IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 91-3322

_____________________

FLORENCE B. CORCORAN

Wife of/and WAYNE D. CORCORAN,

Plaintiffs-Appellants,

v.

UNITED HEALTHCARE, INC.,

and BLUE CROSS and BLUE SHIELD

OF ALABAMA, INC.,

Defendants-Appellees.

_________________________________________________________________

Appeal from the United States District Court

for the Eastern District of Louisiana 

_________________________________________________________________

(June 26, 1992) 

Before THORNBERRY, KING, and DeMOSS, Circuit Judges.

KING, Circuit Judge:

This appeal requires us to decide whether ERISA pre-empts a

state-law malpractice action brought by the beneficiary of an

ERISA plan against a company that provides "utilization review"

services to the plan. We also address the availability under

ERISA of extracontractual damages. The district court granted

the defendants' motion for summary judgment, holding that ERISA

both pre-empted the plaintiffs' medical malpractice claim and

precluded them from recovering emotional distress damages. We

affirm.
 

1 This was the same course of action Dr. Collins had

ordered during Mrs. Corcoran's 1988 pregnancy. In that

pregnancy, Dr. Collins intervened and performed a successful

Caesarean section in the 36th week when the fetus went into

distress.

2

I. BACKGROUND

The basic facts are undisputed. Florence Corcoran, a longtime employee of South Central Bell Telephone Company (Bell),

became pregnant in early 1989. In July, her obstetrician, Dr.

Jason Collins, recommended that she have complete bed rest during

the final months of her pregnancy. Mrs. Corcoran applied to Bell

for temporary disability benefits for the remainder of her

pregnancy, but the benefits were denied. This prompted Dr.

Collins to write to Dr. Theodore J. Borgman, medical consultant

for Bell, and explain that Mrs. Corcoran had several medical

problems which placed her "in a category of high risk pregnancy." 

Bell again denied disability benefits. Unbeknownst to Mrs.

Corcoran or Dr. Collins, Dr. Borgman solicited a second opinion

on Mrs. Corcoran's condition from another obstetrician, Dr. Simon

Ward. In a letter to Dr. Borgman, Dr. Ward indicated that he had

reviewed Mrs. Corcoran's medical records and suggested that "the

company would be at considerable risk denying her doctor's

recommendation." As Mrs. Corcoran neared her delivery date, Dr.

Collins ordered her hospitalized so that he could monitor the

fetus around the clock.1

Mrs. Corcoran was a member of Bell's Medical Assistance Plan

(MAP or "the Plan"). MAP is a self-funded welfare benefit plan

which provides medical benefits to eligible Bell employees. It
 

2 Employee Retirement Income Security Act of 1974, Pub. L.

93-406, 88 Stat. 829, 29 U.S.C. §§ 1001-1461.

3

is administered by defendant Blue Cross and Blue Shield of

Alabama (Blue Cross) pursuant to an Administrative Services

Agreement between Bell and Blue Cross. The parties agree that it

is governed by ERISA.2 Under a portion of the Plan known as the

"Quality Care Program" (QCP), participants must obtain advance

approval for overnight hospital admissions and certain medical

procedures ("pre-certification"), and must obtain approval on a

continuing basis once they are admitted to a hospital

("concurrent review"), or plan benefits to which they otherwise

would be entitled are reduced. 

QCP is administered by defendant United HealthCare (United)

pursuant to an agreement with Bell. United performs a form of

cost-containment services that has commonly become known as

"utilization review." See Blum, An Analysis of Legal Liability

in Health Care Utilization Review and Case Management, 26 Hous.

L. Rev. 191, 192-93 (1989) (utilization review refers to

"external evaluations that are based on established clinical

criteria and are conducted by third-party payors, purchasers, or

health care organizers to evaluate the appropriateness of an

episode, or series of episodes, of medical care."). The Summary

Plan Description (SPD) explains QCP as follows:

The Quality Care Program (QCP), administered by United

HealthCare, Inc., assists you and your covered dependents in

securing quality medical care according to the provisions of

the Plan while helping reduce risk and expense due to

unnecessary hospitalization and surgery. They do this by

providing you with information which will permit you (in
4

consultation with your doctor) to evaluate alternatives to

surgery and hospitalization when those alternatives are

medically appropriate. In addition, QCP will monitor any

certified hospital confinement to keep you informed as to

whether or not the stay is covered by the Plan.

