Hendrix v. United Healthcare Ins. Co. of the River Valley

• Decision Date: 18 September 2020
• Docket Number: 1190107
• Parties: Kathleen HENDRIX, as administratrix of the Estate of Kenneth Morris Hendrix, deceased v. UNITED HEALTHCARE INSURANCE COMPANY OF THE RIVER VALLEY
• Court: Alabama Supreme Court

327 So.3d 191

Kathleen HENDRIX, as administratrix of the Estate of Kenneth Morris Hendrix, deceased

v.UNITED HEALTHCARE INSURANCE COMPANY OF THE RIVER VALLEY

1190107

Supreme Court of Alabama.

September 18, 2020

Rehearing Denied November 20, 2020

Richard Riley, David Marsh, J.D. Marsh, and Julianne Zilahy of Marsh, Rickard & Bryan, P.C., Birmingham, for appellant.

Ed R. Haden, Cavender C. Kimble, and Robert V. Baxley of Balch & Bingham LLP, Birmingham, for appellee.

R. Bernard Harwood, Jr., of Rosen Harwood, P.A., Tuscaloosa, for amicus curiae Business Council of Alabama, in support of the appellee.

SELLERS, Justice.

Kathleen Hendrix ("Hendrix"), as administratrix of the estate of Kenneth Morris Hendrix, deceased, appeals from a judgment of the Etowah Circuit Court, dismissing Hendrix's medical-malpractice wrongful-death claim against United Healthcare Insurance Company of the River Valley ("United"). Kenneth, who was covered by a health-insurance policy issued by United, died after United refused to pay for a course of medical treatment recommended by Kenneth's treating physician. The trial court determined that Hendrix's claim is preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"), because the claim "relate[s] to" the ERISA-governed employee-benefit plan pursuant to which United had issued Kenneth's health-insurance policy. See 29 U.S.C. § 1144(a) ("Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan ...."). We affirm the trial court's judgment.

Introduction

ERISA governs "voluntarily established health and pension plans in private industry." Kennedy v. Lilly Extended Disability Plan, 856 F.3d 1136, 1138 (7th Cir. 2017). It "comprehensively regulates, among other things, employee welfare benefit plans that, ‘through the purchase of insurance or otherwise,’ provide medical, surgical, or hospital care, or benefits in the event of sickness, accident, disability, or death. § 3(1), 29 U.S.C. § 1002(1)." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987).

ERISA's express preemption provision, § 514(a), 29 U.S.C. § 1144(a), provides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." State law that may be preempted because it relates to an ERISA employee-benefit plan "includes all laws, decisions, rules, regulations, or other State action having the effect of law." 29 U.S.C. § 1144(c)(1). This includes civil causes of action brought pursuant to state law. Aldridge v. DaimlerChrysler Corp., 809 So. 2d 785, 792 (Ala. 2001) ("ERISA's express preemption provision ... ‘defeats claims that seek relief under state-law causes of action that "relate to" an ERISA plan.’ " (quoting Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1215 (11th Cir. 1999) )); Seafarers’ Welfare Plan v. Dixon, 512 So. 2d 53 (Ala. 1987) (holding that causes of action alleging breach of contract and bad-faith failure to pay insurance benefits were preempted by ERISA). Thus, if Hendrix's cause of action against United "relate[s] to" an ERISA-governed plan, it is preempted under § 514(a).¹

In October 2015, Kenneth was injured in an automobile accident. He was admitted to Gadsden Regional Medical Center for treatment. Approximately one week later, a physician treating Kenneth at the hospital ordered that he be admitted to an inpatient-rehabilitation facility. The complaint indicates that Kenneth accepted his treating physician's recommendation and that Kenneth "desired that [he] be admitted to such an inpatient facility." The complaint also indicates, and Hendrix concedes, that the United health-insurance policy covering Kenneth was issued as part of an ERISA-governed employee-benefit plan administered by United ("the health-benefit plan").

According to the complaint, after Kenneth's treating physician ordered inpatient rehabilitation, representatives of the hospital and a rehabilitation facility "all contacted [United] numerous times in an attempt to get [Kenneth] admitted to an inpatient facility." Hendrix asserts that United then "imposed itself as [Kenneth's] health care provider, took control of [Kenneth's] medical care, and made a medical treatment decision that [Kenneth] should not receive further treatment, rehabilitation, and care at an inpatient facility." Hendrix asserted in the complaint that, instead, United "made the medical treatment decision that [Kenneth] should be discharged to his home ... and receive a lower quality of care (i.e., home health care) than had been ordered by [his] physicians, therapists, and nurses." Because United rejected Kenneth's request for inpatient rehabilitation, Kenneth was sent home. Kenneth died on October 25, 2015, due to a pulmonary thromboembolism

, which, the complaint asserts, would not have occurred had United approved inpatient rehabilitation.

