The issue the Supreme Court of Alabama (“Alabama Supreme Court”) had to decide in its May 24, 2019 opinion was whether the plaintiff’s Alabama medical malpractice wrongful death claims against Blue Advantage brought pursuant to § 6-5-410, Ala. Code 1975, are preempted by ERISA. The trial court concluded that the plaintiff’s claims were defensively preempted by ERISA and denied the plaintiff’s request to amend his complaint to restate his state-law claims in an attempt to circumvent the ERISA affirmative defense. The Alabama Supreme Court concluded that the trial court should have given the plaintiff the opportunity to amend his complaint and therefore reversed its order of dismissal on procedural grounds.
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.
ERISA comprehensively regulates, among other things, employee welfare benefit plans that, through the purchase of insurance or otherwise, provide medical, surgical, or hospital care, or benefits in the event of sickness, accident, disability, or death. § 3(1), 29 U.S.C. § 1002(1). The question whether a certain state action is pre-empted by federal law is one of congressional intent. The express pre-emption provisions of ERISA are deliberately expansive, and designed to establish pension plan regulation as exclusively a federal concern.
Conflict Preemption vs. Complete Preemption
ERISA is one of the few federal statutes that give rise to two types of preemption: (1) conflict preemption or defensive preemption and (2) complete preemption.
Conflict preemption, also known as defensive preemption, is a substantive defense to preempted state law claims. This type of preemption arises from ERISA’s express preemption provision, § 514(a), which preempts any state law claim that ‘relates to’ an ERISA plan. 29 U.S.C. § 1144(a). Because conflict preemption is merely a defense, it is not a basis for removal.
Complete preemption, also known as super preemption, is a judicially-recognized exception to the well-pleaded complaint rule. It differs from defensive preemption because it is jurisdictional in nature rather than an affirmative defense. Complete preemption under ERISA derives from ERISA’s civil enforcement provision, § 502(a)[29 U.S.C. § 1132], which has such ‘extraordinary’ preemptive power that it ‘converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’ Consequently, any cause of action within the scope of the civil enforcement provisions of § 502(a) is removable to federal court.
Complete preemption is narrower than defensive ERISA preemption, which broadly supersedes any and all State laws insofar as they relate to any ERISA plan. ERISA § 514(a), 29 U.S.C. § 1144(a). Therefore, a state-law claim may be defensively preempted under § 514(a) but not completely preempted under § 502(a). In such a case, the defendant may assert preemption as a defense, but preemption will not provide a basis for removal to federal court.
The issue whether a plaintiff’s claims relate to ERISA, and are therefore defensively preempted, is ultimately an issue to be decided by the state court.
In the case the Alabama Supreme Court was deciding, the issue to be decided was whether the plaintiff’s wrongful death claim is related to the ERISA plan and, therefore, defensively preempted by ERISA under ERISA § 514(a), 29 U.S.C. § 1144(a). “But that issue is premature and not yet before us.”
The Underlying Facts In The Present Case
Blue Advantage was the claims administrator for the decedent’s self-funded employee-health-benefits plan, which he received through his employment with Wal–Mart Stores, Inc. There is no dispute that the health-benefits plan falls under the auspices of ERISA. The plaintiff filed an Alabama medical malpractice wrongful death complaint alleging a wrongful death claim against Blue Advantage, among others, based on the decedent’s death.
The decedent had gone to the hospital on June 11, 2013 complaining of constipation and abdominal pain that he rated as a 10 on a 10–point scale. He was diagnosed with abdominal pain with constipation and fecal impaction. A physician recommended that the decedent undergo a colectomy and sought pre-approval for the surgery from Blue Advantage. Blue Advantage decided that a lower quality of care–continued non-surgical management–was more appropriate than the higher quality of care–surgery–that the decedent needed and that his surgeon felt was appropriate.
Later, the decedent was again taken to the hospital in severe distress. His condition declined rapidly, he had to be intubated, he eventually coded, and he died after midnight that night. An autopsy confirmed that the decedent had a perforated sigmoid colon with abundant fecal material identified within the peritoneal cavity. The decedent’s death certificate listed the cause of death as “septic shock due to peritonitis due to colonic perforation.”
The personal representative of the decedent’s estate filed an Alabama wrongful-death action against Blue Advantage and others, alleging that Blue Advantage had or voluntarily assumed one or more of the following duties, jointly or in the alternative, which it breached: a duty to act with reasonable care in the determining the quality of healthcare the decedent would receive; a duty not to provide to the decedent a quality of healthcare so low that it knew that the decedent was likely to be injured or killed; and a duty to exercise such reasonable care, skill, and diligence as other similarly situated healthcare providers in the same general line of practice ordinarily have and exercise in a like case.
Blue Advantage argued that the plaintiff’s wrongful-death action “relates to” Blue Advantage’s administration of the ERISA plan’s benefits and that, therefore, the claims asserted in the wrongful-death action were preempted. The plaintiff subsequently filed a motion to allow him to amend his claim — not to add an ERISA claim but to more precisely state in the complaint his state-law claims setting forth the allegations he presented in opposition to Blue Advantage’s motion to dismiss. The trial court ultimately denied the plaintiff’s motion to amend his complaint. The plaintiff then appealed (the second appeal in the case).
The Alabama Supreme Court held: “The additional allegations in the proposed amended complaint are essential to the analysis of whether [the plaintiff’s] wrongful-death claim is related to the decedent’s ERISA plan and, therefore, defensively preempted by ERISA § 514(a), 29 U.S.C. § 1144(a), or whether the [the plaintiff’s] state-law claims articulate an independent legal duty that is implicated by Blue Advantage’s actions … Because the trial court determined that [the plaintiff’s] allegations against Blue Advantage as stated in the original complaint were defensively preempted by ERISA, [the plaintiff] should have had the right to amend his complaint to clarify his state-law claims.” The Alabama Supreme Court reversed the judgment of the trial court and remanded the case to the trial court for further proceedings consistent with its opinion.
Source Ghee v. USAble Mutual Insurance Company d/b/a Blue Advantage Administrators of Arkansas, 1170249.
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