Allen v. Unum Life Ins. Co. of Am.
| Decision Date | 17 September 2015 |
| Docket Number | Civil Action No. 3:15-cv-219-JAG |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | MARY E. ALLEN, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant. |
Unum Life Insurance Company of America ("Unum"), the plan administrator for an employee benefit plan in which Mary Allen participated, denied Allen long-term disability benefits. Allen alleges that, in the denial process, Unum defamed her in letters to her doctor and lawyer. Allen filed this action in federal court, alleging two counts under the Employee Retirement Income Security Act of 1974 ("ERISA") and one count of defamation. Unum now seeks to dismiss the defamation claim as preempted by ERISA or, in the alternative, for failure to state a claim. Because ERISA's conflict preemption doctrine reaches state law claims that relate to an employee benefit plan, and because state law claims that arise in the course of processing a benefit claim fall within this category, the Court GRANTS Unum's Partial Motion to Dismiss.
Allen works at CVS Pharmacy1 as a pharmacy technician. As a part of her employment, she participates in an employee benefit plan (the "Plan"). Unum administers the Plan, which includes short- and long-term disability benefits.
In 2010, Allen sustained multiple injuries in a car accident, including serious back, neck, and leg injuries. Despite undergoing spinal fusion surgery in 2012, Allen allegedly continued to experience pain, forcing her to work part-time. Allen received short-term disability benefits through the Plan, then partial long-term disability benefits. Under the Plan, after receiving long-term disability benefits for 24 months, the definition of "disability" changes. Accordingly, as the expiration of the 24-month period approached, Unum conducted a review of Allen's eligibility for continued benefits.
During its review, on June 13, 2014, Unum sent a letter to Allen's primary care physician "to gain a better understanding of [the doctor's] medical opinion and discuss questions [Unum] has regarding [its] interpretation of the available medical data." (Dk. No. 1-7.) That letter included the following sentence: "Inconsistencies were noted on this call between Ms. Allen's report that she had difficulty with sitting, and her report that she sits in a kitchen chair to perform a number of household chores, including unloading dishes from dishwasher and folding her laundry."
Ultimately, Unum denied Allen's claim for continued long-term disability benefits after the expiration of the initial 24-month period. Unum also denied Allen's appeal. Allen then sent additional information to Unum. After its review, on January 9, 2015, Unum sent a letter to Allen's attorney explaining that the additional information did not change its prior decision. (Dk. No. 1-15.) In this letter, Unum noted certain inconsistencies on which it based its denial decision. Among others, these inconsistencies included discrepancies between statements Allen made about her weight fluctuation in comparison to the doctors' reports, and a Facebook post from a different "Mary Allen" talking about going on a cruise.
Allen sued Unum in federal court alleging three counts: (I) seeking to enforce and clarify right to benefits pursuant to 29 U.S.C. § 1132(a)(1)(B); (II) requesting full and fair review under ERISA or, in the alternative, remand to Unum; and (III) seeking damages for defamation. Allen bases her defamation claim on statements made in (1) Unum's June 13, 2014 letter to her doctor and (2) Unum's January 9, 2015 letter to her attorney. Unum moved the Court to dismiss Count III.
Unum moves the Court to dismiss Allen's defamation claim as preempted under ERISA.3 Congress enacted ERISA to protect the interests of participants in employee benefit plans by providing a "uniform regulatory regime over [such] plans." Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004). To accomplish its purpose, ERISA "include[d] expansive pre-emption provisions . . . to ensure that employee benefit plan regulation would be 'exclusively a federal concern.'" Id. (citing Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523 (1981)). The Fourth Circuit "ha[s] been clear that 'ERISA preempts state law, including state common law.'" Trs. of the Plumbers & Pipefitters Nat'l Pension Fund v. Plumbing Servs., Inc., 791 F.3d 436, 447 (4th Cir. 2015) (citing Phx. Mut. Life Ins. Co. v. Adams, 30 F.3d 554, 563 (4th Cir. 1994)).Two types of preemption exist under ERISA: (1) complete preemption under § 502 of ERISA, 29 U.S.C. § 1132; and (2) conflict preemption under § 514 of ERISA, 29 U.S.C. § 1144(a).
