Opinion
No. CV 06-6000188
June 22, 2007
MEMORANDUM OF DECISION
The defendant moves to dismiss this action for lack of subject matter jurisdiction arguing that the Employee Retirement Income Security Act of 1974 ("ERISA") preempts the plaintiff's state law claims. For reasons more fully set forth below, this court grants the defendant's motion to dismiss.
On August 14, 2006, the plaintiff, Mario G. Ceste, filed a three-count complaint against the defendant, Anthem Health Plans, Inc., in which he alleges that the defendant sells and administers health insurance plans in Connecticut, one of which (the BlueCare plan) he is a member. Pursuant to the BlueCare plan, the plaintiff claims that he received prescription drug coverage. In his complaint the plaintiff alleges that since December 2005, he has unsuccessfully attempted to obtain coverage for certain prescription medications. In connection with his attempts to obtain such coverage, the plaintiff claims that the defendant's representatives gave him false and/or misleading information regarding the proper procedures for obtaining benefits. The plaintiff, therefore, claims that the defendant is liable for breach of contract, fraud and violations of the Connecticut Unfair Trade Practices Act (CUTPA). He seeks to recover, inter alia, actual damages, attorneys fees and costs, as well as other relief available under CUTPA, including punitive damages.
General Statutes § 42-110 et seq.
I. Motion to Dismiss
"A motion to dismiss properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." Cox v. Aiken, 278 Conn. 204, 210-11, 897 A.2d 71 (2006). "ERISA preemption infringes upon the court's subject matter jurisdiction." (Internal quotation marks omitted.) Thompson v. Bridgeport Hospital, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 98 352686 (Jun. 18, 2001, Moran, J.). "Pursuant to the rules of practice, a motion to dismiss is the appropriate motion for raising a lack of subject matter jurisdiction"; St. George v. Gordon, 264 Conn. 538, 545, 825 A.2d 90 (2003).
"When a court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Cox v. Aiken, supra, 211.
II. Preemption Arguments of the Parties
The defendant argues that ERISA's broad preemption provision, 29 U.S.C. § 1144(a), deprives this court of subject matter jurisdiction over the plaintiff's claims. Pursuant to § 1144(a), ERISA preempts any state law that "may now or hereafter relate to any employee benefit plan" covered under the statute. The defendant argues that the plaintiff's claims "relate to" the plan and, therefore, come within § 1144(a) preemption because (1) the plaintiff's claims arise out of an ERISA plan, (2) the plaintiff has a remedy under ERISA and (3) enforcement of the plaintiff's claims would involve the interpretation, administration and processing of the ERISA plan at issue. The defendant further argues that the plaintiff's state law claims are preempted because they constitute alternative causes of actions to collect ERISA benefits.
29 U.S.C. § 1144(a) provides. "Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in [ 29 U.S.C. § 1003(a)] . . ." Section 1003(a) refers to "any employee benefit plan . . . established or maintained . . . by any employer engaged in commerce or in any industry or activity affecting commerce . . ."
The plaintiff counters that his claims evade preemption, because they do not attempt to control administration of the plan. Rather, the plaintiff characterizes his causes of actions as seeking redress for the defendant's unscrupulous practices and its failure to follow its own rules and regulations. According to the plaintiff, his claims do not attempt to recover benefits under the plan and adjudication of his claims will not require the court to interpret the plan. He argues that his claims do not "relate to" the plan for purposes of § 1144(a).
III. Threshold Issue: Whether Plan Falls Within Scope of ERISA
As a threshold issue, this court finds that the plan at issue in the present case is an "employee welfare benefit plan" within the scope of ERISA. The defendant submitted the affidavit of a Senior Recovery Manager at Anthem Health Plans, Inc., in which she attests that the plan is employer-sponsored and governed by ERISA. The defendant also submitted a copy of the plan, along with an affidavit attesting to its genuineness. The plan includes a section titled "Enforcement of ERISA Rights," which describes the obligations of plan administrators and explains that beneficiaries of the plan may take steps under ERISA to enforce their rights. Further, the plaintiff does not dispute that ERISA governs the BlueCare plan to which he belongs.
