Jennifer Lukas v. United Behavioral Health

MEMORANDUM

Appellants Jennifer Lukas and Joyce Watters appeal the district court’s judg ment in favor of Appellees United Behavioral Health (UBH) and IBM Medical and Dental Employee Welfare Benefit Plans (Plan) in Appellants’ suit under the Employee Retirement Income Security Act of 1974 (ERISA) for improperly denied benefits. Appellants allege that Appellees abused their discretion in denying their claim for benefits for Lukas’s residential treatment for an eating disorder and co-morbid conditions at Alta Mira Treatment Center (Alta Mira) on the ground that her treatment was not medically necessary. We review de novo the district court’s choice and application of the standard of review to Appellees’ decision to deny benefits, Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 962 (9th Cir.2006) (en banc), and we reverse.

While the parties agree that the district court correctly reviewed the denial of benefits under an abuse of discretion standard, the court erred in -holding that Ap-pellees did not abuse their discretion in this case. Because of IBM’s dual role as evaluator and payor of claims, the Plan Administrator operated under a conflict of interest. See id. at 965 .…