United States District Court, M.D. Pennsylvania
ERIC YOST, individually and on behalf of a class of similarly situated individuals, Plaintiff,
ANTHEM LIFE INSURANCE COMPANY Defendant.
D. MARIANI UNITED STATES DISTRICT JUDGE
Introduction and Procedural History
Eric Yost, individually and on behalf of a class of similarly
situated individuals, filed a putative class action complaint
on December 11, 2015 in the Court of Common Pleas of Pike
County. Doc. 2-1. The case was removed to this Court on
January 14, 2016. Doc. 1. On August 2, 2016, this Court
granted in part and denied in part a motion to dismiss the
original complaint. Yost v. Anthem Life Ins. Co.,
2016 WL 4151214 (M.D. Pa. Aug. 2, 2016). Count I of the
original complaint, a claim for declaratory judgment that
Pennsylvania's Motor Vehicle Financial Responsibility Law
("MVFRL"), 75 Pa.C.S.A. § 1720, is not
preempted by ERISA, survived. Plaintiff then filed an Amended
Complaint on August 18, 2016, re-alleging the claim for
declaratory relief (Count II); and adding a claim for breach
of the ERISA plan's terms under the same preemption
argument (Count III); a claim for breach of fiduciary duty by
misrepresentation (Count IV); and a claim for breach of the
fiduciary duty of loyalty (Count V). Doc. 26. Defendant
Anthem Life Insurance Company ("Anthem") moved to
dismiss Counts II through V of the Amended
Complaint. Doc. 30. For reasons stated below, this
Court will grant Defendant's motion in part and deny the
motion in part.
factual allegations are substantively similar to those of the
original complaint, which the Court has detailed in its
August 2, 2016 opinion. The plaintiff, Eric Yost, was insured
for disability benefits under a Group Plan issued by Anthem
through his former employer. Doc. 26 ¶ 6. On February 2,
2013, Mr. Yost was injured as a result of a motor vehicle
accident, rendering him temporarily disabled. Id.
¶ 7. Mr. Yost submitted a claim for short term
disability benefits to Anthem, and Anthem paid Mr. Yost $5,
654.40 from February 2013 to April 2013. /d.¶¶8, 9.
Mr. Yost sought damages against the alleged tortfeasor from
the motor vehicle accident. Id. ¶ 10. The
tortfeasor's insurer settled the action and compensated
Mr. Yost for his personal injuries. Id. ¶ 11.
Upon learning of the settlement, Anthem asserted a claim for
reimbursement of the short term disability benefits it
previously paid to Mr. Yost in the amount of $6, 997.25.
Id. ¶¶12, 14. Mr. Yost's lawyer and an
Anthem representative then attempted to negotiate a
settlement as to Anthem's assertion for reimbursement.
Id. ¶¶ 14-20.
after settlement discussions were underway, Mr. Yost's
brought the MVFRL to the attention of the Anthem
representative, arguing that Anthem has no right of recovery
because in a motor vehicle action, Pennsylvania law
prohibited reimbursement of "benefits...payable by a
program, group contract or other arrangement" from a
claimant's tort recovery. Doc. 2-1 at 92. Anthem's
representative disagreed and responded that "after
consulting with [Anthem's] in-house legal consultants we
have determined that the Pennsylvanian Code...does not apply
to this matter given it appears that the Code is applicable
when an automobile insurance carrier asserts reimbursement,
" and Anthem was not an auto insurance carrier.
Id. at 99. Thus, Anthem continued to assert a claim
for reimbursement of the disability benefits it paid to Mr.
Yost. Doc. 26 ¶ 24. As a result, Mr. Yost's lawyer
"has been forced to refuse to distribute to Mr. Yost the
money in dispute" due to his ethical obligations,
leaving Mr. Yost "subject to suit and loss of benefits
based on the dispute over the  funds." Id.
Standard of Review
complaint must be dismissed under Federal Rule of Civil
Procedure 12(b)(6) if it does not allege "enough facts
to state a claim to relief that is plausible on its
face." Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007).
"A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Ashcroft v. Iqbal, 556
U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).
a complaint attacked by a Rule 12(b)(6) motion to dismiss
does not need detailed factual allegations, a plaintiff's
obligation to provide the 'grounds' of his
'entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of a cause of
action's elements will not do." Twombly,
550 U.S. at 555 (internal citations and alterations omitted).
"[T]he presumption of truth attaches only to those
allegations for which there is sufficient 'factual
matter" to render them 'plausible on [their]
face'...Conclusory assertions of fact and legal
conclusions are not entitled to the same presumption."
Schuchardt v. President of the United States, 839
F.3d 336, 347 (3d Cir. 2016) (citing Iqbal, 556 U.S.
at 679, 129 S.Ct. 1937).
the plausibility standard 'does not impose a probability
requirement, ' it does require a pleading to show
'more than a sheer possibility that a defendant has acted
unlawfully.'" Connelly v. Lane Const.
