Delgadillo files suit against Blue Shield

LOS ANGELES, Calif. "Our complaint alleges that Blue Shield applications are intentionally misleading. They are essentially a trap that maximizes the possibility of innocent errors or omissions, which Blue Shield can later use as pretext for retroactively cancelling the insurance policy," Delgadillo said.

At a news conference announcing the lawsuit, Delgadillo referred to the case of Ana and Gus Simoes. The couple was insured by Blue Shield in January 2004, and later that year Ana underwent gall bladder surgery. Delgadillo and the couple's attorney allege that Blue Shield used an inadvertent omission to illegally cancel their policy after the fact.

"They went hunting for a reason to cancel Ana's policy, and they couldn't find anything so they started picking on the husband. They took him out just because of cholesterol, and then they cancelled everybody," attorney William Shernoff said.

Delgadillo says Blue Shield has been engaged in such unlawful practices since 2002. The lawsuit seeks civil penalties of $2,500 for each individual violation of unfair competition law, and for each case of false advertising.

"Placing the company's legal exposure well over $1 billion, and that's billion with a 'b,'" Delgadillo said.


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