United States Court of Appeals
For the First Circuit
No. 99-1449
JULIANNE TOMPKINS, KATHLEEN TOMPKINS, and JOHN TOMPKINS,
Plaintiffs, Appellants,
v.
UNITED HEALTHCARE OF NEW ENGLAND, INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Stahl, Circuit Judge,
Bownes, Senior Circuit Judge,
and Lipez, Circuit Judge.
John R. Mitchell for appellants.
Joan O. Vorster, with whom Mirick, O'Connell, DeMallie &
Lougee, LLP, was on brief, for appellee.
February 11, 2000
LIPEZ, Circuit Judge. The plaintiffs, Julianne,
Kathleen, and John Tompkins, appeal from the district court's
dismissal, pursuant to Fed. R. Civ. P. 12(b)(6), of their claims
against United Healthcare of New England, Inc. ("United"),
alleging violations of federal and state anti-discrimination
statutes, as well as negligent and intentional infliction of
emotional distress, misrepresentation, and breach of written, oral,
and implied contracts. The district court found that the Employee
Retirement Income Security Act of 1974 ("ERISA") as amended, 29
U.S.C. § 1001 et. seq., preempted the state statutory and common
law claims of the plaintiffs and that their claims under the
Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-12213,
failed to state a cause of action. For reasons somewhat different
than those relied upon by the district court, we affirm.
I. BACKGROUND
John and Kathleen Tompkins have a daughter, Julianne
Tompkins, who suffers from Trisomy 13, a chromosomal disease that
requires regular medical treatment. From 1993 to 1996, Julianne
received her treatment at the New England Medical Center ("NEMC").
United is the Tompkinses' health care insurer. Between
1993 and 1996, United pre-approved and paid for Julianne's
treatment at NEMC. During that time the Tompkinses received their
insurance through Mr. Tompkins's employer, A.B. Dick. In 1996,
Mrs. Tompkins returned to work and her employer, New Bedford Harbor
Services, Inc. ("New Bedford"), offered her a United insurance
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policy with lower premiums. After emphasizing the importance of
Julianne's continued treatment and receiving assurances from United
representatives that changing employer-providers would not alter
their coverage, the Tompkinses switched and obtained their
insurance through New Bedford.
Less than a week after the switch, however, United began
to deny payments for treatment provided to Julianne at NEMC.
Shortly thereafter, United notified the Tompkinses that Julianne's
therapies at NEMC would no longer be pre-approved or paid for
because Julianne was being "transitioned"--i.e., she was to receive
future treatment by United-covered physicians at less costly
hospitals closer to her home. In the Tompkinses' view, such
"transition" meant that Julianne would be unable to visit her
regular physicians or to benefit from the high level of expertise
and quality available at NEMC.
The Tompkinses appealed United's denial of coverage at
NEMC and its decision to transition Julianne to other hospitals for
treatment. Ultimately, United's Member Relations Committee heard
the appeal and reversed the earlier benefit denial, agreeing to pay
back-costs for treatment already received and authorizing Julianne
to obtain her future treatments at NEMC.
Despite that victory the Tompkinses initiated this
lawsuit, alleging that they suffered emotional distress and
physical ailments, and incurred costs and expenses including
attorneys' fees, as a result of "their efforts to reverse United's
discriminatory denial of Julianne's benefits." In Counts I - IV of
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the complaint, the Tompkinses sought to recover under Titles I and
III of the ADA, the Massachusetts discrimination statute, Mass.
Gen. Laws. ch. 151B, and the Massachusetts Equal Rights Act Mass.
Gen. Laws. ch. 93 § 103. In Counts V - X, the Tompkinses alleged
various common law causes of action, including intentional
infliction of emotional distress, misrepresentation, and breach of
written, oral, and implied contracts.
United moved to dismiss the Tompkinses' claims on the
grounds that, inter alia, (1) ERISA preempted the state statutory
and common law claims, and (2) the ADA claims failed to state a
cause of action. The district court agreed on both grounds.
First, the court held that the Tompkinses' state statutory and
common law claims "related to" United's ERISA-regulated health
insurance plan within the meaning of ERISA's preemption clause,1
and consequently, that ERISA preempted all of the Tompkinses' state
law claims. Second, the court ruled that the Tompkinses did not
state an ADA Title I claim because the allegations of the complaint
did not show that United was a "covered entity" under Title I.
