Homampour v. Blue Shield of California Life and Health Insurance Company, No. 3:2015cv05003 - Document 57 (N.D. Cal. 2016)

Court Description: Order Granting Motion to Dismiss Portions of Third Amended Complaint by Hon. William H. Orrick granting 49 Motion to Dismiss. (jmdS, COURT STAFF) (Filed on 12/22/2016)

Download PDF

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ARAM HOMAMPOUR, et al., Case No. 15-cv-05003-WHO Plaintiffs, 8 v. 9 10 11 BLUE SHIELD OF CALIFORNIA LIFE AND HEALTH INSURANCE COMPANY, et al., ORDER GRANTING MOTION TO DISMISS PORTIONS OF THIRD AMENDED COMPLAINT Re: Dkt. No. 49 United States District Court Northern District of California Defendants. 12 INTRODUCTION 13 14 In the Third Amended Complaint plaintiffs Homampour, Bartels, and Naka again bring 15 claims on behalf of a putative class against defendants Blue Shield Life & Health Insurance Co. 16 (“Blue Shield Life”) and California Physicians’ Service dba Blue Shield of California (“Blue 17 Shield of California”), alleging that they were denied coverage for the drug Harvoni, in violation 18 of ERISA. Defendants move to dismiss plaintiffs’ claims for injunctive relief and all claims 19 against defendant Blue Shield Life on the grounds that (1) plaintiffs’ claims for injunctive relief 20 are moot because Blue Shield of California has changed its policy to allow coverage for Harvoni 21 treatment; and (2) plaintiffs do not have standing to bring claims against defendant Blue Shield 22 Life. As before, I agree with defendants and their motion to dismiss is GRANTED, this time 23 without leave to amend. 24 BACKGROUND 25 Plaintiffs Aram Homampour, John Bartels, and Jon Naka suffer from Hepatitis C, a 26 contagious virus that attacks the liver and may cause severe liver damage, infections, liver cancer, 27 and death. Third Amended Complaint (“TAC”) ¶ 5 (Dkt. No. 46). Harvoni is a prescription drug 28 used to treat Hepatitis C. Id. ¶ 7. It was approved by the FDA on October 10, 2014 and in clinical 1 studies has cured 95-99 percent of patients after eight to twelve weeks of treatment with minimal 2 side effects. Id. The cost of a full 12 weeks of treatment of Harvoni is approximately $99,000. 3 Id. Viekira Pak is another prescription drug used to treat Hepatitis C. Id. ¶ 129. Viekira Pak costs 4 approximately $84,000 for a full 12 weeks of treatment. Id. Viekira Pak may cause significant 5 side effects or complications for patients. Id. ¶ 130. 6 Homampour, Bartels, and Naka each participated in an employee welfare benefit plan 7 covered by ERISA and issued by Blue Shield of California. Id. ¶ 11, 13, 15. Although each 8 plaintiff participated in a separate plan, all of the plans provided coverage for treatments that are 9 medically necessary in exchange for the payment of premiums. Id. ¶ 24, 36, 51. Bartels’s plan (which uses nearly identical language to Homampour’s and Naka’s plans) defines medically 11 United States District Court Northern District of California 10 necessary as follows: 12 Services which are Medically Necessary include only those which have been established as safe and effective and are furnished in accordance with generally accepted professional standards to treat an illness, injury, or medical condition, and which, as determined by Blue Shield, are: (a) consistent with Blue Shield medical policy; and, (b) consistent with the symptoms of diagnosis; and, (c) not furnished primarily for the convenience of the patient, the attending Physician or other provider; and, (d) furnished at the most appropriate level which can be provided safely and effectively to the patient. