1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-19-1995

Dukes v US Healthcare

Precedential or Non-Precedential:

Docket 94-1373

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Recommended Citation

"Dukes v US Healthcare" (1995). 1995 Decisions. Paper 169.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/169
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 

 N0. 94-1373 

 

 CECILIA DUKES, Trustee Ad Litem of the Estate of 

 Darryl Dukes, Deceased, 

 Appellant 

v. 

 U.S. HEALTHCARE, INC.; GERMANTOWN HOSPITAL & MEDICAL CENTER; 

 WILLIAM W. BANKS, M.D.; CHARLES R. DREW MENTAL HEALTH CENTER; 

 EDWARD B. HOSTEN, M.D. 

 

 On Appeal From the United States District Court 

 For the Eastern District of Pennsylvania 

 (D.C. Civil Action No. 93-cv-00577) 

 

 N0. 94-1661 

 

 SERENA MARY VISCONTI, DECEASED, BY LINDA AND RONALD VISCONTI, 

 AS ADMINISTRATORS OF THE ESTATE OF SERENA MARY VISCONTI, 

 DECEASED; LINDA VISCONTI; RONALD VISCONTI, IN THEIR OWN RIGHT, 

 Appellants 

v. 

 U.S. HEALTH CARE, a/k/a 

 THE HEALTH MAINTENANCE ORGANIZATION OF PENNSYLVANIA/NJ 

 

 On Appeal From the United States District Court 

 For the Eastern District of Pennsylvania 

 (D.C. Civil Action No. 93-cv-06495) 

 

 Argued December 5, 1994 

 BEFORE: STAPLETON, ROTH and LEWIS, Circuit Judges
 (Opinion Filed June 19, l995 ) 

 

 

Attarah B. Feenane (Argued) 

Stephen C. Josel 

Stephen C. Josel & Associates, P.C. 

2019 Walnut Street 

Philadelphia, PA 19103 

 Attorneys for Appellant 

 in No. 94-1373 

Edward S. Wardell (Argued) 

Jeffrey S. Craig 

Kelley, Wardell & Craig 

41 Grove Street 

Haddonfield, NJ 08033 

 and 

David F. Simon 

U.S. Healthcare, Inc. 

P.O. Box 1180 

980 Jolly Road 

Blue Bell, PA 19422 

 Attorneys for Appellee 

 U.S. Healthcare, Inc. 

 in Nos. 94-1373 & 94-1661 

Thomas S. Williamson, Jr. 

Solicitor of Labor 

Marc I. Machiz 

Assistant Solicitor 

Plan Benefits Security Division 

Karen L. Handorf 

Counsel for Special Litigation 

G. William Scott (Argued) 

Trial Attorney 

U.S. Department of Labor 

Office of the Solicitor 

Plan Benefits Security Division 

P.O. Box 1914 

Washington, D.C. 20013 

 Attorneys for Amicus Curiae 

 U.S. Secretary of Labor 

 in Nos. 94-1373 & 94-1661 

Jeremy D. Mishkin 

Richard M. Simins 

Montgomery, McCracken, Walker & Rhoads 

Three Parkway - 20th Floor 
Philadelphia, PA 19102 

 Attorneys for Amicus Curiae 

 New Jersey HMO Association 

 in No. 94-1661 
 

 OPINION OF THE COURT

 

STAPLETON, Circuit Judge: 

 The plaintiffs in these two cases filed suit in state 

court against health maintenance organizations ("HMOs") organized 

by U.S. Healthcare, Inc., claiming damages, under various 

theories, for injuries arising from the medical malpractice of 

HMO-affiliated hospitals and medical personnel. The defendant 

HMOs removed both cases to federal court, arguing (1) that the 

injured person in each case had obtained medical care as a 

benefit from a welfare-benefit plan governed by the Employee 

Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 

§ 1001-1461 (1988), (2) that removal is proper under the 

Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987), 

"complete preemption" exception to the "well-pleaded complaint 

rule," and (3) that the plaintiffs' claims are preempted by 

§ 514(a) of ERISA, 29 U.S.C. § 1144(a). The district courts 

agreed with these contentions and dismissed the plaintiffs' 

claims against the HMOs. The plaintiffs appeal those rulings and 

ask that their claims against the HMOs be remanded to state 

court. 

 We hold that on the record before us, the plaintiffs' 

claims are not claims "to recover [plan] benefits due . . . under 

the terms of [the] plan, to enforce . . . rights under the terms 
of the plan, or to clarify . . . rights to future benefits under 

the terms of the plan" as those phrases are used in 

§ 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B). Accordingly, 

we hold that Metropolitan Life's "complete preemption" exception 

is inapplicable and that removal of these claims from state court 

was improper. We will reverse the judgments of the district 

courts and will remand each case to district court with 

instructions to remand the cases to the state courts from which 

they were removed. 

I. 

A. 

 Suffering from various ailments, Darryl Dukes visited 

his primary care physician, defendant Dr. William W. Banks, M.D., 

who identified a problem with Darryl's ears. A few days later, 

Banks performed surgery and prepared a prescription ordering that 

blood studies be performed. Darryl presented that prescription 

to the laboratory of Germantown Hospital and Medical Center but 

the hospital refused to perform the tests. The record does not 

reveal the reasons for the hospital's refusal. 

 The next day, Darryl sought treatment from defendant 

Dr. Edward B. Hosten, M.D. at the Charles R. Drew Mental Health 

Center, who also ordered a blood test. This time, the test was 

performed. Darryl's condition nevertheless continued to worsen 

and he died shortly thereafter. Darryl's blood sugar level was 

extremely high at the time of his death. That condition 
allegedly would have or could have been diagnosed through a 

timely blood test. 

