Pomeroy v. Johns Hopkins Medical Services, Inc., Civ. A. No. MJG-94-2236.

• Decision Date: 17 October 1994
• Docket Number: Civ. A. No. MJG-94-2236.
• Citation: 868 F. Supp. 110
• Parties: Patrick POMEROY, et al., Plaintiffs, v. JOHNS HOPKINS MEDICAL SERVICES, INC., et al., Defendants.
• Court: U.S. District Court — District of Maryland

868 F. Supp. 110

Patrick POMEROY, et al., Plaintiffs, v. JOHNS HOPKINS MEDICAL SERVICES, INC., et al., Defendants.

Civ. A. No. MJG-94-2236.

United States District Court, D. Maryland.

October 17, 1994.

Donald Eugene Kaplan, Donald E. Kaplan, P.A., Pikesville, Maryland, for plaintiffs.

Jonathan D. Smith, Piper and Marbury, Baltimore, MD, for Johns Hopkins Medical Services, Inc. and Dr. Moyses Purisch.

Bryan D. Bolton, Derek Barnet Yarmis, Shapiro & Olander, Baltimore, MD, for Prudential Health Care Plan.

GARBIS, District Judge.

The Court has before it Defendant Prudential Health Care Plan, Inc.'s Motion to Dismiss Second Amended Complaint¹, or in the alternative, for Summary Judgment. The Court has considered the legal memoranda submitted by the parties and has held a hearing to have the benefit of the arguments of counsel.

I. BACKGROUND

In 1988, Plaintiffs Patrick and Barbara Pomeroy became members of the Prudential Health Care Plan of the Mid-Atlantic ("the Plan"), an employee benefits plan offered through Barbara Pomeroy's employer, Maryland Insurance Group. Defendant Prudential Health Care Plan, Inc. ("Prudential"), the company that offers the Plan, is a licensed Health Maintenance Organization ("HMO") operating in the State of Maryland.

Plaintiffs allege that in April of 1990, Patrick Pomeroy was diagnosed with diplopia, a medical condition requiring surgery. Prudential allegedly refused to pay for surgery. In September of 1990, Patrick Pomeroy was diagnosed with chronic back pain, severe depression, and a facial tic. Again, Prudential refused to pay for proper and necessary medical treatment. Additionally, Plaintiffs maintain that as a result of Prudential's refusal to pay for appropriate medical treatment, Patrick Pomeroy has become addicted to the prescription drug percodan, and that Prudential has refused to pay for drug dependency treatment.

In the Second Amended Complaint, Plaintiffs bring six counts, the first four of which are directed at Defendant Prudential and the last two against other defendants. Count I is a claim brought expressly pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., to enforce Plaintiffs' benefit rights and to clarify their future benefits under the Plan. Counts II through IV are brought under the common law theories of medical malpractice, direct and vicarious negligence, and intentional infliction of emotional distress, respectively. Counts V and VI assert purely common law claims against the treating physician and his employer.

Defendant Prudential has moved to dismiss all four Counts asserted against them. Defendants assert first that Plaintiffs' state law claims are preempted by Section 514(a) of ERISA, and second, that given Plaintiffs' failure to exhaust their internal remedies under the Plan, Plaintiffs do not now present any valid cause of action within the Court's jurisdiction. As discussed below, the Court finds that Plaintiffs' state law claims are preempted by ERISA Section 514(a). Since Plaintiffs have voluntarily dismissed without prejudice their ERISA claims, the exhaustion of remedies defense is moot.

II. PREEMPTION OF PLAINTIFFS' STATE LAW CLAIMS

The federal Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA), is a comprehensive statute designed to promote the interests of employees and their beneficiaries by regulating the creation and administration of employee pension and benefit plans. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137, 111 S.Ct. 478, 481, 112 L.Ed.2d 474 (1990), citing Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2890, 77 L.Ed.2d 490 (1983). Consistent with its intent to create a comprehensive, uniform federal scheme for regulation of employee benefit plans, Congress drafted ERISA's pre-emption clause in broad terms. Ingersoll-Rand Co. v. McClendon, 498 U.S. at 137, 111 S.Ct. at 482. Under section 514(a) of ERISA, as set forth in 29 U.S.C. § 1144(a), Congress preempted "all State laws insofar as they may now or hereafter relate to any employee benefit plan." Statutory mandates, court decisions, and state law from all other sources are included within the preemption clause. 29 U.S.C. 1144(c)(1).

The Prudential Health Care Plan of the Mid Atlantic is indisputably an employee benefit plan governed by ERISA.² The question then becomes whether Plaintiffs' state law claims based on state common law theories of liability are preempted by ERISA Section 514(a).

