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`UNITED STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
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`Plaintiffs,
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`MEMORANDUM OF LAW & ORDER
`Civil File No. 18-3472 (MJD/DTS)
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`J.P. and M.K., individually and on
`behalf of all others similarly situated,
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`v.
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`BCBSM, Inc. d/b/a Blue Cross and
`Blue Shield of Minnesota,
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`Charles N. Nauen, Susan E. Ellingstad, David W. Asp, and Jennifer L. M. Jacobs,
`Lockridge Grindal Nauen P.L.L.P., and Jordan Lewis, Jordan Lewis, P.A.,
`Counsel for Plaintiffs.
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`Joel Allan Mintzer and Doreen A. Mohs, Blue Cross and Blue Shield of
`Minnesota, and David M. Wilk, Larson King, LLP, Counsel for Defendant.
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`I.
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`Defendant.
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`INTRODUCTION
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`This matter is before the Court on Plaintiffs’ Motion for Class Certification.
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`[Docket No. 74] The Court heard oral argument by telephone on January 13,
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`2021. The Court denies the motion because Plaintiffs cannot show commonality,
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`typicality, or adequacy sufficient to support certifying the proposed class. The
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`question of whether Blue Cross was entitled to offset is answered by the plan
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`1
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 2 of 29
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`documents, and the putative class members belong to 84 different ERISA plans,
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`an unknown number of which have different controlling plan documents with
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`different plan language that will need to be analyzed to determine the outcome
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`of each class member’s claims. Additionally, there is a substantial question
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`whether Plaintiffs are members of the very class that they propose; there is a
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`substantial and fact-intensive question regarding whether Plaintiffs exhausted
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`their administrative remedies; and, due to the parallel L.P. Lawsuit, Plaintiffs’
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`interests and injuries diverge from those of the proposed class.
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`II.
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`BACKGROUND
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`A.
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`Factual Background
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`1.
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`Parties
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`Bolton & Menk, Inc. self-insures an ERISA health benefit plan that it offers
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`to its employees and hired Defendant BCBSM, Inc. d/b/a Blue Cross and Blue
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`Shield of Minnesota (“Blue Cross”) to administer the plan. (Am. Compl. ¶¶ 5, 8.)
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`Plaintiff J.P. is an employee of Bolton & Menk, Inc. and is covered under the plan
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`as the subscriber or contract holder. (Id. ¶ 5; Bazzarre Decl. ¶ 4.) J.P.’s wife,
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`M.K., and his daughter, L.P., are also covered under the plan as beneficiaries.
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`(Am. Compl. ¶¶ 6, 9; Bazzarre Decl. ¶ 4.)
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`2
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`2.
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`Plan Language
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`The plan’s Summary Plan Description (“SPD”) includes the following
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`sentence, under the heading “Payments Made in Error:” “Payments made in
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`error or overpayments may be recovered by the Claims Administrator as
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`provided by law” (“Payments Made in Error Term”). (Mintzer Decl., Ex. 1,
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`Bolton & Menk, Inc., 2018 Summary Plan Description at 47.)
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`Using its operating system, Blue Cross automates an offsetting process
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`based on the Payments Made in Error Term. Once Blue Cross determines that it
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`has overpaid a claim, a Blue Cross claims examiner codes the claim as overpaid
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`in the system and keys in data that completes an otherwise prepared letter. The
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`letter informs the participant that Blue Cross believes a claim has been overpaid.
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`If the claim remains unpaid for 30 days, a follow-up letter is sent. If it is not paid
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`by 60 days, the case is eligible for offset. When a subscriber has a new claim for
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`which Blue Cross would issue a payment directly to the subscriber (rather than
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`to a provider), the money will not be paid to the subscriber because, as an
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`automatic feature of the software system, the amount is automatically applied to
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`the collection case. (Lewis Decl., Ex. 2, Dressen 30(b)(6) Dep. 23, 25-26.)
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`3
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`3.
