Opposition Brief — Corcoran v. United Healthcare, Inc.

Supreme Court brief1992

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No. 92-547 | ns

ees GES |

In The

Supreme Court of the United States

October Term, 1992

FLORENCE B. CORCORAN, WIFE OF/AND

WAYNE D. CORCORAN,

Petitioners,

versus

UNITED HEALTHCARE, INC AND BLUE CROSS

AND BLUE SHIELD OF ALABAMA, INC.,

Respondents.

Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

BRIEF IN OPPOSITION TO THE PETITION

FOR WRIT OF CERTIORARI

Rospert K. McCatta

(Counsel of Record)

McCa.La, THOMPSON, PyBURN & RIDLEY

Poydras Center — Suite 2800

650 Poydras Street

New Orleans, Louisiana 70130

Telephone (504) 524-2499

Attorneys for Respondents

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

(1) Whether the Fifth Circuit Court of Appeals cor-

rectly decided that the Employee Retirement Income

Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq.,

preempts state law claims, including claims for wrongful

death and medical malpractice, against administrators of

an ERISA plan who were acting in their capacity as plan

administrators.

(2) Whether the Fifth Circuit Court of Appeals cor-

rectly decided that, assuming (a) Petitioner stated a claim

under ERISA Section 502(a)(3)(B), 29 U.S.C.

§ 1132(a)(3)(B), and (b) this provision allowed recovery of

extracontractual money damages as equitable relief,

ERISA did not authorize emotional distress and mental

anguish damages against a plan administrator.

LIST OF ALL PARTIES

TO THE PROCEEDINGS BELOW

Florence B. Corcoran

Wayne D. Corcoran

United HealthCare, Inc.

Blue Cross and Blue Shield of Alabama, Inc.!

' Pursuant to Sup.Ct.R. 29.1, Respondents inform the

Court that United HealthCare, Inc. has no parent companies or

nonwholly owned subsidiaries, and Blue Cross and Blue Shield

of Alabama, Inc. has no parent companies or nonwholly owned

subsidiaries.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ........... i

LIST OF ALL PARTIES TO THE PROCEEDINGS

OE ae aes ee of ae eA ii

me sb a iii

ge Vi

pe ee ee go a ae 1

ge 8 dy. a l

B. COURSE OF PROCEEDINGS AND DISPOSI-

BUEN GE SG ARES MPESGAIEY 6c cee cae saccnes 6

SUMMARY OF THE ARGUMENT ................. 9

ees ca ph ces 64se wes Occ ek 9

REASONS FOR DENYING THE PETITION....... )

A. THE DECISION BELOW WAS CORRECT.... 9

B. THE PETITION DOES NOT PRESENT ANY OF

THE REQUISITE FACTORS CONSIDERED BY

THIS COURT IN GRANTING A PETITION

RE ey ee ee oe re 11

1. There is no conflict in the circuits over

whether professional malpractice actions

such as this one are preempted by 29 USC

a eres Can wkd coke wee OO 1]

a. The allegedly conflicting case is distin-

guishable on its facts and law........ 1]

b. The preemption discussion is dictum

and thus does not constitute a conflict-

RE ik acai sca bok 4 kee ees 13

TABLE OF CONTENTS —- Continued

Page

c. Even assuming the footnote preemp-

tion discussion constitutes a “decision,”

it is not a conflicting decision........

The Fifth Circuit Decision Does Not Con-

flict With Any Supreme Court Decision

Construing 29 USC § 1144(a) Or The Legis-

lative Purpose Embodied In ERISA.......

a. The Fifth Circuit decision does not con-

flict with this Court’s decision in

PERE EET eee Pee eT er eee

b. The Fifth Circuit decision does not con-

flict with the legislative purpose of

ER Pe Os, denn Pony oan Sent See

The Decision Of The Fifth Circuit Below Does

Not Conflict With Decisions In Other Circuits

Or Present An Unsettled Question Of Law

Regarding Whether Extracontractual Dam-

ages Are Recoverable Under ERISA

§ 502(a)(3)(B), Because This Question Was Not

Decided By The Fifth Circuit ..............

C. THE DECISION OF THE FIFTH CIRCUIT

ALSO MAY BE AFFIRMED ON OTHER

CaP NPE sh 6a 6 es Cech aa eee Kee ee nens

ERISA Does Not Permit Recovery Of

Extracontractual Or Compensatory Dam-

Even If Compensatory Or Other Extra-

contractual Damages Were Available

Under ERISA, Plaintiff Has No Claim

Under ERISA, Because Defendants Did

Not Breach Any ERISA Fiduciary Duties

Ce Py re eee ere ee re

TABLE OF CONTENTS ~— Continued

Page

APTN Wn oss 4s on Eee ee eee PU 29

PAE SEONG OE 0a hee eines N0atk eed ees LEE A-1

TABLE OF AUTHORITIES

Page

Cases

Boland v. Chrysler Corp., 933 F.2d 1007, 13 E.B.C.

Bane (GC CAG. BOGE). oon cen cevererccnsevesnseenens 26

Chauffeurs, Teamsters and Helpers, Local No. 391 v.

Terry, 494 U.S. 558, 110 S.Ct. 1339 (1990).......... 11

Caterpillar, Inc. v. Williams, 482 U.S. 386, 107 S.Ct.

de CRGMFD in neces ce chosen een dnb 4ananenneyesass 22

Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d

8 i) ee ee ee eee 13

Danos v. St. Pierre, 402 So.2d 633 (La.1981).......... 20

Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208

(8th Cir.), cert. dented, 454 U.S. 968, 102 S.Ct. 512

and 454 U.S. 1084, 102 S.Ct. 641 (1981)............ 25

Drinkwater v. Metropolitan Life Ins. Co., 846 F.2d 821

(Ist Cir. 1988), cert. denied, 488 U.S. 909, 109

SAC. 261 (FORE)... cask renner siscurneasactunenys 25

Elsesser v. Hospital of Philadelphia College of Osteo-

pathic Medicine, Parkview Div., 1992 U.S. Dist.

LEXIS 16066 (E.D.Pa. 1992) «00s ccscsnvcenwnes 15-16

Forys v. United Food & Commercial Worker's Int'l

Union, 829 F.2d 603 (7th Cir. 1987)................ 25

Ft. Halifax Packing Co. v. Coyne, 482 U.S. 1, 107

PAN, BERd CUTTER, 5c ccc cecscacccureseenietataseees 17

Hancock v. Montgomery Ward Long Term Disability

Trust, 787 F.2d 1302 (9th Cir. 1986)..... eee T vere 25

ndependence HMO, Inc. v. Smith, 733 F.Supp. 983

CADPR. TID) oie sedans canon ecesncitanieseaceneuts 12

Ingersoll-Rand v. McClendon, 498 U.S. 133, 111 S.Ct

G70 CIPD) oon ice vec cessevexnencs 6, 17, 18, 21, 23, 26

——

Vii

TABLE OF AUTHORITIES - Continued

Page

Kleinhans v. Lisle Sav. Profit Sharing Trust, 810 F.2d

gi, Ee a Se errr rrr ers reese 25

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

486 U.S. 825, 108 S.Ct. 2182 (1988)...... 14, 16-18, 20

Massachusetts Mutual Life Ins. Co. v. Russell, 473

U.S. 136, 105 S.Ct. 3065 (9965)........ 11, 2%, 27, 2

McRae v. Seafarer’s Welfare Plan, 920 F.2d 819, reh’g

denied (en banc), 931 F.2d 901 (11th Cir. 1991)..... 25

Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S.

Fay RE ak. Be (EIS oe kn Sa we oen coe ees 20, 21

Morales v. Pan American Life Ins. Co., 914 F.2d 83

Oe ye os ae ee Uh een ER UN Maree hee 25

Morales v. Trans World Airlines, Inc., ik.

ge Bs ae ey. eee reer rr er Tr rer rer 20

Painters of Philadelphia Dist. Council No. 21 Welfare

Fund v. Price Waterhouse, 879 F.2d 1146 (3d Cir.

RN ESD APRS Ie ii Lehre aes Me 11-16

Pickett v. Cigna Healthplan of Texas, Inc., 742

Fees. SOR. CRA). TR, Thee aces sss capctedvendans 12

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct.

oR ys errr rere Torr rer rr tree 8, 14, 18, 27

Pohl v. National Ben. Consultants, Inc., 956 F.2d 126

i, ek eer ae rrr ee Pee rey 22

Powell v. Chesapeake & Potomac Tel. Co., 780 F.2d

419 (4th Cir. 1985), cert. denied, 476 U.S. 1170,

SOR ae TD hes cen nyadsaavnanenweeces 25

Reinking v. Philadelphia American Life Ins. Co., 910

ber 2 ge ee, | rere TCT er rer Ter Ty 25

Vill

TABLE OF AUTHORITIES — Continued

Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 104

ee Ee err rere rrr re re tert ee tT 21

Sokol v. Bernstein, 803 F.2d 532 (9th Cir. 1986)....25, 27

Sommers Drug Stores Co. Employee Profit Sharing

Trust v. Corrigan Enterprises, Inc., 793 F.2d 1456

(5th Cir. 1986), cert. denied, 479 U.S. 1034, 107

S.Ct. 884 and 479 U.S. 1089, 107 S.Ct. 1298 (1987) .10, 25

Verhola v. Doe, 820 F.2d 809 (6th Cir. 1987).......... 25

Warren v. Society Nat. Bank, 905 F.2d 975 (6th Cir.

