PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 13-1408

_____________

ALEXANDER L. MENKES; STEPHEN WOLFE,

individually and on behalf of all others similarly situated,

 Appellants

v.

PRUDENTIAL INSURANCE COMPANY OF AMERICA, a 

New Jersey corporation;

QINETIQ NORTH AMERICA OPERATIONS, LLC, a 

Delaware corporation;

QINETIQ NORTH AMERICA, INC., a Delaware 

corporation;

WESTAR AEROSPACE & DEFENSE GROUP, INC, a 

Nevada corporation;

DOES 1-100, presently known individuals, partnerships, 

companies

and/or other entities, inclusive

____________

On Appeal from the United States District Court

for the District of New Jersey

(No. 2-12-cv-02880)

District Judge: Hon. Susan D. Wigenton

____________

Argued: December 10, 2013

Before: McKEE, Chief Judge, FUENTES, and CHAGARES, 

Circuit Judges.

(Filed: August 6, 2014)
2

Andrew P. Bell, Esq. (ARGUED)

Michael A. Galpern, Esq.

Locks Law Firm, LLC

457 Haddonfield Road, Suite 500

Cherry Hill, NJ 08002

Counsel for Appellants

Hillary Richard, Esq. (ARGUED)

MaryAnn Sung, Esq.

Brune & Richard LLP

One Battery Park Plaza, 34th Floor

New York, NY 10004

Melissa A. Herbert, Esq.

Robin H. Rome, Esq.

Kristine V. Ryan, Esq.

Nukk-Freeman & Cerra, P.C.

26 Main Street, Suite 301

Chatham, NJ 07928

Counsel for Appellee Prudential Insurance Co.

of America

Kimberly B. Martin, Esq.

Scott B. Smith, Esq. (ARGUED)

Bradley, Arant, Boult, Cummings LLP

200 Clinton Avenue West, Suite 900

Huntsville, AL 35801

Edmund S. Sauer, Esq.

Bradley, Arant, Boult, Cummings LLP

1600 Division Street, Suite 700

Nashville, TN 32703

Diane A. Bettino, Esq.

Kellie A. Lavery, Esq.

Reed Smith LLP

Princeton Forrestal Village

136 Main Street, Suite 250

Princeton, NJ 08540

Counsel for Appellees Qinetiq N.A. Operations, LLC, 

Qinetiq, N.A., Inc., & Westar Aerospace & Defense Group, 

Inc.
3

____________

OPINION

____________

CHAGARES, Circuit Judge.

Putative class plaintiffs Alexander L. Menkes and 

Stephen Wolfe appeal the District Court’s dismissal of their 

complaint for failure to state a claim. This appeal requires us 

to determine whether certain supplemental insurance 

coverage is governed by the Employee Retirement Income 

Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. 

We conclude that in the circumstances presented here, it is, 

and that it cannot be unbundled from the plaintiffs’ broader 

employer-provided ERISA benefits plan. We then must 

decide whether ERISA preempts the various state law claims 

that the plaintiffs asserted. Concluding that it does, we will 

affirm the District Court’s dismissal. 

I.

We take the following facts from the plaintiffs’ 

complaint, documents to which it referred and upon which it 

relied, and the plaintiffs’ proposed amended complaint, which 

we must accept as true for the purposes of a motion to 

dismiss. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d 

Cir. 2009). The plaintiffs were employed by defense 

contractor defendant Qinetiq1to work on a military base in 

Kirkuk, Iraq in 2008. As employees, the plaintiffs were 

automatically enrolled in Qinetiq’s Basic Long Term 

Disability, Basic Life, and Accidental Death and

Dismemberment insurance policies (the “Basic Policies”). It 

 

1

The plaintiffs were variously employed by defendants 

Qinetiq North America Operations, LLC, Qinetiq North 

America, Inc., and Westar Aerospace & Defense Group, Inc., 

all of which share the same ownership. The claims against all 

three of these defendants are the same, and the defendants 

defended this case collectively.
4

is undisputed that Qinetiq offered this insurance coverage

pursuant to ERISA. These policies were established pursuant 

to a single group contract with the Prudential Insurance 

Company of North America, and Qinetiq paid the premiums 

for each of these policies on behalf of its employees. 

Both plaintiffs also purchased supplemental insurance 

coverage to augment their basic benefits. Both purchased 

what the plaintiffs term “Supplemental Long Term 

Disability” (“Buy Up LTD”) coverage, and Menkes 

purchased “Supplemental Accidental Death & 

Dismemberment” (“Supplemental AD&D”) coverage 

(collectively, the “Supplemental Coverage”).2The plaintiffs 

paid additional premiums out of their own funds for this 

Supplemental Coverage in return for enhanced benefits 

should they sustain a covered injury. 

