Luebbert v Blue Cross Blue Shield of Tennessee

Filing 35

ORDER - Defendant BlueCross BlueShield of Tennessee's Motion to Dismiss Count II of Plaintiff's Complaint 25 is GRANTED. Count II of Plaintiff's Complaint is preempted by ERISA and is dismissed. Plaintiff's requests for compensa tory damages and a jury trial are also dismissed as such relief is not available under ERISA. Each party shall submit its brief outlining its position on or before Wednesday, May 16, 2012, re: scope of discovery. The parties' responses to the initial briefs shall be submitted on or before Wednesday, May 23, 2012. Signed on 5/8/12 by Chief District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
MARGARET LUEBBERT,
Plaintiff,
v.
BLUE CROSS BLUE SHIELD of
TENNESSEE,
Defendant.

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) No. 11-04347-CV-FJG
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ORDER
Currently pending before the Court is Defendant BlueCross BlueShield of Tennesse’s
(“BCBS”) Motion to Dismiss Case and Strike Plaintiff’s Amended Complaint (Doc. No. 25).
Also, pending before the Court is the parties’ Joint Status Report (Doc. No. 30).
I.

Background
Plaintiff commenced this cause of action in the Circuit Court of Cole County, Missouri

on October 17, 2011 (Doc. No. 1). Defendant was served on November 21, 2011 (Doc. No.
1). On December 20, 2011, this case was removed to the United States District Court for the
Western District of Missouri (Doc. No. 1). On February 24, 2012, Plaintiff filed an Amended
Complaint (Doc. No. 19).
II.

Defendant’s Motion to Dismiss (Doc. No. 25)
On March 16, 2012, Defendant BCBS filed the present Motion to Dismiss Case and

Strike Plaintiff’s Amended Complaint (Doc. No. 25). Defendant submits that Count II of
Plaintiff’s Amended Complaint which asserts a state law claim for negligent misrepresentation
against BCBS for certain health benefits is under a group insurance plan governed
exclusively by the Employee Retirement Income Security Act of 1974, as amended, 29

U.S.C. §1001, et seq. (ERISA) (Doc. No. 25). As such, Defendant states that Plaintiff’s claim
is cognizable - if at all - only under the exclusive remedy provisions of ERISA (Doc. No. 25).
Since Plaintiff has not alleged an ERISA claim against BCBS in Count II, Defendant submits
Count II should be dismissed (Doc. No. 25). Defendant also submits that Plaintiff’s requests
for compensatory damages and a jury trial also should be stricken from the Amended
Complaint, as such relief is not available under ERISA (Doc. No. 26 & 34). Furthermore,
Defendant submits that even if Count II could be asserted under state law, in this case,
Plaintiff fails to adequately plead a negligent misrepresentation claim.
Plaintiff submits that Count II should not be dismissed as Plaintiff’s claim for negligent
misrepresentation does not relate to an insured employee benefit plan and is, therefore, not
preempted by ERISA. Specifically, Plaintiff’s claim has no forbidden connection and no
prohibited reference to ERISA. Furthermore, Plaintiff’s submits that its claim for negligent
misrepresentation is adequately pled so as to survive Defendant’s Motion to Dismiss. (Doc.
No. 28).
ERISA, codified at 29 U.S.C. § 1001-1461, is a comprehensive statute that sets
certain uniform standards and requirements for employee benefit plans. Wilson v. Zoellner,
114 F.3d 713, 1715 (8th Cir. 1997). ERISA’s preemption clause provides:
Except as provided in subsection (b) of this section, the provisions of this
subchapter and subchapter III of this chapter shall supersede any and all State
laws insofar as they may now or hereafter relate to any employee benefit plan
described in section 1003(a) of this title and not exempt under section 1003(b) of
this title...
Id at 716. In analyzing this clause, the Supreme Court has long acknowledged that ERISA’s
preemption provision is clearly expansive. Id. To determine whether a state law “relates to” an
employee benefit plan and thus, is preempted by ERISA, the Supreme Court has created a twopart inquiry. Id. Under this test, a law “relates to” a covered employee benefit plan if it (A) makes
reference to such a plan or (B) has a connection with such a plan. Id. The Missouri state

