McDonald, James v. Household Int'l

Seventh Circuit Court of Appeals

09/29/2005

Opinion

Oral Argument

Oral Argument

"‘make-whole’ relief"?

"It will be up to the McDonalds on remand to decide whether they wish to proceed with their case or to abandon it. In that connection, they may wish to take note of Justice Ginsburg’s comment in her concurring opinion in Davila, in which she drew attention to the Government’s suggestion that ERISA “as currently written and interpreted, may allo[w] at least some forms of ‘make-whole’ relief against a breaching fiduciary in light of the general availability of such relief in equity at the time of the divided bench.” Id. at 2504 (internal quotations omitted). (We note that in Davila, as here, the respondents had declined the opportunity to amend their state-law complaints to add ERISA claims, id. at 2502-03 n.7, but it appears that no one argued to the Court that this step was unnecessary, and it thus had no occasion to reach the point we have discussed in this opinion.)"

Arkansas Dept. of Health and Human Servs. v. Ahlborn

05/01/06

"Held: Federal Medicaid law does not authorize ADHS to assert a lien on Ahlborn’s settlement in an amount exceeding $35,581.47, and thefederal anti-lien provision affirmatively prohibits it from doing so.Arkansas’ third-party liability provisions are unenforceable insofaras they compel a different conclusion. Pp. 9–23......"

Sereboff v. Mid Atlantic Medical Services, Inc.

05/15/06

"Held: Mid Atlantic’s action properly sought "equitable relief" under §502(a)(3). Pp. 3–11......"

Aetna Health Inc. v. Davila

06/21/04

Opinion of the Court

"Held: Respondents’ state causes of action fall within ERISA§502(a)(1)(B), and are therefore completely pre-empted by ERISA §502 and removable to federal court. Pp. 4–20."

"We hold that respondents’ causes of action, brought to remedy only the denial of benefits under ERISA-regulated benefit plans, fall within the scope of, and are completely pre-empted by, ERISA §502(a)(1)(B), and thus removable to federal district court. The judgment of the Court of Appeals is reversed, and the cases are remanded for fur-ther proceedings consistent with this opinion.⁷ It is so ordered."

^"7  The United States, as amicus, suggests that some individuals in respondents’ positions could possibly receive some form of “make-whole” relief under ERISA §502(a)(3). Brief for United States as Amicus Curiae 27, n. 13. However, after their respective District Courts denied their motions for remand, respondents had the opportu-nity to amend their complaints to bring expressly a claim under ERISA §502(a). Respondents declined to do so; the District Courts therefore dismissed their complaints with prejudice. See App. 147–148; id., at 298; App. B to Pet. for Cert. in No. 02–1845, pp. 34a–35a; App. B to Pet. for Cert. in No. 03–83, p. 40a. Respondents have thus chosen not to pursue any ERISA claim, including any claim arising under ERISA §502(a)(3). The scope of this provision, then, is not before us, and we do not address it."

GINSBURG, J., concurring

"The Government notes a potential amelioration. Recog-nizing that “this Court has construed Section 502(a)(3) not to authorize an award of money damages against a non-fiduciary,” the Government suggests that the Act, as currently written and interpreted, may “allo[w] at least some forms of ‘make-whole’ relief against a breaching fiduciary in light of the general availability of such relief in equity at the time of the divided bench.” Brief for United States as Amicus Curiae 27–28, n. 13 (emphases added); cf. ante, at 19 (“entity with discretionary authority over benefits determinations” is a “plan fiduciary”); Tr. of Oral Arg. 13 (“Aetna is [a fiduciary]—and CIGNA is for purposes of claims processing.”). As the Court points out, respondents here declined the opportunity to amend their complaints to state claims for relief under §502(a); the District Court, therefore, properly dismissed their suits with prejudice. See ante, at 20, n. 7. But the Govern-ment’s suggestion may indicate an effective remedy others similarly circumstanced might fruitfully pursue.

“Congress . . . intended ERISA to replicate the core principles of trust remedy law, including the make-whole standard of relief.” Langbein 1319. I anticipate that Congress, or this Court, will one day so confirm."

