Preview
1 DIVYA S. GUPTA (SBN 284282)
gupta.divya@dorsey.com ELECTRONICALLY
2 DORSEY & WHITNEY LLP
600 Anton Boulevard, Suite 2000 F I L E D
Superior Court of California,
3 Costa Mesa, CA 92626 County of San Francisco
Telephone: (714) 800-1400
4 Facsimile: (714) 800-1499 02/05/2020
Clerk of the Court
BY: RONNIE OTERO
5 MICHELLE S. GRANT* Deputy Clerk
grant.michelle@dorsey.com
6 ANDREW HOLLY*
holly.andrew@dorsey.com
7 MEGHAN L. DESLAURIERS*
deslauriers.meghan@dorsey.com
8 DORSEY & WHITNEY LLP
50 South Sixth Street, Suite 1500
9 Minneapolis, MN 55402
Telephone: (612) 340-2600
10 Facsimile: (612) 340-2868
11 Attorneys for Defendant United Behavioral
Health
12 *Admitted Pro Hae Vice
13 SUPERIOR COURT OF THE STATE OF CALIFORNIA
14 FOR THE COUNTY OF SAN FRANCISCO
15
16 BRISTOL SL HOLDINGS, INC., a California Case No. CGC-19-580534
corporation, in its capacity as the owner of the
17 claims of SURE HAVEN, INC., a California
corporation, and CEDAR CREEK RECOVERY, DEFENDANT UNITED BEHAVIORAL
18 INC., a Texas corporation, HEALTH'S REPLY IN SUPPORT OF
DEMURRER
19 Plaintiff,
20 v. RESERVATION NO. 012060213-13
EARING
21 UNITED BEHAVIORAL HEALTH, a ate: February 13, 2020
California corporation; and, DOES 1 Time: 9:30 a.m.
22 THROUGH 25, inclusive, Dept.: 302
23 Defendants. ction Filed: November 5, 2019
Trial Date: None Set.
24
25
26
27 INTRODUCTION
28 Plaintiff Bristol SL Holdings, Inc.' s ("Bristol") claims should be dismissed on the
DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 fundamental basis that Bristol does not have standing. Bristol lacks the right to pursue this cause
2 of action and has not been able to establish otherwise. Moreover, despite its protestations to the
3 contrary, Bristol's allegations are inextricably linked to the benefit plans of the patients at issue.
4 Indeed, Bristol accuses United of verifying coverage based on the benefit plans at issue. In such
5 circumstances, common law claims are preempted by ERISA's exclusive remedies, and as such,
6 this Court should dismiss Bristol's common law claims. Even if ERIS A does not preempt
7 Bristol's claims-it does-Bristol's common law claims fail for an additional reason: they all
8 fail to state a claim upon which relief may be granted.
9 ARGUMENT
10 I. BRISTOL LACKS STANDING
11 A. Bankruptcy Assignment
12 As noted in Defendant United Behavioral Health's ("United") opening memorandum, the
13 bankruptcy documents Bristol relies on for the authority to sue United expressly state that "all
14 claims [and] causes of action" are excluded from the bankruptcy assets Bristol purchased. (See
15 Memorandum of Points and Authorities filed on Dec. 6, 2019 ("United Mem.") at 3.)
16 Bristol's ad hominem attacks, insinuating that United previously raised and lost its
17 "fallacious" bankruptcy standing argument are unfounded. (See Opp. 2.) While it is true that
18 United raised this argument previously in Bristol SL Holdings, Inc., et al.v. United Health Care
19 Services, Inc., et al., No. 8:19-cv-00710-DOC, that court did not expressly rule on whether Bristol
20 validly purchased the claims at issue through its bankruptcy transaction, and instead dismissed ·
21 Bristol's ERISA claim on the basis that Bristol was neither a healthcare provider nor an assignee
22 with proper standing to bring an ERISA claim. See id., ECF No. 62 at 6 (C.D. Cal. Oct. 7, 2019).
23 The court made no ruling on United's bankruptcy standing argument. (Id)
24 Bristol also argues that "United cites to a portion of the [bankruptcy] Stipulation that is
25 taken entirely out of context and misconstrued." (Opp. 3.) However, it is Bristol who
26 misconstrues the section of the stipulation. Bristol states that exclusion of litigation claims
27 referenced in the stipulation "is clearly intended to preserve the Trustee's rights to pursue
28 avoidance claims under 11 U.S.C. §§ 547 and 548." (Id.) However, the full statement is as
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DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 follows:
2 All claims, causes of action, choses in action, rights of recovery, rights of set-off,
3 and rights of recoupment belonging to the Debtors and their Estates, including,
4 without limitation, any and all avoidance causes of action belonging the Estates
5 pursuant to 11 U.S.C. §§ 547 and 548, and all rights and legal privileges and
6 confidential information related thereto (collectively, the "Litigation Claims") shall
7 be excluded from the Transferred Assets and shall be retained by the Estates as
8 Retained Assets.
9 See Deel. of Payton George filed on Dec. 6, 2019, Ex. A, at p. 6, § 4 (emphasis added). The
10 provision was not intended to only cover claims under 11 U.S.C. §§ 547 and 548, but to "all
11 claims" including but not limited to those under 11 U.S.C. §§ 547 and 548. Stated differently,
12 avoidance causes of action under 11 U.S.C. §§ 547 and 548 are one kind of litigation claim
13 excluded from the transferred assets, but nothing in the provision indicates that they are the only
14 claims excluded.
15 To clarify any ambiguity, United reached out to counsel for the liquidating trustee who
16 could not confirm one way or another whether Bristol owned the claims, and informed Bristol
17 counsel on January 24, 2020 that United would seek clarification from the bankruptcy court. See
18 Bristol's Request for Judicial Notice filed on Jan. 31, Ex.Bat p. 59. United offered to stipulate
19 to a stay of the present litigation until the standing issue could be definitively resolved by the
20 bankruptcy court. (Id.) Instead of allowing clarification from the court that approved the very
21 purchase at issue, Bristol would prefer to move ahead with the pending demurrer.
22 Because the plain language of the bankruptcy documents do not demonstrate that Bristol
23 has standing-and Bristol has failed to provide any affidavit or other document confirming its
24 position is accurate-United asks this Court to either: (1) dismiss the lawsuit in its entirety or (2)
25 stay this litigation until the bankruptcy court has confirmed whether or not Bristol purchased the
26 claims at issue in this lawsuit. Either way, absent additional information or evidence, Bristol
27 should not be permitted to pursue this action.
