When you are negotiating a health lien reduction for your injured client's ERISA protected health plan, do not over look utilizing the California Consumers Legal Remedies Act.  You can use the following example language:

"The California Consumers Legal Remedies Act at Civil Code §1750, et seq. prohibits the conduct in which the your client is engaged and provides an effective legal remedy for same. Civil Code §1770(a)(14) provides that the following is an unfair or deceptive act or practice arising out of the provision of services to my client:

Representing that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law.

As demonstrated above, your client’s assertion of a subrogation or reimbursement claim against my clients is prohibited by the make-whole doctrine under both state and federal ERISA law. Moreover, since the reimbursement provision is improperly hidden in a COB provision which does not apply as a matter of both the policy provision and the controlling law, §10.9 does not confer any rights or remedies on that alternate basis. As such, Mr. X would be entitled to file an action under this section. Therein, he could recover damages as well as an order enjoining such deceptive acts and practices. In addition, §1780(d) provides that, “The court shall award court costs and attorneys fees to a prevailing plaintiff in litigation filed pursuant to this section.” (emphasis supplied) Thus, an award of attorney’s fees is mandatory if you lose the action.


§1780(a)(4) also expressly provides for punitive damages if the party violating the Act does not cease and desist the illegal conduct within 30 days (in conjunction with §1782). Since punitive damages are based in part upon wealth, this might be a concern. Finally, it is worth noting that §1781 provides that any such action may be brought as a class action to recover these damages for all similarly situated parties. We are confident that there is no question that the insurance company has collected millions of dollars illegally in disregard of the fact that the reimbursement provision is clearly unenforceable. All of this money can be recovered in such a class action. Therefore, if your client does not cease and desist from this illegal practice within 30 days from the date of this letter, Mr. X can bring a class action under this section seeking restitution of all illegal reimbursements that insurance company has obtained from all beneficiaries under this plan, in addition to the other damages and fees described above. This 30 day notice to cease and desist is a jurisdictional "safe harbor" requirement for such a class action to proceed under §1782.

Please note that the demands to immediately cease the above described unfair and deceptive acts or practices is being made concurrently to Destiny Health and Guardian Life Insurance Co. by this service upon you by certified mail. Separate copies of the demand are included for these entities. We are obliged to serve these demands upon you since your clients are represented by counsel. Obviously, both the Plan and the insurance company would be defendants in any class action filed. In connection with any class action that may be filed, it is important to note that in Progressive West, supra, the court held that the insured’s allegation that his insurance plan had a pattern and practice of seeking reimbursement without regard to whether the insured was made whole stated a cause of action for unlawful, unfair or fraudulent practices under Business & Professions Code §17200. We would also like to point out that even if any provisions of the state’s CLRA or §17200 are found to be preempted by ERISA, there is nothing in ERISA to prevent a class action for restitution of benefits to all affected plan members."

Credit for the above article posting goes directly to the legal foresight an injured consumer advocate Don M. de Camara, Esq.

Mark C. Blane is a San Diego Personal Injury Attorney, and the managing lawyer of the Law Offices of Mark C. Blane, a San Diego, California Personal Injury Law Firm dedicated to representing families of people injured in personal injury accidents including car accidents, slip and falls, dog bites, product defects, and the like. If you or a loved one has been killed or injured in an accident in San Diego, or Southern California, due to the negligence of another, please order your free copy of Mr. Blane's book, The 10 Secrets You Need To Know About Your Injury Case, BEFORE You Call A Lawyer. It is full of helpful information that will help you protect your legal rights and it normally sells for $16.95.  However, it is free to all California residents, or those injured in an California accident.