 Darryl received his medical treatment through the 

United States Health Care Systems of Pennsylvania, Inc., a 

federally qualified health maintenance organization organized by 

U.S. Healthcare. As a qualified HMO under the federal Health 

Maintenance Organization Act of 1973, 42 U.S.C. §§ 300e-300e-17 

(1988), this U.S. Healthcare HMO provides basic and supplemental 

health services to its members on a pre-paid basis.1 As is often 

the case, Darryl received his membership in the HMO through his 

participation in an ERISA-covered welfare plan sponsored by his 

employer. 

 Darryl's wife, Cecilia Dukes, brought suit in state 

court alleging medical malpractice and other negligence against 

numerous defendants, including Banks, Hosten, the Germantown 

Hospital, and the Drew Center. She also brought suit against the 

HMO, alleging that as the organization through which Darryl 

received his medical treatment, it was responsible, under a 

 

1. HMOs often contain costs through a strategy known as 

"utilization review." See generally John D. Blum, An Analysis of 

Legal Liability in Health Care Utilization Review and Case 

Management, 26 Hous. L. Rev. 191, 192-93 (1989); Susan J. Stayn, 

Note, Securing Access to Care in Health Maintenance 

Organizations: Toward a Uniform Model of Grievance and Appeal 

Procedures, 94 Colum. L. Rev. 1674, 1677-83 (1994). Unlike 

traditional insurance policies, HMOs usually decide whether to 

reimburse patients for medical care prospectively -- through 

utilization or "pre-certification" review. The HMO may either 

perform the utilization review itself or assign the task to a 

third-party contractor. Id. at 1681; see also Corcoran v. United 

Healthcare, Inc., 965 F.2d 1321, 1323 (5th Cir.), cert. denied, 

113 S. Ct. 812 (1992). 
Pennsylvania state law ostensible agency theory (the "agency 

theory"), for the negligence of the various doctors and other 

medical-service providers. See Boyd v. Albert Einstein Medical 

Ctr., 547 A.2d 1229, 1234-35 (Pa. Super. Ct. 1988) (holding that 

an HMO may be held liable for malpractice under an ostensible 

agency theory where a patient looks to the HMO for care and the 

HMO's conduct leads the patient to reasonably believe that he or 

she is being treated by an employee of the HMO). She alleged 

further that the HMO failed to exercise reasonable care in 

selecting, retaining, screening, monitoring, and evaluating the 

personnel who actually provided the medical services (the "direct 

negligence theory"). 

 The HMO removed the case to district court pursuant to 

the Metropolitan Life complete-preemption exception to the "wellpleaded complaint rule." In its notice of removal, it claimed 

that the HMO is part of -- or at least plays a role in -- the 

ERISA plan to provide health benefits and that Dukes' claims, 

properly construed, "are directed to the structure and operation 

of the employer benefit plan." (Dukes app. at 31.) In its view, 

Dukes' claims therefore "relate to" the welfare plan and 

accordingly are preempted under ERISA § 514(a), 29 U.S.C. 

§ 1144(a). 

 Dukes moved for a remand and the HMO moved to dismiss. 

The district court denied Dukes' motion and granted the HMO's, 

explaining that Dukes' claims "related to" an ERISA plan -- and 

thus were preempted -- because (1) "any ostensible agency claim 

must be made on the basis of what the benefit plan provides and 
is therefore 'related' to it" and (2) "the treatment received 

must be measured against the benefit plan and is therefore also 

'related' to it." Dukes v. United States Health Care Sys., Inc., 

848 F. Supp. 39, 42 (E.D. Pa. 1994). It remanded to state court 

the remainder of Dukes' claims against the other defendants. Id.

at 43. 

B. 

 Ronald and Linda Visconti are the biological parents of 

Serena Visconti, who was stillborn. During the third trimester 

of her pregnancy with Serena, Linda apparently developed symptoms 

typical of preeclampsia. The Viscontis claim that Linda's 

obstetrician, Dr. Wisniewski, negligently ignored these symptoms 

and that this negligence caused Serena's death. 

 Like Darryl Dukes, Linda received her medical treatment 

through a federally qualified HMO organized by U.S. Healthcare. 

This HMO was called the Health Maintenance Organization of 

Pennsylvania/New Jersey. The Viscontis received their membership 

in the HMO through an ERISA-covered welfare plan. 

 Ronald Visconti, as administrator of Serena's estate, 

and Ronald and Linda, in their own right (collectively, "the 

Viscontis"), brought suit in the Philadelphia County Court of 

Common Pleas. They attempted to hold the HMO liable for Dr. 

Wisniewski's malpractice under ostensible and actual agency 

theories, alleging that when Linda became pregnant, the HMO held 

out Dr. Wisniewski as a competent and qualified participating 

obstetrician/gynecologist. They also sued the HMO under a direct 
negligence theory, claiming, among other things, that the HMO was 

negligent in its selection, employment, and oversight of the 

medical personnel who performed the actual medical treatment. 

 The HMO removed the case to federal court, asserting 

that the Viscontis' claims were completely preempted by ERISA. 

It then filed a motion to dismiss, and the Viscontis filed a 

motion to remand, contending that removal was improper and that 

ERISA did not preempt their state law claims. The district court 

denied the Viscontis' motion but granted the HMO's motion to 

dismiss. Visconti ex rel. Visconti v. U.S. Health Care, 857 F. 

Supp. 1097, 1105 (E.D. Pa. 1994). 

