Mental Health Parity: In a Pair of Decisions, California Federal Court Rejects United’s Efforts to Kick Behavioral Health Class Actions

See Beach v. United Behavioral Health, No. 21-cv-08612-RS (May 5, 2025); Jones v. United Behavioral Health, No. 19-cv-06999-RS (Apr. 14, 2025).

Backdrop: Wit v. United Behavioral Health

As covered in a prior alert, in 2023, the US Court of Appeals for the Ninth Circuit vacated in part a decision certifying a class action against UBH for improperly developing, and relying on, its own internal guidelines for behavioral health claims that were inconsistent with state-mandated criteria and with the terms of the class members’ benefits plans, which required that any treatments approved be consistent with generally accepted standards of care (GASC). In the pertinent part, the court held that the plaintiffs failed to link all class members’ denials to specific challenged portions of the guidelines at issue. In the wake of Wit, many have wondered whether similar class actions would fail for want of such specificity.

Beach: Court Concludes the Class Action Complaint Is Appropriately Specific

In Beach, the plan participants allege that UBH deliberately drafted 2018-2019 Level-of-Care (LOC) Guidelines and a facility “Bundling Policy” to reduce the number and value of paid behavioral health claims. The participants assert that these practices constitute a breach of fiduciary duty and result in wrongful denials of benefits. UBH moved to dismiss the claims.

The court denied the motion in full, based on several key holdings. First, the plaintiffs plausibly alleged that UBH put its financial interest above participants’ interests by creating narrow guidelines and a bundling rule designed to minimize benefit payments. Second, the plaintiffs did enough to satisfy the Wit standard at the pleading stage; UBH’s appeal denial letters cited only the challenged guidelines, plaintiffs alleged the guidelines misstated GASC, and thus they “might be entitled to benefits” under a proper standard. Third, the plaintiffs stated a claim that UBH arbitrarily denied all facility-based charges merely because some services exceeded the covered level of care, despite conceding that certain component services were appropriate. Finally, the plaintiffs plausibly alleged that UBH failed to disclose the bundling rationale in a manner sufficient to allow plaintiffs to perfect a claim under 29 U.S.C. § 1133 for failure to provide adequate notice and opportunity for appeal of a denial.

Separately, the court denied UBH’s motion to strike the plaintiffs’ request for reprocessing of their claims. Whether the plaintiffs ultimately meet Wit’s evidentiary threshold to warrant reprocessing is a merits issue, the court explained. The request itself is permissible at the pleadings stage.

Jones: Court Decides Class Grounded Solely in UBH Guidelines Can Proceed

In Jones, the plan participants make similar allegations, albeit under the 2017 LOC Guidelines. The Jones case is further along than the Beach case. In 2021, the court certified the class in Jones. After the Ninth Circuit issued its final decision in Wit,UBH move to decertify the proposed class. In response, the participants moved to modify the scope of the proposed class.

The court denied UBH’s motion to decertify the proposed class and granted the participants’ motion to modify the class scope. As to many of the class components, the court’s findings were relatively straightforward: numerosity existed because there was a sufficient number of individuals with denied claims; commonality existed because the litigation turned on whether the guidelines violate GASC; typicality existed because the representative’s denial letters mirrored those of the class members; and the representative was adequate to represent the class, despite her later departure from a UBH-administered plan.

As to whether common questions outweighed member-specific issues such that proceeding as a class was superior to individual adjudication, the court focused on distinguishing this class from the rejected class in Wit. By including only members whose appeal denial letters rely solely on challenged guideline provisions, the court held that the subclass aligns with Wit’s directive that reprocessing classes exclude claimants whose claims were denied for reasons other than the challenged provisions.

Key Takeaways

1. Post-Wit, classes seeking certification should (a) limit membership to claims denied solely under challenged guideline provisions and (b) demonstrate that members “might be entitled” to benefits under a proper guideline that is aligned with GASC.
2. Appeal denial letters remain central evidence in establishing class membership without exhaustive individualized record review.
3. Internal guidelines remain critically important and must faithfully implement the Plan’s terms and GASC.

Looking Ahead

Beach confirms that breach of fiduciary duty and wrongful denial theories grounded in restrictive clinical criteria remain viable post-Wit, while Jones demonstrates how plaintiffs can tailor class definitions to navigate the Ninth Circuit’s reprocessing limitations. Collectively, the decisions signal sustained judicial scrutiny of behavioral health guidelines and underscore the importance of robust, GASC-compliant medical necessity criteria and transparent claims communications.

These decisions also come in the wake of an agreement by Anthem to settle a five-year long mental health coverage class action, detailed in a prior alert. Sophisticated class litigation is expected to continue in this space.