Complete preemption does not apply in this case because Allen sued Unum in federal court. The complete preemption doctrine arises under § 502 of ERISA. Section 502(a) presents an "integrated enforcement mechanism" for employee benefit plans, representing "careful balancing" of policy choices by Congress. Davila, 542 U.S. at 208-09 (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987)). As it concerns preemption, § 502(a) "is one of those provisions with such 'extraordinary preemptive power' that it 'coverts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.'" Id. at 209 (citing Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65-66 (1987)).
In other words, complete preemption is "properly understood as a jurisdictional doctrine" which "gives rise to removal jurisdiction." Moon v. BMX Technologies, Inc., 498 F. App'x 268, 272 (4th Cir. 2012) (per curium); see Darcangelo v. Verizon Commc'ns, Inc., 292 F.3d 181, 187 (4th Cir. 2002) (). As such, when a state law claim falls within the scope of § 502(a)—such as claims "to, among other things, recover benefits, enforce rights conferred by an ERISA plan, remedy breaches of fiduciary duty, clarify rights to benefits, and enjoin violations of ERISA"—"the state law claim is converted into a federal cause of action removable to federal court." Marks v. Watters, 322 F.3d 316, 323 (4th Cir. 2003). By logical extension, a court does not need to evaluate a state law claim brought in federal court under complete preemption, as the issue of removal does not apply. See, e.g., In re Managed Care Litig, 595 F. Supp. 2d 1349, 1355 (S.D. Fla. 2009) (footnote omitted) ("As no jurisdictional implications exist [in this action brought infederal court], we need not address whether [the] state law claims . . . are subject to complete preemption under Section 502(a).").
In this case, Allen sued Unum in federal court, alleging federal question jurisdiction as to her two ERISA claims, and diversity jurisdiction as to her defamation claim.4 As a result, the removability of Allen's defamation from state court—and, thus, the doctrine of complete preemption—does not present itself in this case. Accordingly, the Court leaves the parties' expansive briefing on the prongs of Davila and the applicability of Sonoco Products Co. v. Physicians Health Plan Inc., 338 F.3d 366 (4th Cir. 2003), for a future case.5
In contrast to complete preemption, the doctrine of conflict preemption does apply in this case and serves to preempt Allen's defamation claim. Unlike complete preemption, which operates as a jurisdictional doctrine, see supra, conflict preemption "is asserted as 'a federal defense to the plaintiff's suit.'" Darcangelo, 292 F.3d at 186-87 (quoting Metropolitan Life Ins., 481 U.S. at 63). The conflict preemption doctrine arises under § 514 of ERISA. Section 514 dictates that ERISA preempts state laws that "relate to" any employee benefit plan covered by ERISA. 29 U.S.C. § 1144(a); see also Darcangelo, 292 F.3d at 187.
Darcangelo, 292 F.3d at 190 (citing N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 658-59 (1995)). Allen's defamation claim does not fall within the first category of laws, but may fall within the second category.6 Regardless, the claim falls clearly within the third category of laws and, thus, ERISA preempts Allen's defamation claim.
ERISA preempts Allen's defamation claim because, through the defamation claim, Allen seeks an alternative enforcement mechanism to ERISA's civil enforcement provisions, namely, a remedy for Unum's fiduciary conduct during the claim review process. A state law claim "is an alternative enforcement mechanism for ERISA rights if the state claim could be brought as an enforcement action under § 502." Darcangelo, 292 F.3d at 191. Applicable in this case, claims "to enforce [a] defendant's] fiduciary duties under the ERISA plan . . . would constitute alternative enforcement mechanisms to § 502 and would therefore relate to the ERISA plan [as required for conflict preemption]." Id. at 192.
Whether a plan administrator's behavior constitutes fiduciary conduct depends on whether the behavior "was . . . undertaken [by the plan administrator] in the course of carrying out its plan responsibilities." Id. at 193. While some behavior falls outside the bounds of fiduciary conduct, see, e.g., id. at 186 (...
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