UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-30922
JULIO C. ARANA,
Plaintiff - Appellee
VERSUS
OCHSNER HEALTH PLAN, INC.,
Defendant - Appellant
Appeal from the United States District Court
For the Eastern District of Louisiana
August 15, 2002
Before KING, Chief Judge, PARKER, Circuit Judge, and ELLISON,*
District Judge.
ELLISON, District Judge:
Defendant-Appellant Ochsner Health Plan, Inc. (“OHP”)
requested and received certification under 28 U.S.C. § 1292(b) to
appeal the district court's order denying its motion to dismiss or,
alternatively, motion for summary judgment, and granting partial
summary judgment to Plaintiff-Appellee Julio C. Arana (“Arana”).
We hold that the district court erred to the extent that it
determined it had jurisdiction over the instant action, and we
reverse the district court's order on that basis and direct that
the case be remanded to state court. Because we find that subject
matter jurisdiction is lacking, we do not reach the substantive
issues raised on appeal.
I. FACTS AND PROCEEDINGS BELOW
On July 5, 1998, Arana sustained serious injuries when a 1996
Ford Crown Victoria struck the rear of a 1995 Nissan Pathfinder,
operated by Arana and owned by his mother, Odette LeCler. At the
time of the accident, and at all relevant times thereafter, Arana
was a dependent beneficiary under the employee welfare benefit plan
established by his mother's employer, LeCler Printing Company.1
OHP provided health benefits to participants and beneficiaries of
the LeCler Printing employee benefit plan (“the LeCler Plan”)
pursuant to a Group Health Services Agreement (“GHSA”) between OHP
and the employer. After the automobile accident, Arana's health
care providers submitted to OHP claims for services rendered to
Arana, and OHP has paid approximately $180,000 in health benefits
for treatment of Arana's accident-related injuries.
In addition to the health benefits paid by OHP, coverage for
the accident also was available under four automobile insurance
policies: a State Farm liability policy covering the Crown
Victoria, an Allstate liability policy carried by the non-owner
operator of that vehicle, a Fireman's Fund uninsured motorist
insurance policy issued on the Pathfinder, and an excess uninsured
motorist policy underwritten by United Fire. In October, 1998,
State Farm and Allstate paid their respective policy limits to
Arana, in the total amount of $150,000. Fireman's Fund paid Arana
$487,500, on a policy with a $500,000 limit. Finally, in late
2000, United Fire, which provided $2 million in excess uninsured
motorist coverage subject to $650,000 in underlying limits, settled
with Arana for $475,000. Prior to their settlements with Arana,
Fireman's Fund and United Fire both were named as defendants in
Civil Action No. 98-2927, which Arana filed in the Eastern District
of Louisiana in connection with his automobile accident. Pursuant
to the terms of the settlement of that lawsuit, Arana's attorney
has maintained in a trust account $150,000 out of the settlement
proceeds obtained from United Fire. The remainder of the funds
received from the four automobile insurers has been disbursed.
During the relevant time period, OHP maintained an arrangement
under which Subro Audit, Inc., a third-party contractor and
subrogation specialist, handled subrogation for OHP. On November
2, 1999, while the federal tort lawsuit remained pending, Subro
Audit wrote to Arana's mother and to United Fire, notifying both
that OHP claimed a contractual right to reimbursement of the health
benefits it had paid on Arana's behalf.