Lastly, the court concluded that because "Plaintiffs cannot point
to any services which United has denied them, they fail to state a
claim under Title III."
In affirming the dismissal of the Tompkinses' claims, we
rely on somewhat different reasoning than the court below because
1
ERISA's preemption clause, ERISA § 514(a), 29 U.S.C.
§ 1144(a), provides: "Except as provided in subsection (b) of this
section, the provisions of this subchapter . . . shall supersede
any and all State laws insofar as they may now or hereafter relate
to any employee benefit plan. . . ." (emphasis added).
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of the interrelationship between the ADA claims of the plaintiffs
and ERISA preemption. On appeal, the plaintiffs do not argue, as
they did below, that their state-law claims do not "relate to" the
United health care plan within the meaning of ERISA's preemption
clause. Instead, relying on the viability of their ADA claims, the
Tompkinses assert an alternative argument that they made below--
namely, that their Massachusetts statutory claims are exempt from
ERISA preemption as a necessary adjunct to the ADA's enforcement
scheme.2
We reject the premise of the argument by concluding that
both the Title I and the Title III ADA claims were properly
dismissed. The only discriminatory conduct alleged in the
complaint--United's initial decision to deny payment for Julianne's
treatment at NEMC--was fully redressed through United's ERISA-
mandated internal review process. Likewise, we find no merit to
the contention of the plaintiffs that United waived its right to
assert ERISA preemption as an affirmative defense.
II. THE ADA CLAIMS
We review de novo a Rule 12(b)(6) dismissal. See Beddall
v. State St. Bank & Trust Co., 137 F.3d 12, 16 (1st Cir. 1998). In
reviewing a judgment entered under Rule 12(b)(6), we must take the
2
Although the district court did not address the
interrelationship between the ADA claims and ERISA preemption, the
court's conclusion that there were no viable ADA claims had the
effect of deciding the preemption issue on the basis we set forth
here.
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factual allegations of the complaint as true and draw every
reasonable inference in favor of letting the lawsuit proceed. See
Langadinos v. American Airlines, Inc., No. 99-1120, 2000 WL 1998,
at *1 (1st Cir. Jan. 6, 2000). The complaint will survive as long
as it pleads sufficient facts to warrant recovery on any cognizable
theory of the case. See Garita Hotel Ltd. Partnership v. Ponce
Fed. Bank, F.S.B., 958 F.2d 15, 17 (1st Cir. 1992).
To recover under either Title I or Title III of the ADA,
the aggrieved party must be able to show that he or she was denied
some benefit on account of a disability or an association with a
disabled person. Title I of the ADA provides in relevant part:
No covered entity shall discriminate against a
qualified individual with a disability because
of the disability of such individual in regard
to job application procedures, the hiring,
advancement, or discharge of employees,
employee compensation, job training, and other
terms, conditions, and privileges of
employment.
42 U.S.C. § 12112(a). Title III of the ADA provides in relevant
part:
No individual shall be discriminated against
on the basis of disability in the full and
equal enjoyment of the goods, services,
facilities, privileges, advantages, or
accommodations of any place of public
accommodation by any person who owns, leases
(or leases to), or operates a place of public
accommodation.
42 U.S.C. § 12182(a).
Our review of a benefit decision made pursuant to an
ERISA-regulated employee benefit plan "must focus . . . on the
determinations of the final decision-maker." Terry v. Bayer Corp.,
145 F.3d 28, 35-36 (1st Cir. 1998) (emphasizing that "a
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prerequisite to obtaining judicial review . . . is that the
claimant have exhausted the internal administrative remedies
available to him."). In the case at hand, the Tompkinses recovered
the benefits that they claimed were wrongfully denied on the basis
of discrimination by utilizing the internal administrative remedies
available to them. In reversing United's initial decision to deny
the benefits, United's Member Relations Committee ordered payments
of back-costs for treatment already received and authorized
Julianne to receive her future treatments at NEMC. Accordingly,
the Tompkinses were not denied any "terms, conditions, [or]
privileges of employment" under Title I or any "services" under
Title III attributable to United's initial decision to deny
Julianne benefits based on her disability.3
A close examination of the complaint reveals that the
only discriminatory conduct alleged by the Tompkinses was United's
initial decision to refuse payments for Julianne's treatment at
NEMC. In the count of the complaint asserting a cause of action
under Title I, the Tompkinses allege in relevant part:
54. Defendant's establishment of a health
benefit plan, which wrongfully discriminates
against persons with Trisomy 13 and in
particular Julianne Tompkins, and the
Plaintiffs constitutes a violation of ADA.