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DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 B. Under California Law, the Providers Cannot Assign the Claims to Bristol
2 First, under California law, Bristol's UCL claim is unassignable. Bristol admits the UCL
3 claims at issue were received in an assignment from Sure Haven, Inc. and Cedar Creek Recovery,
4 Inc. (the "Providers") through bankruptcy. (Opp. 4-5.) This dooms Bristol's claims. Bristol
5 argues that it has standing because it paid consideration for its assignment. (Id) Bristol cites to
6 no authority for this position and urges this Court to ignore the clear holding of Amalgamated
7 Transit Union Local 1756, AFL-CIO v. Superior Court, 209 P.3d 937,943 (Cal. 2009), which
8 flatly prohibits the assignment of unfair competition claims. Bristol contends that because
9 Amalgamated doesn't discuss "if any consideration was paid for the assignment" it does not apply
10 here. (Opp. 4.) Not so. The holding of Amalgamated contains no such limitation. To the
11 contrary, Amalgamated broadly holds that unfair competition claims cannot be assigned. (Id at
12 1002.) An assignment of such claims would run afoul of "the express statutory requirement in the
13 unfair competition law ... that a private action under that law be brought exclusively by a 'person
14 who has suffered injury in fact and has lost money or property as result of the unfair
15 competition."' (Id.) Bristol's claim therefore fails on this ground alone.
16 Second, the Providers' fraud and tort claims were not properly assigned to Bristol. "[A]
17 person may assign a cause of action for fraud along with the person's right to the property
18 obtained by the fraud, but a mere naked right of action for fraud, divorced from any other
19 property right, is not assignable." White Mountains Reinsurance Co. ofAmerica v. Petrini, 164
20 Cal. Rptr. 3d 912, 917 (Cal. Ct. App. 2013) (emphasis in original). While it is true that
21 assignability is generally permitted, here Bristol did not obtain any property or proceeds related to
22 the fraud; rather, it was assigned a naked fraud claim, which is impermissible.
23 Third, because the other claims at issue in this lawsuit cannot be assigned, claim-splitting
24 would occur, potentially forcing Bristol to go forward with the contract claims when (at least
25 some of) their remaining claims are still in the hands of the bankruptcy trustee. Bristol makes no
26 attempt to argue that claim splitting would not occur; rather, Bristol focuses on discussing the
27 assignability of contract claims (Opp. 5)-which United acknowledged is possible (see United
28 Mem. 5). Bristol then simply concludes that it has the sole right to proceed on all assigned
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DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 claims, based on its prior arguments. (Opp. 5-6.) To the extent Bristol's remaining assigned
2 claims can be raised, they must be brought in the bankruptcy court, which has exclusive
3 jurisdiction over claims by the bankruptcy trustee. See Tu Pham v. Hung Chu, 2013 Cal. App.
4 Unpub. LEXIS 1854, at *7 (Mar. 13, 2013) (recognizing that claims split between two parties
5 must be raised in a joint action brought by both the assignor and assignee).
6 II. ERISA PREEMPTS BRISTOL'S STATE LAW CLAIMS
7 Bristol's opposition makes much of its decision to forgo a claim based on an assignment
8 of benefits, (Opp. 6), but that decision has no bearing on whether its claims are preempted by
9 ERISA Section 514. Rather, the test-which, Bristol does not dispute-is whether a state law has
10 an impermissible "connection with" ERISA plans, including such a law that "interferes with
11 nationally uniform plan administration." See Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936,
12 945 (2016).
13 Bristol, without reference to authority, asserts dismissal is premature because United has
14 not demonstrated that the patients at issue were covered by an ERISA plan. However, courts
15 have recognized that on a motion to dismiss, it is appropriate to dismiss claims "to the extent they
16 seek compensation under ERISA-covered plans." Hill v. Opus Corp., 841 F. Supp. 2d 1070,
17 1081 (C.D. Cal. 2011); see also Ctr.for Special Procedures v. Conn. Gen. Life Ins. Co., 2010
18 U.S. Dist. LEXIS 128289, at *9 (D.N.J. Dec. 6, 2010) ("We find that Count 1 through Count 9 of
19 the Second Amended Complaint, insofar as they are asserted as to the ERISA plans, are expressly
20 preempted by ERISA because they "relate to" Defendants' administration of the ERISA plans.").
21 Given that many, and likely most, of Bristol's claims are governed by an ERISA plan, this Court
22 should dismiss Bristol's claims to the extent they are governed by ERISA. See Bristol SL
23 Holdings, Inc., et al. v. United Health Care Services, Inc., et al., No. 8:19-cv-00710-DOC, ECF
24 No. 38-2 (C.D. Cal. June 13, 2019) (attaching samples ofERISA plans at issue in this case).
25 ERISA's express preemption doctrine preempts all state law causes of action that would
26 "require the Court to analyze the terms of [an] ERISA plan" or would "not exist in the absence of
27 [an] ERlSA Plan." Korman v. ILWU-PMA Claims Office, 2019 U.S. Dist. LEXIS 58646, at *45
28 (C.D. Cal. Mar. 19, 2019); (see also United Mem. at 4-6). And as analyzed more fully in
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DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 United's opening memorandum, Bristol's state law claims all depend on the existence of an
2 ERISA plan. Each claim involves alleged communications about the ERISA plan terms of the
3 Providers' patients. For example, Bristol alleges that United "verified" the participants' benefits
4 and learned the "specific reimbursement rate at which Defendant would pay for mental health and
5 substance use disorder services." (Compl. ,r,r 35-36.) These kind of communications plainly
6 "relate to" an ERISA plan-they are direct communications about plan terms. Thus, because
7 none of these communications would have been made "in the absence of an ERISA plan," they
8 are plainly preempted. Korman, 2019 U.S. Dist. LEXIS 58646 at *45; see also Port Med.
9 Wellness, Inc. v. Conn. Gen. Life Ins. Co., 233 Cal. Rptr. 3d 830, 848 (Cal. Ct. App. 2018) ("[A]
1O health care provider that treats a beneficiary of a welfare benefit plan may assert a claim in state
11 court against the plan if it is based on an obligation between the plan and the provider separate
12 from the welfare benefit plan itself and does not inquire into entitlement to benefits under the
13 plan." (emphasis added)).
14 Under the broader conflict preemption doctrine, Bristol cannot avoid dismissal of its
15 claims by arguing the allegations are violations of legal duties "independ[ent]" of an ERIS A plan.