Arana disputed OHP's right to pursue subrogation and/or
reimbursement, and filed the instant lawsuit against OHP in the
24th Judicial District Court for the Parish of Jefferson, both on
his own behalf and on behalf of other similarly situated
individuals. Specifically, in his petition Arana requests a
declaratory judgment “requiring OHP to release its notice of lien
and to withdraw and release OHP's subrogation, reimbursement, and
assignment claims” against Arana, Fireman's Fund, and/or United
Fire. Arana asserts that such claims violate LA. REV. STAT. 22:663.2
Arana also asks that OHP be ordered to pay statutory penalties and
attorney's fees pursuant to LA. REV. STAT. 22:657.3
OHP removed Arana's lawsuit to the Eastern District of
Louisiana, on the grounds that the petition asserts claims that are
completely preempted by the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. §§ 1001-1461. OHP then filed a motion to
dismiss pursuant to FED. R. CIV. P. 12(b)(6) or, alternatively, a
motion for summary judgment. OHP's motion focuses on three issues:
whether ERISA preempts LA. REV. STAT. 22:663, whether 22:663
prohibits the defendant from claiming subrogation and/or
reimbursement rights, and whether Arana failed to exhaust the
administrative remedies provided by an ERISA plan prior to filing
suit. Arana filed a motion for partial summary judgment seeking a
declaration that, under Louisiana law, OHP does not have a right to
pursue subrogation and reimbursement for medical expenses that it
paid on behalf of Arana from any amount received by Arana under the
United Fire policy. The district court granted Arana's motion and
denied the motion filed by OHP. In reaching its decision, the
district court found that Arana's petition stated a claim for
benefits under 29 U.S.C. § 502(a) that was completely preempted by
ERISA.
Pursuant to 28 U.S.C. § 1292(b), OHP appeals the district
court's order as to OHP's and Arana's respective motions. On
appeal, Arana asserts that subject matter jurisdiction is lacking.4
II. JURISDICTION
A. Complete Preemption and Removal
“[A]ny civil action brought in a State court of which the
district courts of the United States have original jurisdiction,
may be removed by the defendant or the defendants, to the district
court of the United States for the district and division embracing
the place where such action is pending.” 28 U.S.C. 1441(a).
Moreover,
“[a]ny civil action of which the district courts
have original jurisdiction founded on a claim or
right arising under the Constitution, treaties or
laws of the United States shall be removable
without regard to the citizenship or residence of
the parties. Any other such action shall be
removable only if none of the parties in interest
properly joined and served as defendants is a
citizen of the State in which such action is
brought.”
28 U.S.C. § 1441(b); see also 28 U.S.C. § 1331 (granting federal
question jurisdiction to district courts). Because OHP is a
citizen of Louisiana, removal to the district court was proper only
if the instant action arises under federal law.
It is well settled that a cause of action arises under federal
law only when the plaintiff's well-pleaded complaint raises issues
of federal law. Heimann v. Nat'l Elevator Indus. Pension Fund, 187
F.3d 493, 499 (5th Cir. 1999) (citing Gully v. First Nat'l Bank,
299 U.S. 109 (1936); Louisville & Nashville R.R. Co. v. Mottley,
211 U.S. 149 (1908)). Accordingly, petitions, such as Arana's,
that on their face assert only state law claims generally do not
provide a basis for the exercise of federal question jurisdiction.
In limited circumstances, however, “Congress may so completely pre-
empt a particular area that any civil complaint raising this select
group of claims is necessarily federal in character.” Metro. Life
Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987). In effect, the
application of the complete preemption doctrine converts an
ordinary state common law complaint into one stating a federal
claim for purposes of the well-pleaded complaint rule. McClelland
v. Gronwalt, 155 F.3d 507, 512 (5th Cir. 1998) (citation omitted).
Because they are recast as federal claims, state law claims that
are held to be completely preempted give rise to federal question
jurisdiction, and thus may provide a basis for removal. Id.
In particular, certain state law claims that fall within the
scope of ERISA section 502(a), 29 U.S.C. § 1132(a), are completely
preempted and may be removed to federal court. See Metro. Life
Ins. Co., 481 U.S. at 66; Copling v. Container Store, Inc., 174
F.3d 590, 594 (5th Cir. 1999). “Section 502, by providing a civil
enforcement cause of action, completely preempts any state cause of
action seeking the same relief, regardless of how artfully pled as
a state action.” Copling, 174 F.3d at 594. Complete preemption
under section 502(a) thus is jurisdictional in nature, rather than
an affirmative defense to a plaintiff's claims under state law.
Heimann, 187 F.3d at 500.
