In a move that could reshape the legal landscape of mental health coverage in the United States, the 9th U.S. Circuit Court of Appeals has revived a major behavioral health parity lawsuit against UnitedHealthcare. The court ruled on April 11 to remand key parity and fiduciary claims back to a California district court, reversing a lower court’s dismissal. This decision is the latest in a growing trend of judicial scrutiny over how health insurers manage behavioral health benefits, especially when it comes to violations of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).
The case centers on allegations that UnitedHealthcare applied more restrictive criteria to substance use disorder treatment claims than it did to comparable physical health treatments—a practice that, if proven, would violate federal parity laws.
A Personal Battle Ignites Systemic Questions
The plaintiff, referred to as Ryan S., filed the original behavioral health parity lawsuit in 2019 after receiving treatment for substance use disorder between 2017 and 2019. Despite the medical necessity of his care, UnitedHealthcare repeatedly denied his out-of-network outpatient treatment claims, leaving him responsible for hundreds of thousands of dollars in charges.
Ryan S. alleges that UnitedHealthcare’s claim evaluation process for behavioral health care was significantly more stringent than for similar medical or surgical services. This disparity forms the crux of the behavioral health parity lawsuit, raising questions about how internal claims review systems comply—or fail to comply—with federal parity laws.
Attorney Elizabeth Hopkins of Kantor & Kantor LLP, representing the plaintiff, praised the decision. “We are extremely pleased with the 9th Circuit’s decision on behalf of our client and others in California whose access to substance use disorder treatment has been thwarted by UnitedHealthcare’s unfair practices,” she said.
Court Clarifies Pleading Standards in Parity Cases
In a highly anticipated opinion, the 9th Circuit addressed the difficulties plaintiffs face when attempting to bring a behavioral health parity lawsuit under MHPAEA. The court acknowledged that the law does not clearly define what a plaintiff must plead to survive a motion to dismiss.
However, the court laid out several critical clarifications:
- Plaintiffs are not required to allege a uniform or “categorical” practice of denying behavioral health benefits.
- Plaintiffs do not need to identify the comparable physical health benefits with surgical precision.
- Plaintiffs do not have to specify every aspect of how internal review processes differ between behavioral and physical health claims.
Instead, the court stated that a combination of detailed personal experience and external evidence can be enough to support a plausible claim. In Ryan S.’s case, this included his documented struggles with coverage and a 2018 California government report showing UnitedHealthcare used more restrictive policies for behavioral health benefits than physical health ones.
“Simply alleging the denial of a plaintiff’s claims for behavioral health benefits is unlikely by itself to support a plausible inference that a defendant employed policies in violation of the Parity Act,” the court wrote. “In this case, Ryan S. pleads something more.”
That “something more” is exactly what sets this behavioral health parity lawsuit apart from many that have failed at the pleading stage.
Fiduciary Duties Under the Microscope
Beyond parity violations, the lawsuit also accuses UnitedHealthcare of breaching its fiduciary duties under the Employee Retirement Income Security Act (ERISA). The 9th Circuit found that the district court wrongly dismissed these claims alongside the parity allegations, stating that Ryan S. had sufficiently alleged that UnitedHealthcare failed in its obligations to fairly manage and process claims.
The revival of these claims adds another layer of potential accountability for UnitedHealthcare. If proven, such breaches of fiduciary duty could have wide-reaching implications for how all ERISA-covered plans handle behavioral health care.
Implications for Class Action Status
The case now heads to discovery, and the plaintiff is seeking class certification. If granted, the lawsuit could expand to represent thousands of other UnitedHealthcare beneficiaries who were similarly denied behavioral health benefits. This potential class action status dramatically raises the stakes of the behavioral health parity lawsuit, possibly exposing UnitedHealthcare to significant financial liability and prompting broader changes in its internal policies.
Hopkins stated that their ultimate goal is systemic reform. “We want United to be ordered to fairly evaluate substance use disorder claims, pay any that were improperly denied or never decided, including all of Ryan’s claims, and correct its discriminatory and unfair practices going forward.”
Growing Pattern of Judicial Scrutiny
The revival of this behavioral health parity lawsuit is not an isolated event. UnitedHealthcare and its subsidiaries are currently involved in several high-profile cases involving behavioral health benefits.
One of the most prominent cases, Wit v. United Behavioral Health, was remanded by the 9th Circuit in August 2023 for further review of fiduciary duty and claims appeals procedures. That case also focused on allegations that United applied internally developed guidelines that were more restrictive than generally accepted standards of care.
Another case, E.W., et al. v. Health Net Life Insurance Co., saw the 10th Circuit create a four-part test to evaluate parity law violations in November 2023. That ruling highlighted the growing role of the judiciary in defining how parity enforcement is handled in the absence of explicit regulatory direction.
Even the U.S. Supreme Court has been pulled into the conversation. In February 2024, the Court declined to hear an appeal by United Behavioral Health, allowing a lower court decision questioning the insurer’s treatment of mental health and substance use disorder coverage to stand.
Why This Lawsuit Matters
Despite being on the books since 2008, MHPAEA has faced enforcement challenges due to vague standards and limited oversight. Many believe the law lacks the necessary teeth to compel insurer compliance. As a result, the burden has largely fallen on consumers and legal advocates to enforce parity protections through the courts.
This revived behavioral health parity lawsuit signals a turning point. Courts are no longer satisfied with vague or dismissive insurer defenses and are beginning to hold payers accountable for the systemic barriers faced by patients seeking behavioral health treatment.
As courts clarify what constitutes a valid parity claim, they are providing a clearer roadmap for other plaintiffs and attorneys. This trend empowers individuals to challenge unfair denials and helps shift the balance toward more equitable behavioral health coverage.
Conclusion
The 9th Circuit’s decision to revive Ryan S.’s behavioral health parity lawsuit against UnitedHealthcare marks a significant moment for mental health parity enforcement. By affirming that a plaintiff doesn’t need to jump through impossible hoops to make their case, the ruling opens the door for broader accountability and reform.
As this lawsuit proceeds to discovery and potentially to class action status, it will serve as a key test of whether insurers can continue to rely on opaque and restrictive practices in handling behavioral health claims. It also sends a strong signal to the industry: parity is not optional, and insurers will be held to the same standards in behavioral health as they are in physical health.
In the broader push for mental health equity, this case could prove to be a landmark—not just for Ryan S., but for countless others seeking fair and just treatment from their insurance providers.