IV. Complete Preemption pursuant to § 1132 v. Express Preemption pursuant to § 1144
The next issue for the court to consider is whether the claims asserted by the plaintiff are preempted by ERISA. Courts have struggled in determining precisely which state laws ERISA preempts. "As the Supreme Court has recognized . . . ERISA's nearly limitless `relates to' language offers no meaningful guidelines to reviewing judges." Gerosa v. Savasta Co., Inc., 329 F.3d 317, 323 (2d Cir. 2003), cert. denied, 540 U.S. 967, 124 S.Ct. 435, 157 L.Ed.2d 312 (2003), 540 U.S. 1074, 124 S.Ct. 929, 157 L.Ed.2d 744 (2003). This has led to what the Second Circuit has described as a "proliferation of lower court opinions attempting to apply the Supreme Court's still not entirely determinate principles . . ." Id., 324. Adding to the jurisprudential confusion are the courts' attempts to reconcile the preemptive force of its civil enforcement provision, § 1132(a) with ERISA's express preemption provision, § 1144(a). Preemption under § 1132, often referred to as "complete preemption," allows for removal of certain claims to federal court. See Ackerman v. Fortis Benefits Ins. Co., 254 F.Sup.2d 792, 795 n. 2 (S.D. Ohio 2003); Moscovitch v. Danbury Hospital, 25 F.Sup.2d 74, 82 (D.Conn. 1998). By contrast, express preemption under § 1144(a) constitutes an affirmative defense to state law causes of action. Section 1144(a) preemption does not create federal jurisdiction, as § 1132(a) does; rather, it requires dismissal of state law claims. Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir. 1999).
29 U.S.C. § 1132(a) provides in relevant part: "A civil action may be brought . . . (1) by a participant or beneficiary . . . (B) to recover benefits due him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan . . ."
The case law does not reflect a unified approach to actions such as the plaintiff's. On the one hand, although neither party has raised the issue, the court arguably has concurrent jurisdiction over the plaintiff's breach of contract claim pursuant to 29 U.S.C. § 1132(e). On the other hand, numerous courts, including the Superior Court, have applied § 1144(a) preemption in analogous cases, including those involving common-law breach of contract claims. In no event, however, would concurrent jurisdiction extend to the plaintiff's fraud and CUTPA claims.
In Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, CT Page 11271 233, 680 A.2d 127 (1996), cert. denied, 520 U.S. 1103, 117 S.Ct. 1106, 137 L.Ed.2d 308 (1997), the Supreme Court described "the quagmire of ERISA law." It stated: "ERISA is a comprehensive regulation of employee welfare and pension benefit plans [that] extends to those that provide medical, surgical, or hospital care or benefits for plan participants or their beneficiaries through the purchase of insurance or otherwise . . . The federal statute does not go about protecting plan participants and their beneficiaries by requiring employers to provide any given set of minimum benefits, but instead controls the administration of benefit plans . . . as by imposing reporting and disclosure mandates . . . participation and vesting requirements . . . finding standards . . . and fiduciary responsibilities for plan administrators . . . It envisions administrative oversight, imposes criminal sanctions, and establishes a comprehensive civil enforcement scheme . . . It also preempts some state law." (Citations omitted; internal quotation marks omitted.) Id.
Considering the provisions of ERISA, the applicable case law, and the arguments of the parties, this court concludes that it does not have concurrent jurisdiction over the plaintiff's claims pursuant to § 1132 and that § 1144(a) preemption applies to all three counts of the plaintiff's complaint.
A. Concurrent Jurisdiction pursuant to § 1132
As a beneficiary of an ERISA plan, the plaintiff in the present case arguably could have brought an action to enforce his rights under § 1132(a)(1)(B). The civil enforcement provision of ERISA, 29 U.S.C. § 1132(a)(1)(B), authorizes a participant or beneficiary of an ERISA plan to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan . . ." Pursuant to § 1132(e), "[e]xcept for actions under [§ 1132](a)(1)(B) . . . the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by . . . a participant [or] beneficiary . . . State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions under [paragraph] (1)(B) . . . subsection (a) of this section."