 The Visconti and Dukes cases have been consolidated on 

appeal. 

II. 

 The HMOs removed these cases to federal court pursuant 

to 28 U.S.C. § 1441, alleging that the district courts had 

original jurisdiction over the claims, because the claims 

"[arose] under the Constitution, treaties or laws of the United 

States." § 1441(b); 28 U.S.C. § 1331. To determine whether a 

claim "arises under" federal law -- and thus is removable -- we 

begin with the "well-pleaded complaint rule." See Metropolitan 

Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987); see also

Allstate Ins. Co. v. 65 Security Plan, 879 F.2d 90, 92-93 (3d 

Cir. 1989). 

 Under the well-pleaded complaint rule, a cause of 

action "arises under" federal law, and removal is proper, only if 
a federal question is presented on the face of the plaintiff's 

properly pleaded complaint. Franchise Tax Bd. v. Construction 

Laborers Vacation Trust, 463 U.S. 1, 9-12 (1983). A federal 

defense to a plaintiff's state law cause of action ordinarily 

does not appear on the face of the well-pleaded complaint, and, 

therefore, usually is insufficient to warrant removal to federal 

court. Gully v. First Nat'l Bank, 299 U.S. 109, 115-18 (1936). 

Thus, it is well-established that the defense of preemption 

ordinarily is insufficient justification to permit removal to 

federal court. Caterpillar, Inc. v. Williams, 482 U.S. 386, 398 

(1987) ("The fact that a defendant might ultimately prove that a 

plaintiff's claims are pre-empted under [a federal statute] does 

not establish that they are removable to federal court."). 

 The Supreme Court has recognized an exception to the 

well-pleaded complaint rule -- the "complete preemption" 

exception -- under which "Congress may so completely pre-empt a 

particular area that any civil complaint raising this select 

group of claims is necessarily federal in character." 

Metropolitan Life, 481 U.S. at 63-64; see generally Goepel v. 

National Postal Mail Handlers Union, 36 F.3d 306, 309-13 (3d Cir. 

1994) (discussing the Court's complete-preemption jurisprudence 

and holding that the Federal Employees Health Benefits Act did 

not completely preempt plaintiffs' state law claims), cert. 

denied, 131 L. Ed. 2d. 555 (1995); Allstate, 879 F.2d at 93-94 

(holding that the complete-preemption exception did not apply in 

a situation where an insurance company plaintiff sought 

contribution from an ERISA plan because § 502 of ERISA does not 
provide an express cause of action vindicating the interest that 

the suit sought to protect and enforce); Railway Labor Executives 

Ass'n v. Pittsburgh & Lake Erie R.R. Co., 858 F.2d 936, 939-43 

(3d Cir. 1988) (discussing the Court's complete-preemption 

doctrine and holding that neither the Railway Labor Act nor the 

Interstate Commerce Act completely preempted plaintiffs' state 

law fraudulent conveyance claims against railroads and railroad 

officials). The complete preemption doctrine applies when 

 the pre-emptive force of [the federal 

statutory provision] is so powerful as to 

displace entirely any state cause of action 

[addressed by the federal statute]. Any such 

suit is purely a creature of federal law, 

notwithstanding the fact that state law would 

provide a cause of action in the absence of 

[the federal provision]. 

Franchise Tax Bd., 463 U.S. at 23. Claims to enforce a 

collective-bargaining agreement under § 301 of the Labor 

Management Relations Act of 1947, 29 U.S.C. § 185, present a 

typical example of the complete-preemption doctrine at work: In 

Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557 (1968), the Court 

ruled that any claims to enforce a collective-bargaining 

agreement -- even when phrased as a state law cause of action to 

enforce a contract -- are removable to federal court. 

 The Supreme Court has determined that Congress intended 

the complete-preemption doctrine to apply to state law causes of 

action which fit within the scope of ERISA's civil-enforcement 

provisions.2 Metropolitan Life, 481 U.S. at 66. It explained: 

 

2. ERISA's "six carefully integrated civil enforcement 

provisions" are found in § 502. Massachusetts Mut. Life Ins. Co. 

v. Russell, 473 U.S. 134, 146 (1985). The statutory provision 
 [T]he legislative history consistently sets 

out [Congress's] clear intention to make 

§ 502(a)(1)(B) suits brought by participants 

or beneficiaries federal questions for the 

purposes of federal court jurisdiction in 

like manner as § 301 of [the Labor Management 

Relations Act of 1947, 29 U.S.C. § 185.] For 

example, Senator Williams, a sponsor of 

ERISA, emphasized that the civil enforcement 

section would enable participants and 

beneficiaries to bring suit to recover 

benefits denied contrary to the terms of the 

plan and that when they did so "[i]t is 

intended that such actions will be regarded 

as arising under the laws of the United 

States, in a similar fashion to those brought 

under section 301 of the Labor Management 

Relations Act." 

481 U.S. at 66 (citations omitted). Thus, courts have found that 

the Metropolitan Life complete-preemption doctrine permits 

removal of state law causes of action in a host of different 

ERISA-related circumstances. See id. at 63-67 (holding that 

state common law causes of action asserting improper processing 

of a claim for benefits under an employee benefit plan are 

(..continued) 

relevant for the purposes of this appeal, § 502(a)(1)(B), states 

in pertinent part: 

 (a) Persons empowered to bring a civil action

 A civil action may be brought -- 

 (1) by a participant or beneficiary -- 

 . . . . 

 (B) to recover benefits due to him 

under the terms of his plan, to 

enforce his rights under the terms 

of the plan, or to clarify his 

rights to future benefits under the 

terms of the plan . . . . 
removable to federal court); Anderson v. Electronic Data Sys. 

