United States District Court, S.D. Indiana, Indianapolis Division
W. P., a minor by and through his parents and guardians KATHRYN PIERCE and CHESTER PIERCE, on behalf of themselves and similarly situated individuals, and A.B. a minor by and through his parents and guardians MICHAEL BECK AND JOANNE KEHOE, on behalf of themselves and similarly situated individuals, Plaintiffs,
ANTHEM INSURANCE COMPANIES INC an Indiana corporation, Defendant.
ENTRY ON MOTION TO STRIKE AND MOTION FOR LEAVE TO
FILE SECOND AMENDED COMPLAINT
WALTON PRATT, JUDGE.
the Court is a Motion to Strike the Class Allegations of
Plaintiff A.B. and his parents, Michael Beck and Joanne Kehoe
(collectively “Individual Plan Plaintiffs”)
(Filing No. 63), filed by Defendant Anthem Insurance
Companies Inc. (“Anthem”). Anthem is a health
insurance provider. On April 9, 2015, Plaintiff W.P. and his
parents, Kathryn and Chester Pierce (collectively
“ERISA Plan Plaintiffs”), initiated this putative
class action against Anthem under the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C.
§ 1001 et seq. (Filing No. 1.) On
September 20, 2016, the ERISA Plan Plaintiffs filed an
Amended Complaint, adding the Individual Plan Plaintiffs, as
well as their breach of contract and bad faith breach of
insurance contract claims. (Filing No. 57.) On
October 21, 2016, Anthem moved to strike the Individual Plan
Plaintiffs and their claims for lack of standing, contending
that A.B. does not have any ongoing injury or harm as
required under Federal Rule of Civil Procedure
23(b)(2). (Filing No. 63.) In response,
the Individual Plan Plaintiffs concede that A.B. lacks
standing under Rule 23(b)(2), but request leave to amend the
Complaint in order to plead pursuant to Federal Rule of Civil
Procedure 23(b)(3). (Filing No. 66.) For the
following reasons, Anthem's Motion to Strike is GRANTED,
and Plaintiffs' Motion for Leave to File Second Amended
Complaint is GRANTED.
a thirteen year-old who suffers from severe autism. He is the
beneficiary of a health insurance plan (“the
Plan”) sponsored by his father's employer and
Anthem is the insurer and claims administrator for the Plan.
W.P.'s treating physician prescribed forty hours per week
of Applied Behavioral Analysis (“ABA”) therapy to
treat W.P.'s autism. Anthem initially covered W.P.'s
forty hours of ABA therapy but, in July 2013, Anthem reduced
the number of covered ABA therapy hours for W.P. to
twenty-five hours per week. In July 2014, Anthem further
reduced the number of covered hours to twenty hours per week.
an eleven year-old who was diagnosed with autism at the age
of three. In 2009, A.B.'s parents purchased an individual
health insurance plan through Anthem, providing coverage from
July 1, 2009 to February 28, 2015. Similar to W.P.,
A.B.'s treating physician also prescribed forty hours per
week of ABA therapy to treat his autism. Anthem initially
covered A.B.'s forty hours of ABA therapy but, in October
2013, Anthem reduced the number of covered ABA therapy hours
to thirty hours per week. On January 1, 2014, Anthem further
reduced the number of covered hours to twenty hours per week.
W.P. and A.B. filed written appeals to Anthem regarding its
coverage decisions. In response, Anthem issued written
denials of the appeals, upholding its decision to limit the
amount of ABA therapy hours it covered. On April 9, 2015, the
ERISA Plan Plaintiffs filed a putative class action,
asserting that Anthem's policy and practice of limiting
coverage for ABA therapy for school-aged children with autism
violates ERISA because it fails to comply with state and
federal law. (Filing No. 1.) On September 16, 2016,
the ERISA Plan Plaintiffs filed an unopposed Motion to amend
their Complaint in order to add the Individual Plan
Plaintiffs. (Filing No. 55.) The ERISA Plan
Plaintiffs also sought to extend the deadlines “to
permit Anthem sufficient time to complete discovery related
to A.B.'s claims.” Id. at 5. On September
20, 2016, the Court granted the ERISA Plan Plaintiffs'
request and extended the deadline for filing amended
pleadings to September 20, 2016, for the sole purpose of
filing the First Amended Complaint. (Filing No. 56.)
