F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
MAY 29 2002
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
DOUGLAS W. MOFFETT,
Plaintiff - Appellant,
v. No. 00-8083
HALLIBURTON ENERGY
SERVICES, INC., a Delaware
corporation; TRUSTEES OF THE
HALLIBURTON COMPANY
EMPLOYEES TRUST; ENERGY
SERVICES GROUP HUMAN
RESOURCES COMMITTEE,
appointed pursuant to the Trustees of
the Halliburton Company Employees
Trust; HARTFORD LIFE AND
ACCIDENT INSURANCE
COMPANY, a Connecticut
corporation,
Defendants - Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF WYOMING
(D.C. NO. 00-CV-1016-J)
C. John Cotton, Cotton Law Offices, Gillette, Wyoming, for Plaintiff-Appellant.
Stuart B. Johnston, Jr., Vinson & Elkins, LLP, Dallas, Texas (Anissa A.
Allbritton, Vinson & Elkins, LLP, Austin, Texas; and Roger E. Shumate, Murane
& Bostwick, LLC, Casper, Wyoming, with him on the brief), for Halliburton
Defendants-Appellees.
Michael S. Beaver (Parker W. Dragovich with him on the brief), Holland & Hart,
LLP, Greenwood Village, Colorado, for Hartford Defendant-Appellee.
Before HENRY , ANDERSON , and MURPHY , Circuit Judges.
ANDERSON , Circuit Judge.
Plaintiff Douglas W. Moffett appeals from the dismissal with prejudice of
his complaint alleging various ERISA and Wyoming state law violations by
defendants Halliburton Energy Services, Inc., two Halliburton entities, and
Hartford Life & Accident Insurance Co. We affirm.
BACKGROUND
Moffett was employed by Halliburton as a cementer from 1989 to 1994.
During this time, Halliburton maintained an Income Disability Plan, which was
subject to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C.
§§ 1001, et. seq . Defendant Trustees of the Halliburton Company Employees’
Trust (“Trustees”), was initially responsible for administering the Plan. The
Trustees, in turn, created defendant Energy Services Group Human Resources
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Committee (“Committee”), and delegated to the Committee the responsibility of
functioning as Plan administrator. 1
During his employment, which involved heavy labor, Moffett suffered back
injuries, as a result of which he qualified for long term disability payments of,
initially, $1,649.44 per month, effective June 9, 1994. Moffett also applied for
and ultimately was awarded a Permanent Partial Disability Award from the
Wyoming Workers’ Compensation Fund totaling $46,748.40. Moffett utilized the
award for bills and other obligations and expenses, while continuing to receive
monthly payments of $1,649.44 from the Halliburton Plan. During the negotiation
of Moffett’s final Wyoming Workers’ Compensation fund award, neither
Halliburton nor Hartford ever alleged that they were entitled to offset that award
against the disability payments they had been making to Moffett.
At some point in 1996 or 1997, defendant Hartford Life & Accident
Insurance Co. agreed to provide and/or administer insurance and other benefits
(neither the record nor the briefs assist us in the specifics of this agreement) to
Halliburton employees, including Moffett. Hartford began providing some
services to Halliburton in connection with its Plan, including the determination of
benefit claims. In any event, on December 19, 1997, the Halliburton defendants
1
We refer hereafter to these three Halliburton entities collectively as the
“Halliburton defendants.”
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and Hartford entered into an agreement, entitled the “Claim Reserve Buy-Out
Agreement,” pursuant to which Halliburton’s self-funded reserves, totaling
$20,438,000, were transferred to Hartford as a premium for an insurance policy
from Hartford. Hartford then insured benefit claims under the Plan. It is unclear
who the Plan administrator was following the execution of the Buy-Out
Agreement, although there is some evidence in the record that the Halliburton
Company Benefits Committee was designated as the Plan administrator.
Hartford sent Moffett a letter on May 29, 1998, terminating his monthly
disability payments, asserting that Hartford and Halliburton were entitled to a
setoff for the workers’ compensation permanent partial disability award he had
previously received. On August 2, 1998, Moffett received a disability
determination from Social Security, and he began receiving monthly payments of
$775 in November 1998.
