McNealy v. Becnel et al, No. 2:2014cv02181 - Document 264 (E.D. La. 2016)
Court Description: ORDER AND REASONS granting 247 Motion for Reconsideration as per herein. IT IS FURTHER ORDERED that MetLifes motion for summary judgment 210 is GRANTED and all claims against MetLife are hereby DISMISSED WITH PREJUDICE. Signed by Judge Susie Morgan on 11/17/2016. (cg)
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McNealy v. Becnel et al Doc. 264 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A N EW TON MCN EALY, Plain tiff CIVIL ACTION VERSU S N O. 14 -2 18 1 D ARRYL J. BECN EL, ET AL., D e fe n d an ts SECTION : “E” ( 2 ) ORD ER AN D REAS ON S Before the Court is a m otion for reconsideration 1 of its m otion for sum m ary judgm ent 2 filed by Defendant, Metropolitan Life Insurance Com pany (“MetLife”). On October 17, 20 16, the Court issued its Order and Reasons 3 with respect to the Defendants’ eight dispositive m otions. 4 In its Order, the Court dism issed Plaintiff Newton McNealy’s ERISA claim against MetLife under 29 U.S.C. § 10 0 1 for failure to exhaust adm inistrative rem edies. 5 In addition, the Court deferred ruling on Plaintiff’s state law claim s until after its rulings on the rem aining m otions for sum m ary judgm ent. 6 Following a status conference on October 28, 20 16, the Court issued an order allowing MetLife to file a m otion to reconsider with respect certain state law claim s MetLife believes are preem pted by federal law. 7 On Novem ber 2, 20 16, MetLife filed its m otion for reconsideration. 8 Plaintiff opposes MetLife’s m otion. 9 1 R. Doc. 247. R. Doc. 210 . 3 R. Doc. 237. 4 R. Docs. 117, 119, 121, 138, 146, 210 , 215, 216. 5 R. Doc. 237, at 39. 6 R. Doc. 237, at 39. On J uly 8, 20 16, the Court provided the parties with a chart specifying the claim s brought against each of the Defendants. R. Doc. 20 9-1. The Plaintiff brings state law claim s against MetLife under Louisiana Civil Code article 190 6 and Louisiana Revised Statutes sections 22:655; 22:1269; 22:1892; and 22:1973. See id at 5. 7 R. Doc. 245. 8 R. Doc. 247. 9 R. Doc. 256. 2 1 Dockets.Justia.com MetLife argues the rem aining state law claim s against it are preem pted by the Em ployee Retirem ent Incom e Security Act of 1974 (“ERISA”), 29 U.S.C. § 10 0 1, et seq. 10 As a result, MetLife argues it is “entitled to a dism issal from this action due to Plaintiff’s failure to exhaust his adm inistrative rem edies.”11 Plaintiff argues his claim s for breach of contract against MetLife are not preem pted by ERISA. 12 According to the Plaintiff, failure to pay constitutes a breach of contract which is unrelated to an ERISA claim . 13 For the following reasons, MetLife’s m otion for reconsideration 14 is GRAN TED . LAW AN D AN ALYSIS ERISA preem ption com es in two form s: com plete preem ption and conflict preem ption. 15 With respect to com plete preem ption, the Suprem e Court has found that Congress intended to m ake ERISA Section 50 2 the exclusive civil enforcem ent rem edy for violations of ERISA, and as a result, “any state-law cause of action that duplicates, supplem ents, or supplants the ERISA civil enforcem ent rem edy conflicts with the clear congressional intent to m ake the ERISA rem edy exclusive and is therefore pre-em pted.”16 “A state law claim falls within the scope of ERISA and is com pletely preem pted ‘if an individual, at som e point in tim e, could have brought his claim under ERISA § 50 2(a)(1)(B), and . . . there is no other independent legal duty that is im plicated by a defendant’s actions.’”17 To determ in e whether a plaintiff’s cause of action falls “within the 10 R. Doc. 247, at 1. Doc. 247-1, at 14. 12 R. Doc. 256, at 1. As MetLife correctly identifies, Plaintiff filed state law claim s against MetLife for detrim ental reliance, breach of contract and disability insurance ben efits. R. Doc. 247-1. 13 Id. 14 R. Doc. 247. 