Corp., 11 F.3d 1311, 1314 (5th Cir.) (holding that removal was 

proper because state law claim alleging that plan fiduciary was 

demoted and terminated for refusing to violate ERISA fell within 

§ 502(a)(2) & (3)), cert. denied, 115 S. Ct. 55 (1994); Sofo v. 

Pan-American Life Ins. Co., 13 F.3d 239, 240-41 (7th Cir. 1994) 

(plaintiff's state court rescission claim against a group 

insurance policy for the policy's refusal to reimburse plaintiff 

for medical treatment received was properly removed because 

plaintiff's claim was for a denial of benefits); Smith v. DunhamBush, Inc., 959 F.2d 6, 8-12 (2d Cir. 1992) (common law claim for 

breach of an oral promise to pay pension-related benefits 

properly removed to federal court); Lister v. Stark, 890 F.2d 

941, 943-44 (7th Cir. 1989) (plaintiff's state law claim 

challenging the calculation of his time of "uninterrupted 

service" for the purposes of calculating his pension benefits 

held removable), cert. denied, 498 U.S. 1011 (1990). 

 That the Supreme Court has recognized a limited 

exception to the well-pleaded complaint rule for state law claims 

which fit within the scope of § 502 by no means implies that all 

claims preempted by ERISA are subject to removal. Instead, as 

the U. S. Court of Appeals for the Sixth Circuit wrote recently, 

"[r]emoval and preemption are two distinct concepts." Warner v. 

Ford Motor Co., 46 F.3d 531, 535 (6th Cir. 1995). Section 514 of 

ERISA defines the scope of ERISA preemption, providing that ERISA 

"supersede[s] any and all State laws insofar as they may now or 

hereafter relate to any employee benefit plan described in 
[§ 4(a) of ERISA] and not exempt under [§ 4(b) of ERISA]." 

(Emphasis added.) The Metropolitan Life complete-preemption 

exception, on the other hand, is concerned with a more limited 

set of state laws, those which fall within the scope of ERISA's 

civil enforcement provision, § 502. State law claims which fall 

outside of the scope of § 502, even if preempted by § 514(a), are 

still governed by the well-pleaded complaint rule and, therefore, 

are not removable under the complete-preemption principles 

established in Metropolitan Life. See Franchise Tax Bd., 463 

U.S. at 23-27 (holding that preemption under § 514(a) does not 

permit a defendant to remove a suit brought in state court to 

federal court when the plaintiff's state claim does not fall 

within the scope of ERISA's civil remedy provisions); 

Metropolitan Life, 481 U.S. at 64 (stating that ERISA preemption 

under § 514(a) "without more, does not convert [a] state claim 

into an action arising under federal law"); see also Allstate, 

879 F.2d at 93-94 (holding that § 514(a) preemption defense will 

not justify removal unless claim falls within the scope of 

ERISA's civil enforcement provision, § 502); Warner, 46 F.3d at 

535 (that a claim is preempted under § 514(a) does not 

necessarily establish that the claim is removable); Lupo v. Human 

Affairs Int'l, Inc., 28 F.3d 269, 272-73 (2d Cir. 1994) (state 

law professional malpractice claim against company hired by 

plaintiff's employer to provide psychotherapy services deemed 

outside the scope of § 502(a)(1)(B) and therefore not removable). 

 The difference between preemption and complete 

preemption is important. When the doctrine of complete 
preemption does not apply, but the plaintiff's state claim is 

arguably preempted under § 514(a), the district court, being 

without removal jurisdiction, cannot resolve the dispute 

regarding preemption. It lacks power to do anything other than 

remand to the state court where the preemption issue can be 

addressed and resolved. Franchise Tax Bd., 463 U.S. at 4, 27-28; 

Allstate, 879 F.2d at 94; Warner, 46 F.3d at 533-35; Lupo, 28 

F.3d at 274. 

III. 

 The district courts in these cases found that the 

plaintiffs' state law claims against the U.S. Healthcare HMOs 

fall within the scope of § 502(a)(1)(B) and that the Metropolitan 

Life complete-preemption doctrine therefore permits removal.3 We 

disagree. 

 To determine whether the state law claims fall within 

the scope of § 502(a)(1)(B), we must determine whether those 

claims, properly construed, are "to recover benefits due . . . 

under the terms of [the] plan, to enforce . . . rights under the 

terms of the plan, or to clarify . . . rights to future benefits 

under the terms of the plan." In making that determination, it 

would be helpful to have a complete understanding in each case of 

the relationships among the HMO, the employer, and the other 

 

3. There is no contention that the plaintiffs' state law claims 

implicate any of ERISA's civil enforcement provisions other than 

those set out in § 502(a)(1)(B). Accordingly, we direct our 

discussion to whether the plaintiffs' claims fall within the 

scope of § 502(a)(1)(B). 
defendants, the nature of the plan benefits, and the rights of 

participants and beneficiaries under the plan. We are somewhat 

hampered here because these cases come to us on appeal from 

orders granting motions to dismiss. Because of this procedural 

status, the parties have had little chance to develop the records 

and, accordingly, we know very little about the nature of the 

plan benefits or about the role -- if any -- that U.S. 

Healthcare's HMOs play in the respective ERISA welfare plans. 

