United Behavioral Health Patients’ Coverage Fight Not Dead Yet

Patients who’ve spent more than a decade challenging United Behavioral Health’s internal guidelines for mental health coverage kept their case alive when a federal magistrate judge said they could press fiduciary disloyalty and imprudence claims.

The patients have viable claims under the Employee Retirement Income Security Act’s fiduciary duties of loyalty and prudence but not under the statutory requirement to adhere to plan terms, Magistrate Judge Joseph C. Spero said Tuesday. They can press these claims without first being required to exhaust their health plan’s internal claims procedures, Spero said.

The high-profile lawsuit says United improperly limited coverage for mental health treatments by following internal guidelines that focus too much on acute symptoms while ignoring underlying conditions. Spero ruled for the patients in a 106-page decision in 2019, concluding after a 10-day trial that United’s internal coverage guidelines are overly narrow.

On appeal, the US Court of Appeals for the Ninth Circuit largely sided with United in the course of issuing and withdrawing two opinions before publishing the August 2023 decision that rejected the patients’ claims of wrongly denied benefits under ERISA. Spero subsequently took a broad view of the issues left open for him to decide, but the Ninth Circuit rebuffed him in 2024, clarifying that the ERISA benefits claim was definitively dead.

In his latest order, issued in the US District Court for the Northern District of California, Spero determined the scope of the ERISA fiduciary breach claims left standing after this volley of opinions. According to Spero, the Ninth Circuit’s decision to uphold United’s interpretation of its plan terms is fatal to fiduciary breach claims based on a failure to follow plan terms, but not to claims of fiduciary disloyalty and imprudence based on allegations that United adopted the disputed coverage guidelines to further its own financial interest, among other allegations.

Zuckerman Spaeder LLP and Meiram Bendat of Santa Barbara, Calif., represent the patients. Crowell & Moring LLP represents United.

The case is Wit v. United Behavioral Health, 2025 BL 275736, N.D. Cal., No. 3:14-cv-02346, 8/5/25.