15 Arana v. Ochsner Health Plan, 338 F.3d 433, 437 (5th Cir. 20 0 3) (quoting Metro Life Ins. Co. v . Tay lor, 481 U.S. 58 , 63– 64 (1987)). 16 Aetna Health Inc. v. Davila, 542 U.S. 20 0 , 20 9 (20 0 4) 17 Ctr. For Restorative Breast Surgery , L.L.C. v . Hum an a Health Ben. Plan of Louisiana, Inc., No. 10 4346, 20 11 WL 110 3760 , at *2 (E.D. La. Mar. 22, 20 11) (Fallon, J .) (quoting Aetna Health Inc. v. Davila, 542 U.S. 20 0 , 210 (20 0 4)). 11 R. 2 scope” of ERISA § 50 2(a)(1)(B), the Court must exam ine the plaintiff’s com plaints, the statute upon which his claim s are based, and the various plan docum ents. 18 With respect to conflict preem ption, § 514(a), ERISA’s express preem ption clause, provides ERISA “shall supersede any and all State laws insofar as they m ay now or hereafter relate to any em ployer benefit plan.”19 This provision is purposefully expansive and is inten ded to “en sure that em ployee benefit plan regulation would be exclusively a federal concern.” 20 “Any state-law cause of action that duplicates, supplem ents, or supplants the ERISA civil law rem edy conflicts with the clear congressional intent to m ake the ERISA rem edy exclusive and is therefore pre-em pted.”21 The Fifth Circuit has adopted a two-prong test for determ ining whether a state cause of action is preem pted because it “relates to” an em ployee benefit plan. 22 ERISA preem pts a state law claim “if (1) the state law claim address an area of exclusive federal concern, such as the right to receive benefits under the term s of an ERISA plan; and (2) the claim directly affects the relationship between the traditional ERISA entities – the em ployer, the plan and its fiduciaries.”23 Because ERISA preem ption is an affirm ative defense, defendants bear the burden of proof on both elem ents. 24 In the case before the Court, MetLife appears to argue both form s of preem ption apply. First, MetLife argues the Plaintiff has sued for benefits under 29 U.S.C. § 10 0 1, et seq. and has stated expressly that he seeks Plan benefits. 25 As a result, MetLife argues, 18 Davila, 542 U.S. at 210 . 29 U.S.C. § 1144(a) (20 0 6). 20 Davila, 542 U.S. at 20 8. 21 Id. at 20 9. 22 See Hubbard v. Blue Cross & Blue Shield Assoc., 42 F.3d 942, 945 (5th Cir. 1995). 23 Id. 24 Bank of Louisiana v. Aetn a U.S. Healthcare Inc., 468 F.3d 237, 242 (5 th Cir. 20 0 6) (citations om itted). 25 R. Doc. 247-1, at 9. 19 3 “The state law dam ages [Plaintiff] seeks – for breach of contract and detrim ental reliance – are related to the Plan under which he seeks benefits.”26 ERISA § 50 2(a)(1)(B) provides: A civil action m ay be brought – (1) by a participant or beneficiary – … (B) to recover benefits due to him under the term s of his plan, to enforce his rights under the term s of the plan, or to clarify his rights to future benefits under the term s of the plan. 27 Second, MetLife appears to argue that regardless of whether or not the claim s are com pletely preem pted under ERISA § 50 2, the Plaintiff’s claim s clearly “relate to” an ERISA plan and therefore should be preem pted under ERISA § 514. 28 The distinction between com plete preem ption and conflict preem ption has no significance in this case. The im portant distin ction between the two form s of preem ption is that, while com plete preem ption can support rem oval because it provides federal jurisdiction, conflict preem ption alone does not establish federal question jurisdiction “because conflict preem ption serves as a defense to a state action.”29 In this case, Plaintiff originally filed his claim s in Federal Court and, as a result, the Court is not faced with a m otion to rem and. I. Bre ach o f Co n tract To the extent Plaintiff alleges a state law cause of action for breach of contract, it is clear this claim is preem pted by ERISA. 30 In Metropolitan Life Ins. Co. v. Tay lor, the 26 Id. 29 U.S.C. § 1132(a)(1)(B). 28 See R. Doc. 247-1, at 14. 