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`Change Academy Treatment and Claims
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`In 2016 and 2017, J.P. enrolled his daughter at Change Academy at Lake of
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`the Ozarks (“Change Academy”) in Missouri. (Am. Compl. ¶¶ 9–12.) Change
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`Academy is a non-participating (“non-par”) provider, meaning that it does not
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`have a contract with Blue Cross or any other licensee of the Blue Cross and Blue
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`Shield Association. (Mintzer Decl. ¶¶ 4–5; Mintzer Decl., Ex. 1, SPD at AR2751.)
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`J.P. personally paid $189,477.74 for the services rendered at Change Academy
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`and then sought coverage and reimbursement from Blue Cross for those services.
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`(Am. Compl. ¶ 11.) When a member obtains services from a non-par provider,
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`Blue Cross typically does not send a check directly to the provider. (Mintzer
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`Decl., Ex. 1, at AR2711, AR2741.) Instead, Blue Cross sends payment to the
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`subscriber, that is, the employee (unless certain exceptions apply). (Id. at
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`AR2677, AR2737, AR2741; Bazzarre Decl. ¶¶ 4–5.)
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`Initially, Blue Cross determined that some of Change Academy’s services
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`were covered and approved $83,554.55 in payment to J.P. (Am. Compl. ¶ 12.)
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`Because Change Academy is non-par, Blue Cross made the checks payable to
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`J.P., and sent the checks to J.P. (See, e.g., Mintzer Decl. Ex. 2, Administrative
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`4
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`Record1 at AR0639, AR0651; Mintzer Decl., Exs. 5–6; see also Bazzarre Decl. ¶¶
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`6–7.) However, Blue Cross later concluded that Change Academy’s services
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`were not covered and that those payments had been improperly made. (Am.
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`Compl. ¶ 12; see also, e.g., AR0735–42; Mintzer Decl. Ex 8.)
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`Blue Cross sent letters to J.P. requesting repayment. (See, e.g., Mintzer
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`Decl. Ex. 7.) When J.P. did not respond, Blue Cross sent reminder letters. (See,
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`e.g., AR0840–41.) When J.P. still did not respond, Blue Cross’s system noted that
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`future claims would be subject to recoupment. (AR3251–53; Mintzer Decl. Ex. 17,
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`Dressen 30(b)(6) Dep. 10, 15, 19, 23–24.)
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`J.P. contested Blue Cross’s failure to pay for Change Academy’s services,
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`as well as Blue Cross’s decision to reprocess and deny the claims that it had
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`previously paid. (AR0878–83.) After Blue Cross upheld its determination
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`following an administrative appeal, J.P. sued Blue Cross on behalf of his
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`daughter, L.P., in May 2018. L.P. v. BCBSM, Inc., Civil File No. 18-1241 (D.
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`Minn.) (“L.P. Lawsuit”). Blue Cross counterclaimed, seeking a declaration that it
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`had the right to recover any overpayment. ([L.P. Lawsuit Doc. 34] Def.’s Answer
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`1 Citations to the administrative record, other than the plan documents, are
`within Mintzer Decl. Exhibit 2, and will be referred just by their “AR” Bates
`number.
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`5
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`to Am. Compl. and Countercl. at 12.) That counterclaim relies on the same
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`Payments Made in Error Term at issue in this lawsuit. (Id. 11, ¶ 8.)
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`4.
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`Timpone Treatment and Claims
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`In 2018, J.P., M.K., and L.P. each obtained behavioral health services from a
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`different non-par provider, Helene Timpone, LCSW. (See, e.g., AR3157–62.)
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`At J.P.’s request, Timpone provided him invoices labeled “Statement for
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`Insurance Reimbursement,” which he then submitted to Blue Cross. (Mintzer
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`Decl., Ex. 3, J.P. Dep. 77-80, 83, 88–90.) Neither the Statements nor J.P.’s claim
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`forms indicated where J.P. and his family received the services, nor where
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`Timpone provided the services. (See, e.g., AR3157–62; Salkowski Decl. ¶ 4.) Blue
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`Cross approved payments for those services by applying the payments against
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`the refund J.P. owed to Blue Cross. (See, e.g., AR3165-74.)