Alleging wrongful death under § 6-5-410, Ala. Code 1975, Hendrix sued the estate of the other driver involved in the automobile accident, that driver's employer, the owner of the other vehicle involved in the accident, and United.² In support of her claim against United, Hendrix alleged medical malpractice under § 6-5-480 et seq., Ala. Code 1975, and § 6-5-540 et seq., Ala. Code 1975. Hendrix alleged that United

"voluntarily assumed one or more of the following duties, jointly or in the alternative; (1) a duty to act with reasonable care in determining the quality of health care that [Kenneth] would receive; (2) a duty to not provide to [Kenneth] a quality of health care so low that it knew that [Kenneth] was likely to be injured or killed; and/or (3) a duty to exercise such reasonable care, skill, and diligence as other similarly situated health care providers in the same general line of practice ordinarily have and exercise in a like case."

Hendrix alleged further that United

"negligently and wantonly breached the standard of care that applied to [United's] voluntarily undertaken duties in one or more of the following respects: (a) by providing healthcare for [Kenneth] that fell beneath the standard of care; (b) by making the medical treatment decision and mandating that [Kenneth] not receive further treatment, rehabilitation, and care at an inpatient facility following his discharge from [the hospital]; (c) by violating a physician's orders which required that [Kenneth] receive further treatment, rehabilitation, and care at an inpatient facility following his discharge from [the hospital]; (d) by interfering with [Kenneth's] medical care and preventing him from receiving further treatment, rehabilitation, and care at an inpatient facility following his discharge from [the hospital]."

Although somewhat vague, the complaint demonstrates that, based on the recommendation of his treating physician at Gadsden Regional Medical Center, Kenneth wanted to be admitted to an inpatient-rehabilitation facility, that his medical providers requested United pay for that course of treatment pursuant to an insurance policy that is part of an ERISA-governed plan, that United denied that request, and that Kenneth was unable to participate in inpatient rehabilitation because United refused to pay for it.³

United removed Hendrix's action to the United States District Court for the Northern District of Alabama. In its notice of removal, United asserted that federal-question jurisdiction existed under 28 U.S.C. § 1331 because, United contended, Hendrix's claim against United should be treated as one seeking relief under the civil-enforcement provisions of ERISA and was therefore completely preempted by ERISA. See ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (authorizing an ERISA plan participant or beneficiary to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan"); Garrison v. Northeast Georgia Med. Ctr., Inc., 66 F. Supp. 2d 1336, 1340 (N.D. Ga. 1999) ("[C]laims seeking relief available from section 502(a), ERISA's civil enforcement provision, 29 U.S.C. § 1132, are completely preempted, and removal jurisdiction exists.").

In Aetna Health Inc. v. Davila, 542 U.S. 200, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004), the United States Supreme Court reiterated that the civil-enforcement provisions set out in § 502(a) of ERISA have complete preemptive effect and that state-law causes of action that fit within the scope of those enforcement provisions are to be treated as federal claims that can removed to federal court. According to the Court in Davila:

"[I]f an individual brings suit complaining of a denial of coverage for medical care, where the individual is entitled to such coverage only because of the terms of an ERISA-regulated employee benefit plan, and where no legal duty (state or federal) independent of ERISA or the plan terms is violated, then the suit falls ‘within the scope of’ ERISA § 502(a)(1)(B). Metropolitan Life [ Ins. Co. v. Taylor, 481 U.S. 58, 66[, 107 S.Ct. 1542, 95 L.Ed.2d 55] (1987) ]. In other words, if an individual, at some point in time, could have brought his claim under ERISA § 502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant's actions, then the individual's cause of action is completely pre-empted by ERISA § 502(a)(1)(B)."

542 U.S. at 210, 124 S.Ct. 2488. The federal district court in the present case noted that Alabama's wrongful-death statute creates a "new right" that arises after the decedent's death and allows for the recovery of only punitive damages. According to the district court, "[b]ecause the wrongful-death claim vests in the decedent's personal representative as a new right and does not compensate for an injury to the ERISA...