Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

HEALTH SCAN, LTD. v. TRAVELERS INS. CO.

November 28, 1989

HEALTH SCAN, LTD.
v.
TRAVELERS INSURANCE CO.



The opinion of the court was delivered by: WALDMAN

 JAY C. WALDMAN, UNITED STATES DISTRICT JUDGE.

 Plaintiff commenced this action for the cost of unpaid health care services provided to defendant's insureds, and for the value of plaintiff's business which it lost allegedly because of defendant's failure fully to pay for these services. Defendant, The Travelers Insurance Company ("The Travelers"), has filed a motion to dismiss the complaint, alleging that plaintiff's claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and that plaintiff lacks standing to sue under that statute.

 The allegations in the complaint, construed most favorably to plaintiff, indicate the following facts. In February 1985, plaintiff established a health testing service and thereafter tested members of several labor organizations for possible job-related asbestos induced injuries and hearing loss. Defendant had previously issued health insurance policies for the members of each of these labor organizations. These policies covered asbestos and audio testing.

 Plaintiff billed defendant directly for its services. Defendant paid plaintiff without complaint until July 1986, at which time a controversy ensued about plaintiff's billing procedures. Shortly thereafter, defendant resumed regular payments to plaintiff. Payments continued until approximately July 1988. At that time, defendant informed plaintiff that its bills were again under review.

 Defendant paid plaintiff nothing on pending claims from July 1988 until February 1989. From that time onward, defendant made payment on old claims, but at greatly reduced rates. As a result, plaintiff, who had relied on receiving continued payments to buy equipment and expand its business, was forced to sell its equipment and terminate its business.

 In its response to defendant's motion, plaintiff concedes that its state law breach of contract action against defendant is preempted by ERISA. Plaintiff, however, contends that it has standing to sue under ERISA as an assignee of the plan beneficiaries' health benefits and that even if it lacks such standing, its cause of action for promissory estoppel is not preempted. The court shall address these contentions separately.

 I. Standing

 Section 502 of ERISA, 29 U.S.C. § 1132(a), provides that a civil action may be brought under ERISA by a plan "participant," "beneficiary," "fiduciary," or by the Secretary of Labor. *fn1" Courts have generally hewed to a literal construction of this section, rejecting standing under § 1132(a) to parties not specifically enumerated therein. See Hermann Hospital v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1288-89 (5th Cir. 1988); Pressroom Unions Printers League Income Security Fund v. Continental Assurance Co., 700 F.2d 889 (2d Cir. 1983). But see Fentron Industries v. National Shopmen Pension Fund, 674 F.2d 1300 (9th Cir. 1982) (non-enumerated parties have standing under three-part test for determining "implied" standing to sue). Moreover, a court in this circuit has held that a health care provider possesses no ERISA standing in its own right. See Cameron Manor, Inc. v. United Mine Workers of America, 575 F. Supp. 1243 (W.D.Pa. 1983).

 Plaintiff therefore does not contend that it falls among the parties statutorily authorized to sue under § 1132(a). Instead, plaintiff asserts that it has derivative standing to sue as an assignee of the plan beneficiaries' health benefits. Three courts have held that health care providers possess such derivative standing. See Hermann Hospital, supra; Misic v. Building Service Employees Health and Welfare Trust, 789 F.2d 1374 (9th Cir. 1986); Michael Reese Hospital and Medical Center v. Solo Cup Employee Health Benefit Plan, and Solo Cup Co., slip op., 1988 U.S. Dist. LEXIS 14932 (N.D. Ill. December 28, 1988).

 The Third Circuit, however, has stated that standing under ERISA does not extend to assignees of plan benefits. See Northeast Dept. ILGWU Health and Welfare Fund v. Teamsters Local Union No. 229, 764 F.2d 147, 154 n. 6 (3d Cir. 1985). See also Nationwide Mutual Insurance Co. v. Teamsters Health and Welfare Fund of Philadelphia and Vicinity, 695 F. Supp. 181 (E.D.Pa. 1988). As the Court of Appeals noted, Congress simply made no provision in § 1132(a) for persons other than those enumerated to sue, including persons purporting to sue on their behalf. Northeast Dept. ILGWU, 764 F.2d at 154 n.6. Plaintiff attempts to dismiss this reference as dicta, in that, the Court in Northeast Dept. ILGWU found that no assignment of benefits had in fact been made in that case. Dicta though it may have been, this footnote contains an unequivocal statement and provides clear guidance on the standing question here at issue which this court is not at liberty to disregard.

 II. Promissory Estoppel

 ERISA's preemption clause provides in pertinent part that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" described under the statute. 29 U.S.C. § 1144. Courts have construed the phrase "relate to" in the broadest terms, holding that a state law "relates to" a benefit plan if it has any connection or reference to such a plan. See Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 47-48, 95 L. Ed. 2d 39, 107 S. Ct. 1549 (1987); Shiffler v. Equitable Life Assurance Society, 838 F.2d 78, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.