Appendix — CIGNA HealthCare of Connecticut, Inc. v. Napoletano

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TABLE OF CONTENTS

APPENDIX

Appendix A --

Opinion of the Supreme Court of Connecticut

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Appendix B --

Opinion of the Superior Court of Connecticut

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Appendix C --

Orders of the Supreme Court of Connecticut

Denying the Motions for Reargument En Banc

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Appendix D --

Statutory Provisions Involved ....... 68a

APPENDIX A

SUPREME COURT OF CONNECTICUT

Nos. 15282, 15283

ROBERT S. NAPOLETANO, et al. v.

CIGNA HEALTHCARE OF CONNECTICUT, INC.;

F. BARRETT HOLLIS, et al. v.

CIGNA HEALTHCARE OF CONNECTICUT, INC.

March 28, 1996, Argued

July 23, 1996, officially released

William J. Sweeney, Jr., with whom, on the brief, was

David M. Fisher, for the appellants (plaintiffs in each case).

Theodore J. Tucci, with whom, on the brief, were James A.

Wade and Craig A. Raabe, for the appellee (defendant in

both cases). Richard Blumenthal, attorney general, and

Richard J. Lynch and Thomas J. Ring, assistant attorneys

general, filed a brief for the state commissioner of health

Care access as amicus curiae. Lissa J. Paris, Elizabeth J.

Stewart and Jeffrey S. Brody filed a brief for the

Connecticut Business and Industry Association as amicus

curiae. Michael D. Neubert and Peter T. Fay filed a brief

for the Connecticut State Medical Society et al. as amici

curiae.

Before Peters, C.J., and Callahan, Berdon, Katz and Palmer,

Js.

KATZ, Associate Justice.

These cases require us to consider primarily whether an

action for misrepresentation and for violations of the

Connecticut Unfair Trade Practices Act (CUTPA) pursuant

to General Statutes § 42-110b,' the Connecticut Unfair

Insurance Practices Act (CUIPA) pursuant to General

Statutes § 38a-816’ and No. 94-235 of the 1994 Public Acts

* General Statutes § 42-110b provides: “Unfair trade

practices prohibited. Legislative intent.

"(a) No person shall engage in unfair methods of competition

and unfair or deceptive acts or practices in the conduct of any

trade or commerce.

"(b) It is the intent of the legislature that in construing

subsection (a) of this section, the commissioner and the courts of

this state shall be guided by interpretations given by the Federal

Trade Commission and the federal courts to Section 5 (a) (1) of

the Federal Trade Commission Act (15 USC 45[a][1]), as from

time to time amended.

"(c) The commissioner may, in accordance with chapter 54,

establish by regulation acts, practices or methods which shall be

deemed to be unfair or deceptive in violation of subsection (a) of

this section. Such regulations shall not be inconsistent with the

rules, regulations and decisions of the federal trade commission

and the federal courts in interpreting the provisions of the Federal

Trade Commission Act.

"(d) It is the intention of the legislature that this chapter be

remedial and be so construed."

? General Statutes § 38a-816 provides in relevant part:

"Unfair practices defined. The following are defined as unfair

methods of competition and unfair and deceptive acts or practices

in the business of insurance:

"(1) Misrepresentations and false advertising of insurance

policies. Making, issuing or circulating, or causing to be made,

issued or circulated, any estimate, illustration, circular or

statement, sales presentation, omission or comparison which: (a)

Misrepresents the benefits, advantages, conditions or terms of any

insurance policy; (b) misrepresents the dividends or share of the

surplus to be received, on any insurance policy; (c) makes any

(P.A. 94-235),? as alleged by the plaintiffs in Hollis v.

false or misleading statements as to the dividends or share of

surplus previously paid on any insurance policy; (d) is misleading

or is a misrepresentation as to the financial condition of any

person, or as to the legal reserve system upon which any life

insurer operates; (e) uses any name or title of any insurance policy

or class of insurance policies misrepresenting the true nature

thereof; (f) is a misrepresentation for the purpose of inducing or

tending to induce to the lapse, forfeiture, exchange, conversion or

surrender of any insurance policy; (g) is a misrepresentation for

the purpose of effecting a pledge or assignment of or effecting a

loan against any insurance policy; or (h) misrepresents any

insurance policy as being shares of stock."

3 Number 94-235 of the 1994 Public Acts provides in

relevant part: "An Act Concerning Managed Care... .

"(b) All preferred provider networks shall file with the

commission on hospitals and health care prior to the start of

enrolment. Any preferred provider network existing as of October

1, 1993, shall file within sixty days of said date. All networks

shall annually update said filing by July first commencing July 1,

1994. The filing required by such network shall include the

following information, except where such information is filed with

the insurance department . . . (2) A general description of the

preferred provider network, including its geographical service

area, the names of the hospitals included in the network and the

names listed by specialty, of the providers included in the

network... .

"(e) (1) Each preferred provider network shall file with the

commission on hospitals and health care and make available upon

request from a provider, the general criteria for its selection or

termination of health care providers. Disclosure shall not be

required of criteria deemed by the network to be of a proprietary

or competitive nature that would hurt the network’s ability to

compete or to manage health services. For purposes of this

section, disclosure of criteria is proprietary or anticompetitive if

CIGNA Healthcare of Connecticut, Inc., and whether an

action for breach of contract, breach of an implied covenant

it has the tendency to cause health care providers to alter their

practice pattern in a manner that would circumvent efforts to

contain health care costs and is proprietary if revealing criteria

would cause the network’s competitors to obtain valuable business

information.

"(2) If a network uses criteria that has not been filed pursuant

to subdivision (1) of this subsection to judge the quality and

cost-effectiveness of a health care provider’s practice under any

specific program within the network, the network may not reject

or terminate the provider participating in that program based upon

such criteria until the provider has been informed of the criteria

that his practice fails to meet."

Public Act 94-235(a)(3) defines "preferred provider network" as

"an arrangement in which agreements relating to the health care

services to be rendered by providers, including the amounts to be

paid to the providers for such services, are entered into between

such providers and a person who establishes, operates, maintains

or underwrites the arrangement, in whole or in part, and shall

include any provider-sponsored preferred provider network or

independent practice association that offers network services. A

preferred provider network shall not include a workers’

compensation preferred provider organization established pursuant

to Section 31-279-10 of the regulations of Connecticut state

agencies or an arrangement relating only to health care services

offered by providers to individuals covered under self-insured

Employee Welfare Benefit Plans established pursuant to the federal

Employee Retirement Income Security Act of 1974 as from time

to time amended."

Public Act 94-235(a)(4) defines "provider" as "an individual or

entity duly licensed or legally authorized to provide health cane

services.”

We note that P.A. 94-235 has been codified at General Statutes

§ 19a-166b. Because the parties refer to the Public Act rather than

the statute, we do the same for purposes of consistency.

of good faith and fair dealing, tortious interference with

business expectancies and violations of CUTPA and P.A.

94-235, as alleged by the plaintiffs in Napoletano v. CIGNA

Healthcare of Connecticut, Inc., are preempted by the

Employee Retirement Income Security Act of 1974 (ERISA),

29 U.S.C. § 1001 et seq.

The plaintiffs in Hollis are patients who had commenced

treatment with the plaintiff physicians in Napoletano. These

physicians participated in the health care network offered by

the defendant, CIGNA Healthcare of Connecticut, Inc.

(CIGNA). After medical treatment had begun, and although

the plaintiff patients had been provided with various

assurances that their physicians, who met CIGNA’s

credentialing standards, would continue to participate in their

health care plans, the plaintiff physicians were unilaterally

terminated from the network.

Specifically, the nine plaintiffs in Hollis filed a thirty-six

count complaint. F. Barrett Hollis, typical of the eight other

plaintiffs,* alleged that he had commenced medical treatment

* The causes of action of the remaining eight plaintiffs are

substantially similar. Each plaintiff, either through his or her own

employment or that of a spouse, was a participant in a CIGNA

health plan. Each received treatment from a physician who, at the

time treatment commenced, participated in CIGNA’S health care

network. Thereafter, according to the allegations by each plaintiff,

CIGNA removed the physicians treating each of the plaintiffs and

engaged in a course of conduct that was substantially similar to

what Hollis has alleged.

The other plaintiffs in the Hollis case are Vinetta Hollis, Elaine

Arnett, Ellen Gentile, Darlene Chiloyan, Margaret Cooper,

Richard Johnson, Sharon Johnson and Don Ludwinowicz.

with a physician who participated in CIGNA’s health care

providers network and who was subsequently unilaterally

removed by CIGNA from its list of participating physicians.

Specifically, Hollis alleged that several months alter his

treatment for cancer had begun, CIGNA sent him a letter

announcing changes to its network that CIGNA said would

help it to achieve its goal of establishing a “comprehensive

network of quality doctors who meet [its] credentialing

standards. . . ." Because his doctor satisfied CIGNA’s

criteria but was nevertheless removed from its list, Hollis

alleged that this letter misrepresented the credentialing

standards. Three months later, CIGNA sent Hollis a second

letter stating that should his doctor choose not to reenroll in

its plan, Hollis’ care would be transferred to another

participating provider. According to Hollis, because his

physician’s removal from the network had been unilateral,

this letter was also false. CIGNA then placed an

advertisement in the Hartford Courant misrepresenting which

physicians had been allowed to file applications to reenroll

in CIGNA’s network. The advertisement contained the name

of Hollis’ physician. Additionally, CIGNA sent Hollis a

directory of providers, which included his physician, but

failed to inform enrollees in its plan that participating

physicians could be removed from the list without notice.

On the basis of these alleged unfair and deceptive acts of

misrepresentation and false advertising, Hollis alleged that

CIGNA violated CUTPA and CUIPA.* Additionally, Hollis

° Although it appears from the amended complaint in Hollis

that the plaintiffs are bringing separate causes of action under

CUTPA and CUIPA, they explain in their brief and in their reply

brief to this court that their "CUIPA [counts] . . . are incorporated

alleged that CIGNA had violated P.A. 94-235 by removing

his physician from its provider network without advising

Hollis of its criteria for removal and despite having listed his

physician as a CIGNA provider with the commission on

hospitals and health care (commission). Finally, Hollis

alleged that CIGNA had committed acts of misrepresentation

by removing Hollis’ physician from its provider network

even though, in the material it had filed with the

commission, CIGNA had listed his physician’s name and had

failed to indicate that it could remove him without notice.

In his demand for relief as to the alleged violations of

CUTPA, CUIPA and the allegation of misrepresentation,

Hollis sought "monetary damages in excess of $ 15,000.00

exclusive of interest and costs,” “such other equitable relief

as the Court deems necessary and proper,” and, with respect

to the CUTPA and misrepresentation counts, punitive

damages pursuant to General Statutes § 42-110g(a) and

reasonable attorney’s fees pursuant to § 42-110g(d). As to

the alleged violation of P.A. 94-235, Hollis sought a

in [their] CUTPA counts.” This is the same response they offered

to CIGNA’s motion to strike, in which CIGNA claimed that there

is no private cause of action under CUIPA independent of

CUTPA. The trial court never addressed this claim in its

memorandum of decision, concluding instead that all of the

plaintiffs’ claims were preempted by ERISA. In light of the

plaintiffs’ description of their claims, we need not resolve

CIGNA’s claim that there is no independent private cause of action

under CUIPA. See Lees v. Middlesex Ins. Co., 229 Conn. 842,

847 n.4, 850 n.10, 643 A.2d 1282 (1994) (this court declined to

consider defendant’s claim that CUIPA does not create private

cause of action where CUTPA and CUIPA claims not

independent).

declaratory judgment to determine whether CIGNA had

violated P.A. 94-235. He requested that his physician be

reinstated as a participant in CIGNA’s health care plan.

Finally, Hollis sought such other equitable relief as the court

deemed appropriate.

The nine plaintiffs in Napoletano were the physicians who

had treated the plaintiffs in Hollis.* In a forty-five count

complaint, each plaintiff alleged that he was a physician

licensed to practice in Connecticut, that he had been a

participating physician in the CIGNA health care network,

having contracted with CIGNA through Pro Care

Independent Practice Association, Inc. (Pro Care),’ but that,

despite satisfying all of CIGNA’s credentialing standards, he

had been unilaterally terminated without just cause. Each

plaintiff also alleged that although he continues to be board

certified in his area of specialty and continues to satisfy

CIGNA’s credentialing standards, he has been denied the

opportunity to reenroll as a participating physician in the

CIGNA network. Additionally, the complaint alleges that

CIGNA had misrepresented to the plan beneficiaries, as well

as to each plaintiff, that each plaintiff would remain in its

directory of providers throughout the length of CIGNA’s

annual contract with the patient, that each plaintiff would

* The other plaintiffs in the Napoletano case are Jeffrey

Steckler, Terrence K. Donahue, Robert Cosentino, Raphael

Cooper, Paul Ceplenski, Ijaz Shafi, David Bass, and David

Belman, all of whom are physicians.

7 CIGNA contracted with Pro Care to create a preferred

provider network through which services to employee benefit plans

would be provided. Public Act 94-235(a)(3) defines “preferred

provider network." See footnote 3.

have the choice whether to reenroll, and that it would be the

decision of each plaintiff whether to reenroll. In light of this

alleged conduct by CIGNA, the plaintiffs claim that CIGNA

breached its contract with each plaintiff, breached its

obligation to deal in a manner consistent with good faith and

fair dealing, tortiously interfered with each plaintiff's

business expectancies, and violated CUTPA. Finally, by

removing each plaintiff from CIGNA’s plan while being

listed as a provider in CIGNA’s filing with the commission

as mandated by P.A. 94-235, by failing to include in that

filing the name and address of the person to whom the

physicians could apply for participation in the network, and

by rejecting each plaintiff without advising him of the

criteria employed, CIGNA allegedly violated P.A. 94-235.

