• In Fossen v. Blue Cross and Blue Shield of Montana, Inc., ---F.3d---, 2011 WL 4926006 (9th Cir. Oct. 18, 2011), the court held that ERISA and HIPAA preempted plaintiffs’ state law claims seeking restitution of health care coverage premiums they allegedly overpaid. The state law claims were filed under Montana’s “little HIPAA” statute, which protects insureds from premium increases greater than those imposed on similarly situated individuals. Noting that ERISA completely preempts state law claims falling within the scope of ERISA Section 502(a), the court determined that plaintiffs’ claims were properly recast by the district court as ERISA claims. However, the court also held that a claim under the Montana unfair insurance practices statute was saved from ERISA preemption as a law regulating insurance.
  • In Ehlen Floor Covering, Inc. v. Lamb, ---F.3d---, 2011 WL 4922017 (11th Cir. Oct. 18, 2011), the court held that ERISA completely preempted state law claims for negligence and misrepresentation filed by participants of a Section 412(I) plan, a defined benefit plan funded with guaranteed life insurance and/or annuity contracts. The claims were filed against the plan’s service providers after it was discovered that the plan did not comply with several IRS rules and regulations. The court concluded that the state law claims fell within the scope of ERISA Section 502(a) and were completely preempted because the claims arose from the ERISA relationships and duties between the parties, particularly the fiduciary duty to disclose material information to plan participants. The court also concluded that an arbitration provision in the administrative services agreement between the plan sponsor and the plan administrator did not apply to the participants’ claims. Consequently, the district court had subject matter jurisdiction over the dispute and properly rejected the plan administrator’s request for arbitration.
  • In Utility Contractors Assoc. of New England, Inc. v. City of Fall River, No. 10-10994-RWZ, 2011 WL 4710875 (D. Mass. Oct. 4, 2011), the court held that a city ordinance was preempted by ERISA because it required contractors to establish and maintain apprenticeship programs, as well as health and pension benefits for employees. The ordinance in question mandated employee benefits for three years before a contractor could even bid on public work. The court also determined that the law was not saved from preemption by the Fitzgerald Act, a federal statute promoting apprenticeship programs, or the market participant exception of the commerce clause. First, the court held that the Fitzgerald Act does not contain any federal enforcement mechanism, meaning that there was no contradiction with ERISA. Second, the court held that the City failed to advance any factual support for its market participant theory. For the exception to apply, the state entity must directly participate in the market by purchasing goods or services. Requiring contractors to provide employee benefits did not qualify the city as a market participant, as opposed to a regulator.