Mansfield v. Chicago Park Dist. Group Plan, 95 C 3217.

• Decision Date: 05 November 1996
• Docket Number: No. 95 C 3217.,95 C 3217.
• Parties: Robert F. MANSFIELD, Plaintiff, v. The CHICAGO PARK DISTRICT GROUP PLAN, a group health plan, and The Chicago Park District, an Illinois municipal corporation, Defendants.
• Court: U.S. District Court — Northern District of Illinois

946 F.Supp. 586

Robert F. MANSFIELD, Plaintiff, v. The CHICAGO PARK DISTRICT GROUP PLAN, a group health plan, and The Chicago Park District, an Illinois municipal corporation, Defendants.

No. 95 C 3217.

United States District Court, N.D. Illinois, Eastern Division.

November 5, 1996.

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Patricia Wrona, Walsh & Wrona, Chicago, IL, for Robert F. Mansfield.

Nelson A. Brown, Jr., Chicago, IL, for Chicago Park District.

MEMORANDUM OPINION AND ORDER

ANN CLAIRE WILLIAMS, District Judge.

Plaintiff Robert Mansfield ("Mansfield") is suing the Chicago Park District and the Chicago Park District Group Plan ("the Park District"). Count one of Mansfield's two-count complaint alleges that defendants violated the Consolidated Omnibus Budget Reconciliation Act ("COBRA") amendments to both the Employee Retirement Income Security Act ("ERISA") and the Public Health Service Act ("PHSA"). In count two, Mansfield contends that the Park District's breach of these federal statutes constitutes a violation of his civil rights under 42 U.S.C. § 1983. Pursuant to Federal Rules of Civil Procedure 12(b)(6), 12(f), and 8(c),¹ the Park District moves to strike and dismiss Mansfield's first amended complaint. For the reasons set forth below, the Park District's motion is granted in part and denied in part.

Background

The following facts are taken from Mansfield's First Amended Complaint. Mansfield was an employee of the Chicago Park District and a participant in the Park District's group health plan. In May 1993, Mansfield became eligible to retire from his employment with the Park District. On May 4, 1993, Mansfield met with Mrs. Josephine Rankins, an agent of the Park District and the Park District's group health plan. The purpose of this meeting was to finalize arrangements for Mansfield's retirement. During their meeting, Rankins did not inform Mansfield of his right under COBRA to continue his health care coverage when he retired. Instead, Rankins advised Mansfield that his health care coverage would expire June 30, 1993. Mansfield retired from the Park District on May 31, 1993. After Mansfield retired, the defendants again failed to notify him verbally or in writing of his COBRA right to continue his health care coverage under the Park District's health care plan.

On October 3, 1993, Mansfield suffered a serious heart attack while in Honduras, Central America. Mansfield's heart attack caused him to be hospitalized in Honduras, then transported to a hospital in Tampa, Florida. Mansfield's condition required him to remain in the Tampa hospital throughout October and November 1993 to undergo various medical and surgical procedures. Since November 1993, Mansfield has remained in the care of physicians in Tampa as an outpatient and must travel there regularly to receive medical care. Because Mansfield has had no health insurance coverage since June 30, 1993, he has had to bear the costs of his medical treatment.

Analysis

The Park District moves to dismiss Mansfield's first amended complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. A motion to dismiss tests the sufficiency of the complaint, not the merits of the suit. Demitropoulos v. Bank One Milwaukee, N.A., 915 F.Supp. 1399, 1406 (N.D.Ill. 1996) (citing Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir.1990)). Therefore, the court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in favor of the plaintiff. Zinermon v. Burch, 494 U.S. 113, 118, 110 S.Ct. 975, 979, 108 L.Ed.2d 100 (1990); Colfax Corp. v. Illinois State Toll Highway Auth., 79 F.3d 631, 632 (7th Cir.1996) (citation omitted). The court will dismiss a claim only if "it appears beyond doubt that [the plaintiff] can prove no set of facts in support of his claim which would entitle him to relief." Colfax, 79 F.3d at 632 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)).

The defendants' attack Mansfield's complaint on several fronts. Because resolution of all issues depends on whether or not Mansfield may pursue his ERISA claim, the court addresses that question first.

I. ERISA

Mansfield's complaint seeks relief under both the Employee Retirement Income Security Act ("ERISA") and the Public Health Security Act ("PHSA"). The Park District argues that the PHSA governs this suit and that ERISA does not apply. The Park District asserts that only the PHSA applies because Mansfield's claims are based on a "governmental plan" that is specifically exempted from ERISA coverage. The court agrees with the Park District and therefore dismisses those portions of Mansfield's complaint seeking relief under ERISA.