1990), cert. denied, 111 S.Ct. 2256 (1991)........... 26

STATUTES

ee ns ie eC eR Cae ea eee oS hoes 6

ee Ra ae SS ees eee tee SAS ie een eee ews 6

RUC Tad a Fee re eee Terre ree i

29 USA... & TiGs, ERA Section GP .......05000% a ar

29 U.S.C. § 1132(a), ERISA Section 502(a)........ 24-27

29 U.S.C. § 1132(a)(2), ERISA Section 502(a)(2)...... 25

29 US.C. § 1132(a)(3), ERISA Section 502(a)(3). .7, 8, 23-27

29 U.S.C. § 1132(a)(3)(B), ERISA Section

IS 2 is ys eh ea ca nee aa oes i, 10, 23, 26, 27

29 U.S.C. § 1132(e)(1), ERISA Section 502(e)(1)....... 6

29 U.S.C. § 1132(g), ERISA Section 502(g)........... 28

29 U.S.C..§ 1140, ERISA Section 510 ................ 26

29 U.S.C. § 1144(a), ERISA Section 514(a)........ 11, 16

TABLE OF AUTHORITIES — Continued

Page

RULES

LS Se Sn ere reer rer reer err eS 24, 29

a8 eS Pree errr erie Tet erer errr reer coy 19

et et eee ee rere Tee eer rr ey ee

ee ees ii

STATEMENT OF THE CASE

A. STATEMENT OF FACTS?

Petitioner, Florence B. Corcoran,® is an employee of

South Central Bell Telephone Company entitled to certain

medical and hospitalization benefits under the BellSouth

Medical Assistance Plan (the “Plan”), a self-funded

ERISA welfare benefit plan. BellSouth Corporation is the

Plan Sponsor and Administrator. Various BellSouth sub-

sidiaries, including South Central Bell, participate in the

Plan. Pursuant to express Plan authority, BellSouth desig-

nated Blue Cross and Blue Shield of Alabama, Inc. (“Blue

Cross”) as the Claims Administrator, and United Health-

Care, Inc. (“United”) as the administrator of the Quality

Care Program, a component of the Plan. As Plan Admin-

istrators, Blue Cross and United are ERISA fiduciaries.*

The linchpin of Petitioner’s argument throughout

these proceedings has been that the relationship between

Petitioner and United is similar to the relationship

between physician and patient, and that Petitioner’s

claims are based entirely on United’s alleged medical

negligence. This is untrue. Petitioner has admitted that

the only relationship between Petitioner and United was

the result of Petitioner’s status as a Plan participant and

2 Because Respondents take issue with Petitioners’ presen-

tation of the facts of this case, Respondents set forth the “State-

ment of Facts” in order to preserve their right to contest

Petitioners’ version. See Sup.Ct.R. 15.1.

3 Respondents will refer to Ms. Corcoran as “Petitioner.”

Respondents will not discuss Mr. Corcoran’s claims separately,

as they are entirely dependent upon the claims of Ms. Corcoran.

Respondents expressly make any statement regarding Ms. Cor-

coran’s claims equaliy applicable to those of Mr. Corcoran.

4 As the Fifth Circuit noted, Petitioners challenge only find-

ings regarding their claims against United. The Petition to this

Court also refers only to United.

ee ...aaaQ00

United’s fulfillment of its responsibilities as the adminis-

trator of the Quality Care Program. (Appellees’ Rec. Exc.,

p. 010, ¥ 31).5 The District Court held as a matter of law

that the Plan documents unambiguously refuted any

claim that United acted as Petitioner’s physician. Peti-

tioners’ Appendix (“Pet. App.”) at A-50. The Fifth Circuit

held United makes medical decisions only in the context

of making benefits determinations under the Plan. 965

F.2d at 1331, Pet. App. at A-21.

United’s responsibilities under the Plan are to deter-

mine what benefits will be paid for a participant’s treat-

ment, as set forth in an explanatory booklet concerning

the Quality Care Program (“Explanatory Booklet”)

(Appellants’ Rec. Exc., No. 5) and in the Summary Plan

Description (“SPD”) (Appellees’ Rec. Exc., p. 028), which

were both given to Petitioner. The Explanatory Booklet

describes United’s role as follows:

Basically, QCP [Quality Care Program] works

directly with your doctor. If your doctor recom-

mends that you have surgery or go into the

hospital for some kind of treatment, he or she

simply telephones United HealthCare on a toll-

free number and discusses your condition with

a staff member. United will then advise your

doctor what the medical plan will pay for, based

on a review of your clinical information and |

nationally accepted medical guidelines for the |

treatment of your condition.

(Appellants’ Rec. Exc., p. 16).

The Explanatory Booklet specifically tells the partici-

pant United is not her physician:

In contrast, Quality Care is not:

an attempt to limit your access to health care.

You can always get any kind of treatment that

> References are to the Record Excerpts filed with the Fifth

Circuit Court of Appeals by Petitioners herein (“Appellants’

Rec. Exc.”) and by Respondents herein (“ Appellees’ Rec. Exc.”).

you wish. However, you may have to pay a

portion of the cost.

an attempt to interfere in the relationship

between you and your doctor. You are free to

consult any physician you wish.

(Appellants’ Rec. Exc., p. 17).

The Explanatory Booklet explains that the conse-

quence of not using United’s services is that benefits

under the Plan are reduced by 20% up to a maximum of

$1,250. (Appellants’ Rec. Exc., p. 20). Petitioner was speci-

fically advised in the Explanatory Booklet that she is not

required to use United’s services and that she can

“always get any kind of treatment that you wish”, but

that, “[h])owever, you may have to pay a portion of the

cost.”

To support the incorrect premise of this lawsuit, the

existence of a physician-patient relationship between

United and Petitioner, Petitioner cites portions of the

booklet which state United is an independent profes-

sional medical review organization and discuss its profes-

sional staff. Pet. Brief at 3. These positive descriptions of

United’s professional nature are hardly sufficient to

prove United was Petitioner’s physician. Petitioner also

points to some language discussing the unnecessary sur-

geries that occur in the United States. Pet. Brief at 3-4.

This discussion, however, is in the context of explaining

“runaway health care costs.” (Appellants’ Rec. Exc., p.

16-17). These statements are followed by the explicit pro-

vision that the program is not an attempt to limit Peti-

tioner’s access to health care or to interfere in the

relationship between Petitioner and her doctor. (Appel-

lants’ Rec. Exc., p. 17).

The nature of the relationship between Petitioner and

United is similarly explained in the SPD which was pro-

vided to Petitioner (Appellees’ Rec. Exc., p. 003, { 8):

The Quality Care Program (QCP), administered

by United HealthCare, Inc., assists you and vour

covered dependents in securing quality m-dical

care according to the provisions of the Plan

while helping reduce risk and expense due to

unnecessary hospitalization and surgery. They

do this by providing you with information

which will permit you (in consultation with

your doctor) to evaluate alternatives to surgery

and hospitalization when those alternatives are

medically appropriate. In addition, QCP will

monitor any certified hospital confinement to

keep you informed as to whether or not the stay

is covered by the Plan.

* * *

When reading this booklet, remember that all

decisions regarding your medical care are up to

you and your doctor.®

(Appellees’ Rec. Exc., p. 029).

The SPD also explains that the consequences of not

following the procedures with United are that Petitioner

might have to pay 20% of the benefits from her own

pocket, up to $1250. (Appellees’ Rec. Exc., p. 029-30). If a

claim for benefits is denied, the Plan sets forth appeal

procedures (Appellees’ Rec. Exc., p. 031).

Pursuant to the Quality Care Program procedures,

when Ms. Corcoran was diagnosed during her pregnancy

as having high blood pressure and preeclampsia, she and

her doctor, Dr. Jason Collins, contacted United concern-

ing her medical care and hospitalization benefits under

the Pian. Petitioner admitted in the District Court that the

purpose of Dr. Collins’s call to United was to determine

her Plan benefits. This was set forth in the Statement of

Uncontested Material Facts as follows:

6 This statement is repeated in the SPD, at the end of the

introductory explanation of the Quality Care Program, in bold

print. (Appellees’ Rec. Exc., p. 030).

Pursuant to the Quality Care Program pro-

cedures set forth in the Summary Plan Descrip-

tion, when Ms. Corcoran became pregnant in

1989 and was diagnosed by her doctor, Dr. Jason

Collins, as having high blood pressure and pre-

eclampsia, United HealthCare was contacted by

Dr. Collins and by Ms. Corcoran concerning her

medical care and hospitalization benefits under

the Plan. (Affidavit of Donna Armer).

(Appellees’ Rec. Exc., p. 010, ¥ 30).

Petitioner also admitted in the District Court that her

claims all relate to the ERISA plan:

Plaintiffs’ claims that United HealthCare

and Blue Cross negligently deprived Ms. Cor-

coran of medical care, or hospitalization or oth-

erwise engaged in negligent acts as

administrators of the BellSouth Medical Assis-

tance Plan all have a connection with or refer-

ence to the Plan and therefore relate to the Plan.

(Appellees’ Rec. Exc., p. 010-11, 4 32).

In her Petition to this Court, Petitioner states, “the

suit was not premised on improper claims processing or

coverage determination, but rather upon United Health-

Care’s negligence in failing to determine the appropriate

medical care for Mrs. Corcoran.” Pet. Brief at 5-6. Regard-

less of how Petitioner characterizes her claim, the undis-

puted facts establish that her complaint is directed at

United, a fiduciary and administrator of the Plan; com-

plains about actions by United in its capacity as plan

administrator; and complains about specific actions and

judgments allegedly made by United about whether the

Plan should authorize payment for Petitioner’s hospital-

ization. As the Fifth Circuit correctly held, “The existence

of a true doctor-patient relationship between Mrs. Cor-

coran and United . . . is dubious at best.” 965 F.2d at 1337,

Pet. App. at A-35. “United makes medical decisions as

part and parcel of its mandate to decide what benefits are

available under the... plan.” 965 F.2d at 1332, Pet. App.

at A-24.

B. COURSE OF PROCEEDINGS AND DISPOSI-

TION OF CASE BELOW

Petitioners filed suit on October 8, 1990, in the 22nd

Judicial District Court for the Parish of St. Tammany,

State of Louisiana, alleging United and Blue Cross negli-

gently deprived Ms. Corcoran of medical care or hospital-

ization, and improperly provided inadequate medical

oversight and incomplete medical information in connec-

tion with Petitioner’s claim for benefits.

The Respondents removed the action to the United

States District Court for the Eastern District of Louisiana

on October 30, 1990, under 28 U.S.C. § 1331, because the

claims arise under and are preempted by ERISA, and the

district courts have jurisdiction over ERISA actions pur-

suant to Section 502(e)(1) of ERISA, 29 U.S.C.

§ 1132(e)(1).7

The District Court on March 8, 1991, granted Respon-

dents’ Motion for Summary Judgment. The District Court

held ERISA preempted Petitioners’ state law claims

because the ERISA plan was the source of the relationship

between the Corcorans and defendants, and thus the

claims related to the plan:

Here, the existence of the ERISA plan “is a

critical factor in establishing liability under” the

plaintiffs’ would-be state-law malpractice claim.