Complete preemption must be distinguished in this regard from
ordinary preemption, also known as conflict-preemption. In general
terms, ordinary preemption is a federal defense to the plaintiff's
suit, and may arise either by express statutory term or by a direct
conflict between the operation of federal and state law. Id. at
500. In the context of ERISA, section 514(a) provides for the
ordinary preemption of “any and all State laws insofar as they may
now or hereafter relate to any employee benefit plan” regulated by
that statute. 29 U.S.C. 1144(a). State laws preempted under
section 514 therefore are displaced by federal law. McClelland,
155 F.3d at 516. However, because ordinary ERISA preemption almost
invariably arises as a defense, and thus does not appear on the
face of the plaintiff's well-pleaded complaint, ordinary ERISA
preemption alone does not authorize removal to federal court. Id.;
see also Heimann, 187 F.3d at 500.
Accordingly, in determining whether OHP properly removed the
instant action to federal court, the dispositive issue is not
whether ordinary ERISA preemption affords OHP an effective defense
against Arana's state law claims. Irrespective of whether Arana's
claims are subject to ordinary preemption pursuant to section 514,
subject matter jurisdiction will not lie unless, through those
claims, Arana seeks relief available to him under section 502(a).5
See Bauhaus USA, Inc. v. Copeland, 292 F.3d 439, 442 n.6 (5th Cir.
2002); McClelland, 155 F.3d 518-19. It is to this inquiry that we
now turn.
B. Arana's Claims under 22:663 and 22:657
Arana seeks two forms of relief in his state court petition.
First, he requests a declaratory judgment to the effect that LA.
REV. STAT. 22:663 bars OHP from asserting both its contractual right
of subrogation to Arana's state law personal injury cause of
action, and its right to reimbursement from tort settlement funds
paid to Arana.6 Secondly, Arana requests statutory penalties
and/or attorney's fees under LA. REV. STAT. 22:657 for what he claims
was OHP's wrongful attempt to assert a lien against his tort
settlement and to obtain reimbursement therefrom of the health
benefits OHP has paid on Arana's behalf.
1. The 22:663 claim
In ruling that Arana's state court action was completely
preempted by ERISA, the district court determined that Arana's
declaratory judgment claim under 22:663 was in fact a claim for
benefits, and thus fell within the scope of ERISA section
502(a)(1)(B).7 The district court erred in that regard. It is
undisputed that OHP has paid Arana all of the health benefits due
him under the GHSA between OHP and LeCler Printing. Arana does not
rely on 22:663 in order to seek additional health benefits from
OHP, but rather he requests a declaration that OHP is not entitled
to a portion of his tort recovery. Although OHP has not filed a
formal claim for subrogation or reimbursement in either state or
federal court,8 it is OHP that seeks to obtain money from Arana,
not vice versa.9 Arana's claim thus is not one for benefits under
section 502(a). See Blackburn v. Sundstrand Corp., 115 F.3d 493,
495 (7th Cir. 1997).
OHP's assertion that Arana's 22:663 cause of action must be
characterized as a claim for benefits because 22:663 on its face
speaks only to the exclusion or reduction of benefits similarly is
without merit. Arana's cause of action is completely preempted
only if it seeks the same relief as that afforded beneficiaries
under section 502(a), see McClelland, 155 F.3d at 518-19, and
Arana's suit simply does not seek health care benefits under the
LeCler plan. OHP argues as a substantive defense that 22:663 does
not apply to circumstances such as those present here, in which a
health plan does not coordinate or otherwise exclude benefits on
the front end, but rather seeks subrogation or reimbursement on the
back end. Whatever the merits of this defense regarding the scope
of 22:663, it does not convert Arana's suit challenging OHP's
subrogation and reimbursement rights into a claim for benefits.
Just as OHP may assert its ordinary preemption defense in state
court, OHP also may argue that 22:663 on its own terms does not
apply to subrogation and reimbursement at all. However, if a
federal defense does not authorize removal to federal court,
Heimann, 187 F.3d at 500, this state law defense certainly does not
do so.
Finally, as an alternative basis for complete preemption, OHP
also argues that Arana's 22:663 cause of action is within the scope
of 502(a) because through it Arana seeks “to enforce his rights
under the terms of the plan.” This theory draws some support as a
basis for removal from a footnote in the recent Supreme Court
decision Rush Prudential HMO, Inc. v. Moran, 536 U.S. ___, 122
S.Ct. 2151 (2002).