During the subsequent twenty-two months, Moffett and Hartford exchanged
correspondence, during which Moffett endeavored to determine why his benefits
had been discontinued and Hartford continued to refuse to provide Moffett with
any disability payments. In particular, Moffett alleges he sent correspondence to
“defendants” on June 23, July 17, and August 7, 1998, “generally requesting
review and rescission of the May 29, 1998, decision,” Plaintiff’s First Amended
Complaint (“A.C.”) at § B, ¶ 25, Appellant’s Br., App. 4 (“App. 4”) at 11, and
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informing “defendants” that the “Workers’ Compensation award was not a ‘tort
settlement’” and that he had not received a “total disability” award from anyone.
Id. Finally, on February 6, 2000, Hartford sent Moffett a letter explaining that it
had incorrectly terminated his benefits, and it subsequently reimbursed Moffett
approximately $16,000 for benefits wrongfully withheld. Moffett does not
dispute that he has received all benefits to which he is entitled.
This action followed, in which Moffett alleged that Halliburton, the
Trustees and the Committee breached fiduciary duties under ERISA, including the
reporting and disclosure requirements, particularly, 29 U.S.C. §§ 1021, 1022,
1023, 1024, 1104, 1105, 1132 and 1133, and subjecting them to the penalties and
remedial provisions of 29 U.S.C. §§ 1109 and 1132. He alleges that the belated
award of $16,000 erroneously failed to include statutory penalties, consequential
damages, attorney’s fees and costs, and any other “remedial or equitable remedies
available under ERISA.” A.C. at § B, ¶ 50, App. 4 at 16. He also asserted
claims for waiver and estoppel. 2
Moffett also brought a claim against Hartford for “the tort of insurance bad
faith,” id. at § D-1, ¶ 6, App. 4 at 23, as well as a claim under Wyo. Stat. Ann.
§ 26-15-124 for failure to act in a timely manner and unreasonably denying an
insurance payment. He alleged alternative claims against Hartford, asserting the
2
He does not pursue these waiver and estoppel claims on appeal.
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same ERISA violations as against the other defendants, in the event Hartford is
deemed an administrator or fiduciary under ERISA. In addition to the damages
discussed above, Moffett also sought punitive damages.
The Halliburton defendants filed a motion to dismiss under Fed. R. Civ. P.
12(b)(6) for failure to state a claim or, alternatively, a motion for a more definite
statement under Rule 12(e). They argued that Moffett failed to adequately allege
any ERISA violation, and that he has identified no form of relief, equitable or
otherwise, to which he would be entitled under ERISA where he has already
received, albeit belatedly, the full benefits owed him. Defendant Hartford also
asserted that Moffett’s state law claims against it were preempted by ERISA. The
district court agreed with all defendants and dismissed Moffett’s complaint with
prejudice.
Moffett appeals, arguing the district court erred in: (1) dismissing his
complaint without “declaring [Moffett’s] entitlement to benefits without set off
by Defendants,” Appellant’s Br. at 12; (2) dismissing his complaint for “the
failure or refusal of the Halliburton Defendants to comply with the mandatory
reporting requirements of ERISA” and the refusal to provide requested
information, id. at 15, 17; (3) dismissing his complaint alleging that the
Halliburton defendants breached their fiduciary duties in connection with the
Claim Reserve Buy Out Agreement; (4) dismissing his claims for statutory
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penalties and money damages under ERISA; and (5) dismissing his state law
claims against Hartford as preempted.
DISCUSSION
“We review de novo the district court’s grant of a 12(b)(6) motion to
dismiss, bearing in mind that ‘all well-pleaded allegations in the . . . complaint
are accepted as true and viewed in the light most favorable to the nonmoving
party.’” Stidham v. Peace Officer Standards and Training , 265 F.3d 1144, 1149
(10th Cir. 2001) (quoting Sutton v. Utah State Sch. for the Deaf & Blind , 173
F.3d 1226, 1236 (10th Cir. 1999)). Because we review the sufficiency of the
complaint alone, we look only at the four corners of the complaint. 3
See Dean
Witter Reynolds, Inc. v. Howsam , 261 F.3d 956, 960 (10th Cir. 2001)
(“[G]enerally courts should not look beyond the confines of the complaint itself
when deciding a Rule 12(b)(6) motion to dismiss.”). However, “we need not
accept Appellant’s conclusory allegations as true” when we review the grant of a
Rule 12(b)(6) motion. Southern Disposal, Inc. v. Texas Waste Mgmt. , 161 F.3d
1259, 1262 (10th Cir. 1998).