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`Unbeknownst to Blue Cross, at the time Timpone treated Plaintiffs,
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`Plaintiffs were in Minnesota and Timpone was in Arizona. (J.P. Dep. 91-92;
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`Mintzer Decl., Ex. 4, M.K. Dep. 30-31.) Plaintiffs received services primarily over
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`the telephone but also by remote video. (Id.) Timpone is not licensed to practice
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`in Minnesota or in Arizona. (Salkowski Decl. ¶¶ 8-9.)
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`Because Timpone was a non-par provider, to pay for covered services
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`provided by Timpone, Blue Cross usually would have issued payment in the
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`name of the employee, J.P., and would have sent the payment to J.P. (Bazzarre
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`Decl. ¶ 9.) Blue Cross would not have sent payment to either M.K. or L.P. (Id.)
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`But because Blue Cross had overpaid J.P. based on the Change Academy claims,
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`Blue Cross did not send a check; rather, Blue Cross applied the payment to the
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`refund amount J.P. owed.
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`On November 15, 2018, Blue Cross sent J.P. an Explanation of Health Care
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`Benefits (“EOB”) regarding services that L.P. had received from Timpone. The
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`EOB states that Blue Cross approved benefits with an allowed amount of $550,
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`that the 20% coinsurance totaled $110, and that the “paid amount” totaled $440.
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`(See, e.g., AR3165.) But the EOB added: “Payment has been reduced and applied
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`to the refund requested from you by us. You have satisfied $440.00 of the
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`$5550.00 amount owed.” (Id.)
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`After receiving that EOB, J.P. initiated several phone calls to Blue Cross. In
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`a December 3, 2018 call, Blue Cross provided J.P. the claim numbers which Blue
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`Cross believed it had overpaid (for the Change Academy claims). (Mintzer Decl.
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`Ex. 15, Dec. 3, 2018 Tr. at 2–3.) J.P. wrote the numbers down. (Mintzer Decl., Ex.
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`16, J.P. Notes.) The follow exchange then occurred:
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`J.P.: “That all makes sense.”
`Blue Cross: “Okay.”
`J.P.: “I understand what’s going on.”
`Blue Cross: “Okay.”
`J.P.: “Those are the 14 claims, okay.”
`Blue Cross: “Yep.”
`J.P.: “Who made that decision to do that? Does it say that, where
`that comes from, the finance department or who does that?”
`Blue Cross: “That’s with collections, it looks like.”
`J.P. “Oh.”
`Blue Cross: “Yeah, so they received that directly from the collections.
`J.P.: “From collections. Okay.”
`Blue Cross: “Does that make any more sense to you? I just want to
`make sure you got clear answers on [crosstalk] --.
`J.P.: “I just wanted to – I wanted to document what was going on.
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`(Dec. 12, 2018 Tr. 3.)
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`According to J.P.:
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`In response to his receipt of this packet, J.P. telephoned Blue Cross’s
`customer service line. After several days of telephone contact with
`Blue Cross customer support, J.P. was told that Blue Cross’s
`representatives that the $440 was applied by Blue Cross to the
`refund that Blue Cross claims it is owed arising from its partial
`payment for services rendered at Change Academy. Further, J.P.
`was told that there are 14 previously paid claims, all generated by
`L.P. when she was being treated at the residential treatment center,
`for which Blue Cross intends to offset.
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`8
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`[Docket No. 1] Original Compl. ¶ 14; Mintzer Decl., Ex. 3, J.P. Dep. 147–48
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`(testifying that Paragraph 14 of the Original Complaint was accurate).)
