Futterman v. Kaiser Foundation Health Plan, Inc. ( 2023 )

Filed 4/25/23; Certified for Publication 5/17/23 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
SUSAN FUTTERMAN et al.,
Plaintiffs and Appellants,
A162323
v.
KAISER FOUNDATION (Alameda County
HEALTH PLAN, INC., Super. Ct. No. RG13697775)
Defendant and Respondent.
Plaintiffs Susan Futterman, Maria Spivey, and Acianita Lucero appeal
the summary judgment entered in favor of defendant Kaiser Foundation
Health Plan, Inc. (the Plan) on their fourth amended complaint (complaint),
which sought, on behalf of a proposed class, injunctive relief under the Unfair
Competition Law (UCL) (Bus. & Prof. Code, § 17200), based on allegations
that the Plan violates the California Mental Health Parity Act (Parity Act)
(Health & Saf. Code,1 § 1374.72) by failing to provide coverage for all
medically necessary treatment of severe mental illness, and statutory
penalties under the Unruh Civil Rights Act (Civ. Code, § 51), based on
allegations that Kaiser intentionally discriminates against persons with
All statutory references are to the Health and Safety Code unless
1
otherwise noted.
1
disabilities by treating members with mental disabilities differently than
members with physical disabilities.
On appeal, plaintiffs contend the trial court erred in entering judgment
(1) on plaintiff Futterman’s individual claims because triable issues of fact
exist as to whether the Plan may be held liable for the acts of its subsidiary
by whom Futterman’s health care coverage was issued; (2) on the UCL cause
of action because the court failed to consider how the Plan’s own conduct
undermines its formal contractual promises of covered treatment in violation
of the Parity Act and (3) on the Unruh Civil Rights Act cause of action
because triable issues of fact exist as to whether they were denied medically
necessary treatment as a result of the Plan’s intentional discrimination. We
conclude the trial court properly entered summary judgment on Futterman’s
individual claims, but the court erred in entering summary judgment on the
causes of action for violation of the UCL and for violation of the Unruh Civil
Rights Act. Accordingly, we affirm the judgment as to Futterman but reverse
the judgment in all other respects.
I. BACKGROUND
The Plan is a nonprofit health care service plan subject to the
Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) (§ 1340
et seq.) of which the Parity Act is a part. Under the Knox-Keene Act, a
health care service plan “undertakes to arrange for the provision of health
care services to subscribers or enrollees, or to pay for or to reimburse any part
of the cost for those services, in return for a prepaid or periodic charge paid
by or on behalf of the subscribers or enrollees.” (§ 1345, subd. (f )(1), italics
added.) Consistent with the provisions of the Knox-Keene Act, the Plan
contracts with the Permanente Medical Group (TPMG) in Northern
California and Permanente Medical Group in Southern California (SCPMG)
to provide health care services to its members. (§ 1345, subd. (f)(1).)
2
The Plan’s health coverage terms are set forth in the members’
“Evidence of Coverage” (EOC). The Plan covers services if several conditions
are satisfied, including that the services are “medically necessary”—defined
in the EOC as “medically appropriate and required to prevent, diagnose, or
treat your condition or clinical symptoms in accord with generally accepted
professional standards of practice that are consistent with a standard of care
in the medical community.”
At the time of the filing of the complaint, the Parity Act provided in
relevant part: “Every health care service plan contract . . . that provides
hospital, medical, or surgical coverage shall provide coverage for the
diagnosis and medically necessary treatment of severe mental illness of a
person of any age, and of serious emotional disturbances of a child . . . under
the same terms and conditions applied to other medical conditions.” (Former
§ 1374.72, subd. (a), as amended by Stats. 2002, ch. 791, § 7; see Rea v. Blue
Shield of California (2014) 226 Cal.App.4th 1209, 1238 [The Parity Act
requires “treatment of mental illnesses sufficient to reach the same quality of
care afforded physical illnesses.”].) Former subdivision (d) of section 1374.72
defined severe mental illnesses to include a list of recognized disorders,
including schizophrenia, bipolar disorder, major depressive disorders, panic
disorder, anorexia nervosa, and bulimia nervosa. (Stats. 2002, ch. 791, § 7,
p. 5045.)2
Plaintiffs’ fourth amended complaint alleges, among other things, that
the Plan violates the Parity Act by “[d]enying, dissuading and deterring
members from obtaining one-on-one mental health therapy without making
2The Parity Act was amended, effective January 1, 2021, to apply more
broadly to the treatment of “mental health and substance use disorders.”
