United States District Court, N.D. California
ORDER DENYING MOTION TO DISMISS FIRST AMENDED
JEFFREY S. WHITE, JUDGE
before the Court is the motion filed by Defendant Kaiser
Foundation Health Plan (“Kaiser”) to dismiss
Plaintiff Ian Moura's first amended complaint. The Court
finds the motion suitable for disposition without oral
argument and therefore VACATES the hearing set for April 13,
2018. See N.D. Civ. L.R. 7-1(b). Having carefully
reviewed the parties' papers, considered their arguments
and the relevant legal authority, the Court hereby DENIES
Kaiser's motion to dismiss.
brings this action for breach of the Employee Retirement
Income Security Act of 1974 (“ERISA”) on behalf
of himself and all other similarly situated. Plaintiff is a
twenty-nine year old man who has suffered with anorexia
nervosa. (Dkt No. 35, First Amended Complaint
(“FAC”) ¶ 1.) Plaintiff alleges his claim
for treatment for his eating disorder was wrongfully denied
amd that Kaiser engages in a “pattern and practice of
behavior which results in violation of plan terms, violation
of ERISA and its implementing regulations, and violation of
the California Mental Health Parity Act and the Federal
Mental Health Parity Act.” (Id. ¶ 2.)
Court granted Kaiser's motion to dismiss the original
complaint on the basis that Plaintiff had failed to allege
that he had exhausted his administrative remedies for a
benefits claim. The Court further found that to the extent
Plaintiff may seek some other remedy, the Court did not find
leave to amend to be futile, and leave was granted.
Subsequently, Plaintiff filed an amended complaint which
omits reference to his claims for benefits pursuant to 29
U.S.C. Section 1132(a)(1)(B) and retains only a claim
pursuant to 29 U.S.C. Section 1132(a)(3) for breach of
fiduciary duty against the plan administrators. (Id.
at ¶ 77.) Plaintiff, on behalf of himself and other
similarly situated, alleges that Kaiser's pattern and
practice of treatment for eating disorders violates ERISA and
the California and Federal Health Parity Acts. Kaiser now
moves to dismiss the first amended complaint.
Court shall address additional relevant facts in the
remainder of its order.
Legal Standard for Motion to Dismiss.
motion to dismiss is proper under Federal Rule of Civil
Procedure 12(b)(6) where the pleadings fail to state a claim
upon which relief can be granted. The Court's
“inquiry is limited to the allegations in the
complaint, which are accepted as true and construed in the
light most favorable to the plaintiff.” Lazy Y
Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
Even under the liberal pleading standard of Federal Rule of
Civil Procedure 8(a)(2), “a plaintiff's obligation
to provide the ‘grounds' of his
‘entitle[ment] to relief' requires more than labels
and conclusions, and a formulaic recitation of the elements
of a cause of action will not do.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing
Papasan v. Allain, 478 U.S. 265, 286 (1986)).
to Twombly, a plaintiff must not merely allege
conduct that is conceivable but must instead allege
“enough facts to state a claim to relief that is
plausible on its face.” Id. at 570. “A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. __, 129
S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at
556). If the allegations are insufficient to state a claim, a
court should grant leave to amend, unless amendment would be
futile. See, e.g., Reddy v. Litton Indus., Inc., 912
F.2d 291, 296 (9th Cir. 1990); Cook, Perkiss & Liehe,
Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242,
246-47 (9th Cir. 1990).
general rule, “a district court may not consider any
material beyond the pleadings in ruling on a Rule 12(b)(6)
motion.” Branch v. Tunnell, 14 F.3d 449, 453
(9th Cir. 1994), overruled on other grounds, Galbraith v.
County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002)
(citation omitted). However, documents subject to judicial
notice may be considered on a motion to dismiss. In doing so,
the Court does not convert a motion to dismiss to one for
summary judgment. See Mack v. South Bay Beer
Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986),
overruled on other grounds by Astoria Fed. Sav. &
Loan Ass'n v. Solimino, 501 U.S. 104 (1991). The
Court may review matters that are in the public record,
including pleadings, orders and other papers filed in court.
Motion to Dismiss Breach of Fiduciary Duty Claim.
Plaintiff's original complaint which failed to allege a
claim for benefits based on Plaintiff's admitted failure
to exhaust his administrative remedies, Plaintiff's
amended complaint alleges only a breach of fiduciary duty
under ERISA. Although as general rule a plan participant must
exhaust such remedies prior to filing a legal action,
“exhaustion of internal dispute procedures is not
required where the issue is whether a violation of the
terms of the statute has occurred. Fujikawa v.
Gushiken, 823 F.2d 1341, 1345 (9th Cir. 1987) (emphasis
added). Accordingly, where, as in this case, “the
participant's claim rests on an allegation of breach of
fiduciary duty, the exhaustion requirement is
inapplicable.” Rucker v. Pac. FM, Inc., 806
F.Supp. 1453, 1460 (N.D. Cal. 1992).
Court is asked to consider “whether exhaustion of
internal remedies is a prerequisite to a court's
consideration of an ERISA issue.” See Graphic
Communications Union District Council v. GCIU-Employer
Retirement Benefit Plan, 917 F.2d 1184, 1187 (9th Cir.
1990). “[F]ederal courts should usually require that
parties seeking a review of a decision by an employee benefit
plan's administrator first seek review of that decision
from the plan's trustees.” Id. (citing
Amato v. Bernard, 618 F.2d 559, 567-68 (9th Cir.
1980)). However, “such exhaustion was not required, . .