The Supplemental Coverage operated pursuant to the 

exact same benefit terms, rules, exclusions, and claim 

procedures as the Basic Policies. These terms, rules, 

exclusions, and claim procedures for the Basic Policies and 

Supplemental Coverage were outlined in a single insurance 

booklet certificate (“Booklet”) and a single summary plan 

description (“SPD”) for each type of insurance. That is, the 

terms, rules, exclusions, and claim procedures for Qinetiq’s 

long term disability policy, for example, were contained in a 

single Booklet and SPD; there were not separate Booklets and 

SPDs for the Basic Policy and Supplemental Coverage. Each 

SPD explicitly stated that the insurance coverage was being 

provided “under your Employer’s ERISA plan(s).” Appendix 

(“App.”) 553, 621. Each Booklet stated that the plaintiffs’ 

coverage was governed by a single group contract between 

Qinetiq and Prudential, and that Qinetiq was the plan sponsor 

and administrator. App. 552, 620. Had Qinetiq chosen not to 

provide (or to terminate) the Basic Policies, its employees 

would not have been able to purchase (or continue) the 

Supplemental Coverage. An employee seeking benefits

under a given policy would file a single claim, not separate 

 

2

The plaintiffs’ original complaint alleges that they also 

purchased Supplemental Term Life coverage, but they do not 

seek any relief related to this policy on appeal.
5

claims for Basic Policy benefits and Supplemental Coverage 

benefits.

As is relevant to this appeal, each Booklet informed 

the plaintiffs of the policies’ respective war exclusion 

policies. The Long Term Disability Booklet provided that 

“[y]our plan does not cover a disability due to war, declared 

or undeclared, or any act of war.” App. 531. The Accidental 

Death and Dismemberment Booklet provided that loss is not 

covered if it results from “[w]ar, or any act of war. ‘War’ 

means declared or undeclared war and includes resistance to 

armed aggression.” App. 594. These war exclusion clauses 

applied to both the Basic Policies and the Supplemental 

Coverage because, again, each type of coverage was 

governed by a single set of documents with a single set of 

rules and exclusions. 

The plaintiffs were not otherwise uninsured for injuries 

they incurred on account of war or acts of war. As part of its 

government contract, Qinetiq also obtained insurance for its 

employees as required by the Defense Base Act (“DBA”), 42 

U.S.C. § 1651. DBA insurance provides coverage for warrelated injuries sustained by contract employees while serving 

at military bases abroad. Qinetiq obtained this coverage not 

from Prudential, but from the Insurance Company of the State 

of Pennsylvania (“ICSP”).

Menkes filed a claim under his Long Term Disability 

policy for three injuries he received while in Iraq: (1) a back 

injury, (2) a positive tuberculosis (“TB”) test, and (3) posttraumatic stress disorder (“PTSD”). Prudential denied his 

claim for all three injuries. It used the war exclusion 

provision to deny benefits only for his PTSD injury. It 

declined to compensate him for his back injury because it 

determined that his injury did not sufficiently impair his 

ability to pursue his regular occupation. It declined to 

compensate him for his claimed TB because he subsequently 

had a negative TB test and showed no signs of being affected 

by any TB symptoms. Menkes filed only a single claim for 

benefits owed to him under his Long Term Disability policy 

— he does not allege that he filed one claim for benefits 

under the Basic Policy and another for benefits under the 

Supplemental Coverage. Menkes filed another claim for 
6

benefits under his DBA policy for these same injuries. 

Although ICSP and Qinetiq disputed the extent of his injuries, 

the parties ultimately agreed to settle that claim.

Wolfe does not allege that he suffered any injury or 

ever filed any claim for benefits under either one of the 

Prudential policies or the DBA policy.

The plaintiffs filed this action in the District of New 

Jersey on May 14, 2012. In their original complaint, they 

alleged six counts, including: (1) violation of the New Jersey 

Consumer Fraud Act (“CFA”), N.J. Stat. Ann. § 56:8-1, et 

seq.; (2) violation of the Truth in Consumer Contract, 

Warranty, and Notice Act (“TCCWNA”), N.J. Stat. Ann. § 

56:12-1, et seq.; (3) breach of contract and breach of the 

implied covenant of good faith and fair dealing; (4) 

intentional or negligent misrepresentation and/or omission; 

(5) punitive damages; and (6) alternatively, violation of the 

consumer fraud laws of various states. They contended that 

Prudential fraudulently induced them to buy the Supplemental

Coverage knowing that any claim they filed would likely be 

subject to the war exclusion clauses because their place of

employment was in a war zone in Iraq, rendering the 

Supplemental Coverage effectively worthless.

