Welcome

UnitedHealth Subsidiary Owes Millions in Fees in Coverage Suit

Jan. 6, 2022, 4:25 PM

Attorneys who battled United Behavioral Health for six years on behalf of class members wrongly denied mental health coverage claims were awarded more than $20 million in fees and costs by the Northern District of California.

The court rejected UBH’s argument that the plaintiffs obtained only a procedural victory, which doesn’t warrant the award of fees and costs, because the court remanded for reprocessing instead of awarding benefits to the class members.

“None of the cases cited by UBH establishes a bright-line rule that a plaintiff who obtains a remand order in an ERISA case rather than an award of benefits does not qualify for an award of fees and costs,” the U.S. District Court for the Northern District of California said Wednesday.

“The court has no difficulty concluding that Plaintiffs had “some success on the merits,” Judge Joseph C. Spero said. The award includes $19.6 million in fees and $1.2 million in costs.

The ruling comes more than a year after the court ordered UBH to reprocess thousands of wrongly denied mental health coverage claims.

The court in March 2019 found UBH used internal guidelines that were inconsistent with the terms of the class members’ health insurance plans in violation of the Employee Retirement Income Security Act of 1974.

In a Nov. 3, 2020, remedies order, the court said UBH “engaged in this course of conduct deliberately, to protect its bottom line.”

“To conceal its misconduct, UBH lied to state regulators and UBH executives with responsibility for drafting and implementing the guidelines deliberately attempted to mislead the court at trial in this matter,” the court said.

Psych-Appeal Inc., Zuckerman Spaeder LLP, and Maul Firm PC represent the class. Crowell & Moring LLP represents UBH.

The case is Wit v. United Behavioral Health, 2022 BL 2973, N.D. Cal., No. 14-cv-02346, 1/5/22.

To contact the reporter on this story: Peter Hayes in Washington at PHayes@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

To read more articles log in.

Learn more about a Bloomberg Law subscription.