Rebecca Smith, on her own behalf v. UnitedHealth Group Inc.

United States Court of Appeals
For the Eighth Circuit
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No. 23-2369
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Rebecca Smith, on her own behalf and on behalf of all others similarly situated;
Cristine M. Ghanim, individually and on behalf of all others similarly situated
Plaintiffs - Appellants
v.
UnitedHealth Group Inc.; United HealthCare Services, Inc.; United HealthCare
Insurance Company; United Medical Resources; United Healthcare Service LLC;
Doe Defendants, 1-10
Defendants - Appellees
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Appeal from United States District Court
for the District of Minnesota
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Submitted: March 14, 2024
Filed: July 8, 2024
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Before COLLOTON, Chief Judge, ERICKSON and KOBES, Circuit Judges.
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ERICKSON, Circuit Judge.
Rebecca Smith and Cristine Ghanim are participants in separate self-funded
health insurance plans administered by UnitedHealth Group Inc. (“United”). They
initiated this putative class action after United did not pay their providers in full, but
instead offset the amount due based on sums United claimed the provider had been

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previously overpaid. The claims are brought under 29 U.S.C. § 1132(a)(2) and assert
United’s practice of offsetting violates its duty of loyalty and other prohibitions
under the Employee Retirement Income Security Act of 1974 (“ERISA”). United
filed a motion to dismiss the complaint for lack of subject-matter jurisdiction under
Federal Rule of Civil Procedure 12(b)(1) and failure to state a claim under Rule
12(b)(6). The district court1 granted United’s motion, concluding the participants
lacked standing. We affirm.
I. BACKGROUND
United administers two types of health-insurance plans governed by ERISA:
“fully insured” and “self-funded.” For fully insured plans, United pays for covered
healthcare expenses out of its own assets in exchange for premiums. For self-funded
plans, the plan pays for covered expenses by taking contributions from the plan’s
participants (employees) and contributions from the plan’s sponsor (employer). For
both plans, United determines whether a provider’s services are covered and
processes claims, including paying providers. When United overpays a provider, it
utilizes cross-plan offsetting to recoup the overpayment. Cross-plan offsetting
allows a plan administrator to offset amounts due to an overpaid provider when any
participant covered by any of the plans administered obtains covered services from
the overpaid provider.
Rebecca Smith is a participant in a self-funded health benefits plan sponsored
by her husband’s employer. Cristine Ghanim is a participant in a different self-
funded health benefits plan sponsored by her employer. The provision in both plans’
Summary Plan Description describes how the plans will recoup overpayments:
If the refund is due from a person or organization other than the
Covered Person, the Plan may recover the overpayment by reallocating
the overpaid amount to pay, in whole or in part, . . . (ii) future benefits
1 The Honorable Nancy E. Brasel, United States District Judge for the District
of Minnesota.

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that are payable in connection with services provided to persons under
other plans for which [United] makes payments, pursuant to a
transaction in which the Plan’s overpayment recovery rights are
assigned to such other plans in exchange for such plans’ remittance of
the amount of the reallocated payment.
Additionally, both plans delegate to United the discretion to decide how to
implement cross-plan offsets when paying benefits. Both plans state:
Payment of Benefits under the Plan shall be in cash or cash equivalents,
or in the form of other consideration that [United] in its discretion
determines to be adequate. Where Benefits are payable directly to a
provider, such adequate consideration includes the forgiveness in
whole or in part of amounts the provider owes to other plans for which
[United] makes payments, where the Plan has taken an assignment of
the other plans’ recovery rights for value.
Smith and Ghanim underwent medical procedures in 2020. United covered
their claims and utilized cross-plan offsets to pay the providers. For Smith, United
paid $39,458.99 of the $42,082.13 bill after applying a $2,623.14 offset. For
Ghanim, United determined that the total bill was $13,908.24, applied a $10,958.93
offset, and paid the provider $2,949.31. Smith and Ghanim assert that the offsets
leave them liable to the providers for the unpaid difference so they brought suit in
the District of Minnesota seeking to represent all persons in the United States who
were covered under an ERISA self-funded plan administered by United, who had at
least one claim not paid in full because United applied some portion of the covered
amount toward an alleged overpayment by a different plan. They allege that
transferring self-funded plan assets as reimbursement for overpayments made from
its own fully insured plans unlawfully benefits United and is detrimental to self-
funded plans. They claim United’s practice constitutes a breach of fiduciary duty
and loyalty and violates other ERISA prohibitions. Smith and Ghanim seek
injunctive and equitable relief.