In connection with the common law claims for breach of

contract, breach of good faith and fair dealing and tortious

interference with business expectancies, each plaintiff sought

"monetary damages in excess of $15,000.00 exclusive of

interest and costs" and “such other equitable relief as the

Court deems necessary and proper." For the CUTPA

violation, each plaintiff requested monetary damages,

punitive damages pursuant to § 42-110g(a), reasonable

attorney’s fees pursuant to § 42-110g(d) and such other

equitable relief as is appropriate. Each plaintiff also sought

a declaratory judgment to determine whether CIGNA’s

actions constituted violations of P.A. 94-235, to compel

CIGNA’s compliance with the requirements of the act, to

preclude each plaintiff's termination from the network based

upon CIGNA’s previous noncompliance with the act and

such other equitable relief as is appropriate.

CIGNA moved to strike all counts of both the Hollis and

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Napoletano complaints, claiming that they were preempted

by ERISA.* The trial court, in a consolidated memorandum

of decision, agreed and accordingly, granted CIGNA’s

motions to strike.* The plaintiffs in both cases appealed from

the judgment of the trial court to the Appellate Court, and

we transferred the appeal to this court pursuant to Practice

Book § 4023 and General Statutes § 51-199(c).

Following the filing of briefs in this appeal, sua sponte,

we ordered the parties to file supplemental briefs addressing

the following question: "Did all interested persons have

reasonable notice of this action as required by Practice Book

§ 390 (d)? If not, did the trial court have jurisdiction to

consider [CIGNA’s] motions to strike?"

Practice Book § 390 provides in relevant part that “the

court will not render declaratory judgments upon the

complaint of any person . . . (d) unless all persons having an

interest in the subject matter of the complaint are parties to

the action or have reasonable notice thereof." This court has

consistently required strict adherence to this rule. Hopkins v.

Pac, 176 Conn. 318, 319, 407 A.2d 979 (1978). Failure to

comply with § 390(d) deprives the trial court of subject

matter jurisdiction to render a declaratory judgment. Serrani

* Additionally, CIGNA claimed that there was no private

cause of action under P.A. 94-235 and that, even if one were to

exist, the plaintiffs had failed to state a claim under the act.

° The trial court concluded that ERISA preempts any action

under P.A. 94-235 by assuming, without deciding, that a cause of

action exists.

lla

v. Board of Ethics, 225 Conn. 305, 308, 622 A.2d 1009

(1993).

"This rule . . . is not merely a procedural regulation. It is

in recognition and implementation of the basic principle that

due process of law requires that the rights of no man shall be

judicially determined without affording him a day in court

and an opportunity to be heard. Kolenberg v. Board of

Education, 206 Conn. 113, 124, 536 A.2d 577, cert. denied,

487 U.S. 1236, 108 S. Ct. 2903, 101 L. Ed. 2d 935 (1988),

quoting Benz v. Walker, 154 Conn. 74, 77, 221 A.2d 841

(1966). It is the settled rule of this jurisdiction, if indeed it

may not be called an established principle of general

jurisprudence, that no court will proceed to the adjudication

of a matter involving conflicting rights and interests, until all

persons directly concerned in the event have been actually or

constructively notified of the pendency of the proceeding,

and given reasonable opportunity to appear and be heard.

Connecticut Ins. Guaranty Assn. v. Raymark Corporation,

[215 Conn. 224, 229, 575 A.2d 693 (1990)], quoting

Ackerman v. Union & New Haven Trust Co., 91 Conn. 500,

508, 100 A. 22 (1917).” (Internal quotation marks omitted.)

State v. Carey, 222 Conn. 299, 308, 610 A.2d 1147 (1992),

rev'd on other grounds, 228 Conn. 487, 636 A.2d 840

(1994). Consequently, all persons who have a direct interest

in the subject matter of the action are required to be made

parties or to have reasonable notice of the action, even if

their presence is not necessary to a decision of the issues

between the parties of record." Benz v. Walker, supra, at

have an interest in the controversy, but an interest of such a nature

that a final decree cannot be made without either affecting that

12a

78, 221 A.2d 841.

The arguments by all the parties urging this court to

conclude that the trial court had jurisdiction and to reach the

merits are persuasive. The parties first argue that the trial

court had jurisdiction to decide the motion to strike without

providing notice to any additional parties because the

fequirements of Practice Book § 390 (d) were never

triggered. They contend that, because the court never

reached the merits of the declaratory judgment claim, having

concluded that the actions were preempted by ERISA, the

court was not required to reach the question of whether all

interested persons had been given notice. See Bourdieu v.

interest, or leaving the controversy in such condition that its final

{disposition} may be . . . inconsistent with equity and good

conscience." (Internal quotation marks omitted.) Sturman v.

Socha, 191 Conn. 1, 6, 463 A.2d 527 (1983); accord Stamford

Ridgeway Associates v. Board of Representatives, 214 Conn. 407,

439, 572 A.2d 951 (1990). Indispensable parties must be joined

because due process principles make it “essential that [such

parties} be given notice and an opportunity to protect [their]

interests by making [them] a party to the [action]." Fong v.

Planning & Zoning Board of Appeals, 212 Conn. 628, 634, 563

A.2d 293 (1989). Necessary parties, in contrast, are those

“persons having an interest in the controversy, and who ought to

be made parties, in order that the court may act on that rule which

requires it to decide on, and finally determine the entire controver-

sy, and do complete justice, by adjusting all the rights involved in

it . . . But if their interests are separable from those of the parties

before the court, so that the court can proceed to a decree, and do

complete and final justice, without affecting other persons not

before the court, the latter are not indispensable parties." (Internal

quotation marks omitted.) Saurman v. Socha, supra, 191 Conn. at

6-7.

13a

Pacific Western Oil Co., 299 U.S. 65, 70-71, 57S. Ct. 51,

81 L. Ed. 42, reh. denied, 299 U.S. 622, 57S. Ct. 228, 81

L. Ed. 458 (1936) (inquiry into status of absent parties

where complaint falls to state cause of action unnecessary);

Calcote v. Texas Pacific Coal & Oil Co., 157 F.2d 216, 221

(Sth Cir.), cert. denied, 329 U.S. 782, 67 S. Ct. 205, 91 L.

Ed. 671 (1946) (inquiry into absence of indispensable parties

wholly gratuitous where cause of action not stated in

complaint). This distinction is significant because if we

were to disagree with the trial court in this case on the issue

of preemption, the plaintiffs could pursue further procedural

efforts to cure any defect regarding the notice requirement

on remand. See Mannweiler v. LaFlamme, 232 Conn. 27,

36, 53 A.2d 168 (1995) ("unlike other jurisdictional defects

implicating the trial court’s subject matter jurisdiction

. . . the bringing of a declaratory judgment action is not

itself precluded by a failure to comply with the notice

requirement” [internal quotation marks omitted])."

All parties also argue that, even if the trial court had been

required to determine whether § 390(d) had been complied

with, all persons interested in the subject matter of the case

at the time of the motions to strike were parties to the

action." We conclude that all interested persons were

4 Because we conclude, however, that all interested persons

were parties in these cases, we need not address the claim that this

issue is premature.

2 CIGNA further argues that, even if there were additional

interested persons beyond the parties involved in the case, those

interested persons had notice of the action. This court has

previously concluded that “where [interested persons] are

reasonably within the reach of process and are not so numerous

l4a

parties to the action, and therefore find no jurisdictional

defect.

In Hollis, each plaintiff allegedly was insured by CIGNA

and was the patient of a physician who had been removed

from the provider network. Each alleged misrepresentation

by CIGNA and claimed damages resulting from the

interruption of a particular course of treatment with his or

her physician. The record does not indicate that there are

other patients who could claim damages based upon similar

circumstances. Similarly, in Napoletano, there is no

indication that there are other physicians who treated patients

enrolled in CIGNA’s health care plan and who are no longer

in the provider network. Accordingly, we agree that the

actions in the present case are personal to the named parties

and all persons with an interest in the subject matter have

been named. Cf. Mannweiler v. LaFlamme, supra, 232

Conn. at 33, 653 A.2d 168 (unnoticed lot owners were

classic “indispensable parties" because resolution of issues

regarding restrictive covenants and alleged common scheme

that it would impose an unreasonable burden upon the plaintiff

they should be made parties; but if they or some of them are not

reasonably available for service or to summon them or all of them

into the action would put upon the plaintiff a burden he ought not

fairly to be asked to assume, the provision for reasonable notice

applies." Benz v. Walker, supra, 154 Conn. 78. Such reasonable

notice may be accomplished by an order for public notice. Serrani

v. Board of Ethics, supra, 225 Conn. 309-10. CIGNA cites to a

variety of newspapers, including the Hartford Courant, The

Connecticut Post and The Herald, which contained commentary on

these cases, in support of its argument that all interested persons

had notice of this action. Because we conclude that all interested

persons were parties, reliance on these articles is unnecessary.

Peete ee ten eee ern or

15a

of development was relevant to all deeds within

development); Connecticut Ins. Guaranty Assn. v. Raymark

Corp., supra, 215 Conn. at 228, 575 A.2d 693 (unnoticed

persons with outstanding personal injury claims against

named defendant or its predecessors were "interested parties"

where subject matter of complaint was insurance policy

issued by insolvent insurer of named defendant).

We next consider CIGNA’s argument that the plaintiffs’

claims in both Hollis and Napoletano are moot. As to

Napoletano, CIGNA contends that even were this court to

reverse the judgment of the trial court as to the breach of

contract and covenant of good faith and fair dealing claims,

the trial court could not provide the plaintiffs with any

practical relief. CIGNA structured its relationship with the

plaintiff physicians through Pro Care, an independent

practice association that contracted with CIGNA to provide

services to employee benefit plans that CIGNA administered

and of which each of the plaintiff physicians was a member.

The plaintiffs argue that even if there are other potentially

interested persons, the filing of amici curiae briefs on behalf of

consumers, physicians and insurance companies, satisfy any

concerns associated with § 390 (d) because, although they are not

actual parties, the amici nevertheless fully participated in the

briefing of the issues and were not “prejudiced nor otherwise

adversely affected by not being joined as a party... ." Hilton v.

New Haven, 233 Conn. 701, 724, 661 A.2d 973 (1995). Because

we have concluded that all interested persons are parties to this

case, we need not decide whether the circumstances of this case

are unique within the meaning of Hilton. Id. , at 723-24, 661 A.2d

973.

16a

See footnote 7. The plaintiff physicians, consequently, were

third party beneficiaries of this contract, which provided that

it could be terminated at any time and, in fact, was termi-

nated by CIGNA on September 8, 1994. Because the

contract has lawfully expired, CIGNA claims that “it is

impossible to judicially enforce rights to participate in a

provider network under a contract that no longer exists." As

to the alleged violations of P.A. 94-235, CIGNA asserts that

the claims are moot because it has already complied with the

act.

Finally, in connection with the plaintiff physicians’ tortious

interference with business expectancies claim, CIGNA

argues that the plaintiff physicians could not expect that a

business relationship with a patient would exist beyond the

expiration of the patient’s health care benefits under

CIGNA’s health care coverage options. CIGNA claims that

all of its health care options, through which employees

receive health care benefits, are limited to twelve months and

that CIGNA clearly had the right to change its provider

network structure when it renewed its health care coverage

options. Consequently, even if the plaintiff physicians were

to prevail, the trial court could require CIGNA to include

them in the provider network only for the remaining time

that their patients had coverage benefits under the health care

option chosen.

As to the plaintiffs in Hollis, CIGNA contends that the

expiration of the annual health care coverage options for all

the plaintiffs precludes the practical relief they seek. In

* CIGNA made the requisite filing after the plaintiffs filed

their amended complaints.

ee EN ate Spb tiem

nd oe ee Ia OS reed ae

17a

specific, CIGNA argues that the court could not reinstate the

plaintiffs’ physicians in a health care plan that no longer

exists. Additionally, CIGNA argues that because it

exercised its right to change the structure of the provider

network upon the renewal of its contracts with the plaintiffs’

employers, and that these new contracts do not include the

plaintiff physicians as providers, the plaintiffs’ claims have

evaporated. We disagree that the plaintiffs in both cases are

unable to obtain practical relief should they prevail.

"Mootness implicates the court’s subject matter jurisdiction

and is thus a threshold matter for us to resolve... . It is a

well-settled general rule that the existence of an actual

controversy is an essential requisite to appellate jurisdiction;

it is not the province of appellate courts to decide moot

questions, disconnected from the granting of actual relief or

from the determination of which no practical relief can

follow. . . . An actual controversy must exist not only at the

time the appeal is taken, but also throughout the pendency of

the appeal. . . . When, during the pendency of an appeal,

events have occurred that preclude an appellate court from

granting any practical relief through its disposition of the

merits a case has become moot.” (Citations omitted; internal

quotation marks omitted.) Ayala v. Smith, 236 Conn. 89,

93-94, 671 A.2d 345 (1996).

We dispose of CIGNA’s mootness claims summarily.

