United States District Court, N.D. Texas, Dallas Division
UNITEDHEALTHCARE SERVICES, INC. et al.
NEXT HEALTH, LLC et al.
MEMORANDUM OPINION AND ORDER
GREN SCHOLER, UNITED STATES DISTRICT JUDGE
Order addresses UnitedHealthcare Services, Inc.,
UnitedHealthcare Insurance Company, and UnitedHealth Group,
Inc.'s (collectively "United") Motion to
Dismiss First Amended Counterclaim or for More Definite
Statement [ECF No. 194]. For the reasons set forth below, the
Court denies United's Motion to Dismiss and grants
United's Motion for More Definite Statement.
to Special Order 3-318, this case was transferred from the
docket of Chief Judge Barbara M.G. Lynn to the docket of this
Court on March 8, 2018.
this case is the subject of a prior memorandum opinion and
order, the Court will recount only the background facts and
procedural history that are necessary to understand
today's decision. UnitedHealthcare Servs., Inc. v.
Next Health, LLC> Civ. A. No. 3:17-CV-0243-S, 2018 WL
3520429 (N.D. Tex, July 20, 2018). United initiated this
lawsuit on January 26, 2017. United is a provider of health
care insurance, administration, and/or benefits pursuant to a
variety of health care benefit plans and insurance policies.
Compl. ¶ 21. Many of United's private
employer-sponsored plans are governed by the Employee
Retirement Income Security Act of 1974 ("ERISA").
Id. ¶ 24. United uses a two-tier provider
system for its plans, which allows members to obtain
healthcare services from network or out-of-network
("OON") providers. Id. ¶ 33. OON
providers do not enter into any agreement with United, and
they generally bill members at the rates they set.
Id. ¶ 35. United's plans typically require
members to contribute to the costs of care by OON providers.
Id. ¶ 36.
alleges that American Laboratories Group, LLC, Medicus
Laboratories, LLC, United Toxicology, LLC, U.S. Toxicology,
LLC, and Next Health, LLC (collectively, "Entity
Defendants") have defrauded United in connection with
their provision of OON testing services to United members.
See, e.g., Id. ¶ 83.
Entity Defendants filed counterclaims on November 15, 2017,
asserting four ERISA-based causes of action against United.
The Entity Defendants seek: (1) penalties for United's
alleged failure to provide requested plan documents; (2) a
remand of all claims it has submitted to United since 2011
for a full and fair review; (3) declaratory and injunctive
relief as well as economic damages for an alleged breach of
fiduciary duty; and (4) to recover benefits under 29 U.S.C.
moved to dismiss the counterclaims or, in the alternative,
for a more definite statement. See ECF No. 93. On
July 20, 2018, the Court denied United's Motion to
Dismiss but granted United's Motion for a More Definite
Statement. UnitedHealthcare Servs., 2018 WL 3520429,
at *7. Specifically, the Court ordered the Entity Defendants
to (1) "amend their claim spreadsheets" and
"[f]or each claim, .. . identify the member who assigned
their benefits and the plan or policy number under which such
benefits arose"; (2) "provide representative plan
terms"; and (3) for non-benefits claims, "identify
which member assignments were in effect during which time
period and . .. include the specific language of each
assignment identified." Id.
August 1, 2018, the Entity Defendants filed their First
Amended Counterclaims. See ECF No. 183. Alleging
that the First Amended Counterclaims do not comply with the
Court's order to provide a more definite statement,
United asks the Court either to dismiss the Entity
Defendants' First Amended Counterclaims or to renew its
order requiring a more definite statement.
party makes an effort to comply with an order granting a
motion for a more definite statement, "the insufficiency
of the effort does not justify automatic dismissal of the
action. . . . The draconian remedy of dismissal of the action
should be invoked only as a last resort . . . ."
Pardee v. Moses, 605 F, 2d 865, 866 (5th Cir. 1979)
(quoting Schaedler v. Reading Eagle Publ'n,
Inc., 370 F.2d 795, 798-99 (3d Cir. 1967)). Because the
Court finds that the Entity Defendants made an effort to
comply with portions of the Court's prior order, the
Court denies United's Motion to Dismiss.
the Entity Defendants made an effort to comply with the
Court's prior order, the First Amended Counterclaims are
still "insufficiently definite." Bowers v.
Crystal Valley, R.V., No. 95-C-7527, 1996 WL 169415, at
*1 (N.D. 111. Apr. 9, 1996) (citation and internal quotation
marks omitted). Therefore, the Court renews its order that
the Entity Defendants replead more information in support of
the Court renews its order that the Entity Defendants amend
the claim spreadsheets to include member names and plan or
policy numbers for each claim listed on the spreadsheets. The
Entity Defendants claim that they "have produced the
claim file for each of the 60, 000 claims on which their
ERISA claims are based." Resp. 6. According to United,
this production came in the form of a flash drive including
every file for every claim submitted to United from 2015 to
2017. Mot. to Dismiss 6. In their Response, the Entity
Defendants do not contest that allegation or argue that they
have amended their claim spreadsheets. The Court specifically
ordered the Entity Defendants to amend their claim
spreadsheets to include member names and plan or policy
numbers. The Court finds that production via flash drive is
insufficient to comply with that order. Therefore, the Court
again orders the Entity Defendants to amend their claim
spreadsheets. For each claim, the Court orders the Entity
Defendants to identify the member who assigned their benefits
and the plan or policy number under which such benefits
the Entity Defendants must provide representative plan terms.
See Innova Hosp. San Antonio, L.P. v. Blue Cross &
Blue Shield of Ga., Inc.,892 F.3d 719, 729 (5th Cir.
2018) ("Alleging improper reimbursement based on
representative plan provisions... may be sufficient to show
plausibility under Twombly and Iqbal...
.") Contrary to the Entity Defendants' argument in
their Response, the Court did not order them to state
"specific plan terms breached for each of the 60, 000
claims at issue." Resp. 5. Consistent with
Innova, the Court ordered the Entity Defendants to
provide "representative plan provisions." 892 F.3d
at 729. The Court renews its order that the Entity Defendants
provide representative plan terms or provisions, Third, the
Court renews its order that, for non-benefits claims, the
Entity Defendants must (1) identify which member assignments
were in effect during which time period and (2) include the
specific language of each assignment identified. It appears
to the Court that the Entity Defendants have conceded that
certain assignments did ...