In 1986, Congress enacted COBRA to provide temporary health insurance continuation coverage through amendments to both ERISA and the PHSA. Williams v. New Castle Cty., 970 F.2d 1260, 1264 (3d Cir. 1992). These amendments were motivated by Congress' concern over "reports of growing number of Americans without any health insurance coverage and the decreasing willingness of our Nation's hospitals to provide health care to those who cannot afford to pay." H.R.Rep. No. 99-241, 99th Cong., 2d Sess. 44, reprinted in 1986 U.S.C.C.A.N. 579, 622.

COBRA amended both ERISA and the PHSA by adding essentially identical continuation coverage and notification provisions. See 29 U.S.C. §§ 1161 to 1168 (ERISA); 42 U.S.C. §§ 300bb-1 to -8 (PHSA). Under these provisions, group health plans must make continuation coverage available for qualified beneficiaries who would lose coverage as a result of a qualifying event provided he or she elects the coverage within the election period. Williams, 970 F.2d at 1264. Generally, continuation coverage under either ERISA or the PHSA must extend for at least eighteen months after the date of the qualifying event. E.g., 42 U.S.C. 300bb-2.

Unlike the PHSA, ERISA specifically exempts any "governmental plan" from its employee benefit plan provisions. 29 U.S.C. § 1003(b)(1). A governmental plan is defined as any 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 agent or instrumentality of any of the foregoing." 29 U.S.C. § 1002(32). The PHSA, however, fills this gap in ERISA by ensuring continuation coverage to beneficiaries of a plan maintained by "any State that receives funds under this chapter, by any political subdivision of such a State, or by any agency or instrumentality of such a State or political subdivision." 42 U.S.C. § 300bb-1; Williams, 970 F.2d at 1264.² In other words, the PHSA guarantees continuation coverage to governmental plan beneficiaries specifically excluded by ERISA.

"Governmental plans" exempted under ERISA are "either (1) created directly by the state, so as to constitute departments or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate." Shannon v. United Serv. Auto. Ass'n, 965 F.2d 542, 548 (7th Cir.1992) (quoting NLRB v. Natural Gas Util. Dist., 402 U.S. 600, 602-603, 91 S.Ct. 1746, 1748-1749, 29 L.Ed.2d 206 (1971)). In this case, the Park District that administers the defendant plan was created by an act of the Illinois state legislature. See Chicago Park District Act, 70 ILCS 1505 et seq. Thus, under Shannon, the Park District plan is a governmental plan because it is administered by an entity that was created directly by the state. Because the plan is a governmental plan, it is exempt from ERISA coverage. Accordingly, the PHSA governs this lawsuit and those parts of Mansfield's complaint that seek relief under ERISA are dismissed.

Notwithstanding ERISA's clear exclusion of governmental plans, 29 U.S.C. §§ 1003(b)(1) & 1002(32), Mansfield urges the court to ignore the statute and apply ERISA to his case. According to Mansfield, since the COBRA amendments to ERISA and the PHSA "`contain the same continuation of coverage rules' ... then COBRA should provide the same remedies and protections to a covered employee whether that employee works in the public or private sector." (Pl.Resp. at 9 (citation omitted)). Mansfield adamantly pursues his ERISA claim because ERISA provides significantly greater remedies than does the PHSA. For example, under ERISA, a plaintiff may obtain attorneys' fees, money damages, and fines up to $100 per day.³ 29 U.S.C. §§ 1132(c), (g), & (1). In contrast, a plaintiff's remedy under the PHSA is limited to "appropriate equitable relief." 42 U.S.C. § 300bb-7. Mansfield argues that this difference in remedies is unfair to public sector employees and could not have been intended by Congress. (Pl.Resp. at 10). The court does not agree with Mansfield's argument.

When courts interpret statutes, the initial inquiry is the language of the statute itself. United States v. James, 478 U.S. 597, 604, 106 S.Ct. 3116, 3120, 92 L.Ed.2d 483 (1986). If the language on the face of the statute is clear and unambiguous, courts will not look to legislative history determine the intent of Congress. Barnhill v. Johnson, 503 U.S. 393, 401, 112 S.Ct. 1386, 1391, 118 L.Ed.2d 39 (1992); In re McFarland, 84 F.3d 943, 947 (7th Cir.1996). There is nothing ambiguous about ERISA's exemption of governmental plans. In fact, ERISA defines the governmental plan exemption with exceptional clarity.

Similarly, the COBRA amendments to the PHSA expressly recognize ERISA's exclusion of governmental plans and serve to fill this gap. See 42 U.S.C. § 300bb-1 (the PHSA governs group health plans of state governments); Williams, 970 F.2d at 1264 (PHSA intended to fill gap created by ERISA's governmental plan exemption). The PHSA is also unambiguous about the remedy it provides. Under 29 U.S.C. § 300bb-7, any person who is aggrieved by the failure of a state to comply with the requirements of the PHSA "may bring an action for appropriate...