16 (Opp. 8.) The communications that Bristol alleges United made-"verification" of plan benefits
17 and the specific reimbursement rate-were explicitly communications about ERISA plan terms.
18 (Compl. ,r 35.) The preauthorizations that the Providers purportedly obtained were allegedly
19 required by United in its capacity as administrator of the ERISA plan. And the alleged ongoing
20 confirmations of coverage were all made in the context of ERIS A's claims procedures. See
21 ERISA § 503; 29 C.F.R. § 2560.503-l(f)(2)(ii) (providing rules for ongoing communications and
22 authorizations of treatment). All ofUnited's alleged communications, in other words, were about
23 the terms of an ERISA plan or made in the context of administering plan benefits. These
24 communications plainly "relate to" an ERISA plan. Here, the alleged representations underlying
25 Bristol's state law claims are rooted in ERIS A plan terms, and thus are preempted.
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DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 III. BRISTOL'S STATE LAW CLAIMS FAIL TO STATE
2 A. Bristol's Contract and Quasi-Contract Claims Fail to State a Plausible Claim
3 As noted in United's opening memorandum, courts recognize that preauthorization
4 communications between a group health plan and a medical provider do not give rise to a breach
5 of contract cause of action. E.g., Tenet Healthsystem Desert, Inc. v. Fortis Ins. Co., Inc., 520 F.
6 Supp. 2d 1184, 1194 (C.D. Cal. 2007) (stating that coverage verification "cannot be construed as
7 a binding contractual agreement" (quotations omitted)); (see also United Mem. at 11-12). As a
8 result, courts routinely dismiss breach of contract claims raised by providers based upon
9 confirmations of group health plan coverage delivered during preauthorization communications.
10 (United Mem. at 11-12.) For multiple reasons, Bristol's attempts to avoid these authorities fail.
11 First, the majority of courts have rejected the view of cases such as Regents of the Univ. of
12 Cal. v. Principal Fin. Grp., 412 F. Supp. 2d 1037, 1042 (N.D. Cal. 2006). Instead, as these courts
13 recognize, preauthorization communications from a group health plan administrator are not an
14 "offer" to enter into a contractual relationship. (See, e.g., United Mem. 11-12); see also Cedars
15 Sinai Med. Ctr. v. Mid-West Nat'! Life Ins. Co., 118 F. Supp. 2d 1002, 1008 (C.D. Cal. 2000)
16 ("[W]ithin the medical insurance industry, an insurer's verification is not the same as a promise to
17 pay."). 1 As these courts correctly recognize, absent unique circumstances (which must be pled),
18 nothing in routine preauthorization communications between a group health plan administrator
19 and a medical provider suggests that a communication about the terms of a plan constitutes a
20 "binding contractual agreement." Tenet, 520 F. Supp. at 1194. Allowing such claims to go
21 forward based upon nothing more than routine verifications of coverage would greatly hinder an
22 administrators' ability to communicate with medical providers about plan coverage.
23 For example, in Pacific Bay Recovery, Inc. v. California Physicians' Services, Inc., an
24 addiction treatment center brought suit against a healthcare service plan alleging, among other
25 things, breach of implied contract. 218 Cal. Rptr. 3d 562,574 (Cal. Ct. App. 2017). The
26 1 See also YDM Mgmt. Co. v. Aetna Life Ins. Co., 2016 U.S. Dist. LEXIS 91208, at *11 (C.D.
27 Cal. July 13, 2016) (dismissing plaintiffs contractual causes of action based on authorization
phone calls when the insurer "never stated the actual amount that would be paid or allowed for
28 services" (quotations omitted)).
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DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 provider's claim stemmed from its allegations that it had contacted the plan to obtain prior
2 authorization to provide treatment to the patients at issue, and that representatives of the plan
3 assured the provider that it "'would be paid for performance of the procedures, care, and/or
4 treatment'" and "'paid a portion or percentage of its total billed charges, which charges correlated
5 with usual, reasonable, and customary charges."' Id. at 575 (quoting from the provider's
6 complaint). The court of appeals affirmed the dismissal of this claim, finding that these
7 allegations were insufficient to show "there was any meeting of the minds between the parties.
8 At best, [the provider's] allegations show that [the plan] admitted that the subscriber was covered
9 under one of its health plans and that it would pay something for [the provider's] treatment of the
10 subscriber." Id. Like the plan in Pacific Bay, Bristol merely alleges that United verified the
11 benefits for the patients at issue, and does not sufficiently allege that the discussions that took
12 place during these verifications calls amounted to a meeting of the minds between the parties.
13 Second, in any event, Bristol's cited cases are distinguishable. In each case cited by
14 Bristol, the pleading or evidence at issue demonstrated that the administrator intended to be
15 bound to a separate contract-they were not simply communicating information about the terms
16 of the plan in question. For example, in Regents of the Univ. of Cal., the administrator sent a
17 letter to the hospital explicitly authorizing the hospital stay in question. Regents, 412 F. Supp. 2d
18 at 1042. 2 In contrast, the Complaint here does not include any plausible factual allegations that
19 United actually made a promise to pay separate and apart from ERISA plan terms. Rather, all the
20 Complaint alleges is that United confirmed that participants were "eligible for ... benefits"
21 (Compl. il 35) and that the plan would pay out-of-network providers such as the Providers at a
22 rate that was a percentage of the usual and customary in the area. (Id. il 39.) Bristol does not
23 allege that either of these statements were untrue-and they cannot point to any non-conclusory
24 allegation that United made a promise that it would actually pay for the treatments in question.
25 Although Bristol may point to conclusory allegations that United made "offer[s] to
26
2
Bristol's other authorities are similarly distinguishable. See Enloe Med. Ctr. v. Principal Life
27 Ins. Co., 2011 U.S. Dist. LEXIS 146194, at *5-6 (E.D. Cal. Dec. 20, 2011) (insurer authorized
treatment of services "explicitly excluded from coverage").
