Coppe v. The Sac & Fox Casino Healthcare Plan et al

Filing 15

MEMORANDUM AND ORDER denying 8 DEFENDANT, The Plan's Motion to Dismiss. Signed by District Judge Richard D. Rogers on 3/13/15. (meh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
AMY COPPE
Plaintiff,
v.
Case No. 14-2598-RDR
THE SAC & FOX CASINO
HEALTHCARE PLAN;
BENEFIT MANAGEMENT, INC.
Defendants.

MEMORANDUM AND ORDER
This case is now before the court upon a motion to dismiss
or stay for failure to exhaust tribal remedies.

The motion is

brought by defendant Sac & Fox Casino Healthcare Plan.

This

motion asks the court to rule as a matter of comity that before
bringing a claim in this court, plaintiff must bring an ERISA
action for recovery of insurance benefits under the casino’s
nongovernmental plan in tribal court.

We assume for purposes of

this order that plaintiff is not a member of the Sac & Fox Tribe
and that the Plan is not a “governmental plan” as defined in
ERISA.

We

adjudicatory

hold

that

authority

Congress
over

has

ERISA

preempted
claims

and,

the

tribe’s

therefore,

exhaustion of tribal remedies is not required.1

1

The parties’ pleadings do not allege that plaintiff is a member of the Sac &
Fox tribe.
Although we assume that she is not, this assumption is not
critical to the result which hinges mainly upon the conclusion that Congress
has preempted tribal court jurisdiction over ERISA claims for nongovernmental
plans.

1

I.

PLAINTIFF’S ALLEGATIONS
The

amended

as

follows.

Plaintiff was an employee of the Sac & Fox Casino.

In the

summer

of

of

2011,

complaint

in

plaintiff,

this

while

case

still

alleges

an

employee

the

casino, incurred substantial medical expenses in relation to a
pregnancy and the birth of a premature baby.
that

some

or

all

of

these

expenses

Plaintiff asserts

charged

to

her

are

the

responsibility of defendant Sac & Fox Casino Healthcare Plan,
which, she alleges, is an employee welfare benefit plan governed
by

ERISA.

Defendant

Benefit

Management,

Inc.,

an

Oklahoma

company, is alleged to be the Plan supervisor that administers
claims for Plan benefits.

The Plan had group health insurance

through American Fidelity Assurance in 2011.2

Defendants have

refused to pay what plaintiff asserts is owed pursuant to the
provisions
exhausted

of
her

the

Plan.

administrative

Plaintiff

asserts

remedies

under

that
the

she
Plan

has
and,

specifically, that defendants Benefit Management, Inc. and the
Plan

have

asserts,

denied

pursuant

defendants

have

plaintiff’s
to

ERISA,

wrongfully

claims
29

for

U.S.C.

denied

§

her

payment.

Plaintiff

1132(a)(1)(B),
claim

for

that

medical

insurance benefits and seeks an order requiring their payment as
well as other relief.

2

This allegation is made as a “statement of fact” in response to the motion
to dismiss.
Defendant Plan does not dispute the allegation in its reply
brief.

2

Plaintiff

further

alleges

in

response

to

the

motion

to

dismiss that the Plan states that a Plan member may file a claim
for benefits “in a state or federal court” and that there is no
reference to tribal courts in the Plan.

This allegation is not

disputed in defendant Plan’s reply brief.3
II.

DEFENDANT PLAN’S ALLEGATIONS
Defendant Sac and Fox Casino Healthcare Plan has submitted

the following statements of fact in support of its motion to
dismiss or to stay.

The Sac and Fox Nation of Missouri in

Kansas and Nebraska is a federally-recognized Indian tribe.

The

Sac & Fox Casino is a non-corporate operating arm of the tribe.
The casino maintained a self-funded plan of healthcare benefits.
Money to fund the plan came from the casino’s general operating
expenses.

The Plan was managed by the tribe’s council members

who hired defendant Benefits Management Inc. as a third-party
administrator.
directly

from

A judgment against the plan would likely come
the

tribal

treasury

or

the

casino’s

general

operating fund.4

3
While plaintiff argues that this permissive provision constitutes a waiver
of the right to proceed in tribal court, this argument itself could be
decided by the tribal court and therefore does not persuade us that
exhaustion is unnecessary for comity reasons.
The holding cited by
plaintiff, C&L Enterprises, Inc. v. Citizen Band Potawatomi Indian Tribe of
Oklahoma, 532 U.S. 422 (2001), is not contrary to this position. It involved
a mandatory provision which clearly waived tribal sovereign immunity as to
arbitration proceedings that had already been conducted and appealed to state
court.
It did not involve an issue of tribal exhaustion on comity grounds
and a permissive provision which is less than clear.
4
Plaintiff disputes whether a judgment against the plan would likely come
directly from the Tribal treasury or the casino’s operating funds, arguing

3

III.