"The Conference Report on ERISA describing the civil enforcement provisions of § [1132(a)] says: `[W]ith respect to suits to enforce benefit rights under the plan or to recover benefits under the plan which do not involve application of the title I provisions, they may be brought not only in U.S. district courts but also in State courts of competent jurisdiction. All such actions in Federal or State courts are to be regarded as arising under the laws of the United States . . .' H.R. Conf Rep. No. 93-1280, p. 327 (1974) . . . Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65-66, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987), on remand, 826 F.2d 452 (6th Cir. 1987). See also Saks v. Franklin Covey Co., 316 F.3d 337, 349 (2d Cir. 2003) ("ERISA's jurisdictional provision governing benefits-due actions provides concurrent jurisdiction in state and federal district courts . . . and thus ERISA prescribes the choice of law, not jurisdiction"); Sadowski v. Dell Computer Corp., United States District Court, Docket No. CV 2113 (D.Conn. June 23, 2003) (same); Brown v. Zurich US, 150 Ohio App.3d 105, 111, 779 N.E.2d 822 (2002), cert. denied, 98 Ohio St.3d 1491, 785 N.E.2d 473 (2003) ("the affirmative defense of the ERISA preemption issue . . . is not jurisdictional in nature but a matter of choice of law").
While more recent Superior Court and federal court decisions have relied on § 1144(a) to dismiss plaintiffs' breach of contract and other state common-law claims, earlier state court decisions sometimes allowed certain state claims to survive pursuant to § 1132(a)(1)(B). See, e.g. Gianetti v. Aetna Life Casualty Co., Superior Court, judicial district of Fairfield, Docket No. CV 96 335597 (July 16, 1998, Thim, J.); and Mitchell v Blue Cross Blue Shield of Connecticut, Inc., Superior Court, judicial district of Danbury, Docket No. 314947 (April 29, 1997, Stodolink, J.) [19 Conn. L. Rptr. 408].
In Mitchell, the Superior Court denied an insurer's motion to dismiss under circumstances similar to those presented in this case. The defendant sought dismissal of the plaintiff's complaint on the basis that the plaintiff alleged common-law breach of contract, and did not bring an ERISA claim. There, the plaintiff alleged that he was a beneficiary of a health insurance plan issued by the defendant and that he had a claim for benefits under the plan. Id. The plaintiff sought to "enforce his rights to recover these benefits that defendant has refused to pay." Id. The court reasoned, therefore, that "a fair reading of plaintiff's complaint brings it within the provisions of an action under [§ 1132](a)(1)(B) and, thus, this court has concurrent jurisdiction." Id.
In Gianetti, the Superior Court rejected the defendant's preemption argument and concluded, instead, that the court had concurrent jurisdiction over the plaintiff's claim for damages. It reasoned that the plaintiff was a beneficiary of an ERISA plan under an assignment of rights and sought to recover benefits allegedly due the assignor. Thus, the court found that "[s]ince the civil enforcement provision of ERISA authorizes a plan participant to bring the type of claim that is alleged . . . the claim is not preempted by ERISA." Id.
Applying the reasoning in Mitchell and Gianetti, this court considered whether it has concurrent jurisdiction over the plaintiff's contract claims, and concludes that it does not. In so concluding, this court finds that there is a distinction between the claims which specifically invoke ERISA and thereby give state courts concurrent jurisdiction and those which state breach of contract claims. Accordingly, this court concludes that it does not have concurrent jurisdiction over the plaintiff's breach of contract claim alleged in Count One despite § 1132(e).
As to the remaining counts, concurrent jurisdiction would not extend to the plaintiff's fraud or CUTPA claims in the present case. ERISA places significant limitations on the availability of concurrent jurisdiction. "Those suits as to which ERISA recognizes concurrent jurisdiction of actions under subsection (a)(1)(B) are civil actions brought by a participant or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of his plan, or to clarify his rights to future benefits under the plan[.] Duncan v. Junior Achievement, supra, 19 Conn. L. Rptr. 671." (Internal quotation marks omitted.) Thompson v Bridgeport, supra. An action alleging fraud or filed pursuant to CUTPA is not an action to recover benefits due under the terms of the ERISA plan. Accordingly, this court does not have concurrent jurisdiction pursuant to § 1132 to entertain the fraud or the CUTPA claim.