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`On December 3, 2018, Plaintiffs’ counsel, Jordan Lewis, emailed Blue
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`Cross’s counsel, David Wilk, and wrote:
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`I’ve attached an EOB that my client received for a different and
`unrelated service. It appears as if your client has unilaterally
`withheld payment of $5,500 and applied it to “the refund requested
`from you by [Blue Cross].” The client has asked for clarification and
`thus far he’s learned nothing more. Please confirm whether this
`“refund” originates from the mental health services that are at issue
`in the pending case referenced above, and if it is, please provide
`whatever legal authority you have for this sort of “self-help.” You
`should consider this a “meet and confer” respecting this issue.
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`(Wilk Decl. ¶ 3; Wilk Decl., Ex. 1 at 5.)
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`On December 7, 2018, Lewis wrote:
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`On a related matter, your client has, again, offset its insurance
`obligations by deducting from it amounts at issue in this litigation.
`I’ve asked you for authority for this self-help. If you have any, I
`would appreciate seeing it.
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`(Id. at 1.) On December 13, 2018, Wilk responded:
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`With respect to the recent EOBs, they do appear to be related to Blue
`Cross’s overpayment of the behavioral health claims. Under the
`SPD (AR0236): “Payments made in error or overpayments may be
`recovered by the Claims Administrator as provided by law.
`Payment made for a specific Service or erroneous payment shall not
`make the Claims administrator or the Plan Administrator liable for
`further payment for the same Service.”
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`(Id.)
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`B.
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`Procedural History
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`1.
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`Claims
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`On December 26, 2018, L.P., by and through J.P., filed a lawsuit against
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`Blue Cross in this Court. On April 16, 2019, J.P. and M.K. filed an Amended
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`Complaint against Blue Cross. [Docket No. 19] The Amended Complaint
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`alleges: Count 1: Plan Enforcement under 29 U.S.C. § 1132(a)(1)(B); and Count 2:
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`Failure to Provide Full and Fair Review as Required by ERISA under 29 U.S.C. §
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`1132(a)(3).
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`2.
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`Proposed Class
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`Plaintiffs now move for certification of the following class:
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`All persons who are covered under any ERISA-governed health
`benefit plan insured and/or administered by Blue Cross against
`whom Blue Cross offset covered charges based on the following
`language found in the Blue Cross plan and/or certificate of coverage
`and/or summary plan description: “Payments made in error or
`overpayments may be recovered by the Claims Administrator as
`provided by law.”
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`Blue Cross has identified 221 persons who have the same Payments Made
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`in Error Term in their SPDs and against whom Blue Cross may have recovered
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`an overpayment by not issuing a check on a later claim. (Mintzer Decl., Ex. 19,
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`Def. Third Supp. Answer to Interrog. No. 5.) Collectively, Blue Cross has
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`withheld payment of $275,965.00, out of the $378,841.78 it has overpaid. (Id.,
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`Answer to Interrog. Nos. 7-8.) Of those 221 persons, 51 participate in Medtronic,
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`Inc.’s ERISA plan, 10 participate in Cargill, Incorporated’s ERISA plan, and 2
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`participate in The Travelers Indemnity Company’s ERISA plan. (Mintzer Decl. ¶
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`25.) For those 63 members, Blue Cross withheld $115,001.38. (Id.) In addition to
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`those plan members, the proposed class includes participants in 81 other ERISA
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`plans, for a total of 84 separate ERISA plans. (Id. ¶ 24.)
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`III. DISCUSSION
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`A.
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`Standard for Class Certification
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`The class action serves to conserve the resources of the Court and the
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`parties by permitting an issue that may affect every class member to be litigated
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`in an economical fashion. Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 155
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`(1979). Whether an action should be certified as a class action is governed by
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`Rule 23 of the Federal Rules of Civil Procedure.
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`To be certified as a class, plaintiffs must meet all of the
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`requirements of Rule 23(a) and must satisfy one of the three
`subsections of Rule 23(b). The Rule 23(a) requirements for class
`certification are: (1) the putative class is so numerous that it makes
`joinder of all members impractical; (2) questions of law or fact are
`common to the class; (3) the class representatives’ claims or defenses
`are typical of the claims or defenses of the class; and (4) the
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`representative parties will fairly and adequately protect the interests
`of the class.