Cf. Ingersoll-Rand, 498 U.S. at , 111 S.Ct. at

eae

Without the ERISA plan, the plaintiffs could

not establish — as an issue of fact — that the

? Another basis for removal was complete diversity among

Plaintiffs and Defendants, 28 U.S.C. § 1332.

defendants breached any duty to them, for the

source of the defendants’ obligations arose from

the ERISA plan itself... .

Pet. App. at A-44 to A-45.* The District Court on April 4,

1991 denied Petitioners’ Motion for Reconsideration,

declining to deviate from the majority rule that “a bene-

ficiary under an ERISA health plan may not recover

under section 509(a)(3) [sic] of ERISA compensatory or

consequential damages for emotional distress or other

claims beyond medical expenses covered by the plan.”

Pet. App. at A-49.% The District Court held this case did

not implicate the concern over lack of a remedy because

the plaintiffs did have a remedy when informed that

hospital care would not be covered. The District Court

also rejected Petitioners’ position because under the lan-

guage of § 502(a)(3), absent a violation of the terms of

ERISA, there could be no claim for damages, and “plain-

tiffs can show no duty that the defendants allegedly

breached under ERISA.” The District Court held as a

matter of law that the Plan documents unambiguously

refuted any claim that United acted as Petitioner’s physi-

cian. Pet. App. at A-50.

The Fifth Circuit affirmed the District Court’s grant

of summary judgment to Respondents. The Fifth Circuit

held that the Corcorans’ claims were preempted, because

any actions by United were performed in its role as an

ERISA plan administrator:

Ultimately, we conclude that United makes

medical decisions — indeed, United gives medi-

cal advice — but it does so in the context of

® Respondents disagree with Petitioner’s statement that the

District Court reached a decision “[w]ithout actually analyzing

the nature and source of the Corcorans’ claim.” Pet. Brief at 6.

® The relevant ERISA provisions are set forth in Petitioners’

Appendix, at A-51 to A-53.

making a determination about the availability of

benefits under the plan.

+ + + *

... The principle of Pilot Life that ERISA pre-

empts state-law claims alleging improper han-

dling of benefit claims is broad enough to cover

the cause of action asserted here.

965 F.2d at 1331, 1332, Pet. App. at A-21, A-24.!° The Fifth

Circuit also explicitly held “the lack of an ERISA remedy

does not affect a pre-emption analysis.” 965 F.2d at 1333,

Pet. App. at A-27.

With respect to the claim for extracontractual dam-

ages under § 502(a)(3), the Fifth Circuit expressly preter-

mitted the issues of whether Plaintiffs had stated a claim

under the provision, and whether the provision permits

the recovery of extracontractual damages within the

meaning of “other equitable relief.” Instead, the Fifth

Circuit resolved the claim for damages by concluding that

even if the Corcorans had stated a claim and even if such

damages were within the statutory meaning of “equitable

relief,” the Petitioners would not be entitled to damages

under the circumstances of this case, based on principles

of trust and contract law. “The existence of a true doctor-

patient relationship between Mrs. Corcoran and United

which could support a contractual theory of recovery is

dubious at best,” 965 F.2d at 1337, Pet. App. at A-35, and

“the lack of a true doctor-patient relationship between

Mrs. Corcoran and United undermines . . . recovery” on

the basis of a breach of a fiduciary relationship, 965 F.2d

at 1338, Pet. App. at A-36.

10 Petitioner is incorrect that “the Fifth Circuit agreed with

the Corcorans’ position that United HealthCare made medical

decisions ...” Pet. Brief at 7. The Fifth Circuit stated expressly

that it “cannot fully agree with either United or the Corcorans.”

965 F.2d at 1331, Pet. App. at A-21.

SUMMARY OF THE ARGUMENT

Petitioner has failed to show any special or important

reasons this Court should grant her Petition.

The holdings of the District Court and the Fifth Cir-

cuit Court of Appeals were correct as a matter of law.

ERISA contains an explicit, broad preemption clause,

under which Petitioner’s claims were correctly held pre-

empted, and a comprehensive civil enforcement scheme

which was correctly held not to provide the type of

remedies sought by Petitioners in this case.

Furthermore, Petitioner has failed to present any

decisions of this Court or any other circuit court of

appeals which conflict with the decision below regarding

preemption; the one case presented is clearly distinguish-

able on its facts and law. With respect to damages, the

Fifth Circuit correctly decided Petitioners were not enti-

tled to emotional distress or mental anguish damages

under ERISA. However, the Fifth Circuit expressly did

not decide whether ERISA generally provides extra-

contractual remedies; thus, this is an issue not appropri-

ate for review in this case. Although the Fifth Circuit

expressly pretermitted the issues of whether ERISA gen-

erally provides extracontractual relief, or whether Peti-

tioners had stated a cause of action for damages,

authority in a majority of circuits provides an indepen-

dent ground for affirming the result reached.

ARGUMENT

REASONS FOR DENYING THE PETITION

A. THE DECISION BELOW WAS CORRECT

The Court of Appeals’ two holdings in the instant

case are legally correct, and consistent with prior decisions

of this Court and those of other circuit courts. Thus, no

review is needed or required.

The Court of Appeals held ERISA preempts the Peti-

tioner’s claims because even though the Court concluded

United makes medical decisions, “it does so in the con-

text of making a determination about the availability of

benefits under the plan.” 965 F.2d at 1331, Pet. App. at

A-21. As the court correctly stated,

Congress perhaps could not have predicted the

interjection into the ERISA “system” of the med-

ical utilization review process, but it enacted a

pre-emption clause so broad and a statute so

comprehensive that it would be incompatible

with the language, structure and purpose of the

statute to allow tort suits against entities so

integrally connected with a plan.

965 F.2d at 1334, Pet. App. at A-27. The Court of Appeals

properly applied the explicit and expansive ERISA pre-

emption clause, in accord with Congressional intent and

clear precedent.

Even assuming that the Corcorans state a claim for

relief under § 502(a)(3)(B), and that extracontractual dam-

ages are an available remedy thereunder, the Fifth Circuit

correctly decided that the facts of the instant case did not

entitle the Corcorans to money damages under well-

established trust and contract law principles because

Petitioner seeks “make-whole” damages which cannot be

available absent a “true doctor-patient relationship.”?!

11 The damages sought also should be unavailable because

they do not constitute “other appropriate equitable relief.” Som-

mers Drug Stores Co. Employee Profit Sharing Trust v. Corrigan

Enterprises, Inc., 793 F.2d 1456, 1463 (5th Cir. 1986), cert. denied,

479 U.S. 1034, 107 S.Ct. 884 and 479 U.S. 1089, 107 S.Ct. 1298

(1987). Equitable relief consists of remedies such as rescission,

Further, the six carefully integrated civil enforcement

provisions demonstrate that Congress did not intend to

authorize any remedies under ERISA other than those

expressly set forth in the statute. Massachusetts Mutual

Life Ins. Co. v. Russell, 473 U.S. 134, 146, 105 S.Ct. 3085,

3092 (1985). This Court was “reluctant to tamper with an

enforcement scheme crafted with such evident care as the

one in ERISA.” Russell, 473 U.S. at 147, 105 S.Ct. at 3093.

B. THE PETITION DOES NOT PRESENT ANY OF

THE REQUISITE FACTORS CONSIDERED BY

THIS COURT IN GRANTING A PETITION

FOR WRIT

1. There is no conflict in the circuits over

whether professional malpractice actions

such as this one are preempted by 29 USC

§ 1144(a).

a. The allegedly conflicting case is distin-

guishable on its facts and law.

Appellants cite only one circuit court case, Painters of

Philadelphia Dist. Council No. 21 Welfare Fund v. Price

Waterhouse, 879 F.2d 1146 (3d Cir. 1989), which purpor-

tedly conflicts with the decision of the Fifth Circuit in this

removal of a trustee or appointment of a receiver. Id. Like puni-

tive damages, compensatory damages are not “equitable relief,”

but are legal in nature. Chauffeurs, Teamsters and Helpers, Local

No. 391 v. Terry, 494 U.S. 558, 110 S.Ct. 1339, 1347-48 (1990). The

Supreme Court noted in Massachusetts Mut. Life Ins. Co. v.

Russell, 473 U.S. 134, 105 S.Ct. 3085 (1985), that originally the

civil enforcement provision provided for “the full range of legal

and equitable remedies available in both state and federal

courts.” 473 U.S. at 146, 105 S.Ct. at 3092. In the bill ultimately

adopted, however, the reference to legal remedies was omitted,

indicating an affirmative choice by Congress to eliminate those

remedies. Id.

case. Painters is distinguishable on its law and facts, and

thus does not present a conflict.

In Painters, an employee welfare fund and its trustees

sued the fund’s former auditor under ERISA, alleging the

auditors had a fiduciary duty to the plan to conduct

audits in accordance with generally accepted accounting

principles, and had breached this duty by failing ade-

quately to investigate and evaluate fees and expenses

charged by the plan administrator. The Third Circuit

affirmed the district court’s dismissal for failure to state

an ERISA claim because (1) the auditor was not a fiduci-

ary, and (2) ERISA provided no express or implied cause

of action against a non-fiduciary under the circumstances

of that case.

Factually, the case is completely dissimilar from the

claim sub judice. In Painters, a plan and its trustees sued

an entity it had retained to perform services. The relation-

ship which formed the basis of the dispute was nc vne

intended to be regulated by ERISA. The legal pos’ ure of

the case differs because it was brought in Federal court

by the fund under ERISA, and the issue was whether

ERISA provided a cause of action.!?