The plaintiff in the present case cannot avail himself of the concurrent jurisdiction provision of ERISA as to his contract, fraud or CUTPA claims.
B. Preemption pursuant to § 1142
The Superior Court (Blue, J.) noted that "ERISA pre-emption has by no means disappeared, but it has become considerably more nuanced." Stankewich v. Vanguard, Superior Court, judicial district of New Haven, at New Haven, Docket No. CV 434967 (March 28, 2001, Blue, J.).
As noted earlier, ERISA preempts any state law that "may now or hereafter relate to any employee benefit plan" covered under the statute. The Connecticut Supreme Court, in Napoletano v. CIGNA, interpreted "the phrase `relate to' in accordance with the intent of Congress in enacting ERISA." 238 Conn. 234. The court examined "the words of the statute itself . . . the legislative history and circumstances surrounding its enacting the legislative policy it was designed to implement, and . . . its relationship to existing legislation." (Internal quotation marks omitted.) Id. The court also looked to United States Supreme Court precedent, noting that whereas "[e]arly Supreme Court cases provided an expansive view of this term . . ." more recent cases demonstrate a narrower interpretation. Id. at 235. Specifically, the Connecticut Supreme Court pointed to New York State Blue Cross Plans v. Travelers Ins. Co., in which the United States Supreme Court "described the types of cases that raise preemption concerns, focusing on those scenarios in which a state law imposes a substantive mandate on an employee benefit plan." Id. at 238.
514 U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995).
"Since Travelers Ins. Co. was decided, various courts of appeals, including the Court of Appeals for the Second Circuit, have focused on the [United States] Supreme Court's primary concerns with respect to ERISA preemption and, consequently, have followed the lead of that court by limiting ERISA preemption to state action that demonstrably burdens ERISA plans." Id., 240. See also Manchester Health Center, Inc. v. Uniprise, Superior Court, judicial district of Hartford, Docket No. CV 05 4012203 (March 8, 2006, Keller, J.) (plaintiff's claims, which sought a determination of whether benefits were wrongfully withheld, were preempted by ERISA because they would unduly burden the ERISA plan.).
The Supreme Court concluded that the claims presented in Napoletano were not preempted by ERISA because there was no evidence of "such acute [even if] indirect, economic effects . . . as to force an ERISA plan to adopt a certain scheme of substantive coverage or to effectively restrict its choice of insurers." Napoletano v. CIGNA, supra at 239. Therefore, the Court reasoned that the plaintiffs' claims in Napoletano did not "relate to the administration of employee benefit plans. The claims and relief sought do not impermissibly affect the plans — they do not attempt to prescribe the substantive administrative aspects of a plan, such as a determination of an employee's eligibility, the nature and amount of employee benefits, the amount of an employer's contribution to a plan, and the rules and regulations under which the plan operates . . . The plaintiffs' claims do not require the administrators to operate the plans differently, they do not force a plan to adopt a certain scheme of substantive coverage, they do not tell [the defendant] what type of plan to adopt, what coverage to offer, or whom to cover." (Citations omitted.) Id., 243-44. Rather, the Court characterized the plaintiffs' claims as "merely [turning] on requiring [the defendant] to enforce the benefit plan that it has already established and is maintaining." Id., 244.
The plaintiff in the present case relies upon Napoletano, arguing that his claims, too, merely seek to enforce the defendant's existing plan, under which he is covered. In distinction to the facts presented in Napoletano, though, the plaintiff's claims in the present case implicate the "substantive administrative aspects" of the plan in ways that the Napoletano court suggested were impermissible. In the present case, in order to determine whether the defendant breached its contract by failing to provide benefits allegedly covered under the plan, the court would be required to determine the nature and amount of benefits to which the plaintiff is entitled. Additionally, adjudication of his fraud and CUTPA claims would require the court to scrutinize defendant's administration of the plan and to assess the defendant's conduct with respect to the plaintiff. Thus, the outcome of this litigation likely would impact the manner in which the defendant administers its particular plan in the future.