Determining whether a particular state law is preempted by ERISA presents, fundamentally, a question of determining legislative intent. Ingersoll-Rand, 498 U.S. at 137-38, 111 S.Ct. at 482. The Supreme Court repeatedly has concluded that Congress intended the preemption clause to be construed extremely broadly. See, e.g., FMC Corp. v. Holliday, 498 U.S. 52, 58, 111 S.Ct. 403, 407, 112 L.Ed.2d 356 (1990); Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983).

The critical determination governing preemption is whether the state law asserted "relates to" an ERISA plan. 29 U.S.C. § 1144(a). A law "clearly `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, 463 U.S. at 96-97, 103 S.Ct. at 2900. The law need not expressly address a benefit plan to be preempted, however. Under the "broad common-sense meaning" given to the preemption clause by the Supreme Court, a state law may "relate to" a benefit plan, and thereby be preempted, even if the law is not specifically designed to affect such plans, or the effect is only indirect. Ingersoll-Rand, 498 U.S. at 139, 111 S.Ct. at 483; Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 47, 107 S.Ct. 1549, 1552-53, 95 L.Ed.2d 39 (1987). In other words, state law claims which relate to the administration of an ERISA-governed plan, but which arise under general state laws which themselves have no impact on employee benefit plans, fall within the scope of ERISA preemption. Powell v. Chesapeake & Potomac Telephone Co. of Va., 780 F.2d 419, 421 (4th Cir.1985), cert. denied, 476 U.S. 1170, 106 S.Ct. 2892, 90 L.Ed.2d 980 (1986) (emphasis in original).

The Supreme Court has recognized certain limitations on the breadth of ERISA preemption. For example, in Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983), the Court held that "some state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law `relates to' the plan." Shaw, 463 U.S. at 100 n. 21, 103 S.Ct. at 2901 n. 21. Similarly, in Mackey v. Lanier Collection Agency and Serv., Inc., 486 U.S. 825, 108 S.Ct. 2182, 100 L.Ed.2d 836 (1988), the Court held that "lawsuits against ERISA plans for run-of-the-mill state-law claims such as unpaid rent, failure to pay creditors, or even torts committed by an ERISA plan" are not contemplated by Congress as subject to preemption. Id., 486 U.S. at 833, 108 S.Ct. at 2187. Plaintiffs rely on this language to argue that their claims qualify as "run-of-the-mill" state tort law claims which affect only remotely their benefit plan.

It is important to observe, however, that the cases to which the Mackey Court referred as containing examples of "run-of-the-mill" claims involved lawsuits in which the plaintiff was a third party suing an ERISA plan, not a plan participant suing (in such capacity) his or her plan provider. See Nealy v. U.S. Healthcare HMO, 844 F.Supp. 966, 971 (S.D.N.Y.1994) (distinguishing Mackey and listing Supreme Court examples of nonpreemption). By contrast, Plaintiffs' action involves a plan participant suing the plan administrator over allegedly improper denials of medical benefits provided under the terms of the plan. Far from affecting an employee benefit plan in a "tenuous, remote or peripheral" manner, plaintiffs' claims are centered on the parties' rights and duties under the plan.

Because Plaintiffs' allegations are essentially complaints about the administration of claims under an employee benefit plan, the Court finds that Counts II through IV all "relate to" the Plan and are therefore preempted by ERISA § 514(a). To begin with, in Paragraph 12 of their Second Amended Complaint, incorporated by reference into Counts I through IV, Plaintiffs allege that on several occasions Defendant Prudential refused to pay for necessary and proper medical treatment. Theoretically speaking, Prudential would incur liability for this refusal, if at all, only if it had an obligation to pay for Plaintiffs' treatment. Therefore, any analysis of these claims requires an examination of the benefits offered under the plan and Prudential's duties in administering those benefits.

In Count II, Plaintiffs allege that as a result of Prudential's medical malpractice (a claim sounding in negligence), Patrick Pomeroy suffered serious economic, mental and physical losses. Distilled to its basics, Count II alleges that Prudential was negligent in the selection, inspection, and review of Johns Hopkins Medical Services (JHMS) and treating physician Dr. Purisch as health care providers and that Prudential delegated certain nondelegable duties to these providers.³ In turn, these claims reduce to allegations that Prudential failed to provide Plaintiffs with the kind and amount of health care benefits to which they were entitled as Plan participants and beneficiaries, and thus failed to fulfill its job as administrator of Plaintiffs' medical care claims.⁴

In Count III, Plaintiffs claim that "Prudential has breached the duty owed to the Plaintiffs vicariously and is negligent vicariously" for the above stated conduct. Second Amended Complaint at ¶¶ 23, 24. As with Count II, this claim is based upon the duty created by the Plan and the obligations owed to Plaintiffs on account of their participation in the Plan. Any theory based on vicarious liability or...