Dobbs v. Anthem Blue Cross and Blue Shield

• Citation: 600 F.3d 1275
• Decision Date: 31 March 2010
• Docket Number: No. 07-1398,07-1402.,07-1398
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: Steven DOBBS; Naomi Dobbs, Plaintiffs-Appellants-Cross-Appellees, v. ANTHEM BLUE CROSS AND BLUE SHIELD, a Colorado Insurance Company, Defendant-Appellee-Cross-Appellant. Southern Ute Indian Tribe, Amicus Curiae.

600 F.3d 1275

Steven DOBBS; Naomi Dobbs, Plaintiffs-Appellants-Cross-Appellees, v. ANTHEM BLUE CROSS AND BLUE SHIELD, a Colorado Insurance Company, Defendant-Appellee-Cross-Appellant.

Southern Ute Indian Tribe, Amicus Curiae.

Nos. 07-1398, 07-1402.

United States Court of Appeals, Tenth Circuit.

March 31, 2010.

COPYRIGHT MATERIAL OMITTED

Shawn Mitchell, Broomfield, CO, for the Appellants-Cross-Appellees.

John R. Mann, Kennedy Childs & Fogg, P.C., Denver, CO, (Dean A. McConnell with him on the brief), for Appellee-Cross-Appellant.

Thomas H. Shipps and Patricia A. Hall, Maynes, Bradford, Shipps & Sheftel, LLP, Durango, CO, Monte Mills, Legal Department, Southern Ute Indian Tribe, Ignacio, CO, and Nancy Williams Bonnett, Pietzsch, Bonnett & Womack, P.A., Phoenix, AZ, filed a brief on behalf of Amicus Curiae in favor of the Appellee-Cross-Appellant.

Before HENRY, Chief Circuit Judge, BRISCOE, and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

This case comes to us on appeal for the second time. Steven and Naomi Dobbs' state law claims against Anthem Blue Cross and Blue Shield ("Anthem") were initially dismissed by the district court as preempted by the Employee Retirement Income Security Act ("ERISA"). On the first appeal, we vacated the court's disposition, holding that the Dobbs' claims would not be preempted if the insurance plan at issue qualified as a "governmental plan" under an amended statutory definition. We remanded to allow the district court to make that factual determination. On remand, the court determined that the plan qualified as a governmental plan under the amended definition, but dismissed the Dobbs' claims on the ground that the amended definition does not apply retrospectively.

We exercise jurisdiction under 28 U.S.C. § 1291. Because we decided on the first appeal that the amended definition applied to the Dobbs' claims, we reverse the district court's contrary conclusion and remand for fact-finding consistent with this opinion.

I

In September 2004, the Dobbs filed suit against Anthem in Colorado state court. Their complaint alleged five state law causes of action arising from Anthem's alleged failure to comply with the terms of a health insurance policy issued to Steven Dobbs through his employer, the Southern Ute Indian Tribe. Anthem removed the action to the United States District Court for the District of Colorado and contemporaneously filed a motion to dismiss based on ERISA preemption.

The district court granted Anthem's motion in part. It dismissed four of the five claims, rejecting the Dobbs' argument that the statutory exception from ERISA preemption for "governmental plans" included those established by tribal governments. However, the court initially declined to dismiss the Dobbs' fraud-as-to-benefits claim, reasoning that under Woodworker's Supply, Inc. v. Principal Mutual Life Insurance Co., 170 F.3d 985 (10th Cir.1999), ERISA does not preempt state law claims predicated upon misrepresentations that induced plan participation. Id. at 991. The district court later reconsidered that ruling and dismissed the fraud claim as well. The Dobbs appealed.

While the first appeal was pending, Congress passed the Pension Protection Act of 2006 ("PPA"), Pub.L. No. 109-280, 120 Stat. 780. Section 906(a)(2)(A) of the PPA amends ERISA's exception for governmental plans to:

include a plan which is established and maintained by an Indian tribal government... and all of the participants of which are employees of such entity substantially all of whose services as such an employee are in the performance of essential governmental functions but not in the performance of commercial activities.

§ 906(a)(2)(A), 120 Stat. at 1051 (codified as amended at 29 U.S.C. § 1002(32)).

In deciding the Dobbs' first appeal, this court noted that "the amendment's legislative history suggests that Congress expanded the definition to clarify the legal ambiguity regarding the status of employee benefit plans established and maintained by tribal governments." Dobbs v. Anthem Blue Cross & Blue Shield, 475 F.3d 1176, 1178 (10th Cir.2007) hereinafter Dobbs I. We recognized, however, that the amended definition of "governmental plan" may not cover the Dobbs' plan "because the amended provision makes a distinction between `essential governmental functions' and `commercial activities.'" Id. We accordingly remanded to the district court to engage in the necessary factual analysis, concluding that "if the Dobbses' benefit plan meets the new definition of governmental plan under § 1002(32), ERISA will not preempt their state-law causes of action against Anthem." Id. at 1179.