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DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 reimburse [Providers] for services rendered," (id. ,r 36), those conclusory allegations do not save
2 its contract claims. See Armijo v. ILWU-PMA Welfare Plan, 2015 U.S. Dist. LEXIS 192447, at
3 *70-71 (C.D. Cal. Aug. 21, 2015) (dismissing medical providers' breach of implied contract
4 claim, which was premised on preauthorization letters, because the "allegations [were] conclusory
5 and insufficient to state a claim and [were] preempted as currently plead"). Apart from alleging
6 that United confirmed that patients were participants in group health plans and the rate at which
7 the plans paid out-of-network providers, Bristol does not cite to a single factual allegation
8 suggesting that United promised to pay separate and apart from plan terms. In fact, Bristol's legal
9 conclusions are implausible. It is simply not realistic to think that administrative employees at
10 United would make blanket promises to pay for any services that the Providers might provide to
11 their patients, even if those services were not ultimately covered by the group health plans in
12 question. Bristol has thus failed to plausibly allege that United made contractual "offers" to the
13 Providers, which could form the basis for a breach of contract claim under state law.
14 B. Bristol's UCL Claim Fails to State a Claim
15 Like its failure to squarely address many of United's other arguments and authorities,
16 Bristol ignores most ofUnited's UCL arguments. For example, Bristol does not dispute it is not a
17 competitor or consumer of United and therefore cannot proceed under the "unlawful/unfair"
18 prong of the UCL. See Linear Tech. Corp. v. Applied Materials, Inc., 61 Cal. Rptr. 3d 221,237
19 (Cal. Ct. App. 2007) (holding that a non-competing business cannot resolve a business-to-
20 business contract dispute through a claim under the UCL's "unfair" prong."). As to the
21 "fraudulent" prong of the UCL, Bristol failed to allege any fraudulent conduct with particularity.
22 See Flores v. EMC Mortg. Co., 997 F. Supp. 2d 1088, 1119 (E.D. Cal. 2014) (quotations and
23 citation omitted).
24 Bristol argues that it is entitled to "equitable relief' under the UCL without seeking
25 restitution. (Opp. 13.) To be "restitution," Bristol's claim would need to seek the return of
26 money it paid to United. See Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 944 (Cal.
27 2003) ("[A]n order for restitution is one compelling a UCL defendant to return money obtained
28 through an unfair business practice to those persons in interest from whom the property was taken
9
DEFENDANT UNITED BERAVIORALHEALTH'S REPLY IN SUPPORT OF DEMURRER
1 .... " (quotations and citations omitted)). Even Bristol seems to concede its Complaint does not.
2 But the purpose of the UCL is to allow individuals to recover money or property paid to an
3 individual or entity that is engaging in unfair business practices. 3 Bristol has not alleged that it
4 paid any money to United; rather, Bristol is seeking payment pursuant to agreements that were
5 allegedly made during verification of benefit calls with United. (Opp. 13; Compl. ii 1890.) As
6 such, Bristol is not seeking equitable relief and its UCL claim should be dismissed. See IV Sols.,
7 Inc. v. United Healthcare Servs., 2014 U.S. Dist. LEXIS 197034, at *23-25 (C.D. Cal. May 29,
8 2014) (granting summary judgment dismissal of plaintiffs UCL claim, which was a veiled
9 attempt to "recover the amounts [plaintiff] claim[ed] were due under the four contracts on which
10 it has sued").
11 C. Bristol's Interference Claims Fail
12 Finally, Bristol's claim for interference with prospective economic advantage fails on its
13 merits and should be dismissed. In opposition to United's arguments on this point, Bristol merely
14 recites the elements of this cause of action and baselessly states that it has alleged all of the
15 elements. (Opp. 13-14.) Bristol does not address the arguments United made in its opening
16 memorandum: an interference claim is not proper against an entity with a direct interest or
17 involvement in the relationship. See, e.g., PM Grp., Inc. v. Stewart, 64 Cal. Rptr. 3d 227, 235-36
18 (Cal. Ct. App. 2007); see also Mintz v. Blue Cross of Cal., 92 Cal. Rptr. 3d 422, 429-32 (Cal. Ct.
19 App. 2009) (claims administrator not a stranger for purposes of an interference claim asserted
20 against it). Because Bristol only alleges that United interfered in the relationship between United
21 and Bristol (see, e.g., Compl. ilil 1900, 1911 ), which is insufficient to state a claim under this
22 cause of action, Counts VIII and IX of the Complaint should be dismissed.
23 CONCLUSION
24 United respectfully urges this Court to sustain its demurrer to the Complaint without leave
25 to amend. See Hendy v. Losse, 819 P.2d 1, 14 (Cal. 1991).
26
3See Cal. Bus. & Prof. Code§ 17203 (under the UCL, a court may enter an order or injunction
27 "to restore any person in interest any money or property, real or personal, which may have been
acquired by means of unfair competition")
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DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 Dated: February 5, 2020 DORSEY & WHITNEY LLP
{)Jd~
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3 By:~
Div . Gupta
4 M=ll:S. Grant (admitted pro hac vice)
Andrew Holly (admitted pro hac vice)
5 Meghan DesLauriers (admitted pro hac vice)
6 Attorneys for Defendant United Behavioral
Health
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DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER
1 PROOF OF SERVICE
2 STATE OF CALIFORNIA, COUNTY OF ORANGE
3 I am employed in the City of Minneapolis, County of Hennepin, State of Minnesota. I am
over the age of 18 years and not a party to the within action. My business address is 50 South sixth
4 Street, Suite 1500, Minneapolis, Minnesota 55402.
5 On February 5, 2020, I served a copy of the following document(s) described as:
DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF
6 DEMURRER on the interested parties in this action as follows:
7 Jennifer A. Liakos, Esq. Attorneys for Plaintiff
Matthew M. Lavin, Esq.
8 NAPOLI SHKOLNIK PLLC
5757 W. Century Blvd., Suite 680
9 Los Angeles, CA 90045
Tel: (212) 397-1000
10 Fax: (646) 843-7603
j liakos@napo lilaw .com
11 mlavin@napolilaw.com
12 John W. Tower, Esq. Attorneys for Plaintiff
Law Office of John W. Tower
13 2211 Encinitas Blvd., 2nd Floor
Encinitas, CA 92024
14 Tel: (760) 436-5589
Fax: (760) 479-0570
15 towerlawsd@gmail.com
16 IZI BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an
agreement of the parties to accept service by e-mail or electronic transmission, I caused the
17 document to be sent from roadfeldt.christi@dorsey.com to the persons at the e-mail
addresses listed above.
18
STATE: I declare under penalty of perjury under the laws of the State of California that
19 the foregoing is true and correct.