CIGNA focuses solely on the plaintiffs’ claims in both cases

for injunctive relief and all but ignores their claims for

redress of injury for eveu the limited period it contends is in

18a

question.'* Because each of the eighteen plaintiffs in the two

cases sought far more than injunctive relief in the eighty-one

counts and because each states a claim for redress for,

among other things, fraudulent and deceptive behavior,

which, if proven, would entitle them to punitive damages

and attorney’s fees, their claims are not moot.'®

The next issue that we address, which is the central

substantive issue in this case, involves whether the plaintiffs’

claims in both Hollis and Napoletano are preempted by

ERISA. Specifically, we consider whether ERISA preempts

the plaintiffs’ claims for misrepresentation and for violations

of CUTPA, CUIPA and P.A. 94-235 in Hollis and whether

ERISA preempts the plaintiffs’ claims for breach of contract,

breach of an implied covenant of good faith and fair dealing,

tortious interference with business expectancies and

violations of CUTPA and P.A. 94-235 in Napoletano. We

conclude that because the claims raised by the plaintiffs do

not affect or prescribe the establishment, administration,

regulation or maintenance of an employee benefit plan, but,

rather, merely seek to enforce the plan that CIGNA has

chosen to create and administer, the claims do not "relate to"

‘S The plaintiffs in both cases dispute CIGNA’s argument that

the existence of new contracts terminates certain of their claims.

Because we disagree with CIGNA’s interpretation of our mootness

doctrine, we need not resolve this issue.

‘© As stated above, in Hollis, each of the nine plaintiffs

asserted four causes of action, and sought injunctive relief in only

one. In Napoletano, each of the nine plaintiffs asserted five

causes of action, and sought injunctive relief in only one.

19a

employee benefit plans within the meaning of ERISA’s

preemption provision. Consequently, none of the plaintiffs’

claims in the two cases is preempted.

In the present cases, the trial court, on motions to strike,

concluded that the plaintiffs’ claims relate to an ERISA plan

because they both refer to and are connected with such a

plan.” The claims “refer to" an ERISA plan because

"references to the plan abound in the . . . amended

complaint.” Also, the claims are "connected with" a plan

"because the plaintiffs challenge the administration of the

plan in question.” (Emphasis in original.) The court

explained that "the complaint . . . focuses on CIGNA’s

removal of certain physicians from its plan. This is, in

essence, a complaint about plan administration. This is a

core ERISA concern." (Emphasis in original.) Further-

more, the court reasoned that “allowing state law actions like

the one[s] here would subject plans and plan sponsors to

burdens not unlike those that the preemption clause seeks to

foreclose. It is entirely foreseeable that different state

courts, construing a wide array of state statutory provisions

and common law principles, might develop different

substantive standards governing the circumstances under

which health plans could remove physicians from their lists.

This would . . . require the tailoring of plans . . . to the

peculiarities of the law of each jurisdiction. Such an

outcome is fundamentally at odds with the goal of uniformity

7 The trial court first decided the CUIPA claim in Hollis and,

thereafter, adopted the same reasoning to strike all of the

remaining counts in both cases. In reaching its decision, the court

presumed the existence of a private cause of action under P.A.

94-235. See part IV of this opinion.

20a

that Congress sought to implement.” (Internal quotation

marks omitted.)

Our review of the trial court’s decision is plenary. "The

scope of our appellate review depends upon the proper

characterization of the rulings made by the trial court. To

the extent that the trial court has made findings of fact, our

review is limited to deciding whether such findings were

clearly erroneous. When, however, the trial court draws

conclusions of law, our review is plenary and we must

decide whether its conclusions are legally and logically

correct and find support in the facts that appear in the

record.” (Internal quotation marks omitted.) Westport Taxi

Service, Inc. v. Westport Transit District, 235 Conn. 1, 14,

664 A.2d 719 (1995). In this case, the trial court ruled on

motions to strike. The function of a motion to strike is to

test the legal sufficiency of a pleading; it admits all facts

well pleaded. See Practice Book § 152. The role of the

trial court was to examine the complaints, construed in favor

of the plaintiffs, to determine whether the plaintiffs have

stated a legally sufficient cause of action. See Sheets v.

Teddy’s Frosted Foods, Inc., 179 Conn. 471, 472, 427 A.2d

385 (1980). Because the trial court drew conclusions of law,

and did not make findings of fact, our review is plenary.

Our review of the trial court’s decisions leads us into the

quagmire of ERISA law. 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.” [Section 3 (1) of ERISA], 29 U.S.C. § 1002(1).

The federal statute does not go about protecting plan

2la

participants and their beneficiaries by requiring employers to

provide any given set of minimum benefits, but instead

controls the administration of benefit plans, see § 2 [of

ERISA], 29 U.S.C. § 1001 (b), as by imposing reporting

and disclosure mandates, §§ 101-111 [of ERISA], 29 U.S.C.

§§ 1021-1031, participation and vesting requirements,

§§ 201-211 [of ERISA], 29 U.S.C. §§ 1051-1061, funding

standards, §§ 301-308 [of ERISA], 29 U.S.C. §§ 1081-1086,

and fiduciary responsibilities for plan administrators,

§§ 401-414 [of ERISA], 29 U.S.C. §§ 1101-1114. It

envisions administrative oversight, imposes criminal

sanctions, and establishes a comprehensive civil enforcement

scheme. [Sections 501-515 of ERISA], 29 U.S.C.

§§ 1131-1145. It also preempts some state law. [Section 514

of ERISA], 29 U.S.C. § 1144." New York State Conference

of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., ___

US. _, __, 115 S. Ct. 1671, 1674-75, 131 L. Ed. 2d

695 (1995).

The preemption provision of ERISA, 29 U.S.C. § 1144(a)

(1994), preempts any state law that "may now or hereafter

relate to any employee benefit plan. . . .""* (Emphasis

added.) A law that "relates to” a benefit plan and that also

"regulates insurance” pursuant to 29 U.S.C. § 1144(b)(2)(A)

* Section 514(a) of ERISA, codified at 29 U.S.C. § 1144(a),

provides in relevant part: "Except as provided in subsection (b) of

this section, the provisions of this subchapter and subchapter III of

this chapter shall supersede any and all State laws insofar as they

may now or hereafter relate to any employee benefit plan

described in section 1003 (a) of this title and not exempt under

section 1003(b) of this title. This section shall take effect on

January 1, 1975."

22a

and (B) is, however, exempt from ERISA preemption.”

Consequently, our resolution of this matter turns on whether

the plaintiffs’ claims “relate to" the employee benefit plans

offered by CIGNA.”

We begin by construing the phrase “relate to” in

accordance with the intent of Congress in enacting ERISA.

"It is fundamental that statutory construction requires us to

ascertain the intent of the legislature and to construe the

% Title 29 of the United States Code, § 1144(b)(2)(A)

provides: "Except as provided in subparagraph (B), nothing in this

subchapter shall be construed to exempt or relieve any person

from any law of any State which regulates insurance, banking, or

securities."

Title 29 of the United States Code, § 1144(b)(2)(B) provides:

“Neither an employee benefit plan described in section 1003(a) of

this title, which is not exempt under section 1003(b) of this title

(other than a plan established primarily for the purpose of

providing death benefits), nor any trust established under such a

plan, shall be deemed to be an insurance company or other

insurer, bank, trust company, or investment company or to be

engaged in the business of insurance or banking for purposes of

any law of any State purporting to regulate insurance companies,

insurance contracts, banks, trust companies, or investment

companies."

* The plaintiffs claimed at oral argument that the health care

plans offered by CIGNA in this case are not “plans” within the

meaning of ERISA. Although CIGNA disputes this claim, because

the plaintiffs failed to preserve this argument below and failed to

brief this claim, we decline to address it. See Practice Book

§ 4065; State v. Zarick, 227 Cong. 207, 221, 630 A.2d 565, cert.

denied, 510 U.S. 1025, 114 S. Ct. 637, 126 L. Ed. 2d 595

(1993); Liscio v. Liscio, 204 Conn. 502, 507, 528 A.2d 1143

(1987).

23a

Statute in a manner that effectuates that intent. . . . In

seeking to discern that intent, we look to the words of the

statute itself, to the legislative history and circumstances

surrounding its enactment, to the legislative policy it was

designed to implement, and to its relationship to existing

legislation. ... Petco Insulation Co. v. Crystal, 231 Conn.

315, 321, 649 A.2d 790 (1994). In order to determine the

meaning of a statute, we must consider the statute as a whole

when reconciling its separate parts in order to render a

reasonable overall interpretation. Broadley v. Board of

Education, 229 Conn. 1, 6, 639 A.2d 502 (1994); Ganim v.

Roberts, 204 Conn. 760, 763, 529 A.2d 194 (1987).”

(Internal quotation marks omitted.) Murchison v. Civil

Service Commission, 234 Conn. 35, 45, 660 A.2d 850

(1995); accord Angelsea Productions, Inc. v. Commission on

Human Rights & Opportunities , 236 Conn. 681, 688-89, 674

A.2d 1300 (1996); see Oklahoma v. New Mexico, 501 U.S.

221, 235 n.5, 111 S. Ct. 2281, 115 L. Ed. 2d 207 (1991)

("we repeatedly have looked to legislative history and other

extrinsic material when required to interpret a statute which

is ambiguous"); Green v. Bock Laundry Machine Co., 490

U.S. 504, 509-11, 109 S. Ct. 1981, 104 L. Ed. 2d 557

(1989); Pierce v. Underwood, 487 U.S. 552, 564-65, 108 S.

Ct. 2541, 101 L. Ed. 2d 490 (1988); Blum v. Stenson, 465

U.S. 886, 896, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984).

Since ERISA was enacted, the United States Supreme Court

has attempted to explain when a law “relates to” an

employee benefit plan. Early Supreme Court cases provided

24a |

an expansive interpretation of this term." In a 1983 case

dealing with ERISA preemption, the court, viewing ERISA’s

preemption language to be clear and relying on a dictionary

definition of the term “relate” stated that "[a] law ‘relates to’

an employee benefit plan, in the normal sense of the phrase,

if it has a connection with or reference to such a plan... .

"In fact . . . Congress used the words ‘relate to’ in § 514

(a) in their broad sense. To interpret § 514 (a) to [preempt]

only state laws specifically designed to affect employee

benefit plans would be to ignore the remainder of § 514. It

would have been unnecessary to exempt generally applicable

State criminal statutes from [preemption] in § 514(b), for

example, if § 514(a) applied only to state laws dealing

specifically with ERISA plans.

"Nor, given the legislative history, can § 514(a) be

interpreted to [preempt] only state laws dealing with the

subject matters covered by ERISA--reporting, disclosure,

fiduciary responsibility, and the like. The bill that became

ERISA originally contained a limited [preemption] clause,

applicable only to state laws relating to the specific subjects

covered by ERISA. The Conference Committee rejected

these provisions in favor of the present language, and

indicated that the section’s [preemptive] scope was as broad

as its language. See H.R. Conf. Rep. No. 93-1280, p. 383

(1974); S. Conf. Rep. No. 93-1090, p. 383 (1974).

Statements by the bill’s sponsors during the subsequent

debates stressed the breadth of federal [preemption].

7+ As will be discussed later in this opinion, the Supreme

Court and lower federal courts have retreated from an expansive

interpretation in more recent cases.

taal

25a

Representative [John] Dent, for example, stated: ‘Finally, I

wish to make note of what is to many the crowning

achievement of this legislation, the reservation to Federal

authority the sole power to regulate the field of employee

benefit plans. With the preemption of the field, we round

out the protection afforded participants by eliminating the

threat of conflicting and inconsistent State and local

regulation.” 120 Cong. Rec. 29197 (1974). Senator

{Harrison A.] Williams echoed these sentiments: ‘It should

be stressed that with the narrow exceptions specified in the

bill, the substantive and enforcement provisions of the

conference substitute are intended to preempt the field for

Federal regulations, thus eliminating the threat of conflicting

or inconsistent State and local regulation ot employee benefit

plans. This principle is intended to apply in its broadest

sense to all actions of State or local governments, or any

instrumentality thereof, which have the force or effect of

law.’ Id., at 29933." (Emphasis added.) Shaw v. Delta Air

Lines, Inc., 463 U.S. 85, 96-99, 103 S. Ct. 2890, 77 L. Ed.

2d 490 (1983).

"It is thus clear that ERISA’s [preemption] provision was

prompted by recognition that employers establishing and

maintaining employee benefit plans are faced with the task

of coordinating complex administrative activities. A

patchwork scheme of regulation would introduce consider-

able inefficiencies in benefit program operation, which might

lead those employers with existing plans to reduce benefits,

and those without such plans to refrain from adopting them.

[Preemption] ensures that the administrative practices of a

benefit plan will be governed by only a single set of

regulations. See, e.g., H.R. Rep. No. 93-533, p. 12 (1973)

(‘[A] fiduciary standard embodied in Federal legislation is

26a

considered desirable because it will bring a measure of

uniformity in an area where decisions under the same set of

facts may differ from state to state’)." Fort Halifax Packing

Co. v. Coyne, 482 U.S. 1, 11, 107 S. Ct. 2211, 96 L. Ed.

2d 1 (1987).

The Supreme Court has further concluded that "a state law

may ylate to’ a benefit plan, and thereby be [preempted],

eves/ if the law is not specifically designed to affect such

or the effect is only indirect." Ingersoll-Rand Co. v.

MéClendon, 498 U.S. 133, 139, 111 S. Ct. 478, 112 L. Ed.

2d 474 (1990). However, “some state actions may affect

employee benefit plans in too tenuous, remote, or peripheral

a manner to warrant a finding that the law ‘relates to’ the

plan.” Shaw v. Delta Air Lines, Inc., supra, 463 U.S. at

100 n.21. For example, many laws of general applicability

that function irrespective of the existence of an employee

benefit plan are not preempted because they are too remotely

related to the plan. See District of Columbia v. Greater

Washington Board of Trade, 506 U.S. 125, 130 n.1, 113 S.

