Katheryn Swenson v. Eldorado Casino Shreveport

Case: 17-30374 Document: 00514259575 Page: 1 Date Filed: 12/04/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fif h Circuit
No. 17-30374 FILED
Summary Calendar December 4, 2017
Lyle W. Cayce
Clerk
KATHERYN SWENSON,
Plaintiff - Appellant
v.
UNITED OF OMAHA LIFE INSURANCE COMPANY,
Defendant - Appellee
Appeal from the United States District Court
for the Western District of Louisiana
Before DAVIS, CLEMENT, and COSTA, Circuit Judges.
GREGG COSTA, Circuit Judge:
Katheryn Swenson filed suit in Louisiana state court seeking benefits
from a life insurance policy after her husband passed away. The insurance
company refused to pay based on its belief that Swenson’s husband was not a
covered employee at the time of his death. In seeking to recover the death
benefits, Swenson cited Louisiana statutes imposing certain requirements on
group life policies concerning the rights of a discharged employee to convert
the employer-provided policy into individual life insurance. La. R.S. 22:942(7),
(10). Although Swenson alleged only state law claims, the insurer removed the
matter to federal court arguing it was completely preempted by the Employee
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No. 17-30374
Retirement Income Security Act of 1974 (ERISA). After the case was removed,
Swenson added a claim for equitable relief under ERISA.
The district court dismissed Swenson’s claims on various grounds. It
held that ERISA preempted the state law claims, so it dismissed them with
prejudice. Because of this finding of complete preemption, the district court
construed the complaint as seeking recovery of benefits from an ERISA plan.
But that claim was dismissed without prejudice for failure to exhaust
administrative remedies (Swenson has since commenced the ERISA
administrative process). As to the claim for equitable relief under ERISA, the
court dismissed it with prejudice on the ground that equitable relief is not
available when ERISA provides an adequate legal remedy such as the
provision allowing judicial review of benefit denials (29 U.S.C. § 1132(a)(1)).
On appeal, Swenson challenges only the preemption ruling and denial of
her claim for equitable relief. We review de novo these dismissals that occurred
at the pleading stage. N. Cypress Med. Ctr. Operating Co. v. Cigna Healthcare,
781 F.3d 182, 191 (5th Cir. 2015).
Swenson does not dispute that the life insurance policy under which she
seeks to recover is an ERISA plan. For such plans, federal law provides the
sole avenue for seeking to recover benefits. This congressional intent to have
ERISA completely occupy the field converts Swenson’s state law claims seeking
to recover policy benefits into a federal claim under section 502 of ERISA (29
U.S.C. § 1132(a)(1)(B)). Arana v. Ochsner Health Plan, 338 F.3d 433, 440 (5th
Cir. 2003) (en banc) (citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66
(1987)).
Swenson attempts to avoid this complete preemption by invoking
ERISA’s savings clause, which provides that “[e]xcept as provided in
subparagraph (B), nothing in this subchapter shall be construed to exempt or
relieve any person from any law of any State which regulates insurance,
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banking, or securities.” 29 U.S.C. § 1144(b)(2)(A). Swenson emphasizes that
the cited exception to the savings clause, id. § 1144(b)(2)(B), itself excludes
from its carve out a “plan established primarily for the purpose of providing
death benefits.” This means, according to Swenson, that the Louisiana
statutes she cites in seeking to recover death benefits are within the scope of
the savings clause and not preempted.
The problem for Swenson is that the savings clause does not allow state
law claims seeking recovery of ERISA benefits to escape preemption. Quality
Infusion Care Inc. v. Humana Health Plan of Texas Inc., 290 F. App'x 671, 681–
82 (5th Cir. 2008) (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 217–18
(2004)); see also Prudential Ins. Co. of Am. v. Nat'l Park Med. Ctr., Inc., 413
F.3d 897, 913–14 (8th Cir. 2005) (explaining that even a state law saved from
preemption by the savings clause is itself preempted “if it provides a separate
vehicle to assert a claim for benefits outside” of section 502 of ERISA). It only
saves certain state laws from conflict preemption, which is a federal defense
that can be asserted when a federal law conflicts with a state law. Quality
Infusion, 290 F. App’x. at 681–82. In other words, although the savings clause
preserves a role for certain state laws that regulate insurance, 1 state claims
that provide a separate vehicle for seeking benefits from an ERISA plan
1 Kentucky Association of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003), provides
an example of how the savings clause protects certain state laws from conflict preemption.
Health maintenance organizations sought a declaratory judgment that ERISA preempted a
state “Any Willing Provider” law that prohibited health insurers from excluding qualified
doctors from their provider networks. The Supreme Court rejected the preemption defense
because the Kentucky law regulated insurance and thus was within the scope of the savings
clause. Id. at 334–42. Miller did not involve complete preemption as it was not a case brought
to recover ERISA plan benefits. The same is true of other Supreme Court cases applying the
savings clause. See, e.g., Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (2002) (holding
that savings clause allowed Illinois to enforce law requiring independent medical review of
certain denials of medical benefits); UNUM Life Insur. Co. v. Ward, 526 U.S. 358 (1999)
(holding that savings clause allowed California to enforce a law limiting the defense that an
insured provided untimely notice of a claim to situations when the insurer could show that
the delay resulted in prejudice).
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remain preempted as such claims must be brought under ERISA's civil
enforcement provision (section 502). Otherwise the exclusivity and uniformity
of that federal remedy would be undermined. Davila, 542 U.S. at 217–18
(“ERISA § 514(b)(2)(A) must be interpreted in light of the congressional intent
to create an exclusive federal remedy in ERISA § 502(a).”). That is not to say
that, when challenging the lawfulness of the denial of ERISA benefits, a
beneficiary cannot argue that the administrator failed to comply with
applicable laws including any state laws that retain force because of the
savings clause. But that must be done in the context of ERISA’s civil
enforcement provision, a claim that was not ripe when Swenson filed this suit
because she had not engaged in the administrative review process. Because
Swenson’s claim for benefits must be brought under federal law, the district
court correctly dismissed her state law claims seeking the same relief.
The availability of that statutory remedy under section 502 of ERISA
also defeats Swenson’s claim for equitable relief under federal law. Equitable
relief under ERISA is normally unavailable “where Congress elsewhere
provided adequate relief for a beneficiary's injury.” Varity Corp. v. Howe, 516
U.S. 489, 515 (1996). Because ERISA’s civil enforcement provision provides a
direct mechanism to address the injury for which Swenson seeks equitable
relief, she cannot assert a separate ERISA claim for breach of fiduciary duty.
Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998).
The judgment of the district court is AFFIRMED.
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