Two paragraphs below, the SPD contains this statement: When

reading this booklet, remember that all decisions regarding your

medical care are up to you and your doctor. It goes on to

explain that when a beneficiary does not contact United or follow

its pre-certification decision, a "QCP Penalty" is applied. The

penalty involves reduction of benefits by 20 percent for the

remainder of the calendar year or until the annual out-of-pocket

limit is reached. Moreover, the annual out-of-pocket limit is

increased from $1,000 to $1,250 in covered expenses, not

including any applicable deductible. According to the QCP

Administrative Manual, the QCP penalty is automatically applied

when a participant fails to contact United. However, if a

participant complies with QCP by contacting United, but does not

follow its decision, the penalty may be waived following an

internal appeal if the medical facts show that the treatment

chosen was appropriate. 

A more complete description of QCP and the services provided

by United is contained in a separate booklet. Under the heading

"WHAT QCP DOES" the booklet explains:

Whenever your doctor recommends surgery or hospitalization

for you or a covered dependent, QCP will provide an

independent review of your condition (or your covered

dependent's). The purpose of the review is to assess the

need for surgery or hospitalization and to determine the

appropriate length of stay for a hospitalization, based on

nationally accepted medical guidelines. As part of the

review process, QCP will discuss with your doctor the
5

appropriateness of the treatments recommended and the

availability of alternative types of treatments -- or

locations for treatment -- that are equally effective,

involve less risk, and are more cost effective.

The next paragraph is headed "INDEPENDENT, PROFESSIONAL REVIEW"

and states:

United Health Care, an independent professional medical

review organization, has been engaged to provide services

under QCP. United's staff includes doctors, nurses, and

other medical professionals knowledgeable about the health

care delivery system. Together with your doctor, they work

to assure that you and your covered family members receive

the most appropriate medical care.

At several points in the booklet, the themes of "independent

medical review" and "reduction of unnecessary risk and expense"

are repeated. Under a section entitled "THE QUALITY CARE

PROGRAM...AT A GLANCE" the booklet states that QCP "Provides

independent, professional review when surgery or hospitalization

is recommended -- to assist you in making an enlightened decision

regarding your treatment." QCP "provides improved quality of

care by eliminating medically unnecessary treatment," but

beneficiaries who fail to use it "may be exposed to unnecessary

health risks. . . ." Elsewhere, in the course of pointing out

that studies show one-third of all surgery may be unnecessary,

the booklet explains that programs such as QCP "help reduce

unnecessary and inappropriate care and eliminate their associated

costs." Thus, "one important service of QCP will help you get a

second opinion when your doctor recommends surgery."

The booklet goes on to describe the circumstances under

which QCP must be utilized. When a Plan member's doctor

recommends admission to the hospital, 
 

3 The record does not reveal the name of the person or

persons at United that made the decision concerning Mrs.

Corcoran.

6

[i]ndependent medical professionals will review, with the

patient's doctor, the medical findings and the proposed

course of treatment, including the medically necessary

length of confinement. The Quality Care Program may require

additional tests or information (including second opinions),

when determined necessary during consultation between QCP

professionals and the attending physician.

When United certifies a hospital stay, it monitors the continuing

necessity of the stay. It also determines, for certain medical

procedures and surgeries, whether a second opinion is necessary,

and authorizes, where appropriate, certain alternative forms of

care. Beneficiaries are strongly encouraged to use QCP to avoid

loss of benefits: "'fully using' QCP means following the course

of treatment that's recommended by QCP's medical professionals."

In accordance with the QCP portion of the plan, Dr. Collins

sought pre-certification from United for Mrs. Corcoran's hospital

stay. Despite Dr. Collins's recommendation, United determined

that hospitalization was not necessary, and instead authorized 10

hours per day of home nursing care.3 Mrs. Corcoran entered the

hospital on October 3, 1989, but, because United had not precertified her stay, she returned home on October 12. On October

25, during a period of time when no nurse was on duty, the fetus

went into distress and died.

Mrs. Corcoran and her husband, Wayne, filed a wrongful death

action in Louisiana state court alleging that their unborn child

died as a result of various acts of negligence committed by Blue

Cross and United. Both sought damages for the lost love, society
 

4 See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 66

(1987) (because ERISA pre-emption is so comprehensive, preemption defense provides sufficient basis for removal to federal

court notwithstanding "well-pleaded complaint" rule).

7

and affection of their unborn child. In addition, Mrs. Corcoran

sought damages for the aggravation of a pre-existing depressive

condition and the loss of consortium caused by such aggravation,

and Mr. Corcoran sought damages for loss of consortium. The

defendants removed the action to federal court on grounds that it

was pre-empted by ERISA4 and that there was complete diversity

among the parties.