 We recognize that there are issues in dispute. The 

plaintiffs and the Department of Labor as amicus curie, for 

example, claim that the U.S. Healthcare HMOs are separate from 

the ERISA plans and that the sole benefit that participants and 

beneficiaries receive from each plan is the plaintiffs' 

membership in the HMOs. In their view, the plaintiffs' claims 

thus have nothing at all to do with § 502(a)(1)(B) because no one 

contests that the plaintiffs in fact have received their plan 

benefits (their membership in the HMO). Instead, under their 

view, the plaintiffs' claims merely attack the behavior of an 

entity completely external to the ERISA plan. 

 U.S. Healthcare, on the other hand, claims that the 

plan benefits are more than just the plan participants' or 

beneficiaries' memberships in the respective HMOs; it argues that 

the medical care received is itself the plan benefit. As a 

corollary to that position, it also disagrees with the 

plaintiffs' view that the HMOs are completely distinct from the 

respective ERISA plans, arguing that the HMOs in fact play a role 

in the delivery of plan benefits. It further maintains that 
ERISA is implicated because both the plaintiffs' agency claims 

and their direct negligence claims relate to the quality of the 

plan benefits and the HMOs' role as the entity that arranges for 

those benefits for the ERISA plans. 

 We need not here resolve these disputes about how to 

characterize the plan benefits or the HMOs' role in the 

respective ERISA plans. We will assume, without deciding, that 

the medical care provided (and not merely the plaintiffs' 

memberships in the respective HMOs) is the plan benefit for the 

purposes of ERISA. We will also assume that the HMOs, either as 

a part of or on behalf of the ERISA plans, arrange for the 

delivery of those plan benefits. We thus assume, for example, 

that removal jurisdiction would exist if the plaintiffs were 

alleging that the HMOs refused to provide the services to which 

membership entitled them. 

 Given those assumptions, we nevertheless conclude that 

removal was improper. We are compelled to this conclusion 

because the plaintiffs' claims, even when construed as U.S. 

Healthcare suggests, merely attack the quality of the benefits 

they received: The plaintiffs here simply do not claim that the 

plans erroneously withheld benefits due. Nor do they ask the 

state courts to enforce their rights under the terms of their 

respective plans or to clarify their rights to future benefits. 

As a result, the plaintiffs' claims fall outside of the scope of 

§ 502(a)(1)(B) and these cases must be remanded to the state 

courts from which they were removed. 
A. 

 Nothing in the complaints indicates that the plaintiffs 

are complaining about their ERISA welfare plans' failure to 

provide benefits due under the plan. Dukes does not allege, for 

example, that the Germantown Hospital refused to perform blood 

studies on Darryl because the ERISA plan refused to pay for those 

studies. Similarly, the Viscontis do not contend that Serena's 

death was due to their welfare plan's refusal to pay for or 

otherwise provide for medical services. Instead of claiming that 

the welfare plans in any way withheld some quantum of plan 

benefits due, the plaintiffs in both cases complain about the low 

quality of the medical treatment that they actually received and 

argue that the U.S. Healthcare HMO should be held liable under 

agency and negligence principles. 

 We are confident that a claim about the quality of a 

benefit received is not a claim under § 502(a)(1)(B) to "recover 

benefits due . . . under the terms of [the] plan." To reach that 

conclusion, "we begin as we do in any exercise of statutory 

construction with the text of the provision in question, and move 

on, as need be, to the structure and purpose of the Act in which 

it occurs." New York State Conference of Blue Cross & Blue 

Shield Plans v. Travelers Ins. Co., Nos. 93-1408, 93-1414, 93-

1415, 1995 WL 238409, at *6 (April 26, 1995). 

 The text lends no support to U.S. Healthcare's 

argument. On its face, a suit "to recover benefits due . . . 

under the terms of [the] plan" is concerned exclusively with 

whether or not the benefits due under the plan were actually 
provided. The statute simply says nothing about the quality of 

benefits received. 

 Nor does anything in the legislative history, 

structure, or purpose of ERISA suggest that Congress viewed 

§ 502(a)(1)(B) as creating a remedy for a participant injured by 

medical malpractice. When Congress enacted ERISA it was 

concerned in large part with the various mechanisms and 

institutions involved in the funding and payment of plan 

benefits. That is, Congress was concerned "that owing to the 

inadequacy of current minimum [financial and administrative] 

standards, the soundness and stability of plans with respect to 

adequate funds to pay promised benefits may be endangered." § 2, 

29 U.S.C. § 1001(a). Thus, Congress sought to assure that 

promised benefits would be available when plan participants had 

need of them and § 502 was intended to provide each individual 

participant with a remedy in the event that promises made by the 

plan were not kept. We find nothing in the legislative history 

suggesting that § 502 was intended as a part of a federal scheme 

to control the quality of the benefits received by plan 

participants. Quality control of benefits, such as the health 

care benefits provided here, is a field traditionally occupied by 

state regulation and we interpret the silence of Congress as 

reflecting an intent that it remain such. See, e.g., Travelers 

Ins. Co., 1995 WL 238409, at *7 (noting that while quality 

standards and work place regulations in the context of hospital 

services will indirectly affect the sorts of benefits an ERISA 

plan can afford, they have traditionally been left to the states, 
and there is no indication in ERISA that Congress chose to 

displace general health care regulation by the states). 

B. 

 We also reject the HMOs' attempts to characterize the 

plaintiffs' state court complaints as attempts to enforce their 

"rights under the terms of the [respective welfare] plan[s]." 

That phrase is included, we believe, so as to provide a means of 

enforcing any contract rights other than the right to benefits, 

as for example the various plan-created rights of plan 

participants to benefit-claim and benefit-eligibility procedures. 