3

 They 

additionally alleged that Prudential deliberately concealed a

policy or practice of using the war exclusion clauses to deny 

benefits for any and all injuries suffered while stationed 

abroad. The remedies the plaintiffs sought were limited to

return of the premiums they paid and punitive damages.4

The District Court dismissed the suit in its entirety. It 

held that the Supplemental Coverage was governed by 

 

3

These same war exclusion clauses would have rendered the 

Basic Policies (for which defendant Qinetiq paid all of the 

premiums) worthless as well.

4

The plaintiffs brought this as a putative class action on 

behalf of all employees of Department of Defense contractors 

who worked in Iraq and/or Afghanistan from February 10, 

2006 through the present who purchased Supplemental 

Coverage with a war exclusion clause. App. 39-40. Menkes 

sought to represent an additional sub-class of employees who 

had sought and were denied benefits under the Supplemental 

Coverage. App. 40.
7

ERISA and could not be unbundled from the Basic Policies. 

Viewing the Basic Policies and Supplemental Coverage as 

closely related component parts of a single plan, it held that 

all of the plaintiffs’ state law claims were expressly 

preempted by ERISA’s broad preemption clause, § 514(a), 

which provides that ERISA “shall supersede any and all State 

laws insofar as they may now or hereafter relate to any 

employee benefit plan.” 29 U.S.C. § 1144(a). In the 

alternative, it held that the plaintiffs’ claims were preempted 

by § 502(a) of ERISA because the causes of action that the 

plaintiffs asserted conflicted with ERISA’s exclusive civil 

enforcement scheme. It also held that the DBA preempted 

Menkes’s state law claims. 

The District Court also denied the plaintiffs’ motion 

for leave to amend their complaint as futile. The plaintiffs 

submitted a proposed amended complaint in which they: (1) 

deleted any reference to the New Jersey TCCWNA, (2) 

deleted all references to the term life insurance policies, and 

(3) added a state law breach of fiduciary duty claim. The 

court addressed these proposed revisions in its opinion and 

held that the proposed amended complaint was substantially 

similar to the original. The plaintiffs timely appealed.

II.

The District Court exercised jurisdiction pursuant to

the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2). We 

have jurisdiction pursuant to 28 U.S.C. § 1291. 

Our review of the District Court’s grant of a motion to 

dismiss based on ERISA preemption is plenary. Pryzbowski 

v. U.S. Healthcare, Inc., 245 F.3d 266, 268 (3d Cir. 2001). 

To survive a motion to dismiss pursuant to Fed. R. Civ. P. 

12(b)(6), a plaintiff must 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 (2007). A complaint has facial 

plausibility when there is enough 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 (2009). A court must accept all factual 

allegations in the complaint as true and draw all reasonable 
8

inferences in favor of the plaintiff. Phillips v. Cnty. of 

Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). 

We review the denial of a motion for leave to amend 

for abuse of discretion. Lum v. Bank of Am., 361 F.3d 217, 

223 (3d Cir. 2004).

III.

The plaintiffs contend that the District Court erred in 

concluding that their state law claims were preempted by 

ERISA § 514(a), 29 U.S.C. § 1144(a), which broadly 

preempts state laws that “relate to” an ERISA plan. The 

plaintiffs argue that their claims are not preempted because: 

(1) the Supplemental Coverage is not a “plan” that was

“established or maintained” by Qinetiq, and (2) the 

Supplemental Coverage is excluded from the scope of ERISA 

by virtue of a regulatory safe harbor. We conclude that the 

first contention is without merit and that the Supplemental 

Coverage, as part of Qinetiq’s broader benefits plan, is 

governed by ERISA.

A.

ERISA applies to “any employee benefit plan if it is 

established or maintained . . . by any employer engaged in 

commerce.” 29 U.S.C. § 1003(a). ERISA defines an 

employee welfare benefit plan as “any plan, fund, or program 

which was heretofore or is hereafter established or maintained 

by an employer or by an employee organization, or by both, 

to the extent that such plan, fund, or program was established 

or is maintained for the purpose of providing [certain 

benefits] for its participants or their beneficiaries, through the 

purchase of insurance or otherwise.” 29 U.S.C. § 1002(1). 

An ERISA plan “‘is established if from the surrounding 

circumstances a reasonable person can ascertain [1] the 

intended benefits, [2] a class of beneficiaries, [3] the source 

of financing, and [4] procedures for receiving benefits.’” 

Shaver v. Siemens Corp., 670 F.3d 462, 475 (3d Cir. 2012) 

(quoting Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th 

Cir. 1982) (en banc)). The “crucial factor” in determining 

whether a “plan” has been established is “whether the 

employer has expressed an intention to provide benefits on a 
9

regular and long-term basis.” Gruber v. Hubbard Bert Karle 

Weber, Inc., 159 F.3d 780, 789 (3d Cir. 1998).