12 The district court cases cited by Petitioner to show a

conflict among circuits are also distinguishable. Pickett v. Cigna

Healthplan of Texas, Inc., 742 F.Supp. 946 (S.D. Tex. 1990), was a

suit against Cigna as operator of a health maintenance organiza-

tion, acting independently from its capacity as plan administra-

tor, in contrast to United, which was acting pursuant to its

authority and responsibility under the Plan. Independence HMO,

Inc. v. Smith, 733 F.Supp. 983 (E.D.Pa. 1990) was correctly held

by the Fifth Circuit to be distinguishable on its facts because

“the medical decisions at issue do not appear to have been made

in connection with a cost containment feature of the plan or any

other aspect of the plan which implicated the management of

b. The preemption discussion is dictum

and thus does not constitute a conflict-

ing decision

Preemption was not a determinative factor in

Painters; the court did not need to address preemption at

all to reach a decision on whether ERISA provided a

cause of action. Thus, the Third Circuit’s footnote discus-

sion of preemption, 879 F.2d at 1153 n.7, is merely dictum,

and Petitioner’s presentation of this discussion as evi-

dence of a conflict among circuits is incorrect.!3

plan assets, but were instead made by a doctor in the course of

treatment.” 965 F.2d at 1333 n. 16, Pet. App. at A-26 n.16.

13 This is obscured by Petitioners’ failure to distinguish

between the preemption analysis in this footnote and the

implied cause of action analysis in the body of the Painters

opinion. Following their reference to the Painters preemption

discussion, Petitioners write,

The court premised its conclusion upon the facts that

1) professional malpractice liability was a matter of

traditional state regulations, and 2) there was no

explicit provision in ERISA to permit such actions

under its provision if state law were preempted.

Pet. Brief at 12 (emphasis added). This suggests the Painters

court premised its preemption conclusion on the listed factors,

but the opinion does not support this. The court in its footnote

does not discuss any relationship between preemption and

whether or not professional liability is traditionally a matter of

state law. Rather, the court’s conclusion that no cause of action

should be implied, following the Cort v. Ash, 422 U.S. 66, 95 S.Ct.

2080, 45 L.Ed.2d 26 (1975), four-factor analysis, was based, inter

alia, on the fact that professional liability was traditionally a

matter of state law. 879 F.2d at 1152-1153. Furthermore, the

Painters court nowhere suggests that its Cort analysis depends

on a preemption determination.

c. Even assuming the footnote preemption

discussion constitutes a “decision,” it is

not a conflicting decision.

Even assuming, arguendo, that the footnote discussion

of preemption is an adjudication of the matter, the Fifth

Circuit’s decision below and Painters are reconcilable and

do not establish a conflict among circuits.

The court in Painters relied on this Court’s decision in

Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S.

825, 108 S.Ct. 2182 (1988) in concluding that professional

malpractice actions in general were not preempted by

ERISA. Mackey, and the cases it cited in dictum in the

paragraph referenced by Petitioner, not only do not con-

flict with but in fact support the Fifth Circuit decision

below.

The court in Painters concluded only that “ERISA

does not generally preempt state professional malpractice

claims.” 879 F.2d at 1153 n.7. Such a holding does not

conflict with the Fifth Circuit decision below, which held

specifically that a state “tort action... for... wrongful

death allegedly resulting from United’s erroneous medi-

cal decision is preempted by ERISA.” 965 F.2d at 1331,

Pet. App. at A-21. As the Fifth Circuit explained, a “tort

allegedly committed in the course of handling a benefit

determination” is preempted under Pilot Life Ins. Co. v.

Dedeaux, 481 U.S. 41, 107 S.Ct. 1549 (1987). 965 F.2d at

1332, Pet. App. at A-24.

This Court in Mackey reconciled precisely that type of

distinction between the general and the specific. In

Mackey, the Supreme Court held a specific anti-garnish-

ment statute directed to ERISA plans was preempted,

while the generally applicable state garnishment statute

was not. Analogously, the Fifth Circuit below held that a

specific cause of action relating to an ERISA plan benefits

determination was preempted, while Painters held that

professional liability law generally was not preempted.

A recent District Court decision squarely shows why

Painters is distinguishable from and reconcilable with the

decision below. In Elsesser v. Hospital of Philadelphia Col-

lege of Osteopathic Medicine, Parkview Div., 1992 U.S. Dist.

LEXIS 16046 (E.D.Pa. 1992) (set forth in Appendix A), the

District Court, relying on Painters and the Fifth Circuit

decision below, held ERISA did not preempt a state law

claim of medical malpractice, but did preempt state law

claims of negligent failure to provide coverage, misrepre-

sentation, and breach of contract. The plaintiffs sought to

hoid the defendant HMO vicariously liable for the

allegedly negligent medical decisions of plaintiff’s treat-

ing physician. The court held ERISA did not preempt

these medical malpractice claims because “the allega-

tions . . . do not rely on obligations under U.S. Health

Care’s benefits plan, but on the principles of professional

melpractice,” citing Painters. However, citing the Fifth

Circuit decision below, the court held ERISA preempted

all of plaintiff’s remaining claims, including claims that

the HMO negligently refused to pay for certain care,

misrepresented the quality of care, and breached a con-

tract to provide quality care, because all these claims

clearly had “a connection with or reference to a benefit

plan.”

The distinction made by the Elsesser District Court

between allegations of negligent medical treatment and

allegations relating to the ERISA benefit plan establishes

that the Fifth Circuit decision below was correct and not

in conflict with Painters. In the instant case, Petitioner did

not allege, and could not have alleged, an analogous

“pure” medical malpractice claim against United, because

United was not a physician who provided medical care to

Petitioner. As the Fifth Circuit correctly concluded, “[t]he

existence of a true doctor-patient relationship between

Mrs. Corcoran and United . . . is dubious at best.” 965

F.2d at 1337, Pet. App. at A-35. Because the only purpor-

tedly medical decisions at issue were made in connection

with a benefit determination, any claim related thereto

must be preempted, as the Fifth Circuit correctly held.

Moreover, the Elsesser court properly interpreted the

Painters preemption discussion as relating only to a true

medical malpractice claim. The claim for failure to pro-

vide benefits, which is analogous to the instant case, was

correctly held preempted; obviously the Elsesser court did

not construe Painters as requiring a different result.

2. The Fifth Circuit Decision Does Not Con-

flict With Any Supreme Court Decision

Construing 29 USC § 1144(a) Or The Legis-

lative Purpose Embodied In ERISA.

a. The Fifth Circuit decision does not con-

flict with this Court’s decision in

Mackey.

Contrary to Petitioner’s assertion, the Fifth Circuit

decision below does not conflict with any Supreme Court

decision. The case cited by Petitioner to support his claim

of conflict, Mackey, has already been held by this Court to

be distinguishable from and therefore consistent with the

ERISA preemption Supreme Court decisions on which the

Fifth Circuit relied.

In Mackey, this Court affirmed a Georgia Supreme

Court decision that a state statute barring garnishment of

ERISA welfare plan benefits was preempted, while the

general state garnishment law was not preempted. This

Court held the anti-garnishment statute’s “express refer-

ence to ERISA plans suffices to bring it within the federal

law’s preemptive reach,” 486 U.S. at 830, 108 S.Ct. at

2186. With respect to the general garnishment statute,

however, this Court relied on ERISA provisions and the

statute’s structure to conclude Congress did not intend to

forbid state garnishment procedures against welfare

plans. 486 U.S. at 831, 108 S.Ct. at 2186.

In Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111

S.Ct. 478 (1990), this Court held ERISA preempted a state

common law claim of wrongful discharge to prevent

attainment of ERISA pension benefits. The Court noted

that although it had recognized certain limits to ERISA

preemption, citing Mackey and Ft. Halifax Packing Co. v.

Coyne'4, these limitations were not applicable in the case

before it:

We are not dealing here with a generally appli-

cable statute that makes no reference to, or

indeed functions irrespective of, the existence of

an ERISA plan. Nor is the cost of defending this

lawsuit a mere administrative burden. Here, the

existence of a pension plan is a critical factor in

establishing liability under the State’s wrongful

discharge law. As a result, this cause of action

relates not merely to pension benefits, but to the

essence of the pension plan itself.

498 U.S. at __, 111 S.Ct. at 483.

The limitation on preemption recognized in Mackey is

not applicable in the case sub judice because, as the Fifth

Circuit correctly held, “the central purpose of the lawsuit

is to hold United liable for actions it took in connection

with its duties under the plan.” 965 F.2d at 1334, Pet.

App. at A-29. As in Ingersoll-Rand, the court’s inquiry in

this case must be directed to the plan, because the action

which forms the basis of the cause of action, “a tort

allegedly committed in the course of handling a benefit

14 482 U.S. 1, 23, 107 S.Ct. 2211, 2223-24 (1987) (holding that

a state law which required payment of severance benefits was

not preempted because the statute did not require the establish-

ment or maintenance of an ongoing plan).

determination,” 965 F.2d at 1332, Pet. App. at A-24,

would not have occurred had there been no plan.

Petitioner cites the dicta in Mackey listing “run-of-

the-mill” state law claims that the parties conceded were

not preempted, including claims against plans for unpaid

rent, for unpaid attorneys’ fees, and for libel. 486 U.S. at

833 n.8, 108 S.Ct. at 2187 n.8. None of these state law

cases is analogous here because they were totally unre-

lated to the performance by the defendant plan of any

ERISA functions. Petitioner’s characterization of the

instant claim as within the “run of the mill tort claim”

category is simply without any support in the Mackey

decision. Nor would the Fifth Circuit agree with this

characterization. The Fifth Circuit referenced the Mackey

list of “run of the mill” state claims, 965 F.2d at 1329, Pet.

App. at A-17, but nevertheless concluded the case was

outside this category because it involved:

. a tort allegedly committed in the course of

handling a benefit determination . . . . The prin-

ciple of Pilot Life that ERISA preempts state-law

claims alleging improper handling of benefit

claims is broad enough to cover the cause of

action asserted here ... . [T]he central purpose

of the lawsuit is to hold United liable for actions

it took in connection with its duties under the

plan.

