Law.com reports: “Becker Calls on Congress, Justices to Fix ERISA.” According to the article, 3rd Circuit Court Judge Edward Becker, “in his opening paragraph of a lengthy and powerfully worded concurring opinion” in DiFelice v. Aetna, states that he wants to add his voice “to the rising judicial chorus urging that Congress and the Supreme Court revisit what is an unjust and increasingly tangled ERISA regime.” The opinion is artfully written and a must-read for anyone interested in ERISA preemption.
Continue reading for the facts of the case as well as key portions from the opinion, including the answer to this question: “What is a Serbonian blog?” Judge Becker used the term in his opinion.
UPDATE: By the way, at the end of the opinion, Judge Becker writes:
The Clerk of Court is directed to send a copy of this opinion (with attention directed to the concurrence) to the Solicitor of the Department of Labor; the Chair, Ranking Member, Chief Majority Counsel, and Minority Counsel of the Senate Committee on Health, Education, Labor, and Pensions; and the Chair, Ranking Member, Chief Majority Counsel, and Minority Counsel of the House Committee on Education and the Workforce.
(This post should probably be entitled: “3rd Circuit Court Judge Becker has had it with ERISA!”)
Facts of the Case: According to the opinion, the plaintiff in the case was diagnosed with a condition which his doctor decided necessitated a specially designed breathing tube. The HMO allegedly instructed the doctor that the specially designed tube was not “medically necessary” so that the doctor used an alternative device which caused the plaintiff great difficulty. Plaintiff brought suit in state court alleging that the HMO negligently interfered with his medical care in two ways: (1) that the HMO instructed the doctor that the specially designed tube was not medically necessary and (2) that the HMO insisted that plaintiff be discharged from the hospital sooner than his doctor deemed advisable. The HMO removed the case to federal court and then moved to dismiss the complaint alleging that it was preempted by ERISA. The lower court granted the motion to dismiss and the plaintiff then appealed. The Third Circuit upheld the dismissal of the claim as to the first allegation of negligence, but reversed the District Court’s order dismissing the part of the claim pertaining to the discharge from the hospital:
Because [plaintiff’s] claim that [the HMO] interfered with his medical treatment by finding the special tracheostomy tube to be “medically unnecessary” could have been brought under section 502(a) of ERISA for the recovery of benefits due under his plan, it is completely preempted. We will therefore affirm the order of the District Court dismissing that claim. However, because [the HMO] has not shown that [plaintiff’s] claim that [the HMO] interfered with his medical treatment by insisting on his discharge from the hospital is based on any plan benefit, that claim is not completely preempted. We will therefore reverse the District Court’s order dismissing that claim and remand for further proceedings.
Judge Edward Becker then issued his concurring opinion (spanning 26 pages of the opinion). Key portions of the opinion:
1. “I am satisfied that Judge Rendell’s opinion reaches the correct result under our governing caselaw. While I thus join in her opinion and in the judgment, I write separately to add my voice to the rising judicial chorus urging that Congress and the Supreme Court revisit what is an unjust and increasingly tangled ERISA regime. Congress enacted ERISA in 1974 ‘to promote the interest of employees and their beneficiaries in employee benefit plans.’ . . However, with the rise of managed care and the Supreme Court’s series of decisions holding preempted any action for damages against HMOs, ERISA has evolved into a shield that insulates HMOs from liability for even the most egregious acts of dereliction committed against plan beneficiaries, a state of affairs that I view as directly contrary to the intent of Congress. Indeed, existing ERISA jurisprudence creates a monetary incentive for HMOs to mistreat those beneficiaries, who are often in the throes of medical crises and entirely unable to assert what meager rights they possess.
Lower courts have struggled to maintain some semblance of equity notwithstanding the enormous breadth of the preemption test, one that turns on whether the claim is ‘related to’ a benefit plan, inter alia, by identifying exceptions to section 514 preemption, such as that for medical malpractice liability. And in terms of the remedial scope of section 502, they have struggled to make sense out of the distinction between eligibility decisions (which are preempted) and medical decisions (which are not), a hopeless endeavor, as I shall explain. Unfortunately, the price of all this has been descent into a Serbonian bog wherein judges are forced to don logical blinders and split the linguistic atom to decide even the most routine cases.” (Footnote 1 to the concurring opinion explains that a “serbonian bog is a mess from which there is no way of extricating oneself.” According to the opinion, the Serbonian bog “was between Egypt and Palestine.” The footnote goes on to say that “Hume said that whole armies have been lost therein. . .”
2. “. . . ERISA generally, and section 514(a) particularly, have become virtually impenetrable shields that insulate plan sponsors from any meaningful liability for negligent or malfeasant acts committed against plan beneficiaries in all too many cases. This has unfolded in a line of Supreme Court cases that have created a ‘regulatory vacuum’ in which virtually all state law remedies are preempted but very few federal substitutes are provided.”
3. “. . .the root of courts’ ERISA preemption nightmare is that ERISA forces them to distinguish between eligibility and treatment decisions while providing a remedial structure that makes the two virtually synonymous. For participants, the torment is still greater: ERISA de facto places the HMO in control of the treatment a participant receives, yet it preempts any state-law medical malpractice claim against that HMO and provides that the participant can recover no compensatory, punitive, or wrongful-death damages regardless of its malfeasance. This situation has arisen because ERISA has failed to evolve to accommodate the rise of HMOs, which did not even exist when ERISA was enacted in 1974.”
4. “Even if Congress refuses to act, however, the Supreme Court, in its interpretive capacity, is capable of effecting salutary change in many ways. The Court has no crystal ball, and twenty years ago it could not have foreseen the radical changes that have overtaken the health care system, and the difficulties that its preemption decisions would create. The time might be right to reconsider the string of holdings, epitomized by Russell and Mertens, that rule out the possibility of recovering compensatory damages under ERISA section 503(a)(3). See generally John H. Langbein, What ERISA Means by “Equitable”: The Supreme Court’s Trail of Error in Russell, Mertens, and Great-West, Yale Law School Center for Law, Economics, and Public Policy, Research Paper No. 269.”