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Eric P. v. Directors Guild of America

United States District Court, N.D. California

November 19, 2019

ERIC P., Plaintiff,
v.
DIRECTORS GUILD OF AMERICA, et al., Defendants.

          ORDER ON STANDARD OF REVIEW Re: Dkt. No. 37

          William H. Orrick United States District Judge

         Plaintiff seeks review of the Directors Guild of America-Producer Health Plan's decision denying his claim of coverage for residential mental health treatment for his daughter. The question at issue here is what standard of review - de novo or abuse of discretion - applies to my review of the Plan's denial. Plaintiff argues de novo review is appropriate, despite the discretion provided to the Trustees of the Plan and through them to the Benefits Committee under the terms of the Plan, because: (1) because the Plan documents granted deference to so many entities involved in the claim-decision process, that grant is “anything but clear and unambiguous, ” as required in the Ninth Circuit; (2) the Trust documents do not provide deferential decision-making authority over claims to the Benefits Committee that made the final decision for the Trustees; and (3) the second-level appeal denial by the Plan was untimely and, therefore, is not entitled to any deference. Defendants (the Claims Administrator and the Plan) oppose and argue that under the clear provisions of the Plan documents abuse of discretion review is required. I find that the grant to the Benefits Committee is clear and unambiguous and that the delay in decision-making did not cause plaintiff substantive harm. I will utilize the abuse of discretion standard in evaluating this case.[1]

         BACKGROUND

         Plaintiff and his dependent daughter were covered under the defendant Directors Guild of America-Producer Health Plan (“Plan”). The operative provisions of the Plan are the Summary Plan Description (SPD, Dkt. No. 37-1) and the Trust Agreement (Trust, Dkt. No. 39-4). As relevant to determining the standard of review, the SPD contains the following provisions:

The Board of Trustees shall have sole, complete and absolute discretionary authority to, among other things, make any and all findings of facts, constructions, interpretations and decisions relative to the Health Plan, as well as to interpret any provisions of the Health Plan, and to determine among conflicting claimants who is entitled to benefits under the Health Plan. The Board of Trustees shall be the sole judge of the standard of proof in all such cases which means that the Board of Trustees shall have the right to determine the sufficiency of any proof you may provide to support your claim to benefits.[2]

Dkt. 37-1, SPD at p. 86.

The Claim Administrator has full discretion to deny or grant a claim in whole or part. Such decisions shall be made in accordance with the governing Health Plan documents and, where appropriate, Health Plan provisions will be applied consistently with respect to similarly situated claimants in similar circumstances. The Claim Administrator shall have the discretion to determine which claimants are similarly situated in similar circumstances.
How and when claims are processed depends on the type of claim. All claims under the Health Plan that are required to be submitted to the Health Plan office are post-service health care claims. Most other claims under the Health Plan will also be post-service health care claims.

Id.

If the decision to deny the claim was based in whole or in part on a medical judgment, the Claim Administrator will consult with a health care professional who has experience and training in the relevant field and who was not involved in the initial determination.

Id. at 90.

The operation and administration of the Health Plan is the joint responsibility of the trustees who constitute the Board of Trustees. However, the Board of Trustees may designate in writing persons who are not trustees to carry out fiduciary or non-fiduciary duties as long as the designation complies with federal law and all applicable provisions of the Trust Agreement.
The Board of Trustees may establish such committees as the Board of Trustees in its discretion deems proper and desirable for the administration of the Health Plan. . . . Such committees may also take final action in specified areas as authorized by a duly adopted resolution of the Board of Trustees. When final action is authorized and taken as specified in Article IV of the Trust Agreement, then such action taken by a committee shall have the same binding effect as an action by the full Board of Trustees. The standing committees of the Board of Trustees are the Administrative Committee, the Benefits Committee, the Finance Committee, and the Legal and Delinquency Committee. . . . All such committees shall have the authority and responsibilities as described in Article IV, Section 9, of the Trust Agreement and as specified by the Board of Trustees by duly adopted resolution.

Id. at 106. Finally:

With respect to post-service claims, as indicated above, if a third party Claim Administrator denies your claim, you must appeal that claim to the third party Claim Administrator. If the third party Claim Administrator denies your appeal, and you have exhausted the Health Plan's claims and appeals procedure, you may request review of a post-service claim by the Benefits Committee of the Board of Trustees.
The entity reviewing a claim (whether it is a third party Claim Administrator, or the Designated Committee of the Board of Trustees) will have discretion to deny or grant the appeal in whole or part. Decisions shall be made in accordance with the governing Health Plan documents and, where appropriate, Health Plan provisions will be applied consistently with respect to similarly situated claimants in similar circumstances. The entity reviewing a claim (whether it is a third party Claim Administrator or the Designated Committee ...

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