ABC SERVICES GROUP, INC., in its capacity as assignee for the benefit of creditors… v. Aetna Health and Life Insurance Company;

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NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ABC SERVICES GROUP, INC., in its
capacity as assignee for the benefit of
creditors for Morningside Recovery, LLC,
Plaintiff-Appellant,
v.
AETNA HEALTH AND LIFE
INSURANCE COMPANY; et al.,
Defendants-Appellees.
No. 22-55631
D.C. No.
8:19-cv-00243-DOC-DFM
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Submitted October 3, 2023**
Pasadena, California
Before: GRABER, MENDOZA, and DESAI, Circuit Judges.
Plaintiff ABC Services Group, Inc., appeals the district court’s dismissal with
prejudice of its second amended consolidated complaint. We have jurisdiction under
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
FILED
OCT 6 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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28 U.S.C. § 1291. We review de novo the district court’s dismissal under Federal
Rule of Civil Procedure 12(b)(6), DB Healthcare, LLC v. Blue Cross Blue Shield of
Ariz., Inc., 852 F.3d 868, 873 n.5 (9th Cir. 2017), and we review for an abuse of
discretion the district court’s denial of leave to amend, Or. Clinic, PC v. Fireman’s
Fund Ins., 75 F.4th 1064, 1073 (9th Cir. 2023). We affirm.
1. The district court did not err by dismissing Plaintiff’s complaint under
Rule 12(b)(6) because (1) Plaintiff lacks derivative authority to sue under the
Employee Retirement Income Security Act of 1974 (“ERISA”), and (2) Plaintiff
failed to plead ERISA claims sufficiently.
First, Plaintiff lacks derivative authority to bring ERISA claims as a second
assignee. Under 29 U.S.C. § 1132(a)(1)(B), only a “participant or beneficiary” has
authority to sue to recover ERISA benefits. An exception allows health care
providers to sue on their patients’ behalf if the patients assign their claims to the
provider in exchange for health care. That exception furthers ERISA’s purpose of
protecting employees’ rights to health benefits. Simon v. Value Behav. Health, Inc.,
208 F.3d 1073, 1081 (9th Cir. 2000), overruled on other grounds by Odom v.
Microsoft Corp., 486 F.3d 541 (9th Cir. 2007). But where, as here, a health care
provider reassigns its patients’ claims to a non-provider third party that has no
relationship to the patients, the third party cannot file those claims on behalf of the

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patients. Id.1 Because allowing this type of transaction “would be tantamount to
transforming health benefit claims into a freely tradable commodity,” id., Plaintiff
lacks authority to sue.
Second, even if Plaintiff had authority to sue, it failed to plead ERISA claims
adequately. After years of litigation and multiple amended complaints, Plaintiff
asserts near-identical, generalized allegations on information and belief against all
Defendants. But the allegations do not identify any Defendant’s particular plan terms
conferring a benefit on patients, nor do they specify any Defendant’s particular
conduct in denying such a benefit. See, e.g., Doe v. CVS Pharmacy, Inc., 982 F.3d
1204, 1213 (9th Cir. 2020) (holding that, to plead a claim under 29 U.S.C.
§ 1132(a)(1)(B), a “plaintiff must allege ‘the existence of an ERISA plan,’ and
identify ‘the provisions of the plan that entitle [the plaintiff] to benefits’” (quoting
Almont Ambulatory Surgery Ctr., LLC v. UnitedHealth Grp., Inc., 99 F. Supp. 3d
1110, 1155 (C.D. Cal. 2015))). Plaintiff need not recite every relevant term of every
relevant plan, but it must do more than broadly allege that dozens of insurers with
distinct plans all violated the same generalized obligation to reimburse mental health
1 Plaintiff argues that this court should apply Bristol SL Holdings, Inc. v. Cigna
Health & Life Ins. Co., 22 F.4th 1086 (9th Cir. 2022), to expand third-party
derivative authority to bring ERISA claims. But Bristol only “modest[ly]” extended
derivative authority to a health care provider’s successor-in-interest through
bankruptcy proceedings under “unique circumstance[s]” that do not exist here. Id. at
1091, 1092.

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and substance abuse treatment. E.g., Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(holding that Rule 8’s pleading standard “does not require ‘detailed factual
allegations,’” but it “demands more than an unadorned, the-defendant-unlawfully-
harmed-me accusation” (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007))).
2. The district court did not abuse its discretion by denying leave to
amend. Plaintiff forfeited any challenge to the district court’s denial of leave to
amend by failing to raise the issue in its opening brief. Smith v. Marsh, 194 F.3d
1045, 1052 (9th Cir. 1999).
AFFIRMED.

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