One of the touchstones of a plan that is governed by 

ERISA is the “establishment and maintenance of a separate 

and ongoing administrative scheme,” which the plan 

administrator must set up in order to determine eligibility for 

benefits. Shaver, 670 F.3d at 476 (citing Angst v. Mack 

Trucks, Inc., 969 F.2d 1530, 1538 (3d Cir. 1992)). This 

feature derives from the Supreme Court’s decision in Fort 

Halifax Packing Co. v. Coyne, 482 U.S. 1, 11 (1987), in 

which the Court held that ERISA preemption was designed 

“to afford employers the advantages of a uniform set of 

administrative procedures governed by a single set of 

regulations,” in situations where there exists an “ongoing 

administrative program to meet the employer’s obligation.” 

An administrative scheme “‘may arise where the employer, to 

determine the employee’s eligibility for and level of benefits, 

must analyze each employee’s particular circumstances in 

light of the [policy’s] criteria.’” Shaver, 670 F.3d at 477 

(quoting Kulinski v. Medtronic Bio-Medicus, Inc., 21 F.3d 

254, 257 (8th Cir. 1994)).

Given the circumstances outlined in the plaintiffs’ 

complaint, Qinetiq “established and maintained” the 

Supplemental Coverage within the meaning of ERISA. It is 

undisputed that the Supplemental Coverage was governed by 

the same Booklets and SPDs as the Basic Policies. These 

documents quite clearly outlined the intended benefits (see

App. 512-13, 571-73, describing the amount and frequency of 

benefit payments), the class of beneficiaries (see App. 512, 

517-18, 575-76, describing who is eligible to become 

insured), the source of financing (see App. 513, 573, 

informing employees that Qinetiq paid all of the premiums 

for the basic Long Term Disability and basic Accidental 

Death and Dismemberment policies, but that employees must 

contribute to receive other coverage), and the procedures for 

receiving benefits (see App. 553-56, 621-24, detailing each 

policy’s “claim procedures”). 

The portion of the SPDs that details “claim 

procedures” indicates that there existed a comprehensive 

administrative scheme for determining eligibility for benefits 

after an employee filed a claim. The SPDs each promised 
10

that Prudential would notify a claimant regarding a 

determination of eligibility for benefits within forty-five days 

of filing a claim. The criteria for eligibility were exhaustively 

set out in the Booklets. If a claim were denied, Prudential 

promised to inform the employee in writing of the specific 

reason for the denial, whether the denial could be cured, and 

the procedures for appealing the denial. This administrative 

scheme clearly evidences Qinetiq’s “intention to provide 

benefits on a regular and long-term basis.” Gruber, 159 F.3d 

at 789. Qinetiq therefore “established and maintained” the 

Basic Policies and Supplemental Coverage, which operated as 

a single plan, within the meaning of ERISA.

B.

Although the Basic Policies indisputably were 

governed by ERISA, the plaintiffs argue that the 

Supplemental Coverage ought to be “unbundled” and 

analyzed separately. They contend that if the Supplemental 

Coverage is viewed separately, then the Supplemental 

Coverage is not a welfare benefit plan that is governed by 

ERISA because of a regulatory safe harbor that excludes 

certain “programs.” See 29 C.F.R. § 2510.3-1(j). The 

plaintiffs, however, point to no authority that would suggest 

that closely related components of an overarching welfare 

benefit plan ought to be unbundled, and in the circumstances 

presented here, there are several compelling reasons not to do 

so.

All of the characteristics of the Basic Policies and 

Supplemental Coverage indicate that they are not two 

separate sources of coverage, but two parts of one broader 

benefits plan. All of the Basic Policies and Supplemental 

Coverage were governed by a single group contract between 

Qinetiq and Prudential. All of the information regarding 

benefit terms, rules, exclusions, and claim procedures for the 

Basic Policies and Supplemental Coverage were the same and 

contained in the same documents; Qinetiq did not issue 

separate Booklets and SPDs for the Supplemental Coverage. 

If an employee wanted to know, for example, the procedure 

for filing a claim, he would look in only one place, and then 

file only one claim. Purchasing the Supplemental Coverage 
11

merely bestowed a higher level of benefits pursuant to the 

same terms.

Viewing the Basic Policies and Supplemental 

Coverage as two parts of a broader whole is consistent with 

ERISA’s policy goals. One of the statute’s principal aims is 

to avoid subjecting regulated entities to conflicting sources of 

substantive law. N.Y. State Conference of Blue Cross & Blue 

Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 656-57 

(1995). Such uniform regulation “is impossible . . . if plans 

are subject to different legal obligations in different States.” 

Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 148 

(2001). Making different parts of a single, integrated plan 

subject to differing legal regimes could actually deter 

employers from offering such additional coverage in the first 

place. Conkright v. Frommert, 559 U.S. 506, 517 (2010). 

Accordingly, we hold that the Supplemental Coverage 

cannot be unbundled from the Basic Plans. In so holding, we 

join every Court of Appeals to have considered whether to 

unbundle closely related components of an employer’s 

broader ERISA benefits plan and declined to do so. For 

example, in Gross v. Sun Life Assurance Co. of Canada, 734 

F.3d 1 (1st Cir. 2013), the plaintiff’s employer paid all of its 

employees’ premiums for life and accidental death and 

dismemberment insurance, but employees paid all of their 

own premiums for optional long term disability coverage. Id.

at 4. After the plaintiff’s insurance company denied her 

coverage under the long term disability policy, she brought 

numerous state law claims against the carrier responsible for 

the long term disability policy. The district court held that 

her claims with respect to the long term disability policy were 

preempted and the Court of Appeals for the First Circuit 

affirmed. The Court of Appeals viewed the long term 

disability policy as part of a “comprehensive employee

benefit plan” that the employer offered its employees. Id. at 7 

(quotation marks omitted). The court noted that the employer 

offered all three policies pursuant to the same group contract 

with its insurer, and the benefits, rules, exclusions, and claim 

procedures were covered by the same plan documents. Id. at 

8. It held that because a “‘plan’ under ERISA may embrace 

one or more policies,” there was “no justification for isolating 

the long-term disability policy from [the employer’s] 

insurance package.” Id.; see also Sgro v. Danone Waters of 
12

N. Am., Inc., 532 F.3d 940, 943 (9th Cir. 2008) (“So long as 

[the employer] pays for some benefits, ERISA applies to the 

whole plan, even if employees pay entirely for other 

benefits.”); Postma v. Paul Revere Life Ins. Co., 223 F.3d 

533, 538 (7th Cir. 2000) (“For purposes of determining 

whether a benefit plan is subject to ERISA, its various aspects 

ought not be unbundled.”); Gaylor v. John Hancock Mut. Life 

Ins. Co., 112 F.3d 460, 463 (10th Cir. 1997) (refusing to sever 

optional insurance coverage that “was a feature of the Plan, 

notwithstanding the fact that the cost of such coverage had to

be contributed by the employee”); Glass v. United of Omaha 

Life Ins. Co., 33 F.3d 1341, 1345 (11th Cir. 1994) (“The 

Elect Life feature is part and parcel of the whole group 

insurance plan and thus ERISA governs it.”).

Because the Supplemental Coverage cannot be 

unbundled from the Basic Policies here, the regulatory safe 

harbor cannot save the plaintiffs’ state law claims. See Gross, 

734 F.3d at 10 (“Our rejection of [the plaintiff’s] assumption 

that [the employer] provided multiple, independent plans is 

fatal to her safe harbor argument.”); accord Sgro, 532 F.3d at 

942-43; Gaylor, 112 F.3d at 463; Glass, 33 F.3d at 1345. The 

safe harbor provides that “a group or group-type insurance 

program offered by an insurer to employees or members of an 

employee organization” is not considered an ERISA plan, but 

rather a non-ERISA “program” if the following requirements 

are met:

(1) No contributions are made by an employer 

or employee organization;

(2) Participation [in] the program is completely 

voluntary for employees or members;

(3) The sole functions of the employer or 

employee organization with respect to the 

program are, without endorsing the program, 

to permit the insurer to publicize the 

program to employees or members, to 

collect premiums through payroll deductions 

or dues checkoffs and to remit them to the 

insurer; and

(4) The employer or employee organization 

receives no consideration in the form of cash 

or otherwise in connection with the 
13

program, other than reasonable 

compensation, excluding any profit, for 

administrative services actually rendered in 

connection with payroll deductions or dues 

checkoffs. 

29 C.F.R. § 2510.3-1(j). Group programs must meet all four 

criteria to be exempted from ERISA. See Stuart v. UNUM 

Life Ins. Co. of Am., 217 F.3d 1145, 1153 (9th Cir. 2000) 

(collecting authority). 

It is undisputed that Qinetiq paid the premiums for the 

Basic Policies and that it automatically enrolled the plaintiffs 

in basic coverage merely because they were employees. The 

plaintiffs thus fail to meet the first two of the four criteria that 

must all apply in order for the safe harbor to carve out a 

“program” from ERISA’s otherwise expansive “uniform 

regulatory regime.” Aetna Health Inc. v. Davila, 542 U.S. 

200, 208 (2004).

