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Preemption and When it Does Not Apply: N.D. Ohio

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  • Preemption and When it Does Not Apply: N.D. Ohio

    In a recent case from Ohio, the court found that preemption did not apply. The court granted Defendant's Motion for Partial Summary Judgement as to: Plaintiff's ERISA preemption claim, Plaintiff's ADA preemption claim, and Plaintiff's claim of unjust enrichment. In relevant part, the opinion stated:

    Curiously, MMO itself states the following in support of its assertion that it was not required to disclose the ERISA plans to Air Evac: “These twelve ERISA plans are not relevant to the dispute. Indeed, Air Evac, has not brought claims for payment under terms of any member’s specific plans, and instead alleges that a distinct contract exists between it and Medical Mutual.” (Pl.’s Opp’n to Def.’s Mot. to Strike 3– 4.) The court agrees with MMO on this point, and it must follow that the ERISA plan is not primarily related to Air Evac’s claim. As in Hospice of Metro Denver, Inc. v. Grp. Health Ins. of Oklahoma, Inc., 944 F.2d 752, 755 (10th Cir. 1991), Air Evac has “not alleged any conduct on the part of [MMO] which relates to the administration of the plan, to the processing of any covered claim, or which impinges on any employee’s ERISA rights.” Furthermore, the evidence establishes that the denial of payment to Air Evac was “a mere consequence of its denial of coverage to [the patient;] [the plaintiff] does not claim any rights under the plan, and does not claim any breach of the plan contract.” Id. at 754. This outcome is consistent with this court’s observation that “courts generally find that preemption does not exist when a state law contract claim is based upon a relationship that does not involve the ERISA plan itself.” (Order of Feb. 28, 2017, 15) (citing Marks, 342 F.3d at 453; Blue Cross of California v. Anesthesia Care Assocs. Med. Grp., Inc., 187 F.3d 1045, 1054 (9th Cir. 1999)). Here, Air Evac “patients are not a party to this action” and “[their] rights to receive benefits under the plan [are] not at issue.” Hospice of Metro Denver, Inc., 944 F.2d at 754. The present facts are readily distinguishable from Zuniga, 52 F.3d at 1397, wherein a plaintiff doctor was denied preferred provider status under particular ERISA plans, and therefore, could not receive reimbursement for services provided. Because Zuniga had a previous settlement agreement with Blue Cross and Blue Shield of Michigan, which guaranteed he would not be treated differently from any other provider, Zuniga sued for breach of the agreement. Id. The court held that it could only evaluate a potential breach of agreement by reading the relevant ERISA plans and determining how the plans qualified preferred providers. Id. at 1402. Again, by contrast, there is no present allegation by Air Evac of MMO denial under particular ERISA plans. Ultimately, the court “will not conclude that state-law claims are preempted where their 'effect on employee benefits plans is merely tenuous, remote or peripheral.’” Marks, 342 F.3d at 452 (citing Cromwell v. Equicor–Equitable HCA Corp., 944 F.2d 1272, 1276 (6th Cir.1991)). Accordingly, the court grants Air Evac’s Motion for Partial Summary Judgment, as to MMO’s claim for ERISA preemption of Air Evac’s state breach of contract claim. The court denies MMO’s Motion for Partial Summary Judgment, as to ERISA preemption of Air Evac’s breach of contract counterclaim.
    The full opinion is attached.
    Attached Files