Defensive ERISA Preemption

Ghee, as Pers. Rep. of Estate of Fleming v. USAble Mutual Ins. co., etc., [Ms. 1200485, Mar. 31, 2023] __ So. 3d __ (Ala. 2023). In a plurality opinion, the Court (Parker, C.J., Bolin, Special Justice, concurs; Parker, C.J., concurs specially; Stewart, J., concurs specially, which Wise, J., joins; Mendheim, J., concurs in part and concurs in the result; Bryan, J., and Moore, Special Justice, dissent; Shaw, Sellers, Mitchell, and Cook, JJ., recuse) affirms in part and reverses in part the Calhoun Circuit Court’s summary judgment dismissing the personal representative’s wrongful-death claim against USAble Mutual Insurance Company d/b/a Blue Cross Blue Shield of Arkansas and Blue Advantage Administrators of Arkansas (“Blue Advantage”). The decedent died of sepsis caused by a perforated colon. The complaint alleged that despite trips to the emergency room and multiple requests, Blue Advantage would not approve a subtotal colectomy until more conservative treatments proved unsuccessful. Ms. *3.

The main opinion first explains “‘[i]f the claim ... is based on the assertion of ordinary malpractice and vicarious liability, not based upon the denial of coverage or benefits, it is simply not preempted. On the other hand, if the claim is that the plan wrongly denied benefits such as hospitalization, that would be a benefits-denied case and preempted, even if the coverage decision was made negligently,” Ms. *10-11, quoting 2 Dan B. Dobbs et al., The Law of Torts § 318, at 271 (2d ed. 2011), and concludes:

In the present case, certain of the allegations in Ghee’s complaint are indistinguishable from the allegations in Hendrix. Ghee alleged that Blue Advantage breached duties of a health-care provider by declining to approve payment for the proposed surgery. Even though that decision may have involved medical judgment, it was a decision about the administration of benefits. Hence, this aspect of Ghee’s claim was ultimately an assertion that Blue Advantage was subject to state-law liability for the consequences of its coverage decision. Under Hendrix [v. United Healthcare Insurance Co. of the River Valley, 327 So. 3d 191 (Ala. 2020)], such a claim is preempted.


Finally, the main opinion concludes

“it is not clear from the face of the complaint, viewed in the light most favorable to Ghee, that ERISA defensive preemption barred the aspect of his claim that alleged negligent medical advice. Accordingly, we reverse the dismissal of this aspect of the claim.”

Ms. *25. As for Blue Advantage’s new argument that the medical advice claim failed to state a claim, such “a defense may not be presented for the first time on appeal….” Ms. *27, n. 5.

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