Directors Guild Denies Violating Obamacare

Directors Guild of America DGA Logo - H 2012

Directors Guild of America DGA Logo - H 2012

The Directors Guild of America is looking to escape a lawsuit that accuses the guild of violating the Affordable Care Act — popularly known as "Obamacare" — by refusing to pay for naturopathic doctors.

The lawsuit was filed in August by Michael Grossman, who has directed episodes of Legends of Tomorrow, Pretty Little Liars, Drop Dead Divas and other television shows, as well as his husband, Michael Ludin.

According to the complaint in California federal court, Ludin underwent over 15 surgeries for chronic medical conditions before turning to naturopathic medicine, which includes both traditional and non-Western healing methods for pain. Ludin enjoyed "fantastic and encouraging results" including better sleep, less prescription medicine and avoided surgeries, but according to the lawsuit, he was told in October 2014 that the DGA Producer Health Plan wouldn't pay for naturopathic care. He and Grossman claim that the refusal of coverage violates the Affordable Care Act's prohibition against discrimination against the medical care provider of the patient's choice.

On Dec. 27, the DGA filed a motion to dismiss the complaint on the basis that it is a labor organization, not a health plan, and that it had no role in Ludin's denial of benefits. The DGA objects to the conclusion that it is indistinguishable from the health plan offered to members and also asks the court to throw out allegation that it interfered with plaintiffs rights under the Employee Retirement Income Security Act of 1974.

Indeed, the DGA, like the other entertainment unions, is a legally separate organization from its corresponding pension and health plan. The latter is governed by a separate board of trustees that are 50-50 management and labor, as required by law.

Grossman and Ludin are also suing Trustees of the DGA-Producer Health Plan, who have brought their own motion to dismiss.

The Trustees argue there's no private right of action for individuals to sue under the non-discrimination provision of the Affordable Care Act. There's been just a few lawsuits on this topic since Obamacare was enacted in 2010. The ramifications of any decision could be muted if Republicans move forward with a promised repeal of the statute.

Nevertheless, for history's sake, here's the memorandum in support of dismissal, which discusses previous cases over whether there's a right to sue under other provisions of Obamacare, notes some scholarly discussion of the topic and mentions how this is a matter of first impression, meaning there's no case law precedent in which to ground a decision.

"The argument that ACA Sections 2706 and 2719 create an implied private right of action fails because there can be no implied private right of action when the statutory language explicitly says otherwise," argue the Trustees. "A statute should be interpreted according to its plain terms. In this case, the statute expressly incorporates ACA Sections 2706 and 2719 into ERISA and thereby gives Plaintiffs the mechanism they are looking for the bring suit [sic]."

The Trustees also note in their brief that the health plan initially paid for Ludin's naturopathic care in Portland, Ore., before eventually concluding that such care wasn't covered. After an internal appeal, Ludin's office visits were approved for coverage, but not procedures and treatments performed by the naturopathic doctor.

Updated 1/4/2017 10:27 pm PT by Jonathan Handel to add paragraph explaining that DGA is legally separate from its P&H plan.