. . . .
3
Although neither Mr. Tompkins nor Mrs. Tompkins are disabled,
they argue that United discriminated against them because of their
association with Julianne. Given our conclusion that there was no
denial of benefits, we need not address the validity of the
association discrimination claims, or whether Mr. Tompkins or Mrs.
Tompkins are "qualified individuals" under the ADA, or whether
United is a "covered entity" under the ADA.
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56. As a direct and proximate result of these
violations of the ADA by Defendant, Plaintiffs
have lost and will continue to lose benefits
of their employment and contractual
relationship with the Defendant.
57. As a direct and proximate result of these
violations of the ADA by Defendant, Plaintiffs
have experienced and will continue to
experience emotional pain, suffering,
inconvenience, mental anguish, loss of
enjoyment of life, and other non-pecuniary
losses.
The conduct alleged to violate the ADA is the "establishment of a
health benefit plan, which wrongfully discriminates against persons
with Trisomy 13." As a result, the Tomkinses assert that they
"lost and will continue to lose benefits." In specifying what they
mean by the discriminatory establishment of a health benefit plan,
the plaintiffs do not cite any terms of the plan itself. Instead,
they focus exclusively on United's initial decision to deny
benefits based on Julianne's disability, a determination that the
Tomkinses concede in their complaint was reversed when United's
Member Relations Committee "re-determined the appeal and
[determined that] United was now to pay for Julianne's care at New
England Medical Center, past and future, in full at regular HMO
rates."
In the count of the complaint asserting a cause of action
under Title III, the Tompkinses allege:
48. . . . the Defendant has discriminated
against Plaintiffs, solely on the basis of
Julianne's disability, and Kathleen and John's
association with Julianne, by denying them
full and equal enjoyment of the services,
facilities, privileges, advantages, or
accommodations of a place of accommodation as
otherwise available to the general public; by
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failing to make reasonable modifications in
its contracts, policies, practices, or
procedures if these were necessary to afford
Plaintiff Defendants' services, facilities,
privileges, advantages or accommodations; by
refusing or failing to offer continued pre-
authorization numbers, payment for New England
Medical Center treatment, access to therapy
sessions and other benefits as provided by its
contract of insurance with the Plaintiffs and
its past practice in a place or manner
accessible to the Plaintiff; and by failing
and refusing to offer alternative services.
This count, like the Title I count, alleges no discriminatory
conduct aside from United's initial benefit denial determination.
Specifically, it asserts three ways in which United denied the
Tompkinses the benefits of a public accommodation,4 based on
Julianne's disability: (1) "by failing to make reasonable
modifications in its contracts, policies, practices, or procedures
if these were necessary to afford Plaintiff Defendants' services,
facilities, privileges, advantages or accommodations"; (2) "by
refusing or failing to offer continued pre-authorization numbers,
payment for New England Medical Center treatment, access to therapy
sessions and other benefits as provided by its contract of
insurance with the Plaintiffs and its past practice in a place or
manner accessible to the Plaintiff"; and (3) "by failing and
refusing to offer alternative services." Each of these allegedly
discriminatory actions focuses on United's decision to deny payment
4
We have held in Carparts Distribution Center, Inc. v.
Automotive Wholesaler's Association, Inc., 37 F.3d 12, 19-20 (1st
Cir. 1994), that "public accommodations" are not limited to actual
physical structures, and that the discriminatory denial of benefits
under a health care plan might, in some circumstances, state a
claim under Title III of the ADA.
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for Julianne's treatment at NEMC, a denial which, as discussed
above, was reversed through the internal review process.
In an attempt to salvage their case, the Tompkinses
stress on appeal that their emotional and financial injuries
resulted not merely from the initial benefit denial, but also from
the delay and inconvenience in obtaining their benefits through
United's internal review process. Although the Tompkinses surely
suffered inconvenience and distress as a result of the delay in
receiving their health care benefits, that inconvenience and
distress was caused both by the initial denial of benefits, for
which there is no relief here because of the relief obtained on
administrative review, and by the usual operation of the ERISA-
mandated internal review process.5 In order to state a claim for
injuries resulting from the review process itself, the Tompkinses
would have to allege in the complaint that the internal review
process--as opposed to the original denial of benefits--was in some
way unusual or prolonged as a result of unlawful discrimination.
