person with him a 

lawyer would wish to confer confidentially” and “he was in all relevant respects the functional 

 

10 In Upjohn Co. v. United States, the Supreme Court held that a corporation’s attorneyclient privilege “extends to communications between corporate employees and corporate counsel 

as long as the communications are ‘made at the direction of corporate superiors in order to secure 

legal advice.’” United States v. Graf, 610 F.3d 1148, 1158 (9th Cir. 2010) (quoting United States 

v. Chen, 99 F.3d 1495, 1502 (9th Cir. 1996) (citing Upjohn, 449 U.S. at 390-94)). 

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equivalent of an employee.” Id. (citing Upjohn, 449 U.S. at 389; McCaugherty v. Siffermann, 

132 F.R.D. 234, 239 (N.D. Cal. 1990)). 

In ASU Students for Life v. Crow, 2007 WL 2725252 (D. Ariz. Sept. 17, 2007), the court 

applied Bieter and held that the attorney-client privilege applied to communications between 

counsel and members of student groups who were not direct clients of the attorneys. Id. at *3. 

The court explained as follows:

It is true that several others were copied with the communications 

from [the plaintiff] to [counsel]. However, all of those copied were 

either other attorneys or directly involved in the . . . project . . . . 

[the] communications were shared with those having a reasonable 

need to know about the content of the communications.

Id. (citing Bieter, 16 F.3d at 939). After ASU Students was decided, the Ninth Circuit adopted the 

principles announced in Bieter and held that an independent consultant was covered by a 

company’s attorney-client privilege. United States v. Graf, 610 F.3d 1148, 1159 (9th Cir. 2010).

Although Optum is a separate company from Providence, Providence has a contract with 

Optum and Optum processes mental and behavioral health claims on behalf Providence.

Dkt. 135-2 at 17 (August 29, 2013 Jensen Deposition) (testifying that “Providence contracts with 

Optum as a partner, vendor/partner, to provide all behavioral health and mental health services” 

and that Optum handles the claims for mental and behavioral health). On July 19, 2012, 

Providence forwarded an email from its counsel to Optum in the context of asking Optum to 

change its language regarding ABA therapy coverage in letters Optum sends to Plan members on 

behalf of Providence. Subsequent emails between Providence and Optum reveal that Providence 

was changing the denial language “based on an opinion of their legal consul [sic]”. Dkt. 135-3 

at 18 (Bates Number PHP006314). Thus, Optum had a “significant relationship to [Providence] 

and [Providence’s] involvement in the transaction that is the subject of legal services,” and 

Optum had a “reasonable need to know about the content of the communications.” See Sexton, 

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at 487; ASU Students, 2007 WL 2725252, at *3. Accordingly, the Court concludes that because 

Optum was acting as Providence’s agent, Providence did not waive the attorney-client privilege 

when it forwarded the email from its counsel to Optum.

CONCLUSION

Plaintiffs’ Motion to Compel (Dkt. 134) is GRANTED IN PART, as described on 

pages 26-30 of this Opinion and Order.

IT IS SO ORDERED.

DATED this 24th day of March, 2016.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge

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