PROCEDURAL POSTURE
Defendant

12(b)(6)

Plan

motion.

presents
Matters

presented by both sides.

its

motion

outside

the

as

a

FED.R.CIV.P.

pleadings

have

been

Therefore, pursuant to FED.R.CIV.P.

12(d), the motion will be treated in effect as one for summary
judgment.

We assume that there is no issue with this procedural

approach.
Our ruling hinges primarily upon the legal force of ERISA’s
preemptive
proof.

provisions,

not

issues

of

fact

or

the

burden

of

Nevertheless, we note that the Supreme Court has stated

that the burden rests upon an Indian tribe to establish its
authority

over

the

activities

of

nonmembers

of

the

tribe.

Plains Commerce Bank v. Long Family Land and Cattle Co., 554
U.S. 316, 330 (2008).

We further note that exhaustion issues

are often treated as affirmative defenses and, as such, the
burden of proving the defense rests on the defendant.

See Jones

v. Bock, 549 U.S. 199, 212 (2007)(“the usual practice under the
Federal

Rules

is

to

regard

exhaustion

as

an

affirmative

defense”).
IV.

ERISA
The ERISA law provides that a participant or beneficiary in

the ERISA plan may bring an action to recover benefits due under

that the insurance company that issued the policy used by the Plan would be
responsible. We find that this disputed fact is not material to the holding
made in this order.

4

the plan.
district
brought

29 U.S.C. § 1132(a)(1)(B).
courts

under

§

have

concurrent

State courts and federal

jurisdiction

1132(a)(1)(B).

29

U.S.C.

§

over

actions

1132(e).

This

section does not reference tribal courts.
ERISA does not regulate so-called “governmental plans.”

29

U.S.C. § 1003(b)(1). “Governmental plans” are defined to include
“a plan which is established and maintained by an Indian tribal
government . . . a subdivision of an Indian tribal government .
. . or an agency or instrumentality of either, and all of the
participants of which are employees of such entity substantially
all of whose services as such an employee are in the performance
of essential governmental functions but not in the performance
of commercial activities (whether or not an essential government
function).”

29 U.S.C. § 1002(32).

The motion to dismiss does

not allege that the Plan in this case is a “governmental plan.”
As

already

mentioned,

the

court

assumes

that

the

Plan

is

a

nongovernmental plan.
V.

TRIBAL COURTS DO NOT HAVE JURISDICTION OVER ERISA ACTIONS.
Tribal

Nevada

v.

courts
Hicks,

are
533

not
U.S.

courts
353,

of

367

“general
(2001).

jurisdiction.”
Their

inherent

adjudicative jurisdiction over nonmembers is at most only as
broad as their legislative jurisdiction.

5

Id.

Congress has not

purported to grant tribal courts jurisdiction over ERISA claims.5
This was also the situation in Nevada, where the court held that
there was no tribal court jurisdiction over an action under 42
U.S.C. § 1983 against a nonmember state law enforcement agent
for actions taken upon reservation land to investigate an offreservation crime.
laws

governing

The Court held that tribal rights to make

members

and

to

regulate

activity

on

the

reservation did not exclude state authority (as exercised by
nonmembers of the tribe) to investigate off-reservation crimes
on the reservation.

Id. at 362-64.

The Court further held that

permitting tribal court jurisdiction over the § 1983 claim would
create a “serious anomaly” because the removal powers afforded §
1983 defendants in state court under 28 U.S.C. § 1441 would not
be available to a similar defendant in tribal court.

Id. at

368.
Here, we hold that tribal rights to make laws governing
members and to regulate activity upon the reservation does not
exclude federal authority as expressed in ERISA to occupy and
preempt

the

field

of

nongovernmental plans.

ERISA

rights

enforcement

for

We note that, if an ERISA claim was

brought in tribal court against a nonmember defendant or if an
ERISA

claim

against

a

nongovernmental

5

ERISA

plan

had

to

be

We acknowledge though that “[s]ilence is not sufficient to establish
congressional intent to strip Indian tribes of their retained inherent
authority to govern their own territory.”
N.L.R.B. v. Pueblo of San Juan,
276 F.3d 1186, 1196 (10th Cir. 2002).