Just as § 502(a)(1)(B) provides the means by which a participant 

can insist on the promised benefits, so too does it provide the 

means for insisting on the plan-created rights other than plan 

benefits.4

 

4. ERISA ordinarily requires that welfare plans set out a 

description of the rights of the participants and their 

beneficiaries in a summary plan description ("SPD"). 29 U.S.C. 

§ 1022(b); see also 29 C.F.R. § 2520.102-2(a) (the plan 

description must "apprise the plan's participants and 

beneficiaries of their rights and obligations under the plan"); 

29 C.F.R. § 2520.102-3(j)(2) (SPD for an ERISA welfare plan must 

include "a statement of the conditions pertaining to eligibility 

to receive benefits"); 29 C.F.R. § 250.102-3(l) (SPD must include 

"a statement clearly identifying circumstances which may result 

in disqualification, ineligibility, or denial, loss, forfeiture 

or suspension of any benefits"); 29 C.F.R. § 102-3(s) (SPD must 

include a statement describing "[t]he procedures to be followed 

in presenting claims for benefits under the plan and the remedies 

available under the plan for the redress of claims which are 

denied in whole or in part"). That requirement is relaxed in 

situations where the ERISA plan chooses to provide benefits 

through a qualified HMO. Under 29 C.F.R. § 2520.102-5(a), if 

health benefits are provided through an HMO, the SPD need not 

contain the usual description of the rights of participants or 

beneficiaries, provided the SPD contains a notice stating, among 
 The HMOs point to no plan-created right implicated by 

the plaintiffs' state law medical malpractice claims. The best 

they can do is assert that the plaintiffs' medical malpractice 

claims "attempt to define a participant's rights under the plan." 

(Appellee's bf. in Visconti, at 9.) We cannot accept that 

characterization. The plaintiffs are not attempting to define 

new "rights under the terms of the plan"; instead, they are 

attempting to assert their already-existing rights under the 

generally-applicable state law of agency and tort. Inherent in 

the phrases "rights under the terms of the plan" and "benefits 

due . . . under the terms of [the] plan" is the notion that the 

plan participants and beneficiaries will receive something to 

which they would not be otherwise entitled. But patients enjoy 

the right to be free from medical malpractice regardless of 

(..continued) 

other things, that plan participants will receive membership "in 

one or more qualified health maintenance organizations," 

§ 2520.102-5(b)(1), and that upon request each available HMO will 

provide certain written information, namely 

 (i) the nature of services provided to 

members; (ii) conditions pertaining to 

eligibility to receive such services (other 

than general conditions pertaining to 

eligibility for participation in the plan) 

and circumstances under which services may be 

denied; and (iii) the procedures to be 

followed in obtaining such services, and the 

procedures available for the review of claims 

for services which are denied in whole or in 

part. 

§ 2520.102-5(b)(3). 
whether or not their medical care is provided through an ERISA 

plan. 

C. 

 Much of the above analysis also precludes us from 

concluding that the plaintiffs are asking the state courts to 

"clarify [their] rights to future benefits under the terms of the 

plan." As noted, there is no allegation here that the HMOs have 

withheld plan benefits due. Moreover, nothing in the complaints 

remotely resembles a request that the court clarify a right to a 

future benefit; instead, the plaintiffs' complaints center on 

past events. 

 

D. 

 We recognize that the distinction between the quantity 

of benefits due under a welfare plan and the quality of those 

benefits will not always be clear in situations like this where 

the benefit contracted for is health care services rather than 

money to pay for such services. There well may be cases in which 

the quality of a patient's medical care or the skills of the 

personnel provided to administer that care will be so low that 

the treatment received simply will not qualify as health care at 

all. In such a case, it well may be appropriate to conclude that 

the plan participant or beneficiary has been denied benefits due 

under the plan. This is not such a case, however. While the 

Dukes complaint alleges that the Germantown Hospital committed 

malpractice when it decided not to perform certain blood tests, 
no one would conclude from that malpractice that Germantown 

Hospital was not acting as a health care provider when it made 

those decisions. Similarly, while the Viscontis claim that Dr. 

Wisniewski was incompetent, there is no indication that he was 

not performing health care services at the time he allegedly 

committed the malpractice charged. 

 We also recognize the possibility that an ERISA plan 

may describe a benefit in terms that can accurately be described 

as related to the quality of the service. Thus, for example, a 

plan might promise that all X-rays would be analyzed by 

radiologists with a prescribed level of advanced training. A 

plan participant whose X-ray was analyzed by a physician with 

less than the prescribed training might well be entitled to 

enforce the plan's promise through a suit under § 502(a)(1)(B) to 

secure a denied benefit. 

 Much of the HMOs' argument in these cases is at root a 

contention that the employer and the HMO impliedly contracted 

that the health care services provided would be of acceptable 

quality and, accordingly, that these damage suits rest on a 

failure to provide services of acceptable quality. Since we do 

not have before us the documents reflecting the agreements 

between the employers and the HMOs, we are not in a position to 

determine whether such a commitment was implicit in their 

respective agreements. However, the burden of establishing 

removal jurisdiction rests with the defendant. Abels v. State 

Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985); see 

generally 14A Charles A. Wright, et al., Federal Practice & 
Procedure § 3721, at 209-10 (1985 & Supp. 1995). Accordingly, 

the HMO is not in a position to press this argument. 

 Moreover, we hasten to add that while we have no doubt 

that all concerned expected the medical services arranged for by 

the HMOs to be of acceptable quality, this seems to us beside the 

point. The relevant inquiry is not whether there was an 

expectation of acceptably competent services, but rather whether 

there was an agreement to displace the quality standard found in 

the otherwise applicable law with a contract standard. 

