Ninth Circuit Ruling Substantially Resurrects Landmark Mental Health Case for Plaintiffs

The Ninth Circuit Court of Appeals has, for the second time, vacated its previous ruling in the landmark Wit v. United Behavioral Health (UBH) case and issued a new decision that includes significant improvements for the more than 60,000 plaintiffs. The decision comes after Zuckerman Spaeder and its co-counsel filed a motion for reconsideration and en banc review of the panel’s January ruling. 

“This is a far better opinion that addresses many of our major concerns and, importantly, opens the door for us to deliver even more for the plaintiffs,” said Zuckerman Spaeder partner D. Brian Hufford. “Critically, the panel upheld the class certifications on the breach of fiduciary duty claim and refused to ‘disturb’ the finding that UBH prioritized its own financial interests in developing coverage guidelines. With the case now remanded back to the lower court, we are in a strong position to sustain much of the very substantial original relief order.”

In 2019, the U.S. District Court for the Northern District of California found that UBH used overly restrictive internal criteria in denying mental health and substance use disorder coverage claims for tens of thousands of patients, thereby violating its fiduciary obligations under the Employee Retirement Income Security Act (ERISA). It then ordered UBH to reprocess all claims in question and reform its claims handling under the 10-year watch of a Special Master. 

Upon appeal, that decision was largely overturned by the Ninth Circuit. After plaintiffs petitioned for rehearing and en banc review, the panel withdrew its opinion and issued a new opinion in January. Zuckerman Spaeder, along with its co-counsel at Stris & Maher, petitioned for additional reconsideration, which gained tremendous amicus support, including from the U.S. Department of Labor, nearly 20 states, the American Medical Association and dozens of other groups. Yesterday’s ruling granted further reconsideration and substantially improved plaintiffs’ recovery.  

Zuckerman Spaeder partner Caroline Reynolds explained, “The Ninth Circuit’s original ruling was shocking and very nearly gutted the entirety of the lower court’s decision. It is remarkable and commendable that the panel has now twice reconsidered its rulings and has substantially resurrected a generationally important mental health ruling. The fight is far from over, but this decision unquestionably offers new hope for millions of Americans in need of mental health and addiction treatment.”

The case is being led by D. Brian Hufford and Caroline Reynolds, along with Zuckerman Spaeder attorneys Jason S. Cowart, Adam B. Abelson, and David A. Reiser. Co-counsel are Meiram Bendat of Psych-Appeal, Inc., and Peter Stris, Rachana A. Pathak, Dana E. Berkowitz, John Stokes, and Colleen R. Smith from Stris & Maher LLP.