The threshold issue is whether state courts have jurisdiction to determine the ERISA status of a plan. The Eighth Circuit directly considered this question and determined that both state and federal courts have the power to determine ERISA status. Int’l Ass’n of Entrepreneurs of Am. v. Angoff, 58 F.3d 1266, 1269 (8th Cir. 1995). The court reasoned that because the law was silent on whether states have the power to decide ERISA status the default rule should apply: “[u]nless instructed otherwise by Congress, state and federal courts have equal power to decide federal questions.” Id.
Although the Ninth Circuit has not addressed this specific issue, it has held that “state courts amply are able to determine whether a state statute or order is preempted by ERISA.” Delta Dental Plan of California, Inc. v. Mendoza, 139 F.3d 1289, 1296-97 (9th Cir. 1998) disapproved of on other grounds by Green v. City of Tucson, 255 F.3d 1086 (9th Cir. 2001). Other courts that have addressed this issue have found that both federal and state courts have jurisdiction to decide the status of an ERISA plan. See Weiner v. Blue Cross & Blue Shield of Maryland, Inc., 925 F.2d 81, 83 (4th Cir. 1991); Browning Corp. Int’l v. Lee, 624 F. Supp. 555, 557 (N.D. Tex. 1986). Many courts have also assumed concurrent jurisdiction to decide ERISA plan status without specifically addressing the issue. See, e.g., Marshall v. Bankers Life & Cas. Co., 2 Cal. 4th 1045, 1052-54, 10 Cal. Rptr. 2d 72, 832 P.2d 573 (1992).
Knapp v. Cardinale, 2013 U.S. Dist. LEXIS 98644 (N.D. Cal. July 15, 2013)
Although ERISA issues are typically resolved in federal court, this is not always the case. Aside from occasional benefit claims disputes (where there is concurrent jurisdiction by statute), questions of preemption frequently arise in state courts as well.
In a recent district court case, the court explored questions of concurrent jurisdiction. The underlying facts are somewhat curious.
While similar to the Butero test, Davila refines Butero by inquiring about the existence of a separate legal duty, which is not a consideration under Butero.
Moreover, a number of other circuits have recognized Davila’s two-part test as the proper test for complete preemption under ERISA . . . In accordance with the Supreme Court’s directive, we too apply Davila.
Conn. State Dental Ass’n v. Anthem Health Plans, Inc., 2009 U.S. App. LEXIS 28773 (11th Cir. Fla. Dec. 30, 2009)
This recent 11th Circuit opinion applies the two-part analysis required under Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) to health care providers’ allegations in a class action complaint. The now familiar Davila test requires two inquiries: (1) whether the plaintiff could have brought its claim under § 502(a); and (2) whether no other legal duty supports the plaintiff’s claim.
On the facts before it in this case, the Court held that several of the providers’ claims were completely preempted under this test.
“It is not the label placed on a state law claim that determines whether it is preempted, but whether in essence such a claim is for the recovery of an ERISA plan benefit.”
Lockett v. Marsh United States, 2009 FED App. 0759N (6th Cir.) (6th Cir. Ohio Dec. 3, 2009) (citing, Peters v. Lincoln Elec. Co., 285 F.3d 456 (6th Cir. 2002)
This recent unpublished decision from the Sixth Circuit draws on prior authority in that Circuit on the question of when employment law claims tread too closely to ERISA’s domain and thus are preempted by the broad reach of that statutory regime. In this case, the plaintiff sued on state law theories of discrimination and retaliation but the facts she alleged were found tilted toward a claim for severance benefits which in turn warranted preemption.
As applied by the courts in cases brought under ERISA, the “fiduciary” exception to the attorney-client privilege “comes into play when . . . the administrator for an ERISA plan invokes the attorney-client privilege against the plan beneficiaries.” Lewis v. UNUM Corp. Severance Plan, 203 F.R.D. 615, 619 (D. Kan. 2001). “This fiduciary exception derives from the principle that when an attorney advises a plan fiduciary about the administration of an employee benefit plan, the attorney’s client is not the fiduciary personally but, rather, the trust’s beneficiaries.” Lewis, 203 F.R.D. at 619.
Redd v. Bhd. of Maint. of Way Emples. Div. of the Int’l Bhd. of Teamsters, 2009 U.S. Dist. LEXIS 46288 ( E.D. Mich. June 2, 2009)
This opinion involves consideration of the dimensions of the fiduciary exception to attorney-client and work product privileges. The issue arose in the context of district court review of plaintiffs’ objections to a magistrate judge’s ruling on a motion to compel.
St. Luke’s may amend within thirty days. If St. Luke’s amends to assert an ERISA claim, the personal jurisdiction issue is far simpler. “[U]nder ERISA’s nationwide service of process provision,” 29 U.S.C. § 1132(e)(2), “[a] court may exercise personal jurisdiction over the defendant if it determines that the defendant has sufficient ties to the United States.” . . . Because BCBSLA has sufficient contacts with the United States, this court would have personal jurisdiction if St. Luke’s were to amend to assert claims under ERISA.
St. Luke’s Episcopal Hosp. v. La. Health Serv. & Indem. Co., 2009 U.S. Dist. LEXIS 388 (S.D. Tex. Jan. 6, 2009) (citations omitted)
This recent opinion from the Southern District of Texas provides an excellent insight into the strategic decisions involved in provider reimbursement litigation. In the final analysis, the provider’s attempt to assert state law remedies in state court against the Blue Cross defendant failed for want of jurisdiction. All was not lost, however, since the ruling left open the avenue for an amended complaint stating a claim under ERISA on principles of derivative standing (via assignment of benefits).