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Id. ¶ 36. Each of the named plaintiffs made requests for and was denied coverage of Harvoni on the grounds that the medication was not medically necessary. SAC ¶ 20, 38, 56. Blue Shield of California outlined its Harvoni criteria in various communications with plaintiffs. Id. ¶ 22, TAC Ex. A (Dkt. 46-1). On April 22, 2015 Blue Shield denied Homampour’s appeal for Harvoni coverage because under the Blue Shield medical necessity criteria, a patient requesting Harvoni coverage was required to have a METAVIR score of F3 or F4 and Homampour’s score was F0F1. TAC Ex. A. (A METAVIR score assesses liver fibrosis (scarring) and health. The scale ranges from F0 - F4 with F0 reflecting no or minimal liver damage and F4 reflecting the highest level of liver damage. Id.). On February 4, 2016, Blue Shield sent Homampour a letter explaining that under the Blue Shield Commercial Criteria, to qualify for Harvoni, a patient must either have cirrhosis (indicated 2 1 by fibrosis scores of F4 or F3) or show a contraindication to Viekira that would not be expected 2 with Harvoni treatment. TAC ¶ 32. Blue Shield of California sent similar explanations to Bartels 3 and Naka indicating that under its Harvoni criteria, a patient must demonstrate either (1) an F4 or 4 F3 fibrosis score, or (2) demonstrate a contraindication to Viekira that would not be expected with 5 Harvoni. Id. ¶ 38, 56. 6 On December 17, 2015 Blue Shield amended its Harvoni coverage criteria to expand 7 coverage for Harvoni. Garrison Decl. ¶ 3, (Dkt. No. 51). Under this version of the policy Blue 8 Shield extended coverage to include (1) patients with fibrosis level F1 or greater if use is 9 consistent with FDA guidelines; and (2) patients with fibrosis level F0 who have evidence of other extrahepatic complications, or symptoms related to chronic Hepatitis C (i.e., severe fatigue), or 11 United States District Court Northern District of California 10 who are at high risk for transmission of Hepatitis C, or who have pregnancy-related concerns, or if 12 there is evidence of shared decision-making between the member and physician regarding the 13 benefits and risks of treatment, including the option not to treat. Id. 14 On April 11, 2016, Blue Shield updated its Harvoni coverage policy again and removed the 15 requirement that certain patients have a specific contraindication to Viekira Pak that would not be 16 expected with Harvoni in order to qualify for coverage. Garrison Decl. ¶ 4. 17 On or around April 19, 2016, Blue Shield sent letters to its current members and their 18 providers who had requested and been denied Harvoni coverage in the past informing them of a 19 change in policy and inviting them to resubmit any requests. Garrison Decl. ¶ 5. On May 18, 20 2016 Blue Shield sent additional letters to members and providers who had been denied Harvoni 21 coverage because they did not show a specific contraindication to Viekira Pak that would not be 22 expected with Harvoni and invited them to resubmit any requests. Garrison Decl. ¶ 6. 23 Plaintiffs filed suit and defendants moved to dismiss. I granted the motion in part, 24 dismissing plaintiffs’ claims for injunctive relief and the claims against Blue Shield Life, and 25 granting plaintiffs leave to amend to replead these claims. Order Granting In Part Motion To 26 Dismiss (“August 31, 2016 Order”), Dkt. No. 43. I dismissed plaintiffs’ injunctive relief claims as 27 moot because the defendants had provided evidence in the form of “declarations and 28 accompanying attachments showing that Blue Shield of California has changed and broadened its 3 1 Harvoni policy, notified subscribers and members previously denied coverage of the policy 2 update, and invited these individuals to reapply.” Dkt. No. 43 at 7-8. I dismissed the claims 3 against Blue Shield Life because plaintiffs had failed to allege any facts against Blue Shield Life 4 and therefore lacked standing to sue that entity. Id. at 10. I rejected plaintiffs’ argument that 5 defendants should be treated as a single entity for standing purposes because they had participated 6 in a “centralized process,” concluding that plaintiffs had failed to allege facts demonstrating such a 7 process. I declined to reach the issue of whether such facts would allow plaintiffs to sue Blue 8 Shield Life. 9 10 LEGAL STANDARD A Rule 12(b)(1) attack for mootness may be facial or factual. White v. Lee, 227 F.3d 1214, United States District Court Northern District of California 11 1242 (9th Cir. 2000). A factual attack “disputes the truth of the allegations that, by themselves, 12 would otherwise invoke federal jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 13 1039 (9th Cir. 2004). When a party raises a factual attack, a court “may review evidence beyond 14 the complaint without converting the motion to dismiss into a motion for summary judgment.” In 15 re Digimarc Corp. Derivative Litig., 549 F.3d 1223, 1236 (9th Cir. 2008). “If the moving party 16 converts the motion to dismiss into a factual motion by presenting affidavits or other evidence 17 properly brought before the court, the party opposing the motion must furnish affidavits or other 18 evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Wolfe v. 19 Strankman, 392 F.3d 358, 362 (9th Cir. 2004) (internal quotations omitted). 