CHERYL RAMPTON v. ANTHEM BLUE CROSS LIFE AND HEALTH INS CO (2024)

ORDER GRANTING PLAINTIFF'S MOTION FOR DETERMINATION OF THE STANDARD OF REVIEW

Rampton's motion for determination of the standard of review of Anthem's denial of ERISA benefits is GRANTED. The standard of review by which Anthem's denial of benefits will be evaluated is de novo. This order assumes the reader's familiarity with the factual allegations, the relevant law, and the parties' arguments.

The default standard of review in a case challenging the denial of ERISA benefits is de novo. Rampton brings suit under ERISA's civil enforcement provision, 29 U.S.C. § 1132(a)(1)(B), which allows a claimant to recover benefits due under an ERISA plan. (See Compl. ¶¶ 22–28.) “[A] denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) (emphasis omitted). Under de novo review, “a court does not give deference to an insurer's determination to deny benefits.” Andrew C. v. Oracle Am. Inc. Flexible Benefit Plan, 474 F. Supp. 3d 1066, 1068 (N.D. Cal. 2020); see also Murphy v. Cal. Physicians Serv., 213 F. Supp. 3d 1238, 1243 (N.D. Cal. 2016) (“De novo review means that the court ‘considers the matter anew, as if no decision had been rendered.’ ” (quoting Dawson v. Marshall, 561 F.3d 930, 932–33 (9th Cir. 2009))). By contrast, the abuse of discretion standard is deferential, and “a plan administrator's decision will not be disturbed if reasonable.” Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 929 (9th Cir. 2012) (internal quotation marks and citation omitted); see also Day v. AT&T Disability Income Plan, 698 F.3d 1091, 1096 (9th Cir. 2012) (“ERISA plan administrators abuse their discretion if they render decisions without any explanation, construe provisions of the plan in a way that conflicts with the plain language of the plan or rely on clearly erroneous findings of fact.” (cleaned up)).

“[F]or a plan to alter the standard of review from the default of de novo to the more lenient abuse of discretion, the plan must unambiguously provide discretion to the administrator.” Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc). However, the Court need not reach whether the plan in this case conferred such discretion, “because any provision to that effect would be void under” California Insurance Code § 10110.6. Nagy v. Grp. Long Term Disability Plan for Emps. of Oracle Am., Inc., 183 F. Supp. 3d 1015, 1026 (N.D. Cal. 2016), aff'd, 739 F. App'x 366 (9th Cir. 2018); see also Orzechowski v. Boeing Co. Non-Union Long-Term Disability Plan, Plan No. 625, 856 F.3d 686, 692 (9th Cir. 2017) (“[I]f any discretionary provision is covered by the statute, ‘the courts shall treat that provision as void and unenforceable.’ ” (quoting Cal. Ins. Code § 10110.6(g))).

Anthem does not contest this legal conclusion in its briefing. Instead, Anthem expresses concern that a ruling on the standard of review would constitute an advisory opinion. That concern is unfounded. There is undeniably an active case or controversy concerning the denial of ERISA benefits here, on which the parties are to begin briefing the merits shortly. In similar cases, courts routinely determine the standard of review as a threshold matter prior to consideration of the merits. See, e.g., Andrew C., 474 F. Supp. 3d at 1068; Murphy, 213 F. Supp. 3d at 1240–41, 1248; Englert v. Prudential Ins. Co. of Am., No. 15-CV-04814-HSG, 2017 WL 1133380, at *1–*2 (N.D. Cal. Mar. 27, 2017); Hirschkron v. Principal Life Ins. Co., 141 F. Supp. 3d 1028, 1031–32 (N.D. Cal. 2015).

Nor does Rampton's waiver theory of liability obviate the need to determine the standard of review, as Anthem contends. Anthem argues that this is an unusual ERISA case because, in Anthem's view, the insurance policy at issue never went into effect due to the insured's failure to submit required evidence of insurability, which would have disclosed that he was terminally ill when he applied for the policy. (Opp. at 2–3.) Rampton contends, on the other hand, that Anthem waived this requirement when it “accepted premium payments with knowledge that the insured did not meet certain requirements of the insurance policy.” Salyers v. Metro. Life Ins. Co., 871 F.3d 934, 938 (9th Cir. 2017). (Reply at 5.) Rampton's reliance on this waiver theory does not alter the standard of review. Rampton's suit still seeks to “recover benefits due” under the terms of an ERISA plan, 29 U.S.C. § 1132(a)(1)(B), by challenging Anthem's determination that the policy never went into effect. In cases asserting a waiver theory of liability, just like in other ERISA cases, the Court must still decide whether the insurer's denial of benefits should be reviewed de novo or for abuse of discretion. See Schonbak v. Minnesota Life, No. 16-CV-0295 DMS (JMA), 2017 WL 10591660, at *2–*3 (S.D. Cal. Dec. 28, 2017) (determining standard of review for ERISA claim where plaintiff relied on waiver theory); see also Yale v. Sun Life Assur. Co. of Canada, No. 1:12-CV-01429-AWISAB, 2013 WL 5923073, at *2–*3, *10–*11 (E.D. Cal. Oct. 31, 2013) (same). In this case, Anthem's denial will be reviewed under a de novo standard.

Anthem's sur-reply (Dkt. No. 37, Ex. A) contains a request to compel discovery and/or for discovery sanctions that would preclude Rampton's waiver theory of liability. Any discovery motion must be filed according to Magistrate Judge Illman's procedures. Anthem's sur-reply also references a potential request to change the case schedule, depending on the outcome of its discovery motion. A motion for a change to the case schedule must be filed pursuant to Local Rule 6, and should address the parties' diligence in attempting to resolve these issues within the case schedule previously set. Though the Court understands Anthem's concerns, the Court cannot entertain motions raised in the sur-reply briefing for a different motion.

IT IS SO ORDERED.

RITA F. LIN United States District Judge