In Rush Prudential, an ERISA plan participant filed a state
court action seeking an order requiring the plan's service provider
to comply with a state independent medical review law. See Moran
v. Rush Prudential HMO, Inc., 230 F.3d 959, 964 (7th Cir. 2000).
When the service provider sought to remove the original state
action to federal court, the district court remanded on the ground
that the participant's suit for specific performance of state law
obligations was not completely preempted by ERISA. Id. The
participant then filed an amended complaint seeking benefits under
the plan, and the service provider successfully removed this
amended complaint to federal court. Id. at 965-67. The case later
came before the Supreme Court on review, and the Court in dicta
questioned the propriety of the district court's first remand
order. The Rush Prudential Court specifically stated,
a suit to compel compliance with [the state
independent medical review law] in the context of
an ERISA plan would seem to be akin to a suit to
compel compliance with the terms of the plan under
29 U.S.C. § 1132(a)(3). Alternatively, the proper
course may have been to bring a suit to recover
benefits due, alleging that the denial was improper
in the absence of compliance with [the state law].
We need not resolve today which of these options is
more consonant with ERISA.
122 S.Ct. at 2157 n.2.
Although this footnote appears to suggest that a cause of
action seeking a declaration that state law trumps plan documents
may be properly characterized, in some circumstances, as a
completely preempted claim to enforce the terms of the plan, this
Court is not persuaded that such a characterization is appropriate
under the facts of this case. In the first instance, the Court
notes that the terms of the LeCler plan are not in the record on
appeal, and it is not clear whether such plan documents exist at
all. The parties apparently take for granted that the terms of the
GHSA between the LeCler plan and OHP, its health care services
provider, are the equivalent of, or are somehow incorporated into,
the plan's terms. The fact that the terms of the LeCler plan are
so immaterial to Arana's claims that they were never introduced
into the record, even when dispositive motions were before the
district court, certainly undermines any argument that Arana's
cause of action is really an artfully pleaded bid to enforce the
terms of his ERISA plan.
Moreover, assuming arguendo that the terms of the GHSA are
properly considered to be the terms of the LeCler plan, such an
assumption still does not justify characterizing Arana's claim as
one to enforce the plan's terms. Arana does not dispute that the
GHSA affords OHP the subrogation and reimbursement rights it
claims. Arana in fact concedes that he would owe a portion of his
tort recovery to OHP if the terms of the GHSA were enforced, but he
argues that the relevant provisions in the GHSA are illegal by
operation of 22:663.10 Although Arana's suit to enforce state law
over the terms of the plan may be “akin” to a suit to enforce the
terms of the plan itself, the fact that a claim is akin to a cause
of action authorized under section 502(a) is not enough to support
a federal claim under ERISA. This latter point recently has been
demonstrated by the Supreme Court itself, which, when squarely
confronting the issue, has made fine distinctions in order to
determine whether a civil enforcement action is in fact authorized
by ERISA. See Great-West Life & Annuity Ins. Co. v. Knudson, 534
U.S. 204, 122 S.Ct. 708, 714-717 (2002). “ERISA's carefully
crafted and detailed enforcement scheme provides strong evidence
that Congress did not intend to authorize other remedies that it
simply forgot to incorporate expressly.” Id. at 712 (emphasis in
original) (internal quotations omitted). Congress has not
incorporated into section 502(a) a cause of action to enforce an
arguably saved state law over the terms of an ERISA plan, and this
Court declines OHP's invitation to read this civil enforcement
mechanism into the statute.11
Because Arana neither relies on 22:663 to seek benefits under
the plan nor seeks to enforce the terms of the plan, his 22:663
cause of action does not fall within the scope of section 502(a)
and is not completely preempted by ERISA.12
2. The 22:657 claim
LA. REV. STAT. 22:657 allows punitive damage awards for an
insurer's arbitrary refusal to pay benefits, and mandates the
payment of attorney's fees when such a refusal occurs. Cramer v.
