# United States Court of A ppeals For the First Circuit

No. 99-1449 JULIANNE TOMPKINS, KATHLEEN TOMPKINS, and JOHN TOMPKINS,

Plaintiffs, Appellants,

v. UNITED HEALTHCARE OF NEW ENGLAND, INC.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Joseph L. Tauro, U.S. District Judge ]

Before Stahl, Circuit Judge , Bownes, Senior Circuit Judge , and Lipez, Circuit Judge .

John R. Mitchell for appellants. Joan O. Vorster , with whom Mirick, O'Connell, DeMallie & Lougee, LLP , was on brief, for appellee.

February 11, 2000-2- LIPEZ, Circuit Judge . The plaintiffs, Julianne, Kathleen, and John Tompkins, appeal from the district court's dismissal, pursuant to Fed. R. Civ. P. 12(b)(6), of their claims against United Healthcare of New England, Inc. ("United"), alleging violations of federal and state anti-discrimination statutes, as well as negligent andint entional infliction of emotional distress, misrepresentation, and breach of written, oral, andimplied contracts. The district court found that the Employee Retirement Incom e S ecurity Act of 1974 ("ERISA") as amended, 29 U.S.C. § 1001 et. seq. , preempted the state statutory and common law claims of the plaintiffs and that their claims under the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-12213, failedto state a cause of action. For reasons somewhat different than those relied upon by the district court, we affirm.

I. BACKGROUND John and Kathleen Tompkins hav e a d aughter, Julianne Tompkins, who suffers from Trisomy 13, a chromosomal disease that requires regular medical t reatme nt. From 1993 to 1996, Julianne receivedher treatment at the New EnglandMedical Center ("NEMC").

United is the Tompkinses' health care insurer. Between 1993 and 1996, United pre-approved and paid for Julianne's treatment at NEMC. During that time the Tompkinses received their insurance through Mr. Tompkins's em ployer, A.B. Dick. In 1996, Mrs. Tompkins returned to work and her employer, New Bedford Harbor Services, Inc. ("New Bedford") , of fered her a United insurance-3-

p olicy with lower premiums. After emphasizing the importa nce o f Julianne's continued treatment and receiving assurances from United representatives that changing employer-providers would not alter their coverage, the Tompkinses switched and obtained their insurance through New Bedford.

Less than a week after the switch, however, United began to deny paymen ts for treatment provided to Julianne at NEMC. Shortly thereafter, United notified the Tompkinses that Julianne's therapies at NEMC would no longer be pre-approved or paid for because Julianne was being "transitioned"--i.e., she was to receive future treatment by United-coveredphysi cians at less costly hospitals closer to her home. In the Tompkinses' view, such "transition" m eant t hat Julianne would be unable to visit her regular physicians or to benefit from the high level of expertise and quality available at NEMC.

The Tomp kins es appealed United's denial of coverage at NEMC and its decision to transition Julianne to other hospitals for treatment. Ultimately, United's Member Relations Committee heard the appeal and reversed the earlier benefit denial, agreeing to pay back-costs for treatment already received and authorizing Julianne to obtain her future treatments at NEMC.

Despite that victory the Tompkinses initiated this lawsuit, a lle ging that they suffered emotional distress and p hysical ailments, and incurred costs and expenses inc ludin g attorneys' fees, as a result of "their efforts to reverse United's discriminatory denial of Julianne's benefits." In Counts I - IV of1 ERISA's preemption clause, ERISA § 51 4(a ), 29 U.S.C.

§ 1144(a), provides: "Except as provided in subsection (b) of this section, the provisions of this subchapter . . . shall supersede anyand all State laws insofar as they may now or hereafter relate to any employee benefit plan. . . ." (emphasis added). -4- the complaint, the Tompkinses sought to recover under Titles I and III of the ADA, the Massachusetts discrimination statute, Mass. Gen. Laws. ch. 151B, and the Massachusetts Equal Rights Act Mass. Gen. Laws. ch. 93 § 103. In Counts V - X, the Tompkinses alleged various common law causes of action, including intentional infliction of emotional distress, misrepresentation, and breach of written, oral, and implied contracts.