IV.

Having concluded that ERISA governs the 

Supplemental Coverage, we must now examine whether the 

specific causes of action asserted by the plaintiffs are 

preempted by ERISA’s “expansive pre-emption provisions.” 

Id. ERISA possesses “extraordinary pre-emptive power.” 

Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987). 

Congress hoped that consolidating regulation and decisionmaking with respect to covered plans in the federal sphere 

would promote uniform administration of benefit plans and 

avoid subjecting regulated entities to conflicting sources of 

substantive law. Travelers Ins., 514 U.S. at 657. Congress 

intended to “minimize the administrative and financial 

burden” imposed on regulated entities, Ingersoll-Rand Co. v. 

McClendon, 498 U.S. 133, 142 (1990), and to expand 

employers’ provision of benefits in light of the more 

“predictable set of liabilities,” Rush Prudential HMO, Inc. v. 

Moran, 536 U.S. 355, 379 (2002).

Two variants of ERISA preemption are relevant to this 

appeal. The first is express preemption under ERISA § 

514(a). ERISA’s express preemption provision provides that 
14

ERISA’s regulatory structure “shall supersede any and all 

State laws insofar as they may now or hereafter relate to any 

employee benefit plan [subject to ERISA].” 29 U.S.C. § 

1144(a).5 “Relate to” has always been given a broad,

common-sense meaning, such that a state law “‘relates to’ an 

employee benefit plan, in the normal sense of the phrase, if it 

has a connection with or reference to such a plan.” Shaw v. 

Delta Air Lines, Inc., 463 U.S. 85, 96-97 (1983). “State law” 

includes “all laws, decisions, rules, regulations, or other State 

action having the effect of law, of any State,” 29 U.S.C. § 

1144(c)(1), and is “not limited to state laws specifically 

designed to affect employee benefit plans,” Pilot Life Ins. Co. 

v. Dedeaux, 481 U.S. 41, 47-48 (1987) (quotation marks 

omitted). In determining whether a claim “relates to” an 

ERISA plan, we must also consider “the objectives of the 

ERISA statute as a guide to the scope of the state law that 

Congress understood would survive” preemption. Cal. Div. 

of Labor Standards Enforcement v. Dillingham Constr., N.A., 

Inc., 519 U.S. 316, 325 (1997) (quotation marks omitted). 

State common law claims, including those raised here, 

routinely fall within the ambit of § 514. See Ingersoll-Rand, 

498 U.S. at 140; Nat’l Sec. Sys., Inc. v. Iola, 700 F.3d 65, 83 

(3d Cir. 2012).

Some of the plaintiffs’ claims also implicate conflict 

preemption.6 Congress intended for the causes of action and 

remedies available under ERISA § 502 to be the exclusive 

 

5

The parties do not contend that either ERISA’s “savings 

clause,” § 514(b)(2)(A), 29 U.S.C. § 1144(b)(2)(A), which 

exempts state laws that regulate insurance, banking, or 

securities, or its “deemer clause,” § 514(b)(2)(B), 29 U.S.C. § 

1144(b)(2)(B), which makes clear that a state law that 

regulates insurance, banking, or securities cannot deem an 

employee benefit plan to be an insurance company, applies, 

and neither does.

6

The District Court also analyzed the plaintiffs’ claims under 

“complete preemption.” App. 804-05. Complete preemption 

is a “jurisdictional concept,” not a substantive concept 

governing which law is applicable, like express or conflict 

preemption. In re U.S. Healthcare, Inc., 193 F.3d 151, 160 

(3d Cir. 1999). There is no dispute over subject matter 

jurisdiction in this suit, which is proper.
15

vehicles for actions by ERISA plan participants asserting 

improper plan administration. Pilot Life, 481 U.S. at 54. A 

claim is conflict preempted by § 502 when it “duplicates, 

supplements, or supplants the ERISA civil enforcement 

remedy.” Aetna Health, 542 U.S. at 209. Section 502 bars 

any claim that “provides a form of ultimate relief in a judicial 

forum that add[s] to the judicial remedies provided by 

ERISA.” Barber v. UNUM Life Ins. Co. of Am., 383 F.3d 

134, 140 (3d Cir. 2004) (quotation marks omitted).

The plaintiffs’ claims fall into three broad categories: 

(1) common law fraud, misrepresentation, and violation of the 

New Jersey CFA; (2) breach of contract, breach of the 

implied covenant of good faith and fair dealing, and breach of 

fiduciary duty; and (3) punitive damages.7 In the 

circumstances presented here, ERISA preempts all three sets 

of claims.8

A.