Ct. 580, 121 L. Ed. 2d 513 (1992); Ingersoll-Rand Co. v.

McClendon, supra, at 139, 111 S. Ct. at 482-83. Lastly, in

cases “where federal law is said to bar state action in fields

of traditional state regulation . . . [the court has] worked on

the ‘assumption that the historic police powers of the States

were not to be superseded by the Federal Act unless that was

the clear and manifest purpose of Congress.’" (Citation

omitted.) New York State Conference of Blue Cross & Blue

Shield Plans v. Travelers Ins. Co., supra, ___-:;U.S.at__,

115 S. Ct. at 1676.

With the exception of these limitations, the United States

Supreme Court until recently has generally viewed ERISA’s

waite 4.

ee eee

A ca ers inc ti Ae abl Came: RY CN A AA i I

27a

preemption provision broadly. In recentcases, however, the

court has retreated from this expansive view.” In

Travelers Ins. Co., the court acknowledged that although

"the governing text of ERISA is clearly expansive . . . if

‘relate to’ were taken to extend to the furthest stretch of its

indeterminacy, then for all practical purposes [preemption]

would never run its course, for ‘really, universally, relations

stop nowhere,’ H. James, Roderick Hudson xli (New York

ed., World’s Classics 1980). But that, of course, would be

to read Congress’s words of limitation as mere sham, and to

read the presumption against [preemption] out of the law

whenever Congress speaks to the matter with generality."

Id., at__, 115 S. Ct. at 1677.

The Supreme Court in Travelers Ins. Co. 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. /d., at, _, 115

S. Ct. at 1678, 1681; see FMC Corp. v. Holliday, 498 U.S.

52, 60, 111 S. Ct. 403, 112 L. Ed. 2d 356 (1990) (state law

dictated structure of plan); Metropolitan Life Ins. Co. v.

Massachusetts, 471 U.S. 724, 739, 105 S. Ct. 2380, 85 L.

Ed. 2d 728 (1985) (state law mandated coverage of mental

health care benefits); Shaw v. Delta Air Lines, Inc., supra,

463 U.S. at 96-97 (state law mandated subject of plan’s

benefits). The court then contrasted those cases with the

* There is a general consensus that, in Travelers Ins. Co., the

Supreme Court indicated a retreat from preemption. See, e.g.,

Crull v. Gem Ins. Co., 58 F.3d 1386, 1391 n.3 (9th Cir. 1995)

("[Travelers Ins. Co.] may well signal the present Justices’

unhappiness with the rather sweeping d..egulatory effect that an

expansive reading of the words ‘relate to’ has had").

28a

case then before it in which a New York statute imposed

surcharges on hospital rates for patients whose commercial

insurance coverage had been purchased by employee health

care plans governed by ERISA. The court stated that "an

indirect economic influence . . . does not bind plan

administrators to any particular choice and thus function as

a regulation of an ERISA plan itself. . . . Nor does the

indirect influence of the surcharges preclude uniform

administrative practice or the provision of a uniform

interstate benefit package if a plan wishes to provide

one." New York State Conference of Blue Cross & Blue

Shield Plans v. Travelers Ins. Co., supra, __U.S. at ___,

115 S. Ct. at 1679. The court summarized its conclusion as

follows: "We do not hold today that ERISA [preempts] only

direct regulation of ERISA plans, nor could we do that with

fidelity to the views expressed in our prior opinions on the

matter. See, e.g., [Ingersoll-Rand Co. v. McClendon, supra,

498 U.S. at 139]; Pilot Life Ins. Co. v. Dedeaux, 481 U.S.

41, 47-48, 107 S. Ct. [1549], 95 L. Ed. 2d 39 (1987); Shaw

[v. Delta Air Lines, Inc., supra, 98, 103 S. Ct. at 2900-01].

* Additionally, the court stated that “cost-uniformity was

almost certainly not an object of [preemption], just as laws with

only an indirect economic effect on the relative costs of various

health insurance packages in a given State are a far cry from those

‘conflicting directives’ from which Congress meant to insulate

ERISA plans. . . . Such state laws leave plan administrators right

where they would be in any case, with the responsibility to choose

the best overall coverage for the money. . . . [Therefore,] such

state laws do not bear the requisite ‘connection with’ ERISA plans

to trigger [preemption]." (Citation omitted.) New York State

Conference of Blue Cross & Blue Shield Plans v. Travelers Ins.

Co., supra, U.S.at__, 1158S. Ct. at 1680.

29a

We acknowledge that a state law might produce such acute,

albeit indirect, economic effects, by intent or otherwise, as

to force an ERISA plan to adopt a certain scheme of

substantive coverage or effectively restrict its choice of

insurers, and that such a state law might indeed be

[preempted] under § 514. . . . [A law, however, that affects]

only indirectly the relative prices of insurance policies, a

result no different from myriad state laws in areas

traditionally subject to local regulation, [is one] which

Congress could not possibly have intended to eliminate.”

New York State Conference of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co., supra, at __, 115 S. Ct. at

1683.

Since Travelers Ins. Co. was decided, various courts of

appeals, including the Court of Appeals for the Second

Circuit, have focused on the Supreme Court’s primary

concerns with respect to ERISA preemption and, conse-

quently, have followed the lead of that court by limiting

ERISA preemption to state action that demonstrably burdens

ERISA plans. The Court of Appeals for the Sixth Circuit

stated that "Congress sought to [preempt] state laws [or state

claims] that have a burdensome effect on ERISA plans.

When a state law [or claim] has such an effect on a covered

plan, it is [preempted]; when it does not, it is not

[preempted] even if it actually refers to ERISA. Interpreting

‘relates to’ as being concerned with state laws’ significant

effects on covered plans serves Congress’s purpose in

enacting ERISA, [namely,] to avoid encouraging ‘employers

with existing plans to reduce benefits, [or] those without

such plans to refrain from adopting them.’" (Emphasis

added.) Thiokol Corp., Morton International, Inc. v.

Roberts, 76 F.3d 751, 757 (6th Cir. 1996). The court in

30a

Roberts noted that the Shaw court’s definition of "relate

to"--whether a law has a "connection with" or a "reference

to” an ERISA plan--creates a formalistic analytical

distinction. Jd., at 758. The court suggested, instead, that

"both are simply approximations of the same test. Although

in its ERISA [preemption] cases the Supreme Court analyzes

state laws by first examining whether they refer to a covered

plan and, if not, whether they still have some connection

with a covered plan, the two categories are not analytically

distinct; rather, they are two related methods of determining

the fundamental question in ERISA analysis: whether the

state law has an impermissible effect on a covered plan."

(Emphasis added.) Id.

The Court of Appeals for the Seventh Circuit explained

recently that a law or claim will interfere with the provisions

or administration of ERISA plans if it “dictate[s] what

benefits employers may offer their employees [or]

interfere[s] with the manner in which those benefits are

provided.” (Emphasis added.) Safeco Life Ins. Co. v.

Musser, 65 F.3d 647, 653 (7th Cir. 1995). Additionally, the

Court of Appeals for the Eighth Circuit examined a series of

factors to determine whether ERISA preemption applies,

including whether a law or claim involves the historic police

powers of the state, whether a provision of the plan is

negated, whether the relationships among the primary ERISA

entities--the employer, the plan, the plan fiduciaries, and the

beneficiaries--are altered such that the structure of the plan

is changed, and whether there is more than a tenuous or

peripheral economic impact. Boyle v. Anderson, 68 F.3d

1093, 1099, 1102-1105 (8th Cir. 1995), cert. denied, _

U.S. __, 116 S. Ct. 1266, 134 L. Ed. 2d 214 (1996).

3la

The Court of Appeals for the Second Circuit has also

recently examined the ERISA preemption doctrine in light of

Travelers Ins. Co. In five cases, the court has focused on

the Supreme Court’s concerns. Quoting from New York

State Conference of Blue Cross & Blue Shield Plans v.

Travelers Ins. Co., supra, __‘ U.S. at__, 115 S. Ct. at

1677, the court in O’Shea v. First Manhattan Co. Thrift Plan

& Trust, 55 F.3d 109, 113 (2d Cir. 1995), focused on Con-

gress’ goal in enacting ERISA, namely, "to ensure that plans

and plan sponsors would be subject to a uniform body of

benefits law . . . [and to prevent] the potential for conflict in

substantive law . . . requiring the tailoring of plans and

employer conduct to the peculiarities of the law of each

jurisdiction." (Emphasis added; internal quotation marks

omitted.) The court determined that a New York statute

requiring death beneficiary designations to be in writing was

preempted by ERISA because the statute affected key plan

documents and "had Congress chosen to impose a signature

requirement, it could have done so. To impose such a

requirement in New York, but not elsewhere, would frustrate

ERISA’s goal of establishing a unified national system to

safeguard retirement benefits." Jd., at 114; see Greenblatt

v. Delta Plumbing & Heating Corp., 68 F.3d 561, 574 (2d

Cir. 1995) (primary purpose of ERISA preemption is "‘to

avoid a multiplicity of regulation in order to permit the

nationally uniform administration of employee benefit

plans’").

In NYS Health Maintenance. Organization Conference v.

Curiale, 64 F.3d 794, 800 (2d Cir. 1995), the court focused

first on whether the law in question makes “reference to"

ERISA, in specific, whether it "mentions or alludes to

ERISA plans, and if the law affects ERISA plans in some

32a

manner,” such as by mandating or manipulating the contents

of an insurer’s benefits package. Accord New England

Health Care Employees Union v. Mount Sinai Hospital, 65

F.3d 1024, 1032 (2d Cir. 1995). The court also focused on

whether the law was impermissibly connected™ with an

ERISA plan by having "‘an effect on the primary admin-

istrative functions of benefit plans, such as determining an

employee's eligibility for a benefit and the amount of that

benefit.’" NYS Health Maintenance Organization Conference

v. Curiale, supra, at 801. For this to occur, the court stated

that the effect must be "sufficiently disruptive to ERISA

plans to merit preemption." Jd., at 800 n.17. Additionally,

the court, reiterating Travelers Ins. Co., concluded that

"without evidence . . . [of] ‘such acute, albeit 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,’ . . . ERISA does not preempt.

." (Citation omitted.) Connecticut Hospital Assn. v.

Weltman, 66 F.3d 413, 415 (2d Cir. 1995).

In the present cases, CIGNA argues that the claims

asserted by the plaintiffs are preempted by ERISA because

they "relate to" the health care plan that CIGNA administers

* "[A] ‘connection exists where a state statute prescribes

either the type and amount of an employer’s contributions to a

plan . . . the rules and regulations under which the plan operates

. . . Or the nature and amount of the benefits provided thereunder.

. .." NYS Health Maintenance Organization Conference v.

Curiale, supra, 64 F.3d 801, quoting General Electric Co. v. New

York State Dept. of Labor, 891 F.2d 25, 29 (2d Cir. 1989), cert.

denied, 496 U.S. 912, 110 S. Ct. 2603, 110 L. Ed. 2d 283

(1990).

33a

in that they deal with the administration of the plan.~

CIGNA asserts that, because the plaintiffs’ CUTPA, CUIPA

and common law claims are based upon CIGNA’s decision

to restructure the health care coverage that it offers such that

certain physicians would no longer be a part of the new

provider network, the plaintiffs are directly challenging the

propriety of the administration of the plans. CIGNA claims

that the connection between the plaintiffs’ claims and the

ERISA plans is exemplified by the nature of the relief

sought, namely, an injunction requiring CIGNA to include

the physician plaintiffs in its provider network. Similarly,

CIGNA argues that, with respect to the plaintiffs’ claims

arising under P.A. 94-235, in seeking an order to require

that CIGNA include the plaintiff physicians in its provider

network, the claims relate directly to the administration of

the plaintiffs’ employee benefit plans. We disagree.

The essence of the plaintiffs’ claims do 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. See, e.g.,

New York State Conference of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co., supra, __'‘U.S. at__, 1158S.

Ct. at 1683; District of Columbia v. Greater Washington

Board of Trade, supra, 506 U.S. at 130-33; FMC Corp. v.

> CIGNA concedes that the statutory and common law causes

of action are not preempted per se.

Holliday, supra, 498 U.S. at 60; Metropolitan Life Ins. Co.

v. Massachusetts, supra, 471 U.S. at 739; Shaw v. Delta Air

Lines, Inc., supra, 463 U.S. at 95-100; cf. Connecticut

Hospital Assn. v. Weltman, supra, 66 F.3d at 415; NYS

Health Maintenance Organization Conference v. Curiale,

supra, 64 F.3d at 800-801. 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 CIGNA what type of

plan to adopt, what coverage to offer, or whom to cover.

As the Connecticut State Medical Society and the American

Medical Association argue in their amicus brief to this court,

“under the Act, an insurer, such as CIGNA, can structure its

plan . . . and administer it any way it chooses; it simply

must disclose, to a limited extent, what the structure of the

{preferred provider network] is (by listing the providers) and

how it is determined (by listing the criteria). This is not a

substantive requirement, or the type which ERISA sought to

[preempt].” (Emphasis in original.)