ERISAclaim.com Comments (06/21/2004)

    On June 21, 2004, Supreme Court made another landmark ruling on managed-care and ERISA. As I predicted on April 28, 2004, this ruling will affirm long-standing position of court interpretation of the ERISA preemption of medical malpractice claims with punitive damages in state court, the high court also makes another unprecedented interpretation of equitable relief under ERISA as "make-whole" relief as consequential damage remedies, compared to "contractual damages" only remedies under ERISA, although the respondent declined to amend claims to seek such consequential damage relief, as pointed out by the court.

Contrary to mainstream reading of this supreme court ruling, that HMO or ERISA plan cannot be sued in state court for medical malpractice, bad faith or consumer fraud for state remedies and punitive damages, Supreme Court has made it clear that the "make-whole" relief will be available if the issue is before the court , and will be so confirmed (Justice Ginsburg).

The new ERISA era is here today, although no punitive damages available in state court, ERISA plans, fiduciaries and plan administrators can be sued for pain and suffering, lost wages , and any compensable damages , as well as attorney fees under "make-whole" relief in federal court instead of state court. Justice Ginsburg, in her concurring opinion, has made this point so clear that any concerned ERISA practitioners couldn't misunderstand:

"Congress . . . intended ERISA to replicate the core principles of trust remedy law, including the make-whole standard of relief." Langbein 1319. I anticipate that Congress, or this Court, will one day so confirm."

Hopefully this ruling will alert employers, ERISA plans, fiduciaries and managed-care organizations about plan's NEW consequential damage liabilities and faithfully fulfilling plan's fiduciary obligations by complying with ERISA claim regulations to minimize ERISA plan's legal and financial liabilities and to make ERISA claim administration and appeal process practical and meaningful as they argued in this case. And this ruling should also serve as a wakeup call for health care providers, American workers and their attorneys that except for punitive damages, federal court will provide new remedies, unavailable before, to compensate any consequential damages as "make-whole" relief if ERISA claim regulations are closely followed in pursuing healthcare claims under ERISA.

Overview: Aetna v. Davila Decision and Its Consequences (PDF) (ERISA Industry Committee)

3 pages. Excerpt: "The language in the concurring opinion offered by Justice Ginsberg, and joined by Justice Breyer, may ultimately be as significant for major employers as the Court decision......Finally, the concurrence turns to the Brief for United States as Amicus Curiae in this case, in which the Government notes that ERISA as currently written and interpreted, may "allo[w] at least some forms of 'make-whole' relief against a breaching fiduciary in light of the general availability of such relief in equity at the time of the divided bench". (emphasis added in the concurrence). The concurrence suggests that pursuit of fiduciary claims under §502(a) of ERISA may be "an effective remedy others similarly situated might fruitfully pursue"

Overview: Aetna Health Inc. v. Davila (Groom Law Group)

Excerpt: "We note, however, that a concurring opinion in Davila suggests that some form of "make whole" relief (e.g., damages) might be "appropriate equitable relief" under ERISA section 502(a)(3). This discussion was prompted by a U.S. Department of Labor amicus brief and likely will prompt the next wave of litigation as plaintiffs continue to seek damages in excess of the limited relief available under ERISA section 502(a)(1)(B)."

Supreme Court Ruling on Health Care Claims Raises Important Policy Issues: American Benefits Council Responds to Critics of Today's Davila, Calad Rulings (June 21, 2004)

"These review procedures are available under ERISA to help patients get the care they deserve, quickly and without having to resort to costly and lengthy legal procedures. Clearly, a speedy and factual review aided by the expertise of the physicians involved with these two cases could have avoided the need for the courts to be involved at all," Klein said.

"ERISA is intended to protection patients, not enrich plaintiffs' attorneys. If the objective is to ensure healthy and safe outcomes for patients, then certainly efficient review of claims disputes under ERISA, not inviting litigation, is the way to go," Klein added."

ERISAclaim.com Comments (06/21/2004)

"Clearly, a speedy and factual review aided by the expertise of the physicians involved with these two cases could have avoided the need for the courts to be involved at all," Klein said."

 

This could be true only if ERISA claim regulations were educated, complied and enforced in this country in past 30 years, practically and meaningfully (Aetna Video Shows ERISA Patients Mistreated):

 

1. Managed care industry, MCO and physicians have no clue for 30 years about ERISA claim regulation, no one uses, complies or enfornces ERISA claim regulation in past 30 years;

2. Almost all ERISA plans have anti-assignment clause to prohibit physicians from participating ERISA appeals, Physicians' Multispecialty v. The Health.

