United States District Court, N.D. California
ORDER DENYING MOTION TO DISMISS THE FIRST AMENDED
COMPLAINT'S SECOND CLAIM OF RELIEF RE: DKT. NO.
WILLIAM H. ORRICK, UNITED STATES DISTRICT JUDGE
Life Insurance Company (“Aetna”) denied Michala
Kazda insurance coverage for liposuction to treat her
advanced lipedema because it found the procedure was
“cosmetic” and not medically necessary. Kazda
filed suit under the Employee Retirement Income Security Act
(“ERISA”), seeking recovery on behalf of herself
and others who have had their claims erroneously denied. I
previously dismissed her original complaint because she did
not sufficiently plead a claim under 29 U.S.C. § 1132
(a)(1)(B) for denial of benefits and under 29 U.S.C. §
1132 (a)(3) for breach of fiduciary duty. See Order
Granting Motion to Dismiss Without Prejudice
(“Order”) [Dkt. No. 30]. Now in her First Amended
Complaint (“FAC”), Kazda sufficiently pleads that
Aetna, as claims administrator, breached its fiduciary duty
by implementing internal policy guidelines inconsistent with
her plan, and using it to systematically deny insurance
claims like hers. The declaratory and injunctive relief she
seeks are not duplicative of her Section 1132(a)(1)(B) claim.
Aetna's motion to dismiss Kazda's Section 1132(a)(3)
claim in the FAC is DENIED.
is a plan participant in a health benefit plan governed by
ERISA, issued and administered by Aetna, and sponsored by her
husband's employer, Ipsos America, Inc. FAC [Dkt. No. 34]
¶¶ 21, 25. Aetna acts as the claims administrator
of her plan. Id. ¶ 26. She alleges that Aetna
health plans generally “provide surgical benefits to
treat illness and injury, including functional problems that
result from illness or injury.” Id. ¶ 16.
Aetna plans also “exclude from coverage those medical
services that Aetna considers ‘cosmetic, '”
defined as “services, including surgeries, the purpose
of which is to ‘alter, improve or enhance the shape or
appearance of the body whether or not for psychological or
emotional reasons[.]'” Id. ¶ 17. In
particular, she contends that her Aetna health plan covers
“[s]urgery needed to improve a significant functional
impairment [sic] of a body part.” Id. ¶
29. Her plan defines cosmetic services as “[s]ervices
or supplies that alter, improve or enhance appearance.”
Id. ¶ 30.
was diagnosed with Stage 3 lipedema, a condition caused by
abnormal buildup of adipose (fat) tissue in the lower body
and sometimes in the arms. FAC ¶¶ 2, 31. As
lipedema progresses, it causes pain, mobility problems, joint
disorders, and other physical problems that prevent patients
from engaging in daily activities. Id. ¶ 11.
She alleges that the “only effective treatment for the
pain and immobility caused by lipedema is a form of surgery
called tumescent liposuction.” Id. ¶ 12.
sought coverage for tumescent liposuction to treat her
advanced lipedema, a procedure that removes excess fat tissue
to allow patients to gain mobility, reduce or eliminate pain,
and lead a productive life. FAC ¶¶ 12, 33. Her
medical provider submitted this information to Aetna, setting
forth her diagnosis and proposed treatment. Id.
¶ 33. On April 25, 2018, Aetna sent her a letter denying
coverage for the proposed surgery. Id. ¶ 34.
denied coverage by referring to its Clinical Policy Bulletins
(“CPBs”), internal written directives guiding
Aetna's coverage positions with respect to certain
medical treatments. FAC ¶ 18. Aetna's denial letter
states the following:
We received information about your condition and
circumstances. We used the Clinical Policy Bulletin (CPB):
Cosmetic Surgery. Based on CPB criteria and the information
we have, we are denying coverage for this procedure. This
procedure is meant to improve appearance, not to correct a
physical problem that affects your daily activities.
Id. ¶ 34. The denial letter refers to its CPB
0031 on cosmetic surgery, which provides the following:
Aetna plans exclude coverage of cosmetic surgery that is not
medically necessary, but generally provide coverage when the
surgery is needed to improve the functioning of a body part
or otherwise medically necessary even if the surgery also
improves or changes the appearance of a portion of the body.
Id. ¶ 19. According to Kazda, Aetna has
followed a consistent practice of denying claims for
tumescent liposuction to treat advanced lipedema on the basis
that the treatment is “cosmetic.” Id.
¶ 23. She contends that tumescent liposuction is
medically necessary because the surgery treats symptoms of
advanced lipedema, such as pain and mobility problems.
Id. ¶ 12. The surgery is accordingly not
“cosmetic” because it addresses these functional
other denial bases were given in Aetna's initial denial
letter, and Kazda appealed this decision. FAC ¶ 35. On
October 29, 2018, Aetna denied her appeal by relying on CPB
0211. Id. ¶ 36. Under CPB 0211, Aetna considers
“abdominoplasty, suction lipectomy, or
lipoabdominoplasty” as “cosmetic”
procedures. Id. ¶ 21. Aetna stated that it was
“upholding the previous decision to deny the request
for suction-assisted lipectomy” because “[it]
considers this procedure cosmetic per the above reference
guidelines.” Id. ¶ 36.
9, 2019, Kazda filed this action against Aetna on behalf of
herself and a putative class, alleging that Aetna violated
ERISA because it (i) erroneously denied coverage for surgical
treatment for lipedema under 29 U.S.C. § 1132 (a)(1)(B)
and (ii) breached its fiduciary duty under 29 U.S.C. §
1132 (a)(3). See Complaint [Dkt. No. 1]. On
September 11, 2019, I granted Aetna's motion to dismiss
both claims for failure to state a claim and gave Kazda leave
to amend her complaint. See Order. On September 26,
2019, she filed her First Amended Complaint, bringing the
same claims. Aetna now moves to dismiss her second claim for
breach of fiduciary duty under Section 1132(a)(3) for failure
to state a claim. See Motion to Dismiss First
Amended Complaint's Second Claim for Relief (“MTD
FAC”) [Dkt. No. 35].
Federal Rule of Civil Procedure 12(b)(6), a district court
must dismiss a complaint if it fails to state a claim upon
which relief can be granted. To survive a Rule 12(b)(6)
motion to dismiss, the plaintiff must allege “enough
facts to state a claim to relief that is plausible on its
face.” See Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). A claim is facially plausible when the
plaintiff pleads facts that “allow the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” See Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (citation omitted). There must be
“more than a sheer possibility that a defendant has
acted unlawfully.” Id. While courts do not
require “heightened fact pleading of specifics, ”
a plaintiff must allege facts sufficient to “raise a
right to relief above the speculative level.” See
Twombly, 550 U.S. at 555, 570.
deciding whether the plaintiff has stated a claim upon which
relief can be granted, the court accepts the plaintiff's
allegations as true and draws all reasonable inferences in
favor of the plaintiff. See Usher v. City of Los
Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the
court is not required to accept as true “allegations
that are merely conclusory, unwarranted deductions of ...