(Added by Stats. 2020, ch. 151, § 4.) The parties agree that the amendment
does not affect plaintiffs’ claim.
3
individualized determinations as to the medical necessity of one-on-one
mental health therapy for individual members, and where similar policies
and practices are not followed in the treatment of physical health conditions;
[r]equiring, recommending, and/or encouraging ‘group’ therapy, without
making individualized determinations as to the medical necessity or
suitability of group therapy” and “without making individualized
determinations as to the type of group therapy appropriate and medically
necessary for individual members, and where similar policies and practices
are not followed in the treatment of physical health conditions;” and
“[a]ssigning members in need of mental health treatment to one-size-fits-all
group-based [intensive outpatient programs] or similar programs, without
making individualized medical determinations as to whether it is medically
necessary or appropriate for the member, without tailoring the program to
the member’s individual medical need . . . where similar policies and
practices are not followed in the treatment of physical health conditions.”
Plaintiffs’ cause of action under the Unruh Civil Rights Act alleges that the
Plan intentionally discriminates against persons with mental disabilities or
conditions by treating them differently from people with physical disabilities
or conditions.
The amended complaint describes at length the experiences of the three
plaintiffs or their dependents illustrating these alleged deficiencies. In short,
the deceased husband of plaintiff Susan Futterman, who had been “diagnosed
as having bipolar disorder” and who ultimately committed suicide, was
released following a 72-hour stay in an inpatient facility into a group-based
intensive outpatient program. The complaint alleges, “No one individually
assessed [him] for his suitability in the program, or the medical necessity of
the program. The . . . program consisted of group therapy sessions four times
4
per week for the next six weeks and intermittent medication management.
[He] was never offered individual psychotherapy as a treatment option. The
group-based [intensive outpatient program] . . . is a one-size-fits-all program
that is not tailored to the individual medical needs of particular patients or
diagnoses.” The program “consisted of a very large group of individuals,
many of whom were recovering from substance abuse. [Futterman’s
husband] felt that he could not relate to the problems of these individuals
who did not share his condition.” When Futterman told Kaiser that she did
not believe her husband was well-suited for group therapy, Kaiser told her
that “was what was available.”
Plaintiff Acianita Lucero, who had been “diagnosed as having major
depression,” was also “automatically pushed in group therapy and put into
the group-based [intensive outpatient program] without any discussion about
the possibility of one-on-one therapy as an alternative. There also was no
assessment as to the suitability of group therapy or the type of group therapy
that should be provided.” During the course of her treatment, Lucero
received “educational materials” from Kaiser that read, “ ‘We offer brief,
problem solution-focused individual counseling . . . . We do not offer long-
term individual psychotherapy at Kaiser.’ ” Her experience assertedly “is not
uncommon for Kaiser members seeking mental health treatment” but
“[s]imilar policies and practices are not followed in Kaiser’s treatment of
physical health conditions.”
Plaintiff Maria Spivey’s deceased minor daughter, who had been
“diagnosed as having major depression, anxiety, and posttraumatic stress
disorder,” and who ultimately died by suicide, was “automatically referred . . .
into [Kaiser’s] group-based ‘aftercare’ program” following her completion of
six weeks of inpatient treatment without “any kind of individual assessment”
5
of her condition. Her experiences assertedly “are illustrative of Kaiser’s one-
size-fits-all approach to mental health treatment that violates the Parity Act
and Unruh [Civil Rights] Act. [She] was not individually assessed to
determine whether the Aftercare program was medically necessary or an
appropriate means to treat her mental health condition. Rather, she was
automatically put into a group-based program upon release from the
inpatient facility. At no point after her release from the inpatient program
was [she] offered individual one-on-one counseling or assessed to determine
whether one-on-one counseling was medically necessary or would have been a
more appropriate way to treat her condition. The only individualized
meetings that she had were for medication management.”
In July 2020, this court issued an opinion reversing in part the trial
court’s denial of plaintiffs’ motion for class certification. (Futterman v. Kaiser
Found. Health Plan, Inc. (July 31, 2020, A155946) [nonpub. opn.].) In
November 2020, the Plan moved for summary judgment. In February, after
briefing and argument, the court granted the motion.