3. ERISA has been around for almost 30 years, and new ERISA claim regulation went into effect for 2 years, no one, except for Dr. Jin Zhou & ERISAclaim.com, offered any ERISA claim appeal educations to MCO's, providers and ERISA plans.

 

"ERISA is intended to protection patients, not enrich plaintiffs' attorneys. If the objective is to ensure healthy and safe outcomes for patients, then certainly efficient review of claims disputes under ERISA, not inviting litigation, is the way to go," Klein added."

 

1. Only time we talk about "efficient review of claims disputes under ERISA" is when disastrous events like these happened to show the importance of ERISA claim regulation, then the entire country never worked on how to ensure "efficient review of claims disputes under ERISA" (Aetna Video Shows ERISA Patients Mistreated);

2. When this country is facing the worst healthcare crisis, governments, employers, healthcare providers and the industry must put money and practice to where our mouths are: ERISA Claim Regulations education, compliance and enforcement;

3. Only when there is "efficient review of claims disputes under ERISA" and ERISA is working practically and meaningfully, "then certainly efficient review of claims disputes under ERISA, not inviting litigation, is the way to go,"

4. Otherwise, as THE ERISA INDUSTRY COMMITTEE correctly concluded from this Supreme Court ruling for the industry:
    

   "Although the decision is a major preemption victory for health plans, Justices Ginsberg and Breyer's concurrence is fueling efforts in Congress to amend ERISA and either reverse the decision as it affects preemption or provide for a damages remedy in ERISA. In response to the decision, Congressman John Dingell, Ranking Member of the Committee on Energy and Commerce, has reintroduced the Patients' Bill of Rights to allow patients to sue health care plans under state law. It seems unlikely that employer plans, including self funded plans, will escape this latest effort to subject them to new remedies and litigation." (ERIC Analysis of Aetna v. Davila)

ERISAclaim.com Comments (06/22/2004)

"Clas-sifying any entity with discretionary authority over bene-fits determinations as anything but a plan fiduciary would thus conflict with ERISA’s statutory and regulatory scheme." (Aetna Health Inc. v. Davila, p19)

This may indicate that any party makes appeal decisions could be sued as a plan fiduciary and liable for "make-whole" relief.

The Davila Supreme Court Case and the Future of Health Plan Administration (Mintz Levin)

Excerpt: "It is not often that we see a unanimous Supreme Court decision ... This Mintz Levin Publication discusses the consolidated cases of Aetna Health Inc. v. Davila and CIGNA Healthcare of Texas, Inc. v. Calad in which the Court unanimously ruled that the Texas Patient's Bill of Rights Law is preempted by [ERISA] to the extent it attempts to regulate or dictate what is covered by an ERISA-covered group health plan."

ERISA Update: the Supreme Court Texas Decision and Other Recent Developments (PDF) (AcademyHealth)

7 pages. Excerpt: "The purpose of the brief is to explore the U.S. Supreme Court's June 2004 decision that ERISA preempts the Texas HMO liability law and its effects on other state health plan liability laws. The brief also examines implications of ERISA preemption for state health insurance regulation, 'pay or play' health coverage laws, and premium assistance programs."

ERISA Fiduciary Class Action filed for "Equitable Relief"?

PRAYER For RELIEF

"I. An order for equitable restitution and other appropriate equitable monetary relief against defendants."

Keller Rohrback L.L.P. Announces 401(k) Breach of Fiduciary Class Action Against Cardinal Health, Inc.

"SEATTLE, Aug. 12, 2004 (PRIMEZONE) -- Keller Rohrback L.L.P. (www.erisafraud.com) has filed a 401(k) Breach of Fiduciary Duty class action in the United States District Court for the Southern District of Ohio on behalf of participants and beneficiaries of the Cardinal Health Profit Sharing, Retirement and Savings Plan and the Syncor International Employees' Savings and Stock Ownership Plan (the "Plans"), who were invested in Cardinal Health Shares through the Plans between October 24, 2000 and the present (the "Class Period").