Hogan v. Jacobson et al

Filing 56

MEMORANDUM OPINION AND ORDER by Judge David J. Hale. Hogan's complaint fails to state a claim upon which relief can be granted and defects in complaint cannot be remedied by further amendment. Defendant's Motion to Dismiss (DN 46 ) is granted. Action is dismissed with prejudice and stricken from Court's docket. cc: Counsel (JAC)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
VIOLET M. HOGAN,

Plaintiff,

v.

Civil Action No. 3:12-cv-820-DJH

JO ELLEN JACOBSON and KEM ALAN
LOCKHART,

Defendants.
* * * * *

MEMORANDUM OPINION AND ORDER
Plaintiff Violet M. Hogan alleges that Defendants Jo Ellen Jacobson and Kem Alan
Lockhart prevented her from receiving benefits under a long-term disability insurance policy.
Jacobson and Lockhart have moved to dismiss Hogan’s amended complaint, arguing that her
state-law claim of negligence per se must be dismissed on preemption grounds and that she has
failed to allege any actionable interference under the Employee Retirement Income Security Act
(ERISA). (Docket No. 46) Because the Court agrees that the amended complaint fails to state a
plausible claim for relief, the motion to dismiss will be granted.
I.

BACKGROUND
Before the Court examines the amended complaint, a brief procedural history is in order.

This is Hogan’s second lawsuit related to disability insurance policies provided by Life
Insurance Company of North America (LINA). Hogan alleges that she became disabled while
covered under the policies. (D.N. 43 at 3 ¶¶ 12-13) She sought disability benefits, and her claim
was denied. Hogan first sued LINA in federal court, alleging that she had been wrongly denied
short-term disability (STD) and long-term disability (LTD) benefits. This Court concluded, and
the Sixth Circuit Court of Appeals agreed, that LINA’s denial of Hogan’s claim was reasonable

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in light of the minimal evidence Hogan provided in support of the claim. See Hogan v. Life Ins.
Co. of N. Am., 521 F. App’x 410 (6th Cir. 2013) (Hogan I).
The present case was originally filed in Jefferson Circuit Court. In her initial complaint,
Hogan alleged that Jacobson and Lockhart—LINA employees who reviewed Hogan’s medical
records—had engaged in the practice of medicine and psychology without a license in violation
of KRS §§ 311.560 and 319.005. (D.N. 1-3 at 4 ¶¶ 16-20) Jacobson and Lockhart removed the
case to this Court on the ground that it arises under ERISA. (D.N. 1 at 2) The Court agreed and
denied Hogan’s request for remand, finding that her state-law claim was actually a claim for
benefits and therefore completely preempted by ERISA, providing removal jurisdiction. (See
D.N. 23) Following an unsuccessful attempt to have the remand issue reconsidered (see D.N.
39), Hogan filed an amended complaint (D.N. 43).

Notwithstanding the Court’s previous

decision that the claim is preempted, Hogan again alleges negligence per se under KRS
§§ 311.560 and 319.005.1 (D.N. 43 at 4-5) She also asserts a claim of interference with
protected rights under ERISA, 29 U.S.C. § 1140, alleging that Jacobson and Lockhart interfered
with her “right to receive long term disability benefits.” (Id. at 5 ¶ 30) The defendants seek
dismissal of both claims. (D.N. 46)
II.

ANALYSIS
In evaluating a motion to dismiss under Rule 12(b)(6), the Court must ask whether the

complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (alteration in original)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint that merely offers
“‘naked assertions’ devoid of ‘further factual enhancement’” does not satisfy the Federal Rules
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Hogan notes that she asserts this claim “for the sole purpose of preserving her right to pursue
said claim at such future time as the Court allows.” (D.N. 43 at 4 n.1)
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of Civil Procedure. Id. (quoting Twombly, 550 U.S. at 557). With this standard in mind, the
Court turns to Hogan’s amended complaint.
A.