965 F.2d at 1332, 1334, Pet. App. at A-24, A-29.

A cause of action for medical negligence in connec-

tion with a benefit determination is neither a “run of the

mill” state law claim, Mackey, 108 S.Ct. at 2187, nor a

“generally applicable” cause of action that “functions

irrespective of the existence of an ERISA plan.” Ingersoll-

Rand, 498 U.S. at __, 111 S.Ct. at 483. Thus, the Fifth

Circuit’s conclusion that such a cause of action is pre-

empted by ERISA does not conflict with Mackey.

b. The Fifth Circuit decision does not con-

flict with the legislative purpose of

ERISA

Petitioner argues that preemption in this case is

inconsistent with the purposes of ERISA because ERISA

was adopted to protect “worker’s [sic] rights,” Pet. Brief

at 18, and a state law which presumably also protects

individuals by providing a remedy for “wrongful death

due to medical negligence,” Pet. Brief at 17, should not be

preempted.!®

Petitioner’s argument is premised on the incorrect

presumption that the purposes of ERISA and the state

law governing medical negligence are the same. The leg-

islative history of ERISA does not support this. As Peti-

tioner correctly states, Congress enacted ERISA “to

promote the interests of employees and their beneficiaries

in employee benefits plan,” Pet. Brief at 15. There is no

support for an assertion that the state law of medical

malpractice has the same purpose. It is an illogical leap to

say that both “laws” have the same purpose because they

both protect “worker’s rights” [sic]. Carrying this argu-

ment to the extreme, under Petitioner’s reasoning it

would be inappropriate for any state law which gives

remedies to individuals to be preempted by any Federal

law with a similar effect.!®

15 Although this argument goes to the merits of the Fifth

Circuit decision and “conflict with legislative purpose” is not

one of the enumerated reasons for a grant of certiorari under

Sup.Ct.R. 10.1, Respondents address the argument to assure

complete presentation of its position, and to point out errors in

Petitioner’s discussion of the law.

16 Also flawed is Petitioner’s conclusory statement that the

remedy sought here is one “previously available under state law

Petitioner’s argument also is premised on an incor-

rect representation of the opinion below. The Fifth Circuit

specifically held that ERISA preempts the tort action

because it was “allegedly committed in the course of

handling a benefit determination,” and because “the cen-

tral purpose of the lawsuit is to hold United liable for

actions it took in connection with its duties under the

plan.” 965 F.2d at 1332, 1334, Pet. App. at A-24, A-29.

Petitioner’s assertions that this claim is a “run of the mill

tort claim for medical malpractice” and that Congress

could not have “intended to deprive them of all remedies

for wrongful death due to medical negligence” are mis-

leading because they ignore this essential aspect of the

Fifth Circuit decision.!7

prior to ERISA’s enactment.” Pet. Brief at 17. Although Louisi-

ana law provides the remedy of money damages for wrongful

death, Danos v. St.Pierre, 402 So.2d 633 (La.1981), it is incorrect

that Louisiana necessarily provides a remedy for “medical mal-

practice committed in connection with a plan benefit determina-

tion,” 965 F.2d at 1333, Pet. App. at A-26. Rather, this is a matter

for which there is a “lack of clear Louisiana authority.” 965 F.2d

at 1328, Pet. App. at A-14.

17 Furthermore, even assuming arguendo that the state and

Federal laws at issue in this case have the same purpose, this

Court has consistently rejected the argument that only state

laws which conflict with federal laws should be preempted. See

Morales v. Trans World Airlines, Inc., US. ._, 412 $.A%. 2031,

2038 (1992) (relying on ERISA cases in rejecting the argument

that preemption is inappropriate when state and federal law are

substantively consistent, citing Mackey, 486 U.S. at 829, 108 S.Ct.

at 2185, and Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S.

724, 739, 105 S.Ct. 2380, 2388-2389 (1985)). Thus, even assuming

there is a substantive link between a Federal law’s purpose of

protecting plan participants with respect to plan benefits, and a

state law’s purpose of providing a remedy for wrongful death,

such an absence of conflict does not change the preemption

analysis.

As an example of a case in which this Court held a

state law not preempted because a preemption conclusion

would conflict with Congressional intent, Petitioner cites

Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 104 S.Ct. 615

(1984). This Court held in Silkwood that a punitive dam-

ages award for personal injuries suffered in a radiation

accident was not preempted by the Federal law regulat-

ing safety of nuclear power plants. However, this Court

in Silkwood expressly based its conclusion on explicit

legislative history showing Congressional intent to allow

state law tort remedies for personal injuries in connection

with radiation accidents. 464 U.S. at 249-256, 104 S.Ct. at

622-626.

There is no analogous legislative history to support

Petitioner’s argument. As the Fifth Circuit noted, ERISA

has an explicit, broad preemption clause with “deliber-

ately expansive” language, “consistent with Congress’s

decision to create a comprehensive, uniform federal

scheme for the regulation of employee benefit plans.” 965

F.2d at 1328-1328, Pet. App. at A-15 to A-16.'8 To support

the analogy to Silkwood, Petitioner would have to produce

legislative history showing Congress intended to pre-

serve state-law remedies for injuries resulting from fail-

ure of plans to comply with ERISA. Petitioner cannot

18 Because ERISA has an express broad preemption clause,

Petitioner’s citation of the reference in Metropolitan Life Ins. Co.

v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380 (1985), to a pre-

sumption against preemption of areas of traditional state regu-

lation is not persuasive. As the Fifth Circuit correctly held, “As

cases such as Ingersoll-Rand . . . (other citations omitted) illus-

trate, the fact that states traditionally have regulated in a partic-

ular area has functioned as no impediment to ERISA

pre-emption.” 965 F.2d at 1334, Pet. App. at A-27 to A-28.

(Emphasis added.)

make such an argument in the face of ERISA’s compre-

hensive civil enforcement scheme.

That Petitioner seeks money damages unavailable

under ERISA for “a tort allegedly committed in the

course of handling a benefit determination,” 965 F.2d

1332, Pet. App. at A-24, does not change the ERISA

preemption analysis. As the Fifth Circuit correctly noted,

The acknowledged absence of a remedy under

ERISA’s civil enforcement scheme for medical

malpractice committed in connection with a

plan benefit determination does not alter our

conclusion. While we are not unmindful of the

fact that our interpretation of the preemption

clause leaves a gap in remedies within a statute

intended to protect participants in employee

benefit plans [citations omitted] .. . , the lack of

an ERISA remedy does not affect a pre-emption

analysis.

965 F.2d at 1333. Pet. App. at A-26 to A-27 (emphasis

added).!9 Cf. Caterpillar, Inc. v. Williams, 482 U.S. 386, 391

n.4, 107 S.Ct. 2425, 2429 n.4 (1987) (rejecting Court of

Appeals reasoning that case may not be removed to Fed-

eral court on preemption grounds unless Federal cause of

action provides plaintiff with a remedy).?°

19 As the District Court correctly noted, Petitioner had

remedies available to her under ERISA for the denial of benefits,

remedies that she did not exercise. She could have appealed the

decision under the Plan appeal procedures, sued for a declara-

tory judgment regarding coverage on an expedited basis, or

pursued the treatment recommended by her physician and sued

under ERISA for coverage of her expenses. (Appellants’ Rec.

Exc. pp. 40-41).

20 See also Pohl v. National Ben. Consultants, Inc., 956 F.2d 126

(7th Cir. 1992), which held ERISA preempted a state law claim

against a plan administrator seeking damages sustained as a

Congress intended in enacting ERISA that “plans and

plan sponsors would be subject to a uniform body of

benefit law” and not subject to the “burdens of comply-

ing with conflicting directives among States or between

States and the Federal Government.” Ingersoll-Rand, 498

U.S. at __, 111 S.Ct. at 484. The Fifth Circuit furthers this

purpose by avoiding a decision that could lead “to the

kind of patchwork scheme of regulation Congress sought

to avoid.” 965 F.2d at 1333, Pet. App. at A-25.

3. The Decision Of The Fifth Circuit Below

Does Not Conflict With Decisions In Other

Circuits Or Present An Unsettled Question

Of Law Regarding Whether Extracontractual

Damages Are Recoverable Under ERISA

§ 502(a)(3)(B), Because This Question Was

Not Decided By The Fifth Circuit.

The Fifth Circuit in this case expressly pretermitted

the issue of whether ERISA Section 502(a)(3)(B) permits

the recovery of extracontractual damages, resolving the

claim for damages instead by concluding that even if

Petitioners had stated a claim under the provision, and

even if such damages were an available remedy, the Peti-

tioners would not be entitled to damages under the cir-

cumstances of this case:

Assuming without deciding, therefore, that

§ 502(a)(3) permits the award of make-whole

result of misrepresentation as to plan coverage:

The fact that ERISA does not provide a substitute

remedy reflects not a senseless gap in the statute but a

determination to carry through the policy we have

described by confining participants to the entitle-

ments spelled out in writing. Not the semantics of the

word “relate,” but the policy of the statute, requires

preemption and the denial of a remedy.

956 F.2d at 128.

relief as ‘other appropriate equitable relief,’ we

hold that the emotional distress and mental

anguish damages sought here by the Corcorans

are not recoverable.

(Emphasis added.) 965 F.2d at 1338, Pet. App. at A-36.

Petitioner acknowledges that the Fifth Circuit did not

decide this question. Pet. Brief at 19.

Whether or not there is a conflict in the circuits over

this question thus is not relevant to the instant Petition.

Even assuming that there is a conflict among circuits, and

that the question is unsettled and of sufficient importance

to warrant resolution by this Court, this case does not

provide a basis for granting certiorari to resolve the ques-

tion because the Fifth Circuit neither “rendered a deci-

sion” nor “decided an important question,” Sup. Ct. R.

10, with respect to this ERISA provision. Thus, the issue

would not be properly before this Court if certiorari were

granted. Even if the issue is sufficiently important to

justify resolution by this Court, it should be settled upon

review of a case which decided this particular issue.

C. THE DECISION OF THE FIFTH CIRCUIT

ALSO MAY BE AFFIRMED ON OTHER

GROUNDS

Notwithstanding the Fifth Circuit’s pretermission of

this issue, the result reached was correct and may be

affirmed on the following independent grounds.

1. ERISA Does Not Permit Recovery Of Extra-

contractual Or Compensatory Damages

Petitioner argues that if her state law claims are

preempted by ERISA, she nonetheless has a cause of

action under ERISA for compensatory extracontractual

damages under 29 U.S.C. § 1132(a). Petitioner character-

izes her claim as one arising under § 1132(a)(3). Peti-

tioner’s complaint, however, concerns actions which

United took in its capacity as a fiduciary of the Plan.

Therefore, Petitioner’s claims are more properly charac-

terized as claims under § 1132(a)(2).?!

The Supreme Court has held that extracontractual

compensatory and punitive damages are not available

under § 1109 and § 1132(a)(2). Massachusetts Mut. Life Ins.

