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ERISA Preemption and "Implied-in-fact" contracts: D.N.J.

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  • ERISA Preemption and "Implied-in-fact" contracts: D.N.J.

    In a recent case out of New Jersey, the Plaintiff, a surgeon who provided necessary medical care to a patient, sued the Defendant for breach of contract, promissory estoppel, account stated, and fraudulent inducement in NJ state court after the Defendant refused to pay the normal and reasonable charges associated with the surgery. The Defendant then removed the case to federal court, and moved to dismiss on the grounds that ERISA completely preempted the Plaintiff's claims. The court reasoned as follows:

    The state laws at issue here—breach of contract, promissory estoppel, account stated, and fraudulent inducement—neither “refer to” nor have an “impermissible connection with” an ERISA plan. As to whether these laws “refer to” an ERISA plan, the Complaint does not claim that Plaintiff was a contracting party to any ERISA plan. It does not allege that payment is due to him according to the terms of an ERISA plan, or even that any relevant ERISA plan provides reimbursement rates for the out-of-network services provided. To the contrary, the Complaint states that Plaintiff is entitled to recover $209,000 because that amount “represents normal and reasonable charges” under an implied-in-fact contract. (Compl. ¶¶ 17, 21.) The Complaint’s factual assertions, assumed to be true for the purposes of the Motion to Dismiss, do nothing to suggest that the claims brought in this case will require examination of an ERISA plan. The state laws here therefore do not “refer to” an ERISA plan.

    Second, these state laws do not have an “impermissible connection with” an ERISA plan. The central purpose of ERISA is to protect plan participants and beneficiaries. 29 U.S.C. §§ 1001, 1001b (repeatedly referring to the interests of participants and beneficiaries in the statute’s findings and declarations of policy); Peter J. Wiedenbeck, Fed. Judicial Ctr., ERISA in the Courts 17 (2008) (describing ERISA as having been designed to protect consumers). As several Circuit Courts have held, claims brought by a provider against an insurance company do not implicate ERISA’s goals of protecting participants and beneficiaries. Such claims therefore do not have an “impermissible connection with” an ERISA plan, and are not preempted.
    Ultimately, the court found that ERISA did not preempt the Plaintiff's state law claims, and denied the Defendant's Motion to Dismiss. The entire opinion is attached below.
    Attached Files