Initially, the court concluded that plaintiff Futterman, who had filed
the complaint as a representative of her deceased husband, could not assert
any claims against the Plan because her husband’s health coverage was
issued not by the Plan but by Kaiser Permanente Insurance Company
(KPIC), a partially owned subsidiary of the Plan that is not named as a
defendant in this action. With respect to the remaining plaintiffs’ claims, the
court concluded that the Plan was entitled to judgment as a matter of law.
As to the UCL/Parity Act claim, the court concluded that the Plan’s coverage
contained in plaintiffs’ EOC’s satisfied the requirements of the Parity Act.
The court explained that while the Plan and the medical groups “advertise
themselves and consider themselves to be an integrated health care delivery
6
system,” they are not treated as such under the statutes defining the roles
and responsibilities of a health care service plan. The court continued, “The
Knox-Keene Act consistently distinguishes between ‘health care service
plans’ and ‘providers’ ” and it “has different statutory definitions for the
different entities and they have different statutory responsibilities. . . . The
court will not muddle the statutory framework by treating a ‘health care
service plan’ and its contracted ‘providers’ as a single integrated entity or as
having a de facto principal-agent relationship.” With respect to plaintiffs’
claims under the Unruh Civil Rights Act, the court found that plaintiffs had
not raised a triable issue of fact as to whether they were denied any
contractual benefit for a discriminatory reason.
Plaintiffs timely filed a notice of appeal.
II. DISCUSSION
A. The Trial Court Did Not Err in Entering Summary Judgment
on Plaintiff Futterman’s Individual Claims
Plaintiff Futterman brings her claims as the representative of her
husband and it is undisputed his health coverage was issued and
underwritten not by the Plan but by KPIC, a separately incorporated
company that is not named as a defendant in this action. The trial court
summarily adjudicated Futterman’s individual claims on the ground that the
Plan did not provide Futterman or her husband with a “health care service
plan contract.” On appeal, Futterman concedes her husband contracted with
KPIC, not the Plan, but argues that she presented sufficient evidence from
which a fact finder could hold the Plan responsible for the acts of KPIC under
a theory of alter ego. We review the trial court’s ruling on a motion for
summary judgment de novo. (Gopal v. Kaiser Found. Health Plan, Inc.
(2016) 248 Cal.App.4th 425, 429.)
7
The undisputed facts establish that KPIC is a subsidiary of the Plan
and that the Plan owns 50 percent of the voting stock of KPIC. The
insurance contract between Futterman’s husband and KPIC identified the
Plan as a joint “Administrator” as well as “Premiums Collection
Administrator” of his policy. As Futterman acknowledges, alter ego liability
requires a unity of interest between the parent and the subsidiary, such that
the separate personalities do not exist, and that an inequitable result would
follow if the acts in question are treated as those of the subsidiary alone.
(Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.)
We need not decide whether the evidence submitted by Futterman is
sufficient to create a material factual dispute regarding whether KPIC and
the Plan share a sufficient unity of interest for purposes of alter ego liability
because Futterman presented no evidence to support her assertion that not
allowing her to pursue these claims against the Plan would be “an arbitrary
and unjust result.” As the Plan notes, Futterman does not contend that she
or her husband were defrauded by KPIC’s corporate form or that KPIC lacks
the money to pay its own debts. Indeed, Futterman offers no explanation for
why KPIC was not or could not have been named as a defendant in this
action. Accordingly, insofar as Futterman failed to name the correct entity as
a defendant, judgment was properly entered on her individual claims.
B. The Trial Court Erred in Entering Summary Judgment
on the UCL Cause of Action
Initially, for the first time on appeal, the Plan contends that plaintiffs
Lucero and Spivey lack standing to assert a UCL claim. Relying on Troyk v.
Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1345, it argues, “ ‘Because
standing goes to the existence of a cause of action, lack of standing may be
raised . . . at any time in the proceeding’ and is ‘not waived or forfeited’ if
raised for the first time on appeal.” Plaintiffs reasonably counter that “[a]s a
8
practical matter, since [the Plan] did not move for summary adjudication
and/or judgment based on allegations that plaintiffs, or any one of them,
lacked standing, the parties’ separate statements and record evidence do not
address this issue.” Given the lack of factual record, we briefly address only
the Plan’s contention that Lucero and Spivey failed to allege sufficient facts
to establish standing under the UCL.