Unitedmoved to dismiss the Tompkinses' claims on the grounds that, inter alia, (1) ERISA preempted the state statutory andcommon law claims, and (2) the ADA claims failed to state a

cause of action. The district court agreed on both grounds. First, the court held that the Tompkinses' state statutory and

common law claim s "re lated to" United's ERISA-regulated health insurance plan within the meaning of E RISA's preemption clause, 1 andconsequently, that ERISA preempted all of the Tompkinses' state law claims. Second, the court ruled that the Tomp kinse s did not state an ADA Title I claim because the allegations of the complaint didnot show that Unitedwas a "covered entity" under Title I. Lastly, the court concluded that because "Plaintiffs cannot point to any services which United has denied them, they fail to state a claim under Title III."

In affirming the dismissal of the Tompkinses' claims, we rely on somewhat different reasoning than the court below because2 Although the district c ourt did not address the

interrelationship between the ADA claims and ERISApreemption, the court's conclusion that there were no viable ADA claims had the effect of deciding the preemption issue on the basis we set forth here. -5- of the interrelationship between the ADA claims of the plaintiffs and ERISA preemption. On appeal, the plaintiffs do not argue, as they did below, that their state-law claims do not "relate to" the Unitedhealth care plan within the meaning of ERISA's preemption clause. Instead, relying on the viabilityof their ADA claims, the Tompkinses assert an alternative a rgum ent that they made below-- namely, that their Massachusetts statutory claims are exempt from ERISApreemption as a necessary adjunct to the ADA 's enf orcement scheme. 2 We reject the premise of the argument by concluding that both the Title I and the Titl e III AD A claims were properly dismissed. The only discriminatory conduct alleged in t he complaint--United's initial decision to deny payment for Julianne's treatment at NEMC--was fully r edres sed through United's ERISAmandatedinternal review process. Likewise, we find no merit to the contention of the plaintiffs that United waived its right to assert ERISA preemption as an affirmative defense.

II. THE ADA CLAIMS We review de novo a Rule 12(b)(6) dismissal. See Beddall

v. State St. Bank & Trust Co. , 137 F.3d 12, 16 (1st Cir. 1998). In reviewing a judgment entered under Rule 12(b)(6), we must take the-6-

factual allegations of the complaint as true and draw every reasonable inference in favor of letting the lawsuit proceed. See Langadinos v. American Airlines, Inc. , No. 99-1120, 2000 WL 1998, at *1 (1st Cir. Jan. 6, 2000). The complaint will survive as long

as it pleads sufficient facts to warrant recovery on any cognizable theoryof the ca se. See Garita Hotel Ltd. Partnership v. Ponce Fed. Bank, F.S.B. , 958 F.2d 15, 17 (1st Cir. 1992).

To recover under either Title I or Title III of the ADA, the aggrievedparty must be able to show that he or she was denied

so me be nefit on account of a disability or an association with a disabled person. Title I of the ADA provides in relevant part:

No covered entity shall discriminate against a qualifiedindividual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. 42 U.S.C. § 12112(a). Title III of the ADA provides in relevant part: No individual shall be discriminated against

on the basis of disability in the full a n d equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a).

Our review of a benefit decision made pursuant to an ERISA-regulatedemployee benefit plan "must focus . . . on the determinations of the final decision-maker." Terryv. Bayer Corp. , 1 45 F.3d 28, 35-36 (1st Cir. 1998) (emphasizing t hat " a3 Although neither Mr. Tompkins nor Mrs. Tompkins are disabled,

they argue that Uniteddiscriminated against thembecause of their association with Julianne. Given our conclusion that there was no denial of benefits, we need not address the validity of the association discrimination claims, or whether Mr. Tompkins or Mrs. Tompkins are "qu alified individuals" under the ADA, or whether United is a "covered entity" under the ADA. -7- prerequisite to obtaining judicial review . . . is that the claimant have exhausted the internal administrative remedies available to him."). In the case at hand, the Tompkinses recovered the benefits that they claimed were wrongfully denied on the basis of discrimination by utilizing the internal administrative remedies available to them. In reversing United's initial decision to deny the benefits, United's Member Relations Committee ordered payments of back-costs for t rea tment already received and authorized J ulianne to receive her future treatments at NEMC. Accord ingly , the Tompkinses were not denied any "terms, conditions, [or] pr ivileges of employment" under Title I or any "services" und e r Title III attributable to United's initial decision to deny Julianne benefits based on her disability. 3

Aclose examination of the complaint reveals that the only discriminatory conduct alleged by the Tompkinses was United's initial decision to refuse payments for Julianne's treatment at NEMC. In the count of the complaint asserting a cause of action under Title I, the Tompkinses allege in relevant part:

54. Defendant's establishment of a health benefit plan, which wrongfully discriminates against persons with Trisomy 13 and in particular Julianne Tompkins, and the Plaintiffs constitutes a violation of ADA.

