Opinion
Civil Action No. 02-1915
October 22, 2002
MEMORANDUM ORDER
By memorandum and order of September 13, 2002, the court granted defendant's motion to dismiss plaintiff's state law insurer bad faith claim pursuant to 42 Pa. C.S.A. § 8371 as preempted by ERISA. Plaintiff has filed a motion for reconsideration of that decision and an alternative motion to certify the order for interlocutory appeal pursuant to 28 U.S.C. § 1292 (b).
Much of plaintiff's argument is addressed to why, in his view, § 8371 falls within ERISA's saving clause. Suffice it to say that although the court explained why it found this preposition to be doubtful, this was not the basis of the court's decision. The court determined that even assuming arguendo § 8371 falls within the saving clause, it is preempted by virtue of the exclusive civil enforcement scheme set forth in ERISA.
In resisting the motion to dismiss, plaintiff had argued that only laws regulating insurance which "conflict with the remedies provided by ERISA against Employers" are preempted and noted that the defendant insurer was not plaintiff's employer. The court noted in response that "ERISA does not provide remedies against employers" but rather "provides remedies against administrators and fiduciaries, who may or may not be employers." Plaintiff now recites this language back to the court to argue that defendant may not be covered by ERISA at all since it is not the named administrator and is an insurer which "likely disqualifies Defendant from being a plan fiduciary." This contention is specious as evidenced by the myriad of reported ERISA cases in which insurers have served and been sued as plan fiduciaries.
Plaintiff does not explain why he has asserted an ERISA claim for benefits against an insurer if insurers cannot serve as plan fiduciaries.
Plaintiff's alternative contention that whether defendant was a fiduciary has yet to be determined is also unavailing. The only reasonable reading of the complaint is that plaintiff received insurance coverage as part of an employee benefits plan and that claims for benefits were presented to defendant for evaluation and a determination of eligibility. Defendant clearly qualifies as a fiduciary under the broad definition of ERISA. See 29 U.S.C. § 1002 (21) (A); Curcio v. Hancock Mut. Life Ins. Co., 33 F.3d 226, 233 (3d Cir. 1994).
Plaintiff's suggestion that the ERISA and § 8371 claims were pled alternatively is disingenuous. No such contention was made in response to defendant's motion to dismiss. The suggestion is inconsistent with the entire thrust of plaintiff's arguments to preserve the § 8371 claim. It is also inconceivable that if plaintiff were pleading alternatively that defendant may or may not be a plan fiduciary, he would not have asserted a breach of contract claim rather than rely solely on a bad faith claim subject to a more stringent clear and convincing evidence standard. In any event, it clearly appeared from categorical allegations in the pleadings at the time the court entered the order it is now asked to reconsider that defendant was an ERISA plan fiduciary and defendant has so acknowledged in its submissions, subject to Fed.R.Civ.P. 11 and principles of judicial estoppel.
Every judge of this court to address the issue has concluded that § 8371 is preempted by ERISA's exclusive remedial scheme. See Bell v. UNUM Provident Corp., 2002 WL 31099792 (E.D. Pa. Sept. 19, 2002);Kirkhuff v. Lincoln Technical Institute, Inc., 2002 WL 31015204 (E.D. Pa. Sept. 6, 2002); Sprecher v. Aetna U.S. Healthcare, Inc., 2002 WL 1917711 (E.D. Pa. Aug. 19, 2002); Norris v. Continental Casualty Co., 2000 WL 877040 (E.D. Pa. June 28, 2000). Two of these judges also denied requests for certification under § 1292(b) and we have been presented with no persuasive reason for doing otherwise.
Plaintiff correctly notes that Judge Newcomer concluded that a § 8371 claim was not preempted by ERISA in Rosenbaum v. Unum Life Ins. Co., 2002 WL 1769899 (July 29, 2002). That determination, however, was made solely on the basis of the saving clause. The issue of exclusivity of remedies was neither raised nor addressed inRosenbaum.
ACCORDINGLY, this 22nd day of October, 2002, upon consideration of plaintiff's Motions for Reconsideration (Doc. #7, part 1) and for Certification (Doc. #7, part 2), and the response of defendant thereto, IT IS HEREBY ORDERED that said Motions are DENIED.