20 Under Rule 12(b)(6), a district court must dismiss a complaint if it fails to state a claim 21 upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, plaintiffs must 22 allege “enough facts to state a claim to relief that is plausible on its face.” See Bell Atl. Corp. v. 23 Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face when the plaintiffs plead 24 sufficient facts to “allow[] the court to draw the reasonable inference that the defendant is liable 25 for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). 26 Courts do not require “heightened fact pleading of specifics,” but a plaintiff must allege facts 27 sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 570. 28 In assessing whether the plaintiff has stated a claim upon which relief can be granted, the 4 1 court accepts the plaintiffs’ allegations as true and draws all reasonable inferences in favor of the 2 plaintiff. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court 3 need not accept as true “allegations that are merely conclusory, unwarranted deductions of fact, or 4 unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 5 6 7 DISCUSSION I. CLAIMS FOR INJUNCTIVE RELIEF Plaintiffs allege that defendants Blue Shield Life and Blue Shield of California had similar policies that impermissibly denied Harvoni coverage to many members of their healthcare plans, 9 in violation of ERISA. As in their Second Amended Complaint, plaintiffs assert claims seeking to 10 compel defendants to (1) retract their categorical denials of Harvoni treatment; (2) provide notice 11 United States District Court Northern District of California 8 of said determination in the form and manner required by ERISA to all plans’ 12 subscribers/members who have had requests for Harvoni treatment denied; and (3) provide for the 13 re-review of all improperly denied claims. TAC ¶ 136. Defendants contend that these claims are 14 moot, for the same reasons outlined in my August 31, 2016 Order, and that plaintiffs have not 15 made any new allegations that would alter the analysis. I agree. 16 As I outlined in the August 31, 2016 Order, a change in policy moots a claim if the policy 17 represents a “permanent change,” and is “broad in scope and unequivocal in tone” such that it 18 indicates that recurrence of the challenged practice is unlikely. White, 227 F.3d at 1243. In Iron 19 Arrow Honor Society v. Heckler, the Supreme Court found a claim moot on summary judgment 20 where a formal change in policy was publically announced, making it unlikely to be later reversed. 21 464 U.S. 67, 71-72 (1983) (claim was moot where a University “announced its decision to . . . the 22 public, and the courts” such that “there is ‘no reasonable likelihood’ that the University will later 23 change its mind”). In Picrin-Peron v. Rison, the Ninth Circuit found that a claim challenging 24 certain provisions in a student election policy was moot where the school established a new policy 25 and entered into a memorandum of understanding committing not to reenact the challenged 26 provisions such that “there was no reasonable expectation that the injury the plaintiffs suffered 27 will recur.” 378 F.3d 1129, 1130-1131 (9th Cir. 2004). 