Dobbs v. Anthem Blue Cross and Blue Shield

FILED
United States Court of Appeals
Tenth Circuit

March 31, 2010
PUBLISH
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

STEVEN DOBBS; NAOMI DOBBS,

Plaintiffs–Appellants–
Cross-Appellees,

v.

ANTHEM BLUE CROSS AND BLUE
SHIELD, a Colorado Insurance Company, Nos. 07-1398 and 07-1402
Defendant–Appellee–
Cross-Appellant.

------------------------------

SOUTHERN UTE INDIAN TRIBE,

Amicus Curiae.

Appeal from the United States District Court
for the District of Colorado
(D.C. No. 04-cv-02283-LTB)

Shawn Mitchell, Broomfield, Colorado for the Appellants–Cross-Appellees.

John R. Mann, Kennedy Childs & Fogg, P.C., Denver, Colorado (Dean A. McConnell
with him on the brief) for Appellee–Cross-Appellant.
Thomas H. Shipps and Patricia A. Hall, Maynes, Bradford, Shipps & Sheftel, LLP,
Durango, Colorado, Monte Mills, Legal Department, Southern Ute Indian Tribe, Ignacio,
Colorado and Nancy Williams Bonnett, Pietzsch, Bonnett & Womack, P.A., Phoenix,
Arizona, filed a brief on behalf of Amicus Curiae in favor of the Appellee-Cross-
Appellant.

Before HENRY, Chief Circuit Judge, BRISCOE, and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

This case comes to us on appeal for the second time. Steven and Naomi Dobbs’

state law claims against Anthem Blue Cross and Blue Shield (“Anthem”) were initially

dismissed by the district court as preempted by the Employee Retirement Income

Security Act (“ERISA”). On the first appeal, we vacated the court’s disposition, holding

that the Dobbs’ claims would not be preempted if the insurance plan at issue qualified as

a “governmental plan” under an amended statutory definition. We remanded to allow the

district court to make that factual determination. On remand, the court determined that

the plan qualified as a governmental plan under the amended definition, but dismissed the

Dobbs’ claims on the ground that the amended definition does not apply retrospectively.

We exercise jurisdiction under 28 U.S.C. § 1291. Because we decided on the first

appeal that the amended definition applied to the Dobbs’ claims, we reverse the district

court’s contrary conclusion and remand for fact-finding consistent with this opinion.

2
 I

In September 2004, the Dobbs filed suit against Anthem in Colorado state court.

Their complaint alleged five state law causes of action arising from Anthem’s alleged

failure to comply with the terms of a health insurance policy issued to Steven Dobbs

through his employer, the Southern Ute Indian Tribe. Anthem removed the action to the

United States District Court for the District of Colorado and contemporaneously filed a

motion to dismiss based on ERISA preemption.

The district court granted Anthem’s motion in part. It dismissed four of the five

claims, rejecting the Dobbs’ argument that the statutory exception from ERISA

preemption for “governmental plan[s]” included those established by tribal governments.

However, the court initially declined to dismiss the Dobbs’ fraud-as-to-benefits claim,

reasoning that under Woodworker’s Supply, Inc. v. Principal Mutual Life Insurance Co.,

170 F.3d 985 (10th Cir. 1999), ERISA does not preempt state law claims predicated upon

misrepresentations that induced plan participation. Id. at 991. The district court later

reconsidered that ruling and dismissed the fraud claim as well. The Dobbs appealed.

While the first appeal was pending, Congress passed the Pension Protection Act of

2006 (“PPA”), Pub. L. No. 109-280, 120 Stat. 780. Section 906(a)(2)(A) of the PPA

amends ERISA’s exception for governmental plans to:

include[] a plan which is established and maintained by an Indian tribal
government . . . and all of the participants of which are employees of such
entity substantially all of whose services as such an employee are in the
performance of essential governmental functions but not in the performance
3
 of commercial activities.

§ 906(a)(2)(A), 120 Stat. at 1051 (codified as amended at 29 U.S.C. § 1002(32)).

In deciding the Dobbs’ first appeal, this court noted that “[t]he amendment’s

legislative history suggests that Congress expanded the definition to clarify the legal

ambiguity regarding the status of employee benefit plans established and maintained by

tribal governments.” Dobbs v. Anthem Blue Cross & Blue Shield, 475 F.3d 1176, 1178

(10th Cir. 2007) [hereinafter Dobbs I]. We recognized, however, that the amended

definition of “governmental plan” may not cover the Dobbs’ plan “[b]ecause the

amended provision makes a distinction between ‘essential governmental functions’ and

‘commercial activities.’” Id. We accordingly remanded to the district court to engage in

the necessary factual analysis, concluding that “[i]f the Dobbses’ benefit plan meets the

new definition of governmental plan under § 1002(32), ERISA will not preempt their

state-law causes of action against Anthem.” Id. at 1179.

On remand, the district court found that “the Dobbses’ plan meets the new

definition of a governmental plan under ERISA, as amended.” However, it ruled that

Congress intended § 906(a)(2)(A) of the PPA to apply only prospectively. It further

rejected arguments that either the mandate rule or the law of the case doctrine required it

to apply the amended definition of governmental plan to the events at issue. It thus

reiterated its conclusion that ERISA preempted the Dobbs’ claims. This appeal followed.

4
 II

A

We review de novo a district court’s dismissal for failure to state a claim upon

which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). Dias v. City

& County of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009). ERISA preempts state law

claims that “relate to any employee benefit plan.” 29 U.S.C. § 1144(a). However, it

expressly exempts from preemption claims related to “governmental plan[s]” as defined

in § 1002(32). See § 1003(b)(1). At the time of the events relevant to the Dobbs’ claims,

§ 1002(32) defined “governmental plan” as “a plan established or maintained for its

employees by the Government of the United States, by the government of any State or

political subdivision thereof, or by any agency or instrumentality of any of the

foregoing.” § 1002(32) (2002). Section 906(a)(2)(A) of the PPA, however, amended the

definition of governmental plan to include certain plans established by tribal

governments. See § 906(a)(2)(A), 120 Stat. at 1051. In this appeal, the Dobbs do not

dispute that their insurance plan is an employee benefit plan within the meaning of

ERISA or that four of their five claims “relate to” that plan for ERISA purposes.1 They

argue only that the amended definition of governmental plan should apply to the events at

issue, even though they occurred before Congress amended the statute.

1
The Dobbs contend their fraud-as-to-benefits claim is not preempted under
Woodworker’s, 170 F.3d at 989-91. We address that contention in Part III, infra.

5
 B

We must first determine whether Dobbs I decided that § 906 of the PPA applied

retrospectively. If so, we are bound by that decision. In re Smith, 10 F.3d 723, 724 (10th

Cir. 1993). Moreover, if the first appeal decided the issue then the district court was

bound by its determination under the law of the case doctrine, see Homans v. City of

Albuquerque, 366 F.3d 900, 904 (10th Cir. 2004), and under the general rule that a

district court is bound by decisions made by its circuit court.

The law of the case doctrine provides that “when a court decides upon a rule of

law, that decision should continue to govern the same issues in subsequent stages in the

same case.” Arizona v. California, 460 U.S. 605, 618 (1983). “The doctrine is based on

sound public policy that litigation should come to an end and is designed to bring about a

quick resolution of disputes by preventing continued re-argument of issues already

decided” and to discourage forum-shopping by litigants. McIlravy v. Kerr-McGee Coal

Corp., 204 F.3d 1031, 1035 (10th Cir. 2000) (quotation omitted). Thus “the decision of

the appellate court establishes the law of the case and ordinarily will be followed by both

the trial court on remand and the appellate court in any subsequent appeal.” Id. at 1034.

The district court apparently concluded that the Dobbs I retrospectivity holding

was not law of the case because the panel did not expressly reach the preemption issue.

