Le v. Unum Ins. Co. of Am.
| Decision Date | 21 August 2018 |
| Docket Number | CIVIL ACTION CASE NO. 17-833 |
| Citation | 336 F.Supp.3d 642 |
| Court | U.S. District Court — Western District of Louisiana |
| Parties | Paula LE v. UNUM INSURANCE COMPANY OF AMERICA |
Patrick C. Morrow, Richard Theodore Haik, Jr., Morrow Morrow et al., Opelousas, LA, for Paula Le.
Lauren A. Welch, McCranie Sistruck et al., New Orleans, LA, for Unum Insurance Company of America.
ORDER AND REASONS
This is an action brought by Plaintiff Paula Le ("Plaintiff") for denial of long-term disability benefits under an employee welfare benefit plan ("the plan"), written through her employer, the Opelousas General Health System ("OGHS"), and insured by Defendant Unum Life Insurance Company of America ("Defendant").1 The parties have filed cross motions for summary judgment on the issue of whether the plan is governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA").2 Having considered the motions, the memoranda, the record, and the applicable law, the Court will grant Plaintiff's motion, deny Defendant's motion, and hold that the employee benefit plan established and maintained by OGHS is a "governmental plan," which is exempt from ERISA coverage pursuant to 29 U.S.C. § 1003(b)(1).
Plaintiff was involved in a serious vehicular collision on March 20, 2013, in which she sustained spinal injuries.3 As a result of those injuries, Plaintiff underwent several surgical procedures performed by Dr. George Raymond Williams.4 Plaintiff also underwent several procedures as a result of injuries to her hands and arms.5 Since undergoing these surgeries, Plaintiff has been declared totally and permanently disabled.6
At the time of her injury, Plaintiff was insured under an employee benefit plan, written through her employer, OGHS, and insured by Defendant.7 Plaintiff applied for benefits and was awarded long-term disability benefits beginning September 12, 2013.8 On or about January 5, 2017, Plaintiff received notification that her disability benefits were being terminated, which Plaintiff alleges was done without just cause.9
On May 10, 2017, Plaintiff filed a petition in the 27th Judicial District Court for the Parish of St. Landry, State of Louisiana, seeking damages as a result of the allegedly unreasonable denial of benefits under the plan.10 In the petition, Plaintiff brings claims for alleged violations of Louisiana law, asserting that OGHS "operates as a political subdivision" and the plan is therefore exempt from coverage under ERISA.11
On June 28, 2017, Defendant removed the case to the United States District Court for the Western District of Louisiana.12 In the Notice of Removal, Defendant asserts that this Court has original jurisdiction over this matter under 28 U.S.C. § 1331.13 Specifically, Defendant contends that Plaintiff's claim is for benefits under an employee benefit plan governed by the ERISA and is completely preempted by ERISA.14
On September 27, 2017, Plaintiff filed a motion for summary judgment on the issue of whether the plan is governed by ERISA.15 On October 18, 2017, Defendant filed an opposition to Plaintiff's motion for summary judgment.16 On October 27, 2017, with leave of Court, Plaintiff filed a reply brief in further support of the motion for summary judgment.17
On October 2, 2017, Defendant filed a cross motion for summary judgment on the issue of whether the plan is governed by ERISA.18 On October 24, 2017, Plaintiff filed an opposition to Defendant's motion for summary judgment.19 On November 7, 2017, with leave of Court, Defendant filed a reply brief in further support of the motion for summary judgment.20 On July 26, 2018, the case was reassigned to the undersigned Chief United States District Judge.21
Plaintiff contends that her employer, OGHS, is a political subdivision of the State of Louisiana, and as such the plan is exempt from ERISA.22 Therefore, Plaintiff submits that the plan is not an ERISA plan and moves for summary judgment on this issue.23
Plaintiff cites Hightower v. Texas Hospital Association , where the Fifth Circuit held that if a plan was "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," the plan was exempt from coverage under Title I of ERISA.24 Here, Plaintiff asserts that the plan was established and maintained by OGHS for the benefit of the employees of Opelousas General Hospital employees.25 Furthermore, Plaintiff argues that OGHS is a political subdivision of the State of Louisiana.26