Later that day, the ERISA Plan Plaintiffs filed their Amended
Complaint, adding the Individual Plan Plaintiffs, as well as
two claims for breach of contract and bad faith breach of
insurance contract. (Filing No. 57.) The Amended
Complaint states that certification for both classes are
proper under Federal Rule of Civil Procedure 23(b)(2).
Id. at 15.
Anthem moved to strike the Individual Plan Plaintiffs and
their claims, contending that A.B. lacks standing because he
is no longer a member of Anthem's individual health
insurance plan and will not suffer ongoing injury or harm as
required under Federal Rule of Civil Procedure 23(b)(2).
(Filing No. 63.) In response, the Individual Plan
Plaintiffs concede that A.B. lacks standing under Rule
23(b)(2) and request the Court deny Anthem's Motion to
Strike as moot, but allow leave to file a second amended
complaint pursuant to Federal Rule of Civil Procedure
23(b)(3). (Filing No. 65; Filing No. 66.)
The ERISA Plan Plaintiffs also request to amend the Complaint
to seek class certification pursuant to Rule 23(b)(3). Anthem
does not oppose the Individual Plan Plaintiffs' proposed
amendment, but objects to the ERISA Plan Plaintiffs'
only issue before the Court is whether good cause exists for
the ERISA Plan Plaintiffs to amend their pleadings.
Generally, leave to amend a pleading is freely given under
Federal Rule of Civil Procedure 15(a) if the proposed
amendments are timely and not unduly prejudicial or futile.
Shadeland Station Apartments I, LLC v. Realsource
Brokerage Servs., L.C., No. 1:09-CV-629-WTL-TAB, 2011 WL
1769012, at *1 (S.D. Ind. May 5, 2011). However, after the
Case Management Plan deadline, a moving party must show
“good cause” to amend a pleading. Fed.R.Civ.P.
16(b). “Rule 16(b)'s ‘good cause'
standard primarily considers the diligence of the party
seeking amendment.” Trustmark Ins. Co. v. Gen.
& Cologne Life Re of Am., 424 F.3d 542, 553 (7th
Cir. 2005) (quoting Johnson v. Mammoth Recreations,
Inc., 975 F.2d 604, 609 (9th Cir.1992)).
ERISA Plan Plaintiffs contend that good cause exists because
the failure to include a specific reference to Rule 23(b)(3)
in the initial Complaint and the First Amended Complaint was
an oversight by their counsel. The ERISA Plan Plaintiffs
argue that the Court should grant leave to amend because they
diligently pursued discovery and made their motion for leave
to amend within two months after adding the Individual Plan
Plaintiffs. The ERISA Plan Plaintiffs also assert that
amending the Complaint will not disrupt the progress of the
case and will allow the ERISA Plan Plaintiffs the opportunity
to fairly present their argument for class certification, as
well as their arguments on the merits of the claims.
response, Anthem relies on Carroll and
Alioto when arguing that the ERISA Plan Plaintiffs
failed to satisfy the good cause standard. Carroll v.
Stryker Corp., 658 F.3d 675, 684 (7th Cir. 2011)
(holding a plaintiff did not show good cause because
“ignorance is hardly a valid reason for missing the
deadline by [seven] months”); Alioto v. Town of
Lisbon, 651 F.3d 715, 720 (7th Cir. 2011)) (affirming
denial of leave to amend where a party seeking amendment
acted with insufficient diligence because he waited to seek
leave to amend more than eight months beyond the district
court's deadline and he was aware of the deficiencies he
sought to amend two months prior to seeking leave). Anthem
also asserts that the ERISA Plan Plaintiffs' contention
of counsel's oversight does not excuse their delay in
seeking to amend their Complaint nearly eleven months after
the Court's pleading deadline.
reply, the ERISA Plan Plaintiffs again contend that they
acted with diligence and rely on Rock when asserting
that the Court should permit them to amend their allegations.
Rock v. Nat'l Collegiate Athletic Ass'n, No.
1:12-CV-01019-JMS, 2015 WL 329052, at *3-4 (S.D. Ind. Jan.
23, 2015) (holding plaintiff acted with sufficient diligence
when moving for leave to amend his complaint in order to
change his class definition where discovery issues primarily
caused the delay). They further argue that Carroll
and Alioto are distinguishable because in those
cases plaintiffs sought leave to amend in order to add