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`In re St. Jude Med., Inc., 425 F.3d 1116, 1119 (8th Cir. 2005) (citing Fed. R. Civ. P.
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`23(a)) (footnote and other citations omitted).
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`Rule 23 does not set forth a mere pleading standard. A party
`seeking class certification must affirmatively demonstrate his
`compliance with the Rule—that is, he must be prepared to prove
`that there are in fact sufficiently numerous parties, common
`questions of law or fact, etc.
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`Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). At this stage, “[m]erits
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`questions may be considered to the extent – but only to the extent – that they are
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`relevant to determining whether the Rule 23 prerequisites for class certification
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`are satisfied.” Amgen Inc. v. Conn. Ret. Plans and Trust Funds, 568 U.S. 455, 466
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`(2013) (citations omitted).
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`B.
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`Consideration of Blue Cross’s Evidence
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`1.
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`Declarations at Issue
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`The Court denies Plaintiffs’ request to strike the declarations of Blue Cross
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`witnesses Stacey Rice, Senior Lawyer at Cargill, Incorporated (“Cargill”) [Docket
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`Nos. 96-97], Eric Salkowski, Principal Investigator at Blue Cross [Docket No. 92],
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`Thomas E. Bazzarre, IV, Director of Claims in Claims Operations at Blue Cross
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`[Docket No. 91], Amy Johnson, Senior Benefits Director, Americas, at Medtronic,
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`Inc. (“Medtronic”) [Docket No. 90], and Robert Jasper, 2VP, Benefits at The
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`Travelers Indemnity Company (“Travelers”) [Docket No. 89] on the grounds that
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`none of those witnesses were identified by Blue Cross in its Rule 26 disclosures.
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`2.
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`Legal Standard
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`The Federal Rules provide that
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`a party must, without awaiting a discovery request, provide to the
`other parties:
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`(i) the name and, if known, the address and telephone number of
`each individual likely to have discoverable information--along with
`the subjects of that information--that the disclosing party may use to
`support its claims or defenses, unless the use would be solely for
`impeachment.
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`Fed. R. Civ. P. 26(a)(1)(A)(i).
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`The Rules further provide:
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`If a party fails to provide information or identify a witness as
`required by Rule 26(a) or (e), the party is not allowed to use that
`information or witness to supply evidence on a motion, at a hearing,
`or at a trial, unless the failure was substantially justified or is
`harmless.
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`Fed. R. Civ. P. 37(c)(1).
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`3.
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`Discussion
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`Plaintiffs note that Blue Cross’s Rule 26(a)(1) disclosures state that
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 14 of 29
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`[t]he Administrative Record . . . may reference individuals involved
`with these claims, including Plaintiff J.P. To the extent a Blue Cross
`employee is needed to further address the information in the
`Administrative Record, Blue Cross reserves the right to select an
`appropriate corporate designee. Because the causes of action in this
`case are governed by [ERISA], discovery is generally limited to the
`Administrative Record.
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`(Lewis Reply Decl., Ex. A at 1-2.) Plaintiffs point out that none of the declarants
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`were involved in the administrative decision on Plaintiffs’ claim.
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`The Rice, Johnson, and Jasper declarations are custodian declarations
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`attesting to the authenticity of the ERISA plan documents for Cargill, Medtronic,
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`and Travelers. These documents are only relevant for class certification
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`purposes, not to Plaintiffs’ individual claims or to Blue Cross’s defenses to those
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`individual claims. Regardless of whether the Court allows the declarations now,
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`if the Court were to certify the class, the Court would review the plan documents
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`for all 84 separate ERISA plans that apply to the class members in order to
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`interpret the application of the Payments Made in Error Term. If the class were
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`certified, as to those class members to whom those plan documents pertain, those
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`plan documents are necessarily admissible, because they are embraced by the
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`Amended Complaint and are part of the administrative record as to those class
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`members. Thus, the failure to reveal the names of the records custodians who
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`would aver to the authenticity of the plan documents for the class members is
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`harmless.
