Recent Federal Cases Applying the State and Federal Mental Health Parity Acts: What Do They All Mean?

Posted in: Case Updates, Class Actions, Health Insurance, Legislation November 18, 2014

The Federal Mental Health Parity and Addiction Equity Act (“MH Parity Act”) requires, at a minimum, that the financial requirements and treatment limitations for mental health benefits set by group health plans and health insurance carriers be no more restrictive than those provided for non-mental health medical benefits.  The MH Parity Act was originally signed into law by President Bill Clinton in 1996 and amended the Employee Retirement Income Security Act (ERISA) and Public Health Service Act and Internal Revenue Code in 2008.  Now, the MH Parity Act is at issue in an increasing number of cases and has been addressed several times by the federal courts in the Ninth Circuit Court of Appeals.

Read More
0

California Courts Deal Another Blow To Plaintiffs' Efforts To Bring Class Actions Based on Insurer and Agents Misrepresentations

Posted in: Class Actions, Health Insurance, Life Insurance July 28, 2011

The California Court of Appeals for the Second District has upheld a trial court finding that may effectively limit and discourage attorneys from filing class actions based on misrepresentations in the sale of insurance policies through agents.  In Fairbanks et al. v. Farmers New World Life Ins. Co. et al., __ Cal. App. 3d __ (2011), the court of appeal affirmed the trial court’s denial of class certification on the basis that common issues did not prevail, and that the issue was incapable of common proof.  The case involved Farmers’ marketing and sale of universal life insurance policies.  It was alleged that Farmers created a common marketing strategy with respect to the marketing and sale of such policies, and that Farmers instructed its agents to implement such strategy by using Farmers’ marketing materials in the agents’ sales pitch to prospective customers.  After a lengthy discussion of the types of life insurance policies at issue, the appellate court focused on the actual narrow bases on which Plaintiffs sought relief, which was based on a single unified theory relating to fraudulent misrepresentations and concealments made by agents during the marketing of the policies to the individual prospective customers.  The court determined that…

Read More
4

Court of Appeals Rejects Blue Shield's Attempt to Impose a Two-Year Statute of Limitations for Bad Faith

Posted in: Class Actions, Health Insurance, Insurance Bad Faith March 01, 2011

Myrna Kawakita was set to undergo gastric bypass surgery, and her health insurer, Blue Shield of California, initially authorized the procedure.  However, rather than paying for the procedure, Blue Shield rescinded Kawakita’s health insurance policy, asserting that her application contained misrepresentations about her height and weight. Kawakita purchased her health insurance policy through Blue Shield’s alleged agent, Steven Stendal, and claimed that Stendal was responsible for any misstatements on her application.  Blue Shield rescinded Kawakita’s policy in August 2006, and she filed her lawsuit in July 2009, asserting causes of action for breach of contract, tortious breach on the implied covenant of good faith and fair dealing and declaratory relief. Blue Shield filed a motion for summary adjudication, arguing that the bad faith claim was barred by the two-year statute of limitations imposed by California Code of Civil Procedure Section 339 and Love v. Fire Insurance Exchange, 221 Cal. App. 3d 1136, 1144 n.4 (1990).  The trial court rejected Blue Shield’s motion, and with Blue Shield of California Life & Health Insurance Company v. Superior Court (Kawakita), No. B225632, Blue Shield sought a peremptory writ of mandate directing the trial court to reverse its order.  While the California Court of…

Read More
2

U.S. Supreme Court Strikes Down State Limitations Through Use of Federal Class Actions

Posted in: Case Updates, Class Actions, News April 02, 2010

In a significant blow to business but a boon for consumers, the Supreme Court ruled yesterday that certain class actions barred or limited by state laws may proceed in federal courts. In Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Company, __ U.S. __ (March 31, 2010) a 5-4 majority, led by Justice Antonin Scalia, the Supreme Court decided that Rule 23 controls when a class-action lawsuit can be filed in federal court, even when such a case in federal court will be decided based on state law. New York’s law and Rule 23, the opinion said, are directly contradictory: both seek to control whether this class-action lawsuit could be filed at all in federal court, but Rule 23 prevails. The Court ruled that if Rule 23’s specific terms are met on who may file a class-action lawsuit, the case may proceed in federal court. The result: Rule 23 does exactly what it says – it empowers a federal court to certify a class in each and every case where the Rule’s criteria are met. Shady Grove Orthopedic Associates (“Shady Grove”) filed a class action lawsuit in federal court, arguing that Allstate Insurance Company (“Allstate”) violated New York law in…

Read More
0

Tumult in California UCL Class Action Cases: Will the Supreme Court Step in?

