Unpublished Disposition, 869 F.2d 1498 (9th Cir. 1989)

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US Court of Appeals for the Ninth Circuit - 869 F.2d 1498 (9th Cir. 1989)

Sandra RAPP and Eva Nino, Plaintiffs-Appellants,v.TRAVELERS INSURANCE COMPANY, Defendant-Appellee.

Nos. 87-6633, 88-5926.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 8, 1989.Decided Feb. 22, 1989.

Before FARRIS, FERGUSON and BEEZER, Circuit Judges.


Appellants Sandra Rapp and Eva Nino appeal from the district courts' grant of summary judgment holding their claims were preempted by ERISA. 29 U.S.C. § 1001, et seq. In this consolidated appeal Appellants contend that ERISA does not preempt their claims. We affirm.

Rapp and Nino claim that they are entitled to payment for expenses incurred for treatment of their illnesses by psychologists. Rapp and Nino are dependents of AMTRAK employees and are covered by a health plan paid for by AMTRAK and administered by Travelers Insurance Company. Travelers denied the claims on the ground that the services of psychologists are not covered under the plan. Nino filed suit in state court against Travelers alleging various state law claims, sounding in tort and contract, for Travelers failure to pay the claim. Nino's case was properly removed to federal court. Metropolitan Life Ins. Co., v. Taylor, 481 U.S. 58 (1987). Rapp filed suit in federal court alleging the same state law claims. Travelers was granted summary judgment in both cases on the ground that the state law claims were preempted by ERISA.

With one exception relevant to these appeals, ERISA supersedes all state laws which relate to employee benefit plans such as the one at issue in these appeals. 29 U.S.C. § 1144(a). Laws which regulate insurance, however, are not preempted. 29 U.S.C. § 1144(b) (2) (A). Lastly, states may not deem employee benefit plans to be insurers or insurance companies. 29 U.S.C. § 1144(b) (2) (B).

Appellants contend that their state law claims survive because: 1) the plan is a government plan not preempted by ERISA; 2) the underlying California choice of provider statute upon which the actions are based is a regulation of insurance; and 3) that the California statute applies to Travelers as an insurer. Each of these arguments lacks merit.

Appellants first contend that the AMTRAK plan is a government plan, and, as such, not governed and preempted by ERISA. 29 U.S.C. §§ 1002(32), 1003(b) (1), 1144(a). A governmental plan is a "plan established or maintained for its employees by the Government of the United States, ... or by any agency or instrumentality [thereof] ...", or a "plan to which the Railroad Retirement Act of 1935 or 1937 [45 U.S.C. § 231, et seq.] applies, and which is financed by contributions required under that Act ...". 29 U.S.C. § 1002(32). Neither exception applies to the AMTRAK plan.

First, the AMTRAK legislation specifically states that AMTRAK is not an agency or establishment of the United States. 45 U.S.C. § 541. See Sentner v. AMTRAK, 540 F. Supp. 557, 560 (D.N.J. 1982) (examining statute and legislative history and holding AMTRAK liable for punitive damages as it is not an agency or establishment of the United States).

Second, there is no provision in the RRA which even arguably indicates that the health benefits in the AMTRAK plan are required under that act. Appellants are unable to point to, nor have we found, any provision of the RRA which requires these expenditures to be made by AMTRAK. The plan is the product of collective bargaining agreements between many employers, including AMTRAK, and many labor unions. There is no applicability of the RRA to the plan in this case. Accordingly, the plan is not a government plan and ERISA preemption analysis applies.

Cal.Ins.Code Secs. 10176, 10176.5 provide that a health care consumer covered by mental health benefit coverage must be permitted to chose a psychologist as the provider of mental health care. Such laws are commonly referred to as mandated provider laws. See generally, Note, ERISA Preemption of State Mandated Provider Laws, 1985 Duke L.J. 1194. It is clear that the mandated provider law is a law which relates to the plan. 29 U.S.C. § 1144(a). The Supreme Court has noted that the "relate to" clause is to be expansively interpreted. Shaw v. Delta Airlines, Inc., 463 U.S. 85, 97 (1983). Appellants do not contest that the law relates to the plan. Appellants do contend that their civil actions are not preempted as they are based upon a state law which regulates insurance. 29 U.S.C. § 1144(b) (2) (A).

We need not decide whether the mandated provider law at issue in these appeals is saved from preemption as a law which regulates insurance.1  Id. Regardless of whether or not the California mandated provider laws regulate insurance, they cannot be applied to the plan because of the so-called deemer clause. 29 U.S.C. § 1144(b) (2) (B). That clause prohibits the application of laws which regulate insurance to self insured plans. We have held that the deemer clause protects self insured plans from state laws regulating insurance notwithstanding an insurance company acting as administrator of the plan, even if stop loss insurance coverage is provided by that administrator. Moore v. Provident Life Ins. Co., 786 F.2d 922, 927 (9th Cir. 1986).

Following Moore, we conclude that the plan at issue is a self insured plan which may not be deemed an insurance company under Sec. 1144(b) (2) (B). Travelers acts not as an insurer but as a mere administrator of the plan. Travelers does provide excess coverage to the plan. That excess coverage does not cover the pending claims and Travelers has filed an affidavit to that effect. Appellants completely fail to rebut that affidavit or show a genuine issue on this point. Summary judgment on that basis was therefore proper. Anderson v. Liberty Lobby, 477 U.S. 242 (1986); Moore, 786 F.2d at 927.

Because the California choice of provider statute does not apply to the plan, all of Appellants' state law claims are preempted by ERISA. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987); Kanne v. Connecticut General Life Ins. Co., 859 F.2d 96 (9th Cir. 1988). Accordingly, we affirm the district courts.

Lastly, Rapp and Nino seek to raise an ERISA claim on appeal. Those claims were not properly raised in the district courts and we decline to address them on appeal.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3


See Blue Cross & Blue Shield of Kansas City v. Bell, 798 F.2d 1331, 1334-35 (10th Cir. 1986) (holding that mandated provider laws are regulations of insurance and not preempted)