5
ERISA § 503, 29 U.S.C. § 1133, provides:
In accordance with regulations of the Secretary,
every employee benefit plan shall--
(1) provide adequate notice in writing to
any participant or beneficiary whose claim for
benefits under the plan has been denied,
setting forth the specific reasons for such
denial, written in a manner calculated to be
understood by the participant, and
(2) afford a reasonable opportunity to
any participant whose claim for benefits has
been denied for a full and fair review by the
appropriate named fiduciary of the decision
denying the claim.
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Here, the complaint is devoid of any allegation that United's
review of the Tompkinses claim was discriminatory or differed in
any way from the ordinary process afforded any plan member
challenging a benefit denial.6
In summary, the Tompkinses have already fully recovered
for the initial benefit denial; they make no allegations that the
review process itself was discriminatory. Therefore, they do not
allege the discriminatory denial of any benefit protected by Title
I or Title III of the ADA Their ADA claims were properly
dismissed.
III. ERISA PREEMPTION
On appeal, the Tompkinses do not dispute that their state
law claims "relate to" the ERISA-regulated health care plan.
Rather, they argue that: (1) the state anti-discrimination
statutes, as part of the overall enforcement regime contemplated by
the ADA, are exempt from preemption by ERISA § 514(d), 29 U.S.C.
§ 1144(d), which excludes federal law from ERISA's preemptive
scope; and (2) United waived its right to assert ERISA preemption
through its health insurance contract.
6
Indeed, the complaint itself suggests that even United's
initial decision to deny coverage, rather than being the result of
discrimination, was based on the fact that "United no longer wanted
to pay for the high cost of New England Medical Center care."
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A. Federal Enforcement Scheme
The Tompkinses contend that causes of action based on
state human rights legislation are not preempted by ERISA pursuant
to the Supreme Court's decision in Shaw v. Delta Air Lines, Inc.,
463 U.S. 85 (1983).7 In Shaw, the state of New York argued that
the New York Human Rights Law, which required employers to pay
pregnancy leave to employees, was exempted from preemption by ERISA
§ 514(d), 29 U.S.C. § 1144(d), which provides that "[n]othing in
this subchapter shall be construed to alter, amend, modify,
invalidate, impair, or supersede any law of the United States."
This was so, New York argued, because the New York Human Rights Law
was a necessary part of Title VII's overall enforcement scheme, and
hence within ERISA's federal law exemption from preemption. See
463 U.S. at 100-01.
The Court acknowledged that "State laws obviously play a
significant role in the enforcement of Title VII," and that "Title
VII requires recourse to available state administrative remedies."
Id. at 101. "Given the importance of state fair employment laws to
the federal enforcement scheme, pre-emption of the [New York] Human
Rights Law would impair Title VII to the extent that the Human
Rights Law provides a means of enforcing Title VII's commands."
Id. at 102 (emphasis added). The Court concluded, however, that
the practices made unlawful under the New York Human Rights Law--
failing to pay benefits for pregnancy leave--were not unlawful
7
This argument, if successful, would only save the
Massachusetts statutory claims from preemption.
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under Title VII. Thus, it "fail[ed] to see how federal law would
be impaired by pre-emption of a state law prohibiting conduct that
federal law permitted." Id. at 103-04. The Court therefore
concluded that "pre-emption would not impair Title VII within the
meaning of § 514(d)." Id. at 103.
The Tompkinses assert correctly that Shaw's reasoning
applies to the case at bar. We have held that the ADA, like Title
VII, contemplates that state laws will contribute to the overall
federal enforcement regime. See Carparts Distrib. Ctr., Inc. v.
Automotive Wholesaler's Ass'n, 37 F.3d 12, 20-21 (1st Cir. 1994).
Thus, if the Tompkinses' state statutory claims targeted conduct
unlawful under the ADA, those state claims would be exempt from
ERISA preemption pursuant to ERISA § 514(d). See Shaw, 463 U.S. at
102-04; Carparts, 37 F.3d at 20-21 (vacating dismissal of state law
claims on grounds that they might be found exempt from ERISA
preemption as part of the ADA's enforcement scheme). However, we
have already concluded that the Tompkinses have failed to state a
claim under the ADA. Under these circumstances, because the
plaintiffs do not contest the district court's finding that their
state law claims “relate to” the United health benefits plan, and
because the ADA's enforcement regime does not depend on the
availability of the state statutory claims, the state claims are
subject to ERISA preemption.
