Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Friedman v. AARP, Inc.

United States Court of Appeals, Ninth Circuit

May 3, 2017

Jerald Friedman, Individually and on Behalf of All Others Similarly Situated, Plaintiff-Appellant,
v.
AARP, Inc.; AARP Services, Inc; AARP Insurance Plan; UnitedHealth Group, Inc.; UnitedHealth Care InsuranceCompany, Defendants-Appellees.

          Argued and Submitted October 19, 2016 Pasadena, California

          Appeal from the United States District Court for the Central District of California No. 2:14-cv-00034-DDP-PLA, Dean D. Pregerson, District Judge, Presiding

          Andrew S. Love (argued) and Susan K. Alexander, Robbins Geller Rudman & Dowd LLP, San Francisco, California; Kevin K. Green, Frank J. Janecek, Jr., and Christopher Collins, Robbins Geller Rudman & Dowd LLP, San Diego, California; Stuart A. Davidson, Mark J. Dearman, and Christopher C. Martins, Robbins Geller Rudman & Dowd LLP, Boca Raton, Florida; Sean K. Collins, Boston, Massachusetts; Michael F. Ghozland, Ghozland Law Firm, Los Angeles, California; for Plaintiff-Appellant.

          Brian D. Boyle (argued) and Meaghan VerGow, O'Melveny & Myers LLP, Washington, D.C.; Christopher B. Craig, Los Angeles, California; for Defendants-Appellees UnitedHealth Group, Inc. and United HealthCare Insurance Company.

          Douglas E. Winter, Bryan Cave LLP, Washington, D.C.; Jeffrey S. Russell and Darci F. Madden, Bryan Cave LLP, St. Louis, Missouri; for Defendants-Appellees AARP, Inc., AARP Services, Inc., and AARP Insurance Plan.

          Before: Richard C. Tallman, Barrington D. Parker, Jr. [*] and Morgan Christen, Circuit Judges.

          SUMMARY [**]

         California Insurance Law

         The panel reversed the district court's Fed.R.Civ.P. 12(b)(6) dismissal of a complaint brought by a plaintiff Medicare beneficiary who purchased private supplemental health insurance through a group Medigap policy, alleging that AARP Insurance Plan transacted insurance without a license in violation of the California Insurance Code.

         California's Unfair Competition Law ("UCL") broadly prohibits "unfair competition, " defined as "any unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200.

         The panel held that plaintiff stated a plausible claim at the motion to dismiss stage that AARP "solicits" insurance without a license, and, as a consequence, committed an "unlawful" act in violation of the UCL.

         The panel also held that plaintiff adequately alleged that defendants violated the "fraudulent" and "unfair" prongs of the UCL. The panel concluded that plaintiff plausibly alleged that members of the public were likely to be deceived where AARP allegedly misleadingly told its members that their payment only covered AARP's expenses and the premium for

          UnitedHealth's Medigap coverage, but in reality, the payments included an imbedded commission which was not an expense payment.

         The panel remanded for further proceedings.

          OPINION

          PARKER, Circuit Judge:

         Plaintiff Jerald Friedman, a Medicare beneficiary, purchased private supplemental health insurance through a group Medigap policy held by Defendant AARP Insurance Plan ("AARP"), and underwritten and sold by Defendant UnitedHealth Care Insurance Company ("UnitedHealth"). Medigap policies offer supplemental private health insurance to cover costs not covered by Medicare. Friedman filed this putative class action alleging, in essence, that AARP, through its arrangement with Medigap, transacts insurance without a license in violation of the California Insurance Code. Friedman sought relief pursuant to California's Unfair Competition Law and the common law. The district court granted Defendants' motion under Rule 12(b)(6) and dismissed the complaint with prejudice. We reverse.

         I

         AARP, a not-for-profit corporation formerly known as the American Association of Retired Persons, is a dominant figure in the market for Medigap health insurance. See Vencor Inc. v. Nat'l States Ins. Co., 303 F.3d 1024, 1026 (9th Cir. 2002) (describing Medigap health insurance).[1]Approximately one-third of all Medigap policyholders nationwide are enrolled in AARP's program, more than three times AARP's closest competitor. AARP does not itself provide insurance coverage, nor is it licensed to do so. Rather, it is the group policyholder for Medigap coverage underwritten and sold by UnitedHealth, the country's largest health insurer. In 2011, Friedman purchased UnitedHealth Medigap coverage through AARP's group policy.

         AARP and UnitedHealth's Medigap arrangement is governed by a 1997 joint venture agreement (the "AARP-United Agreement" or the "Agreement"). The Agreement requires that individuals wishing to purchase Medigap coverage from UnitedHealth do so through AARP's group policy. The Agreement also requires that AARP administer key aspects of the program, which involves two principal tasks.

         First, AARP solicits its members' enrollment in the Medigap program. An agreement between AARP and its subsidiary trust, Defendant AARP Insurance Plan (the "AARP Trust") contractually obligates AARP to "solicit member participation in the [Medigap] Plan by direct mail and otherwise." ER 299.[2] AARP discharges this duty through television commercials, its website, and other forms of advertisements. For example, a website owned by Defendant AARP Services, Inc., a for-profit, wholly-owned subsidiary of AARP, explained why AARP members should "get an AARP Medicare Supplement Plan." ER 276. It emphasized that: (i) AARP Medicare Supplement Plans are the "only Medicare Supplement plans endorsed by AARP"; (ii) the plans are "[i]nsured by UnitedHealthcare Insurance Company, the insurer serving the most Medicare supplement enrollees nation wide"; and (iii) there is a "94% Customer Satisfaction Rate of those ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.