However, the law of the case doctrine applies to “issues previously decided, either

explicitly or by necessary implication.” Guidry v. Sheet Metal Workers Int’l Ass’n,

6
Local No. 9, 10 F.3d 700, 705 (10th Cir. 1993) (citation omitted). An issue may be

implicitly resolved by a prior appeal in three circumstances:

(1) resolution of the issue was a necessary step in resolving the earlier
appeal; (2) resolution of the issue would abrogate the prior decision and so
must have been considered in the prior appeal; and (3) the issue is so
closely related to the earlier appeal its resolution involves no additional
consideration and so might have been resolved but unstated.

McIlvray, 204 F.3d at 1036 (quotation omitted).

In Dobbs I, we decided by necessary implication that § 906 of the PPA applies

retrospectively. First, resolution of the issue was a necessary step in resolving the earlier

appeal. Noting that Congress had altered the definition of “governmental plan” after the

resolution of proceedings in the district court, Dobbs I, 475 F.3d at 1177-78, we

determined that the Dobbs’ plan might qualify as a governmental plan under the new

language but remanded to the district court to engage in a “fact-specific analysis of the

plan at issue,” id. at 1178. We concluded that “[i]f the Dobbses’ benefit plan meets the

new definition of governmental plan under § 1002(32), ERISA will not preempt their

state-law causes of action against Anthem.” Id. at 1179.

By expressly remanding only the fact-specific analysis and concluding that this

analysis alone would determine if ERISA preempted the Dobbs’ claim, Dobbs I

necessarily decided that the new language of the PPA applied to those claims.2 Had we

2
The dissent contends that our previous decision directed the district court not
only to conduct the fact-specific analysis, but also to “consider in the first instance
Continued . . .
7
not made that determination, there would be no logical reason for us to remand only the

fact-specific analysis; such analysis becomes relevant and determinative only if § 906 of

the PPA applies retrospectively.3 Thus, deciding the retrospectivity question was a

“necessary step in resolving the earlier appeal.” McIlvray, 204 F.3d at 1036 (quotation

omitted).
_________________________
whether state or federal law applied in light of the PPA.” (Dissenting Op. 4-5.) To the
extent the dissent is asserting that we remanded the retrospectivity question, it is
incorrect. We instructed the district court to consider whether ERISA preempted the
Dobbs’ state law claims applying the amended definition of governmental plan. See
Dobbs I, 475 F.3d at 1178 (“Based on the Dobbses’ complaint, we do not have enough
information to determine whether the benefit plan meets the requirements of § 1002(32)
and therefore remand the case to the District Court for consideration in light of the
amended definition.” (emphasis added)); id. at 1179 (“If the Dobbses’ benefit plan meets
the new definition of governmental plan under § 1002(32), ERISA will not preempt their
state-law causes of action against Anthem.” (emphasis added)). We did not issue a broad
mandate to reconsider our determination that the PPA applies retrospectively.

Contrary to the dissent’s assertions, our present opinion does not rely exclusively
on a single sentence from the prior panel opinion to reach this conclusion. Although our
analysis does focus on the prior panel’s explicit directive to the district court, our
interpretation considers and is consistent with all the language in the prior decision. In
contrast, the dissent’s interpretation is plainly inconsistent with the prior panel’s express
directive and its remand to conduct the fact-specific analysis.
3
The dissent asserts that the statement, “If the Dobbses’ benefit plan meets the
new definition of governmental plan under § 1002(32), ERISA will not preempt their
state-law causes of action against Anthem,” 475 F.3d at 11179, is “best understood as
dicta” and thus not subject to the law of the case doctrine. (Dissenting Op. 4.) Under the
dissent’s reading, Dobbs I “explicitly did not reach the preemption issue.” (Id.)
Like the district court, the dissent conflates § 906’s retrospectivity with the fact-
bound question of whether the Dobbs’ plan qualifies as a governmental plan under the
new definition of that term. We answered the first question in the affirmative, remanding
only the fact-based analysis “to the District Court for consideration in light of the
amended definition.” Dobbs I, 475 F.3d at 1178.

8
 Second, the panel decided that § 906 applies retrospectively by necessary

implication because a contrary “resolution of the issue would abrogate the prior decision

and so must have been considered in the prior appeal.” McIlvray, 204 F.3d at 1036

(quotation omitted). To reiterate, we held in the prior appeal that “[i]f the Dobbses’

benefit plan meets the new definition of governmental plan under § 1002(32), ERISA

will not preempt their state-law causes of action against Anthem.” Dobbs I, 475 F.3d at

1179. The district court found that the Dobbs’ plan meets the new definition, but held

ERISA preempts their claim. In doing so, it directly contravened the instruction from

Dobbs I and thus abrogated that decision.4

C

The Tenth Circuit recognizes three “exceptionally narrow” circumstances in which

the law of the case doctrine does not apply: “(1) when the evidence in a subsequent trial

is substantially different; (2) when controlling authority has subsequently made a

contrary decision of the law applicable to such issues; or (3) when the decision was

clearly erroneous and would work a manifest injustice.” McIlravy, 204 F.3d at 1035

4
The dissent disagrees with our determination that the district court abrogated the
Dobbs I decision, concluding that the “the district court did what we directed it to do—it
considered whether federal law applied in light of the enactment of the PPA.”
(Dissenting Op. 5.) But, as discussed in footnotes 2 and 3, supra, Dobbs I did not remand
that broad question to the district court. Rather, it instructed the district court that ERISA
will not preempt the Dobbs’ claims “[i]f the Dobbses’ benefit plan meets the new
definition of governmental plan under § 1002(32).” 475 F.3d at 1179. By ignoring this
mandate, the district court abrogated the prior panel decision.

9
(internal quotation omitted). None apply here: No new evidence on the issue was

presented to the district court, and there has not been a contrary applicable decision.

We further conclude that the prior panel’s decision was not clearly erroneous. 5

Anthem correctly argues that we presume an amendment does not apply retrospectively

absent an indication of contrary intent by Congress. See Landgraf v. USI Film Prods.,

511 U.S. 244, 265 (1994). In determining whether a statute applies retrospectively, “the

court’s first task is to determine whether Congress has expressly prescribed the statute’s

proper reach.” Id. at 280. If not, we ask whether applying the statute to the events at

issue would have retroactive effects. Id. “Statutes are disfavored as retroactive when

their application ‘would impair rights a party possessed when he acted, increase a party’s

liability for past conduct, or impose new duties with respect to transactions already

completed.’” Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37 (2006) (quoting Landgraf,

511 U.S. at 280). “If the statute would operate retroactively, our traditional presumption

teaches that it does not govern absent clear congressional intent favoring such a result.”

Landgraf, 511 U.S. at 280.

Under Landgraf, we first look to whether Congress has expressly prescribed the

5
We question whether we may permissibly endorse a district court order that
rejects a prior panel decision as clearly erroneous. See In re Smith, 10 F.3d at 724 (“We
are bound by the precedent of prior panels absent en banc reconsideration or a
superseding contrary decision by the Supreme Court.”). However, because the Dobbs I
holding was not clearly erroneous, we need not attempt to reconcile McIlravy and In re
Smith. The dissent does not attempt to distinguish In re Smith, but appears willing to
ignore a prior panel decision as clearly erroneous. (See Dissenting Op. 6-7 & n.3.)

10
proper reach of § 906. Congress has given contradictory indications. On the one hand,

§ 906(c) states that “[t]he amendments made by this section shall apply to any year

beginning on or after the date of the enactment of this Act.” 120 Stat. at 1052. However,

the Dobbs persuasively argue that this provision is merely intended to distinguish § 906

from numerous other sections of the PPA that became effective beginning at subsequent

“plan years,” and thus does not address the issue of retrospectivity at all. See, e.g., PPA §

101(d), 120 Stat. at 789; PPA § 103(c), 120 Stat. at 816; PPA § 110(e), 120 Stat. at 820.

