Prologue — Levine v. United Healthcare Corp.

Supreme Court, U.S.

FILED

No. 05-_05 -3 87 SEP 22 2005

Sn The

Supreme Court of the Anited States

*

JEAN LEVINE and NOREEN BOGURSKI,

Petitioners,

v.

UNITED HEALTHCARE CORP. and HORIZON

BLUE CROSS BLUE SHIELD OF NEW JERSEY,

Respondents.

+

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Third Circuit

eo o—---

PETITION FOR A WRIT OF CERTIORARI

+

FRANKLIN P-SODOMON, NATALIE FINKELMAN BENNETT,

ESQUIRE ESQUIRE

(Counsel of Record) SHEPHERD FINKELMAN

WEITZ & LUXENBERG, PC MILLER & SHAH, LLC

210 Lake Drive East, 475 White Horse Pike

Suite 101 Collingswood, NJ 08107

Cherry Hill, NJ 08002 (856) 858-1770

(856) 755-1115

DONNA SIEGEL MOFFA,

ESQUIRE

TRUJILLO RODRIGUEZ &

RICHARDS, LLC

8 Kings Highway West

Haddonfield, NJ 08033

(856) 795-90027-

—-—-—

~—

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

Whether the New Jersey collateral source statute,

N.J.S.A. 2A:15-97, which was enacted to eliminate

“double recoverics” of insured losses in civil actions

and to relieve liability insurers of responsibility for

costs covered by health and disability payers, is a

State law which regulates insurance and is therefore

saved from Federal preemption pursuant to ERISA

§ 514(b)(2)(A), 29 U.S.C. § 1144(b)(2)A)?

Whether plaintiffs’ State-law unjust enrichment

claims for recovery of monies taken by their health

insurers pursuant to unlawful subrogation and reim-

bursement provisions in their employer-provided

health insurance plans should be re-characterized as

claims for “benefits due” from the plans within

the meaning of ERISA § 502(a\1)(B), 29 U.S.C.

§ 1132(aX1)(B), resulting in Federal jurisdiction over

the matters?

‘i

LIST OF PARTIES

The parties to the proceedings in the United States

Court of Appeals for the Third Circuit are:

Plaintiff-Cross-Appellant-Petitioner Jean Levine;

Defendant-Appellant-Respondent United Healthcare

Corp.

Plaintiff-Cross-Appellant-Petitioner Noreen Bogurski;

Defendant-Appellant-Respondent Horizon Blue Cross

Blue Shield of New Jersey.

Plaintiff-Cross-Appellant-Petitioner Benjamin Ed-

monson;

Defendant-Appellant-Respondent Horizon Blue Cross

Blue Shield of New Jersey.

The matter captioned Edmonson v. Horizon Blue

Cross Blue Shield of New Jersey was dismissed pursuant

to an Order of the Court of Appeals for the Third Circuit

on November 17, 2004.

TABLE OF CONTENTS

| ee

OPINIONS AND ORDERS ENTERED IN THE

COURTS BELOW........ Dhoréshivevosaienstntniseconsesetoqsoorees 1

STATEMENT OF JURISDICTION ....................ceeeeees 1

STATUTES INVOLVED IN THE CASE..................5. 2

STATEMENT OF THE CASE ..............0csseccesceeeeeeeeees 5

IEEE corisecdtitonnciatinnsccctpatesicinenmnctousneiiadbesanincasin 9

I. THE THIRD CIRCUIT COURT OF APPEALS

HAS DECIDED AN IMPORTANT FEDERAL

QUESTION IN A WAY THAT CONFLICTS

WITH A DECISION BY THE NEW JERSEY

ee I GAAP OIIEEE ccnnioviguoiisniniiniitinemnmapciaiaiagnbene 9

Ii. THE THIRD CIRCUIT COURT OF APPEALS

HAS ENTERED A DECISION IN CONFLICT

WITH DECISIONS OF OTHER UNITED

STATES COURTS OF APPEALS ON THE

SAME IMPORTANT MATTER. .................::00000 13

Ill. THE THIRD CIRCUIT COURT OF APPEALS

HAS DECIDED AN IMPORTANT FEDERAL

QUESTION IN A WAY THAT CONFLICTS

WITH RELEVANT DECISIONS OF THIS

Pi citasikdentiniicnissundicigepinisanredsaicdicanibeateeipeacians 16

IV. THE THIRD CIRCUIT COURT OF APPEALS

HAS DECIDED IMPORTANT QUESTIONS

OF FEDERAL LAW THAT HAVE NOT BEEN,

BUT SHOULD BE, SETTLED BY THIS

SEI cciiebiidinenicramnsiquabbeiailbiesiaittin -- <diich commpooemipaiiii 23

Sees ctnsiconndetsevnidipenicemsuansttiibiccaseansemmbisiiie 29

iv

TABLE OF AUTHORITIES

Page

CASES:

Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504

COP ovcovhteunsscnecnicintetditiasdedindaatstibnntsinaidbeanitataseliiiannsices 17

Bill Gray Enterprises, Inc. Employee Health &

Welfare Plan v. Gourley, 248 F.3d 206 (3d Cir.

OPED ssrcicncscsaontncopavesvcnceseuvencioniadiiciunbiiieidignicitiiéeiaiebs 15

Blue Cross and Blue Shield of Alabama v. Fondren,

966 F.Supp. 1093 (M.D. Ala. 1997) ..........cccccceereceereeee 15

Blue Cross and Blue Shield of Alabama v. Lewis,

754 F.Supp. 849 (N.D. Ala: 1991).............ccccsssorsecsseseeres 16

Board of Trustees of Montana Teamsters Employers

v. Coyne, 628 F.Supp. 561 (D.Mont. 1986).................... 16

Brotherhood of R.R. Trainmen v. Baltimore & O.R.

Gi, Bee ar Oe Pic ninsncecoosbccbacsiecacniciaceditcnaumdens 19

Bush v. Palm Beach County Canvassing Bd., 531

Ree PU IND wee -sngeubvedvdoniepevneviatactnenetintsiotbiblavbbibambdiaad 18

Carducci v. Aetna U.S. Healthcare, 204 F.Supp.2d

Fee ele Be ivansosctstnvidieelsetniserekinieatiundiigs tsreeesecenes 7, 23

Carducci v. Aetna U.S. Healthcare, 247 F.Supp.2d

Re Cea ee iicctcceccnltheintesaceciseenseibpabibastiaieacided 8,15

Cippolone v. Liggett Group, Inc., 505 U.S. 504

CUED octicndeiddactenivendcabihededinkbadesadeembuliuisdnabccdedicticbeinulaa sited 17

Curri v. Reno, 86 F.Supp.2d 413 (D.N.J. 2000)................ 19

Donlan v. Greater Cleveland Reg’l Transit Auth.,

2000 WL 485268 (N.D. Ohio 2000) ................cceeeeeeeeeeeee 15

Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir.

ITD cestnxécinctntndspneinvintaniliccnivebtninecinbindenmndumgedbuats 24, 25, 26

TABLE OF AUTHORITIES - Continued

Page

Fayer v. Keene Corp., 311 N.J. Super. 200, 709 A.2d

ey GD cccecitnsicintncinntilosscensitiedesimiagirensimaammmasineliieiaie 11

FMC Corp. v. Holliday, 885 F.2d 79 (3d Cir. 1989),

rev'd on other grounds, 498 U.S. 52 (1990)...............00. 15

FMC Corp. v. Holliday, 498 U.S. 52 (1990)................ 16, 19

Great-West Life & Annuity Ins. Co. v. Knudson, 534

Ss Se ee aliciasinesciiniadibavechidsilbdiaatinanisiiittedpimuiidigilsidabidinlinis. 27

Hampton Indus. v. Sparrow, 981 F.2d 726 (4th Cir.

AR. HEC a A SS ieseatniiahnetanealianiags 14

Health Cost Controls v. Ross, 1997 WL 222877

(N.D. 1). 1997)........ nsescesevececene reseoersecoussoenonoseuenecssooosooess 5

Health Cost Controls v. Whalen, 1996 WL 787163

FN SE AS eh Re, Sk SER ae 15

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

SaDITTD citeiitdscnneniciiupdibennintcedabedacsatiiidnanetaniineshdsmnulinnitetaltitaate 24

