Court Allows Key Claims to Proceed in Ghost Network Case Against Carelon Behavioral Health
April 1, 2026
NEW YORK, April 1, 2026 – In an important “ghost network” case, a United States District Court has allowed the core claims against Carelon Behavioral Health to proceed. Judge Edgardo Ramos of the Southern District of New York denied Carelon’s motion to dismiss the plaintiff’s case alleging deceptive business practices, deceptive advertising, violations of New York Insurance Law § 4226, claims for fraudulent and negligent misrepresentation, and unjust enrichment claims.
Although the court dismissed plaintiff’s breach of contract and breach of the covenant of good faith and fair dealing claims – because Carelon’s contract was with New York State and not with the individual members – Judge Ramos allowed the alternative argument that Carelon profited unjustly to proceed. The decision leaves intact all the core allegations and positions the case to advance on substantive grounds.
“We are thrilled with the Court’s ruling,” said Steve Cohen of Pollock Cohen LLP, one of the attorneys representing the plaintiffs. “This is an important victory for consumers.”
“Carelon’s victims are a major step closer to getting the justice they deserve,” said co-counsel Jacob Gardener, a partner at Walden Macht Haran & Williams LLP.
The lawsuit, filed by Pollock Cohen LLP and Walden Macht Haran & Williams on behalf of more than 1 million patients, was brought against Carelon Behavioral Health in April 2025. Carelon provides the mental health benefits to state and municipal employees who choose the Empire Plan under the New York State Health Insurance Program (NYSHIP). The lawsuit alleged the health insurance company perpetrated fraud by publishing an inaccurate directory of doctors who supposedly accepted the Empire Plan insurance but, in fact, did not.
The case is 25-cv-03489 (ER).
About Pollock Cohen LLP
Pollock Cohen LLP is an impact-driven litigation firm that delivers unusually effective plaintiff-side legal representation. We are known for our ability to solve client problems—with strategy, creativity, and thought—both inside the courtroom and outside the four corners of a legalistic approach. We thrive on representing plaintiffs in cases that are impactful and meaningful, and where we can make a difference. For more information, visit http://www.pollockcohen.com
About Walden Macht Haran & Williams LLP
Walden Macht Haran & Williams LLP is a premier litigation boutique that handles high-stakes civil and criminal cases Based in New York, they are known for their work on high-profile complex commercial disputes, appeals, white-collar defense and investigations, monitorships, and corporate compliance matters. Walden Macht Haran & Williams strives to do good. For more information, visit https://wmhwlaw.com