 It may well be that an employer and an HMO could agree 

that a quality of health care standard articulated in their 

contract would replace the standards that would otherwise be 

supplied by the applicable state law of tort. We express no view 

on whether an ERISA plan sponsor may thus by contract opt out of 

state tort law and into a federal law of ERISA contract. We will 

reserve that issue until a case arises presenting it.5 Nothing 

in this record suggests an agreement to displace the otherwise 

applicable state laws of agency and tort. 

 

IV. 

 

5. It would seem to Judge Roth that, if a plan were to adopt its 

own standard of acceptable health care to be made available to 

beneficiaries, the plan should provide concurrently, through 

insurance or otherwise, an appropriate remedy to beneficiaries 

for any failure of the plan care providers to meet that standard 

or, in the alternative, should inform plan beneficiaries that 

tort law remedies for medical malpratice would not be available 

to them under the plan. 
 The HMOs take heart in a recent case, Corcoran v. 

United Healthcare, Inc., 965 F.2d 1321 (5th Cir.), cert. denied, 

113 S. Ct. 812 (1992), in which the U.S. Court of Appeals for the 

Fifth Circuit held that ERISA preempts a medical malpractice 

claim against a medical consulting company for decisions it made 

as the third-party administrator of a welfare plan's "precertification" review program. We agree with the HMOs that under 

Corcoran, third-party private companies may, in some 

circumstances, play a role in an ERISA plan and that claims 

against such companies may fall within the scope of § 502(a). We 

nevertheless find Corcoran inapposite on the facts and claims 

alleged in this case. 

 Corcoran began as a state law wrongful death action 

against Blue Cross and Blue Shield of Alabama ("Blue Cross") and 

United Heathcare ("United"), in which Florence Corcoran charged 

that the defendants were responsible for the death of her unborn 

fetus. An employee at South Central Bell Telephone, Corcoran was 

a member of Bell's Medical Assistance Plan ("the Bell Plan"), a 

self-funded welfare-benefit plan which provides medical benefits 

to eligible Bell employees. The Bell Plan was administered by 

Blue Cross. 

 One provision of the plan, the "Quality Care Program" 

("QCP") required plan participants and beneficiaries to obtain 

advance approval for certain medical procedures and overnight 

hospital visits. Such cost-containment programs typically are 

known as "utilization review" or "pre-certification review" 

programs. Under the QCP, once a patient's doctor recommended 
surgery or hospitalization, the staff assigned to the QCP was 

required to perform an independent review of the patient's 

condition to determine both the need for the surgery and the 

appropriate length of hospitalization. As is often the case, the 

Bell Plan hired a third party -- United -- to perform the QCP for 

the Plan. See generally Susan J. Stayn, Note, Securing Access to 

Care in Health Maintenance Organizations: Toward a Uniform Model 

of Grievance and Appeal Procedures, 94 Colum. L. Rev. 1694, 1677-

83 (1994). 

 Corcoran's doctor, in response to difficulties Corcoran 

was experiencing with her pregnancy, recommended that Corcoran be 

hospitalized. As a result, Corcoran applied to the Bell Plan for 

disability benefits for the remainder of her pregnancy. Despite 

the recommendation of Corcoran's doctor, United determined that 

hospitalization was unnecessary, and instead authorized only 10 

hours a day of home nursing care. The fetus went into distress 

and died during a period of time when the nurse assigned to 

Corcoran was not on duty. Corcoran subsequently filed suit in 

Louisiana state court against Blue Cross and United. 

 United removed the case to federal district court, 

claiming that Corcoran's claims were completely preempted by 

ERISA. The district court then granted United's motion to 

dismiss and Corcoran appealed. 

 The U.S. Court of Appeals for the Fifth Circuit ruled 

that ERISA preempted Corcoran's claim against United and -- 

implicitly, at least -- that Corcoran's claims were completely 

preempted. It explained that while United was in fact giving 
medical advice, it gave that advice as part of its role of making 

benefit determinations for the plan. 965 F.2d at 1331. Thus, 

the court determined that plaintiffs were "attempting to recover 

for a tort allegedly committed in the course of handling a 

benefit determination," id. at 1332, and that such state law 

claims are preempted by ERISA. See Pilot Life Ins. Co. v. 

Dedeaux, 481 U.S. 41, 48 (1987) (common law cause of action 

arising from "improper processing of a claim for benefits" 

preempted by ERISA); see also Kuhl v. Lincoln Nat'l Health Plan, 

Inc., 999 F.2d 298, 303 (8th Cir. 1993) (medical malpractice 

claim against plan administrator for delaying pre-certification 

of heart surgery arose from administration of benefits and 

therefore was preempted), cert. denied, 114 S. Ct. 694 (1994); 

Berger v. Edgewater Steel Co., 911 F.2d 911, 923 (3d Cir. 1990) 

(claim against plan sponsor for misrepresenting available 

benefits preempted), cert. denied, 499 U.S. 920 (1991). 

 The HMOs argue that we should read Corcoran broadly to 

hold that medical malpractice claims against an HMO should be 

removable under Metropolitan Life whenever an HMO provides the 

complained-about medical treatment as a benefit of an ERISAcovered health plan. They note that several district courts have 

adopted versions of their suggested approach. See, e.g., Ricci 

v. Gooberman, 840 F. Supp. 316, 317-18 (D.N.J. 1993) (plaintiff's 

attempt to hold an HMO liable under a vicarious liability claim 

similar to the ones at bar held preempted); Butler v. Wu, 853 F. 