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`Bazzarre’s declaration repeats information that was revealed in Blue
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`Cross’s 30(b)(6) deposition, so its admission appears harmless, and he fits into
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`the category of “an appropriate corporate designee,” as stated in Blue Cross’s
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`Rule 26 disclosures, so he has been properly disclosed.
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`Salkowski’s declaration relates to the licensure of Timpone and the
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`question of whether the claim for her services was covered. Blue Cross did not
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`know that this issue would be relevant until, during Plaintiffs’ November 5, 2020
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`depositions, conducted after Plaintiffs had filed their motion to certify, Plaintiffs
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`first revealed that Timpone was located in her residence in Arizona when she
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`provided the services to Plaintiffs in Minnesota over the telephone and internet.
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`Blue Cross alerted Plaintiffs to Salkowski in a timely manner by filing his
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`declaration in conjunction with their opposition brief approximately two weeks
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`after the depositions. Thus, the failure to reveal Salkowksi’s name before
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`Plaintiffs’ depositions was substantially justified.
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`C. Numerosity (Rule 23(a)(1))
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`Numerosity is met when the proposed class is “so numerous that joinder
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`of all members is impracticable.” Fed. R. Civ. P. 23(a)(1). It is undisputed that
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`numerosity is met in this case because the proposed class includes more than 200
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`individuals.
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`D. Commonality (Rule 23(a)(2))
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`Federal Rule of Civil Procedure 23(a)(2) requires that there are “questions
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`of law or fact common to the class.”
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`Commonality requires the plaintiff to demonstrate that the class
`members have suffered the same injury. . . . Their claims must
`depend upon a common contention . . . . That common contention,
`moreover, must be of such a nature that it is capable of classwide
`resolution—which means that determination of its truth or falsity
`will resolve an issue that is central to the validity of each one of the
`claims in one stroke.
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`Dukes, 564 U.S. at 349–50 (citation omitted).
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`
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`The Court concludes that Plaintiffs have failed to show commonality.
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`In construing a plan, the Court “begin[s] by examining the language of the
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`plan documents.” Bond v. Cerner Corp., 309 F.3d 1064, 1067 (8th Cir. 2002). A
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`claim, such as Plaintiffs’, brought under § 1132(a)(1)(B) “stands or falls by the
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`terms of the plan.” Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan, 555 U.S.
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`285, 300 (2009). ERISA requires that a plan be established pursuant to a “written
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`instrument.” 29 U.S.C. § 1102(a)(1). At a minimum, there must be a “summary
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`plan description” (“SPD”). 29 U.S.C. § 1024(b)(1). Some plans also have master
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`documents, commonly referred to as “wrap” documents, in addition to the SPD.
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 17 of 29
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`See, e.g., Admin. Comm. of the Wal-Mart Stores, Inc. Assocs.’ Health & Welfare
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`Plan v. Gamboa, 479 F.3d 538, 540 (8th Cir. 2007).
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`In Cigna Corp. v. Amara, the Supreme Court held that, if there is a conflict
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`between an SPD and the wrap, the wrap controls. 563 U.S. 421, 438 (2011). The
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`Supreme Court explained that the “objective” of an SPD was
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`clear, simple communication. To make the language of a plan
`summary legally binding could well lead plan administrators to
`sacrifice simplicity and comprehensibility in order to describe plan
`terms in the language of lawyers.
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`Id. at 437 (cleaned up). The Supreme Court thus concluded “that the summary
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`documents, important as they are, provide communication with beneficiaries
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`about the plan, but that their statements do not themselves constitute the terms of
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`the plan for purposes of § [1132(a)(1)(B)].” Id. at 438 (emphases in original).