6

brought

first

in

tribal

court,

the

described in Nevada would be present.

same

“serious

anomaly”

The power of an ERISA

defendant to remove the action to federal court, as exists for
state court ERISA defendants, would not be present.

And, the

right of an ERISA plaintiff to choose a federal forum at the
outset of an action would be infringed.
This holding is supported, even as to members of a tribe,
by the preemptive intent of Congress in passing ERISA.

In El

Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473 (1999), members
of the Navajo Nation brought claims in the Navajo tribal court
alleging that they were harmed by the conduct of uranium mining
companies operating upon the reservation in violation of Navajo
Nation law.

The Court held that the claims in tribal court

could be enjoined by a federal district court order because the
federal government, with the passage of the Price-Anderson Act,
had preempted any state law and any tribal law claims arising
from the mining of uranium or uranium ore and the byproducts of
that activity.

This finding was based upon the Act’s “unusual

preemption provision” which the Court compared to the provisions
of the Labor Management Relations Act and ERISA.
484 n 6.

526 U.S. at

The Court stated:

The [Price-Anderson] Act not only gives a district
court original jurisdiction over such a claim . . .
but provides for removal to a federal court as of
right if a putative Price-Anderson action is brought
in a state court . . . Congress thus expressed an
7

unmistakable preference for a federal forum, at the
behest of the defending party, both for litigating a
Price-Anderson claim on the merits and for determining
whether a claim falls under Price-Anderson when
removal is contested.
Id. at 484-85.
The

Supreme

Court

commented

upon

the

similar

preemptive

force of ERISA in Aetna Health Inc. v. Davila, 542 U.S. 200,
208-09 (2004):
Congress enacted ERISA to “protect . . . the interests
of participants in employee benefit plans and their
beneficiaries” by setting out substantive regulatory
requirements for employee benefit plans and to
“provid[e] for appropriate remedies, sanctions, and
ready access to the Federal courts.”
29 U.S.C.
1001(b). The purpose of ERISA is to provide a uniform
regulatory regime over employee benefit plans.
To
this
end,
ERISA
includes
expansive
pre-emption
provisions, see ERISA § 514, 29 U.S.C. § 1144, which
are intended to ensure that employee benefit plan
regulation would be “exclusively a federal concern.”
Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504,
523, 101 S.Ct. 1895, 68 L.Ed.2d 402 (1981).
ERISA’s “comprehensive legislative scheme” includes
“an integrated system of procedures for enforcement.”
Russell, 473 U.S., at 147, 105 S.Ct. 3085. (internal
quotation marks omitted). This integrated enforcement
mechanism, ERISA § 502(a), 29 U.S.C. § 1132(a), is a
distinctive feature of ERISA, and essential to
accomplish
Congress’
purpose
of
creating
a
comprehensive statute for the regulation of employee
benefit plans. . . .
In Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58,
65-66, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987), the Court
determined that the similarity of the language used in
the Labor Management Relations Act, 1947 (LMRA), and
ERISA, combined with the “clear intention” of Congress
“to make § 502(a)(1)(B) suits brought by participants
or beneficiaries federal questions for the purposes of
federal court jurisdiction in like manner as § 301
8

LMRA,” established that ERISA § 502(a)(1)(B)’s preemptive force mirrored the pre-emptive force of LMRA §
301. Since LMRA § 301 converts state causes of action
into federal ones for purposes of determining the
propriety of removal . . . so too does ERISA §
502(a)(1)(B).
Thus,
ERISA’s
civil
enforcement
mechanism is one of those provisions with such
“extraordinary pre-emptive power” that it “converts an
ordinary state common law complaint into one stating a
federal claim for purposes of the well-pleaded
complaint rule.” Metropolitan Life, 481 U.S., at 6566, 107 S.Ct. 1542.
Hence, “causes of action within
the scope of the civil enforcement provisions § 502(a)
[are] removable to federal court.”
Id. at 66, 107
S.Ct. 1542.
(emphasis added).
Defendant

Plan

asserts

that

the

unique

context

of

the

Price-Anderson Act distinguishes the holding in Neztsosie from
the facts in this case.

We reject this argument because the

Neztsosie opinion compares the Price-Anderson Act to ERISA, and
the rights of removal set forth in the Price-Anderson Act (at 42
U.S.C.