Rather than affecting or prescribing the establishment,

administration, regulation or maintenance of an employee

benefit plan, the plaintiffs’ claims merely turn on requiring

CIGNA to enforce the benefit plan that it has already

established and is maintaining. The Hollis plaintiffs’

statutory and common law claims are based on CIGNA’s

** To the extent that a requirement that CIGNA enforce the

plans as created imposes administrative costs and burdens upon the

benefit plans, the Supreme Court has concluded that indirect costs

and burdens do not result in preemption. See New York State

Conference of Blue Cross & Blue Shield Plans v. Travelers Ins.

Co., supra, 115 S. Ct. 1680.

35a

alleged misrepresentations that their physicians chose not to

continue as plan providers and that the physicians did not

meet the requisite criteria. One of the alleged reasons that

the Hollis plaintiffs became or remained members of this

plan was because CIGNA had contracted with certain

physicians, whose identities they knew based upon the filing

that CIGNA was required to make under P.A. 94-235. The

Hollis plaintiffs, therefore, could reasonably presume that as

long as their physicians continued to meet the credentialing

criteria and did not meet any of the reasons for discharge,

that they would continue to be providers under the plan.

Furthermore, even if P.A. 94-235 did not exist, the Hollis

plaintiffs could reasonably expect that their physicians would

continue to be providers under the plan for the duration of

the physicians’ contracts with CIGNA and would not be

unilaterally terminated.

Similarly, the Napoletano plaintiffs’ claims simply assert

that CIGNA has failed to enforce the employee benefit plan

that it administers. The Napoletano plaintiffs reasonably

believed that they would continue to be providers under the

plan as long as they met the criteria that P.A. 94-235

required that CIGNA provide or for the duration of their

contracts. The Napoletano plaintiffs are merely asking that

their relationship with CIGNA be managed in accordance

with a specific filing that CIGNA has made with the state in

which CIGNA was required to indicate the criteria by which

it would select and could discharge providers, as well as in

accordance with their one year contracts with CIGNA. This

is not a case in which the Napoletano plaintiffs seek to force

themselves into CIGNA’s plan. CIGNA removed the

physicians from its list of providers before their contracts

had expired and without following the requirements of P.A.

36a

94-235--it did not inform the plaintiff physicians of its

criteria for discharge and did not give alternate reasons for

discharging them. Neither class of plaintiffs is requesting

that CIGNA change the method by which it determines

which physicians will be providers under its plan--in other

words, the plaintiffs are not claiming that CIGNA should

change its list of criteria. Instead, the plaintiffs are merely

asking that CIGNA disclose its criteria and, subsequently,

adhere to them.

Significantly, CIGNA conceded during oral argument that

P.A. 94-235 is not per se preempted by ERISA in that it

does not directly affect plan administration and does not

interfere with substantive decisions CIGNA makes with

respect to structuring health benefit plans. Furthermore, at

oral argument, CIGNA conceded that ERISA would not

preempt a claim by the plaintiffs that CIGNA had failed to

make the requisite filing with the commission pursuant to

P.A. 94-235(e)(1)”’ because such a claim would be too

remote to the administration of the plan. It follows logically

from this concession that the plaintiffs’ claim that CIGNA

failed to comply with another provision of P.A. 94-235,

namely, subsection (e)(2), which provides that "if a network

uses criteria that [have] not been filed pursuant to

subdivision (1) of this subsection to judge the quality and

cost-effectiveness of a health care provider’s practice under

any specific program within the network, the network may

not reject or terminate the provider participating in that

program based upon such criteria until the provider has been

informed of the criteria that his practice fails to meet,” is

” See footnote 3.

37a

likewise not preempted by ERISA. CIGNA argues,

however, that the difference in the relief sought in the two

circumstances--in the former, it is simply that CIGNA make

the appropriate filing; in the latter, it is that CIGNA pay

monetary damages for the harm suffered by the

plaintiffs--dictates that ERISA preempts the claim that a

provider has been improperly discharged. Because the relief

in the second scenario involves the payment of monetary

damages, CIGNA argues, the administration of the plan is

affected. We disagree with CIGNA.

The plaintiffs are not seeking monetary damages for their

claim that CIGNA violated P.A. 94-235. Rather, they are

seeking a declaratory judgment requiring solely that CIGNA

** A second reason for our conclusion is that even if the

plaintiffs were seeking damages, CIGNA’s argument creating a

distinction between the type of relief sought is contrived. The

administration of the plan is not affected in a greater way by

mandating that a plan pay money damages for violating a law than

by mandating that a plan make an appropriate filing according to

law. In either situation, CIGNA is left "right where [it] would be

in any case, with the responsibility to choose the best overall

coverage for the money." New York State Conference of Blue

Cross & Blue Shield Plans v. Travelers Ins. Co., supra, 115 S. Ct.

“1680. Where a cause of action to enforce the filing requirements

of P.A. 94-235 is admittedly not preempted, CIGNA cannot

thereafter argue that just because the remedy of another type of

enforcement would be monetary damages, preemption suddenly

applies. See International Paper Co. v. Ouellette, 479 U.S. 481,

498 n.19, 107 S. Ct. 805, 93 L. Ed. 2d 883 (1987) ("unless there

is evidence that Congress meant to ‘split’ a particular remedy for

[preemption] purposes, it is assumed that the full cause of action

under state law is available [or preempted]").

38a

comply with the act.” As we have previously stated, by

® In the demand for relief under their claim for an alleged

violation of P.A. 94-235, the Napoletano plaintiffs seek a

declaratory judgment determining:

"1. That Plaintiff is listed as a participating physician in

[CIGNA]’s plan, filed with the Commission on Hospitals and

Health Care as of October 1, 1994.

"2. That the Plaintiff has been removed from [CIGNA]’s list

without being informed of the criteria Plaintiff's practice fails to

meet.

"3. That [CIGNA] failed to file the general criteria for its

selection or termination of health care providers pursuant to [P.A.

94-235 (e) (1) and (2)].

"4. That [CIGNA] be required to disclose its general criteria for

its selection or termination of physicians pursuant to [P.A. 94-235

(e) (1)}.

"5. That [CIGNA] may not reject or terminate Plaintiff due to

[CIGNA]’s failure to file criteria pursuant to [P.A. 94-235 (a)

(2)).

"6. Such other equitable relief as the Court deems necessary and

proper.”

In the demand for relief under their claim for an alleged

violation of P.A. 94-235, the Hollis plaintiffs seek a declaratory

judgment determining:

"1. That Plaintiffs physician is listed as a participating

physician in [CIGNA]’s plan, filed with the Commission on

Hospitals and Health Care as of October 1, 1994.

"2. That the Plaintiff's physician has been removed from

[CIGNA]’s list without being informed of the criteria Plaintiff's

practice fails to meet.

"3. That CIGNA failed to file the general criteria for its

selection or termination of health care providers under the Act.

"4. That Plaintiff's physician remain a participating physician in

[CIGNA]’s plan.

"5. Such other equitable relief as the Court deems necessary and

proper.”

39a

conceding that a claim that CIGNA failed to make the

requisite filing under P.A. 94-235(e)(1) would not be

preempted, CIGNA has essentially conceded that ERISA

does not preempt a claim under P.A. 94-235(e)(2).

Although a successful claim under P.A. 94-235(e)(2) would

in effect require that CIGNA continue to employ the plaintiff

physicians, such a result would not have an impermissible or

burdensome effect on the administration of the plan; see

Thiokol Corp., Morton International, Inc. v. Roberts, supra,

76 F.3d at 757-58; Greenblatt v. Delta Plumbing & Heating

Corp., supra, 68 F.3d at 574; because it would simply

enforce CIGNA’S plan as CIGNA created it. CIGNA is free

to establish a health benefit plan as it chooses--the plaintiffs

are not seeking to require that it adopt a plan with certain

features. See NYS Health Maintenance Organization

Conference v. Curiale, supra, 64 F.3d at 801. Upon

adopting such a plan, however, P.A. 94-235, which CIGNA

concedes is not per se preempted, requires that CIGNA file

with the commission "the general criteria for its selection or

termination of health care providers" and thereafter prohibits

the use of criteria that have not been filed to terminate a

provider.” Public Acts 1994, No. 94-235(e)(1) and (2).

Consequently, no part of the plaintiffs’ claim under P.A.

94-235 relates to the administration of the plan and no part

of their claim is preempted by ERISA.

Moreover, preemption of the plaintiffs’ claims would not

further the purpose of ERISA preemption, which is to permit

” We note that, even having failed to make the requisite

filing, CIGNA may stili discharge a plaintiff physician as long as

the physician "has bees .n/ermed of the criteria that his practice

fails to meet." Public Auts '994, No. 94-235(e)(2).

40a

the creation of a uniform body of employee benefit law and

avoid multiple regulatory schemes. Fort Halifax Packing

Co. v. Coyne, supra, 482 U.S. at 9-11; Greenblatt v. Delta

Plumbing & Heating Corp., supra, 68 F.3d at 574; O’Shea

v. First Manhattan Co. Thrift Plan & Trust, supra, 55 F.3d

at 113. Requiring CIGNA to enforce a plan that it has

established according to law does not interfere with the

adoption of uniform administrative practices.*

Having concluded that ERISA does not preempt the

plaintiffs’ claims, we must next determine whether P.A.

94-235 confers a private cause of action affording

declaratory relief. The parties agree that the act does not

expressly provide a private cause of action. The plaintiffs,

however, claim that the availability of a private cause of

action is implied. "In determining whether a private remedy

is implicit in a statute not expressly providing one, several

factors are relevant. First, is the plaintiff one of the class

for whose . . . benefit the statute was enacted ...?

Second, is there any indication of legislative intent, explicit

or implicit, either to create such a remedy or to deny one?

* Because we conclude that the plaintiffs’ claims in both

cases are not preempted by ERISA, we need not address ERISA’Ss

savings and deemer clauses. See 29 U.S.C. § 1144(b)(2)(A) and

(B) (1994); see footnote 19. Additionally, in light of our

conclusion, we need not address the plaintiffs’ claims in both cases

that the trial court improperly declined to open the judgments to

reconsider its rulings on CIGNA’s motions to strike based on the

Supreme Court’s decision in New York State Conference of Blue

Cross & Blue Shield Plans v. Travelers Ins. Co., supra, _ U.S.

__, 115 S. Ct. at 1671.

4la

...+ Third, is it consistent with the underlying purposes of

the legislative scheme to imply such a remedy for the

plaintiff?" (Citations omitted; internal quotation marks

omitted.) Cort v. Ash, 422 U.S. 66, 78, 95 S. Ct. 2080, 45

L. Ed. 2d 26 (1975).”

We will examine the test as it relates to each class of

plaintiffs. The act benefits the class of physician providers

directly. The act benefits this class by mandating that a

preferred provider network, such as that administered by

CIGNA, file with the commission a list of participating

physicians and a list of criteria for selecting or terminating

health care providers. This filing benefits the Napoletano

plaintiffs because they are able to determine whether they

meet the criteria for selection and continued enrollment with

CIGNA’s health care network. Additionally, the act benefits

a class of patients, such as the Hollis plaintiffs, by informing

them which physicians are available if they take part in a

particular plan and by informing them of the credentialing

standards for these physicians.

Second, we do not find any indication, explicit or implicit,

in the legislative history that the legislature intended either

to create or to deny a private cause of action. The history

is silent in this respect.

* The Supreme Court lists a fourth factor in Cort v. Ash,

supra, 422 U.S. 78, namely, whether “the cause of action [is] one

traditionally relegated to state law, in an area basically the concern

of the States, so that it would be inappropriate to infer a cause of

action based solely on federal law?" Because we are not

concerned with a federal law in determining whether P.A. 94-235

provides a private cause of action, this factor does not apply to our

analysis.

42a

Third, providing a private cause of action to the plaintiffs

is consistent with the underlying purposes of P.A. 94-235.

One purpose of the act is to give health care providers

information by which they can determine whether they are

eligible for participation in a network. See 37 H.R. Proc.,

Pt. 17, 1994 Sess., p. 5951; id., p. 5956, remarks of

Representative Joseph Courtney ("what this amendment seeks

to do is . . . address some of the disclosure and notification

problems that providers have . . . complained about in terms

of their ability to communicate with provider

organizations"). A second purpose is to provide information

to the public to enaple health care purchasers to make

informed decisions regarding their choice of health plans and

doctors. See id., p. 5980, remarks of Representative Patrick

J. Flaherty ("I hope that this legislation will allow all of us

to go forward and make decisions based on more complete

and accurate information"); id., pp. 5981-82, remarks of

Representative Christopher G. Donovan ("The consumer is

not involved in the selection of the network providers as

much as they could. There is no consumer report so to

speak of the network providers which is given to the

consumer, and | feel that if there is more consumer input in

the choice of provider and more consumer input in the

direction of health care, we can do better with our managed

care networks in the state."). On balance, we are persuaded

that, under the criteria set forth by the Supreme Court in

Cort v. Ash, supra, 422 U.S. at 78, a private cause of action

exists under P.A. 94-235 to enforce its provisions.

Additionally, where the legislature wishes to limit

enforcement of a statute to an administrative body, it has

expressly done so. See, e.g., Connecticut Environmental

Protection Act (General Statutes § 22a-5, 22a-6a and 22a-6b

43a

expressly vests enforcement power in commissioner);

CUTPA (General Statutes § 42-110d, 42-110k, 42-110m and

42-1100 delineate procedure by which commission is to

enforce act). Notably, the legislature has not expressly

limited authority to enforce P.A. 94-235 in the commission

although it has done so in other sections of chapter 368c of

the General Statutes. See, e.g., General Statutes § 19a-151

(commission has express power to regulate increased charges

to patients); General Statutes § 19a-154 (commission has

express authority to ensure proper application of provision

regulating health care facility’s transfer of ownership);

General Statutes § 192-155 (commission must approve

certain capital expenditures by health care agency); General

Statutes § 19a-156 (commission has authority to approve,

deny or modify hospital’s proposed budget); General Statutes

§ 19a-167j (commission has authority to impose civil penalty

upon health care facility that fails to file certain requested

information, not including that information pursuant to P.A.

