Hamann et al v. AmeriHealth Administrators, Inc. et al

Filing 10

ORDER & REASONS granting 3 Defendants, AmeriHealth Administrators, Inc. and Independence Blue Cross's Motion to Dismiss and that Plaintiffs' claims are DISMISSED with prejudice. Signed by Judge Carl Barbier on 2/21/13. (sek, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

HAMMANN ET AL.

CIVIL ACTION

VERSUS

NO: 12-2545

AMERIHEALTH ADMINISTRATORS,
INC. ET AL.

SECTION: "J” (5)

ORDER AND REASONS
Before the Court are Defendants, AmeriHealth Administrators,
Inc. and Independence Blue Cross’s, Motion to Dismiss (Rec. Doc.
3) and Plaintiffs Victoria Hamann, Nicole Hamann, Jessica Hamann,
Sarah

Hamann,

and

Natalie

Hamann

(collectively,

the

“Hamann

Family”)’s opposition to same (Rec. Doc. 8). Additionally, also
before the Court are the parties supplemental letters to the
Court, presenting the Court with additional cases in support of
the parties’ positions. Defendants’ motion was set for hearing on
January

30,

2013,

with

oral

argument.

Having

considered

the

motion and legal memoranda, oral argument, the record, and the
applicable law, the Court finds that Defendants’ motion should be
GRANTED for the reasons set out more fully below.

1

PROCEDURAL HISTORY AND BACKGROUND FACTS
This action arises out of claims for recovery of benefits
under the Employee Retirement Income Security Act (“ERISA”), 29
U.S.C. § 1001 et seq., and state law claims for wrongful death
and survival. On October 18, 2012, the Hamann Family filed this
action, naming Blue Cross Blue Shield of
Cross”)

and

AmeriHealth

Administrators,

Pennsylvania (“Blue
Inc.

(“AHA”)

as

Defendants.1
In their complaint, the Hamann Family alleges that Blue
Cross and AHA wrongfully denied their father and spouse, Dean
Hamann (“Mr. Hamann”), benefits due to him under his ERISA plan.
Plaintiffs

assert

that

Mr.

Hamann

suffered

from

chronic

lymphocytic leukemia.2 They contend that in January 2012, after
his diagnosis, he was added to his wife’s Blue Cross insurance
policy,

which

specifically

covered

stem

cell

transplants.

Sometime after December 2010, tests revealed that Mr. Hamann’s
condition had worsened, and his doctors recommended stem cell

1

In
improperly
complaint.
Order, any

their motion, Defendants note that Independence Blue Cross was
designated as “Blue Cross Blue Shield of Pennsylvania” in the
Defs.’ Mot. to Dismiss, Rec. Doc. 3, p. 1. For the purposes of this
reference to “Blue Cross” applies to both entities.

2

The Court assumes that Nicole, Jessica, Sarah, and Natalie Hamann are the
children of Dean Hamann. The complaint specifically states that Victoria Hamann
is Dean Hamann’s spouse; however, it does not provide any relation for the other
Plaintiffs. See Compl., Rec. Doc. 1, p. 9, ¶ 32 (noting that Victoria Hamann was
Dean Hamann’s spouse).

2

transplants. Plaintiffs allege that Mr. Hamann’s doctors wrote
Blue

Cross

and

requested

the

stem

cell

treatments

with

an

accompanying trial study. On June 10, 2011, Blue Cross denied Mr.
Hamann’s claim for lack of coverage. Plaintiffs report that on
July 22, 2011, Mr. Hamann’s doctors appealed the Blue Cross
decision, explaining to Blue Cross that Mr. Hamann’s condition
required the procedure and that it was “urgent.” Blue Cross again
denied the request, explaining to the doctors that the procedure
was deemed to be “experimental” and, therefore, by definition was
not covered. On September 13, 2011, Mr. Hamann’s doctors made
another appeal to Blue Cross, requesting the stem cell transplant
with the trial study or, alternatively, without the trial study.
On

September

22,

2011,

Blue

Cross

approved

the

stem

cell

transplant without the trial study. Plaintiffs report, however,
that Blue Cross’s approval came too late. Mr. Hamann had been
hospitalized for pneumonia in late September and was no longer
eligible for the stem cell transplant. He died on October 19,
2011.
Plaintiffs assert that Blue Cross and AHA wrongfully denied
Mr. Hamann benefits that were due to him under his ERISA
plan, which effectively denied him the opportunity to survive
and/or increase his life expectancy. Therefore, as his decedents,