Posted in: Case Updates, Class Actions, News, Unfair Business Practices/Unfair Competition February 21, 2010

Late last year the Fourth Appellate District of the California Court of Appeal issued its decision in Zhang v. Superior Court, 178 Cal. App. 4th 1081 (2009).  In that case, the court identified the issue presented “as whether fraudulent conduct by an insurer, which is connected with conduct that would violate Insurance Code § 790.03 et seq., sometimes referred to as the ‘Unfair Insurance Practices Act’—can also give rise to a private civil cause of action under the Unfair Competition Law (UCL), Business and Professions Code § 17200 et seq.”  The court held that it did.  This case will thus address whether insurance companies enjoy any special exemption from UCL liability.  The statement of issues on review reads: (1) Can an insured bring a cause of action against its insurer under the unfair competition law (Bus. & Prof. Code, § 17200) based on allegations that the insurer misrepresents and falsely advertises that it will promptly and properly pay covered claims when it has no intention of doing so? (2) Does Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287 bar such an action? This was a departure from Textron Financial Corp. v. National Union Fire Ins. Co., 118 Cal….

Read More
0

California Supreme Court Holds that Only the Class Representative Needs to Meet the Standing Requirements of Proposition 64 to Pursue a Representative Action

Posted in: Case Updates, Class Actions, News, Unfair Business Practices/Unfair Competition January 14, 2010

Following the passage of Proposition 64 on November 2, 2004, in order to bring a representative claim under the unfair competition law (“UCL”), a plaintiff must meet the following standing requirements: (1) establish that he or she “has suffered injury in fact and has lost money or property as a result of such unfair competition” and (2) comply with the class action requirements as set forth in California Code of Civil Procedure Section 382. Bus. & Prof. Code §§ 17203, 17204 and 17535. After the passage of Prop 64, litigants continued to debate whether only the named plaintiff or all class members had to meet the more stringent standing requirements of injury in fact and loss of money or property as a result of the alleged conduct.  In In Re Tobacco II Cases, 46 Cal. 4th 298 (2009), the California Supreme Court resolved that debate. Specifically, the Court addressed two questions: “First, who in a UCL class action must comply with Proposition 64’s standing requirements, the class representative or all unnamed class members, in order for the class action to proceed?” and “Second, what is the causation requirement for purposes of establishing standing under the UCL and in particular what is the meaning…

Read More
2

California Supreme Court Restricts the Use of Business & Professions Code Section 17200

Posted in: Case Updates, Class Actions, News, Unfair Business Practices/Unfair Competition January 14, 2010

In a pair of cases, the California Supreme Court restricted the use of California Business & Professions Code Section 17200 et seq.   One case affirmed what many expected, that Proposition 64, a 2004 voter initiative, requires plaintiffs to follow strict class-action procedures when seeking to recover under California’s unfair competition law (Bus. & Prof. Code § 17200 et seq.) which prohibits “any unlawful, unfair or fraudulent business act or practice . . . .”  Before 2004, any person could assert representative claims under the unfair competition law to obtain restitution or injunctive relief against unfair or unlawful business practices. Such claims were not required to be brought as a class action, and a plaintiff had standing to sue even without having personally suffered an injury. (See Former §§ 17203, 17204; Stop Youth Addiction, Inc. v. Lucky Stores, Inc., 17 Cal. 4th 553, 561 (1998)). In 2004, however, the California electorate passed Proposition 64, amending the unfair competition law to provide that a private plaintiff may bring a representative action under this law only if the plaintiff has “suffered injury in fact and has lost money or property as a result of such unfair competition” and “complies with Section 382…

Read More
2

The U.S Supreme Court's Iqbal Opinion to Get Congressional Airing

Posted in: Class Actions, News January 14, 2010

Ashcroft v. Iqbal, 556 U.S. ___, 129 S. Ct. 1937 (2009), the 5-month-old U.S. Supreme Court decision that has made federal pleadings standards much more stringent, will get a Capitol Hill airing on Tuesday October 27, 2009. The House Judiciary Committee is scheduled to hold the first congressional hearing on the far-reaching May ruling, which raised the pleading standard for most civil complaints, making it more difficult to keep cases from being dismissed. Iqbal was a 5 to 4 decision delivered on May 18, 2009 by Justice Kennedy held that Iqbal’s complaint failed to plead sufficient facts to state a claim for purposeful and unlawful discrimination. Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” “[D]etailed factual allegations” are not required (Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)), but the Rule does call for sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face,” Id. at 570. A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for…

Read More
0