The plaintiffs’ claims for common law fraud,

misrepresentation, and violation of the New Jersey CFA 

relate to the plaintiffs’ ERISA plan because they are premised 

on the existence of the plan and require interpreting the plan’s

terms. In order to state a claim for common law fraud, a 

plaintiff must claim that the defendant made a material 

misrepresentation. See Banco Popular N. Am. v. Gandi, 876 

A.2d 253, 260 (N.J. 2005). The contours of a CFA violation 

are similar in that the plaintiff must claim that the defendant 

engaged in unlawful conduct that includes employing a 

 

7

The plaintiffs’ complaint also alleged violations of the New 

Jersey TCCWNA, which prohibits misleading contracts, and 

violations of statutory consumer fraud laws of every state 

(except Ohio) and the District of Columbia. App. 49, 55-61. 

The plaintiffs do not challenge the dismissal of these claims 

on appeal. Therefore, they have waived any arguments they 

had related to these laws. See Sharp v. Johnson, 669 F.3d 

144, 152 n.10 (3d Cir. 2012).

8 Because we hold that ERISA preempts all of the plaintiffs’ 

claims, we need not reach the District Court’s alternative 

conclusion that the plaintiffs’ claims were also preempted by 

the DBA.
16

misrepresentation or omitting a material fact. See N.J. Stat. 

Ann. § 56:8-2; see also Manahawkin Convalescent v. O’Neill, 

85 A.3d 947, 960 (N.J. 2014). The plaintiffs’ contention here 

is that the defendants “deliberately concealed material facts 

regarding the [Supplemental Coverage], including but not 

limited to: (1) the [Supplemental Coverage] did not provide 

disability benefits in the event Plaintiffs and members of the 

Class were injured in Iraq and/or Afghanistan; [and] (2) 

Defendant Prudential would deny the disability claims of 

Plaintiffs and members of the Class based upon the war 

exclusion in the [Supplemental Coverage].” App. 21

(Complaint ¶ 35). 

Resolving these allegations would require a court to 

assess the defendants’ “representations in light of the 

plaintiffs’ benefits and rights under the plans.” Iola, 700 F.3d 

at 84. When the plaintiffs decided to pay additional 

premiums to enroll in the Supplemental Coverage, they 

(rightly or wrongly) thought that the policies would cover 

them in a certain set of circumstances. The war exclusions

reduced the set of covered circumstances. Determining 

whether the coverage was of negligible value involves 

determining the set of covered circumstances, which involves 

reference to the war exclusion, which is part of the policy. 

“This type of analysis — concerning the accuracy of 

statements . . . to plan participants in the course of 

administering the plans — sits within the heartland of 

ERISA,” and ERISA expressly preempts these claims. Id. 

Courts have routinely held that claims like these that sound in 

fraud are expressly preempted by ERISA. See Pilot Life, 481 

U.S. at 47 (fraudulent inducement claim preempted by 

ERISA); Iola, 700 F.3d at 84 (claims for misrepresentations 

about commissions and size of reserve fund preempted 

because they were premised on the existence of the ERISA 

plans); Berger v. Edgewater Steel Co., 911 F.2d 911, 923 (3d 

Cir. 1990) (misrepresentation claim premised on a deceptive 

statement in a letter regarding plan amendments preempted 

because the letter related to the ERISA plan).9

 

9

The same is true of the CFA claim. Other Courts of 

Appeals have held that similar consumer fraud statutes are 

also expressly preempted by ERISA. See, e.g., Paneccasio v. 

Unisource Worldwide, Inc., 532 F.3d 101, 114 (2d Cir. 2008) 
17

The plaintiffs attempt to circumvent this barrier by 

arguing that their claims relate to an unstated policy or 

practice of automatically denying claims based on the war 

exclusion clauses even in situations where the exclusions 

should not apply. However, this is still a claim that is about 

the benefits owed and is expressly preempted by ERISA. The 

plaintiffs ignore that proving this claim will require reference 

to plan documents to determine what each policy covers, and 

then examining Prudential’s claims administration processing 

and procedures in light of the plan’s contours. In essence, 

they allege that Prudential was consistently making improper 

benefit determinations. Where liability is predicated on a 

plan’s administration, ERISA preempts state law claims 

because “a benefit determination is part and parcel of the 

ordinary fiduciary responsibilities connected to the 

administration of a plan.” Aetna Health, 542 U.S. at 219; see 

also Kollman v. Hewitt Assocs., LLC, 487 F.3d 139, 150 (3d 

Cir. 2007) (determining whether erroneous benefits 

calculation was malpractice would require consulting what 

benefits the plan provides and was thus preempted).

B.