Corp., 809 F.3d 780, 786 (3d Cir. 2016) (citing
Twombly, 550 U.S. at 556, 127 S.Ct. 1955 and
Iqbal, 556 U.S. at 678, 129 S.Ct. 1937). "The
plausibility determination is 'a context-specific task
that requires the reviewing court to draw on its judicial
experience and common sense.'" Id. at
786-87 (citing Iqbal, 556 U.S. 679, 129 S.Ct. 1937).
and III: ERISA Preemption
ERISA preemption issue has been fully litigated and resolved
in the previous motion to dismiss in Mr. Yost's favor.
Yost, 2016 WL 4151214, at *4. For the sake of
brevity, the Court offers a simple summary of its previous
opinion. Anthem argued-and continues to argue-that ERISA
preempts § 1720 of the MVFRL because "it
'relates to' employer-benefit plans and is not saved
from preemption by ERISA's 'saving clause.'"
Doc. 31 at 1. The parties do not dispute that the Plan is
subject to the provisions of ERISA because it was a
"welfare benefit plan." Nor do they dispute that
ERISA may "preempt" any state laws that
"relate to" ERISA plans. However, a state law may
be "saved" from preemption if it is
"specifically directed toward the insurance
industry." Yost, 2016 WL 4151214, at*3 (citing
Kentucky Ass'n of Health Plans, Inc.v. Miller,
538 U.S. 329, 334, 123 S.Ct. 1471, 155 L.Ed.2d 468 (2003)).
And it is on the issue of the savings clause that the parties
continue to disagree.
stated in the Court's first opinion, the Supreme Court
has already instructed that "[t]here is no dispute that
the [Section 1720] falls within ERISA's insurance savings
clause...Section 1720 directly controls the terms of
insurance contracts by invalidating any subrogation provision
that they contain. It does not merely have an impact on the
insurance industry; it is aimed at it" FMC Corp. v.
Holliday, 498 U.S. 52, 60-61, 111 S.Ct. 403, 112 L.Ed.2d
356 (1990) (emphasis added) (internal citations omitted).
Relying on the language in FMC Corp., the Court
denied Anthem's motion to dismiss the claim for
having had the opportunity to fully litigate this issue,
Anthem devotes over half of its new motion to dismiss brief
arguing that the Court's opinion is incorrectly decided,
as well as three footnotes alluding to a motion for
certification of an interlocutory appeal. Doc. 31, at 6-17,
n. 1, 2, 5. Anthem also attached a draft brief it planned on
filing for certification for appeal. Doc. 31-3. Both the new
motion to dismiss brief and the attached draft brief contain
substantively the same arguments that this Court has already
considered in its previous opinion. The court appreciates the
fact that Anthem sincerely believes that the first opinion
was wrongly decided, but notes that a brief summary of the
arguments would have been sufficient to preserve the issue,
especially since Anthem has not cited any new legal
developments since the Court issued its first opinion.
sake of completeness, the Court will expound upon its
reasoning in holding that § 1720 of the MVFRL is not
saved from ERISA preemption. There are "[t]hree
provisions of ERISA [which] speak expressly to the question
of preemption, " the preemption clause, the saving
clause, and the deemer clause. FMC Corp., 498 U.S.
at 58. The first preempts state laws that "relate to any
employee benefit plan." 29 U.S.C. § 1144(a). The
second "saves" such laws from preemption if they
"regulate insurance, banking, or securities." 29
U.S.C. § 1144(b)(2)(A). And the third "exempt[s]
self-funded ERISA plans from state laws that 'regulat[e]
insurance' within the meaning of the saving clause."
FMC Corp., 498 U.S. at 61, 111 S.Ct. at 409
(interpreting 29 U.S.C. § 1144(b)(2)(B)).
question in FMC Corp. revolved around the third
clause, or the so-called "deemer clause."
Id. What is at issue in this case, by contrast, is
the second clause, or the "savings clause, " i.e.
the parties here dispute whether MVFRL is "saved"
from preemption. However, it is not as if FMC Corp.
left the Court with no elucidation, because the Supreme Court
stated explicitly that "[t]here is no dispute that the
Pennsylvania law falls within ERISA's insurance saving
clause." Anthem argues that this language is
"dicta." Doc. 31 at 20. It also argues that the
Third Circuit's description of FMC Corp. is
"dicta" when it noted that the Supreme Court
"'already resolved' the saving clause question
with respect to §1720." Id. at 15 n. 12
(citing Wlrth v. Aetna U.S. Healthcare, 469 F.3d
305, 309 n.6 (3d Cir. 2006)). Anthem would have this Court
rely on Levine v. United Healthcare Corp., 402 F.3d
156 (3d Cir. 2005) instead, which is a Third Circuit case
that analyzed whether a New Jersey statute is saved
under the ERISA savings clause. Anthem claims that
Levine should control because it applied the most
recent framework for determining whether the savings clause
applies, as set forth by the Supreme Court in
Miller. The Miller framework asks whether
the state law is "specifically ...