20 Executed on February 5, 2020, at Minneapolis, Minnesota.
21
22 Christi Roadfeldt
(Type or print name) ( ~
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PROOF OF SERVICE
Preview
1 DIVYA S. GUPTA (SBN 284282) gupta.divya@dorsey.com ELECTRONICALLY 2 DORSEY & WHITNEY LLP 600 Anton Boulevard, Suite 2000 F I L E D Superior Court of California, 3 Costa Mesa, CA 92626 County of San Francisco Telephone: (714) 800-1400 4 Facsimile: (714) 800-1499 02/05/2020 Clerk of the Court BY: RONNIE OTERO 5 MICHELLE S. GRANT* Deputy Clerk grant.michelle@dorsey.com 6 ANDREW HOLLY* holly.andrew@dorsey.com 7 MEGHAN L. DESLAURIERS* deslauriers.meghan@dorsey.com 8 DORSEY & WHITNEY LLP 50 South Sixth Street, Suite 1500 9 Minneapolis, MN 55402 Telephone: (612) 340-2600 10 Facsimile: (612) 340-2868 11 Attorneys for Defendant United Behavioral Health 12 *Admitted Pro Hae Vice 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 FOR THE COUNTY OF SAN FRANCISCO 15 16 BRISTOL SL HOLDINGS, INC., a California Case No. CGC-19-580534 corporation, in its capacity as the owner of the 17 claims of SURE HAVEN, INC., a California corporation, and CEDAR CREEK RECOVERY, DEFENDANT UNITED BEHAVIORAL 18 INC., a Texas corporation, HEALTH'S REPLY IN SUPPORT OF DEMURRER 19 Plaintiff, 20 v. RESERVATION NO. 012060213-13 EARING 21 UNITED BEHAVIORAL HEALTH, a ate: February 13, 2020 California corporation; and, DOES 1 Time: 9:30 a.m. 22 THROUGH 25, inclusive, Dept.: 302 23 Defendants. ction Filed: November 5, 2019 Trial Date: None Set. 24 25 26 27 INTRODUCTION 28 Plaintiff Bristol SL Holdings, Inc.' s ("Bristol") claims should be dismissed on the DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 fundamental basis that Bristol does not have standing. Bristol lacks the right to pursue this cause 2 of action and has not been able to establish otherwise. Moreover, despite its protestations to the 3 contrary, Bristol's allegations are inextricably linked to the benefit plans of the patients at issue. 4 Indeed, Bristol accuses United of verifying coverage based on the benefit plans at issue. In such 5 circumstances, common law claims are preempted by ERISA's exclusive remedies, and as such, 6 this Court should dismiss Bristol's common law claims. Even if ERIS A does not preempt 7 Bristol's claims-it does-Bristol's common law claims fail for an additional reason: they all 8 fail to state a claim upon which relief may be granted. 9 ARGUMENT 10 I. BRISTOL LACKS STANDING 11 A. Bankruptcy Assignment 12 As noted in Defendant United Behavioral Health's ("United") opening memorandum, the 13 bankruptcy documents Bristol relies on for the authority to sue United expressly state that "all 14 claims [and] causes of action" are excluded from the bankruptcy assets Bristol purchased. (See 15 Memorandum of Points and Authorities filed on Dec. 6, 2019 ("United Mem.") at 3.) 16 Bristol's ad hominem attacks, insinuating that United previously raised and lost its 17 "fallacious" bankruptcy standing argument are unfounded. (See Opp. 2.) While it is true that 18 United raised this argument previously in Bristol SL Holdings, Inc., et al.v. United Health Care 19 Services, Inc., et al., No. 8:19-cv-00710-DOC, that court did not expressly rule on whether Bristol 20 validly purchased the claims at issue through its bankruptcy transaction, and instead dismissed · 21 Bristol's ERISA claim on the basis that Bristol was neither a healthcare provider nor an assignee 22 with proper standing to bring an ERISA claim. See id., ECF No. 62 at 6 (C.D. Cal. Oct. 7, 2019). 23 The court made no ruling on United's bankruptcy standing argument. (Id) 24 Bristol also argues that "United cites to a portion of the [bankruptcy] Stipulation that is 25 taken entirely out of context and misconstrued." (Opp. 3.) However, it is Bristol who 26 misconstrues the section of the stipulation. Bristol states that exclusion of litigation claims 27 referenced in the stipulation "is clearly intended to preserve the Trustee's rights to pursue 28 avoidance claims under 11 U.S.C. §§ 547 and 548." (Id.) However, the full statement is as 2 DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 follows: 2 All claims, causes of action, choses in action, rights of recovery, rights of set-off, 3 and rights of recoupment belonging to the Debtors and their Estates, including, 4 without limitation, any and all avoidance causes of action belonging the Estates 5 pursuant to 11 U.S.C. §§ 547 and 548, and all rights and legal privileges and 6 confidential information related thereto (collectively, the "Litigation Claims") shall 7 be excluded from the Transferred Assets and shall be retained by the Estates as 8 Retained Assets. 9 See Deel. of Payton George filed on Dec. 6, 2019, Ex. A, at p. 6, § 4 (emphasis added). The 10 provision was not intended to only cover claims under 11 U.S.C. §§ 547 and 548, but to "all 11 claims" including but not limited to those under 11 U.S.C. §§ 547 and 548. Stated differently, 12 avoidance causes of action under 11 U.S.C. §§ 547 and 548 are one kind of litigation claim 13 excluded from the transferred assets, but nothing in the provision indicates that they are the only 14 claims excluded. 15 To clarify any ambiguity, United reached out to counsel for the liquidating trustee who 16 could not confirm one way or another whether Bristol owned the claims, and informed Bristol 17 counsel on January 24, 2020 that United would seek clarification from the bankruptcy court. See 18 Bristol's Request for Judicial Notice filed on Jan. 31, Ex.Bat p. 59. United offered to stipulate 19 to a stay of the present litigation until the standing issue could be definitively resolved by the 20 bankruptcy court. (Id.) Instead of allowing clarification from the court that approved the very 21 purchase at issue, Bristol would prefer to move ahead with the pending demurrer. 22 Because the plain language of the bankruptcy documents do not demonstrate that Bristol 23 has standing-and Bristol has failed to provide any affidavit or other document confirming its 24 position is accurate-United asks this Court to either: (1) dismiss the lawsuit in its entirety or (2) 25 stay this litigation until the bankruptcy court has confirmed whether or not Bristol purchased the 26 claims at issue in this lawsuit. Either way, absent additional information or evidence, Bristol 27 should not be permitted to pursue this action. 