Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The Estate of Josiah Wheeler and Josiah’s parents, Keith and Rhetta Wheeler (collectively, “the Wheelers”) appealed the district court’s grant of summary judgment in favor of Garrison Property and Casualty Insurance Company (“Garrison”).   The Ninth Circuit explained that because this case involves an issue of first impression under Alaska law, it respectfully asks the Alaska Supreme Court to exercise its discretion to decide the following certified question: Does a total pollution exclusion in a homeowners’ insurance policy exclude coverage of claims arising from carbon monoxide exposure? View "THE ESTATE OF JOSIAH WHEELER, ET AL V. GARRISON PROPERTY AND CASUALTY INSURANCE COMPANY" on Justia Law

United Behavioral Health (“UBH”) appeals from the district court’s judgment finding it liable to classes of Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001 et seq. (“ERISA”) Plaintiffs under 29 U.S.C. Sections 1132(a)(1)(B) and (a)(3), as well as several pre- and posttrial orders, including class certification, summary judgment, and a remedies order. UBH contends on appeal that Plaintiffs lack Article III standing and that the district court erred at class certification and trial in several respect.   The Ninth Circuit reversed in part. The panel held that Plaintiffs had Article III standing to bring their claims. Plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denial of benefits claim. Further, plaintiffs alleged a particularized injury as to both claims because UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making medical necessity or coverage determinations materially affected each Plaintiff. And Plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct. The panel held that the district court did not err in certifying the three classes to pursue the fiduciary duty claim, but the panel reversed the district court’s certification of the denial of benefits classes. The panel held that, on the merits, the district court erred to the extent it determined that the ERISA plans required the Guidelines to be coextensive with generally accepted standards of care. View "DAVID WIT, ET AL V. UNITED BEHAVIORAL HEALTH" on Justia Law

This appeal arises out of a commercial property insurance policy (“Policy”) that Oregon Clinic, P.C. (“Oregon Clinic”) purchased from Fireman’s Fund Insurance Company (“Fireman’s Fund”). The Policy provides Oregon Clinic, a medical provider with more than fifty locations in Oregon, with coverage for a reduction of business income only if its insured property suffers “direct physical loss or damage.” In March 2020, after the COVID-19 pandemic began, Oregon Clinic, like hundreds of other insured businesses nationwide, sought coverage under its Policy. It alleged that it suffered “direct physical loss or damage” because of the COVID-19 pandemic and related governmental orders that prevented it from fully making use of its insured property. Fireman’s Fund denied coverage. Oregon Clinic then sued Fireman’s Fund in the United States District Court for the District of Oregon. At Oregon Clinic’s request, the Ninth Circuit certified to the Oregon Supreme Court the interpretation of “direct physical loss or damage” under Oregon law and stayed proceedings. The Oregon Supreme Court declined the certification request.   The Ninth Circuit affirmed the district court’s dismissal. The panel held that the Oregon Supreme Court would interpret “direct physical loss or damage” to require physical alteration of property, consistent with the interpretation reached by most courts nationwide. Because Oregon Clinic failed to state a claim under this interpretation and because the amendment would be futile, the panel affirmed the district court’s judgment. View "THE OREGON CLINIC, PC V. FIREMAN'S FUND INS. CO." on Justia Law

Plaintiff filed individual and class claims in Montana state court against GEICO after GEICO failed to advance pay Plaintiff’s medical bills and lost wages following a car accident caused by GEICO’s insured. GEICO removed the lawsuit to federal court, asserting jurisdiction under the Class Action Fairness Act (CAFA). Neither Plaintiff nor the district court questioned whether CAFA jurisdiction was proper.   The Ninth Circuit vacated the district court’s judgment and remanded for the district court to conduct the necessary evidentiary inquiry and determine whether GEICO can sufficiently establish that more than $5 million is in dispute. The panel held that it could sua sponte question a defendant’s allegation of CAFA jurisdiction. The panel further concluded that the current record did not sufficiently demonstrate that CAFA’s amount-in-controversy requirement was met because it was not evident from the face of the complaint and the nature of the class claims that this controversy involved more than $5 million, nor did GEICO’s notice of removal and supporting declaration satisfactorily establish that more than $5 million was in dispute. View "BRANDON MOE V. GEICO INDEMNITY COMPANY, ET AL" on Justia Law

This case involves an insured who sued for breach of contract and for breach of the implied duty of good faith and fair dealing when its insurer denied coverage for business income losses that the insured incurred during the COVID19 pandemic. The insured alleged that the COVID-19 virus was present on its premises and that state government closure orders prevented it from fully making use of its insured property due to infections and prohibitions on elective medical procedures. The district court dismissed the insured’s suit for failure to state a claim.   The Ninth Circuit certified the following question to the Oregon Supreme Court: Can the actual or potential presence of the COVID-19 virus on an insured’s premises constitute “direct physical loss or damage to property” for purposes of coverage under a commercial property insurance policy? View "THE OREGON CLINIC, PC V. FIREMAN'S FUND INS. CO." on Justia Law

Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates. Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which Plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.   The Ninth Circuit affirmed the district court’s dismissal for lack of Article III standing. The court held that Plaintiffs failed to establish Article III standing as to either of their two theories of injury. The panel held, as to the out-of-pocket-injury theory, Plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. And Plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief. View "RACHAEL WINSOR, ET AL V. SEQUOIA BENEFITS & INSURANCE, ET AL" on Justia Law

The certified a question to the Supreme Court of California in a case where an insured who sued for declaratory judgment that its insurance policy provides coverage for its losses arising from the COVID-19 pandemic. At issue here is whether the policy’s virus exclusion is enforceable and precludes coverage.   The Ninth Circuit certified the following question to the Supreme Court of California: Is the virus exclusion in French Laundry’s insurance policy unenforceable because enforcing it would render illusory a limited virus coverage provision allowing for the possibility of coverage for business losses and extra expenses allegedly caused by the presence and impacts of COVID-19 at an insured’s properties, including the loss of business due to a civil authority closure order? View "FRENCH LAUNDRY PARTNERS, LP, ET AL V. HARTFORD FIRE INSURANCE CO., ET AL" on Justia Law

Appellant is the owner of a rental house and property in Livingston, Montana (“Property”). Appellant purchased a Landlord Protection Policy (“Policy”) from Safeco Insurance Company (“Safeco”) to insure the Property. In 2017, a water main line leading into the house broke, saturating the area around and under the property with water. A few months later, soft spots developed on the floor of the house. An investigation determined that the soil under the foundation had contracted as a result of the water damage, causing the foundation slab to sag. Safeco informed Appellant that the damage to the Property was not covered under the Policy based on its Earth Movement and Water Damage exclusions, which are listed as excluded perils in the Policy’s ACC clause. The District Court granted summary judgment in favor of Safeco, finding that 1) the ACC clause barred coverage, 2) the Policy was not illusory or ambiguous, and 3) Safeco did not violate Montana’s Unfair Trade Practices Act when it denied Appellant coverage. Appellant appealed.   The Ninth Circuit certified the following questions to the Montana Supreme Court: 1) Whether an anti-concurrent cause (“ACC”) clause in an insurance policy applies to defeat insurance coverage despite Montana’s recognition of the efficient proximate cause (“EPC”) doctrine; and 2) Whether the relevant language in the general exclusions section on page 8 of the insurance policy in this case is an ACC clause that circumvents the application of the EPC doctrine. View "VIRGINIA WARD V. SAFECO INSURANCE COMPANY" on Justia Law

This case involves an insured who sued for breach of contract, bad faith, and fraud when its insurer denied coverage for business income losses that the insured incurred following government closure orders issued during the COVID-19 pandemic. The insured alleged that the COVID-19 virus was present on its premises before the orders were issued, or would have been present had the insured not closed its venues in compliance with the orders, and it sought coverage under several provisions of its commercial property insurance policy that require “direct physical loss or damage to property” to trigger coverage. The district court dismissed the insured’s suit for failure to state a claim.   The Ninth Circuit certified the following question to the California Supreme Court: Can the actual or potential presence of the COVID-19 virus on an insured’s premises constitute “direct physical loss or damage to property” for purposes of coverage under a commercial property insurance policy? View "ANOTHER PLANET ENTERTAINMENT V. VIGILANT INSURANCE COMPANY" on Justia Law

Plaintiff challenged Lincoln’s denial of her claim for long-term disability benefits. On de novo review, the district court affirmed Lincoln’s denial of Plaintiff's claim, but it adopted new rationales that the ERISA plan administrator did not rely on during the administrative process. Specifically, the district court found for the first time that Plaintiff was not credible and that she had failed to supply objective evidence to support her claim.The Ninth Circuit held that when a district court reviews de novo a plan administrator’s denial of benefits, it examines the administrative record without deference to the administrator’s conclusions to determine whether the administrator erred in denying benefits. The district court’s task is to determine whether the plan administrator’s decision is supported by the record, not to engage in a new determination of whether the claimant is disabled. Accordingly, the district court must examine only the rationales the plan administrator relied on in denying benefits and cannot adopt new rationales that the claimant had no opportunity to respond to during the administrative process.Here, the district court erred because it relied on new rationales to affirm the denial of benefits. View "VICKI COLLIER V. LINCOLN LIFE ASSURANCE COMPANY" on Justia Law