Shortly thereafter, the defendants moved for summary

judgment. They argued that the Corcorans' cause of action,

properly characterized, sought damages for improper handling of a

claim from two entities whose responsibilities were simply to

administer benefits under an ERISA-governed plan. They contended

that their relationship to Mrs. Corcoran came into existence

solely as a result of an ERISA plan and was defined entirely by

the plan. Thus, they urged the court to view the claims as

"relating to" an ERISA plan, and therefore within the broad scope

of state law claims pre-empted by the statute. In their

opposition to the motion, the Corcorans argued that "[t]his case

essentially boils down to one for malpractice against United

HealthCare. . . ." They contended that under this court's

analysis in Sommers Drug Stores Co. Employee Profit Sharing Trust

v. Corrigan Enterprises, Inc., 793 F.2d 1456 (5th Cir. 1986),

cert. denied, 479 U.S. 1034 (1987), their cause of action must be
8

classified as a state law of general application which involves

an exercise of traditional state authority and affects principal

ERISA entities in their individual capacities. This

classification, they argued, together with the fact that preemption would contravene the purposes of ERISA by leaving the

Corcorans without a remedy, leads to the conclusion that the

action is permissible notwithstanding ERISA.

The district court, relying on the broad ERISA pre-emption

principles developed by the Supreme Court and the Fifth Circuit,

granted the motion. The court noted that ERISA pre-emption

extends to state law claims "'of general application,' including

tort claims where ERISA ordinarily plays no role in the state law

at issue." (citing Metropolitan Life Ins. Co. v. Taylor, 481

U.S. 58 (1987) and Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41

(1987)). The court found that the state law claim advanced by

the Corcorans "relate[d] to" the employee benefit plan (citing

the statutory pre-emption clause, ERISA § 514(a)), and therefore

was pre-empted, because

[b]ut for the ERISA plan, the defendants would have played

no role in Mrs. Corcoran's pregnancy; the sole reason the

defendants had anything to do with her pregnancy is because

the terms of the ERISA plan directed Mrs. Corcoran to the

defendants (or at least to United HealthCare) for approval

of coverage of the medical care she initially sought.

The court held that, because the ERISA plan was the source of the

relationship between the Corcorans and the defendants, the

Corcorans' attempt to distinguish United's role in paying claims

from its role as a source of professional medical advice was

unconvincing. 
 

5 The district court had stated that "[b]ecause the

plaintiffs concede that the defendants have fully paid any and

all medical expenses that Mrs. Corcoran actually incurred that

were covered by the plan, the plaintiffs have no remaining claims

under ERISA." In a footnote, the court indicated that Mrs.

Corcoran could have (1) sued under ERISA, before entering the

hospital, for a declaratory judgment that she was entitled to

hospitalization benefits; or (2) gone into the hospital, incurred

out-of-pocket expenses, and sued under ERISA for these expenses.

9

The Corcorans filed a motion for reconsideration under Rule

59 of the Federal Rules of Civil Procedure. They did not ask the

district court to reconsider its pre-emption ruling, but instead

contended that language in the district court's opinion had

implicitly recognized that they had a separate cause of action

under ERISA's civil enforcement mechanism, § 502(a)(3).5 They

argued that the Supreme Court's decision in Massachusetts Mutual

Life Ins. Co. v. Russell, 473 U.S. 134 (1985), did not foreclose

the possibility that compensatory damages such as they sought

constituted "other appropriate equitable relief" available under

§ 502(a)(3) for violations of ERISA or the terms of an ERISA

plan. The district court denied the motion. Although the court

recognized that there was authority to the contrary, it pointed

out that "[t]he vast majority of federal appellate courts have .

. . held that a beneficiary under an ERISA health plan may not

recover under section 509(a)(3) [sic] of ERISA compensatory or

consequential damages for emotional distress or other claims

beyond medical expenses covered by the plan." (citations

omitted). Moreover, the court pointed out, a prerequisite to

recovery under § 502(a)(3) is a violation of the terms of ERISA

itself. ERISA does not place upon the defendants a substantive
10

responsibility in connection with the provision of medical advice

which, if breached, would support a claim under § 502(a)(3). The

court entered final judgment in favor of Blue Cross and United,

and this appeal followed.

II. STANDARD OF REVIEW

Because this case is on appeal from the district court's

grant of summary judgment, our review is plenary. Dorsett v.

Board of Trustees for State Colleges & Universities, 940 F.2d

121, 123 (5th Cir. 1991). We view the evidence in the light most

favorable to the nonmoving party, id., and must affirm if "the

pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of law." 