Negligence Per Se

As in her initial complaint, Hogan contends that Jacobson and Lockhart violated
Kentucky statutes prohibiting the practice of medicine and psychology without a license.2 (D.N.
43 at 4-5) The Court previously determined that this claim was completely preempted by ERISA
because Jacobson and Lockhart had no duty to Hogan outside the administrative review process.
(D.N. 23 at 7) According to the defendants, the Court’s earlier ruling is dispositive here; they
maintain that Hogan’s state-law claim should be dismissed as preempted. The answer is not that
simple, however.
The basis for removal in this case was complete preemption—that is, the Court found that
Hogan’s negligence claim was in essence a claim for benefits under ERISA. (See generally D.N.
23) Complete preemption is different from express preemption. Whereas the latter generally
results in dismissal, complete preemption “converts a state-law claim that could have been
brought under § 1132 into a federal claim and makes the recharacterized claims removable to
federal court.” Loffredo v. Daimler AG, 500 F. App’x 491, 495 (6th Cir. 2012); see 29 U.S.C.
§ 1144 (ERISA express-preemption provision). The two doctrines “are unique, distinct, and
mutually exclusive; as to a single claim, they are incompatible and cannot exist.” Ackerman v.
Fortis Benefits Ins. Co., 254 F. Supp. 2d 792, 818 (S.D. Ohio 2003). Thus, the Court’s previous

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Jacobson and Lockhart are the nurse case managers who were assigned to review Hogan’s file
on appeal after her claim for STD benefits was denied. Hogan I, 521 F. App’x at 414. This
Court has previously held that such review does not constitute the practice of medicine for
purposes of KRS § 311.560. See Anderson v. Standard Ins. Co., No. 3:14-CV-51-H, 2014 U.S.
Dist. LEXIS 150013, at *8-9 (W.D. Ky. Oct. 21, 2014) (citing Hackney v. Lincoln Nat’l Life Ins.
Co., 3:12-CV-170-CRS, 2014 U.S. Dist. LEXIS 73771 (W.D. Ky. May 30, 2014)). The Court
need not reach that issue in this case, however.
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decision that Hogan’s claim was completely preempted does not amount to a finding that the
claim cannot survive in federal court. To the contrary, complete preemption means that the
claim is innately federal. Id. at 817; see also Loffredo, 500 F. App’x at 495 (“Complete
preemption applies when a plaintiff dresses up a claim for benefits under a pension plan in statelaw clothing . . . .”).
A court presented with a claim that is completely preempted by ERISA has two options:
allow the plaintiff to amend the complaint to expressly assert an ERISA claim or simply treat the
state-law claim as a claim under ERISA. Ackerman, 254 F. Supp. 2d at 818. Here, Hogan has
already had an opportunity to amend. Therefore, the Court will construe the state-law claim as
an ERISA claim and analyze it accordingly. Cf. Mazur v. Unum Ins. Co., 590 F. App’x 518, 521
(6th Cir. 2014) (approving district court’s use of this approach).
The Court previously found Hogan’s state-law claim to be “subsumed within the claim
for wrongful denial of benefits under the ERISA plan.” (D.N. 23 at 7) In Hogan’s prior lawsuit,
she alleged improper denial of both STD and LTD benefits. See id. at 411. Her present
complaint asserts only that she was wrongly denied LTD benefits. (See D.N. 43 at 4 ¶ 22
(“Defendants’ illegal opinions were provided with the express purpose of denying Mrs. Hogan
her long term disability benefits, and in fact resulted in Mrs. Hogan’s loss of the right to attain
these protected benefits.”)) According to Hogan, “no court has ever addressed or ruled upon
[her] LTD benefits.” (D.N. 51 at 3) She proceeds to quote the following portion of the Sixth
Circuit’s decision:
While Hogan also seeks LTD benefits, she did not first seek these benefits
from LINA and therefore she failed to exhaust administrative remedies with
respect to this claim. She advances a theory that LTD benefits should be awarded
automatically if STD benefits are granted, because LINA’s policy includes a
provision that automatically transitions STD into LTD after the expiration of the