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United moved to dismiss under Fed. R. Civ. P. 12(b)(1), asserting that Smith
and Ghanim lack standing because they have not suffered a concrete injury. It also
moved to dismiss under Rule 12(b)(6) for failure to state a claim. The district court
found Smith and Ghanim’s claims lack constitutional standing and dismissed the
complaint under Rule 12(b)(1).
II. DISCUSSION
We review standing de novo. Dalton v. NPC Int’l, Inc., 932 F.3d 693, 695
(8th Cir. 2019). “In assessing a plaintiff’s Article III standing, we must ‘assume that
on the merits the plaintiffs would be successful in their claims.’” Am. Farm Bureau
Fed’n v. U.S. Env’t Prot. Agency, 836 F.3d 963, 968 (8th Cir. 2016) (quoting Muir
v. Navy Fed. Credit Union, 529 F.3d 1100, 1106 (D.C. Cir. 2008)).
When considering a motion under Rule 12(b)(1), a court is to consider
whether a party is asserting a “facial attack” or a “factual attack” on jurisdiction.
Carlsen v. GameStop, Inc., 833 F.3d 903, 908 (8th Cir. 2016) (citation omitted). If
it is a facial attack, the court looks only at the pleadings and gives the non-moving
party the same protections available under Rule 12(b)(6). Id. Here, the district court
stated it was applying the standard for reviewing motions under Rule 12(b)(6).
“Congress’ role in identifying and elevating intangible harms does not mean
that a plaintiff automatically satisfies the injury-in-fact requirement whenever a
statute grants a person a statutory right and purports to authorize that person to sue
to vindicate that right.” Spokeo, Inc. v. Robins, 578 U.S. 330, 341 (2016). In other
words, even in the context of a statutory violation, a plaintiff must still demonstrate
a concrete injury. Id. at 342. Because the fiduciary duties created by ERISA are
owed to the plan, plan participants lack a “legal or equitable ownership in the plan
assets.” Thole v. U. S. Bank N.A, 590 U.S. 538, 548 (2020) (Thomas, J.,
concurring).

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While Smith and Ghanim contend they suffered a concrete injury similar to
the plan participants in Mitchell v. Blue Cross Blue Shield of North Dakota, 953 F.3d
529, 535–36 (8th Cir. 2020), Mitchell is distinguishable. The plaintiffs in Mitchell
alleged a breach of contract that could be redressed by an award of contractual
benefits. See 953 F. 3d at 536 (holding that “[t]he denial of benefits to which a plan
participant is contractually entitled is a ‘particularized’ injury that affects the
participant in ‘a personal and individual way’ [and] [is] [concrete]” and “[a] court
can redress this injury by awarding the contractual benefits to which the participant
is entitled”) (quoting Spokeo, 578 U.S. at 339). Smith and Ghanim do not allege a
breach of contract as they are not contractually entitled to having a payment of
approved benefits be made in cash. In fact, Smith and Ghanim recognize that their
plans explicitly delegate to United the discretion to implement cross-plan offsetting.
Smith and Ghanim’s reliance on GameStop, Inc., 833 F.3d 903, is also
unavailing because in that case there was a breach of contract while the plans here
specifically allow for cross-plan offsetting. Smith and Ghanim make no claim that
United breached their plans; rather they assert that a breach exists only because the
plans’ language is inconsistent with ERISA. By seeking to construe their plans
consistent with ERISA, Smith and Ghanim have asserted a statutory cause of action
but have not shown a concrete injury.
Smith and Ghanim’s final undeveloped argument is that the material risk of
future harm can satisfy the concrete-harm requirement. This claim fails because the
Supreme Court “has recognized, a person exposed to a risk of future harm may
pursue forward-looking, injunctive relief to prevent the harm from occurring, at least
so long as the risk of harm is sufficiently imminent and substantial.” TransUnion
LLC v. Ramirez, 594 U.S. 413, 435 (2021). But here the injunctive relief Smith and
Ghanim seek will not prevent providers from collecting on their outstanding debts.
Also, they merely argue that United’s cross-plan offsetting created a risk that the
providers will seek to collect on their outstanding debts in the future. “Plaintiffs
cannot rely on speculation about the unfettered choices made by independent actors

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not before the court.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 414 n.5 (2013)
(internal quotation omitted).
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s grant of United’s
motion to dismiss for lack of jurisdiction under Rule 12(b)(1).
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