Jones v. Rath Packing Co., 430 U.S. 519 (1977)............... 17

Kentucky Assn. of Health Plans, Inc. v. Miller, 538

U.S. 329 (2003) ........ vi cdicdaiteialathlaidit aioe Saieeeciaitas 16, 17, 21

Kiss v. Jacob, 138 N.J. 278, 650 A.2d 336 (1994)............. 11

Levine v. United Healthcare Corp., 402 F.3d 156 (3d

Tk ERNE SEE eS Oe oS FR TY hae 1,8

Lusby v. Hitchner, 273 N.J. Super. 578, 642 A.2d

| ER Ser ee eee 11

Medical Mutual of Ohio v. DeSoto, 245 F.3d 561

(6th Cir. 2001) ................: EE AES EN Se —

Metropolitan Life Ins. Co. v. Massachusetts Travel-

ers Ins. Co., 471 U.S. 724 (1985) ................. 16, 17, 20, 24

vi

TABLE OF AUTHORITIES - Continued

Page

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58

2, SECS eae earn es Pen ia rk ee ets SOO 24

Missouri v. Hunter, 459 U.S. 359 (1983)..............cccccccceeee 18

Mullaney v. Wilbur, 421 U.S. 684 (1975)................::00008 =.18

Parker v. Esposito, 291 N.J. Super. 560, 677 A.2d

I iiciesiecinstititcniriccasnaitcpiedeilaiameehadeiciie iia el ctinai 11

PAS v. Travelers Ins. Co., 7 F.3d 349 (3d Cir. 1993) .. 24, 26

Pegram v. Hedrich, 530 U.S. 211 (2000)...............c:cccceeeees 26

Perreira v. Rediger, 169 N.J. 399, 778 A.2d 429

GID nencchcedsenicnteupettiuqueiiseciedeastiasnnnalaanntdindaeigiiad passim

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) ... 16, 22, 26

Pryzbowski v.U.S. Healthcare, 245 F.3d 266 (3d Cir.

SD cis nicinstiesscuicdetecieiigniateneibchaaitieceies tibia iaeata ili lia 21, 26

Rice v. Santa Fe Elevator Corp., 331 U.S. 218

CP TaeeD diihsetsiccsciediensienccibiebiiehineducitiicétiedinanebesadamaiinishddainaddmeiiabties 17

Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355

I vc. cicactiaduticinalicssnssiheiinipsinmeseiiptieelidieaumetieiaddcmheteedinls 21

Ryan v. Fed. Express Corp., 78 F.3d 123 (3d Cir.

IND ch dtccenttkcbinaiizisicdibttidisdialeasialcecssdieogdimanitetdisieedavmiesiets 28

Singh v. Prudential Health Care Plan, Inc., 335

ee CSI ccnchicensitthdsccitcsdiendidiciidinsescienseniibenisanaiad 14

United Food & Commercial Workers & Employers

Health & Welfare Trust v. Pacyga, 801 F.2d 1157

ESE SEEN RU RRR ae 2255 ae a SL es 14

UNUM Life Ins. Co. of America v. Ward, 526 US.

I escceviitvitreattincenissidinciiidiginllieh dnsibiadindtta incite iene 18, 21

vii

TABLE OF AUTHORITIES - Continued

Page

STATUTES:

> eS Oe A BOING, pincccticttnincetantininete te bak, 17

eds OF Bee intinctetidnitionictactradinliasaaeiilane na 2

SE RMA Le See Se DE Ca ete st 7

Fe ee GE OID cnckitnintitctiltiebeatiiniin ei 7

PTI As ) RRO vestsccscsnncinncptnnctindistiditalaeindadicnmelncl 4

BP EF BAL. | LIBBY. occ cccevvcenticcecacctcunsnincsivenvenec 7, 23, 24

Pals OED cndterciniviscetstencencninddandaibidinns atin tener ee 3

SP ITOK, B LEAD esicccciiccbvtcntciinininnteinctec dieser 10

PP Cha Ee Se nciecisnesitnbiedantinseaaaltdiinn gla ae 20

pk MEE py PDA R SMa Ba Oe BADD 9. 20

Fest ihr SR scnenitesincbitsdeamapieiiamidbeniiia ig cia seas 12

8 ae ED EIA LER OUTRO LINO Ge Ss 5

OTHER AUTHORITIES:

Baron, RM: Public Policy Considerations Warranting

Denial of Reimbursement to ERISA Plans: It’s

Time io Recognize the Elephant in the Courtroom,

55 Mercer Law Review 595 (2004) ......00...ccccccececeeeceeeeee 28

1

OPINIONS AND ORDERS

ENTERED IN THE COURTS BELOW

The March 16, 2005 opinion and judgment of a panel

of the Third Circuit Court of Appeals, together with a

dissenting opinion, reported at 402 F.3d 156, is reprinted

in the Appendix at pages App. 1 through App. 33. The

Third Circuit’s June 24, 2005 order denying plaintiffs’

petition for rehearing or rehearing en banc is reprinted in

the Appendix at pages App. 146 through App. 148.