This court agrees with the reasoning articulated in Griffin v. Hartford Life Annuity Ins. Co., supra. In Griffin, the plaintiff alleged that the defendant improperly failed to provide the forms necessary to convert her husband's life insurance policy, regulated under ERISA, to an individual policy. As in the present case, the Griffin plaintiff sought to recover damages for the defendant's purported breach of contract, as well as for negligence. The court in Griffin distinguished the plaintiff's claims from those set forth in Napoletano, noting that the Napoletano plaintiffs were not seeking to recover benefits allegedly due under their plan. Rather, Judge Holzberg observed that the two classes of plaintiffs in Napoletano (physicians, who had been unilaterally terminated from the defendant's health care network, and patients, who had begun courses of treatment with the physicians prior to such termination) were dissimilar to the plaintiff in Griffin who claimed to have been denied benefits under an ERISA plan. The "claim plainly [implicates] the administration and processing of an employee benefit plan, and [was] therefore preempted by ERISA." Id. The court in Griffin granted the defendant's motion to dismiss.
Likewise, the facts in the present case are distinguishable from Napoletano on grounds similar to those articulated in Griffin. The plaintiff in this case seeks damages and other relief intended to compensate him for benefits wrongfully withheld. The plaintiff's requests for damages are, in effect, substitutes for requests for benefits. The fact that the "plaintiff artfully pleads common law causes of action . . . [does] not change the fact that [the plaintiff's] claim is based on the contention that defendant improperly administered" his claim for prescription drug coverage. See, Bailey-Gates v. Aetna Life Ins. Co., 890 F.Sup. 73, 77 (D.Conn. 1994). See, also Fischman v. Blue Cross Blue Shield of Connecticut, 755 F.Sup. 528, 530-31 (D.Conn. 1990) ("If recovery was allowed on common law claims, based on the impropriety of the decision to deny benefits and the unreasonableness of defendant's administration of its plan, plaintiff would have effectively `end-run' the statute, the aim of which was to establish uniform standards for administration of welfare benefit plans . . ."); and Advance PCS v. Bauer, 280 Ga. 639, 641, 632 SE.2d 95 (2006) (citing Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S.Ct. 478, 112 L.Ed.2d 474) ("[w]here a state law tort action is based on alleged improper processing of a claim for benefits under an employee benefit plan . . . that claim absolutely `relates to' the plan . . . A claim will also be preempted where the terms or existence of the plan is a critical factor in establishing liability").
Claims brought under CUTPA seek an alternative enforcement mechanism, and are therefore preempted by ERISA. See, Glynn v. Bankers Life Casualty Co., 297 F.Sup.2d 424, 427-8 (D.Conn. 2003) (The plaintiff-beneficiary sought damages pursuant to CUTPA for the defendant's allegedly wrongful refusal to make payments in accordance with the policy, but the court held that the "cause of action [was] preempted under ERISA as an alternative enforcement mechanism . . ."); Cote v. Durham Life Ins. Co., 754 F.Sup. 18, 22 (D.Conn. 1991) (with regard to CUTPA and CUIPA claims, court concluded that "[t]his district has consistently held that statutory claims are preempted by ERISA"); Altieri v. CIGNA Dental Health, Inc., 753 F.Sup. 61 (D.Conn. 1990) (CUTPA claim preempted); and Case v. Hospital of Saint Raphael, 38 F.Sup.2d 207, 209 ("CUTPA provides an alternative mechanism for enforcing the rights protected by ERISA's civil enforcement scheme").
V. Conclusion
For reasons set forth in this Memorandum of Decision, this court concludes that: (1) the policy at issue in this case falls within the scope of ERISA; (2) the provisions of ERISA do not provide this court with concurrent jurisdiction over the plaintiff's contract claims, his fraud claims, or his CUTPA claims; and (3) the provisions of ERISA preempt all the causes of actions asserted by the plaintiff in his three-count complaint.