PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY,
Plaintiff-Appellee,
v. No. 07-1502
INFORMATION SYSTEMS & NETWORKS
CORPORATION,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Alexander Williams, Jr., District Judge.
(8:03-cv-00951-AW)
Argued: March 18, 2008
Decided: April 11, 2008
Before Sandra Day O’CONNOR, Associate Justice (Retired),
Supreme Court of the United States, sitting by designation,
WILLIAMS, Chief Judge, and HAMILTON, Senior Circuit Judge.
Affirmed by published opinion. Senior Judge Hamilton wrote the
opinion, in which Associate Justice O’Connor and Chief Judge Wil-
liams joined.
COUNSEL
ARGUED: Norman Henry Singer, SINGER & ASSOCIATES, P.C.,
Bethesda, Maryland, for Appellant. Thomas G. Collins,
2 GREAT-WEST LIFE v. INFORMATION SYSTEMS
BUCHANAN, INGERSOLL & ROONEY, P.C., Harrisburg, Penn-
sylvania, for Appellee. ON BRIEF: Stephen Moniak, BUCHANAN,
INGERSOLL & ROONEY, P.C., Harrisburg, Pennsylvania, for
Appellee.
OPINION
HAMILTON, Senior Circuit Judge:
This appeal presents yet another set of facts upon which we must
determine whether the Employee Retirement Income Security Act of
1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq.,
preempts certain state law claims. More specifically, the sole issue we
decide in this appeal is whether ERISA preempts a state law breach
of contract claim and an alternatively pled state law unjust enrichment
claim brought by a third-party company hired to perform only non-
discretionary administrative services, under the self-funded portion of
an employee health care benefit plan covered by ERISA, against the
sponsor of such plan for reimbursement of $93,999.73 in nondiscre-
tionary payments the third-party company fronted to satisfy self-
funded benefit claims, when: (1) the plan administrator, with full dis-
cretion to determine whether a claim for self-funded benefits should
be paid or denied (and who also served as the sponsor’s chief finan-
cial officer) expressly acknowledged the debt and recommended to
the sponsor’s chief executive officer that it should be paid; and (2)
resolution of either claim requires no interpretation of the plan terms
nor is it in any way dependant upon the plan being governed by
ERISA. After careful consideration, we hold that ERISA preempts
neither state law claim at issue in this appeal. Accordingly, we affirm
the district court’s entry of judgment in favor of the third-party com-
pany following the grant of the third-party company’s motion for
summary judgment.
I.
Effective September 1, 2000, the defendant in this case, Informa-
tion Systems and Networks Corp. (ISN), established a health care
benefit plan for the purpose of providing certain health care benefits
GREAT-WEST LIFE v. INFORMATION SYSTEMS 3
to its covered employees and their dependents (the Plan). The parties
agree that the Plan is governed by ERISA.
ISN is the "plan sponsor," as that term is defined by ERISA. 29
U.S.C. § 1002(16)(B) ("The term ‘plan sponsor’ means (i) the
employer in the case of an employee benefit plan established or main-
tained by a single employer . . . ."). ISN operated the Plan pursuant
to the written terms of a summary plan description. The Plan desig-
nated ISN’s Chief Financial Officer, Charles Bonuccelli (CFO
Bonuccelli) as the Plan’s "administrator" as that term is defined by
ERISA. 29 U.S.C. § 1002(16)(A) ("The term ‘administrator’ means—
(i) the person specifically so designated by the terms of the instrument
under which the plan is operated . . . .").
ISN purchased insurance from the plaintiff in this case, Great-West
Life and Annuity Insurance Company (Great-West), to cover some
benefits under the Plan, for example, accidental death benefits. ISN
also contracted separately with Great-West to provide stop-loss cover-
age for the amount any claims by an employee or dependent exceeded
$30,000.00 per month in the aggregate.
