Aetna Denied Appeal of Class Certified Over Disability Clawbacks

Aetna Life Insurance Co. waited too long to seek permission to appeal an order clarifying the scope of the class certified in a lawsuit alleging the company illegally sought to recoup disability payments out of personal injury settlements, a federal appeals court ruled Wednesday.

Aetna should have filed its petition within fourteen days of a class certification order issued in May 2022, said Judge D. Brooks Smith, writing for a three-judge panel of the US Court of Appeals for the Third Circuit.

Instead, Aetna sought permission to appeal a November 2022 order by the district court revised the scope of a class action certified in the previous order.

“The changes to the class definition were minor, and their practical effect on the class will be, at most, limited. Nor did the District Court alter its analysis to conform with any intervening authority,” Smith wrote in appeals court’s opinion.

Modifying a class certification order triggers a new 14-day petition period “only when the modified order materially alters the original order granting (or denying) class certification,” he wrote.

The district court’s second order revised the class definition to include claims that arose between Aug. 8, 2013, and Nov. 30, 2017; individuals who enrolled in a disability benefits plan “insured and administered” by Aetna; and individuals covered by plans that didn’t identify personal injury recoveries as a potential source of recoupment for Aetna’s disability payments, the opinion said.

While awaiting a decision from the appeals court, the parties recently told the district court they were working on a settlement.

The plaintiff who brought the original lawsuit, Joanna Wolff, was covered by an Aetna disability plan when she was temporarily disabled in a car accident. Aetna paid her over $50,000 in benefits. When she later sued and settled with the other driver, Aetna sought money from her settlement as reimbursement for the benefits it paid.

Wolff alleged Aetna’s demand for reimbursement and others like it are illegal because they aren’t authorized by the terms of the company’s standard long-term disability insurance policy.

Wolff’s attorney, Charles Kannebecker, posited in oral arguments that Aetna wanted “another bite of at the apple” of the May 2022 class certification order.

Aetna lost its bid earlier this year to pause the litigation in the lower court, when Judge Matthew Brann of the US District Court for the Middle District of Pennsylvania concluded the appeals court wasn’t likely to consider the petition. The appeals court in May denied Aetna’s motion to stay proceedings in the district court.

Aetna is represented by Elliott Greenleaf PC.

The case is Wolff v. Aetna Life Insurance Co., 3d Cir., No. 22-08056, 8/9/23.