28 The defendants have submitted declarations and accompanying attachments showing that 5 1 Blue Shield of California has changed and broadened its Harvoni policy, has notified subscribers 2 and members previously denied coverage of the policy update, and has invited these individuals to 3 reapply. Garrison Decl. ¶¶ 4-6; Garrison Decl. Exs. B-D. Defendants have also submitted 4 evidence that Blue Shield of California removed the requirement that certain members show a 5 contraindication to Viekira Pak to qualify for Harvoni, has notified members previously denied 6 coverage for this reason of the update, and has invited these individuals to reapply. Id. Given 7 these actions, recurrence of the challenged practice is unlikely and plaintiffs’ claims against Blue 8 Shield of California for denial of benefits are moot. In their opposition, plaintiffs argue that their claims seeking to compel defendants to re- 9 review all previously denied claims are not moot because the defendants have not conducted such 11 United States District Court Northern District of California 10 a review.1 Oppo. at 4. However, plaintiffs do not dispute that defendants have invited previously 12 denied members to resubmit their requests. They also do not dispute that plaintiff Homampour’s 13 renewed request for Harvoni has already been granted, and that Bartels and Naka would no longer 14 qualify for Harvoni because they have already received treatment from Viekira Pak and, 15 presumably, are no longer suffering from Hepatitis C. As noted in my prior Order, plaintiffs are 16 not entitled to Harvoni treatment itself, but to enforce their rights to benefits under their respective 17 health plans. Dkt. No. 43 at 8; 29 U.S.C.A § 1132(a)(1)(B). As none of the named plaintiffs have 18 an ongoing medical need for Harvoni, and therefore have no right to Harvoni related-coverage, 19 they are not entitled to compel Blue Shield to re-review their years old requests. Blue Shield has 20 already provided a means to re-review improperly denied claims by inviting members to resubmit 21 their requests: under this procedure Blue Shield can ensure that members still requiring Harvoni 22 treatment are able to enforce their rights to such benefits without improperly granting coverage to 23 individuals, like the named plaintiffs, who have no medical need, based on outdated information. Plaintiffs’ claims for injunctive relief, including their claims seeking to compel Blue Shield 24 25 to provide for re-review of all previously denied claims, are dismissed as moot. 26 27 1 28 Plaintiffs’ argument that these injunctive relief claims would not require individualized inquiry at class certification is premature and does not address the preliminary question of mootness. 6 1 II. CLAIMS AGAINST BLUE SHIELD LIFE Defendants again move to dismiss all claims against defendant Blue Shield Life arguing 2 that plaintiffs lack standing to sue this entity. I previously dismissed these claims concluding that 3 plaintiffs had failed to allege any conduct by Blue Shield Life or that they were participants, or 4 beneficiaries of a Blue Shield Life plan. I also rejected plaintiffs’ argument that the defendants 5 should be treated as a single entity because they participated in a centralized process, concluding, 6 without addressing the legal merits of the argument, that plaintiffs had not successfully alleged 7 such a process. 8 Plaintiffs have not alleged any new facts indicating that plaintiffs were participants or 9 beneficiaries of a Blue Shield Life plan, but have added additional allegations regarding a 10 United States District Court Northern District of California 11 “centralized process.” Plaintiffs allege that Blue Shield of California Pharmacy and Therapeutics (“P&T”) Committee is a group made up of independent community physicians and pharmacists, 12 who are not Blue Shield employees. TAC ¶ 95. This group approves internal clinical guidelines 13 for medical procedures and specialty pharmacy drugs. Id. ¶ 94. Following FDA approval of 14 Harvoni, the P&T Committee adopted guidelines which denied Harvoni to individuals without 15 fibrosis staging scores of F3 or F4 and chose Viekira Pak as the Blue Shield specialty drug 16 formulary’s preferred drug for the treatment of Hepatitis C. Id. ¶¶ 96-97. Health care plans 17 offered by Blue Shield of California, and insurance policies offered by Blue Shield Life were and 18 are all required to exclusively cover specialty drugs from the P&T Committee’s drug formulary. 19 Id. ¶ 97. Both Blue Shield of California, and Blue Shield Life adopted policies tying their 20 “Outpatient Drug Coverage” in their plans to the P&T Committee’s drug formulary and adopted 21 similar plan policies on Harvoni. Id. ¶ 98. They also note that Blue Shield Life is a wholly owned 22 subsidiary of Blue Shield of California. Id. ¶ 99. 