Thus, despite Moffett’s references to his motion for partial summary
3
judgment and affidavits in support thereof, we do not consider those materials.
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Focusing strictly on the allegations in Moffett’s complaint, we agree with
the district court and defendants that he has failed to state a claim for a violation
of ERISA. We consider Moffett’s claims, as articulated in his complaint, against
the Halliburton defendants and against Hartford in turn.
I. Claims Against Halliburton Defendants
Moffett’s complaint contains three primary groups of claims against the
Halliburton defendants. He also scatters throughout his complaint references to
other ERISA provisions. First, Moffett alleges that “Defendants are in violation
of ERISA, and subject to statutory penalties, including but not limited to those
referenced in 29 U.S.C. § 1132, which provides for Defendants to be ‘personally
liable to (Plaintiff) . . . in the amount of . . . $100 per day’ for enumerated
violations.” A.C. at § C-1, ¶ 2, App. 4 at 20.
Section 1132(a)(1)(A) of ERISA permits a participant or beneficiary to
bring an action for the relief provided in subsection (c) which, in turn, provides a
penalty for an administrator “who fails to meet the requirements of . . . section
1166 . . . or section 1021(e)(1) or “who fails or refuses to comply with a request
for any information which such administrator is required by this subchapter to
furnish.” 29 U.S.C. § 1132(c)(1)(A) and (B). Section 1166 of ERISA applies to
group health plans, not disability income plans. Section 1021(e)(1) of ERISA
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references transfers by employee pension benefit plans to health benefits
accounts. Accordingly, neither section has any applicability to this case. Except
as discussed more fully below, Moffett does not identify what information
“required by this subchapter” he requested and did not receive. Thus, he has
failed to state a claim under section 1132(a)(1)(A).
Section 1132(a)(1)(B) of ERISA permits a participant or beneficiary to
bring an action “to recover benefits due to 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). ERISA further
permits an action by a participant or beneficiary “to obtain other appropriate
equitable relief.” 29 U.S.C. § 1132(a)(3)(B).
Assuming Moffett seeks relief under section 1132(a)(1)(B), the conduct
Moffett alleges is redressable under section 1132 consisted of defendants’:
A. . . . fail[ure] to provide written notice . . . ;
B. . . . fail[ure] to provide “adequate notice in writing . . . setting
forth the specific reasons for (the) denial, written in a manner
reasonably calculated to be understood by the participant” as
required by 29 USC § 1133(1);
C. . . . fail[ure] to provide “opportunity . . . for a full and fair
review . . . of the decision denying the claim,” as required by
29 USC § 1133(2); and
D. . . .fail[ure] to provide Plaintiff with information as required
by ERISA.
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A.C. at § C-1, ¶ 3, App. 4 at 20. Thus, the only acts Moffett alleges violate
section 1132(a)(1)(B) are purported violations of sections 1133(1) and (2).
We first note that Moffett’s first and fourth claims, alleging “failure to
provide written notice” and failure to provide “information as required by
ERISA,” are vague and conclusory. We have held that an ERISA claim based
upon an alleged failure to provide information is subject to dismissal under Rule
12(b)(6) where the plaintiff fails to identify what information he alleges was
wrongfully withheld. See Maez v. Mountain States Tel. and Tel., Inc. , 54 F.3d
1488, 1507 (10th Cir. 1995).
Additionally, and more fundamentally, when Moffett accuses the
defendants of failing to provide him with information about the reasons for the
denial of his benefits and/or any avenues for review of that denial, he
inadequately alleges a violation of section 1133 because that section requires
“every employee benefit plan ” to “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.” 29 U.S.C. § 1133(1). Similarly,
the plan must “afford a reasonable opportunity to any participant whose claims for
benefits has been denied for a full and fair review by the appropriate named
fiduciary of the decision denying the claim.” 29 U.S.C. § 1133(2). Moffett
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makes no allegations about the Plan ’s failure to provide notice or other
information. He alleges that the Halliburton defendants failed in that regard.
However, an alleged failure by the employer or the plan administrator to provide
such notice and/or opportunity is not a violation of section 1133. See Walter v.
Int’l Ass’n. of Machs. Pension Fund , 949 F.2d 310, 315 (10th Cir. 1991).