Ass'n Life Ins. Co., 569 So. 2d 533, 538 (La. 1990). In his
petition, Arana claims that 22:657 entitles him to statutory
penalties and attorney's fees for OHP's wrongful assertion of
subrogation and reimbursement rights.
In contrast to 22:657, ERISA's civil enforcement scheme does
not afford plan participants or beneficiaries a mechanism for
obtaining punitive damages and mandatory attorney's fees such as
those sought by Arana.13 See Ramirez v. Inter-Continental Hotels,
890 F.2d 760, 763-64 (5th Cir. 1989); Sommers Drug Store Co.
Employee Profit Sharing Trust v. Corrigan Enters., Inc., 793 F.2d
1456, 1463-65 (5th Cir. 1986); Cramer, 569 So. 2d at 538. Arana's
22:657 claim cannot “arise under” ERISA for purposes of federal
question jurisdiction if ERISA does not authorize the suit.
Bauhaus, 292 F.3d at 442 n.6 (citing Franchise Tax Bd. v. Construc.
Laborers Vacation Trust, 463 U.S. 1 (1983); Metro. Life Ins. Co.,
481 U.S. 58 (1987)). Because section 502 does not authorize the
relief sought in Arana's 22:657 cause of action, that cause of
action cannot form the basis of federal question jurisdiction.
Id.; see also McClelland, 155 F.3d at 518.
The cases cited by OHP for their holdings that 22:657 is
preempted by ERISA do not warrant a contrary result. Almost all of
the cases addressing the issue hold that 22:657 is subject to
ordinary preemption under ERISA section 514. See, e.g., Clancy v.
Employers Health Ins. Co., 101 F. Supp. 2d 463, 466-67 (E.D. La.
2000); Chatelain v. S. Baptist Health Sys., 907 F. Supp. 206, 208-
12 (E.D. La. 1995); Coles v. Metro. Life Ins. Co., 837 F. Supp.
764, 768 (M.D. La. 1993); Cramer, 569 So. 2d at 537-541. Notably,
many of these cases specifically find that 22:657 is preempted
because it creates an alternative remedy that is not authorized
under ERISA's civil enforcement scheme. E.g., Clancy, 101 F. Supp.
2d at 467; Cramer, 569 So. 2d at 538. The fact that a state law
conflicts with ERISA, and thus arguably is subject to ordinary
preemption, does not authorize removal to federal court. See
McClelland, 155 F.3d at 516; Heimann, 187 F.3d at 500. In the one
case cited by OHP that determines that a 22:657 cause of action is
completely preempted by ERISA, the district court overlooked this
fundamental point of law. See Taylor v. Blue Cross/Blue Shield,
684 F. Supp. 1352, 1358-59 (E.D. La. 1988).
OHP's argument that ERISA section 502(a) displaces 22:657 is
a defense to Arana's 22:657 claim, and not a basis for converting
Arana's state law claim to one arising under federal law. Such a
conversion would be impossible, as Arana's state law claim for
punitive damages and mandatory attorney's fees is not authorized
under section 502(a). OHP accordingly must assert this defense, as
well as any other defense it may have to Arana's 22:657 cause of
action, before the state court on remand.
III. CONCLUSION
Arana does not seek relief available under ERISA section
502(a), and accordingly his state law claims under La. Rev. Stat.
22:663 and 22:657 are not completely preempted by federal law.14
Because subject matter jurisdiction is lacking, we direct that the
instant action be remanded to state court.
* District Judge of the Southern District of Texas, sitting by
designation.
1. For purposes of this appeal, Arana concedes that the LeCler
employee welfare benefit plan is a plan governed by ERISA.
2. LA. REV. STAT. 22:663 provides:
Notwithstanding any other provisions in this title
to the contrary, no group policy of accident,
health or hospitalization insurance, or of any
group combination of these coverages, shall be
issued by any insurer doing business in this state
which by the terms of such policy group contract
excludes or reduces the payment of benefits to or
on behalf of an insured by reason of the fact that
benefits have been paid under any other
individually underwritten contract or plan of
insurance for the same claim determination period.
Any group policy provision in violation of this
section shall be invalid.