The May 28, 2002 opinion and order of the United

States District Court for the District of New Jersey,

reported at 204 F.Supp.2d 796, 27 Employee Benefits Cas.

2955, is reprinted in the Appendix at pages App. 128

through App. 145. The District Court’s opinion and order

of July 24, 2002 was not ofSicially reported, but may be

found at 2002 WL 31262100 (D.N.J.), 28 Employee Bene-

fits Cas. 2460, and is reprinted in the Appendix at pages

App. 118 through App. 127. The District Court’s opinion

and order of March 4, 2003, reported at 247 F.Supp.2d 596,

30. Employee Benefits Cas. 1014, is reprinted in the

Appendix at pages App. 64 through App. 117. The District

Court’s opinion and order of Octeber 6, 2003, reported at 285

F.Supp.2d 552, 32 Employee Benefits Cas. 1169, is reprinted

in the Appendix at pages App. 34 through App. 63.

¢

STATEMENT OF JURISDICTION

Petitioners seek a writ of certiorari to review the

March 16, 2005 decision of the United States Court of

Appeals for the Third Circuit in Levine v. United Health-

care Corp., 402 F.3d 156 (3d Cir. 2005), rehearing denied,

June 24, 2005. This Court has jurisdiction to review the

2

decision of the Court of Appeals pursuant to 28 U.S.C.

§ 1254(1) on grant of a writ of certiorari upon the petition

of any party to the case.

ry ‘

STATUTES INVOLVED IN THE CASE

The New Jersey collateral source statute, N.J.S.A.

2A:15-97, provides:

Deduction of duplicate benefits

In any civil action brought for personal in-

jury or death, except actions brought pursuant to

the provisions of P.L.1972, c. 70 (C. 39:6A-l et W_

seq.), if a plaintiff receives or is entitled to re-

ceive benefits for the injuries allegedly incurred

from any other source other than a joint tortfea-

sor, the benefits, other than workers’ compensa-

tion benefits or the proceeds from a life insurance

policy, shall be disclosed to the court and the

amount thereof which duplicates any benefit con-

tained in the award shall be deducted from any

award recovered by the plaintiff, less any pre-

mium paid to an insurer directly by the plaintiff

or by any member of the plaintiff’s family on be-

half of the plaintiff for the policy period during

which the benefits are payable. Any party to the

action shall be permitted to introduce evidence

regarding any of the matters described in this

act.’

* The statute's citation of “P.L.1972, c. 70 (C. 39:6A-1 et seq.)”

refers to the New Jersey Automobile Reparation Reform Act, which

provides for, inter alia, “no-fault” medical benefits in the event of a

motor vehicle accident and for insurers’ inter-company arbitration of

related subrogation claims.

3

Section 514 of the Employee Retirement Income

Security Act of 1974 (“ERISA”), 29 U.S.C. § 1144, provides:

Other laws a

(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

(1) This section shall not apply with respect

to any cause of action which arose, or any act or

omission which occurred, before January 1, 1975.

(2A) 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 de-

scribed 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 in-

sumer, bank, trust company, or investment com-

pany or to be engaged in the business of

insurance or banking for purposes of any law

of any State purporting to regulate insurance

4

companies, insurance contracts, banks, trust

companies, or investment companies.

Section 502 of the Employee Retirement Income

Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132, provides,

in relevant part:

Civil enforcement

(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 sub-

section (c) of this section, or

(B) to recover bénefits due to him un-

der 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 un-

der section 1109 of this title;

(3) by a participant, beneficiary, or fiduci-

ary (A) to enjoin any act or practice which vio-

lates any provision of this subchapter or the

terms of the plan, or (B) to obtain other appro-

priate equitable relief (i) to redress such viola-

tions or (ii) to enforce any provisions of this

subchapter or the terms of the plan|.]

,

v