common-law tort of negligent misrepresentation makes no reference to and functions irrespective
of the existence of an ERISA plan. Id. at 716-17. In deciding whether a state law has a
forbidden connection to an ERISA plan, this Court has considered the following factors:
(1) whether the state law negates an ERISA plan provision, (2) whether the state
law affects relations between primary ERISA entities, (3) whether the state law
impacts the structure of ERISA plans (4) whether the state law impacts the
administration of ERISA plans (5) whether the state law has an economic impact
on ERISA plans (6) wehther preemption of the state law is consistent with other
ERISA provisions, and (7) whether the state law is an exercise of traditional state
power.
Id. at 717-22.
In this case, in Count II of Plaintiff’s Amended Complaint, Plaintiff attempts to make a
Missouri state common-law tort of negligent misrepresentation claim. As such, Count II is not
preempted by ERISA on the basis of any “reference to” ERISA. Because the Missouri tort of
negligent misrepresentation does not contain a prohibited “reference to” an ERISA plan, we must
now determine if Plaintiff’s action against Defendant has a prohibited “connection with” an ERISA
plan. First, Plaintiff is suing for plan benefits. As such, allowing the negligent misrepresentation
claim to proceed could negate an ERISA plan provision. Id. Second, since Defendant is being
sued as a plan administrator for its actions in administration of the plan under Count II, this Count
affects the relations between primary ERISA entities and has an impact on the structure of the
plan. Id. Third, Defendant is being sued regarding alleged misrepresentations by its agent
during the existence of the ERISA plan. As such, this could have an impact on the administration
of the ERISA plan. Id. Fourth, while the costs associated with marketing and selling ERISA
plans could be influenced by allowing claims to proceed against insurance agents for negligent
misrepresentation, this is such an indirect economic influence on an ERISA plan that it is not a
significant factor favoring preemption. Id. Finally, Missouri’s efforts to prevent benefit plans from
misrepresenting the contents of their wares or the scope of their services is remote from the
areas in which ERISA is expressly concerned. Id. As such, this factor does not support a finding
of preemption. Id.

Nonetheless, weighing these various factors together, this Court concludes that, in this
case, ERISA preempts Count II of Plaintiff’s Complaint which attempts to assert a state law claim
for negligent misrepresentation. Accordingly, Defendant BlueCross BlueShield of Tennesse’s
(“BCBS”) Motion to Dismiss Count II of Plaintiff’s Complaint (Doc. No. 25) is hereby GRANTED.
Count II of Plaintiff’s Complaint is preempted by ERISA and thus, is dismissed. As such,
Plaintiff’s requests for compensatory damages and a jury trial are also dismissed, as such relief
is not available under ERISA.
III.

Joint Status Report (Doc. No. 30)
On March 14, 2012, the parties submitted a Joint Proposed Scheduling Order and

Discovery Plan (Doc. No. 24). In their proposal, the parties disagreed as to the scope of the
present litigation. Specifically, Defendant stated in a footnote that it believes the scope of this
matter is confined to a review of the administrative record, and consequently, Plaintiff is not
entitled to discovery beyond the administrative record. Plaintiff stated that she disagrees and
believes that broader discovery may be needed. The parties proceeded to propose additional
discovery deadlines.
On April 4, 2012, the Court ordered the parties to file briefing which addressed their
respective positions on the scope of this case, specifically addressing whether discovery
should be confined to the administrative record (Doc. No. 29). On April 10, 2012, the parties
filed a Joint Status Report which requested deferral of briefing on the scope of discovery
pending the Court’s ruling of Defendant’s Motion to Dismiss (Doc. No. 25). Given the Court’s
ruling today, the parties are directed to refer to the Court’s previous order requesting briefing
(Doc. No. 29) and comply in accordance. Each party shall submit its brief outlining its
position on or before Wednesday, May 16, 2012. The parties’ responses to the initial briefs
shall be submitted on or before Wednesday, May 23, 2012. IT IS SO ORDERED.
Date: May 8, 2012
Kansas City, Missouri

S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
Chief United States District Judge