Eastern District Concludes That ERISA Preempts Negligent Misrepresentation Claim

Korman v. Consolidated Edison Co., No. 12-CV-1561 (JFB-ARL) (E.D.N.Y. Jan 16, 2013): The plaintiff brought the Employee Retirement Income Security Act (ERISA) and common law claims against his benefits provider, UnitedHealthcare (UHC), arising out of its misrepresentation as to the medical benefits available to him under his employer’s benefits plan after retirement. His employer, Con Edison, had separate medical benefits plans for its employees and retirees. In 2000, the plaintiff received a letter informing him that the plan’s maximum lifetime medical benefit had increased from $1 million to $2 million. In mid-2009, the plaintiff retired and, soon thereafter, received a statement indicating that he had over $1.5 million remaining in his lifetime medical benefit plan. Based on the assumption that he was entitled to a total of $2 million in benefits, the plaintiff underwent elective back surgery. He subsequently received a letter stating that he had exceeded the $1 million benefit limit under the plan.

UHC moved to dismiss the negligent misrepresentation claim on the grounds that it was preempted by ERISA, arguing that the plaintiff’s claim was essentially one for benefits under an ERISA plan. The court agreed, reasoning that the plaintiff’s claim was “colorable” under ERISA because the dispute concerned his right to payment for medical expenses under the plan, and that the substance of UHC’s communication to the plaintiff implicated coverage and benefits determinations under the terms of the plans, requiring the court to analyze the terms of ERISA-governed plans. Thus, the claim was not merely a dispute over a dollar amount. Additionally, the court rejected the plaintiff’s argument that his claim sounded independently of ERISA under state insurance law, explaining that UHC’s actions were “inextricably intertwined” with the terms of the plan,” and that the plaintiff’s right to benefits arose, not from state insurance law, but rather from the plan’s terms.

Note: This article was published in the February 2013 issue of the New York eAuthority.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.