To have standing to pursue a claim under the UCL, a plaintiff must
prove they “suffered injury in fact and has lost money or property as a result
of the unfair competition.” (Bus. & Prof. Code, § 17204.) The standing
requirement is intended to “ ‘preserve[] standing for those who had had
business dealings with a defendant and had lost money or property as a
result of the defendant’s unfair business practices.’ ” (Kwikset Corp. v.
Superior Court (2011) 51 Cal.4th 310, 321.) “[T]he quantum of lost money or
property necessary to show standing is only so much as would suffice to
establish injury in fact . . . . [F]ederal courts have reiterated that injury in
fact is not a substantial or insurmountable hurdle; . . . Rather, it suffices for
federal standing purposes to ‘ “allege[] some specific, ‘identifiable trifle’ of
injury.” ’ ” (Id. at pp. 324.)
The Plan argues that Lucero and Spivey failed to allege they suffered a
sufficient economic injury as a result of any conduct by the Plan. It is
undisputed, however, that they were Kaiser members with coverage under a
contract issued by the Plan that was paid for by them or on their behalf. The
complaint alleges they did not receive the coverage promised by the Plan
because Kaiser had an actual and consistent practice of basing treatment
decisions for severe mental illness on factors unrelated to medical necessity.
(See Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471,
493 [plaintiff could prove a violation of the Parity Act “by showing that
9
Kaiser categorically denies coverage for mental health care services that
may, in some circumstances, be medically necessary, and that Kaiser does so
without considering whether such services are in fact medically necessary for
its individual plan members”].) Overpayment for mental health coverage by
members who sought mental health treatment is a nontrivial economic injury
sufficient to confer standing. (See Kwikset Corp. v. Superior Court, supra,51 Cal.4th at p. 323 [plaintiff may demonstrate economic injury by showing
they “surrender[ed] in a transaction more . . . than he or she otherwise would
have”].) Accordingly, the allegations of the complaint are sufficient to
establish standing.
Plaintiffs contend a triable issue of fact exists as to whether the Plan
violated the Parity Act. They argue, “The trial court’s summary adjudication
of the Parity Act claims is erroneous because it fails to look at how the Plan
itself actually undermines its formal contractual promises of covered
treatment, through the Plan’s own conduct: its own negotiations, its funding,
its involvement in staffing, and its overall integration with the exclusively
contracted medical groups.” They emphasize that they do not seek to hold
the Plan vicariously liable for independent acts of the medical providers.
Rather, they argue that the manner in which the Plan arranges and pays for
mental health treatment limits patients’ access to individual therapy thereby
undermining the promised coverage. We agree.
Plaintiffs presented deposition testimony showing that the Plan
negotiates with the medical groups and provides the financial resources for
the staff at each medical center. One witness explained that the Plan’s
motto, “Our Model – Care and Coverage Together,” means that “we have an
integrated model, and the hospitals and the medical groups and the health
plan work together to make sure that members get, as much as possible, all
10
the care under one roof.” The witness explained that the medical groups “get
their budgets and they get their money from the health plan to provide
services to [the Plan’s] members.” The Plan acknowledges that it “negotiates
with the Medical Groups, provides funding to pay for their services, and
oversees the quality of care provided.”
Plaintiffs presented evidence that Kaiser schedules patients in a
manner that makes return or repeat appointments virtually impossible, and
provides staff at levels that are insufficient to allow for frequent, individual
therapy for patients who need it. For example, plaintiffs presented
declarations from providers detailing how their availability for individual
therapy is limited by Kaiser’s scheduling and staffing practices. The
providers explained that in making treatment plans for patients, they are
“severely limited by availability of therapy appointments and treatment
modalities within Kaiser’s integrated, closed system.”
One provider states, “Kaiser requires that I continue to regularly add
new patients to my caseload at a rate of one or more per day. Once a patient
is under my care, I am responsible for providing them all medically necessary
one-on-one therapy, and their access to that treatment is limited by my
availability. I currently am booked out approximately six to eight weeks for
return therapy appointments, so my patients cannot receive one-on-one
therapy more frequently than that. For many of my patients with Parity Act
conditions, frequent one-on-one therapy is an essential part of the medically
necessary care to treat their conditions. I have asked my manager to close
my patient load so that I can have enough available appointments to provide
therapy to my existing patients, but my requests have been denied or
ignored.”