In his second group of claims, Moffett’s amended complaint charged that
“Defendants were under and owed Plaintiff a fiduciary duty pursuant to the
provisions of ERISA 29 USC § 1001 et. seq.” A.C. § C-3, ¶ 2, App. 4 at 21. He
further alleges that “Defendants breached the fiduciary duty owed pursuant to
ERISA and to Plaintiff.” Id. at ¶ 30. Those conclusory allegations fail to
establish the basis for an alleged breach of fiduciary duties. 4
Moffett’s third group of claims is entitled “waiver, estoppel and attorney
fees and costs.” As indicated, he does not pursue these on appeal.
4
He also alleges that, in connection with the execution of the Buy-Out
Agreement, the Halliburton defendants “breached their fiduciary duties under
ERISA, including reporting requirements and other fiduciary duty
responsibilities.” A.C. at § B, ¶ 21-2, App. 4 at 9. We explain, infra, that
Moffett has limited the relief he seeks for the alleged reporting violations. His
other allegation regarding the breach of “other fiduciary duty responsibilities” is
wholly conclusory and vague. Moffett expands upon his fiduciary duty
allegations in his brief on appeal, more clearly arguing that, in his view,
defendants’ alleged violations of ERISA’s reporting requirements and their
conduct in entering into the Buy-Out Agreement constituted a breach of fiduciary
duty. However, because we are reviewing a Rule 12(b)(6) dismissal, we look
only at Moffett’s complaint.
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In addition to those three groups of claims, Moffett alleges general
violations of ERISA as follows: failure to provide “written notice and
information required pursuant to ERISA . . . at the time of commencement of
coverage under the Plan,” id. at § B, ¶ 3, App. 4 at 4, as well as breach of
“fiduciary obligations owed pursuant to ERISA . . . at the time of commencement
of coverage under the Plan.” Id. at ¶ 3a. He further asserts that the Halliburton
defendants failed to inform him that they had entered into the Buy-Out
Agreement, but he does not articulate how that violated ERISA. He also alleges
that, following the execution of the Buy-Out Agreement, the Halliburton
defendants did not “provide . . . the name and address of the ‘Plan Administrator,’
and/or . . . other information required pursuant to ERISA.” Id. at ¶ 21-6, App. 4
at 10. These vague and general allegations fail to state a claim for a violation of
ERISA.
Moffett also lists the following series of alleged statutory violations:
following the execution of the “Claim Reserve Buy Out Agreement,” he claims
the Halliburton defendants “failed to provide the protections afforded pursuant to
ERISA and the Plan, including but not limited to the protections and guarantees
afforded by 29 U.S.C. § 1021-1024, 1104, 1105, 1109, 1132 and 1133.” Id. at
¶ 50-1, App. 4 at 17. He further alleges that defendants failed to furnish plan
beneficiaries and participants with a “written plan or summary thereof;” with
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“information regarding modifications of and to the plan or summary;” and
required “written notice.” Id. at ¶ 52(A)-(C), App. 4 at 18. He repeats his
allegations of failure to provide him with the reasons for the denial of his benefits
and any review mechanism thereof. Id. at ¶ 52(D)-(E). Moffett also alleges that
defendants committed some error and/or violation in entering into the Buy-Out
Agreement, but he alleges no provision of ERISA allegedly violated thereby. Id.
at ¶ 52(F).
Sections 1021-24 of ERISA set forth reporting and disclosure requirements
for plan administrators, see 29 U.S.C. §§ 1022-24, and include the obligation to
provide participants with summary plan descriptions, including descriptions of
any changes and modifications of the plan. Moffett concedes that he did not
notify defendants that he had never received any such information, nor did he
allege that he ever asked for it prior to this lawsuit. At oral argument on appeal,
Moffett conceded that the only remedy he seeks for these violations is a
declaratory judgment directing defendants to provide information to Moffett and
all other plan participants. Since he failed to seek such a declaratory judgment
before the district court, however, we will not consider his request on appeal.
Sections 1104, 1105 and 1109 provide for remedies for a breach of
fiduciary duty, see 29 U.S.C. §§ 1104-05 and 1109, and we have explained, supra ,
that Moffett failed to state a claim for breach of any fiduciary duties. We have
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also explained, supra , that Moffett failed to state a claim for a violation of section
1133 which would implicate the remedial provisions of section 1132.
