Duane Morris ERISA Class Action Review – 2024

denial of benefits notification did not indicate that the challenged provisions were in fact the reason for the denial. Thus, there would be no reason to reevaluate these denials because they were not based on the allegedly improper provisions of the Coverage Determination Guidelines. As a result, the Ninth Circuit opined that the district court ’ s certification of classes for these claims was an abuse of discretion. Furthermore, the Ninth Circuit ruled that the district court ’ s decision to excuse absent class members from exhausting administrative remedies violated the Rules Enabling Act because it abridged the defendant ’ s affirmative defense. The court applied Wit in Hendricks, et al. v. Aetna Life Insurance Co., 344 F.R.D. 237 (C.D. Cal. 2023), and denied the defendants’ motion to decertify the class. The plaintiffs, a group of participants in the defendant ’ s life insurance plan, filed a class action alleging that they suffered harm due to the defendant ’ s general policy of denying coverage requests for lumbar artificial disc replacement surgery on the grounds that the surgery was considered “experimental or investigational.” Id. at 240. The court granted class certification to a class consisting of all persons covered under the defendant ’ s plans governed by the ERISA, whose lumbar artificial disc replacement surgery requests were denied, or would be denied in the future, on the basis of experimental or investigational classification. Following discovery, the defendant moved to decertify the class, and the court denied the motion. The defendant argued that, in light of the holding in Wit that the court could not excuse absent class members from exhausting administrative remedies, typicality was defeated. The court found that the plaintiffs’ claims were typical to those of the class members because the defendant systematically denied coverage based on a company policy. The court reached this conclusion by applying anticipatory repudiation and explaining that because company policy was to deny coverage, exhaustion of administrative remedies would have been futile. The court also determined that the plaintiffs met the commonality requirement because common questions existed for all class members of whether Lumbar ADR has been proven safe and effective for treating degenerative disc disease and whether they were denied coverage due to the defendant ’ s policy. The court previously had certified the plaintiffs’ class under Rule 23(b)(1)(A), noting that the plaintiffs were primarily seeking an injunction requiring the defendant to retract its policy that Lumbar ADR is “experimental or investigational.” Id. at 246. The defendant argued that it had changed the policy, and thus the request for an injunction should be rendered moot. The court disagreed. It held that absent an injunction, there was no guarantee that the defendant would not revert to its previous practice. For these reasons, the court denied the defendant ’ s motion to decertify the class. 12. Issues In Motions To Compel Arbitration Despite the increasingly successful reliance on arbitration and class action waiver provisions to defeat class litigation elsewhere in the law, federal courts over the past year consistently refused to enforce them in the ERISA context. Most motions to compel arbitration in ERISA class actions were denied in 2023, and courts held that such provisions were unenforceable under the effective vindication exception to the Federal Arbitration Act. Under this exception, plaintiffs’ statutory rights may not be abridged by arbitration agreements. Because plaintiffs in ERISA class action suits seek relief on behalf on the plan at issue, most courts found that the statutory right to such relief would be impermissibly abridged by the enforcement of arbitration agreements. For example, in Harrison, et al. v. Envision Management Holding, Inc. , 59 F.4th 1090 (10th Cir. 2023), the Tenth Circuit upheld the district court ’ s ruling denying the defendants’ motion to compel arbitration. It reasoned that holding otherwise would deny the plaintiffs access to statutory remedies to which they are entitled under the ERISA, including the right to seek plan-wide relief and relief on behalf of other participants in the form of declaratory relief, an injunction of further breaches of fiduciary duties, the removal of fiduciaries and appointment of new fiduciaries, the restoration of losses and disgorgement of profits, and other appropriate equitable relief. The Tenth Circuit reasoned that all of these remedies affect the plan as a whole, rather than the plaintiff as an individual. In Harrison , the plaintiffs alleged that the defendants breached their fiduciary duty of prudence. When the defendants sought to enforce an

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