finding that the plaintiffs state law claims of promissory estoppel, breach of contract, negligent misrepresentation, and breach of good faith were preempted, and stating that “[t]his circuit ... has repeatedly recognized that virtually all state law claims relating to an employee benefit plan are preempted by ERISA”
How later courts described this case
- finding that the plaintiffs state law claims of promissory estoppel, breach of contract, negligent misrepresentation, and breach of good faith were preempted, and stating that “[t]his circuit ... has repeatedly recognized that virtually all state law claims relating to an employee benefit plan are preempted by ERISA”
- holding that, even though "appellants filed suit in state court alleging ... promissory estoppel, negligence, and breach of good faith," ERISA preempts these claims since they are at the "heart of issues within the scope of ERISA’s exclusive regulation"
- reasoning that “if health care providers have no recourse under ERISA or under state law, there will be reluctance on the part of health care providers to extend care without prepayment”
- noting that the dissent’s failure could result in negative effects including: the plan will have to pay the judgment, “payment of the award will require actuarial adjustments,” “assessment of such judgments against a plan may reduce the amount available to the plan’s beneficiaries and increase administrative costs,” and that “the plan will ... be subject to the laws of the individual states concerning the types of damages recoverable in tort.”
Written by the judges who cited it.
The opinion
SUHRHEINRICH, Circuit Judge,
concurring.
I concur in the result reached in this opinion, but write separately to express my agreement with the dissent’s analysis regarding the proper procedure to be employed by the district court once it accepts removal jurisdiction.
The majority approves a procedure whereby the district court, upon removal, dismissed three of the four claims as preempted and later determined as to the fourth issue that plaintiff had no standing in the first place. I believe that the dissent is correct in its determination that Supreme Court and Sixth Circuit precedent clearly require that a district court make an independent inquiry at the outset to determine whether the plaintiff is a “participant” or “beneficiary” within the meaning of ERISA, before it turns to the issue of preemption.
Where I believe the dissent fails, however, is in its analysis of whether appellants’ promissory estoppel and negligent misrepresentation claims are preempted. The dissent neglects the third factor articulated by this court in Firestone Tire & Rubber Co. v. Neusser, 810 F.2d 550 (6th Cir.1987), i.e., the effect state law has on the plan. Id. at 556 . I perceive several negative effects. First, a judgment in this type of case, obviously not limited to contractual damages since plaintiff was never a participant or beneficiary, will nonetheless have to be paid by the plan, leaving fewer funds available to pay the claims of beneficiaries. Second, the payment of the award will require actuarial adjustments, since such a judgment will not have been a factor in the plan’s projections. Thus, the assessment of such judgments against a plan may reduce the amount available to the plan’s beneficiaries and increase administrative costs. Third, the plan will also be subject to the laws of the individual states concerning the types of damages recoverable in tort, including consequential and punitive damages. The danger of inconsistent state laws, with its attendant effect of increasing the administration costs of a plan, is the key concern behind ERISA preemption.
Finally, by not preempting such state law claims, we are allowing parties to do indirectly through tort law what we would prevent them from doing directly through contract law. It is for these reasons then, that I think the state laws at issue here “relate to” the ERISA plan and are therefore preempted.