Marcella v. Capital Dist. Physicians Health Plan, 97-CV-596 LEK/DNH.
Decision Date | 07 April 1999 |
Docket Number | No. 97-CV-596 LEK/DNH.,97-CV-596 LEK/DNH. |
Citation | 47 F.Supp.2d 289 |
Parties | Carol P. MARCELLA, Plaintiff, v. CAPITAL DISTRICT PHYSICIANS HEALTH PLAN, INC., Defendant. |
Court | U.S. District Court — Northern District of New York |
Office of Nicholas D. Morsillo, Schenectady, NY (Nicholas D. Morsillo, of counsel), for plaintiff.
Iseman, Cunningham, Riester & Hyde, Albany, NY (Brian M. Culnan, of counsel), for defendant.
DECISION AND ORDER
Plaintiff commenced this action in New York State Supreme Court, alleging claims for breach of contract, intentional infliction of emotion distress and prima facie tort. On April 24, 1997, Defendant Capital District Physicians' Health Plan, Inc. ("CDPHP") removed the action pursuant to 28 U.S.C. § 1441 on the grounds of preemption by Section 514(a) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1144(a) (1994). On August 26, 1997, Magistrate Judge David N. Hurd denied Plaintiff's motion to remand the action without prejudice to renew upon submission of additional relevant evidence. On renewal, Magistrate Judge Hurd again denied the motion on the grounds that Plaintiff's claims were preempted by ERISA.
Presently before the Court is a motion for summary judgment by Defendant. The Defendant argues again that all of Plaintiff's claims are preempted by ERISA and must therefore be dismissed. Defendant further argues that preemption is established as the law of the case and thus that the claims should be dismissed without further legal analysis. Plaintiff argues that the claims fall under a statutory exception to ERISA preemption for claims based on laws that regulate the insurance industry. After consideration, the Court find that the claims are preempted and that the asserted exception is not applicable. Accordingly, summary judgment is granted to the Defendant.
During the relevant period, Plaintiff was employed by Prudential Manor Homes, Inc. ("Prudential"), a member of the Latham Area Chamber of Commerce ("the Chamber"). The Chamber had previously entered into an agreement ("the Chamber Plan") with the Defendant, a Health Maintenance Organization ("HMO"), whereby members of the Chamber and their employees could receive health care benefits provided by the Defendant at a reduced rate under a particular health plan referred to as an Emerald 15 Plan.
Pursuant to her employment, Plaintiff enrolled in the Chamber Plan on June 14 1994 by application through the Chamber. On or about March 25, 1996, Plaintiff had surgery performed at Brigham & Women's Hospital ("BWH") in Boston, Massachusetts. She thereafter requested that the Defendant pay for the surgery. Defendant refused to do so, asserting that Plaintiff was not entitled to reimbursement for surgery performed by non-participating physicians, i.e. not associated with the HMO, because she had not first obtained the permission which Defendant asserted was required by the terms of the Emerald 15 Plan.
Seeking to have the decision reversed, Plaintiff first exhausted administrative appeals, and then filed a grievance with the New York State Department of Health ("DOH"). On January 27, 1997, the DOH concluded that it was "in agreement with CDPHP's decision." Wilkes Aff., Dkt. 12, Ex. J.
Under Rule 56(c), summary judgment:
shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c); see Anderson v. Liberty Lobby, 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party has the initial burden of "informing the district court of the basis for its motion" and identifying the matter that "it believes demonstrate[s] the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Federal Deposit Ins. Corp. v. Giammettei, 34 F.3d 51, 54 (2d Cir.1994). The substantive law determines which facts are material to the outcome of a particular litigation. See Anderson, 477 U.S. at 250, 106 S.Ct. 2505. In determining whether summary judgment is appropriate, a court must resolve all ambiguities, and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)); Hurwitz v. Sher, 982 F.2d 778, 780 (2d Cir. 1992), cert. denied, 508 U.S. 912, 113 S.Ct. 2345, 124 L.Ed.2d 255 (1993).
If the moving party meets its burden, the burden then shifts to the non-moving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. 1348. Only when it is apparent, however, that no rational finder of fact "could find in favor of the non-moving party because the evidence to support its case is so slight" should summary judgment be granted. Gallo v. Prudential Residential Servs., 22 F.3d 1219, 1223 (2d Cir.1994).
Defendant first argues that Plaintiff's state law claims have been previously found by the Magistrate Judge to be preempted by federal law and that this finding is the law of the case. Defendant further asserts that, if the issue is considered de novo, this Court should reach the same conclusion, and accordingly dismiss the action.
In his January 28, 1998 Order denying Plaintiff's second motion to remand the case back to state court, Magistrate Judge Hurd found that "[t]his action is based upon the defendant's alleged failure to approve treatment for the plaintiff as a participant in the Chamber Plan and is preempted under ERISA." Order, 97-CV-596, at 4 (Jan. 28, 1998). Defendant argues that the preemption of Plaintiff's claims are established as the law of the case and the action must therefore be dismissed.
Although the applicability of ERISA preemption as a jurisdictional matter is established as the law of the case, the Magistrate Judge's Order does not make it explicit that each of Plaintiff's state law claims are preempted. Further, it is noted that Plaintiff raises arguments here that were not addressed by the Magistrate Judge. Therefore, the Court finds it prudent to restrict the law of the case to the Magistrate Judge's determination that the Chamber Plan is a qualified ERISA employee benefit plan as defined in ERISA § 3(1), 29 U.S.C. § 1002(1) (West Supp.1998), and that Plaintiff was a participating employee. Whether each of Plaintiff's state law claims is preempted will be considered de novo.
ERISA includes a broad preemption provision which states, inter alia, that the statute "shall supercede any and all State laws insofar as they may now or hereafter relate to any employee health benefit plan." ERISA § 514(a), 29 U.S.C. § 1144(a) (1994). "A law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). Under this standard, state law claims which arise directly out of an allegedly wrongful administration of benefits are routinely preempted. See Valentine v. Carlisle Leasing Int'l Co., No 97-CV-1407, 1998 WL 690877, *5 (N.D.N.Y. Sept.30, 1998) (); Aetna Life Ins. Co. v. Borges, 869 F.2d 142, 146-47 (2d Cir.1989) () Preemption applies to claims for enforcement of benefits whether under a breach of contract theory or a tort theory. See Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987) ( ); Nealy v. U.S. Healthcare HMO, 844 F.Supp. 966, 974 (S.D.N.Y.1994) ( ). Claims that do not seek the actual benefit but rather seek relief for damages resulting from a denial of benefits are similarly preempted. See Powell v. Chesapeake and Potomac Telephone Co., 780 F.2d 419, 421 (4th Cir.1985) ( ); see also Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 61, 66-67, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) ( ); Reilly v. Blue Cross & Blue Shield United of Wis., 846 F.2d 416, 425 (7th Cir.1988) ( ).
All of Plaintiff's claims arise out of the administration of benefits and seek relief for the allegedly wrongful denial of such benefits. See Notice of Removal Ex. A at ¶ 37-39 ( ); ¶ 49 (...
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