23 24 Individual standing is a prerequisite to all actions. O’Shea v. Littleton, 414 U.S. 488, 494 (1974). In the class action context, “if none of the named plaintiffs purporting to represent a class 25 establishes the requisite of a case or controversy with the defendants, none may seek relief on 26 behalf of himself or any other member of the class.” Id. 27 Under ERISA only a “participant or beneficiary” may bring civil actions challenging the 28 7 1 denial of benefits, and only a “participant, beneficiary, or fiduciary” may bring claims related to a 2 breach of fiduciary duty. 29 U.S.C. § 1132(a)(1), (3). Plaintiffs admit that they are not 3 participants in any plan with Blue Shield Life and that Blue Shield Life did not act as an ERISA 4 fiduciary with respect to the named plaintiffs’ claims. Generally, this would mean that plaintiffs 5 do not have standing to bring ERISA claims against Blue Shield Life. Plaintiffs make two 6 arguments as to why they nevertheless have standing: (1) in an ERISA class action a plaintiff need 7 only establish standing with respect to her own ERISA plan if her complaint challenges general 8 practices applicable to all plans at issue; and (2) defendants should be treated as a single entity for 9 the purpose of standing because they participated in a centralized process to deny Harvoni 10 United States District Court Northern District of California 11 coverage to their members. Neither of these arguments is convincing. With regards to their first argument, plaintiffs rely on Fallick v. Nationwide Mutual 12 Insurance Company 162 F.3d 410, 423 (6th Cir. 1998) and Stearns v. Ticketmaster Corp., 655 13 F.3d 1013, 1021 (9th Cir. 2011). These cases do not support plaintiffs’ argument. 14 In Fallick, the Sixth Circuit held that a plaintiff participant in one benefit program could 15 represent participants of other plans, but only because all the plans were offered by the same 16 defendant. 162 F.3d at 423. The Fallick court permitted a plaintiff belonging to a particular 17 Nationwide benefit program to bring claims on behalf of class members that participated in other 18 Nationwide programs – it did not permit it to represent class members belonging to plans offered 19 by a completely separate entity. Id. Indeed, the court was clear that its holding related only to a 20 plaintiff’s ability to represent absent class members under Rule 23 and did not impact whether a 21 plaintiff had standing to sue a particular entity. Id. at 422 (The district court “confuse[d] the issue 22 of a plaintiff’s standing under Article III vis-à-vis a defendant with the relationship between a 23 potential class representative and absent class members” when it found that plaintiff lacked 24 standing to represent beneficiaries of other Nationwide programs.). The Fallick court reaffirmed 25 the importance of establishing individual standing, stating that “[a] potential class representative 26 must demonstrate individual standing vis-a-vis the defendant; he cannot acquire such standing 27 merely by virtue of bringing a class action.” Id. at 423. Fallick does not support plaintiffs’ 28 argument that their standing to sue Blue Shield of California allows them to represent a class 8 1 bringing similar claims against Blue Shield Life. 2 The Ninth Circuit’s decision in Stearns also offers plaintiffs no help. In Stearns, the Ninth 3 Circuit noted that in a class action, plaintiffs meet the standing requirement if “at least one named 4 plaintiff satisfies the standing requirements.” 655 F.3d at 1021. Stearns is not applicable because 5 it is undisputed that none of the named plaintiffs have met the standing requirements against Blue 6 Shield Life. Under Fallick and Stearns, plaintiffs’ standing against Blue Shield of California does 7 not allow suit against Blue Shield Life simply because plaintiffs challenge similar policies offered 8 by these separate entities. Plaintiffs must still establish individual standing against each entity. 