United States District Court, D. Connecticut
MARK DANE, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
UNITEDHEALTHCARE INSURANCE COMPANY, et al., Defendants.
ORDER ON MOTION TO DISMISS
R. Underhill United States District Judge.
Mark Dane (“Dane”), individually and on behalf of
all others similarly situated, brings this suit against
Defendants AARP, Inc., AARP Services, Inc., AARP Insurance
Plan, UnitedHealthCare Insurance Company and UnitedHealth
brings claims on behalf of a purported nationwide class of
current and former insureds who purchased United Medigap
coverage. Id. at ¶ 95. He asserts seven
Connecticut-law causes of action: (1) violation of the
Connecticut Unfair Trade Practices Act (“CUTPA”),
Conn. Gen. Stat. § 42-110b; (2) breach of contract; (3)
unjust enrichment; (4) breach of the implied covenant of good
faith and fair dealing; (5) money had and received; (6)
conversion; and (7) statutory theft. Id. at
¶¶ 118-169. He also asserts one District of
Columbia claim: violation of the District of Columbia's
Consumer Protection Procedures Act (“CPPA”), D.C.
Code § 28-3904 et seq. Dane seeks a permanent
injunction and declaratory relief that will end United's
payments to AARP, as well as “disgorgement and
restitution of all monies taken” from the class and
paid to AARP. Pl's Mem., Doc. No. 70, at 6.
reasons set forth below, the motion to dismiss, Doc. No. 64,
is granted, and the case is dismissed.
Standard of Review
motion to dismiss for failure to state a claim pursuant to
Rule 12(b)(6) is designed “merely to assess the legal
feasibility of a complaint, not to assay the weight of
evidence which might be offered in support thereof.”
Ryder Energy Distribution Corp. v. Merrill Lynch
Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984)
(quoting Geisler v. Petrocelli, 616 F.2d 636, 639
(2d Cir. 1980)).
deciding a motion to dismiss pursuant to Rule 12(b)(6), the
court must accept the material facts alleged in the complaint
as true, draw all reasonable inferences in favor of the
plaintiffs, and decide whether it is plausible that
plaintiffs have a valid claim for relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678-79 (2009); Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555-56 (2007); Leeds v.
Meltz, 85 F.3d 51, 53 (2d Cir. 1996).
Twombly, “[f]actual allegations must be enough
to raise a right to relief above the speculative level,
” and assert a cause of action with enough heft to show
entitlement to relief and “enough facts to state a
claim to relief that is plausible on its face.” 550
U.S. at 555, 570; see also Iqbal, 556 U.S. at 679
(“While legal conclusions can provide the framework of
a complaint, they must be supported by factual
allegations.”). The plausibility standard set forth in
Twombly and Iqbal obligates the plaintiff
to “provide the grounds of his entitlement to
relief” through more than “labels and
conclusions, and a formulaic recitation of the elements of a
cause of action.” Twombly, 550 U.S. at 555
(quotation marks omitted). Plausibility at the pleading stage
is nonetheless distinct from probability, and “a
well-pleaded complaint may proceed even if it strikes a savvy
judge that actual proof of [the claims] is improbable, and .
. . recovery is very remote and unlikely.” Id.
at 556 (quotation marks omitted).
a Section 501(c)(4) tax-exempt nonprofit organization that
advocates for seniors' interests, and United is an
insurance corporation. See First Amended Complaint
(“FAC”), Doc. No. 61, at ¶¶ 31, 35.
United offers a Medigap insurance program to individual AARP
members across the country. See Id. In 1997, United
and AARP entered into an agreement in which United licensed
AARP's intellectual property, including the AARP name,
trademarked logo, and membership list, to be used in the
Medigap program. Id. at ¶ 13. United pays for
the use of AARP's intellectual property. AARP Trust is a
group policyholder for AARP Medigap, an insurance product of
United. FAC, Doc. No. 61, at ¶ 33.
principal issue raised in this case is whether a group
policyholder can take a percentage cut of a member
insured's monthly insurance payments that flow through
the group plan on their way to the insurer other than for
reimbursement of expenses in administering a group insurance
plan. Defendants argue that the percentage cut is payment for
an intellectual property license for use with the program in
exchange for a royalty. Dane, however, contends that the
percentage cut constitutes a “premium rebate”, or
kickback, in violation of state anti-rebating laws, including
the Connecticut Unfair Insurance Practices Act
(“CUIPA”), Conn. Gen. Stat. § 38a-815,
et seq., and the District of Columbia anti-rebating
statute, D.C. Code § 31-2231.12. Dane seeks a permanent
injunction and declaratory relief that will halt the alleged
kickbacks from occurring in the future as well as
disgorgement and restitution of all monies paid to AARP in
violation of Connecticut law, District of Columbia law, and
the health insurance policy.
argues the following: (1) AARP Trust is wholly dominated and
controlled by AARP, Inc., and United pays AARP in the form of
a “premium rebate”; (2) individual consumers,
including himself, are harmed by Defendants'
“scheme” because they are forced to absorb the
costs of the inducement in the form of a 4.9% surcharge on
top of premiums; (3) the most current version of the AARP
kickback has been kept “secret and confidential”;
(4) Defendants' reliance on the filed rate doctrine,
which bars suits against regulated utilities grounded on the
allegation that the rates charged by the utility are
unreasonable, is misplaced because the case involves only
state law claims; and (5) Defendants violated CUTPA or CPPA
by mischaracterizing the alleged “premium rebate”
to AARP as a royalty. Dane also raises several common law
reasons that follow, I reject Dane's arguments and grant
Defendants' motion to dismiss.
The AARP Royalty is not an Unlawful “Premium
anti-rebate statute prohibits any “insurance company
doing business in [Connecticut] from “pay[ing] or
allow[ing] or offer[ing] to pay or allow, as inducement
to insurance, any rebate of premium payable on the
policy . . . or any valuable consideration or inducement
not specified in the policy of insurance.” Conn. Gen.
Stat. § 38a-825 (emphasis added). The District of
Columbia's anti-rebate statute is similar. D.C. Code
does not provide facts to support a theory that a payment to
AARP induces AARP members to choose United Medigap overage
over other insurance options because individual insureds are
not receiving any monetary award for choosing United. AARP is
a distinct entity from AARP Trust, which is the group
policyholder. See Agreement and Declaration of Trust
(“Agreement”), Doc. No. 61-4, at §§
2.1, 2.3. AARP Trust reimburses United only for
administrative expenses, rather than for
“referrals”. See Agreement, Doc. No.
61-4, at §§ 4.2, 6.1, 6.2.
payments that AARP makes to United are for use of AARP's
intellectual property. See Agreement, Doc. No. 61-4,
at § 6.1 (“AARP shall be entitled to receive an
allowance for AARP's ...