Relevant to the preemption issue we decide in the present appeal,
in a separate and distinct contractual agreement between ISN and
Great-West (the Services Agreement), ISN also hired Great-West to
perform certain non-discretionary administrative services under the
Plan. Great-West’s state law claims against ISN in this case both arise
from Great-West’s performance of only one of these nondiscretionary
administrative services, namely, Great-West’s non-discretionary duty
to front the payment of claims made by ISN employees and their
dependents for self-funded benefits under the Plan. ISN, in turn,
agreed to reimburse Great-West for any such payments.
Notably, the Plan stated the following with respect to the roles of
the plan administrator (the Plan Administrator) and Great-West with
respect to the self-funded portion of the Plan:
Self-Funded Benefits
Medical, Prescription Drug, Dental and Vision Benefits
4 GREAT-WEST LIFE v. INFORMATION SYSTEMS
The Plan Administrator has complete authority to control
and manage the Plan. The Plan Administrator has full dis-
cretion to determine eligibility, to interpret the Plan and to
determine whether a claim should be paid or denied, accord-
ing to the provisions of the Plan as set forth in this booklet.
The Employer is fully responsible for the self-funded bene-
fits. Great-West processes claims and provides other ser-
vices to the Employer related to the self-funded benefits.
Great-West does not insure or guarantee the self-funded
benefits.
(J.A. 84).
Article 4 of the Services Agreement confirms that, at all times, ISN
retained the authority to control and manage the Plan:
[ISN] acknowledges that [it] has authority to control and
manage the operation of the Plan. It is expressly agreed that
under no circumstances will Great-West be designated as
plan administrator or a fiduciary of the Plan. Nothing herein
will be deemed to constitute Great-West a party to the Plan
or to confer upon Great-West any authority or control
respecting management of the Plan, authority or responsibil-
ity in connection with administration of the Plan or respon-
sibility for the terms or validity of the Plan.
(J.A. 36).
By letter dated December 28, 2000, ISN notified Great-West of its
intention to terminate their contractual relationship effective February
1, 2001. Thereafter, Great-West, pursuant to the Services Agreement,
demanded that ISN reimburse it $93,999.73, representing the balance
amount of benefit claims Great-West paid out on behalf of ISN under
the self-funded portion of the Plan. In the spring of 2002, Great-
West’s collection representative spoke with CFO Bonuccelli about the
outstanding balance. Over the course of an eight-month period, Great-
West issued a series of letters, some with supporting documentation
and some without, to ISN seeking payment of the outstanding bal-
ance.
GREAT-WEST LIFE v. INFORMATION SYSTEMS 5
After reviewing the documentation provided by Great-West as to
the self-funded benefit payments at issue, CFO Bonuccelli acknowl-
edged the validity of Great-West’s demand for reimbursement of the
$93,999.73 and recommended to ISN’s President and Chief Executive
Officer Roma Malkani (CEO Malkani), on at least two occasions, that
ISN satisfy Great-West’s demand. But each time, without explana-
tion, CEO Malkani refused to reimburse Great-West, and continues
steadfastly to do so. Notably, ISN does not dispute that, pursuant to
Great-West’s obligations under the Services Agreement, Great-West
fronted $93,999.73 on behalf of ISN to satisfy claims for self-funded
benefits under the Plan.
With no hope of ISN voluntarily reimbursing it the $93,999.73, on
April 2, 2003, Great-West filed the present civil action against ISN
in federal court in Maryland, based upon diversity jurisdiction. The
complaint alleged two alternative common law causes of action under
Maryland law—breach of contract and unjust enrichment. As should
be obvious by now, the crux of both causes of action is that ISN owes
Great-West $93,999.73 for breach of the Services Agreement. To be
clear, Great-West’s claims against ISN arose exclusively under the
Services Agreement.