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`After Amara, if there is a summary plan description and a plan document, the
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`terms of the summary plan description are not part of the plan. MBI Energy
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`Servs. v. Hoch, 929 F.3d 506, 510 (8th Cir. 2019). However, “in the absence of a
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`formal plan document,” “the SPD is the Plan’s written instrument because it is
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`the only document providing benefits.” Id.
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`As to each class member, the Court must determine if there is a separate
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`wrap document and, if so, whether that document has additional or different
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`17
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 18 of 29
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`language relevant to each class member’s claim. Blue Cross notes that, for
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`example, 51 putative class members are participants in a health plan sponsored
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`by Medtronic. Medtronic’s wrap contains a provision specific to the “Recovery
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`of Erroneous Claim Payments:”
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`Unless a Component Plan specifies otherwise, the Plan has the right
`to deduct from any claim payment properly payable under this Plan
`or any Component Plan to a Covered Person the amount of any
`previous claim payment that was made . . . in error . . . . If such a
`deduction is appropriate, the deduction will be applied to a claim
`submitted by any covered family member regardless whether the
`erroneous claim payment was made to or on behalf of the same or a
`different family member.
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`(Johnson Decl. ¶ 3, Ex. 1, Medtronic Group Insurance Plan at 15, ¶ 5.3.) Given
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`this relevant wrap language, the analysis of the claims of putative class members
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`who participate in the Medtronic plan will be wholly distinct from the analysis of
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`Plaintiffs’ claims.
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`Ten putative class members are participants in a health plan sponsored by
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`Cargill with relevant wrap language. (See Rice ¶ 4, Ex. 2, Cargill, Incorporated
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`Welfare Benefit Plan (2018) at 14, ¶ 9.8.) Two putative class members are
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`participants in a health plan sponsored by Travelers that includes relevant wrap
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`language. (See Jasper Decl. ¶¶ 2–3; Jasper Decl., Ex. 1, The Travelers Trusteed
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`Employee Benefit Plan at 12, ¶ 6.4.1.)
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`18
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 19 of 29
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`For each of the aforementioned putative class members to recover, they
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`would need to establish that their particular wrap language does not empower
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`Blue Cross to withhold additional payment. Even where an employer does not
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`maintain a separate wrap, the SPD must be construed along with other plan
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`documents, which will also vary from plan to plan. Those documents might
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`include, for example, the service agreement between the employer and Blue
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`Cross. See 29 U.S.C. § 1024(b)(4) (plan participants may obtain copies of “other
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`instruments under which the plan is established or operated”).
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`In order for there to be a common question regarding Blue Cross’s
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`authority to offset, the Court would need to know that all class members
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`participated in plans with only SPDs and no other plan documents with relevant
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`terms. If some class members participate in plans that have formal plan
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`documents, then the SPD does not control, and the question of whether Blue
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`Cross was entitled to offset must be answered by examining the particular
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`language of that class member’s formal plan documents. The evidence before the
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`Court is that many class members did participate in plans with wrap documents
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`that control over the SPD and govern whether Blue Cross had the authority to
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`offset against any family member’s claims. Individualized inquiry into 84 sets of
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`19
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 20 of 29
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`different plan documents to determine Blue Cross’s authority to offset in each
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`plan is incompatible with a finding that the commonality prong has been met.
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`The Court has already denied Plaintiffs’ request to strike the Johnson, Rice,
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`and Jasper declarations. The Court further notes that striking these declarations
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`would not change the Court’s determination. The fact that the putative class
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`members belong to 84 different ERISA plans is in evidence through the
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`declaration of Joel Mintzer, which Plaintiffs do not challenge. And Plaintiffs, not
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`Defendant, have the burden of showing commonality. Even if Plaintiffs
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`successfully eliminated evidence of the contents other putative class members’
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`plans from the record, they will not have met their burden to show commonality,
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`because Plaintiffs have offered no evidence that the 221 class members in 84
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`plans all have the same plan language as it relates to Blue Cross’s ability to offset.