Co. v. Russell, 473 U.S. 134, 148, 105 S.Ct. 3085, 3093

(1985). Thus, Petitioner’s claims for extracontractual

damages are foreclosed. However, even if Petitioner’s

claims can be brought under § 1132(a)(3), virtually every

court of appeals which has considered the issue has held

that compensatory, punitive and other extracontractual

damages are not available under § 1132(a) of ERISA.?

21 Section 1132(a)(2) allows a civil action to be brought for

appropriate relief under the provision relating to breach of

fiduciary duty, 29 U.S.C. § 1109.

22 See Sommers Drug Stores Co. Employee Profit Sharing Trust

v. Corrigan Enterprises, Inc., 793 F.2d 1456, 1463-1464 (5th Cir.

1986), cert. denied, 479 U.S. 1034, 107 S.Ct. 884 and 479 U.S. 1089,

107 S.Ct. 1298 (1987); Drinkwater v. Metropolitan Life Ins. Co., 846

F.2d 821, 825 (1st Cir. 1988), cert. denied, 488 U.S. 909, 109 S.Ct.

261 (1988); Powell v. Chesapeake & Potomac Tel. Co., 780 F.2d 419,

424 (4th Cir. 1985), cert. denied, 476 U.S. 1170, 106 S.Ct. 2892

(1986); Reinking v. Philadelphia American Life Ins. Co., 910 F.2d

1210, 1219-20 (4th Cir. 1990); Varhola v. Doe, 820 F.2d 809, 817

(6th Cir. 1987); Kleinhans v. Lisle Sav. Profit Sharing Trust, 810 F.2d

618, 625-27 (7th Cir. 1987); Hancock v. Montgomery Ward Long

Term Disability Trust, 787 F.2d 1302, 1306-07 (9th Cir. 1986); Forys

v. United Food & Commercial Worker's Int'l Union, 829 F.2d 603,

604-05 n.2 (7th Cir. 1987); Dependahl v. Falstaff Brewing Corp., 653

F.2d 1208, 1216 (8th Cir.), cert. denied 454 U.S. 968, 102 S.Ct. 512

and 454 U.S. 1084, 102 S.Ct. 641 (1981); Sokol v. Bernstein, 803 F.2d

532, 534-37 (9th Cir. 1986); McRae v. Seafarer’s Welfare Plan, 920

F.2d 819, 821-23, reh’g denied (en banc), 931 F.2d 901 (11th Cir.

1991); c.f. Morales v. Pan American Life Ins. Co., 914 F.2d 83, 87

(5th Cir. 1990).

Petitioner’s reliance on the case of Warren v. Society

Nat. Bank, 905 F.2d 975, 982 (6th Cir. 1990), cert. denied, 111

S.Ct. 2256 (1991) is misplaced. Even in Warren, the Sixth

Circuit held that, although compensatory damages may

be appropriate in certain circumstances, extracontractual

damages for emotional distress are excluded per se from

“other appropriate equitable relief” under § 1132(a)(3).

Boland v. Chrysler Corp., 933 F.2d 1007 (table), 13 E.B.C.

2456, 2458 (6th Cir. 1991), citing Warren, 905 F.2d at 980,

983. Warren held that “clearly consequential damages”

such as claims for emotional distress were not recover-

able. Id. at 983.

Petitioner cites Ingersoll-Rand, as having “clearly sug-

gested” that extracontractual money damages are recov-

erable under § 502(a)(3)(B). In Ingersoll-Rand, this Court

held a state law claim for wrongful discharge to prevent

attainment of ERISA pension benefits was preempted

under ERISA’s express preemption clause, and, alter-

natively, because the claim conflicted directly with Sec-

tion 510 of ERISA, which makes it unlawful to discharge

a plan participant for the purpose of interfering with the

attainment of a right to benefits. In discussing this latter

“conflict pre-emption,” the Court stated that because

§ 502(a) provides the exclusive remedy for vindicating

§ 510-protected rights, an appropriate remedy must be

available under § 502(a). 498 U.S. at __, 111 S.Ct. at 486.

To support an analogy to the instant case, Petitioners

would have to point to a violation of an ERISA provision.

Because they cannot do so, the analogy must fail.

The legislative history of ERISA also gives no sup-

port to a congressional intent to provide extracontractual

damages of any kind. While Congress repeatedly empha-

sized the purpose of protecting contractually defined

benefits, nowhere did the legislative history indicate an

intent to provide extracontractual damages. Indeed, Con-

gress was concerned that the high costs of benefit plans

would discourage employers from offering them. Russell,

473 U.S. at 148 & n.17, 105 S.Ct. at 3093 & n.17 (and

legislative history cited therein). This concern about costs

arises regardless of whether a participant seeks such

damages under § 1109 or § 1132(a)(3).

Despite Petitioner’s argument to the contrary, the

same rationale for rejecting extracontractual damages

under § 1109 applies in determining whether such dam-

ages are available under 29 U.S.C. § 1132(a)(3)(B). The

logic of Russell “forecloses the availability of extra-con-

tractual damages under § 502(a)(3) [§ 1132(a)(3)].” Sokol v.

Bernstein, 803 F.2d 532, 536 (9th Cir. 1986). The legislative

history of ERISA clearly indicates that “other appropriate

equitable relief” means just that — injunctive or declara-

tory relief, such as removal of the trustee. Id. at 537 (and

the legislative history cited therein). The Sokol court

expressly rejected extracontractual claims for damages

for emotional distress. Id. at 538.

In enacting the civil enforcement provisions of

ERISA, Congress was balancing the interests of partici-

pants in protecting their accrued benefits and the need to

encourage employers to provide benefit plans:

Under the civil enforcement provision of

§ 502(a), a plan participant or beneficiary may

sue to recover damages due under the plan, to

enforce the participant's rights under the plan, or to

clarify rights to future benefits. Relief may take the

form of accrued benefits due, a declaratory judg-

ment on entitlement to benefits, or an injunction

against a plan administrator's improper refusal to

pay benefits.

Pilot Life, 481 U.S. at 53, 107 S.Ct. at 1556 (emphasis

added). If the participant is forced to seek these remedies,

the court has the discretion to award attorneys fees under

29 U.S.C. § 1132(g). Id. Thus, Petitioner’s rights as a

participant were fully protected by ERISA.

Any concern about the breadth of ERISA preemption

and the narrowness of the civil enforcement provisions

must be addressed to Congress, not this court. See Russell,

473 U.S. at 145; 105 S.Ct. at 3092.

2. Even If Compensatory Or Other Extra-

contractual Damages Were Available Under

ERISA, Plaintiff Has No Claim Under

ERISA, Because Defendants Did Not Breach

Any ERISA Fiduciary Duties To Plaintiff

Even if compensatory or other extracontractual dam-

ages were available, Petitioner had no claim under ERISA

because Respondents breached no ERISA fiduciary

duties. The facts alleged in Petitioner’s complaint all

concern an alleged physician-patient relationship

between United and Petitioner or assume that United had

a duty to Plaintiff to make recommendations regarding

her treatment.

The District Court, upon reviewing the plan docu-

ments, determined that the only relationship between the

parties was that of plan administrator and participant, as

made clear by the SPD and Explanatory Booklet:

[T]he ERISA plan here concerned only the pay-

ment, not the medical propriety, of health-care

expenses and expressly provided that no such

doctor-patient relationship was created by the

plan: the plan contained specific warnings that

all health care decisions were for the plan par-

ticipant and her treating doctor to make.

(Appellants’ Rec. Exc. p. 41). Respondents had no duty

under ERISA to determine what type of treatment was

appropriate for Petitioner. Rather, Respondents made

coverage determinations.

The Fifth Circuit also concluded correctly, “The exis-

tence of a true doctor-patient relationship between Mrs.

Corcoran and United which could support a contractual

theory of recovery is dubious at best.” 965 F.2d at 1337,

Pet. App. at A-35, and “the lack of a true doctor-patient

relationship between Mrs. Corcoran and United under-

mines ... recovery” on the basis of a breach of a fiduciary

relationship, 965 F.2d at 1338, Pet. App. at A-36.

Petitioner has not argued that Respondents wrong-

fully failed to perform their duties under the Plan.?%

Therefore, Petitioner has no claim under ERISA.

CONCLUSION

It is respectfully submitted that petitioner has wholly

failed to sustain its burden of establishing under

Sup.Ct.R.10 that there are special and important reasons

the writ should be granted. The decision below does not

conflict with applicable decisions of this Court or of

another Court of Appeals on the same matters; nor has

the Court of Appeals decided an important federal ques-

tion which has not been, but should be, settled by this

court at this time. The Fifth Circuit Court of Appeals

correctly decided that Petitioner’s claims are preempted,

and that Petitioner is not entitled to extracontractual

23 Petitioner admits she has been paid all benefits due and

owing to her under the Plan relating to the pregnancy. (See

Appellees’ Rec. Exc., pp. 37-38.)

ie healt ineeinen ses eneeiiemmmeie

damages under the circumstances of this case. Therefore,

the Petition for Writ of Certiorari should be denied.

Respectfully submitted,

Ropert K. McCaA.Lta

(B.R. Number 9233)

McCa.ta, THOMPSON, PyBURN &

RIDLEY

Poydras Center, Suite 2800

650 Poydras Street

New Orleans, Louisiana 70130

(504) 524-2499

Counsel For Defendants, United

Healthcare, Inc. and Blue Cross and

Blue Shield of Alabama

—<=<«—— i tt

APPENDIX A

VIRGINIA ELSESSER and COURAGE VERZICCO,

co-guardians of the Estate and Persor of

CAROLYN VERZICCO, an incompetent

VS.

HOSPITAL OF THE PHILADELPHIA COLLEGE OF

OSTEOPATHIC MEDICINE, PARKVIEW DIVISION,

a Pennsylvania Corporation, et al

C.A. NO. 92-3045

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

1992 U.S. Dist. LEXIS 16046

September 30, 1992, Decided

September 30, 1992, Filed

COUNSEL: [*1]

For VIRGINIA ELSESSER, COURAGE VERZICCO, Co-

Guardians of the Estate and Person of Carolyn Verzicco,

an incompetent, PLAINTIFFS: GARY M. GUSOFF, 2401

WALNUT ST., SUITE 102, PHILA., PA 19103.