3. La. Rev. Stat. 22:657 provides, in pertinent part:
A. All claims arising under the terms of health
and accident contracts issued in this state,
[except claims for accidental death], shall be
paid not more than thirty days from the date upon
which written notice and proof of claim, in the
form required by the terms of the policy, are
furnished to the insurer unless just and
reasonable grounds, such as would put a
reasonable and prudent businessman on guard,
exist. The insurer shall make payment at least
every thirty days to the assured during that part
of the period of his disability covered by the
policy or contract of insurance during which the
insured is entitled to such payments. Failure to
comply with the provisions of this Section shall
subject the insurer to a penalty payable to the
insured of double the amount of the health and
accident benefits due under the terms of the
policy or contract during the period of delay,
together with attorney's fees to be determined by
the court. Any court of competent jurisdiction
in the parish where the insured lives or has his
domicile, except a justice of the peace court,
shall have jurisdiction to try such cases.
In addition to his penalty claim under 22:657, in his original
state court petition, Arana also sought penalties under Louisiana's
Unfair Trade Practices and Consumer Protection Law, LA. REV. STAT.
51:1401-1420. Arana's unfair trade practices claim has since been
withdrawn, and on appeal OHP does not argue that this claim
supports federal jurisdiction. Accordingly, the withdrawn unfair
trade practices claim will not be addressed further.
4. Arana did not petition the district court to remand the instant
action to state court, and first raised the argument that his
claims were not completely preempted by ERISA only in response to
OHP's motion to dismiss. Nonetheless, we must examine the basis of
our jurisdiction and, if there is doubt, we must address it.
Castaneda v. Falcon, 166 F.3d 799, 801 (5th Cir. 1999); Jones v.
Collins, 132 F.3d 1048, 1051 (5th Cir. 1998). Furthermore, when a
action is under our appellate review, this Court also must satisfy
itself that the district court properly exercised jurisdiction.
Heimann v. Nat'l Elevator Indus. Pension Fund, 187 F.3d 493, 499
(5th Cir. 1999).
5. The parties dispute whether Arana's state law claims are subject
to ordinary preemption. They specifically disagree on the issue of
whether LA. REV. STAT. 22:663 and 22:657 are saved from preemption
by ERISA section 514(b)(2), which states that “[n]othing in this
subchapter shall be construed to exempt or relieve any person from
any law of any State which regulates insurance, banking, or
securities.” 29 U.S.C. § 1144(b)(2)(A). The scope of this
insurance “saving clause” is significantly limited by ERISA's
“deemer clause,” which provides that neither an ERISA plan nor any
trust established under such a plan “shall be deemed to be an
insurance company or other insurer, bank, trust company, or
investment company or to be engaged in the business of insurance or
banking for purposes of any law of any State purporting to regulate
insurance companies, insurance contracts, banks, trust companies,
or investment companies.” 29 U.S.C. § 1144(b)(2)(B); see generally
FMC Corp. v. Holliday, 498 U.S. 52, 60-61 (discussing interaction
of saving clause and deemer clause in ordinary preemption analysis
of state anti-subrogation law).
“Previous panels of this Circuit, exercising great caution, have
used a two-step analysis under both § 514 and § 502(a) in their
complete preemption analysis.” Heimann, 187 F.3d at 502
(discussing McClelland), 155 F.3d at 515-17; see also Copling, 174
F.3d at 597 n.14 (same). This approach has developed because the
“deliberately expansive” nature of section 514 preemption almost
always will encompass claims completely preempted by section 502 as
well. Heimann, 187 F.3d at 502 (citation omitted). However,
claims such as those asserted in the instant action, which arguably
fall within the ambit of ERISA's insurance saving clause, present
a situation in which the two-step analysis may become problematic.
See Rush Prudential HMO, Inc., v. Moran, 536 U.S. ___, 122 S.Ct.
2151, 2165-67 (2002) (discussing conflict under ERISA between
congressional policies of exclusively federal remedies and the
reservation of insurance regulation to the states). For example,
a plaintiff's cause of action may fall within the scope of section
502, and therefore arise under federal law, even though it is
grounded in a state law rule of decision that, due to the operation
of the saving clause, is not displaced by federal law. See UNUM
Life Ins. Co. v. Ward, 526 U.S. 358, 376-77 (1999) (applying state
insurance law as rule of decision in section 502 (a)(1)(B) suit to
recover benefits).