Finally, Moffett seeks a variety of remedies for all of the alleged ERISA
violations, but he pursues none which are actually available under ERISA. His
complaint requests “any relief authorized pursuant to 29 U.S.C. § 1109 or § 1132,
and specifically including equitable and remedial remedies.” A.C. at § C-3, ¶ 5,
App. 4 at 22. More specifically, he seeks:
(a) the maximum penalties allowed pursuant to ERISA, (b) attorney
fees, (c) costs and expenses, and, in the event that it is determined
that ERISA is inapplicable and/or does not bar other claims, (d) loss
of income, loss of property, loss of credit and credit reputation,
mental and emotional distress, pain and suffering, loss of enjoyment
of life and punitive damages, (f) remedies and relief afforded by 29
U.S.C. § 1001 et. seq. for breach of duty by [d]efendants . . .
including remedial, equitable or other remedies provided for by 29
U.S.C. § 1109 and 1132, and (e) such other damages and relief as
may be allowed by law.
Id. at § B, ¶ 54, App. 4 at 19.
As indicated above, he failed to adequately allege a violation of
section 1132(c), which provides for a statutory penalty of $100 per day. With
respect to the other, non-statutory remedies he pursues, he did not identify in his
complaint what specific equitable relief he desires. 5
To the extent we read his
To the extent he now requests, in his brief on appeal and at oral argument,
5
declaratory relief of some kind, we must reject it because he failed to seek it in
his complaint.
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complaint as seeking non-statutory remedies and/or damages, in the form of
monetary compensation for economic or other harm suffered because of the delay
in his receipt of his benefits, we agree with the district court that those remedies
are not available under ERISA. See Great-West Life & Ann. Ins. Co. v. Knudson ,
534 U.S. 204, __, 122 S. Ct. 708, 718 (2002) (“[Section 1132(a)(3)], by its terms,
only allows for equitable relief.”); Massachusetts Mut. Life Ins. Co. v. Russell ,
473 U.S. 134, 148 (1985) (“[T]he relevant text of ERISA, the structure of the
entire statute, and its legislative history all support the conclusion that in [29
U.S.C. § 1109(a)] Congress did not provide, and did not intend the judiciary to
imply, a cause of action for extra-contractual damages caused by improper or
untimely processing of benefit claims.”); Kerr v. Charles F. Vatterott & Co. , 184
F.3d 938, 943 (8th Cir. 1999) (“The Supreme Court confirmed that section
1132(a)(3) recovery is limited to classic equitable remedies such as injunctive,
restitutionary, or mandamus relief, and does not extend to compensatory
damages.”).
We accordingly affirm the district court’s grant of the Halliburton
defendants’ motion to dismiss for failure to state a claim. We turn now to
Moffett’s claims against Hartford.
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II. Claims Against Hartford
Moffett asserts two Wyoming state law claims against Hartford: one for
the “tort of insurance bad faith” and one for breach of the statutory duty to accept
or reject insurance claims within a specified time period and not to refuse to pay
“unreasonabl[y] or without cause.” Wyo. Stat. Ann. § 26-15-124. Moffett also
seeks punitive damages, an issue he does not pursue on appeal, and he alleges
“alternative” claims against Hartford, identical to the ERISA claims he brought
against the Halliburton defendants. The district court granted Hartford’s motion
to dismiss these claims for failure to state a claim. We affirm.
“ERISA comprehensively regulates, among other things, employee welfare
benefit plans that, ‘through the purchase of insurance or otherwise,’ provide
medical, surgical, or hospital care, or benefits in the event of sickness, accident,
disability, or death.” Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 41, 44 (1987)
(quoting 29 U.S.C. § 1002(1)). To facilitate that comprehensive regulation,
Congress enacted a preemption clause which preempts any state law which
“relate[s] to any employee benefit plan.” 29 U.S.C. § 1144(a). Two further
provisions contain exceptions to that broad preemption clause: “The saving
clause excepts from the pre-emption clause laws that ‘regulat[e] insurance. . . .’
The deemer clause makes clear that a state law that ‘purport[s] to regulate
insurance’ cannot deem an employee benefit plan to be an insurance company.”