29 Giles v. N YLCARE H ealth Plans, Inc., 172 F.3d 332, 337 (5th Cir. 1999). See also Rem oval Based on Federal Question Jurisdiction—Rem oval Based on Com plete Preem ption , 14B Fed. Prac. & Proc. J uris. § 3722.2 (4th ed.) (“[C]om plete preem ption does not represent m erely a difference in the scope of the preem ption of a state cause of action by federal law; rather, it is a difference in kind. In concluding that a claim is com pletely preem pted, a federal court finds that Con gress desired not just to provide a federal defense to a state law claim but also to replace the state law claim with a federal law claim and thereby give the defendant the ability to seek adjudication of the claim in federal court.”). 30 Plaintiff appears to allege breach of contract under Louisiana Civil Code article 190 6 which is a definitional statute. 27 4 Suprem e Court explained breach of contract claim s related to an ERISA plan are both com pletely and conflict preem pted: Under our decision in Pilot Life, Ins. Co. v. Dedeaux, Taylor’s com m on law contract and tort claim s are preem pted by ERISA. This lawsuit “relate[s] to [an] em ployee benefit plan.” It is based upon com m on law of general application that is not a law regulating insurance. Accordingly, the suit is preem pted by § 514(a) and is not saved by § 514(b)(2)(A). Moreover, as a suit by a beneficiary to recover benefits from a covered plan, it falls directly under § 50 2(a)(1)(B) of ERISA, which provides an exclusive federal cause of action for resolution of such disputes. 31 In his opposition, Plaintiff states he “executed an agreem ent with Met-Life for insuran ce protection regarding life, incom e, vacation, disability, retirem ent, and legal representation, am ong others, for a price which was directly deducted from his check.”32 Plaintiff argues, “MetLife failed to pay the am ounts owed under the policies.” 33 As a result, it is clear the Plaintiff’s claim for breach of contract is in reality a claim that is both com pletely preem pted by ERISA § 50 2(a)(1)(B) and also conflict preem pted under ERISA § 514. II. D e trim e n tal Re lia n ce Plaintiff alleges he detrim entally relied on m isrepresentations m ade by MetLife “in their prom ises to [sic] under” the insurance policy. 34 The Fifth Circuit has held that ERISA does not necessarily preem pt state law claim s for detrim ental reliance. 35 In Marlbrough, the court explain ed: The inquiry into whether detrim ental relian ce claim s are preem pted by ERISA turns on “whether the claim itself created a relationship between the 31 Metropolitan Life Ins. Co. v. Tay lor, 481 U.S. 58 , 62-63 (1987) (citin g Pilot Life In s. Co. v . Dedeaux, 481 U.S. 41 (1987)) (internal citations om itted) (alterations in original). 32 R. Doc. 256-1, at 3. 33 Id. 34 See R. Doc. 141, at 24 ¶ 161. 35 Marlbrough v. Kanaw ha Ins. Co., 20 12 WL 48560 61, at *5 (W.D. La. Oc.t 11, 20 12). See also King v. Bluecross Blueshield of Alabam a, 439 F.App’x 386 (5th Cir. 20 11) (findin g Plaintiff’s state detrim ental reliance claim was preem pted by ERISA); Bailey v . CIGN A Ins. Co., 20 0 1 U.S. Dist. LEXIS 24855 (W.D. La. 20 0 1) (findin g Plaintiff’s detrim ental reliance claim s preem pted by ERISA). 5 plaintiff and the defendant that is so intertwined with the ERISA plan that it cannot be separated … [T]he extent the claim itself relates to an ERISA plan guides [a court’s] determ ination.”36 The Marlbrough court further explained, “In cases where the Fifth Circuit courts have not found ERISA preem ption for detrim ental reliance claim s, typically the courts have found that ERISA preem ption does not apply because the m isleading activity on the part of the defendant did not relate to interpretation or adm inistration of the plan.”37 In Jefferson Par. Hops. Dist. N o. 2 v. Cent. States, Se. & Sw . Areas Health & W elfare Fund, the plaintiff alleged the defendant insurance fund denied coverage and refused to pay hospital costs despite verification at the tim e of the injured party’s adm ission to the hospital. 