Articles Posted in ERISA

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Plaintiff filed suit against the Plan to recover payment for health care services provided to Plan policyholders. The trial court dismissed plaintiff's suit because the state law causes of action were preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court concluded that, notwithstanding procedural irregularies, plaintiff's due process rights were not violated where any error by the trial court was harmless; plaintiff's claims for breach of contract, quantum meruit, and promissory estoppel are not preempted by ERISA where these quasi-contract and contract causes of action do not address an area of exclusive federal concern; and plaintiff's claim for interference with contractual relations is preempted where this cause of action addresses an area of exclusive federal concern. View "Morris B. Silver M.D., Inc. v. Int'l Longshore & Warehouse Union" on Justia Law

Posted in: Contracts, ERISA

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UEBT is a healthcare employee benefits trust governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and pays healthcare providers directly from its own funds for the services provided to enrollees in its health plans. UEBT contracted with a “network vendor,” Blue Shield, to obtain access to Blue Shield’s provider network at the rates Blue Shield had separately negotiated, and certain administrative services. One of Blue Shield’s preexisting provider contracts was with Sutter, a group of health care providers in Northern California. UEBT sued Sutter, on behalf of a putative class of all California self-funded payors, alleging that Sutter’s contracts with network vendors, such as Blue Shield, contain anticompetitive terms that insulate Sutter from competition and drive up the cost of healthcare. UEBT sought damages, restitution, and injunctive relief under the Cartwright Act (Bus. & Prof. Code 16720) and California’s unfair competition law (section 17200). Sutter moved to compel arbitration, relying on an arbitration clause in the provider contract signed by Sutter and Blue Shield. The trial court denied Sutter’s motion, concluding that UEBT was not bound to arbitrate its claims pursuant to an agreement it had not signed or even seen. The court of appeal affirmed. View "UFCW & Employers Benefit Trust v. Sutter Health" on Justia Law

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Plaintiff Sonia Graciano was injured after she was hit by a car driven by Saul Ayala. Ayala was insured by defendant California Automobile Insurance Company (CAIC). Three weeks after Graciano's attorney first contacted CAIC regarding the accident, Graciano misidentified both the driver and the applicable insurance policy. CAIC investigated the accident, identified the applicable policy and the correct driver, and offered to settle Graciano's claim with a "full policy limits offer." Graciano did not accept CAIC's full policy limits offer and, in this suit, alleged CAIC and its parent and affiliated companies acted in bad faith, based on an alleged "wrongful failure to settle." Graciano argued CAIC could have and should have earlier discovered the facts, and should have made the full policy limits offer more quickly. The jury found in favor of Graciano and this appeal followed. CAIC argued that, as a matter of law, there was no evidence to support the verdict that CAIC acted in bad faith by unreasonably failing to settle Graciano's claim against Saul. The Court of Appeal agreed, and reversed the judgment.View "Graciano v. Mercury General Corp." on Justia Law