11
The provider continues, “Kaiser’s system of treatment for mental
disorders, including Parity Act diagnoses, is based on a model that
emphasizes group therapy, with much more limited access to one-on-one
therapy. My schedule is regulated by Kaiser consistent with this emphasis
on group therapy. Because of the long waiting times for individual return
visits, I sometimes refer patients to group therapy because that is the only
available modality for them to receive any therapy at the frequency medically
necessary to treat their condition. For some patients with Parity Act
conditions, such as those that are actively suicidal or have psychosis, group
therapy is not clinically appropriate and frequent one-on-one therapy is
medically necessary to treat them.” Another provider repeats the above
testimony and adds that “while I have determined that some of my patients
require weekly or frequent one-on-one therapy, this form of therapy is not in
practice available within Kaiser’s closed system given current staffing levels.”
Plaintiffs’ evidence shows that once a patient is assigned to a particular
provider, that clinician is responsible for providing all medically necessary
one-on-one therapy to that patient. Kaiser has no written or consistent policy
to ensure that patients receive care when their psychiatrists or therapists are
on vacation. In addition, Kaiser’s policy that “any patient that has received
any contact with our department in the last two years is not considered a new
patient” also poses a “barrier to patients receiving timely medically necessary
treatment.” Plaintiffs also submitted survey data which shows that a
significant number of providers believe their facility does not have sufficient
staff to provide patients with timely return visits and evidence of patients
who filed complaints reporting an inability to access individual therapy at all
or with any regularity.
12
Finally, plaintiffs presented evidence that the Plan has knowledge that
the staffing levels are insufficient to provide for individual therapy if
determined to be medically necessary. Internal Kaiser documents show that
the Plan’s staffing recommendations are inadequate to provide what both the
Plan and its medical groups consider necessary for optimal patient outcomes.
The evidence submitted raises a triable issue of fact as to whether the
Plan arranges and pays for mental health coverage in a way that limits
access to individual therapy without consideration of a patient’s medical
necessity and thus it provides coverage for mental health illness differently
than it provides coverage for physical illnesses. The Plan’s arguments to the
contrary are not persuasive.
The Plan argues that much of the above evidence is not temporally
relevant to plaintiffs’ claims and insufficient to establish that each individual
plaintiff was denied medically necessary treatment because of the Plan’s
funding decisions. Plaintiffs’ evidence, however, is sufficient to support an
inference that decisions regarding individual treatment for all members,
including plaintiffs, were based on criteria other than medical necessity. In
addition, plaintiffs Spivey and Lucero submitted evidence, discussed post at
page 19–20, supporting a reasonable inference that individual therapy was
medically necessary for the treatment of their mental health illnesses. These
inferences are sufficient to defeat summary judgment.
Similarly, the Plan emphasizes that it has taken steps to make sure
out-of-network individual services are available to any member who needs
them and that plaintiffs failed to request an out-of-network referral. While
the existence of readily available out-of-network treatment might be
sufficient to defeat plaintiffs’ theory of liability at trial, for purposes of
summary judgment, the Plan’s evidence and argument in this regard only
13
serves to reinforce the conclusion that triable issues of fact exist. Indeed, as
discussed post at p. 19, the record reflects that Spivey filed a formal grievance
requesting individual therapy for her daughter but was asked to withdraw
her grievance by the Plan. This evidence, if credited at trial, raises triable
issues of fact both as to whether referrals were readily available and whether
the Plan was on notice that members were being denied medically necessary
individual services.
The Plan’s remaining arguments are also unavailing. The Plan argues
that plaintiffs cannot hold it vicariously liable for any alleged failure by the
medical groups to provide medically necessary treatment to plaintiffs. They
rely on section 1371.25 of the Knox-Keene Act which bars claims against a
plan for vicarious liability, stating in relevant part: “A plan, any entity
contracting with a plan, and providers are each responsible for their own acts
or omissions, and are not liable for the acts or omissions of, or the costs of
defending, others.” Plaintiffs, however, do not seek to hold the Plan
vicariously liable for the acts of the medical groups. As stated above,
plaintiffs’ claim is that the Plan itself does not provide coverage as required
by the Parity Act because it arranges and pays for medical treatment for
severe mental illness at a different or insufficient level than it does for the
treatment of physical illness.