Supp. 125, 129-30 (D.N.J. 1994) (same); Nealy v. U.S. Healthcare 

HMO, 844 F. Supp. 966, 973 (S.D.N.Y. 1994) (plaintiff's attempts 
to hold an HMO liable under several common law theories held 

preempted); Altieri v. Cigna Dental Health, Inc., 753 F. Supp 61, 

63-65 (D. Conn. 1990) (ERISA preempts plaintiff's negligent 

supervision claim against an HMO). But see Independence HMO, 

Inc. v. Smith, 733 F. Supp. 983, 987-89 (E.D. Pa. 1990) (ERISA 

does not preempt medical malpractice-type claims brought against 

HMOs under a vicarious liability theory); Elsesser v. Hospital of 

the Philadelphia College of Osteopathic Medicine, 802 F. Supp. 

1286, 1290-91 (E.D. Pa. 1992) (same for a claim against an HMO 

for the HMO's negligence in selecting, retaining, and evaluating 

plaintiff's primary-care physician). See also Kearney v. U.S. 

Healthcare, Inc., 859 F. Supp. 182, 186-87 (E.D. Pa. 1994) 

(holding in a case similar to those at bar that ERISA preempts 

plaintiff's direct negligence claim, but not its vicarious 

liability claim). 

 The HMOs' reliance on Corcoran is misplaced. Although 

United's decisions in Corcoran were in part medical decisions, 

United, unlike the HMOs here, did not provide, arrange for, or 

supervise the doctors who provided the actual medical treatment 

for plan participants. (Blue Cross played that role in 

Corcoran.) Instead, United only performed an administrative 

function inherent in the "utilization review." The difference 

between the "utilization review" and the "arranging for medical 

treatment" roles is crucial for the purposes of § 502(a)(1)(B) 

because only in a utilization-review role is an entity in a 
position to deny benefits due under an ERISA welfare plan.6 965 

F.2d at 1333 n.16 (noting that ERISA is implicated in 

"utilization review" decisions but not medical-treatment 

decisions because only the former are "made in connection with a 

cost containment plan"); see also Kuhl, 999 F.2d at 301-03 

(malpractice claims against insurance company hired to perform a 

"pre-certification review" held to fall within § 502(a)'s civil 

enforcement provisions); Elsesser, 802 F. Supp. at 1290-91 

(holding that the cause of action based on allegations that HMO 

withheld benefits were preempted, while the claims against HMO 

for its negligent selection, retention, and evaluation of a 

primary-care physician were not preempted). 

 In these cases, the defendant HMOs play two roles, not 

just one.7 In addition to the utilization-review role played by 

United in Corcoran, the HMOs also arrange for the actual medical 

treatment for plan participants. Only this second role is 

relevant for this appeal, however: on the faces of these 

complaints there is no allegation that the HMOs somehow should be 

held liable for any decisions they might have made while acting 

 

6. As noted in Part III, we are assuming, without deciding, that 

the medical care provided (and not merely the plaintiffs' 

memberships in the respective HMOs) is the plan benefit for the 

purposes of ERISA. So viewed, when acting in their utilizationreview role, the HMOs are making benefit determinations. 

7. There is nothing unusual about this. HMOs often arrange for 

the medical treatment and perform the utilization review (instead 

of hiring a third party). See, e.g., Elsesser, 802 F. Supp. at 

1290-91 (HMO playing both roles); see also Stayn, supra, at 1677. 
in their utilization-review roles.8 Stated another way, unlike 

Corcoran, there is no allegation here that the HMOs denied anyone 

any benefits that they were due under the plan. Instead, the 

plaintiffs here are attempting to hold the HMOs liable for their 

role as the arrangers of their decedents' medical treatment. 

 For this reason, these cases are more like Lupo v. 

Human Affairs Int'l, Inc., 28 F.3d 269 (2d Cir. 1994). There, an 

employer had contracted with a psychotherapy service group, Human 

Affairs International, Inc. ("HAI"), to provide mental health 

services to its employees in connection with an employee benefit 

plan governed by ERISA. Lupo, an employee who received 

psychotherapy services from HAI, sued HAI in a state court for 

his therapist's professional malpractice, breach of fiduciary 

duty, and intentional infliction of emotional distress. HAI, 

like the HMOs here, removed the case to federal court, claiming 

that ERISA completely preempted Lupo's claims. The district 

court agreed with HAI, and, accordingly, dismissed Lupo's claim. 

The U.S. Court of Appeals for the Second Circuit reversed, 

holding that the district court lacked removal jurisdiction and 

was thus obligated to remand to the state court. It reached this 

conclusion because "[o]n their face, none of [Lupo's] claims 

[bore] any significant resemblance to those described in 

 

8. The only possible exception is Dukes' allegation that the 

Germantown Hospital refused to perform blood studies on Darryl. 

Still, on the record before the court, there is no indication 

that the hospital refused to perform those studies because of the 

ERISA plan's refusal to pay. 
[§ 502(a)(1)(B)]." 28 F.3d at 272. The situation in the cases 

at bar is closely analogous. As in Lupo, the plaintiffs' claims 

in these cases do not concern a denial of benefits due or a 

denial of some other plan-created right. Thus, the claims here, 

like those in Lupo, bear no significant resemblance to the claims 

described in § 502(a)(1)(B). 

V. 

 For the foregoing reasons, the district courts' 

judgments in these cases will be reversed and remanded with 

instructions to remand the cases to the state courts from which 

they came. Our holding that the districts courts lack removal 

jurisdiction, of course, leaves open for resolution by the state 

courts the issue of whether the plaintiffs' claims are preempted 

under § 514(a).