ISN moved to dismiss Great-West’s complaint under Federal Rule
of Civil Procedure 12(b)(6), on the grounds that Great-West’s state
law breach of contract and unjust enrichment claims were preempted
by ERISA, 29 U.S.C. § 1144(a), and that Great-West lacked standing
to assert any claims under ERISA’s civil enforcement provision, id.
at § 1132. The district court denied the motion, but noted that ISN
would have the opportunity to reassert its ERISA preemption argu-
ment in a future motion for summary judgment. ISN then filed its
answer to Great-West’s complaint, asserting, inter alia, ERISA pre-
emption as an affirmative defense to both claims.
Following discovery, the parties filed cross-motions for summary
judgment, with ISN’s motion asserting ERISA preemption as its sole
basis. In fact, in its "OPPOSITION TO PLAINTIFF GREAT-WEST
LIFE & ANNUITY INSURANCE COMPANY’S MOTION FOR
SUMMARY JUDGMENT AND CROSS-MOTION FOR SUM-
MARY JUDGMENT," filed with the district court, ISN expressly "re-
cognize[d] that the payments made by Plaintiff pursuant to the Health
6 GREAT-WEST LIFE v. INFORMATION SYSTEMS
Plan, if not for ERISA, would be reimbursable if ERISA had not been
implicated."
The district court rejected ISN’s ERISA preemption argument,
denied its motion for summary judgment, and granted summary judg-
ment for $93,999.73 in favor of Great-West with respect to Great-
West’s breach of contract claim.* This timely appeal by ISN fol-
lowed.
II.
As its sole challenge to the judgment below, ISN argues that the
district court erred in concluding that ERISA does not preempt either
of Great-West’s state law claims. As ISN seeks to use ERISA pre-
emption as an affirmative defense to Great-West’s state law claims,
ISN bears the burden of proving the defense’s applicability. See Bank
of Louisiana v. Aetna U.S. Healthcare, Inc., 468 F.3d 237, 242 (5th
Cir. 2006) (when defendant uses ERISA preemption as an affirmative
defense to plaintiff’s state law claims, defendant bears burden of
proof that defense applies), cert. denied, 127 S. Ct. 1826 (2007). Cf.
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987) ("Federal pre-
emption is ordinarily a federal defense to the plaintiff’s suit."). ISN
presents no specific argument in challenge to the district court’s rul-
ing on the merit’s of Great-West’s breach of contract claim. Accord-
ingly, the sole issue presented in this appeal is whether ISN has
carried its burden of showing that ERISA preempts Great-West’s
state law breach of contract claim as well as its alternative and virtu-
ally identical state law claim for unjust enrichment.
Our review of this issue on appeal from the grant of summary judg-
ment is de novo, construing the evidence in the light most favorable
to ISN, the nonmoving party. See Holland v. Washington Homes, Inc.,
487 F.3d 208, 213 (4th Cir. 2007). We begin our analysis by setting
forth the text of ERISA’s preemption clause: "[T]he provisions of
[ERISA] shall supersede any and all State laws insofar as they may
now or hereafter relate to any employee benefit plan." 29 U.S.C.
*Given its ruling with respect to the merits of Great-West’s breach of
contract claim, the district court expressly did not address the merits of
Great-West’s alternatively pled unjust enrichment claim.
GREAT-WEST LIFE v. INFORMATION SYSTEMS 7
§ 1144(a). "A law ‘relates to’ an employee benefit plan, in the normal
sense of the phrase, if it has a connection with or reference to such
a plan." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97 (1983).
Although the phrase "relates to" has an expansive connotation,
ERISA’s preemptive scope is not unlimited, for "[i]f ‘relate to’ were
taken to extend to the furthest stretch of its indeterminacy, then for
all practical purposes pre-emption would never run its course, for
really, universally, relations stop nowhere." N.Y. State Conference of
Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645,
655 (1995) (internal quotation marks omitted). Thus, as the Supreme
Court has instructed, courts must go "beyond the unhelpful text . . .
and look instead to the objectives of the ERISA statute as a guide to
the scope of the state law that Congress understood would survive."
Id. at 656.
"Considering ERISA’s objectives set forth in 29 U.S.C.A.