Martin v. PacifiCare of California (2011) 198 Cal.App.4th 1390 and
Watanabe v. California Physicians’ Service (2008) 169 Cal.App.4th 56 are
distinguishable in that neither case involves a claim based on the health care
service plan’s direct liability. In both cases, the court held that section
1371.25 barred vicarious liability by a health care service plan for the acts
and omissions of its medical group. In Martin, plaintiffs sought to hold the
health care service plan vicariously liable for the medical provider’s delay in
14
approving medically necessary treatment for their relative. (Martin, supra,
198 Cal.App.4th at p. 1398.) The court noted that plaintiffs’ argument that
the health care service plan was directly liable for “how it designed and
implemented the standards and procedures it required [the providers] to use
in performing the utilization review function” was rejected at trial based on a
lack of evidence and not pursued on appeal. (Id. at p. 1408.) In Watanabe,
plaintiff also sought to hold the health care service plan vicariously liable for
the medical provider’s failure to provide the plaintiff with necessary medical
care. (Watanabe, supra, 169 Cal.App.4th at p. 62.) The court expressly noted
that no evidence was presented at trial that the health care service plan
committed an act or omission for which it would be directly liable. (Id. at
p. 68.)
The Plan also argues that there is no legal support for plaintiffs’
argument that the Plan is part of an integrated system such that it may be
held liable under an alter ego or joint enterprise theory. The Plan
emphasizes that the Knox-Keene Act expressly authorizes and encourages
the corporate structure utilized by the Kaiser entities. (See § 1395, subd. (c)
[authorizing health care service plan to “directly own, and . . . directly
operate” hospitals and contract with physicians to provide health care to its
members]; § 1342.6 [“Legislature finds and declares that it is in the public
interest to promote various types of contracts between public or private
payers of health care coverage, and institutional or professional providers of
health care services”]; Gopal v. Kaiser Found. Health Plan, Inc., supra,
248 Cal.App.4th at p. 432 [finding joint enterprise doctrine inappropriate in
part because the “close relationship” between the Plan and its providers is
authorized by Knox-Keene and is necessary for the Plan to meet its
obligations of a health plan to oversee and manage its providers per the
15
statutory requirements of Knox-Keene].) The trial court seemingly agreed
that the statutory authorization for Kaiser’s integrated system precludes
liability in this instance. Plaintiffs do not argue, however, that Kaiser’s
integrated system provides a basis for alter ego liability. Rather, their
evidence regarding Kaiser’s integrated system is intended to describe how the
Plan is able to promise coverage based on medical necessity and then
undermine that coverage so that members do not have equal access to certain
treatment. Acknowledging the context in which coverage is provided does not
interfere with the Legislature’s regulation of health care delivery systems
under the Knox-Keene Act.
The cases cited by the trial court and defendant are distinguishable.
In Hambrick v. Healthcare Partners Medical Group, Inc. (2015)
238 Cal.App.4th 124, 133, the trial court reasonably abstained from deciding
whether a defendant was a de facto health care plan under the Knox-Keene
Act. In affirming the trial court’s abstention, the appellate court held that
“determination of [what criteria to use in defining a de facto health care
service plan] is a regulatory decision involving complex economic policy
considerations that should be made by [the Department of Managed Health
Care (DMHC)], the regulatory agency tasked with interpreting and enforcing
the Knox-Keene Act.” (Hambrick, at p. 133.) In Samura v. Kaiser
Foundation Health Plan, Inc. (1993) 17 Cal.App.4th 1284, 1301–1302, the
court reversed an injunction entered by the trial court on the ground that the
injunction invaded the regulatory scope of the Knox-Keene Act. The court
noted that provisions of the injunction requiring, for example, that a certain
term be written “in plain English” and be given “greater prominence” sought
improperly to enforce the authority of the state regulatory department.
(Samura, supra, at p. 1301.) The court explained, “The courts cannot assume
16
general regulatory powers over health maintenance organizations through
the guise of enforcing Business and Professions Code section 17200.
[Citation.] To the extent that the order on appeal is based on portions of the
Knox-Keene Act having a purely regulatory import, it improperly invades the
powers that the Legislature entrusted” to the governing regulatory
department. (Id. at pp.1301–1302.)
Unlike in these cases, a finding here that the Plan violated the Parity
Act would not interfere with the DMHC’s regulatory authority. Plaintiffs do
not dispute that the Plan can contract with providers and manage care for its
members. Plaintiffs simply assert that the Plan cannot do so in a manner
that undermines statutorily required coverage for mental health treatment.
(See Samura v. Kaiser Foundation Health Plan, Inc., supra, 17 Cal.App.4th
at p. 1299 [recognizing that actions under the UCL maybe be used to enjoin
acts which are declared to be unlawful under the Knox-Keene Act].)