9 Because they have not done so, plaintiffs’ first standing argument fails. Plaintiffs next argue that Blue Shield of California and Blue Shield Life should be treated 11 United States District Court Northern District of California 10 as a single entity for standing purposes because they participated in a centralized process to deny 12 Harvoni coverage, adopted similar restrictive policies, and because Blue Shield Life is a wholly 13 owned subsidiary of Blue Shield of California. They cite to Cady v. Anthem Blue Cross Life & 14 Health Ins. Co., 583 F. Supp. 2d 1102, 1107 (N.D. Cal. 2008) and Alves v. Harvard Pilgrim 15 Health Care Inc., 204 F. Supp. 2d 198 (D. Mass. 2002). 16 In Alves, the District of Massachusetts concluded that, under Fallick, and the Ninth 17 Circuit’s decision in La Mar v. H & B Novelty & Loan Co., 489 F.2d 461, 466 (9th Cir. 1973), 18 plaintiffs who had ERISA plans through Harvard Pilgrim Health Care (“HPHC”) also had 19 standing to sue two separate but related entities, explaining that “[b]ecause these defendants are 20 wholly owned affiliates of HPHC, in which plaintiffs were participants, and the copayment plan 21 provisions are substantially the same, a single resolution of the dispute would be expeditious.” 22 204 F. Supp. 2d at 205. In Cady, the Hon. Claudia Wilken held that plaintiffs only had standing to 23 sue the defendant who supplied the named plaintiff’s health plan and dismissed other defendants 24 from the case. 583 F. Supp. 2d at 1107. However, she noted that “[a] different conclusion might 25 be warranted if, as in Alves, Defendants shared some relationship such that they should be treated 26 as a single entity. For instance, Plaintiff might be able to proceed against Defendants other than 27 Anthem if the decision not to cover RFA treatment was made as the result of a centralized process 28 involving all Defendants, and operated to deny RFA coverage to all members of Defendants’ 9 1 plans.” Id. Although plaintiffs have alleged a common process by which the defendants adopted 2 3 substantially similar Harvoni coverage policies, I conclude that the Alves decision and the Cady 4 dicta, to the extent it relies on Alves, are not persuasive as they rest on improper readings of 5 Fallick and La Mar. As discussed above, although the Fallick court held that plaintiffs of a 6 particular healthcare plan could represent plaintiff participants of other healthcare plans offered by 7 the same defendant, it expressly noted that “[a] potential class representative must demonstrate 8 individual standing vis-a-vis the defendant; he cannot acquire such standing merely by virtue of 9 bringing a class action.” Fallick, 162 F.3d at 423. The court did not find that the participant’s standing to sue one defendant gave the participant standing to assert claims against other 11 United States District Court Northern District of California 10 defendants. The Alves court incorrectly expanded the holding of Fallick by concluding that a 12 parent-subsidiary relationship, and the fact that the companies used substantially similar policies, 13 excused the normal Article III standing requirement.2 The Ninth Circuit has rejected this precise idea. Lee v. American Nat. Ins. Co., 260 F.3d 14 15 997 (9th Cir. 2001). In Lee, the court held that a plaintiff who had purchased life insurance 16 policies from ANI did not have standing to represent a class of plaintiffs who purchased similar 17 policies from ANI’s subsidiary, ANTEX. Id. at 999. The court explained, “because Lee had not 18 purchased an ANTEX policy, he could not demonstrate that he had suffered an actual injury and 19 therefore could not establish standing to bring suit in federal court.” Id.; see also Perez v. State 20 Farm Mut. Auto. Ins. Co., No. 06-cv-01962, 2011 WL 5833636-JW, at *2 (N.D. Cal. Nov. 15, 21 2011) (holding that plaintiffs with standing to sue parent insurance company did not have standing 22 to bring similar claims against its subsidiaries). 23 The Alves court also incorrectly applied La Mar, which is not applicable in the standing 24 context. In La Mar, the Ninth Circuit established the juridical link doctrine, holding that, in the 25 context of Rule 23 of the Federal Rules of Civil Procedure, a “plaintiff who has no cause of action 26 27 28 2 In an appeal of the Alves decision the First Circuit noted, but did not address, the standing issues because they had not been reasserted on appeal. Alves v. Harvard Pilgrim Health Care, Inc., 316 F.3d 290 (1st Cir. 2003). 