Plaintiff contends that in Bertrand v. Sandoz the Louisiana Supreme Court held that Hospital District No. 2 ("HSD"), which Plaintiff contends later became OGHS, is a political subdivision of the State.27 Plaintiff cites Buller v. American United Life Ins. Co. , a case decided by a district judge in the Western District of Louisiana, holding that OGHS is a political subdivision of the State and that a policy established by OGHS for its employees was exempt from ERISA coverage.28 Plaintiff also cites Andrus v. Unum Life Insurance Company of America , a case decided by a district judge in the Eastern District of Louisiana, holding that OGHS is a political subdivision of the State and that the same policy at issue in this case was exempt from ERISA coverage.29 Thus, Plaintiff asserts that "there can be no question that Opelousas General Health System is a governmental entity," and "any Plan or Policy established and/or maintained by Opelousas General Health System and/or Opelousas General Hospital is exempt under ERISA."30 Accordingly, Plaintiff urges the Court to grant the motion for summary judgment and find that the plan is exempt from ERISA coverage.31
In response, Defendant first states that it does not dispute that HSD is a political subdivision of the State of Louisiana.32 However, Defendant contends that OGHS is a trust established for a public purpose, and is not a political subdivision of the State of Louisiana.33
Defendant argues that the exhibits submitted in connection with this motion establish that OGHS became the operating entity of the hospital by way of a resolution transferring the management of the hospital from the Hospital Corporation of the Sisters Marianites of the Holy Cross to OGHS.34 Defendant contends that OGHS did not become a political subdivision of the State by operating the hospital under the terms of this agreement.35
According to Defendant, HSD and OGHS are distinct legal entities, and only HSD is a political subdivision of the State.36 Defendant asserts that Plaintiff's position is based on the erroneous premise that HSD and OGHS are the same legal entity, and Defendant argues there is no documentation showing that HSD ever became OGHS, as Plaintiff suggests.37 Defendant contends that Plaintiff misreads the holding of the Louisiana Supreme Court in Bertrand.38 According to Defendant, the Louisiana Supreme Court held that HSD was a political subdivision and that OGHS was a public trust, not a political subdivision.39 Moreover, Defendant contends that HSD has no control over the employment or benefit operations of OGHS, and OGHS establishes and maintains its own employee benefit plan for its employees.40
Defendant contends that the district court cases cited by Plaintiff are merely interlocutory orders that should not be considered, even as persuasive authority, because Defendant alleges that the Louisiana Supreme Court has decided the question presented.41 Defendant acknowledges that the issue as to whether the OGHS plan is governed by ERISA is a question that is to be determined under federal law.42 However, Defendant posits that "it is appropriate for the highest court of the state to make a determination as to whether a specific entity is a political subdivision of the state."43 Because there is no governing federal authority that is determinative of the issue, Defendant submits that this Court should look to the ruling of the Louisiana Supreme Court that definitively established that OGHS is not a political subdivision of the State.44
In the reply brief, Plaintiff contends that Defendant "ignores the factors which establish that OGHS is in fact a political subdivision or, at a minimum, an agency or instrumentality of a state or political subdivision."45 According to Plaintiff, OGHS was created as a public trust and specifically refers to itself as an instrumentality of the State.46 Plaintiff also asserts that OGHS is a "public corporation of the beneficiary" and subject to the "Public Contracts Law, Public Records Law, Public Meetings Law, Code of Ethics, and the Bond Validation Procedures Law."47 Plaintiff notes that all of OGHS's meetings are open to the public.48 Furthermore, Plaintiff states that the trust is exempt from all state and federal taxes and the property of the trust is considered public property.49
Plaintiff also disputes Defendant's assertion that OGHS operates independently from HSD and is not subject to its supervision and control.50 According to Plaintiff, the Board of Trustees, which conducts the affairs of OGHS, is appointed by the HSD, and five of the nine trustees are commissioners of HSD.51 Plaintiff contends that the Commission of HSD has the power to remove a trustee of OGHS for cause.52 Moreover, Plaintiff asserts that the Commission must approve OGHS's bylaws, and the Commission has the power to veto the bylaws or propose changes to them.53 Therefore, Plaintiff asserts that "[t]here is no question that control of OGHS is vested with Hospital Service District No. 2, and the District Commission controls the governing board of OGHS."54...
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