For U.S. HEALTHCARE, INC., DEFENDANT: GILBERT F.

CASELLAS, KIMBERLY H. HUMES, MONTGOMERY,

MC CRACKEN, WALKER & RHOADS, THREE PARK-

WAY, 20TH FL., PHILA, PA 19102, USA.

JUDGES: WEINER

OPINIONBY [sic]: CHARLES R. WEINER

OPINION: MEMORANDUM OPINION AND ORDER

WEINER, J.

SEPTEMBER 30, 1992

Plaintiffs originally brought this personal injury

action in the Court of Common Pleas of Philadelphia

A-2

County against a hospital, several doctors in the emer-

gency room of the hospital, plaintiffs’ incompetent’s pri-

mary care physician, and United States Health Care

Systems of Pennsylvania, Inc. (“U.S. Health Care”), a

health maintenance organization (“HMO”). U.S. Health

Care subsequently removed the action to this court pur-

suant to 28 U.S.C. @ 1441(b), claiming that the causes of

action plaintiffs assert against it arise under the laws of

the United States. The suit arises out of personal injuries

allegedly sustained by plaintiffs’ incompetent Carolyn

Verzicco (“Verzicco”) as a result of care she received at

the hospital [*2] of the Philadelphia college of Osteo-

pathic Medicine, Parkview Division (“Parkview”) in con-

nection with U.S. Health Care’s selection of primary care

physicians. U.S. Health Care filed a motion to dismiss the

Complaint against it for failure to state a claim upon

which relief can be granted pursuant to Rule 12(b)(6) of

the Federal Rules of Civil Procedure. In its motion, U.S.

Health Care argued that plaintiffs’ state law claims

asserted against it should be dismissed as pre-empted by

the Employee Retirement Income Security Act (“ERISA”),

29 U.S.C. @ 1001 et seq. Plaintiffs responded by filing a

motion to remand the entire action to the state court on

the basis that the state claims are not preempted by

ERISA. By Memorandum Opinion and Order dated July

13, 1992, we denied the motion to dismiss and granted

the motion to remand. Presently before the court is the

motion of U.S. Health Care for reconsideration nl or, in

the alternative, for certification for immediate appeal

under 28 U.S.C. Section 1292(B). For the reasons which

follow, the motion for reconsideration is granted in part

and denied in part and the motion for certification [*3] is

denied.

nl Plaintiffs argue that 28 U.S.C. @ 1447(d) pre-

cludes a district court from reconsidering an Order

A -3

remanding a case to the state court. Section 1447(d) states

that, except for civil rights cases removed pursuant to 28

U.S.C. @ 1443, “an order remanding a case to the State

Court from which it was removed is not reviewable on

appeal or otherwise ... ” We read this language to

preclude only certain appellate review of a remand order.

Indeed, we have located four decisions wherein a district

court entertained a motion for reconsideration of an

Order remanding a case to state court. See e.g. State of

Fla. v. Simanonok, 850 F.2d 1429 (11th Cir. 1988); Smith v.

Anadrill, Inc., 762 F.Supp. 1267 (S.D. Tex. 1991); Knicker-

bocker v. Chrysler Corp., 728 F.Supp. 460 (E.D. Mich.

1990); Litka v. University Of Detroit Dental School, 610

F.Supp. 80 (D.C. Mich. 1985).

Accepting the allegations in the complaint as true as

we must when considering a Rule 12(b)(6) motion, the

relevant facts are as follows:

Verzicco worked for a company that provided its

employees with a U.S. Health Care benefits plan. n2 Once

an employee chooses to become a member of this plan,

the employee selects out of a directory provided by U.S.

Health Care a primary care physician. The primary care

physician supervises, coordinates and provides initial

care and basic medical services to its members. The pri-

mary care physician also refers the member for specialist

care and maintains the continuity of patient care. Defen-

dant Dr. Leonard Harman was Verzicco’s primary care

physician. Verzicco had been under Dr. Harman’s care

since November of 1977.

n2 It is undisputed that this plan constitutes a

“employee benefit plan” as defined by ERISA, 29 U.S.C.

@ 1002(1) and (3).

A-4

On July 30, 1990, Verzicco visited Dr. Harman’s office

complaining of chest pain, mild shortness of breath, and

[*5] numbness in her shoulders lasting about twenty min-

utes. Dr. Harman measured Verzicco’s blood pressure,

which was 150/88, and took an electrocardiogram which

revealed an abnormality in t-waves. Dr. Harman ordered

blood tests and the use of a Halter Monitor. After approx-

imately one day, Dr. Harman discontinued use of the

Halter Monitor because he was told by U.S. Health Care

that it would not pay for the service of the Halter Moni-

tor. Dr. Harman did not read the results of the day

Verzicco wore the Halter Monitor.

On August 14, 1990, Verzicco began experiencing

chest pains radiating across her shoulders, down her arm

and up her neck. She went to the Emergency Room at

Parkview where she was examined by the attending phy-

sicians, defendants Robert McAndrew, M.D. and Dr. Pot-

man. Verzicco’s blood pressure was 180/110 and the

doctors ordered an electrocardiogram which showed evi-

dence of anterior wall ischemia or infarction. Verzicco

was given medication and was directed to return if her

condition worsened. She was also instructed to contact

Dr. Harman on Thursday, August 16, 1990.

The following day, while driving her car, Verzicco

experienced extreme chest pain and passed out. She was

[*6] rushed to Parkview where prolonged resuscitative

efforts were performed. However, Verzicco remained

unconscious with cardiac arrest and to this day has not

regained consciousness. Verzicco suffered irreversible

anoxic encephalopathy, which is expected to last for the

rest of her life. Verzicco remains at the Fox Nursing

Home and Rehabilitation Center where she has been in a

persistent vegetative state.

In their complaint, plaintiffs assert, inter alia, claims

for negligence, misrepresentation, and breach of contract

eee

A-5

against U.S. Health Care with regard to the treatment

rendered to Verzicco by her primary care physician. In its

motion for reconsideration, U.S. Health Care continues to

insist that all three claims are pre-empted by ERISA and

should, therefore, be dismissed. We will address all three

claims in seriatim. But first a word about ERISA pre-

emption in general.

The pre-emption section of ERISA, 29 U.S.C. @

1144(a) provides in relevant part that ” .. . the provisions

of this subchapter .. . shall supersede any and all state

laws insofar as they may now or hereafter relate to any

employee benefit plan ...” In determining that a state

common [*7] law claim for tortious breach of contract was

pre-empted by ERISA, the court in Pilot Life Insurance

Company v. Dedeaux, 481 U.S. 41, 47 (1987) described the

inclusive nature of the pre-emption clause:

In both Metropolitan Life (citation omitted) and Shaw v.

Delta Airlines, Inc., (citation omitted), we noted the

expansive sweep of the pre-emption clause. In both cases

‘the phrase ‘[sic] relate to’ was given its broadest com-

mon-sense meaning, such that a state law ‘relates to a

benefit plan’ in the normal sense of the phrase, if it has a

connection with or reference to such a plan.’ (citations

omitted) In particular we have emphasized that the pre-

emption clause is not limited to ‘state laws specifically

designed to affect employee benefit plans.’

The court re-emphasized the broad scope of the pre-

emptive effect of ERISA in Ingersoll-Rand Company v.

McClendon, __ U.S. __, 111 S.Ct. 478, 482-83 (1990).

‘The pre-emption clause is conspicuous for its breath [sic]

(citation omitted).’ Its ‘deliberately expansive’ language

was designed to ‘establish pension plan regulation as

exclusively a federal concern (citation [*8] omitted).’ The

key to @ 514(a) is found in the words ‘relate to.” Congress

used those words in their broad sense rejecting more

limited pre-emption language that would have made the

A - 6

clause ‘applicable only to state laws relating to the speci-

fic subjects covered by ERISA (citation omitted).’ More-

over, to underscore its intent that @ 514(a) be expansively

applied, Congress used equally broad language in defin-

ing the ‘State law’ that would be pre-empted. Such laws

included ‘all laws, decisions, rules, regulations or other

state action having the effect of law.’ 514(c)(1), 29 U.S.C.

@ 1144(c)(1).

See also, The 1975 Salaried Retirement Plan for Eligible

Employees of Crucible, Inc. v. Nobers, 968 F.2d 401 (3d

Cir. 1992).

With those principles in mind, we now turn to plain-

tiffs’ three state law claims to determine if indeed they

are pre-empted by ERISA. We begin with plaintiffs’ negli-

gence claim. In that claim plaintiffs allege:

(i) All of the acts referred to above by all of the

individual physicians and professional corporation physi-

cian, as well as, defendant Parkview, are imputed to

defendant, U.S. Health Care, particularly [*9] since plain-

tiff, Verzicco, looked to U.S. Health Care for care and U.S.

Health Care held out Dr. Leonard Harman, P.C. and

Leonard Harman, M.D. as its employee. Verzicco justifia-

bly relied upon the care and skill of Leonard Harman,

M.D. based, in part, upon the assurances of defendant,

U.S. Health Care, that Dr. Leonard Harman, P.C. and

Leonard Harman, M.D., the primary care physician, were

competent and qualified;

(ii) U.S. Health Care failed to exercise reasonable

care in selecting, retaining and evaluating plaintiff’s pri-

mary care physician and, as a result of its failure to use

such reasonable care, the risk of harm to plaintiff, Ver-

zicco, was increased resulting in the injuries and damages

as set forth herein, thus, subjecting it to liability pursuant

to 323 of the Restatement of Torts 2d;

A-7

(iii and iv) U.S. Health Care improperly instructed

Leonard Harman, M. D. that it would not pay for the

Halter Monitor causing him to discontinue its use after

approximately one day and causing Dr. Harman to fail

and refuse to read the results thereof, particularly when

the continued use of the Halter Monitor was important

for diagnosis and treatment based upon the complaints of

Verzicco, and her history;

(v) Other acts of negligence of defendants, Dr.

Leonard Harman, P.C. and Leonard Harman, M.D. per-

taining to the medical treatment rendered to Verzicco.

Complaint at 41(c)1.