28 3 DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 B. Under California Law, the Providers Cannot Assign the Claims to Bristol 2 First, under California law, Bristol's UCL claim is unassignable. Bristol admits the UCL 3 claims at issue were received in an assignment from Sure Haven, Inc. and Cedar Creek Recovery, 4 Inc. (the "Providers") through bankruptcy. (Opp. 4-5.) This dooms Bristol's claims. Bristol 5 argues that it has standing because it paid consideration for its assignment. (Id) Bristol cites to 6 no authority for this position and urges this Court to ignore the clear holding of Amalgamated 7 Transit Union Local 1756, AFL-CIO v. Superior Court, 209 P.3d 937,943 (Cal. 2009), which 8 flatly prohibits the assignment of unfair competition claims. Bristol contends that because 9 Amalgamated doesn't discuss "if any consideration was paid for the assignment" it does not apply 10 here. (Opp. 4.) Not so. The holding of Amalgamated contains no such limitation. To the 11 contrary, Amalgamated broadly holds that unfair competition claims cannot be assigned. (Id at 12 1002.) An assignment of such claims would run afoul of "the express statutory requirement in the 13 unfair competition law ... that a private action under that law be brought exclusively by a 'person 14 who has suffered injury in fact and has lost money or property as result of the unfair 15 competition."' (Id.) Bristol's claim therefore fails on this ground alone. 16 Second, the Providers' fraud and tort claims were not properly assigned to Bristol. "[A] 17 person may assign a cause of action for fraud along with the person's right to the property 18 obtained by the fraud, but a mere naked right of action for fraud, divorced from any other 19 property right, is not assignable." White Mountains Reinsurance Co. ofAmerica v. Petrini, 164 20 Cal. Rptr. 3d 912, 917 (Cal. Ct. App. 2013) (emphasis in original). While it is true that 21 assignability is generally permitted, here Bristol did not obtain any property or proceeds related to 22 the fraud; rather, it was assigned a naked fraud claim, which is impermissible. 23 Third, because the other claims at issue in this lawsuit cannot be assigned, claim-splitting 24 would occur, potentially forcing Bristol to go forward with the contract claims when (at least 25 some of) their remaining claims are still in the hands of the bankruptcy trustee. Bristol makes no 26 attempt to argue that claim splitting would not occur; rather, Bristol focuses on discussing the 27 assignability of contract claims (Opp. 5)-which United acknowledged is possible (see United 28 Mem. 5). Bristol then simply concludes that it has the sole right to proceed on all assigned 4 DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 claims, based on its prior arguments. (Opp. 5-6.) To the extent Bristol's remaining assigned 2 claims can be raised, they must be brought in the bankruptcy court, which has exclusive 3 jurisdiction over claims by the bankruptcy trustee. See Tu Pham v. Hung Chu, 2013 Cal. App. 4 Unpub. LEXIS 1854, at *7 (Mar. 13, 2013) (recognizing that claims split between two parties 5 must be raised in a joint action brought by both the assignor and assignee). 6 II. ERISA PREEMPTS BRISTOL'S STATE LAW CLAIMS 7 Bristol's opposition makes much of its decision to forgo a claim based on an assignment 8 of benefits, (Opp. 6), but that decision has no bearing on whether its claims are preempted by 9 ERISA Section 514. Rather, the test-which, Bristol does not dispute-is whether a state law has 10 an impermissible "connection with" ERISA plans, including such a law that "interferes with 11 nationally uniform plan administration." See Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936, 12 945 (2016). 13 Bristol, without reference to authority, asserts dismissal is premature because United has 14 not demonstrated that the patients at issue were covered by an ERISA plan. However, courts 15 have recognized that on a motion to dismiss, it is appropriate to dismiss claims "to the extent they 16 seek compensation under ERISA-covered plans." Hill v. Opus Corp., 841 F. Supp. 2d 1070, 17 1081 (C.D. Cal. 2011); see also Ctr.for Special Procedures v. Conn. Gen. Life Ins. Co., 2010 18 U.S. Dist. LEXIS 128289, at *9 (D.N.J. Dec. 6, 2010) ("We find that Count 1 through Count 9 of 19 the Second Amended Complaint, insofar as they are asserted as to the ERISA plans, are expressly 20 preempted by ERISA because they "relate to" Defendants' administration of the ERISA plans."). 21 Given that many, and likely most, of Bristol's claims are governed by an ERISA plan, this Court 22 should dismiss Bristol's claims to the extent they are governed by ERISA. See Bristol SL 23 Holdings, Inc., et al. v. United Health Care Services, Inc., et al., No. 8:19-cv-00710-DOC, ECF 24 No. 38-2 (C.D. Cal. June 13, 2019) (attaching samples ofERISA plans at issue in this case). 25 ERISA's express preemption doctrine preempts all state law causes of action that would 26 "require the Court to analyze the terms of [an] ERISA plan" or would "not exist in the absence of 27 [an] ERlSA Plan." Korman v. ILWU-PMA Claims Office, 2019 U.S. Dist. LEXIS 58646, at *45 28 (C.D. Cal. Mar. 19, 2019); (see also United Mem. at 4-6). And as analyzed more fully in 5 DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 United's opening memorandum, Bristol's state law claims all depend on the existence of an 2 ERISA plan. Each claim involves alleged communications about the ERISA plan terms of the 3 Providers' patients. For example, Bristol alleges that United "verified" the participants' benefits 4 and learned the "specific reimbursement rate at which Defendant would pay for mental health and 5 substance use disorder services." (Compl. ,r,r 35-36.) These kind of communications plainly 6 "relate to" an ERISA plan-they are direct communications about plan terms. Thus, because 7 none of these communications would have been made "in the absence of an ERISA plan," they 8 are plainly preempted. Korman, 2019 U.S. Dist. LEXIS 58646 at *45; see also Port Med. 9 Wellness, Inc. v. Conn. Gen. Life Ins. Co., 233 Cal. Rptr. 3d 830, 848 (Cal. Ct. App. 2018) ("[A] 1O health care provider that treats a beneficiary of a welfare benefit plan may assert a claim in state 11 court against the plan if it is based on an obligation between the plan and the provider separate 12 from the welfare benefit plan itself and does not inquire into entitlement to benefits under the 13 plan." (emphasis added)). 14 Under the broader conflict preemption doctrine, Bristol cannot avoid dismissal of its 15 claims by arguing the allegations are violations of legal duties "independ[ent]" of an ERIS A plan. 16 (Opp. 8.) The communications that Bristol alleges United made-"verification" of plan benefits 17 and the specific reimbursement rate-were explicitly communications about ERISA plan terms. 