. . . .-8- 56. As a direct and proximate result of these violations of the ADA by Defendant, Plaintiffs have l ost and will continue to lose benefits of their employment and contractual relationship with the Defendant. 57. As a direct and proximate result of these violations of the ADA by Defendant, Plaintiffs have experienced and will continue to experience emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-pecuniary losses. The conduct alleged to violate the ADA is the "establishment of a health benefit plan, which wrongfully discriminates against persons with Trisomy 13." As a result, the Tomk inses assert that they "lost and will continue to lose benefits." In specifying what they

mean by the discriminatory establishment of a health benefit plan, the plaintiffs do not cite any terms of the plan itself. Instead, they focus exclusively on United's initial decision to deny benefits based on Julianne's disability, a determination that the Tomkinses concede in their complaint was reversed when United's Member Relations Committee "re-determined the appeal and [determinedthat] United was now to pay for Julianne's care at New EnglandMedical Center, past and future, in full at regular HMO rates." In the count of the complaint asserting a cause of action under Title III, the Tompkinses allege:

48. . . . the De fe ndant has discriminated against Plaintiffs, solely on the basis of Julianne's disability, and Kathleen and John's association with Julianne, by denying them full and equal enjoyment of the services, facilities, privileges, advantages, or accommodations of a place of accommodation as otherwise available to the general public; by4 We have held in Carparts Distribution Center, Inc. v.

Automotive Wholesaler's Association, Inc. , 37 F.3d 12, 19-20 (1st Cir. 1994), that "public accommodations" are not limited to actual physical structures, and that the discriminatory denial of benefits under a health care plan might, in some circumstances, state a claim under Title III of the ADA. -9- failing to make reasonable modifications in its contracts, policies, practices, or procedures if these were necessary to afford Plaintiff Defendants' services, facilities, privileges, advantages or accommodations; by refusing or failing to offer continued preauthorization numbers, payment for New England Medical Center treatment, access to therapy sessions and other benefits as provided by its contract of insurance with the Plaintiffs and its past practice in a place or manner accessible to the Plaintiff; and by failing and refusing to offer alternative services. This count, like the Title I count, alleges no disc rimina tory conduct aside from United's initial benefit denial determination. Specifically, it asserts three ways in which United denied the Tompkinses the benefits of a publi c ac commodation, 4 based on Ju lianne's disability: (1) "by failing to make reasona bl e modifications in its contracts, policies, practices, or procedures if these were necessary to afford Plaintiff Defendants' services, facilities, privileges, advantages or accommodations"; (2) "by refusing or failing to offer continued pre-authorization numbers, payment for New England Medical Center treatment, access to therapy sessions and other benefits as pro vided by its contract of insurance with the Plaintiffs and its past practice in a place or

manner accessible to the Plaintiff "; and (3) "by failing and refusing to offer alternative services." Each of these allegedly discriminatory actions focuses on United's decision to deny payment5 ERISA § 503, 29 U.S.C. § 1133, provides: In accordance with regulations of the Secretary, every employee benefit plan shall--

(1) provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manne r ca lculated to be understood by the participant, and (2) afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim. -10- for Julianne's treatment at NEMC, a denial which, as discussed above, was reversed through the internal review process.