§ 1001(b), the Supreme Court has explained that Congress intended
ERISA to preempt at least three categories of state law: (1) laws that
‘mandate[ ] employee benefit structures or their administration’; (2)
laws that bind employers or plan administrators to particular choices
or preclude uniform administrative practice; and (3) ‘laws providing
alternate enforcement mechanisms’ for employees to obtain ERISA
plan benefits." Wilmington Shipping Co. v. New England Life Ins.
Co., 496 F.3d 326, 342 (4th Cir. 2007) (quoting Travelers, 514 U.S.
at 658) (alteration in original). "A key feature of these categories of
laws is that they implicate the relations among the traditional ERISA
plan entities." Id. (internal quotation marks omitted). "Some state
actions may affect employee benefit plans in too tenuous, remote, or
peripheral a manner to warrant a finding that the law ‘relates to’ the
plan." Shaw, 463 U.S. at 100 n.21. Indeed, the Supreme Court has
explained that ERISA does not preempt "lawsuits against ERISA
plans for run-of-the-mill state-law claims such as unpaid rent, failure
to pay creditors, or even torts committed by an ERISA plan" even
though such claims "obviously affect[ ] and involv[e] ERISA plans
and their trustees." Mackey v. Lanier Collection Agency & Svc., Inc.,
486 U.S. 825, 833 (1988).
With these guiding principles in mind, we now turn to consider
whether ERISA preempts Great-West’s state law claims for breach of
8 GREAT-WEST LIFE v. INFORMATION SYSTEMS
contract and unjust enrichment. Both claims rest upon the same basic
theory of liability; specifically, that ISN is liable to reimburse Great-
West for non-discretionary payments totaling $93,999.73 that Great-
West fronted on self-funded claims under the Plan.
The following two sentences set forth the crux of ISN’s position on
appeal. First, Great-West’s claims implicate the uniform administra-
tive practice under the Plan because any determination of Great
West’s state law claims, and the defenses thereto, would determine
whether any claims should be paid under the Plan. Second, ISN fur-
ther argues that any potential claim brought by a participant or benefi-
ciary of the Plan regarding benefits paid or unpaid during the life of
the Plan will be impacted by a ruling under state law in this case as
to the proper administration of claims under the Plan.
Neither argument bears fruit for ISN. Instead, we agree with Great-
West and the district court that Great-West’s claims are run-of-the-
mill state law claims alleging failure to pay a creditor, i.e., Great-
West under the Services Agreement, and thus, are not preempted. The
plain and unambiguous terms of the Plan and the Services Agreement
make clear that Great-West lacked any discretion in determining
whether to pay claims submitted by Plan participants and their benefi-
ciaries for benefits under the self-funded portion of the Plan. Rather,
the Plan and the Services Agreement reserved all discretion to deny
claims for benefits under the self-funded portion of the Plan to the
Plan Administrator, who the parties agree was CFO Bonuccelli.
Accordingly, proof that Great-West is deserving of reimbursement
under the Services Agreement for the nondiscretionary payment of
benefit claims under the self-funded portion of the Plan does not
implicate the uniform administration of the Plan as ISN maintains.
The final analysis establishes that Great-West has come forward
with undisputed evidence that it paid, on behalf of ISN, $93,999.73
in claims for benefits under the self-funded portion of the Plan, for
which amount ISN agreed under the Services Agreement to reimburse
Great-West. Of significant evidentiary weight is the deposition testi-
mony of CFO/Plan Administrator Charles Bonuccelli, who had full
discretion to determine whether a claim under the self-funded portion
of the Plan should be paid or denied, acknowledging that ISN owes
Great-West the claimed $93,999.73. Because ISN’s payments were
GREAT-WEST LIFE v. INFORMATION SYSTEMS 9
nondiscretionary, and were approved by Bonuccelli, we can reduce
this situation to a simple form where the details of the ERISA plan
are immaterial: ISN owes a debt to Great-West for a series of loans
that Great-West made to ISN. Accordingly, Great-West’s alternative
claims under Maryland common law: (1) do not mandate employee
benefit structures or their administration; (2) do not bind ISN as an
employer or plan administrator to particular choices or preclude uni-
form administrative practice; and (3) do not provide an alternate
enforcement mechanism for ISN’s employees and their dependants to
obtain ERISA plan benefits. Thus, neither claim implicates the three
categories of state law that the Supreme Court has long recognized
Congress intended to preempt by enacting ERISA.