18 (Compl. ,r 35.) The preauthorizations that the Providers purportedly obtained were allegedly 19 required by United in its capacity as administrator of the ERISA plan. And the alleged ongoing 20 confirmations of coverage were all made in the context of ERIS A's claims procedures. See 21 ERISA § 503; 29 C.F.R. § 2560.503-l(f)(2)(ii) (providing rules for ongoing communications and 22 authorizations of treatment). All ofUnited's alleged communications, in other words, were about 23 the terms of an ERISA plan or made in the context of administering plan benefits. These 24 communications plainly "relate to" an ERISA plan. Here, the alleged representations underlying 25 Bristol's state law claims are rooted in ERIS A plan terms, and thus are preempted. 26 27 28 6 DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 III. BRISTOL'S STATE LAW CLAIMS FAIL TO STATE 2 A. Bristol's Contract and Quasi-Contract Claims Fail to State a Plausible Claim 3 As noted in United's opening memorandum, courts recognize that preauthorization 4 communications between a group health plan and a medical provider do not give rise to a breach 5 of contract cause of action. E.g., Tenet Healthsystem Desert, Inc. v. Fortis Ins. Co., Inc., 520 F. 6 Supp. 2d 1184, 1194 (C.D. Cal. 2007) (stating that coverage verification "cannot be construed as 7 a binding contractual agreement" (quotations omitted)); (see also United Mem. at 11-12). As a 8 result, courts routinely dismiss breach of contract claims raised by providers based upon 9 confirmations of group health plan coverage delivered during preauthorization communications. 10 (United Mem. at 11-12.) For multiple reasons, Bristol's attempts to avoid these authorities fail. 11 First, the majority of courts have rejected the view of cases such as Regents of the Univ. of 12 Cal. v. Principal Fin. Grp., 412 F. Supp. 2d 1037, 1042 (N.D. Cal. 2006). Instead, as these courts 13 recognize, preauthorization communications from a group health plan administrator are not an 14 "offer" to enter into a contractual relationship. (See, e.g., United Mem. 11-12); see also Cedars 15 Sinai Med. Ctr. v. Mid-West Nat'! Life Ins. Co., 118 F. Supp. 2d 1002, 1008 (C.D. Cal. 2000) 16 ("[W]ithin the medical insurance industry, an insurer's verification is not the same as a promise to 17 pay."). 1 As these courts correctly recognize, absent unique circumstances (which must be pled), 18 nothing in routine preauthorization communications between a group health plan administrator 19 and a medical provider suggests that a communication about the terms of a plan constitutes a 20 "binding contractual agreement." Tenet, 520 F. Supp. at 1194. Allowing such claims to go 21 forward based upon nothing more than routine verifications of coverage would greatly hinder an 22 administrators' ability to communicate with medical providers about plan coverage. 23 For example, in Pacific Bay Recovery, Inc. v. California Physicians' Services, Inc., an 24 addiction treatment center brought suit against a healthcare service plan alleging, among other 25 things, breach of implied contract. 218 Cal. Rptr. 3d 562,574 (Cal. Ct. App. 2017). The 26 1 See also YDM Mgmt. Co. v. Aetna Life Ins. Co., 2016 U.S. Dist. LEXIS 91208, at *11 (C.D. 27 Cal. July 13, 2016) (dismissing plaintiffs contractual causes of action based on authorization phone calls when the insurer "never stated the actual amount that would be paid or allowed for 28 services" (quotations omitted)). 7 DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 provider's claim stemmed from its allegations that it had contacted the plan to obtain prior 2 authorization to provide treatment to the patients at issue, and that representatives of the plan 3 assured the provider that it "'would be paid for performance of the procedures, care, and/or 4 treatment'" and "'paid a portion or percentage of its total billed charges, which charges correlated 5 with usual, reasonable, and customary charges."' Id. at 575 (quoting from the provider's 6 complaint). The court of appeals affirmed the dismissal of this claim, finding that these 7 allegations were insufficient to show "there was any meeting of the minds between the parties. 8 At best, [the provider's] allegations show that [the plan] admitted that the subscriber was covered 9 under one of its health plans and that it would pay something for [the provider's] treatment of the 10 subscriber." Id. Like the plan in Pacific Bay, Bristol merely alleges that United verified the 11 benefits for the patients at issue, and does not sufficiently allege that the discussions that took 12 place during these verifications calls amounted to a meeting of the minds between the parties. 13 Second, in any event, Bristol's cited cases are distinguishable. In each case cited by 14 Bristol, the pleading or evidence at issue demonstrated that the administrator intended to be 15 bound to a separate contract-they were not simply communicating information about the terms 16 of the plan in question. For example, in Regents of the Univ. of Cal., the administrator sent a 17 letter to the hospital explicitly authorizing the hospital stay in question. Regents, 412 F. Supp. 2d 18 at 1042. 2 In contrast, the Complaint here does not include any plausible factual allegations that 19 United actually made a promise to pay separate and apart from ERISA plan terms. Rather, all the 20 Complaint alleges is that United confirmed that participants were "eligible for ... benefits" 21 (Compl. il 35) and that the plan would pay out-of-network providers such as the Providers at a 22 rate that was a percentage of the usual and customary in the area. (Id. il 39.) Bristol does not 23 allege that either of these statements were untrue-and they cannot point to any non-conclusory 24 allegation that United made a promise that it would actually pay for the treatments in question. 25 Although Bristol may point to conclusory allegations that United made "offer[s] to 26 2 Bristol's other authorities are similarly distinguishable. See Enloe Med. Ctr. v. Principal Life 27 Ins. Co., 2011 U.S. Dist. LEXIS 146194, at *5-6 (E.D. Cal. Dec. 20, 2011) (insurer authorized treatment of services "explicitly excluded from coverage"). 