In sum, the evidence submitted in opposition to the Plan’s motion for
summary judgment raises a triable issue of fact as to whether the Plan is
actually providing coverage for the treatment of severe mental illness in the
same manner that it provides coverage for physical illness. Accordingly, the
trial court erred in entering summary judgment in favor of the Plan on
plaintiffs’ claims under the UCL based on its violation of the Parity Act.
C. The Trial Court Erred in Entering Summary Judgment on
the Cause of Action Under the Unruh Civil Rights Act
The Unruh Civil Rights Act creates a civil cause of action for anyone
who is “denied the right” to “full and equal accommodations, advantages,
facilities, privileges, or services in all business establishments of every kind
whatsoever” on the basis of “their sex, race, color, religion, ancestry, national
origin, disability, medical condition, genetic information, marital status,
sexual orientation, citizenship, primary language, or immigration status.”
17
(Civ. Code, §§ 51, subd. (b), 52.) Except for claims under the act grounded in
violations of the federal Americans with Disabilities Act of 1990 (42 U.S.C.
§ 12101 et seq.), the act requires proof of “ ‘intentional acts of
discrimination’ ” on any of the bases it specifies as prohibited; disparate
impact alone will not suffice. (Koebke v. Bernardo Heights County Club
(2005) 36 Cal.4th 824, 853–854.)
In our prior opinion in this case, which upheld the denial of class
certification on plaintiffs’ Unruh Civil Rights Act claims, we held that to
recover under the act each plaintiff “would be required to establish that he or
she was injured by the Plan’s restrictive practices. A Kaiser member who did
not need more extensive or one-on-one therapy would not have been injured
by any failure to have provided more extensive treatment.” (Futterman v.
Kaiser Found. Health Plan, Inc., supra, A155946.)3
3 We note briefly that the standing requirements under the UCL and
the Unruh Civil Rights Act are not the same. (See Midpeninsula Citizens for
Fair Housing v. Westwood Investors (1990) 221 Cal.App.3d 1377, 1385
[“Standing requirements will vary from statute to statute based upon the
intent of the Legislature and the purpose for which the particular statute was
enacted.”].) While standing under the UCL requires a nontrivial, economic
injury in fact, discussed above, standing under the Unruh Civil Rights Act
requires that the plaintiff “has been the victim of the defendant’s
discriminatory act.” (Angelucci v. Century Supper Club (2007) 41 Cal.4th
160, 175, citing Midpeninsula Citizens for Fair Housing v. Westwood
Investors, supra, 221 Cal.App.3d at pp. 1383, 1386, [“standing under the Act
extends to persons ‘actually denied full and equal treatment by a business
establishment’—that is, to ‘victims of the discriminatory practices’ ”].) In
Midpeninsula Citizens for Fair Housing v. Westwood Investors, supra,
221 Cal.App.3d at page 1385, the court held that federal cases interpreting
scope of standing requirements under federal discrimination laws, which
require that a plaintiff meet the constitutional minima of showing an “injury
in fact,” do not expand the standing under the Unruh Civil Rights Act.
18
Here, the trial court entered judgment for the Plan, finding that
plaintiff Lucero and plaintiff Spivey’s daughter were not denied coverage for
medically necessary treatment on a discriminatory basis. The Plan argues
summary judgment was proper because “none of the individual Plaintiffs
offered evidence to establish injury” and the “evidence does not remotely
support an inference the Plan intended to discriminate against members with
Parity Act conditions.” We disagree.
To defeat summary judgment, Lucero and Spivey were not required to
show that a Kaiser medical provider determined that individual therapy was
medically necessary, only that a triable issue of fact exists as to whether such
treatment was medically necessary. As they have argued, no determination
of medical necessity for individual therapy was made by the Kaiser doctors
because of Kaiser’s standard and assertedly discriminatory practice of
emphasizing group therapy over individual therapy without determinations
regarding medical appropriateness of group therapy. As set forth more fully
above, declarations by several Kaiser practitioners explained that “[f]or many
patients with Parity Act diagnoses, frequent one-on-one outpatient therapy is
an essential part of the medically necessary care to treat their conditions.”
Spivey presented evidence that her daughter received weekly individual
therapy for approximately five years, through a non-Kaiser clinic because her
providers determined weekly therapy was medically necessary for her but she
was unable to access those services after her medical coverage changed.