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B. Waiver
The Tompkinses assert that United waived its right to
claim ERISA preemption based on this provision of its contract with
the Tompkinses to provide health insurance:
In compliance with state and federal law, PLAN
shall not discriminate on the basis of age,
sex, color, race, disability, marital status,
sexual preference, religious affiliation, or
public assistance status.
The Tompkinses argue that this commitment to "compliance with state
law" operates as an express waiver of United's right to invoke
ERISA-preemption as an affirmative defense. We disagree. The
cited provision does not approach the type of clear and express
language typically required for waiver of a known right. See,
e.g., Fowler v. Boise Cascade Corp., 948 F.2d 49, 57-58 (1st Cir.
1991) (under Maine law, applying strict construction standard to
waiver of employer immunity under an indemnification agreement);
Irons v. Fed. Bureau of Investigation, 880 F.2d 1446, 1452 (1st
Cir. 1989) ("Courts sometimes say an individual has 'waived' a
protection the law grants him when the individual expressly says
that he wishes to do without the protection."); Jardines Bacata,
Ltd. v. Diaz-Marquez, 878 F.2d 1555, 1559 (1st Cir. 1989) (waiver
must be "unequivocal"). This provision merely expresses United's
intent to administer the plan in accordance with applicable laws.
It does not waive any rights afforded by federal law.
Although in some circumstances contractual waiver of
statutory rights is permissible, see, e.g., Canal Elec. Co. v.
Westinghouse Elec. Corp., 548 N.E.2d 182, 187 (Mass. 1990), we find
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no case holding that parties may contractually waive the right to
assert ERISA preemption. Our decision in Wolf v. Reliance Standard
Life Ins. Co., 71 F.3d 444, 449 (1st Cir. 1995), relied upon by the
Tompkinses, merely holds that ERISA preemption, as an affirmative
defense rather than as an element of the court's jurisdiction, is
waived if not timely raised. But Wolf, which addresses only
procedural waiver, offers no support for the Tompkinses'
contractual waiver argument.
Although "[a] statutory right or remedy may be waived
when the waiver would not frustrate the public policies of the
statute," see Canal Elec. Co., 548 N.E.2d at 187, "[a] statutory
right may not be disclaimed if the waiver could 'do violence to the
public policy underlying the legislative enactment,'" see id.
(quoting Spence v. Reeder, 416 N.E.2d 914, 924 (Mass. 1981)).
ERISA provides an elaborate set of rules "designed to promote the
interests of employees and their beneficiaries in employee benefit
plans." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983).8
In New York State Conference of Blue Cross & Blue Shield Plans v.
Travelers Ins. Co., 514 U.S. 645 (1995), the Supreme Court stated
that in passing ERISA Congress intended
8
ERISA contains, inter alia, reporting and disclosure
requirements (the ERISA 100s), see 29 U.S.C. § 1021 et seq.,
participation and vesting guidelines (the ERISA 200s), see 29
U.S.C. § 1051 et seq., funding rules (the ERISA 300s), see 29
U.S.C. § 1081 et seq., rules of fiduciary responsibility (the ERISA
400s), see 29 U.S.C. § 1101 et seq., and criminal and civil
enforcement provisions (the ERISA 500s), see 29 U.S.C. §
1131(criminal enforcement); 29 U.S.C. § 1132 et seq. (civil
enforcement).
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to ensure that plans and plan sponsors would
be subject to a uniform body of benefits law;
the goal was to minimize the administrative
and financial burden of complying with
conflicting directives among States or between
States and the Federal Government . . ., [and
to prevent] the potential for conflict in
substantive law . . . requiring the tailoring
of plans and employer conduct to the
peculiarities of the law of each jurisdiction.
Id. at 656-57 (alterations in original). Allowing parties to opt
out of ERISA preemption contractually would enable plan sponsors to
avoid compliance with ERISA's regulatory structure and would
subject ERISA-regulated plans to a multitude of divergent state law
causes of action. These results would conflict with Congress's
objective of establishing a "uniform body" of federal employee
benefits law under ERISA.
We conclude, therefore, that United did not waive its
right to raise ERISA preemption as an affirmative defense to the
Tompkinses' state law claims, and that ERISA preempts all of those
claims.
Affirmed.
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