28 8 DEFENDANT UNITED BERAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 reimburse [Providers] for services rendered," (id. ,r 36), those conclusory allegations do not save 2 its contract claims. See Armijo v. ILWU-PMA Welfare Plan, 2015 U.S. Dist. LEXIS 192447, at 3 *70-71 (C.D. Cal. Aug. 21, 2015) (dismissing medical providers' breach of implied contract 4 claim, which was premised on preauthorization letters, because the "allegations [were] conclusory 5 and insufficient to state a claim and [were] preempted as currently plead"). Apart from alleging 6 that United confirmed that patients were participants in group health plans and the rate at which 7 the plans paid out-of-network providers, Bristol does not cite to a single factual allegation 8 suggesting that United promised to pay separate and apart from plan terms. In fact, Bristol's legal 9 conclusions are implausible. It is simply not realistic to think that administrative employees at 10 United would make blanket promises to pay for any services that the Providers might provide to 11 their patients, even if those services were not ultimately covered by the group health plans in 12 question. Bristol has thus failed to plausibly allege that United made contractual "offers" to the 13 Providers, which could form the basis for a breach of contract claim under state law. 14 B. Bristol's UCL Claim Fails to State a Claim 15 Like its failure to squarely address many of United's other arguments and authorities, 16 Bristol ignores most ofUnited's UCL arguments. For example, Bristol does not dispute it is not a 17 competitor or consumer of United and therefore cannot proceed under the "unlawful/unfair" 18 prong of the UCL. See Linear Tech. Corp. v. Applied Materials, Inc., 61 Cal. Rptr. 3d 221,237 19 (Cal. Ct. App. 2007) (holding that a non-competing business cannot resolve a business-to- 20 business contract dispute through a claim under the UCL's "unfair" prong."). As to the 21 "fraudulent" prong of the UCL, Bristol failed to allege any fraudulent conduct with particularity. 22 See Flores v. EMC Mortg. Co., 997 F. Supp. 2d 1088, 1119 (E.D. Cal. 2014) (quotations and 23 citation omitted). 24 Bristol argues that it is entitled to "equitable relief' under the UCL without seeking 25 restitution. (Opp. 13.) To be "restitution," Bristol's claim would need to seek the return of 26 money it paid to United. See Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 944 (Cal. 27 2003) ("[A]n order for restitution is one compelling a UCL defendant to return money obtained 28 through an unfair business practice to those persons in interest from whom the property was taken 9 DEFENDANT UNITED BERAVIORALHEALTH'S REPLY IN SUPPORT OF DEMURRER 1 .... " (quotations and citations omitted)). Even Bristol seems to concede its Complaint does not. 2 But the purpose of the UCL is to allow individuals to recover money or property paid to an 3 individual or entity that is engaging in unfair business practices. 3 Bristol has not alleged that it 4 paid any money to United; rather, Bristol is seeking payment pursuant to agreements that were 5 allegedly made during verification of benefit calls with United. (Opp. 13; Compl. ii 1890.) As 6 such, Bristol is not seeking equitable relief and its UCL claim should be dismissed. See IV Sols., 7 Inc. v. United Healthcare Servs., 2014 U.S. Dist. LEXIS 197034, at *23-25 (C.D. Cal. May 29, 8 2014) (granting summary judgment dismissal of plaintiffs UCL claim, which was a veiled 9 attempt to "recover the amounts [plaintiff] claim[ed] were due under the four contracts on which 10 it has sued"). 11 C. Bristol's Interference Claims Fail 12 Finally, Bristol's claim for interference with prospective economic advantage fails on its 13 merits and should be dismissed. In opposition to United's arguments on this point, Bristol merely 14 recites the elements of this cause of action and baselessly states that it has alleged all of the 15 elements. (Opp. 13-14.) Bristol does not address the arguments United made in its opening 16 memorandum: an interference claim is not proper against an entity with a direct interest or 17 involvement in the relationship. See, e.g., PM Grp., Inc. v. Stewart, 64 Cal. Rptr. 3d 227, 235-36 18 (Cal. Ct. App. 2007); see also Mintz v. Blue Cross of Cal., 92 Cal. Rptr. 3d 422, 429-32 (Cal. Ct. 19 App. 2009) (claims administrator not a stranger for purposes of an interference claim asserted 20 against it). Because Bristol only alleges that United interfered in the relationship between United 21 and Bristol (see, e.g., Compl. ilil 1900, 1911 ), which is insufficient to state a claim under this 22 cause of action, Counts VIII and IX of the Complaint should be dismissed. 23 CONCLUSION 24 United respectfully urges this Court to sustain its demurrer to the Complaint without leave 25 to amend. See Hendy v. Losse, 819 P.2d 1, 14 (Cal. 1991). 26 3See Cal. Bus. & Prof. Code§ 17203 (under the UCL, a court may enter an order or injunction 27 "to restore any person in interest any money or property, real or personal, which may have been acquired by means of unfair competition") 28 10 DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 Dated: February 5, 2020 DORSEY & WHITNEY LLP {)Jd~ 2 3 By:~ Div . Gupta 4 M=ll:S. Grant (admitted pro hac vice) Andrew Holly (admitted pro hac vice) 5 Meghan DesLauriers (admitted pro hac vice) 6 Attorneys for Defendant United Behavioral Health 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF DEMURRER 1 PROOF OF SERVICE 2 STATE OF CALIFORNIA, COUNTY OF ORANGE 3 I am employed in the City of Minneapolis, County of Hennepin, State of Minnesota. I am over the age of 18 years and not a party to the within action. My business address is 50 South sixth 4 Street, Suite 1500, Minneapolis, Minnesota 55402. 5 On February 5, 2020, I served a copy of the following document(s) described as: DEFENDANT UNITED BEHAVIORAL HEALTH'S REPLY IN SUPPORT OF 6 DEMURRER on the interested parties in this action as follows: 7 Jennifer A. Liakos, Esq. Attorneys for Plaintiff Matthew M. Lavin, Esq. 8 NAPOLI SHKOLNIK PLLC 5757 W. Century Blvd., Suite 680 9 Los Angeles, CA 90045 Tel: (212) 397-1000 10 Fax: (646) 843-7603 j liakos@napo lilaw .com 11 mlavin@napolilaw.com 12 John W. Tower, Esq. Attorneys for Plaintiff Law Office of John W. Tower 13 2211 Encinitas Blvd., 2nd Floor Encinitas, CA 92024 14 Tel: (760) 436-5589 Fax: (760) 479-0570 15 towerlawsd@gmail.com 16 IZI BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the 17 document to be sent from roadfeldt.christi@dorsey.com to the persons at the e-mail addresses listed above. 18 STATE: I declare under penalty of perjury under the laws of the State of California that 19 the foregoing is true and correct. 20 Executed on February 5, 2020, at Minneapolis, Minnesota. 21 22 Christi Roadfeldt (Type or print name) ( ~ 23 24 25 26 27 28 PROOF OF SERVICE