This month's Friday Five covers cases relating to preemption, anti-assignment provisions, discretionary clause bans and the "de facto" administrator theory. We also examine a case upholding a denial of accidental death benefits.

1. The Sixth Circuit upholds dismissal of fraud claim on the basis of preemption. The plaintiff asserted a cause of action for fraud against her former employer based on allegations that her former employer destroyed documents in her personnel file relating to her disability benefits and termination. The Sixth Circuit affirmed the Eastern District of Michigan Court’s decision to grant the defendant’s motion to dismiss on the basis that ERISA preempted the plaintiff’s fraud claim. The court reasoned that Michigan imposed no legal duty independent of the benefits plan relationship that would allow the claim to escape preemption. Arora v. Henry Ford Health Sys., No. 17-2252, 2018 U.S. App. LEXIS 18712 (6th Cir. July 9, 2018)
2. Are anti-assignment provisions enforceable in New Jersey? Relying on the Third Circuit's recent decision in Am. Orthopedic & Sports Med. v. Indep. Blue Cross Blue Shield, 890 F.3d 445, 453 (3d Cir. 2018), the court denied the plaintiff’s medical provider’s claim for reimbursement for medical services and enforced the anti-assignment provision in the insured’s ERISA-governed health plan. The court further rejected the plaintiff’s argument that the plan waived the anti-assignment clause by dealing directly with the medical provider in the claim review process and by remitting payment directly to the medical provider. Shah v. Horizon Blue Cross Blue Shield of N.J., Civ. A. 1:17-cv-1662018 (D.N.J. July 13, 2018)
3. Is the Illinois discretionary clause ban applicable to policies insuring Illinois residents but not issued in the state? The policy at issue provided the administrator with discretionary authority. However, the plaintiff, a resident of Illinois, sought application of the de novo standard of review to her ERISA-governed benefits claim, arguing that Section 2001.3 of Illinois’ Administrative Code banning discretionary clauses in policies “offered or issued” in Illinois applied to her claim. The plaintiff’s employer, who was headquartered in Missouri, was the policyholder and the policy was delivered in Missouri. Ruling that Section 2001.3 was not applicable and that the “arbitrary and capricious” standard applied to the plaintiff’s claim, the court reasoned that (1) there was nothing in the record suggesting that any of the negotiations or policy decisions regarding the policy at issue occurred in Illinois; (2) the policy was delivered outside of Illinois; and (3) the policyholder paid all of the premiums for the policy from Missouri. Meyer v. Grp. Long Term Disability Plan for Emples. of Edward D. Jones & Co., L.P., Civ. A. 1:16-cv-01282, (C.D. Ill. June 28, 2018)
4. Can a party be held liable under a "de facto administrator" theory? The plaintiff asserted a claim under ERISA Section 502(c)(1) alleging failure to timely respond to his request for the summary plan description in violation of § 104(b)(4). The plaintiff requested a copy of the summary plan description from the pension trust fund’s executive director. However, the plan made clear that the board of trustees of the fund, not its executive director, was the plan administrator. The plaintiff argued that the executive director was the de facto plan administrator. The district court recognized that the Third Circuit had not yet ruled on whether a party can be held liable under a de facto plan administrator theory but that eight other circuit courts rejected the de facto administrator theory. Following suit with its sister circuits and other district courts in the Third Circuit, the court rejected the plaintiff’s de facto administrator theory and dismissed the § 502(c)(1) claim as the plaintiff did not submit his request for the SPD to the plan administrator. Bergamatto v. Bd. of Trs. of the NYSA-ILA Pension Trust Fund, Civ. A. 16-5484 (D.N.J. July 12, 2018)
5. The Sixth Circuit affirms denial of accidental death benefits where insured’s heart attack contributed to motor vehicle accident. The plaintiff challenged a decision denying accidental death benefits. The Sixth Circuit affirmed the district court’s decision to grant the insurer's motion for judgment on the administrative record because the record showed that the deceased employee more likely than not crossed the center line in his vehicle as a result of a heart attack, striking the other driver's vehicle as the driver turned toward the shoulder trying to avoid the accident. While it was not clear who honked his horn, the other driver or the deceased employee, all the other evidence in the administrative record suggested that it was the employee who drove his car into the westbound lane. Hutson v. Reliance Std. Life Ins. Co., No. 17-2453 (6th Cir. July 16, 2018)