Moreover, § 906(b) states that it is merely a “clarification” rather than a

substantive change in the law—seemingly contradicting § 906(c). Although we have

acknowledged that it is “hazardous . . . to assume from the enactment of a ‘clarifying’

amendment that Congress necessarily was merely restating the intent of the original

enacting Congress,” Fowler v. Unified Sch. Dist., No. 259, 128 F.3d 1431, 1436 (10th

Cir. 1997), a true clarification applies retrospectively, see, e.g., United States v. Aptt, 354

F.3d 1269, 1276 (10th Cir. 2004) (“[A] subsequent amendment to the Guidelines can

sometimes be given retroactive effect if the changes are clarifying rather than

substantive.” (quotation omitted)); Andrews v. Deland, 943 F.2d 1162, 1172 n.7 (10th

Cir. 1991) (A court’s decision may apply retrospectively when it is a clarification of a

rule rather than a change in the substantive law). “When Congress enacts a statute using

a phrase that has a settled judicial interpretation, it is presumed to be aware of the prior

interpretation.” Ford v. Ford Motor Credit Corp. (In re Ford), 574 F.3d 1279, 1283 (10th

11
Cir. 2009); see also Comm’r v. Keystone Consol. Indus., 508 U.S. 152, 159 (1993).

Congress’ use of the term “clarification” therefore indicates an intent that the amendment

apply retrospectively. Due to the contrary indications from Congress, we cannot

conclude Congress clearly and expressly prescribed the proper reach of § 906.6 Given

the holding of Dobbs I, we may not hold that § 906 applies only prospectively absent an

unambiguous statutory command. See McIlravy, 204 F.3d at 1035.

We therefore turn to the second step of the Landgraf analysis: We must ask if

§ 906 of the PPA would have retroactive effect if applied retrospectively.7 That is, we

examine whether the amendment “would impair rights a party possessed when he acted,

increase a party’s liability for past conduct, or impose new duties with respect to

transactions already completed.” Landgraf, 511 U.S. at 280. Notably, “[a] statute does

not operate [retroactively] merely because it is applied in a case arising from conduct

antedating the statute’s enactment or upsets expectations. Rather, the court must

6
The dissent contends that § 906(b) of the PPA should not impact our analysis of
§ 906(a). (Dissenting Op. 11-12.) We disagree. Section 906(b) expressly states that the
textual changes it makes are clarifying rather than substantive. Our reasoning does not
rely on any particular clarification made by that subsection, but instead highlights the
tension between § 906(b) and § 906(c) on the question of whether § 906 should apply
retrospectively. This tension prevents us from concluding that Congress clearly and
expressly prescribed the reach of § 906 as a whole.
7
In the interests of clarity, we will differentiate between statutes that operate
retrospectively and statutes that operate retroactively. For our purposes, a retrospective
statute applies to pre-enactment events. A retroactive statute is one that attaches legal
rights, duties, responsibilities, or consequences to pre-enactment events. The cases to
which we cite do not make this distinction and generally use the terms interchangeably.

12
determine whether the new provision attaches new legal consequences to events

completed before its enactment.” Hem v. Maurer, 458 F.3d 1185, 1190 (10th Cir. 2006).

Our precedent exempting Indian tribes from the preemptive reach of federal

regulatory schemes leads us to conclude that the prior panel’s determination that ERISA

was always intended to exclude tribal plans was not clearly erroneous. “Tribes retain

those attributes of inherent sovereignty not withdrawn either expressly or necessarily as a

result of their status” until Congress acts to withdraw those powers. NLRB v. Pueblo of

San Juan, 276 F.3d 1186, 1192 (10th Cir. 2002) (en banc). This respect for sovereignty

has lead to the “well-established canon of Indian law that ‘statutes are to be construed

liberally in favor of the Indians, with ambiguous provisions interpreted to their benefit.’”

Id. at 1191 (quoting Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985)). “The canon

applies to other statutes, even where they do not mention Indians at all.” Pueblo of San

Juan, 276 F.3d at 1191-92.

In this circuit, respect for Indian sovereignty means that federal regulatory

schemes do not apply to tribal governments exercising their sovereign authority absent

express congressional authorization.8 Compare Pueblo of San Juan, 276 F.3d at 1200

8
The district court cited to Phillips Petroleum Co. v. U.S. Environmental
Protection Agency, 803 F.2d 545, 556 (10th Cir. 1986), for the proposition that “[f]ederal
statutes of general application apply to Native Americans and their property interests.”
We have distinguished, however, between cases in which an Indian tribe exercises its
property rights and cases in which it “exercise[s] its authority as a sovereign.” Pueblo of
Continued . . .
13
(National Labor Relations Act does not preempt tribal government from enacting right-

to-work ordinance), EEOC v. Cherokee Nation, 871 F.2d 937, 939 (10th Cir. 1989) (Age

Discrimination in Employment Act does not apply to Indian tribes), and Donovan v.

Navajo Forest Prods. Indus., 692 F.2d 709, 714 (10th Cir. 1982) (Occupational Safety

and Health Act does not apply to business operated by an Indian tribe in part because its

application would dilute principles of tribal self-government), with Osage Tribal Council

ex rel. Osage Tribe of Indians v. Dep’t of Labor, 187 F.3d 1174, 1180-81 (10th Cir.

1999) (Congress expressly abrogated tribal sovereign immunity in Safe Drinking Water

Act). Although our early cases relied in part on treaties that expressly protected Indian

tribes’ sovereignty, see, e.g., Donovan, 692 F.2d at 711-12, we later recognized that a

treaty was not a necessary prerequisite to exemption, see, e.g., Pueblo of San Juan, 276

F.3d at 1191.

Applying certain federal regulatory schemes to Indian tribes would impinge upon

their sovereignty by preventing tribal governments from freely exercising their powers,

including the “sovereign authority to regulate economic activity within their own

territory.” Id. at 1192-93. For this reason, ERISA would not apply to insurance plans

purchased by tribes for employees primarily engaged in governmental functions unless

Congress expressly or necessarily preempted Indian tribal sovereignty. Applying ERISA

_________________________
San Juan, 276 F.3d at 1199. In the first set of cases, Phillips Petroleum applies; in the
second, it does not. Pueblo of San Juan, 276 F.3d at 1199.

14
to such plans would prevent tribal governments from purchasing insurance plans for

governmental employees in the same manner as other government entities, thus treating

tribal governments as a kind of inferior sovereign. We do not assume Congress intended

to infringe on Indian tribal sovereignty in this manner absent an express statement or

strong evidence of congressional intent.

Anthem argues that the pre-PPA definition of governmental plan could not have

covered tribal plans because a tribe is not the “Government of the United States, . . . the

government of any State or political subdivision thereof, or . . . [an] agency or

instrumentality of any of the foregoing.” § 1002(32) (2002). It is true that an Indian

tribal government does not fit into any of the articulated categories. However, we have

held that “normal rules of construction do not apply when . . . matters involving Indians[]

are at issue.” Cherokee Nation, 871 F.2d at 939; see also Blackfeet Tribe, 471 U.S. at

766; Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 152 (1982). “[I]n cases where

ambiguity exists,” including those where there is silence with respect to Indian tribal

governments, “and there is no clear indication of congressional intent to abrogate Indian

sovereignty rights . . . , the court is to apply the special canons of construction to the

benefit of Indian interests.” Cherokee Nation, 871 F.2d at 939. Thus, for example, we

interpreted the Age Discrimination in Employment Act’s express exemption for “the

United States or a corporation wholly owned by the Government of the United States,”

29 U.S.C. § 630(b), to exempt Indian tribes. Cherokee Nation, 871 F.2d at 939.

15
Similarly, we held that Congressional silence exempted Indian tribes from the National

Labor Relations Act. Pueblo of San Juan, 276 F.3d at 1200.9

We thus conclude that § 906(a)(2)(A) is at least arguably a clarification rather than

a substantive amendment, and thus applies retrospectively to the events at issue. We

recognize that Anthem’s position may well have carried the day had the retrospectivity of

§ 906 been a matter of first impression, and the dissent reaches this conclusion after

engaging in a de novo analysis. However, because the prior appeal determined that § 906

of the PPA applies retrospectively and none of the McIlravy exceptions to the law of the

case doctrine apply, we are bound by the holding of Dobbs I. See McIlravy, 204 F.3d at

1035-36.