10 1 against [a] defendant cannot ‘fairly and adequately protect the interests’ of those who do have 2 such causes of action,” but if a group of plaintiffs have suffered identical injury as a “result of a 3 conspiracy or concerted schemes” among defendants, or if defendants are “juridically related in a 4 manner that suggests a single resolution of the dispute would be expeditious,” then those suits 5 would be permitted. 489 F.2d at 466. The Alves court clearly applied the La Mar rationale in 6 concluding that, given the defendants’ parent-subsidiary relationship, and similar policies, “a 7 single resolution of the dispute would be expeditious” and that plaintiffs therefore had standing 8 against all defendants. Alves, 204 F. Supp. 2d at 205. 9 However, the Ninth Circuit explicitly declined to resolve the issue of standing in La Mar, and cases in this circuit have consistently held that the La Mar juridical link doctrine should not be 11 United States District Court Northern District of California 10 applied to resolve standing issues at the pleading stage; it applies only to issues relevant to class 12 certification purposes, such as adequacy and typicality. See Siemers v. Wells Fargo & Co., No. 13 05-cv-04518-WHA, 2006 WL 3041090, at *6 (N.D. Cal. Oct. 24, 2006) (“the juridical-link 14 doctrine has been held not to apply to standing questions at the pleading stage”); Akaosugi v. 15 Benihana Nat. Corp., No-11-cv-01272-WHA, 2011 WL 5444265, at *2 (N.D. Cal. Nov. 9, 2011) 16 (“[A] careful review of all decisions on point revealed that no district court in the Ninth Circuit 17 has found a plaintiff to have established Article III standing based on a juridical link between 18 defendants.”). The Cady court itself rejected Alves’s reading of La Mar by concluding that “the 19 [juridical link] doctrine, developed in the context of class certification analysis under Rule 23, 20 should properly remain in the analysis of adequacy and typicality of plaintiffs for which it was 21 originally conceived.” 583 F. Supp. 2d at 1107. 22 Because I conclude the Alves court’s holding was based on an incorrect reading of Fallick 23 and La Mar, I do not find it persuasive. Similarly, the dicta from Cady, citing Alves, is 24 unsupported by the case law. The Ninth Circuit, and district courts in this Circuit, have 25 consistently held that a plaintiff who purchased insurance from a parent insurance company does 26 not have standing to sue that parent’s subsidiaries, even when those subsidiaries have similar or 27 identical policies. See, e.g., Lee, 260 F.3d at 999; Perez, 2011 WL 5833636-JW, at *2; Carranza 28 v. GEICO Gen. Ins. Co., No. 13-cv-1932-HZ, 2015 WL 1611442, at *2 (D. Or. Apr. 10, 2015); 11 1 Shin v. Esurance Ins. Co., No 8-cv-5626, 2009 WL 688586, at *5 (W.D. Wash. Mar. 13, 2009) 2 (“The Court refuses to embrace the notion that all related companies may be haled into court for 3 the actions of one . . . of those inter-related, but distinct, companies merely because they have 4 agreed on common practices”). 5 Plaintiffs have failed to allege facts indicating that they are participants or beneficiaries of 6 a Blue Shield Life plan. Accordingly, they have failed to establish standing to bring claims 7 against Blue Shield Life. The claims against Blue Shield Life must be dismissed. 8 CONCLUSION 9 For the reasons outline above, defendants’ Motion to Dismiss Portions of the Third Amended Complaint is GRANTED. Because plaintiffs have already been given leave to amend 11 United States District Court Northern District of California 10 their claims for injunctive relief and their claims against Blue Shield Life, and it appears that 12 further amendment would be futile, these claims are dismissed WITH PREJUDICE. 13 14 15 16 IT IS SO ORDERED. Dated: December 22, 2016 ______________________________________ WILLIAM H. ORRICK United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 12

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.