§

2210(n)(2))

and

those

recognized

Congress in ERISA actions are similar.

by

the

Court

and

As the Court stated in

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987) in
language

similar

to

that

used

in

Neztsosie:

“Congress

has

clearly manifested an intent to make causes of action within the
scope of the civil enforcement provisions of [ERISA] § 502(a)
[or

29

U.S.C.

§

1132(a)]

removable

to

federal

court.”

In

Taylor, as in this case, the plaintiff was making a claim for
benefits

under

an

ERISA

plan,

although

plaintiff

styled his claims as being made under state law.
9

in

Taylor

Defendant Plan also argues that ERISA does not provide for
federal

preemption

because

state

of

courts

benefit
have

claims under § 1132(e).
because

the

jurisdiction

concurrent

state

under

§

1132(a)(1)(B)

jurisdiction

over

such

This is not a significant distinction

Price-Anderson
in

claims

Act

court.

also

Removal

permits
is

concurrent

required

U.S.C. § 2210(n)(2) only upon a motion of a defendant.

under

42

The key

point is that access to a federal forum must be allowed to ERISA
defendants and plaintiffs and that such access via removal would
be denied to ERISA defendants if tribal courts had jurisdiction
to decide ERISA claims, and such access for ERISA plaintiffs
would be denied or at least infringed if cases were forced to be
brought initially in tribal court.
VI.
THE GOVERNMENT’S PREEMPTIVE ACTION UNDER ERISA DICTATES
THAT EXHAUSTION IN TRIAL COURT SHOULD NOT BE REQUIRED AS A
MATTER OF COMITY.
In Montana v. United States, 450 U.S. 544 (1981), the Court
held in general that the sovereign powers of an Indian tribe do
not extend to the activities of nonmembers of the tribe. But,
two exceptions were noted:
To be sure, Indian tribes retain inherent sovereign
power to exercise some forms of civil jurisdiction
over non-Indians on their reservations, even on nonIndian fee lands.
A tribe may regulate, through
taxation, licensing, or other means, the activities of
nonmembers who enter consensual relationships through
commercial
dealing,
contracts,
leases,
or
other
arrangements. . . . A tribe may also retain inherent
power to exercise civil authority over the conduct of
10

non-Indians on fee lands within its reservation when
that conduct threatens or has some direct effect on
the political integrity, the economic security, or the
health or welfare of the tribe.
450 U.S. 565-66.
In Strate v. A-1 Contractors, 520 U.S. 438, 453 (1997), the
Court said that the rule described in Montana applies to the
adjudicatory authority of tribal courts:
As to nonmembers, . . . a tribe’s adjudicative
jurisdiction
does
not
exceed
its
legislative
jurisdiction.
Absent
congressional
direction
enlarging tribal-court jurisdiction, we adhere to that
understanding.
Subject to controlling provisions in
treaties
and
statutes,
and
the
two
exceptions
identified in Montana, the civil authority of Indian
tribes and their courts with respect to non-Indian fee
lands generally “do[es] not extend to the activities
of nonmembers of the tribe.”
(Quoting Montana, 450 U.S. at 565).
these

exceptions

does

not

control

But, the application of
when

there

is

an

express

jurisdictional prohibition or it is otherwise clear that the
tribal

court

lacks

jurisdiction.

Nevada,

533

U.S.

at

369;

Burrell v. Armijo, 456 F.3d 1159, 1168 (10th Cir. 2006) cert.
denied, 549 U.S. 1167 (2007).

Here, we have held that it is

clear that the tribal court lacks jurisdiction.

So, we need not

consider exhaustion of tribal court remedies as a matter of
comity.
One other court has made a similar holding.
States

District

Court

for

the

Northern

The

District

United
of

Oklahoma

relied upon Neztsosie to hold that it should not abstain from
11

determining

an

ERISA

benefits

claim

while

the

plaintiff

proceeded in tribal court. Vandever v. Osage Nation Enterprise,
Inc.,

2009

Peabody

WL

702776

Holding

*5

Company,

(N.D.Okla.
LLC

v.

3/16/2009).

Black,

2013

WL

See

also,

2370620

*6

(D.Ariz. 5/29/2013)(citing Vandever in support of a refusal to
abstain from deciding an ERISA claim brought by a fiduciary
involving competing claims of tribal members residing on Navajo
land).
VII.

CONCLUSION
For

the

above-stated

reasons,

the

court

shall

defendant Plan’s motion to dismiss (Doc. No. 8).
IT IS SO ORDERED.
Dated this 13th day of March, 2015, at Topeka, Kansas.

s/ RICHARD D. ROGERS
Richard D. Rogers
United States District Judge

12

deny