Priddy v. Health Care Service Corp.

Dist. Ct. erred in granting plaintiff’s motion for certification of class action in action alleging that defendant-health insurance company violated ERISA by contracting with outside affiliates to perform prescription drug services, claims payments and other administrative work and then having said outside affiliates overcharge defendant’s customers and splitting said overcharges with defendant. Remand was required because Dist. Ct. had failed to consider or explain: (1) whether defendant owed many proposed class members any fiduciary duty at all, especially for those class members whom defendant did not insure and who did not pay defendant any premiums; and (2) how ERISA even applied to class members who bought health insurance directly from defendant.