3

they claim that they are entitled to the value of those benefits
under both ERISA and Louisiana state law. They also sue on his
own behalf.
Defendants filed the instant motion on December 17, 2012. It
was set for hearing on January 16, 2012, with oral argument.
Subsequently, this Court granted Plaintiffs’ request to continue
the hearing on the motion until January 30, 2013. Plaintiffs
filed their response to Defendants’ motion on January 22, 2013.
Oral argument took place on January 30, 2013.
THE PARTIES’ ARGUMENTS
Defendants

argue

that

Plaintiffs’

complaint

must

be

dismissed because it fails to state a claim upon which relief can
be granted. First, Defendants contend that Plaintiffs’ state law
claims must be dismissed because they are preempted by ERISA.
Defendants assert that the United States Court of Appeals for the
Fifth Circuit applies a two-prong test to determine whether state
law claims are preempted by ERISA. They assert that the court
must determine (1) if the benefit plan is an ERISA plan, and (2)
if the state law claim relates to that plan. Here, Defendants
contend that the plan in question is an ERISA plan, and that
Plaintiffs’ wrongful death and survival action claims relate to
that plan, because they concern the improper processing of the

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claim benefits and, therefore, require interpreting the plan.
Consequently, Defendants argue that Plaintiffs’ state law claims
are wholly preempted by ERISA and must be dismissed.
Second, Defendants argue that Plaintiffs’ ERISA claim must
be dismissed, because Plaintiffs seek to recover the value of the
benefits due to Mr. Hamann — a form of relief that Defendants
contend is not expressly authorized under ERISA. Specifically,
Defendants contend that ERISA only explicitly allows for an award
of the benefits due, not compensatory damages, punitive damages,
or the value of the benefits due. Accordingly, Defendants contend
that

because

Plaintiffs

seek

relief

that

is

not

expressly

authorized by the statute, their ERISA claim must be dismissed.
In response, Plaintiffs assert that their state law claims
are not preempted by ERISA, and that ERISA’s statutory scheme
contemplates the type of relief they seek. Plaintiffs argue that
their state law claims are not sufficiently related to ERISA
plans to be preempted. In particular, Plaintiffs contend that in
order to be related to a plan, the state law claim must (1)
“mandate employee benefit plans or their administration;” (2)
“function to regulate the ERISA plan itself”; and (3) provide
alternative means of enforcement for employees to obtain ERISA
benefits.” Pls.’ Opp., Rec. Doc. 8, p. 9. Plaintiffs assert that

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their wrongful death and survival claims do not implicate any of
these categories and, therefore, are not preempted by ERISA.
In

response

to

Defendants’

arguments

about

their

ERISA

claim, Plaintiffs assert that the ERISA statutory scheme does
authorize

relief

in

the

form

of

the

value

of

benefits

due.

Specifically, Plaintiffs rely on Erwin v. Texas Health Choice,
L.C., 187 F. Supp. 2d 661 (N.D. Tex. 2002), in which the court
held

that

the

surviving

spouse

of

an

ERISA

beneficiary

was

entitled to the value of the benefits that the beneficiary should
have received. Id. at 669. Plaintiffs contend that this case
provides the necessary jurisprudence in support of their claim
for relief and allows their ERISA claim to survive.
DISCUSSION
A.

Legal Standard

Under the Federal Rules of Civil Procedure, a complaint must
contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.”

FED. R. CIV. P. 8(a)(2).

The

complaint must “give the defendant fair notice of what the claim
is and the grounds upon which it rests.”
Broudo, 544 U.S. 336, 346 (2005).
simple, concise, and direct.”

Dura Pharm., Inc. v.

The allegations “must be

FED. R. CIV. P. 8(d)(1).

To survive a Rule 12(b)(6) motion to dismiss, the plaintiff

6

must plead enough facts to “state a claim to relief that is
plausible on its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547
(2007)). A claim is facially plausible when the plaintiff pleads
facts that allow the court to “draw the reasonable inference that
the defendant is liable for the misconduct alleged.”

Id.

A

court must accept all well-pleaded facts as true and must draw
all reasonable inferences in favor of the plaintiff.

Lormand v.

U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009); Baker
v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). The court is not,
however, bound to accept as true legal conclusions couched as
factual allegations.
B.

Iqbal, 556 U.S. at 678.

ERISA Preemption

Section 1144(a) of ERISA provides that the statute “shall
supersede any and all State laws insofar as they may now or
hereafter relate to any employer benefit plan.” 29 U.S.C. §
1144(a) (2012). The Fifth Circuit applies a two part test when
determining whether a state law claim is preempted by ERISA.
Hernandez v. Jobe Concrete Prods., 282 F.3d 360, 362 n.3 (5th
Cir. 2002). First, the court determines “whether the benefit plan
at

issue

constitutes

an

ERISA

plan.”