9
Anthem notes that other courts interpreted the pre-PPA definition of
“governmental plan” to not cover Indian tribal governments. See Lumber Indus. Pension
Fund v. Warm Springs Forest Prods. Indus., 939 F.2d 683, 685-86 (9th Cir. 1991); Smart
v. State Farm Ins., Co., 868 F.2d 929, 936 (7th Cir. 1989). Given the Tenth Circuit
presumption against extending federal regulatory schemes to Indian tribal governments
absent express authorization or strong evidence of congressional intent, however, it is at
least plausible that a pre-amendment panel of this court would have held that the
exemption for “governmental plan[s]” covered Indian tribal governments.
Anthem also argues that, in a 2006 Notice, the Internal Revenue Service (“IRS”)
concluded that § 906 of the PPA substantively changed, rather than clarified, the
definition of governmental plan. See I.R.S. Notice 2006-89, 2006-2 C.B. 772. Although
the Notice states that § 906 “changed” the definition of governmental plan, the Notice
gives no indication that the IRS actually considered whether the amendment was a
clarification or whether it should apply retrospectively. Even if it did, we need not defer
to the IRS’ interpretation of a statute it does not administer. Francis v. Reno, 269 F.3d
162, 168 (10th Cir. 2001).

16
 D

Our conclusion that § 906(a)(2)(A) of the PPA applies retrospectively does not

resolve the ultimate ERISA preemption question. That question turns on whether the

Dobbs’ plan is a “governmental plan” under 29 U.S.C. § 1002(32), as amended.

Although the district court concluded that the Dobbs’ plan fell within the amended

definition, it applied an erroneous interpretation of § 1002(32). We therefore remand

again for the district court to make the factual determination of whether the Dobbs’ plan

qualifies as a governmental plan using the proper definition.

As amended, § 1002(32) defines “governmental plan” to include “a plan which is

established and maintained by an Indian tribal government,” but only when “all of the

participants” in the plan are employees “substantially all of whose services as such an

employee are in the performance of essential governmental functions but not in the

performance of commercial activities (whether or not an essential government function).”

Thus a plan qualifies as a governmental plan only if it is established and maintained by an

Indian tribal government and all of the participants are employees primarily engaged in

essential governmental functions rather than commercial activities.

On remand from Dobbs I, the district court ruled that the Dobbs’ plan was a

“governmental plan” because it was “established and maintained by an Indian tribal

government” and Steven Dobbs’ job duties—assisting in the management of the Tribal

treasury—related to essential government functions. This analysis misunderstands the

17
test under § 1002(32). Rather than looking to Mr. Dobbs’ duties, the court must

determine whether all plan participants are employees “substantially all of whose services

. . . are in the performance of essential governmental functions but not in the performance

of commercial activities (whether or not an essential government function).” § 1002(32).

Unfortunately, we cannot resolve this issue on appeal. As noted in Dobbs I, “[t]he

determination of whether a tribal plan qualifies as a governmental plan under § 1002(32)

requires a fact-specific analysis of the plan at issue and the nature of its participants’

activities.” 475 F.3d at 1178. As on the first appeal, we must remand to allow the district

court to determine whether the Dobbs’ plan qualifies as a governmental plan under

§ 1002(32).

III

The Dobbs further argue that ERISA does not preempt their fraud-as-to-benefits

claim under the rule set forth in Woodworker’s. There, we held that ERISA preemption

does not extend to employers’ claims against insurance companies that arise from pre-

contractual misrepresentations of plan terms. Woodworker’s, 170 F.3d at 989-90. In

such cases, the employer sues the insurance company “in its role as a seller of insurance,

not as an administrator of an employee benefits plan.” Id. at 991. Moreover, at the time

of the fraud, the insurance company could not yet be a plan fiduciary, one of the four

principal ERISA entities, because the employer had not yet purchased a plan. Id.

Arguably, this reasoning could apply to an individual employee’s claim against a

18
plan fiduciary that misrepresented the terms of a plan: At the time of the alleged

misrepresentation, the insurance company could be acting in its role as a seller of

insurance, and the employee would not be a plan beneficiary if she had not yet purchased

the plan.

Nevertheless, we conclude that Woodworker’s is inapposite here. The Dobbs

initially styled their fraud-as-to-benefits claim similarly to the claim in Woodworker’s,

asserting that Anthem “represented that its Blue Preferred policy allowed insureds to see

any Blue Cross Blue Shield Preferred Provider and receive coverage at in-network

levels,” but that “[t]he statements were false.” However, the Dobbs further allege in this

claim that “Anthem refused to provide the highest level of benefits under the Policy[]

even when the Dobbs met Anthem’s requirements and condition[s].” In other words, the

improper conduct for which the Dobbs seek relief is not Anthem’s misrepresentation of

the terms of the insurance plan, but Anthem’s failure to abide by those terms. The Dobbs

fail to cite any discrepancies between Anthem’s representations and the terms of the plan.

Instead, they claim only that Anthem promised to provide the “highest level of benefits”

at “in-network” rates to plan members who used Preferred Providers, but did not actually

do so. Indeed, the basis of their claim for bad faith breach of an insurance contract is that

“[u]nder the policy, Anthem should have made an in-network determination regarding

[the Dobbs’ son’s] treatment . . . and should have paid the claims at in-network levels.”

As a result, Woodworker’s does not apply to the Dobbs’ claims. If their plan is

19
not a governmental plan within the meaning of § 1002(32), then the Dobbs’ claims are

subject to ERISA preemption.

IV

For the foregoing reasons, we REVERSE the decision of the district court and

REMAND for factfinding consistent with this opinion.

20
Nos. 07-1398 & 07-1402, Dobbs v. Anthem Blue Cross & Blue Shield

BRISCOE, Circuit Judge, concurring in part and dissenting in part:

I concur in part and dissent in part. I respectfully disagree with Part II of

the majority opinion. 1 In my view, the law of the case does not prevent us from

reaching the question of whether the Pension Protection Act (“PPA”) applies

retroactively. Additionally, I would conclude that the PPA applies only

prospectively and that the pre-PPA version of ERISA did not include Indian

tribes under the governmental plan exemption. And, as a result, I would conclude

that we need not address whether the district court erred in determining whether

the Dobbses’ plan qualifies as a governmental plan under 29 U.S.C. § 1002(32),

as amended. I agree with Part III of the majority opinion, but write separately to

emphasize why the Dobbses’ fraudulent inducement claim is preempted by

ERISA. Accordingly, I would affirm the judgment of the district court.

I

A

The law of the case doctrine does not bar us from considering the issue of

retroactivity. The majority concludes that “[i]n Dobbs I, we decided by necessary

implication that § 906 of the PPA applies retrospectively.” Maj. Op. at 7. I

1
Part I of the majority opinion sets out the factual background and procedural
history of the case. Parts II and III contain the legal analysis pertaining to the
issues raised. Parts II and III are the focus of this separate opinion.
respectfully disagree. “The law of the case doctrine is not an inexorable

command but a rule to be applied with good sense.” Pittsburg County Rural

Water Dist. No. 7 v. City of McAlester, 358 F.3d 694, 711 (10th Cir. 2004)

(quotation omitted).

In Dobbs I, the Dobbses appealed “the [d]istrict [c]ourt’s dismissal of all

claims, arguing that their state-law claims against Anthem [were] not preempted

by federal law.” Dobbs v. Anthem Blue Cross & Blue Shield, 475 F.3d 1176,

1177 (10th Cir. 2007) (hereinafter “Dobbs I”). We stated:

The threshold question in this case is whether federal or state law
applies to an employee benefit plan established and maintained by a
tribe for the benefit of its employees. If federal law applies, the next
question is whether it preempts the state-law causes of action in this
case. We do not reach the second issue concerning preemption
because we remand the case so that the [d]istrict [c]ourt can consider
the first question in light of a recent change in federal law.