94-235). "The use of different words [or the absence of

repeatedly ued words in the context of] the same [subject

matter] must indicate a difference in legislative intention.”

(Internal quotation marks omitted.) Plourde v. Liburdi, 207

Conn. 412, 416, 540 A.2d 1054 (1988); see Angelsea

Productions, Inc. v. Commission on Human Rights &

Opportunities, supra, 236 Conn. at 694-95. The absence of

similar express limitations in P.A. 94-235 supports our

conclusion that the act permits a private cause of action.

Furthermore, we discern from the legislative history that

to effectuate fully the purposes of P.A. 94-235 of providing

health care providers with information so that they can

determine whether they are eligible to join a network and of

providing the public with information about their choice of

t4a

health plans and physicians so that they can make informed

decisions, “private interests [would not be] amply served

without private causes of action." Antinerella vy. Rioux, 229

Conn. 479, 495, 642 A.2d 699 (1994). Because the act does

not provide a mechanism enabling private individuals to file

grievances, private persons would be denied all access to the

administrative enforcement process in the absence of a

private cause of action. Cf. Connecticut Environmental

Protection Act (General Statutes § 22a-13 provides that

council on environmental quality is empowered to receive

citizen grievances alleging violation of any statute regarding

environmental quality). Accordingly, we conclude that P.A.

94-235 confers a private cause of action for declaratory relief

upon the plaintiffs.

We reverse the judgments of the trial court and remand the

cases to the trial court for further proceedings according to

law.

In this opinion the other justices concurred.

45a

APPENDIX B

SUPERIOR COURT OF CONNECTICUT

JUDICIAL DISTRICT OF HARTFORD - NEW

BRITAIN

Nos. 705357, 705358

F. BARRETT HOLLIS, et al. v.

CIGNA HEALTHCARE OF CONNECTICUT, INC.;

ROBERT S. NAPOLETANO, M.D., et al. v.

CIGNA HEALTHCARE OF CONNECTICUT, INC.

December 5, 1994, Decided

December 5, 1994, FILED

CONSOLIDATED MEMORANDUM OF DECISION RE

MOTIONS TO STRIKE

I. INTRODUCTION

On Labor Day 1974, President Ford signed into law the

Employee Retirement Income Security Act of 1974,

popularly known as ERISA. 88 Stat. 829 (1974). ERISA,

as it is well known, was intended to safeguard the pensions

of American workers, but its sweep is much broader than

that. It "sets out a comprehensive system for the federal

regulation of private employee benefit plans, including both

pension plans and welfare plans." District of Columbia v.

Greater Washington Board of Trade, 121 L. Ed. 24 513, 113

S. Ct. 580, 582 (1992). One of the cornerstones of this

comprehensive system is a preemption provision, codified at

29 U.S.C. § 1144, that, while complicated, "is conspicuous

46a

for its breadth.” FMC Corp. v. Holliday, 498 U.S. 52, 58,

112 L. Ed. 2d 356, 111 S. Ct. 403 (1990). The motions to

strike that are now before me present the question of

whether § 1144 preempts the state law tort, contract and

statutory claims contained in two companion cases. For the

reasons set forth below, I conclude that all of these claims

are preempted.

II. THE CAUSES OF ACTION

The allegations presented in the amended complaints filed

in these companion cases -- which, for purposes of the

respective motions to strike, I assume to be true -- arise

from the unilateral decision of CIGNA, an issuer of health

insurance, to remove certain physicians from its list of

participating physicians. The two cases here were apparently

brought in concert. Hollis presents the claims of a number

of patients; Napoletano presents the claims of a number of

physicians. The causes of action asserted in these cases must

be described in some detail.

A. Hollis

Hollis is an action brought by nine plaintiffs, each of

whom asserts four causes of action.

F. Barrett Hollis, the named plaintiff, alleges that he was

insured for medical benefits under a group insurance plan

between CIGNA and his wife’s employer. He began cancer

treatment with Dr. Raphael Cooper, a participating physician

in CIGNA’s Health Care Network. In May 1994, CIGNA

decided to remove Dr. Cooper from its list of participating

physicians as of September 1994. At about this time,

CIGNA sent a letter to its Health Care members stating that

its "goal is to establish a comprehensive network of quality

47a

doctors who meet [CIGNA’s] credentialing standards.”

Hollis claims that this letter is misleading because Dr.

Cooper meets these standards. A few months later, CIGNA

sent a second letter to its participants stating that, if their

providers "choose[] not to participate,” their care would be

transferred to participating providers. Hollis claims that this

letter is misleading in that it does not reflect that the removal

decision was unilateral. At about the time of this second

letter, CIGNA placed an advertisement in the Hartford

Courant listing a number of participating physicians. This

advertisement is assertedly false because it misrepresents

which physicians are allowed to re-enroll in CIGNA’s

network. Finally, CIGNA sent its participants a directory of

providers that is allegedly misleading because it fails to

indicate that physicians can be removed from the list without

notice.

The first count of Hollis’ amended complaint alleges that

CIGNA’s actions violate the Connecticut Unfair Insurance

Practices Act (CUIPA), specifically the prohibitions against

misrepresentations and false information and advertising

contained in Conn. Gen. Stat. § 38a-816. The second count

alleges that these actions violate the Connecticut Unfair

Trade Practices Act (CUTPA) in that they were unfair or

deceptive acts or practices in violation of Conn. Gen. Stat.

§ 42-110b(a). The third count alleges that CIGNA has

violated 1994 Conn. Acts 94-235, entitled An Act

Concerning Managed Care, by removing Dr. Cooper from

its plan even though Dr. Cooper is listed as a provider in

CIGNA’s filing with the Commission on Hospitals and

Health Care and by failing to inform Dr. Cooper of the

criteria that he has failed to meet. The fourth count alleges

that these various acts constitute the common law tort of

48a

misrepresentation.

The causes of action of the remaining eight plaintiffs are

substantially similar to those asserted by Hollis. Each

Plaintiff claims that he or she was, either through the

plaintiff's own employment or that of a spouse, a participant

in a CIGNA health plan. Each plaintiff began treating with

a participating physician who was subsequently removed

from CIGNA’s list of participating physicians. Each

plaintiff asserts the four causes of action asserted by Hollis.

CIGNA has filed a motion to strike the entire amended

complaint, claiming that all causes of action asserted therein

are preempted by ERISA.

B. Napoletano

Napoletano is an action brought by nine plaintiffs, each of

whom asserts five causes of action.

Robert S. Napoletano, M.D., the named plaintiff, alleges

that he is a physician licensed to practice in the State of

Connecticut. He was a participating physician in the CIGNA

Health Care Network and contracted with CIGNA through

Pro Care Independent Practice Association, Inc. In May

1994, Napoletano received a letter from Pro Care informing

him that CIGNA had unilaterally terminated its agreement

with Pro Care as of September 1994. Napoletano claims

that he continues to meet all of CIGNA’s credentialing

standards, that he is a third-party beneficiary of the contract

between CIGNA and Pro Care, and- that he was terminated

without just cause.

The first three counts of Napoletano’s amended complaint

assert common law causes of action. The first count alleges

49a

breach of contract. The second count alleges breach of an

implied covenant of good faith and fair dealing. The third

count alleges tortious interference with business

expectancies. In making this third claim, Napoletano alleges

that CIGNA made the various communications to its

beneficiaries that have already been recounted in describing

the Hollis complaint.

The fourth and fifth counts of Napoletano’s amended

complaint assert statutory causes of action. The fourth count

alleges that CIGNA has violated Conn. Gen. Stat § 42-110b

(CUTPA) by engaging in unfair or deceptive acts or

practices. The fifth count alleges that CIGNA has violated

1994 Conn. Acts 94-235 by removing him from it plan. The

specific allegations set forth in Napoletano’s fifth count are

similar to those contained in Hollis’ third count.

The causes of action of the remaining eight plaintiffs are

substantially similar to those asserted by Napoletano. Each

plaintiff alleges that he is a physician who contracted with

CIGNA through Pro Care and was removed from CIGNA’s

list of participating physicians when CIGNA terminated its

contract with Pro Care. Each plaintiff asserts the five causes

of action asserted by Napoletano.

CIGNA has filed a motion to strike the entire amended

complaint, claiming, as in Hollis, that all causes of action

asserted therein are preempted by ERISA.

Ifl. DISCUSSION

A. ERISA Preemption Principles

Whether the causes of action asserted here are preempted

by ERISA is a question of statutory interpretation. The

50a

Statute in question, as mentioned, is 29 U.S.C. § 1144,

which provides, in relevant part, as follows:

(a) Supersedure ....

Except as provided in subsection (b) of this section, the

provisions of this subchapter and subchapter III of this

chapter shall supersede any and all State laws insofar as they

may now or hereafter relate to any employee benefit plan

described in section 1003(a) of this title and not exempt

under section 1003(b) of this title...

(b) Construction and application .... (2)

(A) Except as provided in subparagraph (B), nothing in

this subchapter shall be construed to exempt or relieve any

person from any law of any State which regulates insurance,

banking, or securities.

(B) Neither an employee benefit plan described in section

1003(a) of this title, which is not exempt under section

1003(b) of this title (other than a plan established primarily

for the purpose of providing death benefits), nor any trust

established under such a plan, shall be deemed to be an

insurance company or other insurer, bank, trust company, or

investment company or to be engaged in the business of

insurance or banking for purposes of any law of any State

purporting to regulate insurance companies, insurance

contracts, banks, trust companies, or investment companies.

Each of the three clauses just quoted has come to be

known by a popular name. The first clause is the

preemption clause. The second clause is the saving clause.

The final clause is the deemer clause. FMC Corp. v.

Holliday, supra, 498 U.S. at 58. The interpretation of these

Sla

three clauses -- individually and in combination -- has caused

twenty years of judicial perplexity, with no obvious end in

sight. The Supreme Court has diplomatically stated that they

“are not a model of legislative drafting." Metropolitan Life

Insurance Co. v. Massa-chusetts, 471 U.S. 724, 739, 85 L.

Ed. 2d 728, 105 S. Ct. 2380 (1985), while the Second

Circuit has more candidly described § 1144 as "a veritable

Sargasso Sea of obfuscation,” Travelers Insurance Co. v.

Cuomo, 14 F.3d 708, 717 (2d Cir. 1993), cert. granted, 115

S. Ct. 305 (1994).

Although the statutory text is confusing, § 1144 has been

considered by the Supreme Court on a number of occasions,

and a number of reasonably clear principles have emerged

from the Court’s decisions. These principles are grounded

not only in the statutory language but in "the structure and

purpose of the statute." Ingersoll-Rand Co. v. McClendon,

498 U.S. 133, 138, 112 L. Ed. 2d 474, 111 S. Ct. 478

(1990).

First and foremost, "the pre-emption clause is conspicuous

for its breadth." FMC Corp. v. Holliday, supra, 498 U.S.

at 58. The focal point of this breadth is the word "relate."

The Supreme Court held early on that, "A law ‘relates to’ an

employee benefit plan, in the normal sense of the phrase, if

it has a connection with or reference to such a plan." Shaw

v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 77 L. Ed. 2d

490, 103 S. Ct. 2890 (1983). "This reading is true to the

ordinary meaning of ‘relate to,’ see BLACK’s LAW

DICTIONARY 1288 (6th ed. 1990), and thus gives effect to

the ‘deliberately expansive’ language chosen by Congress."

District of Columbia v. Greater Washington Board of Trade,

supra, 113 S. Ct. at 583 (quoting Pilot Life Insurance Co. v.

52a

Dedeaux, 481 U.S. 41, 46, 95 L. Ed. 2d 39, 107 S. Ct.

1549 (1987)).

A second, related, principle is that the spectrum of laws

preempted by ERISA is considerably broader than the

subject matter of ERISA. The focal point of this principle

is the statute’s preemption of "any and all State laws."

"State law” is defined as including “all laws, decisions,

rules, regulations, or other State action having the effect of

law, of any State.” 29 U.S.C § 1144 (c)(1). Congress, in

enacting § 1144, specifically decided "to pre-empt state laws

relating to benefit plans, rather than those laws relating to

subjects covered by ERISA.” Shaw v. Delta Air Lines, Inc.,

supra, 463 U.S. at 98 n.19. This is because “one of

ERISA’s main objectives was to eliminate State regulation of

employee benefit plans." NYSA-ILA Medical & Clinical

Services Fund v. Axelrod, 27 F.3d 823, 826 (2d Cir. 1994).

Because of this fact, "ERISA pre-empts any state law that

refers to or has a connection with covered benefit plans . .

. “even if the law is not specifically designed to affect such

plans, or the effect is only indirect,’ Ingersoll-Rand, supra,

498 U.S., at 139. . . and even if the law is ‘consistent with

ERISA’s substantive requirements,’ Metropolitan Life, supra,

471 U.S. at 739." District of Columbia v. Greater

Washington Board of Trade, supra, 113 S. Ct. at 583.

"Even in the absence of an express link to an employee

benefit plan, State law is preempted ‘insofar as’ the law

applies to benefit plans in particular cases. (Shaw v. Delta

Air Lines, supra, at 97 n.17....).". Morgan Guaranty Trust

Co. v. Tax Appeals Tribunal, 80 N.Y.2d 44, 599 N.E.2d

656, 659, 587 N.Y.S.2d 252 (N.Y. 1992).