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`Thus, even if the declarations are struck, the Court would simply have no
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`evidence one way or the other that class members share common plan language,
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`and Plaintiffs would not have met their burden to show commonality. See, e.g.,
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`In re Wellpoint, Inc. Out-of-Network “UCR” Rates Litig., No. MDL 09-2074, 2014
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`WL 6888549, at *9 (C.D. Cal. Sept. 3, 2014) (denying motion to certify a class of
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`persons participating in differing ERISA plans and noting that the defendant
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`20
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 21 of 29
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`plan administrator “does not have the burden of showing that commonality is
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`absent . . . . Plaintiffs have the burden of showing that there is a common issue of
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`law or fact that would support class certification [and] [t]hey have manifestly
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`failed to carry their burden, as they have not offered any meaningful analysis of
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`the relevant terms in [the defendant’s] ERISA plans”).
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`
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`Finally, the Court rejects Plaintiffs argument that the lack of commonality
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`can be solved by eliminating putative class members who belong to the
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`Medtronic, Cargill, or Travelers plans from the class. Plaintiffs bear the burden
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`of showing commonality, and they have submitted no evidence that the
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`remaining putative class members participate in plans that do not have relevant
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`wrap documents or other plan documents that might control whether Blue
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`Cross’s offsetting was permitted under their particular plans. See Huffman v.
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`The Prudential Ins. Co. of Am., No. 2:10-cv-5135, 2018 WL 583046, *4 (E.D. Penn.
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`Jan. 29, 2018) (“This Court cannot ignore wrap plans, SPDs, and other documents
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`that may collectively comprise a plan, and as a result, would have to analyze
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`each of the 2,200 plans individually to determine the scope of Prudential’s
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`obligations, and therefore whether it breached any fiduciary duty.”).
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`E.
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`Typicality (Rule 23(a)(3))
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`21
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 22 of 29
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`Typicality requires that “the claims or defenses of the representative
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`parties are typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3).
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`“The burden is fairly easily met so long as other class members have claims
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`similar to the named plaintiff. Factual variations in the individual claims will not
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`normally preclude class certification if the claim arises from the same event or
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`course of conduct as the class claims, and gives rise to the same legal or remedial
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`theory.” Alpern v. UtiliCorp United, Inc., 84 F.3d 1525, 1540 (8th Cir. 1996)
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`(citations omitted). “A proposed class representative is not adequate or typical if
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`it is subject to a unique defense that threatens to play a major role in the
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`litigation.” In re Milk Prod. Antitrust Litig., 195 F.3d 430, 437 (8th Cir. 1999).
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`The Court holds that Plaintiffs cannot show that they are typical and
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`adequate class representatives because they are subject to major and unique
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`defenses.
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`1. Whether Plaintiffs Are Members of the Proposed Class
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`“A litigant must be a member of the class which he or she seeks to
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`represent at the time the class action is certified by the district court.” Sosna v.
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`Iowa, 419 U.S. 393, 403 (1975). Blue Cross asserts that Plaintiffs are not members
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`of their proposed class. The proposed class consists of persons “who are covered
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`22
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`CASE 0:18-cv-03472-MJD-DTS Doc. 103 Filed 01/14/21 Page 23 of 29
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`under any ERISA-governed health benefit plan insured and/or administered by
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`Blue Cross against whom Blue Cross offset covered charges” (emphasis added)
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`based on the Payments Made in Error Term in the SPD. Blue Cross argues that,
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`here, the charges against which it applied offsets were not covered charges
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`because the provider (Timpone) was not properly licensed to provide those
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`services to J.P., M.K., or L.P.
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`The evidence in the record shows that, at the time Plaintiffs received
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`services from Timpone, Timpone was located at her residence in Arizona, and
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`Plaintiffs were located in Minnesota. Plaintiffs’ SPD states, in part, that the plan
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`covers mental health care services “provided by a Health Care Provider.”
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`(Mintzer Decl. Ex. 1