Spivey was told that weekly therapy was “not available” at Kaiser and once
her daughter no longer had weekly therapy, her condition worsened. After
her daughter was hospitalized following a suicide attempt, Spivey filed a
formal grievance requesting “intense psychological therapy.” She withdrew
her request only after the Plan asked her to do so and placed her daughter in
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a short-term residential treatment program. Plaintiff Lucero presented
evidence that when she was first diagnosed with having a major depressive
disorder in 2010, she received individual therapy with a Kaiser therapist over
a period of several months. Within a few months, she was in remission. In
2012, however, her symptoms returned. The Kaiser mental health provider
who evaluated her at the crisis clinic found that she was suffering from
severe symptoms of major depression and needed urgent mental healthcare.
Around this time, she was given a pamphlet that explained that long term
individual therapy was not available at Kaiser; only group therapy was
available. She contacted her therapist requesting urgent individual therapy
but was told she could only schedule a “couple” appointments with her.
Combined, this evidence raises a triable issue of fact as to whether individual
therapy was medically necessary for Lucero and Spivey’s daughter.
The evidence detailed above regarding how the Plan arranges and pays
for mental health coverage supports an inference that the Plan intentionally
underfunds mental health treatment and therefore raises a triable issue of
fact as to whether it intentionally discriminates against patients with certain
mental illnesses.4 The trial court’s reliance on Spivey and Lucero’s failure to
submit grievances asserting that their mental health providers were not
providing covered services fails to recognize that the inference of intentional
4 The Plan’s argument that such an inference cannot be drawn without
additional evidence regarding “funding, staffing, scheduling, or treatment
decisions for physical conditions” is not well taken. The Parity Act was
enacted to remedy the fact that most health insurance plans were providing
“coverage for mental illness at levels far below coverage for other physical
illnesses,” which had “resulted in inadequate treatment for persons with
those [mental] illnesses.” (Stats. 1999, ch. 534, § 1, p. 3702.) For purposes of
summary judgment, the evidence that the Plan’s decision not to fund its
coverage at a level necessary to provide all medically necessary treatment for
Parity Act conditions supports an inference of discrimination.
20
discrimination arises from the way the Plan arranges for the treatment of
Parity Act conditions in the first instance, not how it handles grievances
based on the denial of services.
Accordingly, the court erred in entering judgment in favor of the Plan
on this cause of action.
III. DISPOSITION
We affirm the summary judgment entered on plaintiff Futterman’s
individual claims. We reverse the summary judgment on the remaining
plaintiffs’ causes of action for violation of the UCL and for violation of the
Unruh Civil Rights Act. Plaintiffs shall recover their costs on appeal.
STREETER, J.
WE CONCUR:
BROWN, P. J.
MILLER, J.
21
Filed 5/17/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
SUSAN FUTTERMAN et al.,
Plaintiffs and Appellants, A162323
v. (Alameda County Super. Ct.
KAISER FOUNDATION No. RG13697775)
HEALTH PLAN, INC.,
Defendant and Respondent. ORDER GRANTING REQUESTS
TO CERTIFY OPINION FOR
PUBLICATION
BY THE COURT*:
The opinion in the above-entitled matter filed on April 25, 2023,
was not certified for publication in the Official Reports. Latika Malkani of
Siegel LeWitter Malkani, counsel for plaintiffs and appellants, Attorney
General Rob Bonta, and San Diego City Attorney Mara W. Elliott, have filed
requests that the opinion be published. Joseph Laska of Manatt, Phelps &
Phillips, counsel for defendant and respondent, has filed a response opposing
publication.
Having considered the arguments for and against publication, we have
determined that publication is appropriate. For good cause it now appears
that the opinion should be published in the Official Reports and it is so
ordered.
Dated: May 17, 2023 BROWN, P. J.
*Brown, P. J., Streeter, J., Miller, J. (Associate Justice of Court of Appeal,
First Appellate District, Division Two, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution)
1
Trial Court: Superior Court of California, County of Alameda
Trial Judge: Hon. Winifred Smith
Counsel: Siegel LeWitter Malkani and Jonathan H. Siegel, Latika
Malkani, Laura Herron Weber for Plaintiffs and
Appellants.
Manatt, Phelps & Phillips, Gregory N. Pimstone, Joanna S.
McCallum, Joseph E. Laska for Defendant and Respondent.
2