Dobbs I, 475 F.3d at 1177 (internal citation and footnote omitted; emphasis

added). We recognized that “[b]ased on the Dobbses’ complaint, we do not have

enough information to determine whether the benefit plan meets the requirements

of § 1002(32) and therefore remand the case to the [d]istrict [c]ourt for

consideration in light of the amended definition.” Id. at 1178. “In light of the

amended definition of ‘governmental plan’ under ERISA,” we vacated the district

court’s previous order and remanded the case to the district court “for further

proceedings consistent with this opinion.” Id. at 1179. On remand, the district

-2-
court concluded that although the Dobbses’ benefit plan met the new definition of

governmental plan, the new definition does not apply retroactively. By deciding

whether the PPA applies retroactively, the district court did not violate the law of

the case.

In Dobbs I, we stated that we did not reach the preemption issue because

we were remanding to allow the district court to consider “whether federal or

state law applies to an employee benefit plan established and maintained by a

tribe for the benefit of its employees . . . in light of a recent change in federal

law.” 475 F.3d at 1177. Thus, we allowed the district court to consider the effect

of the PPA in the first instance. Because we declined to reach the issue of the

effect of the PPA, the law of the case did not bar the district court from

considering that issue on remand. See United States v. Wittig, 575 F.3d 1085,

1097 (10th Cir. 2009) (“The law of the case does not extend to issues a previous

court declines to decide.”).

According to the majority, the prior panel decided the effect of the PPA by

necessary implication because “(1) resolution of the issue was a necessary step in

resolving the earlier appeal; [and] (2) resolution of the issue would abrogate the

prior decision and so must have been considered in the prior appeal . . . .” Guidry

v. Sheet Metal Workers Int’l Ass’n, Local No. 9, 10 F.3d 700, 707 (10th Cir.

1993). I conclude that neither situation applies to the case at bar.

-3-
 The resolution of the retroactivity issue was not a necessary step in

resolving the earlier appeal. We resolved the earlier appeal by directing the

district court to consider whether federal or state law applied to the benefits plan

in light of the PPA. The majority relies heavily on our statement in Dobbs I that:

“[i]f the Dobbses’ benefit plan meets the new definition of governmental plan

under § 1002(32), ERISA will not preempt their state-law causes of action against

Anthem.” 475 F.3d at 1179. According to the majority, this means that we

“expressly remand[ed] only the fact-specific analysis and conclud[ed] that this

analysis alone would determine if ERISA preempted the Dobbs’ claim . . . .”

Maj. Op. at 7. I disagree. We explicitly did not reach the preemption issue.

See Dobbs I, 475 F.3d at 1177 (“We do not reach the [preemption issue] because

we remand the case so that the District Court can consider [whether federal or

state law applies] in light of a recent change in federal law.”). Therefore, our

statement that “[i]f the Dobbses’ benefit plan meets the new definition of

governmental plan under § 1002(32), ERISA will not preempt their state-law

causes of action against Anthem,” id. at 1179, is best understood as dicta, which

“is not subject to the law of the case doctrine.” Homans v. City of Albuquerque,

366 F.3d 900, 904 n.5 (10th Cir. 2004). Further, we did not remand to the

district court simply to conduct factfinding; rather, we issued a broader remand.

See Pittsburg County 358 F.3d at 711 (noting that the law of the case did not

-4-
apply because “the remand to the district court was general, stating only that the

remand was ‘for further proceedings consistent with this opinion.’”). We

remanded to the district court to consider in the first instance whether state or

federal law applied in light of the PPA. 2 “When further proceedings follow a

general remand, the lower court is free to decide anything not foreclosed by the

mandate issued by the higher court.” Guidry, 10 F.3d at 706 (quotations

omitted).

Additionally, I disagree with the majority’s conclusion that the district

court “directly contravened the instruction from Dobbs I and thus abrogated that

decision.” Maj. Op. at 8–9. To the contrary, the district court did what we

directed it to do — it considered whether federal law applied in light of the

enactment of the PPA. Thus, the district court did not abrogate Dobbs I.

Accordingly, I would conclude that the prior panel did not decide by necessary

implication that the PPA applied retroactively, and I would turn to the merits of

2
Moreover, the parties did not argue the retroactivity issue in Dobbs I. Indeed,
neither party even alerted us to the enactment of the PPA while Dobbs I was
pending, and we found it necessary to remind the parties of the importance of
filing a notice of supplemental authority under Federal Rule of Appellate
Procedure 28(j). See Dobbs I, 475 F.3d at 1179. Under these circumstances, it is
particularly troubling that the majority concludes that we are bound by the law of
the case. Cf. Mendenhall v. Nat’l Transp. Safety Bd., 213 F.3d 464, 469 (9th Cir.
2000) (departing from the law of the case when the prior panel clearly erred “for
want of proper briefing”).

-5-
the issues before this court.

In summary, I differ from the majority’s views in these regards. The

majority takes a very narrow reading of Dobbs I, relying entirely on a single

sentence: “If the Dobbses’ benefit plan meets the new definition of governmental

plan under § 1002(32), ERISA will not preempt their state-law causes of action

against Anthem.” Dobbs I, 475 F.3d at 1179. But the majority seems to ignore

the other language that suggests a broader remand, e.g., “We do not reach the

[preemption issue] because we remand the case so that the District Court can

consider [whether federal or state law applies] in light of a recent change in

federal law.” Id. at 1177. Ultimately, the majority appears to start from the

conclusion that we decided the “retrospectivity” question and remanded only for

factual analysis. For example, the majority reasons: “We did not issue a broad

mandate to reconsider our determination that the PPA applies retrospectively,”

Maj. Op. at 7 n.2, but this begs the question — it assumes that we made that

determination in the first place. Further, the majority suggests that we answered

the retrospectivity issue when we remanded “only the fact-based analysis ‘to the

District Court for consideration in light of the amended definition.’” Maj. Op. at

8 n.3 (quoting Dobbs I, 475 F.3d at 1178). If that is indeed the majority’s

interpretation, that is a rather strained reading of “for consideration in light of the

amended definition.” Moreover, we issued a rather generic, open-ended mandate,

-6-
which stated: “In light of the amended definition of ‘governmental plan’ under

ERISA, we VACATE the District Court’s order and REMAND for further

proceedings consistent with this opinion.” Dobbs I, 475 F.3d at 1179.

Reading Dobbs I as a whole, I conclude that we remanded the case to the

district court for consideration in light of a change in federal law, not simply to

conduct fact-finding. Because we did not remand only the factual analysis, we

did not decide by implication that the PPA applies retrospectively. Consequently,

the law of the case doctrine does not apply.

B

Even if the law of the case doctrine is applicable, it does not bar us from

considering the issue of retroactivity. “We have routinely recognized that the law

of the case doctrine is discretionary, not mandatory, and that the rule merely

expresses the practice of courts generally to refuse to reopen what has been

decided, not a limit on their power.” Kennedy v. Lubar, 273 F.3d 1293, 1299

(10th Cir. 2001) (quotations omitted). One well-recognized exception to the law

of the case doctrine is “when the decision was clearly erroneous and would work

a manifest injustice.” McIlravy v. Kerr-McGee Coal Corp., 204 F.3d 1031, 1035

(10th Cir. 2000) (quotation omitted). If, as the majority concludes, the prior

panel implicitly decided that the PPA “applies retrospectively to the events at

issue,” Maj. Op. at 16, that decision was clearly erroneous. As explained more

-7-
fully in the discussion that follows, based on the plain text of the statute, the PPA

is unambiguously prospective only, and prior to the PPA, ERISA applied to

pension plans established and maintained by Indian tribes. 3

Further, this clear error could work a manifest injustice by depriving

Anthem of the “opportunity to present [its] dispositive defense [of preemption] —

a defense that fully vindicates [Anthem’s] right to be free from a trial and an

adverse damage award.” See Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l

Planning Agency, 216 F.3d 764, 789 (9th Cir. 2000) (exercising its discretion to

depart from the law of the case where the prior panel’s clear error would work a

manifest injustice by depriving the defendants of their statute of limitations

defense). Additionally, by concluding that the PPA has retroactive effect, there

could be serious economic consequences for insurers such as Anthem who would

be open to substantial liability under state law causes of action. Cf. Mendenhall,

213 F.3d at 469 (prior panel’s error would work a manifest injustice when the

failure to cap attorneys’ fees threatened “adverse fiscal consequences” to the U.S.