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STD period. However, because we uphold LINA’s denial of STD benefits we
have no reason to reach Hogan’s LTD claims on this theory.
Hogan I, 521 F. App’x at 417. (See D.N. 51 at 4) Thus, the Sixth Circuit did address Hogan’s
entitlement to LTD benefits—it found that the issue was not properly before the court because
she had not even sought those benefits from LINA.
Hogan does not allege that she has now exhausted her administrative remedies with
respect to LTD benefits or that she should be excused from this requirement.3 See Coomer v.
Bethesda Hosp., Inc., 370 F.3d 499, 504-05 (6th Cir. 2004) (plan participant must exhaust
administrative remedies before challenging denial of benefits in court unless she can show with
certainty that the claim would be denied on appeal). The Court cannot consider a claim that
Hogan was wrongly denied benefits when she never tried to obtain them in the first place. See
Stevens v. Employer-Teamsters Joint Council No. 84 Pension Fund, 979 F.2d 444, 451 (6th Cir.
1992) (“An ERISA cause of action for benefits under ERISA does not arise until a claim for
benefits has been made and formally denied.”). Moreover, a claim for denial of benefits is not
properly brought against Jacobson and Hogan, as they are not responsible for approving or
denying claims. See Riverview Health Inst. LLC v. Med. Mut. of Ohio, 601 F.3d 505, 522 (6th
Cir. 2010) (noting that “the proper defendant in an ERISA action concerning benefits is the plan
administrator”). In short, although Hogan’s first cause of action is “a claim for benefits . . . in
state-law clothing,” Loffredo, 500 F. App’x at 495, it is not a viable claim for benefits. Cf.
Mazur, 590 F. App’x 518 (affirming 12(b)(6) dismissal of state-law claims construed as ERISA
claims).

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The fact that Hogan was denied STD benefits does not necessarily mean that a claim for LTD
benefits would be futile; she acknowledges in her complaint that “her right to receive long term
disability benefits was not predicated on her having received short term disability benefits.”
(D.N. 43 at 3 ¶ 15)
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B.

Interference with Protected Rights

In her second cause of action, Hogan alleges that Jacobson and Lockhart interfered with
her “right to pursue, attain and receive long term disability benefits” in violation of 29 U.S.C.
§ 1140. (D.N. 43 at 5) Section 1140 provides, in relevant part, that it is “unlawful for any person
to discharge, fine, suspend, expel, discipline, or discriminate against a participant or
beneficiary . . . for the purpose of interfering with the attainment of any right to which such
participant may become entitled under [an employee benefit] plan.” As the Sixth Circuit has
explained, “[t]his section was designed to prevent ‘employers from discharging or harassing’
employees to preclude ‘them from obtaining vested pension rights.’” Crawford v. TRW Auto.
U.S. LLC, 560 F.3d 607, 611 (6th Cir. 2009) (quoting West v. Butler, 621 F.2d 240, 245 (6th Cir.
1980)).
Aside from the fact that Hogan was not employed by Jacobson or Lockhart, she does not
allege any action by either of them that is prohibited under section 1140. She describes their
involvement as “provid[ing] opinions concerning [her] diagnosis and treatment[,] including her
physical and mental restrictions and limitations.” (D.N. 43 at 3-4 ¶ 19) As an example, the
complaint quotes Jacobson’s conclusion that there was “a lack of clinical evidence . . . to support
[Hogan’s] reported symptoms.” (Id. at 4 ¶ 19) According to Hogan, Jacobson and Lockhart
“sought to render a diagnosis and treatment conclusion that would prevent [her] from becoming
eligible to receive her long term disability benefits” (Id. ¶ 21), allegedly for “their own financial
gain, both in terms of favorable performance reviews and in compensation.” (Id. ¶ 20)
Nothing in Hogan’s amended complaint could be read to suggest that she was
“discharge[d], fine[d], suspend[ed], expell[ed], discipline[d], or discriminate[d] against.” 29
U.S.C. § 1140. Her conclusory assertions that the defendants interfered with her right to receive

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benefits are insufficient to overcome a motion to dismiss. See Iqbal, 556 U.S. at 678. The Court
thus finds that Hogan has failed to state a plausible claim for relief under § 1140.
III.

CONCLUSION
Hogan’s complaint fails to state a claim against Jacobson and Lockhart upon which relief

can be granted. Moreover, the defects in her complaint are not the sort that could be remedied by
further amendment. Accordingly, and the Court being sufficiently advised, it is hereby
ORDERED that the Defendants’ Motion to Dismiss (D.N. 46) is GRANTED. This
action is DISMISSED with prejudice and STRICKEN from the Court’s docket.
April 27, 2015

David J. Hale, Judge
United States District Court

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