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Pilot Life , 481 U.S. at 45 (quoting 29 U.S.C. §§ 1144(b)(2)(A) and (B)). The
Supreme Court has expressly observed that ERISA’s preemption provisions are
“deliberately expansive.” Id. at 46; see also Shaw v. Delta Air Lines, Inc. , 463
U.S. 85, 98 (1983).
Because there is no question that the tort of insurance bad faith “relates to”
the Halliburton Plan, an ERISA-regulated employee benefit plan, Moffett’s state
law claim for bad faith is preempted unless exempted from preemption by the
saving clause. That clause exempts from preemption “any law . . . which
regulates insurance.” 29 U.S.C. § 1144(b)(2)(A). Moffett argues that the
Wyoming law of bad faith insurance regulates insurance so as to escape ERISA’s
preemption clause. We agree with the district court that it does not.
“Our precedent provides a framework for resolving whether a state law
‘regulates insurance’ within the meaning of the saving clause.” Unum Life Ins.
Co. v. Ward , 526 U.S. 358, 367 (1999). The first inquiry is “whether, from a
‘common-sense view of the matter,’ the contested prescription regulates
insurance.” Id. (quoting Metropolitan Life Ins. Co. v. Massachusetts , 471 U.S.
724, 740 (1985)). “Second, we consider three factors employed to determine
whether the regulation fits within the ‘business of insurance’ as that phrase is
used in the McCarran-Ferguson Act.” Id. The three McCarran-Ferguson factors
are (1) “whether the practice has the effect of transferring or spreading a
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policyholder’s risk;” (2) “whether the practice is an integral part of the policy
relationship between the insurer and the insured;” and (3) “whether the practice is
limited to entities within the insurance industry.” Metropolitan Life Ins. , 471
U.S. at 743 (internal citations and quotations omitted); see also Pilot Life , 481
U.S. at 48-49. A state regulation need not satisfy all three factors in order to
satisfy the “regulate insurance” requirement of ERISA’s saving clause. Rather,
the factors are “guideposts, not separate essential elements.” Unum Life Ins. , 526
U.S. at 374 (internal quotation omitted).
Relying heavily on the Supreme Court’s analysis in Pilot Life of the
Mississippi law of bad faith , which the Court held did not regulate insurance and
therefore was preempted by ERISA, the district court concluded that Wyoming’s
law of bad faith was also preempted. We agree. As the Supreme Court observed
in Pilot Life :
A common-sense view of the word “regulates” would lead to the
conclusion that in order to regulate insurance, a law must not just
have an impact on the insurance industry, but must be specifically
directed toward that industry. Even though the Mississippi Supreme
Court has identified its law of bad faith with the insurance industry,
the roots of this law are firmly planted in the general principles of
Mississippi tort and contract law. Any breach of contract, and not
merely breach of an insurance contract, may lead to liability for
punitive damages under Mississippi law.
Pilot Life , 481 U.S. at 50. The Court has further explained that a law regulates
insurance if it “homes in on the insurance industry and does ‘not just have an
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impact on [that] industry.’” Unum Life Ins. , 526 U.S. at 368 (quoting Pilot Life ,
481 U.S. at 50). Thus, in Unum Life Ins. the Court found that California’s
notice-prejudice rule, whereby an insurer must prove prejudice from an insured’s
failure to give timely notice of a claim in order to enforce its proof-of-claim
requirements, did specifically regulate insurance and therefore was not preempted
by ERISA. Id. at 372.
Moffett argues that Wyoming’s tort of bad faith insurance “homes in on the
insurance industry” and, like California’s notice-prejudice rule, is more uniquely
directed at that industry than is the Mississippi law of bad faith. We disagree.
While the Wyoming tort-based claim of bad faith insurance breach may be more
narrowly applied than Mississippi’s law of bad faith, it does not “home in” on the
insurance industry alone, as does California’s notice-prejudice law.
As the Wyoming Supreme Court has observed, Wyoming “has recognized a
tort-based claim for breach of the implied covenant of good faith in limited
circumstances.” Scherer Constr., LLC. v. Hedquist Constr., Inc. , 18 P.3d 645,
652 (Wyo. 2001). Those limited circumstances include employment cases “where
a ‘special relationship’ exists between the employer and the employee,” id. , and
insurance cases. The Wyoming Supreme Court has noted that “[a] special
relationship is also an element of a tort-based claim in the insurance context,
which automatically exists by virtue of the unequal bargaining power the insurer
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has over an insured.” Id. at n.1. Thus, the tort of bad faith breach as developed
in Wyoming is not unique to the insurance industry; rather, it is unique to those
settings in which a “special relationship” exists, including the insurance and
employment contexts.