In any event, because, as discussed below, the Court finds that
Arana's state law claims are not completely preempted under section
502(a), it may remand without addressing the first step of the
McClelland two-step complete preemption analysis, and without
commenting on the merits of OHP's ordinary preemption defense.
Copling, 174 F.3d at 597 n.14. Instead, the merits of this defense
will be a matter for the state court to determine on remand. See
Soley v. First Nat'l Bank of Commerce, 923 F.2d 406, 410 (5th Cir.
1991).
6. OHP's subrogation and reimbursement claims are based upon the
following provision in the GHSA between OHP and LeCler Printing:
If any Member is injured by an act or omission of a
third party and if such third party and/or any
other third party or entity, including but not
limited to the Member's medical, health and
accident, uninsured/underinsured motorist, school,
and/or no fault insurer(s) (each referred to
hereafter as a “Third Party”), is subsequently
determined to be liable and/or responsible for the
Expenses incurred because of such act or omission
or by contract, O/SCHP will be subrogated to, and
may enforce the rights of, the Member against the
Third Party(ies) for such Expenses.
In addition to and notwithstanding the subrogation
rights granted to O/SCHP, by becoming a Member of
O/SCHP and/or accepting benefits under O/SCHP and
the provision of health care services by O/SCHP,
including payment of the Expenses, each Member does
hereby assign and shall be deemed to have assigned
to O/SCHP all rights and claims against such Third
Party(ies) for such Expenses, including the right
to compromise claims independently of the Member,
to commence and prosecute any legal proceeding, and
to pursue judgments through collection, in its name
or in the Member's name.
Any settlement, compromise, or release by a Member
in favor of a Third Party, made in violation of the
provisions of this [section], shall be deemed to
include the full amount due O/SCHP, up to the
amount of the settlement, compromise or release,
regardless of whether the Member receives full or
partial recovery from such Third Party, and any
funds received by the Member shall be held in trust
by the Member and/or his attorney or other
representative and paid to O/SCHP without any
deductions for attorneys' fees or other costs.
At the time the applicable GHSA was issued to LeCler Printing, OHP
was known as Ochsner/Sisters of Charity Health Plan, Inc. (O/SCHP).
Subsequently, the name was changed to Ochsner Health Plan, Inc.
(OHP), which is used in this opinion.
7. Section 502(a)(1)(B) creates a civil enforcement mechanism
whereby an ERISA plan participant or beneficiary is authorized to
bring a civil action “to recover benefits due him under the terms
of his plan, to enforce his rights under the terms of the plan, or
to clarify his rights to future benefits under the terms of the
plan.” 29 U.S.C. § 1132(a)(1)(B).
8. Apparently in support of its claim that the federal courts have
jurisdiction over the instant action, OHP has asserted in a letter
submitted to the Court under FED. R. APP. P. 28(j) that ERISA
authorizes OHP to bring suit requesting the imposition of a
constructive trust over that portion of Arana's settlement with
United Fire that is being maintained in a trust account by Arana's
attorney. In support of this argument, OHP cites Bauer vv. Gytten,
2002 U.S. Dist. LEXIS 7246 (D.N.D. Apr. 22, 2002) and Admin. Comm.
of the Wal-Mart Stores, Inc. Assoc. Health & Welfare Plan v. Varco,
2002 U.S. Dist. LEXIS 530 (N.D. Ill. Jan. 14, 2002). However, the
fact that OHP may have a federal cause of action that it has chosen
not to pursue, or even assert as a counterclaim in the instant
action, does not convert Arana's state court declaratory judgment
action to a claim arising under federal law and thus subject to
complete preemption.
9. Arana's case therefore does not present a situation in which a
participant or beneficiary seeks benefits withheld by an ERISA plan
pursuant to a plan provision authorizing coordination of benefits,
e.g., Clancy v. Employer's Health Ins. Co., 82 F. Supp. 2d 589, 596
(E.D. La. 1999), or in which a participant or beneficiary seeks to
recover benefits she claims were wrongly reimbursed to an ERISA
plan out of funds recovered from a third party, e.g. Carducci v.