Furthermore, analysis of Great-West’s claims do not require inter-
pretation of the Plan terms nor depend upon the existence of an
ERISA plan. Thus, Great-West’s claims do not fall within the recog-
nized rule that "[w]hen a cause of action under state law is ‘premised
on’ the existence of an employee benefit plan so that ‘in order to pre-
vail, a plaintiff must plead, and the court must find, that an ERISA
plan exists,’ ERISA preemption will apply." Griggs v. E.I. DuPont de
Nemours & Co., 237 F.3d 371, 378 (4th Cir. 2001) (quoting Ingersoll-
Rand Co. v. McClendon, 498 U.S. 133, 140 (1990)) (citation omitted).
See also Tri-State Machine, Inc. v. Nationwide Life Ins. Co., 33 F.3d
309, 313-14 (4th Cir. 1994) (employer/sponsor’s state-law claims
against its ERISA plan’s third-party administrator for improper claims
processing preempted because they related to an ERISA plan).
Finally, we take a moment to distinguish an unpublished opinion
of this court, Information Systems & Networks Corp. v. Principal Life
Ins. Co., 2004 WL 1244290 (4th Cir. June 8, 2004), upon which ISN
heavily relies in support of its appeal. Before we begin, however, we
note that, as an unpublished opinion, Principal Life is not binding pre-
cedent in our circuit. Hogan v. Carter, 85 F.3d 1113, 1118 (4th Cir.
1996) (en banc). That being said, in Principal Life, ISN brought suit
against a third-party administrator of its employer sponsored ERISA
plan alleging state law claims of breach of contract and professional
negligence. Principal Life, 2004 WL 1244290 at *1. The gravamen
of ISN’s complaint in Principal Life was that certain distributions
made by the third-party administrator were erroneous because the
beneficiaries were not entitled to those distributions under the terms
10 GREAT-WEST LIFE v. INFORMATION SYSTEMS
of the ERISA plan. Id. The third-party administrator moved to dismiss
under Rule 12(b)(6) on the ground that ERISA preempted ISN’s
claims. The district court granted the motion, "holding that because
ISN’s claims essentially asserted ‘improper administration of the
plan,’ they were pre-empted under ERISA." Id. We affirmed on the
same basis. Id. As noted previously, Great-West’s claims here are not
based upon claims processing errors, but upon its right to reimburse-
ment under the Services Agreement for its nondiscretionary payment
of claims under the self-funded portion of the Plan, which claims the
Plan Administrator, who has full discretion to determine whether a
claim should be paid or denied, has already determined were properly
paid. As such, Principal Life, is materially inapposite to the case at
hand.
To summarize, we hold that ERISA does not preempt a state law
breach of contract claim, nor an alternatively pled state law unjust
enrichment claim, brought by the third-party company hired to per-
form only nondiscretionary administrative services, under the self-
funded portion of an employee health care benefit plan covered by
ERISA, against the sponsor of such plan for reimbursement of
$93,999.73 in nondiscretionary payments the third-party company
fronted to satisfy self-funded benefit claims, when: (1) the plan
administrator, with full discretion to determine whether a claim for
self-funded benefits should be paid or denied (and who also served as
the sponsor’s chief financial officer) expressly acknowledged the debt
and recommended to the sponsor’s chief executive officer that it
should be paid; and (2) resolution of either claim requires no interpre-
tation of the plan terms nor is it in any way dependant upon the plan
being governed by ERISA. Accordingly, we affirm the judgment
below.
AFFIRMED