38 The court in Jefferson Par. Hosp. Dist. No. 2 found that case distinguishable from Herm ann Hosp. v. MEBA Medical Benefits Plan 39 in which the Fifth Circuit held the plaintiff’s claim s were preem pted by ERISA because the hospital sued as an assignee of the patient’s benefits. 40 Instead, the Jefferson Par. Hosp. Dist. N o. 2 court held that plaintiff’s state law claim of detrim ental reliance was not preem pted because the claim neither addressed an area of exclusive concern nor directly affected the relationship am ong traditional ERISA entities. 41 The court concluded, “Because plaintiff bases its 36 Id. (quotin g Hobson v. Robinson, 75 F.App’x 949, 954 (5th Cir. 20 0 3). Id. (citing E.I. DuPont de N em ours & Co. v. Saw y er, 517 F.3d 785, 80 0 (5th Cir. 20 0 8) (findin g that fraudulent inducem ent claim did not relate to ERISA because the claim did not require plaintiffs to prove em ployer’s adm in istration of plan was im proper); Sm ith v. Texas Children’s Hospital, 84 F.3d 152, 155 (5th Cir. 1996) (findin g that the defendants’ m isleading statem ents about whether the plaintiff would retain benefits did not relate to quantum of benefits un der plan , and thus ERISA did not preem pt the claim ; Percle v . Perform an ce Energy Servs., LLC, 20 11 WL 337891 (E.D. La. J an. 31, 20 11) (sam e)) (em phasis in original). 38 814 F. Supp. 25, 26 (E.D. La. 1993). 39 845 F.2d 1286, 1290 (5th Cir. 1988 ). 40 See 814 F. Supp. at 26. 41 Id. at 27. 37 6 claim on detrim ental reliance, and not on recovery of the patient’s benefits, the claim is not sufficiently related to the em ployee benefit claim ,” and is not preem pted by ERISA. 42 Jefferson Par. Hosp. Dist. N o. 2 is distinguishable from the case currently before this Court. In this case, Mr. McNealy filed his detrim ental reliance claim as the direct beneficiary of the plan. In addition, as stated in his com plaint, Mr. McNealy claim s he relied on m isrepresentations m ade by MetLife in the ERISA policy itself. 43 In this respect, Plaintiff’s detrim ental reliance claim s are sim ilar to breach of contract claim s to recover benefits owed. As a result, Plaintiff’s detrim en tal reliance claim , like his breach of contract claim , is in reality a claim to recover ben efits due to him under the term s of his plan and therefore is com pletely preem pted under ERISA § 50 2(a)(1)(B). Plaintiff’s detrim ental reliance claim s also are conflict preem pted under ERISA § 514 as the claim s clearly relate to the ERISA policy in question. III. Oth e r State Law Claim s Plaintiff also alleges claim s under Louisiana Revised Statutes sections 22:655; 22:1269; 22:1892; and 22:1973. 44 Section 22:655 applies to unearned prem ium reserves; section 22:1269 applies to liability policies; section 22:1892 applies to “paym ent and adjustm ent of claim s policies other than life an d health and accident;” and section 22:1793 expressly states that its provisions are not applicable to claim s m ade under health and accident policies. The Court finds any causes of action under these statutes also are preem pted under ERISA as the causes of action, to the extent they exist, are based on the ERISA plan in question. 42 Id. See R. Doc. 141, at 24 ¶ 161. 44 See R. Doc. 20 9-1. 43 7 CON CLU SION For the foregoing reasons; IT IS ORD ERED that MetLife’s m otion for reconsideration 45 is GRAN TED . IT IS FU RTH ER ORD ERED that MetLife’s m otion for sum m ary judgm ent 46 is GRAN TED and all claim s again st MetLife are hereby D ISMISSED W ITH PREJU D ICE. N e w Orle a n s , Lo u is ian a, th is 17th d ay o f N o ve m be r, 2 0 16 . ______________________ _________ SU SIE MORGAN U N ITED S TATES D ISTRICT J U D GE 45 46 R. Doc. 247. R. Doc. 210 . 8
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