Aetna U.S. Healthcare, 204 F. Supp. 2d 796, 803 (D.N.J. 2002). The
Court need not address whether a claim brought under the
circumstances described in Clancy and/or Carducci is properly
characterized as a claim for benefits under ERISA section
502(a)(1)(B).
10. Arana's claim is in this regard distinguishable from the claim
at issue in the second footnote of the Supreme Court's Rush
Prudential opinion. In Rush Prudential, the ERISA plan participant
argued that the relevant state law created an extra condition with
which the plan was required to comply in the course of making
benefit determinations. As a result, the participant essentially
claimed that the state law operated to insert additional terms into
the plan. In contrast, Arana asserts that the subrogation and
reimbursement provisions contained in the GHSA are illegal under
22:663, not that 22:663 imposes additional duties on OHP. If the
subrogation and reimbursement provisions are struck from the GHSA,
as Arana asserts that 22:663 requires, the GHSA still will not
afford Arana any affirmative right, enforceable under section
502(a)(1)(B), to retain possession of the full amount of his tort
settlement.
Furthermore, Arana's claim is not subject to the alternative
characterization discussed in Rush Prudential's footnote two,
further limiting the applicability of that footnote to the instant
case. The plaintiff-participant in Rush Prudential had not yet
received all of the health care benefits she claimed were due her
under the terms of the plan, and ultimately sought to obtain
additional benefits upon the completion of the independent medical
review she requested. As discussed above, unlike the plaintiff in
Rush Prudential, Arana already has received all of the benefits due
him under the terms of the LeCler plan.
11. This Circuit previously has refused to comment on the scope of
complete preemption under section 502(a), and specifically has
refused to address whether the complete preemption doctrine extends
only to claims under section 502(a)(1)(B). See Giles v. NYLCare
Health Plans, Inc., 172 F.3d 332, 336 n.6; McClelland, 155 F.3d at
517 n.34. Assuming arguendo that complete preemption under section
502(a) is not so limited, Arana's 22:663 claim would not fall
within the scope of section 502(a)(3) for the same reasons it
cannot be characterized as a suit under section 502(a)(1)(B) to
enforce the terms of the LeCler plan. Section 502(a)(3) authorizes
plan beneficiaries to bring civil enforcement actions only “(A) to
enjoin any act or practice which violates any provision of this
subchapter or the terms of the plan, or (B) to obtain other
appropriate equitable relief (i) to redress such violations, or
(ii) to enforce any provisions of this subchapter or the terms of
the plan.” 29 U.S.C. § 1132(a)(3). Even putting aside for a
moment the potentially problematic technical distinctions between
legal and equitable remedies, see Great-West Life & Annuity Ins.
Co., 122 S.Ct. at 714-17, Arana alleges that OHP's subrogation and
reimbursement claims violate 22:663, not ERISA and not the terms of
the LeCler plan.
12. The Court notes that on one previous occasion a panel of this
Circuit has assumed jurisdiction and ruled on the merits of a claim
seeking, under Mississippi law, relief similar to the declaratory
judgment requested by Arana. See Walker v. Wal-mart Stores, Inc.,
159 F.3d 938 (5th Cir. 1998) (per curiam). “Even though subject
matter can be raised sua sponte, we take nothing away from our
failure to do so” in Walker. Giles, 172 F.3d at 338 n.12.
13. While ERISA does not authorize punitive damages at all, it does
authorize the discretionary award of attorney's fees to a plan
participant or beneficiary. 29 U.S.C. § 1132(g)(1).
14. On appeal, OHP argues for the first time that Arana's class
allegations are preempted by the Medicare Act, 42 U.S.C. § 1395,
and that this Medicare Act preemption provides an additional ground
for the exercise of federal question jurisdiction. OHP did not
raise this issue either in its Notice of Removal or at any time
during which this case was pending before the district court, and
we will not consider it now. In any event, there is insufficient
information in the record to evaluate this claim by OHP, even if we
were to reach its merits.