In an attempt to salvage their case, the Tompkinses stress on appe al t hat their emotional and financial injuries resultednot merely from the initial benefit denial, but also from the delay and inconvenience in obtaining their benefits through United's internal review process. Although the Tompkinses surely sufferedinconvenience and distress as a result of the delay in

r eceiving their health care benefits, that inconvenien ce an d distress was caused both by the initial denial of benefits, for which the re is no relief here because of the relief obtained o n administr ati ve review, and by the usual operation of the ERISAmandatedinternal review process. 5 In order to state a claim for injuries resulting from the review process itself , the Tompkinses wouldhave to allege in the complaint that the internal review process--as opposed to the original denial of benefits--was in some

w ay unusual or prolonged as a result of unlawful discrimin ation .6 Indeed, the complaint itself su g gests that even United's

initial decision to deny coverage, rather than being the result of discrimination, was based on the fact that "United no longer wanted to pay for the high cost of New England Medical Center care." -11- Here, the complaint is devoid of any allegation that U nited' s

re view o f the Tompkinses claim was discriminatory or differed in anyway from the ordinary process afforded any pla n memb er challenging a benefit denial. 6

In summary, the Tompkinses have already fully recovered for the initial benefit denial; they make no allegations that the review process itself was discriminatory. Therefore, they do not allege the discriminatory denial of any benefit protectedby Title I or Title III of the ADA Their ADA claims were properly dismissed.

III. ERISA PREEMPTION

On appeal, the Tompkinses do not dispute that their state law claims "re late to" the ERISA-regulated health care plan. Rather, they argue that: (1) the state anti-discrimination statutes, as part of the overall enforcement regime contemplated by the ADA, are exempt from preemptio n by ERISA § 514(d), 29 U.S.C. § 1144(d), which excludes federal law from ERISA's preemptive scope; and (2) United waived its right to assert ERISA preemption through its health insurance contract.7 This argument, if succe s sful, would only save the

Massachusetts statutory claims from preemption. -12- A. Federal Enforcement Scheme

The Tompkinses contend that causes of action based on state human rights legislation are not preempted by ERISA pursuant to the Supreme Court's decision in Shaw v. Delta Air Lines, Inc. , 46 3 U.S. 85 (1983). 7 In Shaw , the state of New York argued that the New York Human Rights Law, which required employers to pay pregnancyleave to employees, was exempted frompreemption by ERISA § 514(d), 29 U.S.C. § 1144(d), which provides that "[n]othing in this subchapter shall be construed to alter, amend, modify, invalidate, impair, or supe rse de any law of the United States." This was so, New York argued, because the New York Human Rights Law

was a necessary part of Title VII's overall enforcement scheme, and he nce wi thin ERISA's federal law exemption from preemption. See 463 U.S. at 100-01.

The Court acknowledgedthat "State laws obviously play a significant role in the enforcement of Title VII," and that "Title VII requires recourse to available state administrative remedies." Id. at 101. "Given the importance of state fair employment laws to the federal enforcement scheme, pre-emption of the [New York] Human Rights Law would impair Title VII to the extent that the Human Rights Law provides a mea ns of enforcing Title VII's commands ." Id. at 102 (emphasis added). The Court concluded, however, that the practices made unlawful under the New York Human Rights Law-- failing to pay benefits for pregnancy leave--were not unlawful-13-

under Title VII. Thus, it "fail[ed] to see how federal law would be impaired by pre-emption of a state law prohibiting conduct that federal law permitted." Id. at 103-04. The Court therefore concluded that "pre-emption would not impair Title VII within the meaning of § 514(d)." Id. at 103.

The Tompkinses assert correctly that Shaw 's reasoning applies to the case at bar. We have held that the ADA, like Title VII, contemplates that state laws will contribute to the overall f ederal enforcement regime. See Carparts Distrib. Ctr., I nc. v . Automotive Wholesaler's Ass'n , 37 F.3d 12, 20-21 (1st Cir. 1994). Thus, if t he T ompkinses' state statutory claims targeted conduct unlawful under the ADA, those state claims would be exempt from ERISApreemption pursuant to ERISA § 514(d). See Shaw , 463 U.S. at 102-04; Carparts , 37 F.3d at 20-21 (vacating dismissal of state law claims on grounds that they might be found exempt from ERISA preemption as part of the ADA's enforcement scheme). However, we have already concluded that the Tompkinses have failed to state a claimunder the ADA. Under these circumstances, becau se the plaintiffs do not contest the district court's finding that their state law claims “relate to” the United health benefits plan, and because the ADA's enforcement regime does not depend on the availabilityof the state statutor y clai ms, the state claims are subject to ERISA preemption.-14-

