Bieber et al v. Nace et al

Filing 53

ORDER granting pltf's motion in limine 26 , STRIKING 5th affirm defense of deft David J. Nace 8 , STRIKING 4th affirm defense in answer of deft Eastern Industries 11 , & noting that ERISA preempts PMVFRL from operating to bar or reduce recovery of med expenses by Biebers in instant action. (See order for complete details.) Signed by Honorable Christopher C. Conner on 12/13/11. (ki)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

STEPHEN K. BIEBER and KAREN
BIEBER,
Plaintiffs
v.
DAVID J. NACE and EASTERN
INDUSTRIES, INC.,
Defendants

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CIVIL ACTION NO. 1:10-CV-0718
(Judge Conner)

ORDER
AND NOW, this 13th day of December, 2011, upon consideration of the
motion in limine (Doc. 26) filed by plaintiffs Steven K. Bieber and Karen Bieber
(“the Biebers”), wherein the Biebers request that the court strike the fifth
affirmative defense of defendant David J. Nace (“Nace”) (Doc. 8, at 18), and the
fourth affirmative defense of defendant Eastern Industries, Inc. (Doc. 11, at 18),
both of which assert that the Biebers’ recovery of medical expenses may be reduced
or barred by provisions of the Pennsylvania Motor Vehicle Financial Responsibility
Law (“PMVFRL”), see 75 PA . CONS. STAT . §§ 1720, 1722,1 and wherein the Biebers
1

Section 1720, which governs subrogation in Pennsylvania and prohibits
plans from being structured in a manner requiring reimbursement in the event of
recovery from a third party, states:
In actions arising out of the maintenance or use of a motor
vehicle, there shall be no right of subrogation or reimbursement from
a claimant’s tort recovery with respect to workers’ compensation
benefits, benefits available under section 1711 (relating to required
benefits), 1712 (relating to availability of benefits) or 1715 relating to
availability of adequate limits) or benefits paid or payable by a
program, group contract or other arrangement whether primary or

assert that they are members of a self-funded employee benefits plan governed by
the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.,
that preempts operation of the PMVFRL, and upon further consideration of the
brief in opposition (Doc. 28) filed by Eastern Industries, wherein Eastern Industries
claims that the Biebers have provided no support for their contention that Biebers’
employee benefits plan is an uninsured, self-funded plan with a right to subrogation
governed by ERISA (Doc. 28, at 5), and it appearing from the affidavits and exhibits,
submitted by the Biebers that the Biebers are indeed members of an uninsured,
self-funded employee benefits plan subject to ERISA, (see Doc. 27, Ex. B; Doc. 29,
Exs. A-C); see also Walker v. Rose, 22 F. Supp. 2d 343, 348 (D.N.J. 1998) (accepting
declaration of plan administrator that plan at issue was self-funded, ERISA
governed plan), and that the Biebers’ employee benefits plan contains subrogation
or reimbursement provisions, and liens have been asserted against the Biebers by

excess under section 1719 (relating to coordination of benefits).
75 PA. CONS. STAT . § 1720.
Section 1722 states:
In any action for damages against a tortfeasor, or in any
uninsured or underinsured motorist proceeding, arising out of the
maintenance or use of a motor vehicle, a person who is eligible to
receive benefits under the coverages set forth in this subchapter, or
workers’ compensation , or any program, group contract or other
arrangement for payment of benefits as defined in section 1719
(relating to coordination of benefits) shall be precluded from
recovering the amount of benefits paid or payable under this
subchapter, or workers’ compensation, or any program, group contract
or other arrangement for payment of benefits as defined in section
1719.
75 PA . CONS. STAT . § 1722.
2

the third-party administrators of the plan, (see Doc. 29, at 5-7 & Exs. C-F), and the
court noting that ERISA broadly preempts state regulation of employee benefits
plans, see 29 U.S.C. § 1144(a) (preemption clause), but does not preempt state laws
governing insurance, see 29 U.S.C. § 1144(b)(2)(A) (savings clause), however, ERISA
makes clear that an employee benefits plan governed by ERISA shall not be
deemed an insurance company or insurer for purposes of state laws regulating
insurance companies or insurance contracts, see 29 U.S.C. § 1144(b)(2)(B) (deemer
clause), and the court finding that, pursuant to Supreme Court precedent, ERISA
preempts operation of the PMVFRL against a self-funded and uninsured employee
benefits plan governed by ERISA, see FMC Corp. v. Holliday, 498 U.S. 52, 64 (1990)
(“Our interpretation of the deemer clause makes clear that if a plan is insured, a
State may regulate it indirectly through regulation of its insurer and its insurer’s
insurance contracts; if the plan is uninsured, the State may not regulate it.”);2 see

2

In FMC Corp. v. Holliday, the Supreme Court held that ERISA preempted
application of § 1720 of the Pennsylvania Motor Vehicle Financial Responsibility
Law to a self-funded health care plan. 498 U.S. 52 (1990). In examining the
preemption, savings and deemer clauses of ERISA, the Court explained:
We read the deemer clause to exempt self-funded ERISA plans
from state laws that “regulat[e] insurance” within the meaning of the
saving clause. By forbidding States to deem employee benefit plans “to
be an insurance company or other insurer ... or to be engaged in the
business of insurance,” the deemer clause relieves plans from state
laws “purporting to regulate insurance.” As a result, self-funded
ERISA plans are exempt from state regulation insofar as that
regulation “relate[s] to” the plans. State laws directed toward the
plans are pre-empted because they relate to an employee benefit plan
but are not “saved” because they do not regulate insurance. State
laws that directly regulate insurance are “saved” but do not reach selffunded employee benefit plans because the plans may not be deemed
3

also Bill Gray Enterprises, Inc. Employee Health and Welfare Plan v. Gourley, 248
F.3d 206, 212-13 (3d Cir. 2001), and the court therefore concluding that the
PMVFRL cannot operate to reduce or bar the Biebers’ recovery of medical
expenses in the above-captioned matter, it is hereby ORDERED that:
1.

The motion in limine (Doc. 26) is GRANTED.

2.

The fifth affirmative defense in the answer of defendant David J. Nace
(Doc. 8, at 18) is STRICKEN.

3.

The fourth affirmative defense in the answer of defendant Eastern
Industries, Inc. (Doc. 11, at 18) is STRICKEN.

4.

ERISA preempts the PMVFRL from operating to bar or reduce the
recovery of medical expenses by the Biebers in the instant action. See
FMC Corp. v. Holliday, 498 U.S. 52 (1990).

S/ Christopher C. Conner
CHRISTOPHER C. CONNER
United States District Judge

to be insurance companies, other insurers, or engaged in the business
of insurance for purposes of such state laws.
Id. at 61.