The Supreme Court is considering whether to grant certiorari in Aetna Health Inc. v. Davila to address the Fifth Circuit’s adoption of a self-described “narrow” test for complete preemption. In Davila, a plan participant brought a state law tort action (pursuant to the Texas Health Care Liability Act) against the plan’s third party administrator (TPA) for what amounted to a routine benefit claim denial. The Fifth Circuit ruled that the participant’s state law tort claim was not completely preempted under ERISA section 502, concluding that ERISA section 502 preempts only those state law claims that “duplicate[]” a cause of action provider under ERISA section 502. Applying this test, the court found that the state law tort claim did not encroach on ERISA’s remedies, since it did not duplicate the equitable claims authorized by section 502(a)(3), the fiduciary duty claims authorized by section 502(a)(2) or the contract claims authorized by section 502(a)(1)(B).
Groom Law Group recently filed a brief, in support of the petitioner in Davila, on behalf of amici curiae the American Association of Health Plans, the Chamber of Commerce of the United States, the American Benefits Council and the National Association of Manufacturers. The brief argues the Fifth Circuit mistakenly relied on dicta in the Supreme Court’s Pegram v. Herdich decision to depart from an unbroken string of Supreme Court decisions holding that ERISA’s remedies are exclusive. The brief further argues that the Supreme Court should grant the petition to (1) clarify its decision in Pegram, (2) restore uniformity and exclusivity to ERISA’s remedy scheme for benefit disputes, and (3) limit the exposure of employers and labor unions who sponsor plans, and the insurers and third party administrators who act on their behalf, to suits for compensatory and punitive damages.