On remand, the district court found that "the Dobbses' plan meets the new definition of a governmental plan under ERISA, as amended." However, it ruled that Congress intended § 906(a)(2)(A) of the PPA to apply only prospectively. It further rejected arguments that either the mandate rule or the law of the case doctrine required it to apply the amended definition of governmental plan to the events at issue. It thus reiterated its conclusion that ERISA preempted the Dobbs' claims. This appeal followed.

II

A

We review de novo a district court's dismissal for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). Dias v. City & County of Denver, 567 F.3d 1169, 1178 (10th Cir.2009). ERISA preempts state law claims that "relate to any employee benefit plan." 29 U.S.C. § 1144(a). However, it expressly exempts from preemption claims related to "governmental plans" as defined in § 1002(32). See § 1003(b)(1). At the time of the events relevant to the Dobbs' claims, § 1002(32) defined "governmental plan" as "a plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing." § 1002(32) (2002). Section 906(a)(2)(A) of the PPA, however, amended the definition of governmental plan to include certain plans established by tribal governments. See § 906(a)(2)(A), 120 Stat. at 1051. In this appeal, the Dobbs do not dispute that their insurance plan is an employee benefit plan within the meaning of ERISA or that four of their five claims "relate to" that plan for ERISA purposes.¹ They argue only that the amended definition of governmental plan should apply to the events at issue, even though they occurred before Congress amended the statute.

B

We must first determine whether Dobbs I decided that § 906 of the PPA applied retrospectively. If so, we are bound by that decision. In re Smith, 10 F.3d 723, 724 (10th Cir.1993). Moreover, if the first appeal decided the issue then the district court was bound by its determination under the law of the case doctrine, see Homans v. City of Albuquerque, 366 F.3d 900, 904 (10th Cir.2004), and under the general rule that a district court is bound by decisions made by its circuit court.

The law of the case doctrine provides that "when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983). "The doctrine is based on sound public policy that litigation should come to an end and is designed to bring about a quick resolution of disputes by preventing continued re-argument of issues already decided" and to discourage forum-shopping by litigants. McIlravy v. Kerr-McGee Coal Corp., 204 F.3d 1031, 1035 (10th Cir.2000) (quotation omitted). Thus "the decision of the appellate court establishes the law of the case and ordinarily will be followed by both the trial court on remand and the appellate court in any subsequent appeal." Id. at 1034.

The district court apparently concluded that the Dobbs I retrospectivity holding was not law of the case because the panel did not expressly reach the preemption issue. However, the law of the case doctrine applies to "issues previously decided, either explicitly or by necessary implication." Guidry v. Sheet Metal Workers Int'l Ass'n, Local No. 9, 10 F.3d 700, 705 (10th Cir.1993) (citation omitted). An issue may be implicitly resolved by a prior appeal in three circumstances:

(1) resolution of the issue was a necessary step in resolving the earlier appeal; (2) resolution of the issue would abrogate the prior decision and so must have been considered in the prior appeal; and (3) the issue is so closely related to the earlier appeal its resolution involves no additional consideration and so might have been resolved but unstated.

McIlravy, 204 F.3d at 1036 (quotation omitted).

In Dobbs I, we decided by necessary implication that § 906 of the PPA applies retrospectively. First, resolution of the issue was a necessary step in resolving the earlier appeal. Noting that Congress had altered the definition of "governmental plan" after the resolution of proceedings in the district court, Dobbs I, 475 F.3d at 1177-78, we determined that the Dobbs' plan might qualify as a governmental plan under the new language but remanded to the district court to engage in a "fact-specific analysis of the plan at issue," id. at 1178. We concluded that "if the Dobbses' benefit plan meets the new definition of governmental plan under § 1002(32), ERISA will not preempt their state-law causes of action against Anthem." Id. at 1179.

By expressly remanding only the fact-specific analysis and concluding that this analysis alone would determine if ERISA preempted the Dobbs' claim, Dobbs I necessarily decided that the new language of the PPA applied to those claims.² Had we not made that determination, there would be no logical reason for us to remand only the fact-specific analysis; such analysis becomes relevant and determinative only if § 906 of the PPA applies retrospectively.³ Thus, deciding the retrospectivity question was a "necessary step in resolving the...