In our Memorandum Opinion of July 13, we found

that all of the allegations in plaintiffs’ negligence claim

were predicated upon the negligence theory of “appar-

ent” or “ostensible agency.” Although an HMO is not

usually liable for the negligence of the independent con-

tractor physicians and health care providers that service

the HMO members, an HMO may nevertheless be held

liable if the health care provider is the “ostensible agent”

of the HMO. Boyd v. Albert Einstein Medical Center, 377

Pa. Super. 609, 547 A.2d 1229 (1988). n3 At least with

respect to paragraphs one, two and five of plaintiffs’

negligence claim, plaintiffs are seeking to hold U.S.

Health Care vicariously liable for the actions of Verzicco’s

primary physician acting ostensibly as an agent of U.S.

Health Care. As such, the allegations contained in these

paragraphs do not rely on obligations under U.S. Health

Care’s benefits plan, but on the principles of professional

malpractice. [*11] See Kohn v. Delaware Valley HMO,

Inc., C.A. No. 91-2745 (E.D. Pa. December 19, 1991) (Hut-

ton, J); Independence HMO, Inc. v. Smith, 733 F.Supp.

983, 987-989 (E.D. Pa. 1990). Our Court of Appeals

recently opined, in Painters of Philadelphia District

Council No. 21 Welfare Fund v. Price Waterhouse, 879

F.2d 1146 (3d Cir. 1991), “that ERISA does not generally

A - 8

pre-empt state professional malpractice actions.” Id. at

1153, n. 7. In rejecting the argument that an implied cause

of action existed under ERISA for medical malpractice

claims, the Court of Appeals stated:

.. . State law has traditionally prescribed the standards of

professional liability and, in the absence of clear indicia

in the act or legislative history, we are reluctant to ascribe

to Congress an intention to intrude in this area. Far from

there being clear indicia of an intent to create an implied

professional malpractice cause of action under ERISA,

there is not a scintilla of evidence that Congress had this

in its mind

Id. at 1152-53. We, therefore, find that paragraphs one,

two [*12] and five of plaintiffs’ negligence claim are not

pre-empted by ERISA.

n3 In Boyd, the Pennsylvania Court found that “the

two factors relevant to a finding of ostensible agency are:

(1) whether the patient looks to the institution, rather

than the individual physician for care, and (2) whether

the HMO “holds out” the physician as its employee.” 547

A.2d at 1233. In paragraph one of their negligence count,

plaintiffs specifically allege that “Verzicco looked to U.S.

Health Care for care and U.S. Health Care held out Dr.

Leonard Harman, P.C. and Leonard Harman, M.D. as its

employee.”

The allegations in paragraphs three and four of plain-

tiffs’ negligence count, however, present a different story.

In those paragraphs plaintiffs allege that U.S. Health Care

improperly instructed Dr. Harman that it would not pay

for the Halter Monitor. Plaintiffs are not seeking to hold

U.S. Health Care liable on a vicarious basis for acts of

negligence allegedly committed by Dr. Harman while

[13*] acting ostensibly as an agent of U.S. Health Care.

A-9

Rather, plaintiffs seek to hold U.S. Health Care directly

liable, for refusing to pay for the Halter Monitor under its

benefits plan. Such a claim for failure to provide funding

clearly has a “connection with or reference to” a benefit

plan. See Corcoran v. United Healthcare, Inc., No.

91-3322, 1992 U.S. App. Lexis 14621 (5th Cir. June 26,

1992). (Plaintiffs’ claim that U.S. Health Care was negli-

gent in failing to pre-certify payment for certain medical

services held pre-empted by ERISA); Kohn, supra (plain-

tiffs’ claim that the defendant HMO failed to provide

finding to the plaintiff decedent’s family for treatment

that their own therapists prescribed for plaintiff decedent

held pre-empted by ERISA). We, therefore, find that para-

graphs three and four of plaintiffs’ negligence count are

pre-empted by ERISA.

Having found that all of plaintiffs’ negligence claims

with the exception of paragraphs three and four are not

pre-empted by ERISA, we turn to plaintiffs’ claims for

misrepresentation and breach of contract against U.S.

Health Care. In those clams [sic], plaintiffs allege:

(i) U.S. Health [14*] Care intentionally misrepre-

sented that each and every primary care physician,

including Leonard Harman, M.D. and Dr. Leonard

Harman, P.C., satisfied criteria for participation as a qual-

ified physician after passing vigorous screening criteria

established by U.S. Health Care and the primary care

physician with whom Verzicco enrolled under the terms

of the contract with U.S. Health Care would perform all

necessary medical care and treatment and any diagnostic

tests which were necessary, including referring Verzicco

to a coronary care unit or hospital, if necessary;

(ii) Verzicco relied upon the statements of U.S.

Health Care which were intentionally false and mislead-

ing, and, as a result of her reliance, she sustained the

injuries described herein;

A - 10

(iii) The misrepresentations and fraudulent

utterances were intended by U.S. Health Care to cause

Verzicco to act by subscribing to U.S. Health Care as an

HMO and Verzicco justifiably relied upon the misrepre-

sentations with resultant damages as the proximate result

thereof;

(iv) The misrepresentations, even if innocent by

U.S. Health Care, relates to matters material to the choice

and continued use of a health care provider by Verzicco

[*15] since it was in such a character that if the misrepre-

sentations had not been made, Verzicco would not have

joined U.S. Heaith Care, or would not have chosen and

continued to use Leonard Harman, M.D. as her primary

care physician;

(i) U.S. Health Care through contracts and other

documents that are within the possession of U.S. Health

Care promised that the primary care physicians, includ-

ing Leonard Harman, M.D., had to undergo vigorous

screening and meet certain criteria to be qualified as a

primary care physician for U.S. Health Care, and prom-

ised that Leonard Harman, M.D. did undergo this screen-

ing, met the criteria and was qualified as a primary care

physician and that the patient would be referred by

Leonard Harman, M.D. to appropriate specialists or hos-

pitals as required for necessary medical treatment and

Verzicco enrolled herself and her family with U.S. Health

Care for all of her medical care and executed a contract

with U.S. Health Care for U.S. Health Care to provide

said medical care;

(ii) U.S. Health Care breached the provisions of the

contract which required it to provide Verzicco with a

qualified primary care physician tc previde reasonably

competent medical care, including [*16] appropriate

referrals;

A - ll

(iii) As a result of the breach, Verzicco suffered the

injuries described herein.

Complaint at 41(c)2,3.

In our Memorandum Opinion of July 13, we lumped

plaintiffs’ misrepresentation and breach of contract

claims with plaintiffs’ negligence claim and found that all

three claims attempted to hold U.S. Health Care liable in

a vicarious capacity for the actions of Verzicco’s primary

care physician. Upon further reflection, however, we find

that each of plaintiffs’ three claims are separate and dis-

tinct from each other and must be considered individu-

ally.

As noted above, the nature of plaintiffs’ misrepresen-

tation claim is that U.S. Health Care misrepresented that

the primary care physician with whom Verzicco enrolled

under the terms of the contract with U.S. Health Care

would perform all necessary medical care and treatment.

This claim obviously has a connection with or reference

to a benefit plan as it is based on representations over the

extent of and nature of the care provided under the

benefit plan. Plaintiffs’ claim for misrepresentation is,

therefore, pre-empted by ERISA. See Berger v. Edgewater

Steel Co., 911 F.2d 922, 923 (3d Cir. 1990). [*17] (ERISA

pre-empted state law claim for misrepresentation); Ber-

natowicz v. Colgate-Palmolive Co., 785 F.Supp. 488, 493

(D.N.J. 1992).

Plaintiffs’ breach of contract claim is likewise pre-

empted by ERISA. In that claim, plaintiffs allege that U.S.

Health Care breached the provisions of the contract when

it failed to provide Verzicco with a qualified primary care

physician. Again, this claim obviously has a connection

with a benefit plan, as it is based on an alleged contrac-

tual obligation under the benefit plan to provide for a

qualified primary care physician. See Pane v. R.C.A.

Corp., 868 F.2d 631, 635 (3d Cir. 1989); Kohn, supra.

A - 12

The fact that ERISA may not offer a remedy for

plaintiffs’ pre-empted claims does not alter our conclu-

sion. Although our Court of Appeals has not addressed

the issue, the Courts of Appeals for the Fifth and Seventh

Circuits have both held that a claim is still pre-empted

under ERISA even if the plaintiff is left without a remedy.

See Corcoran, supra; Lister v. Stark, 890 F.2d 941, 946 (7th

Cir. 1989), cert. denied, 111 S.Ct. 579 (1990). [*18] See also

Weir v. Northwestern National Life Insurance Company,

1992 U.S. Dist. LEXIS 9653 (E.D. Pa. July 2, 1992).

In sum, plaintiffs’ claims against U.S. Health Care for

misrepresentation, breach of contract and negligence

(paragraphs three and four only) will be dismissed as

pre-empted by ERISA. The remainder of the action,

including the remainder of plaintiffs’ negligence claim

against defendant U.S. Health Care will be remanded to

the Court of Common Pleas of Philadelphia County.

ORDER - October 1, 1992, Entered

The motion of the defendant U.S. Health Care Sys-

tems of Pennsylvania, Inc. for reconsideration is

GRANTED in part and DENIED in part.

The motion of the defendant U.S. Health Care Sys-

tems of Pennsylvania, Inc. for certification is DENIED.

The Order of this Court dated July 13, 1992 is

VACATED.

In its stead, it is ORDERED that:

The motion of the defendant United States Health

Care Systems of Pennsylvania, Inc. to dismiss the com-

plaint is GRANTED in part and DENIED in part.

The motion of the plaintiffs to remand is GRANTED

in part and DENIED in part.

Plaintiffs’ claims for misrepresentation, breach of

contract and negligence (paragraphs [*19] three and four

A - 13

only) against U.S. Health Care are DISMISSED as pre-

empted by ERISA.

The remainder of the action, including the remainder

of plaintiffs’ negligence claim against defendant U.S.

Health Care is REMANDED to the Court of Common

Pleas of Philadelphia County.

Defendant U.S. Health Care is not responsible for

plaintiffs’ attorney’s fees and costs as originally stated in

our July 13 Order.

The Clerk is DIRECTED to mark this case closed.

IT IS SO ORDERED.

CHARLES R. WEINER

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.