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AETNA HEALTH INC. V. DAVILA (02-1845)
Web-accessible at:
http://supct.law.cornell.edu/supct/html/02-1845.ZS.html
Argued March 23, 2004 -- Decided June 21, 2004*
Opinion author: Thomas
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Respondents brought separate Texas state-court suits,
alleging that petitioners, their health maintenance organizations
(HMOs), had refused to cover certain medical services in
violation of an HMO's duty "to exercise ordinary care" under the
Texas Health Care Liability Act (THCLA), and that those
refusals "proximately caused" respondents' injuries. Petitioners
removed the cases to federal courts, claiming that the actions fit
within the scope of, and were thus completely pre-empted by,
sect. 502 of the Employee Retirement Income Security Act of
1974 (ERISA). The District Courts agreed, declined to remand
the cases to state court, and dismissed the complaints with
prejudice after respondents refused to amend them to bring
explicit ERISA claims. Consolidating these and other cases,
the Fifth Circuit reversed. It found that respondents' claims did
not fall under ERISA sect. 502(a)(2), which allows suit against a
plan fiduciary for breaches of fiduciary duty to the plan, because
petitioners were being sued for mixed eligibility and treatment
decisions that were not fiduciary in nature, see Pegram v.
Herdrich, 530 U.S. 211; and did not fall within the scope of
sect. 502(a)(1)(B), which provides a cause of action for the
recovery of wrongfully denied benefits, because THCLA did
not duplicate that cause of action, see Rush Prudential HMO,
Inc. v. Moran, 536 U.S. 355.
Held: Respondents' state causes of action fall within ERISA
sect. 502(a)(1)(B), and are therefore completely pre-empted
by ERISA sect. 502 and removable to federal court. Pp. 4-
20.
(a) When a federal statute completely pre-empts a state-law
cause of action, the state claim can be removed. See
Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8.ERISA is
such a statute. Because its purpose is to provide a uniform
regulatory regime, ERISA includes expansive pre-emption
provisions, such an ERISA sect. 502(a)'s integrated
enforcement mechanism, which are intended to ensure that
employee benefit plan regulation is "exclusively a federal
concern," Alessi v. Raybestos&nbhyph;Manhattan, Inc., 451
U.S. 504, 523. Any state-law cause of action that duplicates,
supplements, or supplants ERISA's civil enforcement remedy
conflicts with clear congressional intent to make that remedy
exclusive, and is therefore pre-empted. ERISA sect. 502(a)'s
pre-emptive force is still stronger. Since ERISA sect.
502(a)(1)(B)'s pre-emptive force mirrors that of sect. 301 of
the Labor Management Relations Act, 1947, Metropolitan Life
Ins. Co. v. Taylor, 481 U.S. 58, 65-66, and since sect. 301
converts state causes of actions into federal ones for purposes
of determining the propriety of removal, so too does ERISA
sect. 502(a)(1)(B).
Pp. 4-7.
(b) If an individual, at some point in time, could have brought
his claim under ERISA sect. 502(a)(1)(B), and where no other
independent legal duty is implicated by a defendant's actions,
then the individual's cause of action is completely pre-empted
by ERISA sect. 502(a)(1)(B). Respondents brought suit only
to rectify wrongful benefits denials, and their only relationship
with petitioners is petitioners' partial administration of their
ERISA-regulated benefit plans; respondents therefore could
have brought sect. 502(a)(1)(B) claims to recover the allegedly
wrongfully denied benefits. Both respondents allege violations
of the THCLA's duty of ordinary care, which they claim is
entirely independent of any ERISA duty or the employee
benefits plans at issue. However, respondents' claims do not
arise independently of ERISA or the plan terms. If a managed
care entity correctly concluded that, under the relevant plan's
terms, a particular treatment was not covered, the plan's failure
to cover the requested treatment would be the proximate
cause of any injury arising from the denial. More significantly,
the THCLA provides that a managed care entity is not subject
to THCLA liability if it denies coverage for a treatment not
covered by the plan it administers. Pp. 7-12.
(c) The Fifth Circuit's reasons for reaching its contrary
conclusion are all erroneous. First, it found significant that
respondents asserted tort, rather than contract, claims and that
they were not seeking reimbursement for benefits denied.
However, distinguishing between pre-empted and non-pre-
empted claims based on the particular label affixed to them
would allow parties to evade ERISA's pre-emptive scope
simply by relabeling contract claims as claims for tortious breach
of contracts. And the fact that a state cause of action attempts
to authorize remedies beyond those that ERISA sect. 502(a)
authorizes does not put it outside the scope of ERISA's civil
enforcement mechanism. See, e.g., Pilot Life Ins.
Co. v. Dedeaux, 481 U.S. 41, 43. Second, the court
believed the plans' wording immaterial because the claims
invoked an external ordinary care duty, but the wording is
material to the state causes of action and the THCLA creates a
duty that is not external to respondents' rights under their
respective plans. Finally, nowhere in Rush Prudential did this
Court suggest that ERISA sect. 502(a)'s pre-emptive force is
limited to state causes of action that precisely duplicate an
ERISA sect. 502(a) cause.Nor would it be consistent with this
Court's precedent to do so. Pp. 12-14.
(d) Also unavailing is respondents' argument that the
THCLA is a law regulating insurance that is saved from pre-
emption by ERISA sect. 514(b)(2)(A). This Court's
understanding of sect. 514(b)(2)(A) is informed by the
overpowering federal policy embodied in ERISA sect. 502(a),
which is intended to create an exclusive federal remedy, Pilot
Life, 481 U.S., at 52. Allowing respondents to proceed with
their state-law suits would "pose an obstacle" to that objective.
Ibid. Pp. 14
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