3
The majority contends that I reach this conclusion “after engaging in a de novo
analysis.” Maj. Op. at 16. Because the law of the case doctrine does not bar our
consideration, I would review the retroactivity issue de novo. Nonetheless, I
would reach the same conclusion under clear error analysis, as I have a “clear
conviction of error with respect to a point of law on which [the] previous decision
was predicated.” Fogel v. Chestnutt, 668 F.2d 100, 109 (2d Cir. 1981) (quotation
omitted).

-8-
Treasury that “could prove substantial”). Accordingly, I would exercise our

discretion to depart from the law of the case.

II

A

Prior to the PPA, ERISA defined “governmental plan” in relevant part as “a

plan established or maintained for its employees by the Government of the United

States, by the government of any State or political subdivision thereof, or by any

agency or instrumentality of any of the foregoing.” ERISA, Pub. L. No. 93-406,

§ 3(32), 88 Stat. 829, 837 (1974) (current version at 29 U.S.C. § 1002(32)). In

August 2006, however, Congress amended the definition of “governmental plan”

under ERISA to include certain plans established and maintained by Indian tribes.

The amended definition provides:

The term “governmental plan” includes a plan which is established
and maintained by an Indian tribal government (as defined in section
7701(a)(40) of the Internal Revenue Code of 1986), a subdivision of
an Indian tribal government (determined in accordance with section
7871(d) of such Code), or an agency or instrumentality of either, and
all of the participants of which are employees of such entity
substantially all of whose services as such an employee are in the
performance of essential governmental functions but not in the
performance of commercial activities (whether or not an essential
government function)[.]

PPA, Pub. L. No. 109-280, § 906(a)(2)(A), 120 Stat. 780, 1051 (codified as

amended at 29 U.S.C. § 1002(32)).

Therefore, if the new definition applies to the Dobbses’ plan, then the plan

-9-
will fall within the exception to ERISA preemption, and their state law claims

would not be preempted by ERISA. Anthem, however, contends that the

Dobbses’ plan is not encompassed within the new definition because the new

definition does not apply retroactively.

The Supreme Court has recently explained the proper sequence of analysis

regarding retroactivity of statutes:

We first look to whether Congress has expressly prescribed the
statute’s proper reach, and in the absence of language as helpful as
that we try to draw a comparably firm conclusion about the temporal
reach specifically intended by applying our normal rules of
construction. If that effort fails, we ask whether applying the statute
to the person objecting would have a retroactive consequence in the
disfavored sense of affecting substantive rights, liabilities, or duties
on the basis of conduct arising before its enactment. If the answer is
yes, we then apply the presumption against retroactivity by
construing the statute as inapplicable to the event or act in question
owing to the absence of a clear indication from Congress that it
intended such a result.

Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37–38 (2006) (internal quotations,

citations, and alterations omitted). Thus, our first inquiry is whether Congress

“has expressly prescribed the statute’s proper reach.” Id. at 37.

The stated effective date of the PPA amendment to the definition of

governmental plan is as follows: “Effective Date.—The amendments made by this

section shall apply to any year beginning on or after the date of the enactment of

this Act.” PPA § 906(c), 120 Stat. 780, 1052. The date of enactment of the PPA

was August 17, 2006. Pub. L. No. 109-280, 120 Stat. 780, 1172.

- 10 -
 The plain language of this effective date provision dictates that the

amended definition shall apply to any “year” beginning on or after August 2006.

To determine what “year” means, we look first to the text to discern the meaning.

See Wright v. Fed. Bureau of Prisons, 451 F.3d 1231, 1234 (10th Cir. 2006)

(stating that for issues of statutory construction, we should “interpret the words

of the statute in light of the purposes Congress sought to serve” and that we

should begin with “the language employed by Congress,” and “read the words of

the statute in their context and with a view to their place in the overall statutory

scheme” (internal quotation omitted)); Colorado High Sch. Activities Ass’n v.

Nat’l Football League, 711 F.2d 943, 945 (10th Cir. 1983) (“A fundamental

canon of statutory construction is that, unless otherwise defined, words will be

interpreted as taking their ordinary, contemporary, common meaning.” (internal

quotation omitted)).

Anthem contends that “year” unambiguously means “plan year” and that

therefore the clear language of the statute is that it applies prospectively to plan

years established and maintained after August 2006. The Dobbses contend that

Congress used the phrase “plan year” in other portions of the statute, and that if

Congress had intended to mean “plan year,” it would have said so. The Dobbses

argue that “year” is more broad, and means that the PPA’s change to the

definition of governmental plan applies to any “issues” “in the present year” that

- 11 -
arise “under earlier ‘plan years.’” Appellants’ Br. at 33–34.

The majority appears to find the Dobbses’ argument persuasive, see Maj.

Op. at 10, but I cannot square the Dobbses’ argument with the text of the statute.

The text of section 906(a) of the PPA amends the definition for governmental

plans (and therefore the exception from preemption) to include certain pension

plans “established and maintained by an Indian Tribal government.” PPA §

906(a)(2)(A). The effective date states that this amended definition, and

therefore exception from preemption, applies “to any year beginning on or after”

August 2006. Id. § 906(c). “A statement that a statute will become effective on a

certain date does not even arguably suggest that it has any application to conduct

that occurred at an earlier date.” Landgraf v. USI Film Prods., 511 U.S. 244, 257

(1994) (footnote omitted).

I conclude this language unambiguously states that the new definition

applies only to governmental plans beginning on or after August 17, 2006. See

Lockheed Corp. v. Spink, 517 U.S. 882, 896–97 (1996) (“Where, as here, the

temporal effect of a statute is manifest on its face, there is no need to resort to

judicial default rules, and inquiry is at an end.” (internal quotation omitted)). No

party has pointed to any legislative history that would provide otherwise. See

Colorado High Sch. Activities Ass’n, 711 F.2d at 945 (“If the statutory language

is unambiguous, in the absence of a clearly expressed legislative intent to the

- 12 -
contrary, that language must ordinarily be regarded as conclusive.” (internal

quotations omitted)). 4 It is not the province of this court to revise a statute when

the express language of the statute is clear. See Reames v. Oklahoma ex rel.

Okla. Health Care Auth., 411 F.3d 1164, 1173 (10th Cir. 2005).

Additionally, I disagree with the majority’s contention that Congress has

given contrary indications regarding the proper reach of subsection 906(a) of the

PPA. The majority concludes that subsection 906(b) uses the term “clarification”

and thus, Congress “indicate[d] an intent that the amendment apply

retrospectively.” Maj. Op. at 11. To be sure, “[w]hen Congress enacts a statute

using a phrase that has a settled judicial interpretation, it is presumed to be aware

of the prior interpretation.” Ford v. Ford Motor Credit Corp. (In re Ford), 574

F.3d 1279, 1283 (10th Cir. 2009). But Congress did not use the term

“clarification” in subsection 906(a), which amended ERISA’s definition of

“governmental plan.” Congress used the term “clarification” only in subsection

4
If anything, the legislative history supports the conclusion that the PPA as
enacted should be applied only prospectively. An earlier version of the bill
provided for the effective date as follows: “The amendments made by this subtitle
shall apply to any year beginning before, on, or after the date of the enactment of
this Act.” S. 1783, 109th Cong. § 1314 (2005). However, the ultimate version
that was passed stated: “any year beginning on or after the date of the enactment
of this Act.” PPA § 906(c). At the very least, the legislative history is hardly an
expression of clear legislative intent that the PPA should be applied retroactively.

- 13 -
906(b), which does not apply to ERISA. 5 Although subsection 906(b) may make

“clarifying rather than substantive” changes, Maj. Op. at 11 n.6, it does not

follow that subsection 906(a) is a clarification. Subsection 906(a) — the only

relevant subsection that amends ERISA — does not use the term “clarification.”