Id.

Second,

the

court

determines whether the state law claims “‘relate to’ the plan.”

7

Id.

When evaluating whether a state law claim relates to an

ERISA plan, the court commonly asks “(1) whether the state law
claims address areas of exclusive federal concern, such as the
right to receive benefits under the terms of an ERISA plan; and
(2) whether the claims directly affect the relationship among the
traditional

ERISA

entities-the

employer,

the

plan

and

its

fiduciaries, and the participants and beneficiaries.” Woods. v.
Texas Aggregates, LLC, 459 F.3d 600, 602 (5th Cir. 2006) (citing
Mem. Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 245
(5th Cir. 1990)). In general, a state law relates to an ERISA
plan “whenever is has ‘a connection with or reference to such a
plan.’” Hubbard v. Blue Cross & Blue Shield Ass’n, 42 F.3d 942,
945 (5th Cir. 1995) (quoting Corcoran v. United Healthcare, Inc.,
965 F.2d 1321, 1329 (5th Cir. 1992), abrogated on other grounds
by Mertens v. Hewitt Assoc., 508 U.S. 248 (1993))). Furthermore,
the United States Supreme Court has found that ERISA preempts
state law tort and contract claims for improper processing of a
claim for benefits. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41,
57

(1987).

“The

language

of

the

ERISA

preemption

clause

is

deliberately expansive, and has been construed broadly by federal
courts.” Hubbard, 42 F.3d at 945 (citing Corcoran, 965 F.2d at
1328-29).

8

As an initial matter, because both parties have agreed that
the plan at issue is an ERISA plan, the Court finds that part one
of the Fifth Circuit test is satisfied. Therefore, the Court
proceeds

to

analyze

the

second

party

of

the

two

part

test:

whether the state law claims relate to the ERISA plan.
Defendants argue that Plaintiffs’ state law wrongful death
and survival action claims relate to the ERISA benefits plan at
issue

because

they

are

effectively

claims

alleging

improper

processing of claim benefits. Furthermore, Defendants note that
the claims are related to the plan because any determination of
liability requires an interpretation of the benefits plan as well
as the benefits that Mr. Hamann had the right to receive under
the plan. The Court agrees. With respect to their state law
claims, Plaintiffs’ complaint alleges that “Defendants’ negligent
failure to approve timely Mr. Hamann’s request for [a stem cell
transplant] caused him to die, or at the very least, to lose the
chance

to

survive.”

Compl.,

Rec.

Doc.

1,

p.

Accordingly, in order to determine whether or not

8,

¶

29.

Defendants

were negligent, the trier of fact must necessarily interpret the
plan in order to determine what benefits were due under the plan

9

and

whether

while

or

Plaintiff

“negligent,”

the

not

they

were

alleges
Court

negligently

that

notes

denied.3

Defendant’s

that

there

is

Likewise,

actions
little

difference between the use of the word negligent

were

practical

and the use of

the word “improper” in this context. Substantively, under either
wording, Plaintiffs have asserted that the Defendants are liable
for “improperly” administering the benefits plan. As such, the
Court finds that Plaintiffs’ state law claims are preempted by
ERISA and, therefore, must be dismissed.4
C.

Relief Under ERISA

The

ERISA

statute

states,

in

pertinent

part,

that

a

participant or beneficiary of the policy may file suit in order
to recover, “benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify his
rights to future benefits under the terms of the plan.” 29 U.S.C.

3

As such, because resolution of these claims would interpret the ERISA
plan, they would also potentially: “(1) “mandate employee benefit plans or their
administration;” (2) “function to regulate the ERISA plan itself”; and (3)
provide alternative means of enforcement for employees to obtain ERISA benefits.”
Pls.’ Opp., Rec. Doc. 8, p. 9. Thus, under the test proposed by Plaintiff, their
state law claims would also be preempted.
4
Additional support for this finding can be found in the following cases:
Corcoran, 965 F.2d at 1331 (holding that ERISA preempts a wrongful death claim);
Bast v. Prudential Ins. Co. of America, 150 F.3d 1003 (9th Cir. 1998) (holding
that state law claims for emotional distress, loss of income, and loss of
consortium were preempted by ERISA because they were related to the
administration of deceased’s benefits plan); Spain v. Aetna Life Ins. Co., 11 F.
3d 129 (9th Cir. 1993) (finding that ERISA preempted a state wrongful death
action).

