A settlement proposal between plaintiff Mary Caldwell and the group she represents and UnitedHealthcare Insurance was rejected by United States District Judge William Alsup. Judge Alsup noted, “The court sees such a high fee for the attorneys, little benefit for the class action members and significant disadvantages for the class action.”
UnitedHealthcare is a health insurance company with most of its plans being “employer sponsored and governed by the Employee Retirement Income Security Act of 1974 (ERISA)”.
Caldwell’s original complaint was made when the insurance company rejected claims it had made for the surgical treatment of lipedema. UnitedHealthcare allegedly denied the claims on the grounds that they were unproven, despite the fact that lipedema is a “rare disease that is chronic, progressive, painful and immobilizing”. In addition, surgical treatment for lipedema is the only available therapy for the condition.
UnitedHealthcare had dismissed a large number of lipedema allegations, prompting Caldwell to apply for class certification in her first complaint on behalf of her and everyone else similarly. The lawsuit was filed in the Northern District of California.
Judge William Alsup rejected the proposed collective settlement on Tuesday. The document detailing the denial stated that the judge deemed the deal unfair to the class plaintiffs as it was impossible to be sure that the class plaintiffs would even be eligible for a re-examination of the claims under the terms of the settlement in Question came. Additionally, the settlement raises the question that it would require the class plaintiffs to file new claims rather than UnitedHealthcare correcting the improper denials they made.
If Judge Alsup had approved the settlement in this way, he would have risked “activating a defendant”. [in this case, UnitedHealthcare] Paying excessive fees and costs to the class plaintiff in exchange for the attorney’s acceptance of an unfair settlement on behalf of the class action. ”To avoid a collusive settlement, he emphasizes that the judge must determine the level of legal fees. Any settlement in which the attorney receives “funds disproportionate to the benefit granted to the class” must be accompanied by acceptable justification.
The plaintiff is represented by Gianelli & Morris while the defendant is represented by Hogan Lovells.