Thus, I see no contrary indications from Congress or tension within section 906:

subsection 906(a) amends the definition of governmental plans to include certain

plans of Indian tribes, and subsection 906(b) is a “clarification” of the Internal

Revenue Code.

Congress “has expressly prescribed the statute’s proper reach,” as

prospective from the effective date, and thus, our retroactivity analysis is at an

end. Landgraf, 511 U.S. at 280. As a result, the amended statutory definition of

governmental plan in the PPA does not apply to the case at bar.

Moreover, I disagree with the majority’s analysis at the next step of the

Landgraf analysis, whether the PPA would have retroactive effect. The majority

concludes that because of “[o]ur precedent exempting Indian tribes from the

preemptive reach of federal regulatory schemes . . . the prior panel’s

5
Subsection 906(b) of the PPA, as originally enacted, amended ERISA at 29
U.S.C. § 1321 to include certain Indian tribal pension plans. However, Congress
enacted technical corrections to the PPA in 2008. Following these technical
corrections, subsection 906(b) amends only the Internal Revenue Code, not
ERISA. See Pub. L. No. 110-458, § 109(d)(2), 122 Stat. 5092, at 5112.

- 14 -
determination that ERISA was always intended to exclude tribal plans was not

clearly erroneous.” Maj. Op. at 12. First, the prior panel’s decision in Dobbs I

does not reach this conclusion explicitly. Second, as discussed more fully below,

I think our precedent is clear that prior to the PPA, ERISA applied to plans

established or maintained by Indian tribes.

Further, the PPA did not simply amend the definition of “governmental

plan” to include all plans established and maintained by Indian tribes. Rather, the

PPA included a very specific kind of tribal plan. 6 It must be a plan where “all of

the participants of which are employees of such entity substantially all of whose

services as such an employee are in the performance of essential governmental

functions but not in the performance of commercial activities (whether or not an

essential government function).” PPA § 906(a)(2)(A). There is no suggestion

that ERISA was always intended to exclude this specific formulation of tribal

6
The legislative history suggests that Congress originally considered a version of
the PPA that amended ERISA to include in 29 U.S.C. § 1321(b) the following
language: “established and maintained by an Indian tribal government (as defined
in section 7701(a)(40) of the Internal Revenue Code of 1986), a subdivision of an
Indian tribal government (determined in accordance with section 7871(d) of such
Code), an agency or instrumentality of an Indian tribal government or subdivision
thereof, or an entity established under Federal, State, or tribal law that is wholly
owned or controlled by any of the foregoing.” S.1783, 109th Cong. § 1313(b)
(2005) (“Pension Security and Transparency Act of 2005). But the enacted
version of the PPA included a much more specific formulation. See PPA §
906(a).

- 15 -
plan. Thus, I cannot conclude that the PPA merely clarified the definition of

“governmental plan.” Expanding an exemption to ERISA preemption is a

profound change in existing law, with effects on the providers of employee

benefit plans such as Anthem. Accordingly, I would adhere to the presumption

that “[i]f the statute would operate retroactively, . . . it does not govern absent

clear congressional intent favoring such a result.” Landgraf, 511 U.S. at 280.

However, this conclusion does not end the inquiry because the Dobbses

have also argued that even if the PPA does not apply retroactively, the earlier

version of ERISA would not preempt their claim. They contend that our circuit

does not construe federal regulatory statutes to cover tribal governments unless

Congress expresses its intent to cover tribes. The majority also relies on our

precedent exempting Indian tribes from certain federal regulatory schemes, but

the majority does so under its inquiry into whether the PPA has retroactive effect

or if it is merely a clarification. Regardless of the context, I would conclude that

our precedent clearly establishes that prior to the enactment of the PPA, ERISA

applied to plans established or maintained by Indian tribes.

B

The majority states that “[i]n this circuit, respect for Indian sovereignty

means that federal regulatory schemes do not apply to tribal governments

exercising their sovereign authority absent express congressional authorization.”

- 16 -
Maj. Op. at 13. But our case law recognizes a distinction between cases where a

tribe “has exercised its authority as a sovereign” and where a tribe acts “in a

proprietary capacity such as that of employer or landowner.” NLRB v. Pueblo of

San Juan, 276 F.3d 1186, 1199 (10th Cir. 2002) (en banc) (emphasis added).

When an Indian tribe is acting in its proprietary capacity, we apply the rule

set forth in Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99

(1960). See Pueblo of San Juan, 276 F.3d at 1199. As the Supreme Court stated

in Tuscarora: “a general statute in terms applying to all persons includes Indians

and their property interests.” 362 U.S. at 116. We have recognized three

exceptions to the Tuscarora rule:

(1) the law touches exclusive rights of self-governance in purely
intramural-matters; (2) the application of the law to the tribe would
abrogate rights guaranteed by Indian treaties; or (3) there is proof by
legislative history or some other means that Congress intended [the
law] not to apply to Indians on their reservations.

Shivwits Band of Paiute Indians v. Utah, 428 F.3d 966, 984 (10th Cir. 2005)

(Lucero, J., concurring) (quoting Nero v. Cherokee Nation of Okla., 892 F.2d

1457, 1462–63 (10th Cir. 1989)).

Thus, to determine whether a generally applicable federal statute applies to

an Indian tribe, we must first determine whether the tribe is exercising its

sovereign authority or whether it is acting in its proprietary capacity. See Pueblo

of San Juan, 276 F.3d at 1199. If the tribe is exercising its authority as a

- 17 -
sovereign, the Tuscarora rule does not apply. Id. However, if the tribe is acting

in its proprietary capacity, the Tuscarora rule does apply, see id., and we must

then determine whether there is an exception to that rule, see Nero, 892 F.2d at

1462–63.

Applying this framework to the case at bar, it is clear that the Tuscarora

rule applies. The present case involves an Indian tribe acting in its proprietary

capacity as employer or purchaser of insurance, not in its sovereign authority.

See Pueblo of San Juan, 276 F.3d at 1199. Although we have previously held

that certain federal regulatory schemes do not apply to Indian tribes as employers,

those cases involved Indian treaties. See EEOC v. Cherokee Nation, 871 F.2d

937, 938 (10th Cir. 1989) (“[W]e hold that ADEA is not applicable because its

enforcement would directly interfere with the Cherokee Nation’s treaty-protected

right of self-government.”); Donovan v. Navajo Forest Prods. Indus., 692 F.2d

709, 710 (10th Cir. 1982) (agreeing that to “apply OSHA to [the tribal entity]

would violate the Navajo Treaty”). The majority attempts to wave away this

critical distinction by citing Pueblo of San Juan for the proposition that we have

since “recognized that a treaty [is] not a necessary prerequisite to exemption.”

Maj. Op. at 14. But Pueblo of San Juan did not rely on the existence of a treaty

because that case involved a Tribe’s inherent sovereign authority: the authority to

enact its own laws in its territory. See 276 F.3d at 1195 (“In the absence of clear

- 18 -
evidence of congressional intent . . . federal law will not be read as stripping

tribes of their retained sovereign authority to pass right-to-work laws and be

governed by them.”). Where a tribe’s sovereign authority is not at issue, such as

when it is acting as an employer, we do not apply Pueblo of San Juan, but we

apply the Tuscarora rule.

The majority does not identify precisely what sovereign authority it

believes is at stake. The majority refers to the “sovereign authority to regulate

economic activity within their own territory.” Maj. Op. at 14 (quoting Pueblo of

San Juan, 276 F.3d at 1192–93). But the case at bar involves no regulation of

economic activity. Cf. Pueblo of San Juan, 276 F.3d at 1195 (discussing tribes’

“retained sovereign authority to pass right-to-work laws and be governed by

them”). The majority also suggests that “[a]pplying ERISA to such plans would

prevent tribal governments from purchasing insurance plans for governmental

employees in the same manner as other government entities, thus treating tribal

governments as a kind of inferior sovereign.” Maj. Op. at 14 (emphasis added).