A third principle, however, is that ERISA preemption is

53a

not without limitations. The exact scope of these limitations

is not entirely clear. Shaw recognized that, "Some state

actions may affect employee benefit plans in too tenuous,

remote, or peripheral a manner to warrant a finding that the

law ‘relates to’ the plan." 463 U.S. at 100 n.21.

Unhappily, when it announced this limitation, the Court

expressed "no views about where it would be appropriate to

draw the line.” Jd. In order to assess where the line should

be drawn, it is helpful to consider the only two cases in

which the Court has found state actions to have a sufficiently

“tenuous” connection with covered plans to survive

preemption.

In Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 96 L.

Ed. 2d 1, 107 S. Ct. 2211 (1987), the Court held that a

Maine statute requiring employers to provide a one-time

severance payment to employees in the event of a plant

closing was not preempted. The Court reasoned that the law

in question related to a benefit rather than a "plan." "Only

a plan," it explained, "embodies a set of admin-istrative

practices vulnerable to the burden that would be imposed by

a patchwork scheme of regulation." Jd. at 11-12. "The

focus of the statute,” it concluded, "is on the administrative

integrity of benefit plans -- which presumes that some type

of administrative activity is taking place." Jd. at 15.

In Mackey v. Lanier Collection Agency & Service, Inc.,

486 U.S. 825, 100 L. Ed. 2d 836, 108 S. Ct. 2182 (1988),

the Court held that ERISA does not forbid garnishment of a

benefit plan where the purpose is to collect judg-ments

against plan participants. The Court reasoned that "several

types of civil suits . . . can be brought against ERISA

welfare benefit plans.” Jd. at 832. ERISA specifi-cally

54a

authorizes certain civil enforcement actions to secure

specified relief, including the recovery of plan benefits. 29

U.S.C. § 1132. In addition, “lawsuits against ERISA plans

for run-of-the-mill State law claims such as unpaid rent,

failure to pay creditors, or even torts committed by an

ERISA plan ... are relatively commonplace.” 486 U.S. at

833. Money judgments must be collectible in some way.

The Court concluded that "garnishment is one permissible

method." Jd. at 834.

Balanced against Fort Halifax and Mackey, however, is

Pilot Life Insurance Co. v. Dedeaux, supra. Pilot Life holds

that ERISA preempts state common law tort and contract

actions asserting improper processing of a claim for bene-fits

under an insured employee benefit plan. These causes of

action “relate to" an employee benefit plan. Because they

were "based on alleged improper processing of a claim for

benefits under an employee benefit plan, [they] undoubtedly

meet the criteria for pre-emption." Jd. at 48.

The Supreme Court, as mentioned, has left the dividing

line between Mackey (which allows some "run-of-the-mill"

tort actions) and Pilot Life (which broadly preempts many

other tort actions) unclear, and, however this case is

resolved, it is necessary to resort to first principles. The

governing principle has been well stated by the Second

Circuit in Aetna Life Insurance Co. v. Borges, 869 F.2d 142

(2d Cir.), cert. denied, 493 U.S. 811, 107 L. Ed. 2d 25,

110 S. Ct. 57 (1989). “What triggers ERISA preemption is

not just any indirect effect on administrative procedures but

rather an effect on the primary administrative functions of

benefit plans, such as determining an employee’s eligibility

for a benefit and the amount of that benefit." Jd. at 146-47.

55a

Accord Airparts Co. v. Custom Benefit Services of Austin,

Inc., 28 F.3d 1062, 1065 (10th Cir. 1994). ERISA thus

"preempts claims challenging the administration of employee

benefit plans." MNVA Railroad, Inc. v. John Alden Life

Insurance Co., 507 N.W.2d 15, 18 (Minn. Ct. App. 1993).

(Emphasis in original.) As the Seventh Circuit has pithily

explained, if a participant goes to a plan office and slips on

a banana peel, that participant can bring a negligence suit.

A case involving the nature of plan benefits, however, "is

not a banana-peel case." Pohl v. National Benefit

Consultants, Inc., 956 F.2d 126, 128 (7th Cir. 1992).

The preceding discussion of principles has focused on the

preemption clause. The saving clause and the deemer clause

raise complex issues of their own. "The saving clause

returns to the States the power to enforce those state laws

that ‘regulate insurance,’ except as provided in the deemer

clause. Under the deemer clause, an em-ployee benefit plan

governed by ERISA shall not be ‘deemed’ an insurance

company, an insurer, or engaged in the business of insurance

for purposes of state laws ‘purporting to regulate’ insurance

companies or insurance contracts." FMC Corp. v. Holliday,

supra, 498 U.S. at 58.

Each clause has some internal complexity of its own. The

principal task in construing the saving clause is to define

what is a law that "regulates insurance." In addressing this

question, the Supreme Court has referred to the case law

interpreting the phrase “business of insurance” under the

McCarran-Ferguson Act, 15 U.S.C. § 1011, et seq. Three

criteria have been used to determine whether a practice falls

under the "business of insurance" for purposes of the

McCarran-Ferguson Act: "first, whether the practice has the

56a

effect of transferring or spreading a policyholder’s risk;

second, whether the practice is an integral part of the policy

relationship between the insurer and the insured; and third,

whether the practice is limited to entities within the

insurance industry." Union Labor Life Ins. Co. v. Pireno,

458 U.S. 119, 129, 73 L. Ed. 2d 647, 102 S. Ct. 3002

(1982). (Emphasis in original.) See Pilot Life Insurance

Co. v. Dedeaux, supra, 481 U.S. at 48-49. Under the

McCarran-Ferguson Act, Pireno explains, "none of these

criteria is necessarily, determinative in itself,” but, rather,

"all three criteria" must be examined. 458 U.S. at 129.

The deemer clause is also a clause of great complexity.

See FMC Corp. v. Holliday, supra. Because the pre-emption

and saving clauses are dispositive of the claims in this case,

however, the deemer clause need not be con-sidered here.

These governing principles must now be applied to the

various causes of action asserted in the amended complaints.

B. Application of the Principles

1. Hoilis

a. CUIPA

The first question that must be addressed with respect to

the CUIPA claims asserted in Hollis is whether these claims

are preempted by the preemption clause. I con-clude that

they are.

The CIGNA plan in question is plainly "an employee

benefit plan" as that term is defined by ERISA. An

“employee benefit plan” means "an employee welfare benefit

plan.” 29 U.S.C. § 1002(3). An "employee welfare benefit

plan” is defined as "any plan, fund, or program ...

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established or maintained by an employer .. for the pur-pose

of providing for its participants or their beneficiaries,

through the purchase of insurance or otherwise, (A) medical,

surgical, or hospital care or benefits..... 29 U.S.C.

§ 1002(1). Each of the plaintiffs in Hollis is described in the

amended complaint as being insured under a group insurance

plan between CIGNA and an employer. The plaintiffs do

not contend that this plan is anything other than "an

employee benefit plan."

Hollis’ CUIPA cause of action "relates to” the plan. As

already discussed, the Supreme Court has broadly con-strued

the term "relate to,” requiring only "a connection with or

reference to such a plan." Shaw v. Delta Air Lines, Inc.,

supra, 463 U.S. at 97. Such a connection plainly exists here

since references to the plan abound in the first count of the

amended complaint. The only real question is whether the

connection here is "too tenuous, remote or peripheral ... to

warrant a finding that the [cause of action] ‘relates to’ the

plan.” Jd. at 100 n.21. The connection here cannot be so

described. This is because the plaintiffs challenge the

administration of the plan in question.

This case is not analogous to DiPietro Corp. v. Interactive

Benefits Corp., 825 F. Supp. 459 (D. Conn. 1993), and

Pace v. Signal Technology Corp., 417 Mass. 154, 628

N.E.2d 20 (Mass. 1994), the principle authorities relied on

by the plaintiffs in this regard. DiPietro was an action

brought by an employer alleging, inter alia, misrepresen-

tation and CUIPA violations. The complaint essentially

alleged that the defendant insurance company had misrep-

resented the nature of the plan in selling that plan to the

employer. Pace was an action brought by a discharged

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employee who alleged that the defendant insurance company

had falsely told him that his disability insurance would

continue while he received severance pay. Acting in reliance

on this representation, he did not obtain such insurance

elsewhere and was, subsequently, disabled during the

severance period.

Even on their own terms, DiPietro and Pace cannot be

reconciled with controlling Second Circuit precedent. See

Smith v. Dunham-Bush, Inc., 959 F.2d 6 (2d Cir. 1992);

Nealy v. U.S. Healthcare HMO, 844 F. Supp. 966, 973 n.1

(S.D.N.Y. 1994) (both holding claims of reliance on

insurance company representations to be preempted). But

the claims advanced in Hollis are, in any event, quite

different. There is no allegation in Hollis that CIGNA sold

its plan to an employer by the use of misrepresen-tation or

that the plaintiffs relied on some misrepresenta-tion to their

detriment. The complaint here, rather, focuses on CIGNA’s

removal of certain physicians from its plan. This is, in

essence, a complaint about plan administration. This is a

core ERISA concern.

A moment’s reflection will confirm why this is so. The

preemption clause "was intended to ensure that plans and

plan sponsors would be subject to a uniform body of benefits

law; the goal was to minimize the administrative and

financial burden of complying with conflicting direc-tives

among States or between States and the Federal

Government." Ingersoll-Rand Co. v. McClendon, supra, 498

U.S. at 142. Allowing state law actions like the one here

would subject plans and plan sponsors to burdens not unlike

those that the preemption clause seeks to foreclose. It is

entirely foreseeable that different state courts, construing a

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wide array of state statutory provisions and common law

principles, might develop different substan-tive standards

governing the circumstances under which health plans could

remove physicians from their lists. ‘This would, in the

language of Ingersoll-Rand, require "the tailoring of plans ...

to the peculiarities of the law of each jurisdiction. Such an

outcome is fundamentally at odds with the goal of uniformity

that Congress sought to implement." Jd.

The final question that must be addressed is whether the

CUIPA cause of action, in spite of being preempted by the

preemption clause, is saved by the savings clause. [I

conclude that it is not.

Three different judges of the United States District Court

for the District of Connecticut, as well as two United States

Magistrates, have held that claims under CUIPA are

preempted by ERISA. Fischman v. Blue Cross & Blue

Shield of Connecticut, 755 F. Supp. 528, 531 (D. Conn.

1990) (Dorsey, J.); Bailey-Gates v. Aetna Life Insurance

Co., No. 3:93CV01404 (D. Conn. Sept. 21, 1994) (Daly, J.,

approving recommended ruling of Margolis, Mag.); Lazaroff

v. Blue Cross & Blue Shield of Connecticut, Inc., 1989 WL

235958 (D. Conn. Jan. 11, 1989) (Daly, J.); Stone v. Blue

Cross & Blue Shield of Connecticut, 1988 WL 146645 (D.

Conn. Jan. 6, 1989) (Nevas, J., approving recommended

ruling of Latimer, Mag.). Judge Daly’s opinion in Lazaroff

contains the most thorough analysis and carefully considers

the three-prong analysis of Pireno and Pilot Life descri+<d

above. He acknowledges that CUIPA satisfies the third

Pireno prong (inquiring whether the cause of action is

limited to entities within the insurance industry). It does

not, however, meet either of the first two prongs. Judge

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Daly explains that: CUIPA prohibits certain practices by

insurers, but it does not directly or appreciably alter a

policyholder’s risk. Moreover, although CUIPA does affect

the policy rela-tionship between the insurer and the insured

by prohibit-ing various unfair practices, it is not integral to

the policy relationship. Unlike other statutory provisions,

see, e.g., Conn. Gen. Stat. § 38-319 et seq. (no-fault motor

vehicle insurance requirements), CUIPA does not regulate

the in-surance contract itself. Because it regulates conduct

surrounding the insurance contract rather than focusing on

the nature of the contractual relationship between the insured

and the insurer, CUIPA does not regulate the business of

insurance under the second McCarranFerguson criterion.

See Roberson v. Equitable Life Assur. Soc. of U.S., 661 F.

Supp. 416, 422 (C. D. Cal. 1987). More importantly, the

remedies provided by CUIPA conflict with the civil remedies

provided by ERISA in § 1132. As the Supreme Court has

recently concluded,

the detailed provisions of [§ 1132(a)] set forth a

comprehensive civil enforcement scheme that represents

a careful balancing of the need for prompt and fair

claims settlement procedures against the public interest

in encouraging the formation of employee benefit plans.

The policy choices reflected in the inclusion of certain

remedies and the exclusion of others under the federal

scheme would be completely undermined if

ERISA-based plan partici-pants and beneficiaries were

free to obtain remedies under state law that Congress

rejected in ERISA. Dedeaux, [481 U.S. at 54].

ERISA’s enforcement pro-visions permit beneficiaries to

recover benefits due them under the plan, to enforce

existing rights under the plan, and to clarify future

6la

rights under the plan. 29 U.S.C. § 1132(a)(1)(B). In

addition, a beneficiary may bring a civil action to enjoin

any conduct that violates ERISA or the plan or to obtain

other appropriate equitable relief. 29 U.S.C. § 1132

(a)(3). By contrast, CUIPA provides a private right of

action for money damages resulting from unfair

insurance practices.