10

§ 1132(a)(1)(B). The Supreme Court has stated that the civil
remedies

provided

by

the

statute

were

intended

to

be

comprehensive and exclusive, explaining that, “Congress did not
intend to authorize other remedies that it simply forgot to
incorporate expressly.” Mass. Mutual Life Ins. Co. v. Russell,
473 U.S. 134, 146-48 (1985); see also Pilot Life Ins. Co., 481
U.S. at 54. In keeping with the Supreme Court’s opinions, the
Fifth Circuit has expressly found that ERISA does not allow for
recovery of extracontractual, punitive, or compensatory damages.
Rogers v. Hartford Life & Acc. Ins. Co., 167 F.3d 933, 943-44
(5th Cir. 1999); Medina v. Anthem Life Ins. Co., 983 F.2d 29, 323 (5th Cir. 1993). Extracontractual damages are defined as more
damages than a beneficiary would be entitled to receive under the
terms of the ERISA plan. Nero v. Industrial Molding Corp., 167
F.3d 921, 931 (5th Cir. 1999).
Defendants

argue

that

Plaintiffs’

requested

relief,

the

value of the benefits due to Mr. Hamann, is not recognized under
the ERISA statutory scheme. Defendants assert that the statute
must

be

read

literally

and,

therefore,

only

the

benefits

themselves can be awarded — not the value of those benefits.
Defendants argue that awarding the value of such benefits can be
likened to an award of compensatory damages, which is prohibited.
11

Plaintiffs assert that the statutory scheme does not prohibit an
award of the value of benefits, because they are not asking for
anything more than what was originally due to Mr. Hamann. In
support, they rely on the United States District Court for the
Northern District of Texas’ decision in Erwin v. Texas Health
Choice, L.C.
In Erwin, when addressing the exact same question, the court
found

that

nothing

in

the

case

law

or

statute

expressly

prohibited an award of the value of benefits due. 187 F. Supp. 2d
at

669.

The

court

based

its

holding

on

a

reading

of

the

controlling case law, the language of the statute, and the public
policy

rationale

behind

the

passage

of

the

statute.

Id.

Specifically, it reasoned that denying an award of the value of
the benefits would give plan administrators incentive to prolong
denial until a patient died and/or was no long able to receive a
procedure. Id. The court found that this was out of line with the
purpose of the statute which it explained was, “to protect ...
the interests of participants ... and ... beneficiaries ... by
establishing standards of conduct, responsibility, and obligation
for fiduciaries ... and ... providing for appropriate remedies
... and ready access to the Federal courts.” Id. at n. 3 (quoting
29 U.S.C. § 1001(b)).
12

While this Court certainly understands the Erwin court’s
reasoning

and,

furthermore,

sympathizes

with

the

Plaintiffs’

plight, it cannot adopt the reasoning set forth in that case. As
this Court interprets the ERISA jurisprudence, the ERISA statute
is not only meant to be strictly construed but, moreover, should
be

literally

construed

because

of

its

comprehensive

remedial

scheme. As the Supreme Court has specifically stated, “Congress
did not intend to authorize other remedies that it simply forgot
to incorporate expressly.” Mass. Mutual Life Ins. Co., 473 U.S.
at 146-48. Such language by the Supreme Court indicates that the
lower courts should look only at the express language of the
statute when determining the relief that it provides. Thus, had
Congress intended for the value of benefits to be available to
the decedents of a beneficiary, Congress would have specifically
provided for that in the statute. Instead, the plain language of
the statute indicates that Congress only contemplated providing
the actual benefits due to the beneficiary or participant. See 29
U.S.C. § 1132(a)(1)(B) (“benefits due to him under the terms of
his plan, to enforce his rights under the terms of the plan, or
to clarify his rights to future benefits under the terms of the
plan.”); see also Zavala v. Trans-System, Inc., No. 05-6308, 2006
WL 898019, at *5-6 (D. Or. April 4, 2006) (finding that ERISA did

13

not provide recovery of the monetary value of the treatment for
which benefits were denied). Although the Court acknowledges that
this finding seems contrary to the Congressional intent outlined
by the Erwin court, it also notes that in Corcoran, the Fifth
Circuit expressly acknowledged that there may be situations in
which ERISA, as drafted, simply provides no remedy. 965 F.2d at
1338

(“The

result

ERISA

compels

us

to

reach

means

that

the

[Plaintiffs] have no remedy, state or federal, for what may have
been a serious mistake.”). While such a result is unfortunate, it
appears to be consistent with the current state of the law. See
Bast, 150 F.3d at 1011 (noting that in certain situations ERISA
may

not

provide

a

remedy

and,

therefore

“without

action

by

Congress, there is nothing [the courts] can do”). Accordingly,
IT IS HEREBY ORDERED that Defendants’ motion is GRANTED and
that Plaintiffs’ claims are DISMISSED with prejudice.
New Orleans, Louisiana this 21st day of February, 2013.

____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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