The plaintiffs’ claims for breach of contract, breach of 

the implied covenant of good faith and fair dealing, and 

breach of fiduciary duty10 are likewise expressly preempted 

because they also relate to the administration of the ERISA 

 

(claim under the Connecticut Unfair Trade Practices Act 

concerning improper denial of benefits related to the plan and 

was preempted); Anderson v. Humana, Inc., 24 F.3d 889, 891 

(7th Cir. 1994) (application of Illinois’s consumer protection 

law to representations made in documents regulated by 

ERISA plan was preempted). A number of district courts in 

this Circuit have also held that the New Jersey CFA is 

expressly preempted. See, e.g., Beye v. Horizon Blue Cross 

Blue Shield of N.J., 568 F. Supp. 2d 556 (D.N.J. 2008).

10 The plaintiffs brought their claim for state law breach of 

fiduciary duty in their amended complaint. See App. 496. 

The District Court denied the plaintiffs’ motion for leave to 

amend the complaint as futile because this breach of fiduciary 

duty claim — the only claim that the plaintiffs sought to add 

— was preempted. For the reasons stated herein, we agree.
18

plans. To prove breach of contract, a contract must have 

existed. See Sheet Metal Workers Int’l Ass’n Local Union 

No. 27, AFL-CIO v. E.P. Donnelly, Inc., 737 F.3d 879, 900 

(3d Cir. 2013). The plaintiffs specifically allege that the 

contracts that the defendants purportedly breached were the 

insurance policies they purchased. See App. 50 (Complaint ¶ 

171). The defendants owed the plaintiffs fiduciary duties 

only on account of these agreements. 

These claims again relate to the improper denial of 

benefits because of the war exclusion clause. Claims 

involving denial of benefits or improper processing of 

benefits require interpreting what benefits are due under the 

plan. Because these claims explicitly require reference to the 

plan and what it covers, they are expressly preempted. See

Pilot Life, 481 U.S. at 47-48 (breach of contract claim 

expressly preempted); accord Pane v. RCA Corp., 868 F.2d 

631, 635 (3d Cir. 1989).

C.

The plaintiffs’ claim for punitive damages is conflict 

preempted by ERISA’s exclusive civil remedy scheme in § 

502(a). As we have previously held, the Supreme Court’s 

decision in “Aetna Health confirms that conflict preemption 

applies to any ‘state cause of action that provides an 

alternative remedy to those provided by the ERISA civil 

enforcement mechanism’ because such a cause of action 

‘conflicts with Congress’ clear intent to make the ERISA 

mechanism exclusive.’” Barber, 383 F.3d at 140 (quoting 

Aetna Health, 542 U.S. at 214 n.4). Congress did not make 

punitive damages available under ERISA. “The policy 

choices reflected in the inclusion of certain remedies and the 

exclusion of others under the federal scheme would be 

completely undermined if ERISA-plan participants and 

beneficiaries were free to obtain remedies under state law that 

Congress rejected in ERISA.” Pilot Life, 481 U.S. at 54. 

Because Congress did not choose to include punitive damages 

as an available remedy, ERISA § 502(a) conflicts with and 

preempts the plaintiffs’ state law claim. See Pane, 868 F.2d 
19

at 635 & n.2 (ERISA preempted claim for punitive 

damages).11

V.

For the foregoing reasons, we will affirm the order of 

the District Court dismissing the plaintiffs’ complaint for 

failure to state a claim and denying leave to file an amended 

complaint.

 

11 The plaintiffs also argue that their state law claims are not 

preempted because another remedy they seek — return of 

premiums — is not available under ERISA. This argument 

conflates potential remedies with causes of action, and is also 

irrelevant. Any state laws that supplement the remedies 

available under ERISA conflict with the “clear congressional 

intent to make the ERISA remedy exclusive.” Aetna Health, 

542 U.S at 209. Furthermore, this kind of relief may well be 

available under ERISA § 502(a). The Supreme Court 

recently held, albeit in a different context, that “other 

appropriate equitable relief” in § 502(a)(3) may consist of 

“monetary compensation for a loss resulting from a trustee’s 

breach of duty, or to prevent the trustee’s unjust enrichment.” 

CIGNA Corp. v. Amara, 131 S. Ct. 1866, 1880 (2011) 

(quotation marks omitted). Several Courts of Appeals have 

held that the remedy of return of premiums is available under 

ERISA § 502(a). See, e.g., Kenseth v. Dean Health Plan, 

Inc., 722 F.3d 869, 882 (7th Cir. 2013); McCravy v. Metro. 

Life Ins. Co., 690 F.3d 176, 182-83 (4th Cir. 2012); 

Amschwand v. Spherion Corp., 505 F.3d 342, 348 (5th Cir. 

2007); Callery v. U.S. Life Ins. Co. in City of New York, 392 

F.3d 401, 407 (10th Cir. 2004).