B. Waiver The Tompkinses assert that United waived its right to claimERISA preemption based on this provision of its contract with the Tompkinses to provide health insurance:

In compliance with state andfederal law, PLAN shall not discrimin a te on the basis of age, sex, color, race, disability, marital status, sexual preference, religious affiliation, or public assistance status. The Tompkinses argue that this commitment to "compliance with state law" operates as an express waiver of United's right to invoke ERISA-preemption as an affirmative defense. We disagree. The citedprovision does not approach the type of clear and express language typically required for waiver of a known right. See, e.g. , Fowler v. Boise Cascade Corp. , 948 F.2d 49, 57-58 (1st Cir. 1991) (und er M aine law, applying strict construction standard to waiver of employer imm unity under an indemnification agreement); Irons v. Fed. Bureau of Investigation , 880 F.2d 1446, 1452 (1st Cir. 1989) ("Courts sometimes say an individual has 'waived' a protection the law grants him when the ind ividua l expresslysays that he wishes to do without the protection."); Ja rdines Bacata, Ltd. v. Diaz-Marquez , 878 F.2d 1555, 1559 (1st Cir. 1989) (waiver must be "unequivocal"). This provision merely expresses United's intent to administer the plan in accordance with applicable laws. It does not waive any rights afforded by federal law.

Although in some circumstances contractual waiver of statutoryrights is permissible, see, e.g. , Canal Elec. Co. v. Westinghouse Elec. Corp. , 548 N.E.2d 182, 187 (Mass. 1990), we find8 ERISAcontains, inter alia, reporting and disclosure

requirements (the ERISA 100s), see 29 U.S.C. § 1021 et seq., participation and vesting guidelines (the ERISA 200s), see 29 U.S.C. § 1051 et s eq., fund ing rules (the ERISA 300s), see 29 U.S.C. § 1081 et seq., rules of fiduciary responsibility (the ERISA 400s), see 29 U.S.C. § 1101 et seq., and criminal and ci vi l enforcement pr ovis ions (the ERISA 500s), see 29 U.S.C. § 1131(criminal enforcement); 29 U.S.C. § 1132 et seq. (civil enforcement). -15- no case holding that parties may contractually waive the right to assert ERISA preemption. Our decision in Wolf v. Reliance Standard Life Ins. Co. , 71 F.3d 444, 449 (1st Cir. 1995), reliedupon by the Tompkinses, merely holds that ERISA preemption, as an affirmative defense rather than as an element of the court's jurisdiction, is waivedif not timely raised. But Wolf , which addresses only procedural waiver, offers no support for the Tompkinses' contractual waiver argument.

Although "[a] statutory right or remedy may be waived when the waiver would not frustrate the public policies of the statute," see Canal Elec. Co. , 548 N.E.2d at 187, "[a] statutory right may not be disclaimed if the waiver could 'do violence to the public policy un derlying the legislative enactment,'" see id. (quoting Spence v. Reeder , 416 N.E.2d 914, 924 (Mass. 1981)). ERISA provides an elaborate set of rules "designed to promote the interests of employees and their beneficiaries in employee benefit plans." Shawv. Delta Air Lines, Inc. , 463 U.S. 85, 90 (1983). 8 In New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. , 514 U.S. 645 (1995) , the Supreme Court stated that in passing ERISA Congress intended-16- to ensure that plans and plan sponsors wou l d be subject to a uniform body of benefits law; the goal was to minimize the administrative andfinancial burden of complying with conflicting directives among States or between States and the Federal Government . . ., [and to prevent] the potential for conflict in substantive law . . . requiring the tailoring of plans and employer conduct to the peculiarities of the law of each jurisdiction. Id. at 656-57 (alterations in original). Allowing parties to opt out of ERISA preemption contractually would enable plan sponsors to avoidcomplian ce wit h ERISA's regulatory structure and would subject ERISA-regulated plans to a multitude of divergent state law

causes of action. These re sults would conflict with Congress's objective of establishing a "u niform body" of federal employee benefits law under ERISA.

We conclude, therefore, that United did not waive its right to raise ERISA preemption as an affirmative defense to the Tompkinses' state law claims, and that ERISA preempts all of those claims. Affirmed .