Applying the McCarran-Ferguson factors to Wyoming’s bad faith law, and
considering Pilot Life and other cases applying those factors to comparable state
laws, we conclude that Wyoming’s law does not regulate insurance such that it
falls within ERISA’s saving clause. Wyoming’s bad faith law does not have the
effect of transferring or spreading policyholder risk. See Pilot Life , 481 U.S. at
50 (holding that Mississippi bad faith law “does not effect a spreading of
policyholder risk”); Gaylor v. John Hancock Mut. Life Ins. Co. , 112 F.3d 460,
466 (10th Cir. 1997) (“Oklahoma’s bad faith law does not regulate the spreading
of policyholder risk.”); Kelley v. Sears, Roebuck & Co. , 882 F.2d 453, 456 (10th
Cir. 1989) (holding that Colorado’s common law of bad faith does not “spread[]
policyholder risk”).
Nor is Wyoming’s bad faith law an integral part of the policy relationship
between the insured and the insurer. The “law of bad faith does not define the
terms of the relationship between the insurer and the insured; it declares only that,
whatever terms have been agreed upon in the insurance contract, a breach of that
contract may in certain circumstances allow the policyholder to obtain punitive
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damages.” Pilot Life , 481 U.S. at 51; see also Gaylor , 112 F.3d at 466; Kelley ,
882 F.2d at 456. Further, although associated with the insurance industry, along
with the employment industry, Wyoming’s bad faith law has its roots in general
principles of tort and contract law. Finally, as we have held with respect to
Oklahoma and Colorado bad faith laws, and as the Supreme Court held with
respect to Mississippi’s bad faith law, Wyoming’s bad faith law conflicts with
ERISA’s civil enforcement remedies. See Pilot Life , 481 U.S. at 54 (“The
deliberate care with which ERISA’s civil enforcement remedies were drafted and
the balancing of polices embodied in its choice of remedies argue strongly for the
conclusion that ERISA’s civil enforcement remedies were intended to be
exclusive.”); see also Gaylor , 112 F.3d at 466; Kelley , 882 F.2d at 456.
We similarly hold that Moffett’s claim under Wyo. Stat. Ann. § 26-15-124
is preempted because it conflicts with ERISA’s exclusive remedial scheme. 6
We
6
Our conclusion that ERISA preempts section 26-15-124 includes that
section’s attorney’s fee provision, which states that “if it is determined that the
company refuses to pay the full amount of a loss covered by the policy and that
the refusal is unreasonable or without cause, any court in which judgment is
rendered for a claimant may also award a reasonable sum as an attorney’s fee.”
We agree with the majority of courts addressing this issue, which have concluded
that ERISA preempts state attorney fee statutes, at least to the extent that they fail
to use the applicable ERISA standards for awarding attorney’s fees. See, e.g.,
San Francisco Culinary, Bartenders and Serv. Employees Welfare Fund v. Lucin,
76 F.3d 295, 298 (9th Cir. 1996); Allison v. Continental Cas. Ins. Co., 953 F.
Supp. 127, 129 (E.D. Va. 1996); Gelzinis v. John Hancock Mut. Life Ins. Co., No.
CIV. A. 93-0569, 1993 WL 131566, at *5 (E.D. Pa. 1993); Milano v. Connecticut
(continued...)
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further uphold the dismissal of Moffett’s alternative ERISA claims against
Hartford, for the same reasons we affirmed dismissal of those claims against the
Halliburton defendants.
CONCLUSION
For the foregoing reasons, we AFFIRM the dismissal of Moffett’s
complaint against defendants.
6
(...continued)
Gen. Life Ins. Co., No. 92 C 1606, 1992 WL 168801, at **4-5 (N.D. Ill. 1992).
Cf. Ford v. Uniroyal Pension Plan, 154 F.3d 613, 617 (6th Cir. 1998) (holding
that incorporation of state standards for calculating attorney fee award in ERISA
case would conflict with ERISA’s exclusive remedial scheme).
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