Thus, the majority shifts from a tribe’s sovereign authority to regulate economic

activity to its ability to act as a purchaser of insurance, without clarifying how the

purchasing of insurance plans is a sovereign authority. Moreover, our inquiry is

whether sovereign authority is at issue, not whether the federal government treats

different sovereigns differently, or even somehow as an “inferior sovereign.” In

- 19 -
Pueblo of San Juan, we recognized that the Tuscarora rule “does not apply . . .

where the matter at stake is a fundamental attribute of sovereignty and a

necessary instrument of self government and territorial management . . . .” 276

F.3d at 1200 (quotations omitted). Here, there is no sovereign authority at stake,

and therefore, the Tuscarora rule applies.

Applying the Tuscarora rule to this case, I would conclude that prior to the

PPA, ERISA applied to Indian tribes. The Seventh Circuit was faced with the

same question in Smart v. State Farm Insurance Co., 868 F.2d 929 (7th Cir.

1989), prior to the enactment of the PPA. In that case, a member of an Indian

tribe (the insured) sued the insurer alleging that the insurer failed to pay claims

for medical expenses. 868 F.2d at 930. The insured claimed that ERISA did not

apply to “an employee benefits plan established and operated by an Indian Tribe

for Tribe employees . . . .” Id. The Seventh Circuit recognized that “ERISA is

clearly a statute of general application, one that envisions inclusion within its

ambit as the norm.” Id. at 933. Then, the Smart court applied the Tuscarora rule

and its exceptions — the same exceptions that this circuit recognizes. See id. at

934–36; Nero, 892 F.3d at 1462–63 (recognizing the three exceptions to the

Tuscarora rule). First, the court was unable “to uncover a single specific treaty or

statutory right that would be affected by application of ERISA.” Smart, 868 F.2d

at 935. Similarly, neither the Dobbses nor the majority have identified a treaty or

- 20 -
statutory right that would be affected by application of ERISA.

The Seventh Circuit in Smart then turned to whether ERISA would

interfere with the Tribe’s “self-governance in intramural affairs.” Id. The Court

stated:

The application of ERISA to this case would not impermissibly upset
the Tribe’s self-governance in intramural matters. ERISA does not
broadly and completely define the employment relationship — even
less so than the federal withholding tax. It is only applied to an
employment relationship if the employer decides to offer an
employee benefit plan. Even then, ERISA merely requires reporting
and accounting standards for the protection of the employees.
Moreover, the activity underlying this challenge to ERISA is the
Tribe’s subscription of services and pooling of risks with [the
insurer], an outside, non-Indian agent. ERISA is instructive on how
a covered health insurance plan operates vis-á-vis the beneficiaries
and the trustee, not between the [health center] and [the plaintiff]. In
sum, plaintiff has failed to demonstrate how ERISA will intrude
upon Tribal self-governance; ERISA merely imposes beneficiary
protection while in no way limiting the way in which the Tribe
governs intramural matters.

Id. at 935–36 (footnotes omitted). Again, neither the Dobbses nor the majority

have identified or discussed how ERISA would upset tribal self-governance in

intramural matters.

Finally, the Seventh Circuit concluded that the plaintiff was “unable to

point to any evidence of congressional intent that ERISA is not applicable to

Tribe employers and Indians.” Id. at 936. In the case at bar, the Dobbses argue

that there is such evidence because Congress defined a governmental plan to

include any “instrumentality” of a “State or political subdivision thereof. . . .” 29

- 21 -
U.S.C. § 1002(32). The Seventh Circuit rejected a similar argument that the

then-effective version of ERISA indicated “Congress’ unwillingness to have

ERISA apply to sovereigns generally, and thus Indian tribes should also be

similarly exempt . . . .” 868 F.2d at 936. The court noted that there are

“significant differences between states and their political subdivisions on one

hand and Indian Tribes on the other.” Id. The majority appears to agree that “an

Indian tribal government does not fit into any of the articulated categories” under

ERISA prior to the PPA. Maj. Op. at 15.

I find the Seventh Circuit’s analysis of ERISA under the Tuscarora rule and

its exceptions to be very persuasive, particularly where the Dobbses have made

nearly identical arguments to those made by the plaintiffs in Smart. See also

Lumber Indus. Pension Fund v. Warm Springs Forest Prods. Indus., 939 F.2d 683,

686 (9th Cir. 1991) (holding that ERISA applies to a tribally owned and operated

mill). The majority appears to disagree, relying on our “presumption against

extending federal regulatory schemes to Indian tribal governments . . . .” Maj.

Op. at 15 n.9. But our presumption, articulated in Pueblo of San Juan, is a

presumption against extending certain federal laws and regulatory schemes to

Indian tribal governments acting in their sovereign authority. Because this is not

a case involving a tribe’s sovereign authority, I would agree with the Seventh

Circuit’s application of the Tuscarora rule, and I would conclude that ERISA

- 22 -
applied to plans established or maintained by Indian tribes prior to the PPA.

Following this rationale, I would also conclude that the district court correctly

ruled on remand that the pre-PPA version of ERISA did not exempt the Dobbses’

claim from ERISA coverage.

III

Although I agree with Part III of the majority opinion, I write separately to

emphasize why the Dobbses’ fraudulent inducement claim is preempted by

ERISA.

The Dobbses’ amended complaint alleged in part as follows:

81. Through literature . . . Anthem represented that its Blue
Preferred policy allowed insureds to see any Blue Cross Blue
Shield Provider and receive coverage at in-network levels . . . .
82. The statements were false.
83. Anthem knew or should have known its statements were false.
84. Anthem refused to provide the highest level of benefit under
the Policyeven [sic] when the Dobbs met Anthem’s
requirements and conditions.
85. Anthem’s refusal to provide the promised service and benefits
has caused the Dobbs significant economic and noneconomic
damages.

App. at 11. I agree with the majority that the Dobbses’ claim, although styled as

“fraudulent inducement,” appears to be a claim for benefits: the Dobbses alleged

that “Anthem refused to provide the highest level of benefit under the Policy,”

and Anthem refused “to provide the promised service and benefits . . . .” Id.

(emphasis added).

- 23 -
 “[T]he allocation of benefits under an employee benefits plan goes to the

core of ERISA, and so such claims are usually preempted.” Woodworker’s

Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 991 (10th Cir. 1999);

see also Variety Children’s Hosp., Inc. v. Century Med. Health Plan, Inc., 57 F.3d

1040, 1042 (11th Cir. 1995) (finding preemption “where state law claims of fraud

and misrepresentation are based upon the failure of a covered plan to pay

benefits”). Moreover, the fraudulent inducements claims are preempted because

the “factual basis for . . . plaintiff[s’] state law claim[] directly concerns the

alleged improper administration of the benefit plan.” Settles v. Golden Rule Ins.

Co., 927 F.2d 505, 509 (10th Cir. 1991).

Further, the Dobbses’ claim could affect the structure, administration, or

benefits provided by the plan. Cf. Airparts Co. v. Custom Benefit Servs. of

Austin, Inc., 28 F.3d 1062, 1066 (10th Cir. 1994) (“Plaintiffs make no claim

based on any rights under the plan; there is no allegation that any of the plan’s

terms have been breached.”). “What triggers ERISA preemption is not just any

indirect effect on administrative procedures but rather an effect on the primary

administrative functions of benefits plans, such as determining an employee’s

eligibility for a benefit and the amount of that benefit.” Id. at 1065 (quotation

omitted). The Dobbses’ action, which is based on Anthem’s alleged refusal to

provide benefits under the policy, could “interfere with the calculation of benefits

- 24 -
owed to an employee,” and thus, is preempted. See Monarch Cement Co. v. Lone

Star Indus., Inc., 982 F.2d 1448, 1452 (10th Cir. 1992) (quotation omitted).

I would affirm the district court’s ruling that the PPA does not apply

retroactively to the plan in question and that the pre-amendment version of

ERISA preempts the Dobbses’ state law claims. Given that conclusion, I would

not reach whether the district court properly conducted its fact finding.

- 25 -