The Employee Retirement Income Security Act (ERISA) is a federal law that governs claims for benefits under retirement and disability plans, among other things. In enacting ERISA, Congress explicitly stated that ERISA is an area of federal law that can preempt related state law claims. This means that when a state law claim duplicates or supplants the federal enforcement schemes set forth under ERISA, Congress makes ERISA the exclusive remedy for relief, and the state law claim is preempted. While such preemption may seem straightforward, plaintiffs are still entitled to bring tort and personal injury claims that may be tangentially related to an ERISA violation, as long as the claims do not essentially duplicate the ERISA claim. In many cases, plaintiffs may also attempt to artfully plead personal injury claims so that they appear to be independent of an ERISA violation, when they are in fact the same thing. A recent case in the Sixth Circuit Court of Appeals takes a look at claims of negligence against medical practitioners involved in an ERISA-related evaluation of disability.
In Hogan v. Jacobson & Lockhart, Ms. Hogan applied for disability benefits through her employer’s long-term disability insurer. Her claim was denied by the insurer because she was found not to qualify for benefits. Shortly thereafter, Ms. Hogan filed an ERISA lawsuit against the insurer for an improper denial of short-term and long-term benefits. The claim was rejected by the district court, which held that she did not follow the proper procedures for appealing the denial of her benefits.
While Ms. Hogan’s ERISA case was up on appeal, Ms. Hogan filed a second lawsuit in state court, alleging that Jo Ellen Jacobson and Kem Alan Lockhart were liable for negligence per se because of their involvement in the evaluation of Ms. Hogan’s claims for disability. Although not licensed to practice in Kentucky, where Ms. Hogan filed her claim, the two had evaluated Ms. Hogan’s case and provided medical opinions about whether Ms. Hogan was in fact disabled. Ms. Hogan argued in her second lawsuit that this was a violation of Kentucky’s medical licensing statutes. The defendants immediately moved to transfer the case to federal court, based on ERISA preemption, where it was later dismissed. On appeal, Ms. Hogan argued that her claim for negligence per se was independent of her ERISA claim and was not preempted by ERISA. Accordingly, it should never have been transferred to federal court.
Under the preemption standards imposed by ERISA, a state law claim is preempted by a federal statute if (1) the plaintiff complains about a denial of benefits to which she is entitled under an ERISA employee benefit plan, and (2) the plaintiff does not allege a violation of an independent legal duty beyond ERISA. Here, the Sixth Circuit held that, at the heart of Ms. Hogan’s negligence claim, she was complaining about a denial of her disability benefits. Ultimately, the harm that Ms. Hogan experienced as a result of the medical evaluations by Ms. Jacobson and Ms. Lockhart was a denial of these benefits, and the only relationship between the plaintiff and the defendants arose out of the evaluation of possible ERISA benefits. For this reason, the Sixth Circuit held that Ms. Hogan’s artful pleading was, in reality, simply a reassertion of her ERISA claim that had already been denied.
Likewise, the Sixth Circuit also found that Ms. Hogan could not identify an independent legal duty that the defendants violated during their evaluations. The duty of Ms. Jacobson and Ms. Lockhart to Ms. Hogan arose solely from her application for disability benefits, and again her damages claim flowed only from the denial of benefits. Accordingly, the Sixth Circuit affirmed the determination that Ms. Hogan’s claims were preempted by ERISA and properly removed to federal court.
If you are contemplating a tort or personal injury action based on an injury that is closely linked to a denial of disability or retirement benefits, it is important to speak with an attorney for guidance on how to craft a claim distinct from an ERISA violation. While many plaintiffs successfully bring such claims each year, it is easy to fall within the ERISA preemption trap without proper legal advice and assistance. Personal injury attorney Eric Beasley can assist you in evaluating and carefully drafting your claim. For more information on seeking redress and compensation for your injuries, contact the Law Office of Eric Beasley today at 615-859-2223.
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Managing Parallel Criminal and Civil Proceedings for Personal Injury Claims, Tennessee Personal Injury Blog, February 24, 2016