Zuckerman Spaeder Petitions Ninth Circuit for “Desperately Needed” En Banc Review of Panel Decision in Wit v. United Behavioral Health

Caroline E. Reynolds
Caroline E. Reynolds
Adam Abelson
Adam Abelson
Jason S. Cowart
Jason S. Cowart
D. Brian Hufford
D. Brian Hufford
David A. Reiser
David A. Reiser

On behalf of more than 60,000 plaintiffs, Zuckerman Spaeder attorneys, along with co-counsel, have petitioned the Ninth Circuit Court of Appeals for en banc review in Wit v. United Behavioral Health (UBH). The petition comes after a three-judge panel in March issued a seven-page ruling that overturned the landmark March 2019 District Court decision.

The 2019 decision found that UBH intentionally used self-serving, overly restrictive internal criteria in denying mental health and substance use disorder coverage claims for tens of thousands of patients, and that, in doing so, UBH violated its fiduciary obligations under the Employee Retirement Income Security Act (ERISA).

“If allowed to stand, the Ninth Circuit’s ruling will reverse years of legal progress towards mental health parity and be devastating for millions of Americans seeking mental health and addiction treatment,” said Zuckerman Spaeder partner Caroline E. Reynolds. “It will encourage UBH and every other insurer to treat the terms of American workers’ health plans as mere suggestions that can be overridden at the insurer’s whim. As this and other cases have already proven, that means coverage decisions will end up being driven by accountants rather than medical professionals.”

“Beyond the huge societal impact of this ruling, there are unambiguous and compelling legal reasons for a rehearing,” said Zuckerman Spaeder partner Adam B. Abelson. “The panel’s decision essentially nullified the laws of four states by failing to consider one of the cases’ three certified classes and also ignored well-established precedent regarding insurer conflicts of interest. Further, the core holding regarding UBH’s discretion to develop and use its own coverage guidelines is based on a fundamental misunderstanding of how health plans operate.”

Joining the effort to file the petition was Peter Stris of Stris & Maher LLP, who has argued ten cases before the U.S. Supreme Court, including nearly half of the Court's ERISA cases over the last two decades. "There hasn't been a more important ERISA case in recent memory, and unfortunately, the panel got this one wrong," said Mr. Stris. "If not corrected, it will undermine core ERISA protections across the country."

In the petition, the plaintiffs outlined three reasons why rehearing is required and urgently needed. 

First, the Ninth Circuit ruling omitted, and seemingly failed to consider, the “State Mandate Class” – one of three classes certified by the district court. In reversing the district court’s decision, the appeals panel stated that UBH had discretion under its plans to use the guidelines that were being contested by plaintiffs. However, the state laws governing the ERISA plans of the State Mandate Class members explicitly bar such discretion – forbidding any guidelines to be used other than those specifically prescribed by the statutes. 

Second, the ruling’s erroneous conclusion that UBH has discretion to apply its own guidelines over standards set by the medical community undermines ERISA in ways that will severely harm mental health and addiction treatment in this country. The panel’s decision, which follows UBH’s entirely misleading argument about the way health plans work, means that the insurer – and virtually every other for-profit insurer – can simply ignore the actual terms of their plans in making coverage decisions.

Third, the ruling disregarded binding Ninth Circuit and Supreme Court precedent regarding ERISA plan administrators’ conflicts of interest. The panel deferred to UBH’s guidelines without scrutinizing whether they were consistent with the plan terms they purported to interpret, despite the District Court’s unchallenged factual findings that UBH’s deep conflict of interest actually infected the guidelines. 

The petition was filed by Zuckerman Spaeder partners Ms. Reynolds, Mr. Abelson, Jason S. Cowart, D. Brian Hufford, and David A. Reiser, along with co-counsel Meiram Bendat of Psych-Appeal, Inc., and Mr. Stris from Stris & Maher LLP.

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Kalie Walrath
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