Griswold v. Union Labor Life Ins. Co., 186 Conn. 507,

519-20, 442 A.2d 920 (1982). Such a supplementation of

ERISA’s civil enforcement provisions is contrary to

congressional intent to provide an exclusive and

comprehensive procedure for claims settlement. Lazaroff,

supra, at 2-3. (Footnote omitted.) This analysis is

persuasive. For the reasons stated by Judge Daly, the

CUIPA cause of action is not saved by the saving clause.

The motion to strike the CUIPA causes of action must

consequently be granted.

Given the analysis already set forth, the remaining causes

of action can be considered much more expeditiously.

b. CUTPA

Three cases recently decided by the United States District

Court for the District of Connecticut hold that CUTPA

claims against employee healthcare plans are preempted by

ERISA. Bailey-Gates, supra; Lazaroff, supra; Stone, supra.

The case for preemption here is even stronger than in the

case of CUIPA, because the CUTPA claims, like the

common law claims about to be discussed, do not fall within

the scope of the saving clause. "They are based on state

laws of general application that do not specifically regulate

the insurance industry....Although they may have some

62a

impact on the insurance industry and although insurers

obviously can breach contractual obligations and engage in

unfair trade practices, neither the common law actions nor

CUTPA is specifically directed at insurance companies.”

Lazaroff, supra, at 2.

c. P.A. 94-235

1994 Conn. Acts 94-235, § (e)(1) requires each preferred

provider network to file with the Commission on Hospitals

and Health Care "the general criteria for its selection or

termination of health care providers.” Section (e)(2) then

provides that, "If a network uses criteria that has not been

filed pursuant to subdivision (1) of this subsection to judge

the quality and cost-effectiveness of a health care provider’s

practice under any specific program within the network, the

network may not reject or terminate the provider

participating in that program based upon such criteria until

the provider has been informed of the criteria that his

practice fails to meet."

P.A. 94-235 does not on its face provide for a private

cause of action. Assuming, without deciding, that such a

cause of action exists, the cause of action asserted by the

Hollis plaintiffs is plainly preempted by ERISA. Section (e)

of the act has a direct impact on plan administration, and the

potential for conflict in substantive law is obvious. If such

a cause of action were allowed, it is entirely foreseeable that

different states might develop different standards —

to the same plan conduct, "requiring the tailoring of plans ..

to the peculiarities of the law of each jurisdiction.”

Ingersoll-Rand, supra, 498 U.S. at 142. Such an outcome

is fundamentally inconsistent with the preemption clause.

63a

This cause of actin is not saved by the saving clause.

P.A. 94-235 is not on its face limited to practices within the

insurance industry. This contrasts with the Virginia statute

held to be “saved” in Stuart Circle Hospital Corp. v. Aetna

Health Management, 995 F.2d 500 (4th Cir.), cert. denied,

126 L. Ed. 2d 478, 114 S. Ct. 579 (1993), which expressly

applied to "insurers." Jd. at 501. Moreover, the agency

designated for filing by P.A. 94-235 is not the Department

of Insurance but the Commission on Hospitals and Health

Care, which is part of the Department of Health Services.

Conn. Gen. Stat. § 19a-148. Although P.A. 94-235 plainly

has some impact on insurers, it is not a law that "regulates

insurance” for purposes of the saving clause. The motion to

strike this cause of action must consequently be granted.

d. Misrepresentation

The misrepresentation causes of action are preempted for

reasons already explained. In the Second Circuit, at least,

misrepresentation actions that affect plan administration

much more tenuously than those asserted in Hollis are

preempted under Smith v. Dunham-Bush, Inc., supra. As

explained above, however, the causes of action here go

directly to plan administration and are plainly preempted.

The motion to strike them must be granted.

2. Napoletano

a. Breach of Contract

The Napoletano causes of action are even more plaimy

preempted by ERISA than the causes of action asserted in

Hollis. The Hollis complaint is concerned in part with

misrepresentations made to plan beneficiaries, although its

ultimate focus on CIGNA’s removal of certain physicians

64a

from its list is clear. Napoletano, in contrast, does not even

have a misrepresentation veneer. It is a complaint brought

by physicians who directly challenge their removal from the

list. This is a direct challenge to plan administration and, as

such, is preempted by ERISA. A number of courts have

found that "ERISA preempts claims of breach of contract ...

filed by plan participants against plan providers.” Nealy v.

U.S. Healthcare HMO, 844 F. Supp. 966, 972 (S.D.N.Y.

1994) (citing authorities). The case for preemption is even

stronger when a physician brings a breach of contract action

disputing his removal from a plan’s list of participating

physicians. Conflict in the law governing such plans is

inevitable if different states are allowed to develop different

common law standards regulating the circumstances under

which such contracts can be terminated. It is a conflict of

this sort that the preemption clause was intended to

foreclose. The motion to strike the breach of contract counts

must be granted.

b. Breach of Implied Covenant of Good Faith and Fair

Dealing

The same considerations govern the counts asserting

breach of an implied covenant of good faith and fair dealing.

The motion to strike these counts must be granted.

c. Tortious Interference with Business Expectancies

The same considerations again govern the counts asserting

tortious interference with business expectancies. The

common law tort invoked by these counts does not turn on

the existence of an actual contract but, by its nature, does

require that there be "business expectations” that the law will

protect from interference. Sportsmen’s Boating Corp. v.

65a

Hensley, 192 Conn. 747, 753, 474 A.2d 780 (1984). Here,

perhaps even more than in the breach of contract counts, the

development of different state standards as to just what

“expectations” the law will recognize between a plan and its

participating physicians will result in the very patchwork of

conflicting laws governing plan administration that the

preemption clause was intended to avoid. The motion to

strike these counts must be granted.

d. CUTPA

The preemption of CUTPA claims by ERISA has already

been discussed with respect to Hollis. For the reasons

discussed above, the case for preemption is even stronger

here. The motion to strike the CUTPA counts must be

granted.

e. P.A. 94-235

The preemption of private action claims based on P.A.

94-235, assuming for purposes of argument that a private

right of action exists, has already been discussed with respect

to Hollis. For the reasons discussed above, the case for

preemption is even stronger here. The motion to strike the

P.A. 94-235 counts must be granted.

IV. CONCLUSION

For the reasons set forth above, the motions to strike the

entire complaints in Hollis and Napoletano are granted.

Jon C. Blue

Judge of the Superior Court

66a

APPENDIX C

STATE OF CONNECTICUT

SUPREME COURT

NO. SC 15283

F. BARRETT HOLLIS, ET AL.

CIGNA HEALTHCARE

OF CONNECTICUT, INC. : SEPTEMBER 18, 1996

ORDER

THE MOTION OF THE DEFENDANT, FILED AUGUST

1, 1996, FOR REARGUMENT EN BANC, HAVING

BEEN PRESENTED TO THE COURT, IT IS HEREBY

ORDERED DENIED.

BY THE COURT

/s/ FRANCIS J. DRUMM, JR.

CHIEF CLERK

67a

STATE OF CONNECTICUT

SUPREME COURT

NO. SC 15282

ROBERT S. NAPOLETANO, M.D., ET AL.

CIGNA HEALTHCARE

OF CONNECTICUT, INC. : SEPTEMBER 18, 1996

ORDER

THE MOTION OF THE DEFENDANT, FILED AUGUST

1, 1996, FOR REARGUMENT EN BANC, HAVING

BEEN PRESENTED TO THE COURT, IT IS HEREBY

ORDERED DENIED.

BY THE COURT

/s/ FRANCIS J. DRUMM, JR.

CHIEF CLERK

68a

APPENDIX D

STATUTORY PROVISIONS INVOLVED

EMPLOYEE RETIREMENT INCOME SECURITY

ACT OF 1974

TITLE I -- PROTECTION OF EMPLOYEE BENEFIT RIGHTS

SUBTITLE B -- REGULATORY PROVISIONS

Part 5 -- Administration and Enforcement

ERISA § 502, 29 U.S.C. § 1132 (1994)

(a) Persons empowered to bring a civil action

A civil action may be brought --

(1) by a participant or beneficiary --

(A) for the relief provided for in subsection (c) of this

section, or

(B) 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;

(2) by the Secretary, or by a participant, beneficiary or

fiduciary for appropriate relief under section 1109 of this

title;

(3) by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any provision of

this subchapter or the terms of the plan, or (B) to obtain

Me eo Bn) at Dm oo iE ieee Ate bbe

69a

other appropriate equitable relief (i) to redress such

violations or (ii) to enforce any provisions of this

subchapter or the terms of the plan;

ERISA § 514, 29 U.S.C. § 1144 (1994)

(a) Supersedure; effective date

Except as provided in subsection (b) of this section, the

provisions of this subchapter and subchapter III of this

chapter shall supersede any and all State laws insofar as they

may now or hereafter relate to any employee benefit plan

described in section 1003(a) of this title and not exempt

under section 1003(b) of this title. This section shall take

effect on January 1, 1975.

(b) Construction and application

(2)(A) Except as provided in subparagraph (B), nothing in

this subchapter shall be construed to exempt or relieve any

person from any law of any State which regulates insurance,

banking, or securities.

(B) Neither an employee benefit plan described in

section 1003(a) of this title, which is not exempt under

section 1003(b) of this title (other than a plan established

primarily for the purpose of providing death benefits), nor

any trust established under such a plan, shall be deemed to

be an insurance company or other insurer, bank, trust

company, or investment company or to be engaged in the

business of insurance or banking for purposes of any law of

70a

any State purporting to regulate insurance companies,

insurance contracts, banks, trust companies, or investment

companies.

CONNECTICUT UNFAIR TRADE PRACTICES ACT

Conn. Gen. Stat. § 42-110b (1992 and Supp. 1996)

(a) No person shall engage in unfair methods of

competition and unfair or deceptive acts or practices in the

conduct of any trade or commerce.

(b) It is the intent of the legislature that in construing

subsection (a) of this section, the commissioner and the

courts of this state shall be guided by interpretations given

by the Federal Trade Commission and the federal courts to

Section 5 (a) (1) of the Federal Trade Commission Act (15

USC 45 (a) (1)), as from time to time amended.

54, establish by regulation acts, practices or methods which

shall be deemed to be unfair or deceptive in violation of

subsection (a) of this section. Such regulations shall not be

inconsistent with the rules, regulations and decisions of the

federal trade commission and the federal courts in

interpreting the provisions of the Federal Trade Commission

Act.

{d) It is the intention of the legislature that this chapter be

remedial and be so construed.

be OOC PLONE IEE A Mb 20ND

Tila

CONNECTICUT UNFAIR INSURANCE PRACTICES

ACT

Conn. Gen. Stat. § 38a-816 (1992 & Supp. 1996)

The following are defined as unfair methods of

competition and unfair and deceptive acts or practices in the

business of insurance:

(1) Misrepresentations and false advertising of insurance

policies. Making, issuing or circulating, or causing to be

made, issued or circulated, any estimate, illustration, circular

or statement, sales presentation, omission or comparison

which: (a) Misrepresents the benefits, advantages,

conditions or terms of any insurance policy; (b)

misrepresents the dividends or share of the surplus to be

received, on any insurance policy; (c) makes any false or

misleading statements as to the dividends or share of surplus

previously paid on any insurance policy; (d) is misleading

or is a misrepresentation as to the financial condition of any

person, or as to the legal reserve system upon which any life

insurer operates; (e) uses any name or title of any insurance

policy or class of insurance policies misrepresenting the true

nature thereof; (f) is a misrepresentation for the purpose of

inducing or tending to induce to the lapse, forfeiture,

exchange, conversion or surrender of any insurance policy;

(g) is a misrepresentation for the purpose of effecting a

pledge or assignment of or effecting a loan against any

insurance policy; or (h) misrepresents any insurance policy

as being shares of stock.

72a

CONNECTICUT MANAGED CARE ACT

Conn. Gen. Stat. § 19a-166b (Supp. 1996)

(a) As used in this section and subsection (b) of section

20-138b: . . . (3) "Preferred provider network" means an

arrangement in which agreements relating to the health care

services to be rendered by providers, including the amounts

to be paid to the providers for such services, are entered into

between such providers and a person who establishes,

operates, maintains or underwrites the arrangement, in whole

or in part, and shall include any provider-sponsored

preferred provider network or independent practice

association that offers network services. . . .

(b) All preferred provider networks shall file with the

Commission on Hospitals and Health Care prior to the start

of enrolment. Any preferred provider network existing as of

October 1, 1993, shall file within sixty days of said date. All

networks shall annually update said filing by July first

commencing July 1, 1994. The filing required by such

network shall include the following information, except

where such information is filed with the insurance

department: . . . (2) a general description of the preferred

provider network, including its geographical service area, the

names of the hospitals included in the network and the names

listed by speciality, of the providers included in the network;

and (3) the name and address of the person to whom

applications may be made for participation.

(e) (1) Each preferred provider network shall file with

73a

the Commission on Hospitals and Health Care and make

available upon request from a provider, the general criteria

for its selection or termination of health care providers.

Disclosure shall not be required of criteria deemed by the

network to be of a proprietary or competitive nature that

would hurt the network’s ability to compete or to manage

health services. For purposes of this section, disclosure of

criteria is proprietary or anticompetitive if it has the

tendency to cause health care providers to alter their practice

pattern in a manner that would circumvent efforts to contain

health care costs and is proprietary if revealing criteria

would cause the network’s competitors to obtain valuable

business information.

(2) If a network uses criteria that have not been filed

pursuant to subdivision (1) of this subsection to judge the

quality and cost-effectiveness of a health care provider’s

practice under any specific program within the network, the

network may not reject or terminate the provider

participating in that program based upon such criteria until

the provider has been informed of the criteria that his

practice fails to meet.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.