Fed. R. Civ. P. 56(c). As this case currently stands, the

parties dispute not the relevant facts, but the legal conclusions

that must be applied to those facts. As the Corcorans put it,

"[t]he question on appeal is whether the plaintiffs are afforded

any relief, under state law or ERISA, for damages caused by [the

defendants' actions]."

III. PRE-EMPTION OF THE STATE LAW CAUSE OF ACTION

A. The Nature of the Corcorans' State Law Claims

The Corcorans' original petition in state court alleged that

acts of negligence committed by Blue Cross and United caused the
 

6 They also do not mention Blue Cross when arguing that

extracontractual damages are available under § 502(a)(3).

11

death of their unborn child. Specifically, they alleged that

Blue Cross wrongfully denied appropriate medical care, failed

adequately to oversee the medical decisions of United, and failed

to provide United with Mrs. Corcoran's complete medical

background. They alleged that United wrongfully denied the

medical care recommended by Dr. Collins and wrongfully determined

that home nursing care was adequate for her condition. It is

evident that the Corcorans no longer pursue any theory of

recovery against Blue Cross. Although they mention in their

appellate brief the fact that they asserted a claim against Blue

Cross, they challenge only the district court's conclusion that

ERISA pre-empts their state law cause of action against United.6

We, therefore, analyze solely the question of pre-emption of the

claims against United. See Hulsey v. State of Texas, 929 F.2d

168, 172 (5th Cir. 1991) (issues stated but not briefed need not

be considered on appeal).

The claims against United arise from a relatively recent

phenomenon in the health care delivery system -- the prospective

review by a third party of the necessity of medical care. 

Systems of prospective and concurrent review, rather than

traditional retrospective review, were widely adopted throughout

the 1980s as a method of containing the rapidly rising costs of

health care. Blum, supra, at 192; Furrow, Medical Malpractice

and Cost Containment: Tightening the Screws, 36 Case Western L.
12

Rev. 985, 986-87 (1986). Under the traditional retrospective

system (also commonly known as the fee-for-service system), the

patient obtained medical treatment and the insurer reviewed the

provider's claims for payment to determine whether they were

covered under the plan. Denial of a claim meant that the cost of

treatment was absorbed by an entity other than the one designed

to spread the risk of medical costs -- the insurer.

Congress's adoption in 1983 of a system under which

hospitals are reimbursed for services provided to Medicare

patients based upon average cost calculations for patients with

particular diagnoses spurred private insurers to institute

similar programs in which prospective decisions are made about

the appropriate level of care. Although plans vary, the typical

prospective review system requires some form of pre-admission

certification by a third party (e.g., the HMO if an HMOassociated doctor provides care; an outside organization such as

United if an independent physician provides care) before a

hospital stay. Concurrent review involves the monitoring of a

hospital stay to determine its continuing appropriateness. See

generally, Blum, supra, at 192-93; Tiano, The Legal Implications

of HMO Cost Containment Measures, 14 Seton Hall Legis. J. 79, 80

(1990). As the SPD makes clear, United performs this sort of

prospective and concurrent review (generically, "utilization

review") in connection with, inter alia, the hospitalization of

Bell employees.
 

7 The case went to trial, but the plaintiff settled with

Western Medical, the provider of utilization review services. 

See Milt Freudenheim, When Treatment and Costs Collide, N.Y.

Times, Apr. 28, 1992, at C2 col. 1. 

13

The Corcorans based their action against United on Article

2315 of the Louisiana Civil Code, which provides that "[e]very

act whatever of man that causes damage to another obliges him by

whose fault it happened to repair it." Article 2315 provides

parents with a cause of action for the wrongful death of their

unborn children, Danos v. St. Pierre, 402 So. 2d 633, 637-38 (La.

1981), and also places liability on health care providers when

they fail to live up to the applicable standard of care. 

Chivleatto v. Divinity, 379 So. 2d 784, 786 (La. Ct. App. 4th

Dist. 1979). Whether Article 2315 permits a negligence suit

against a third party provider of utilization review services,

however, has yet to be decided by the Louisiana courts. The

potential for imposing liability on these entities is only

beginning to be explored, with only one state explicitly

permitting a suit based on a utilization review company's

allegedly negligent decision about medical care to go forward. 

Wilson v. Blue Cross of So. California, 22 Cal. App. 3d 660, 271

Cal. Rptr. 876, 883 (1990) (reversing summary judgment for

utilization review company which determined that further

hospitalization was not necessary; ERISA not implicated);7 see

also Wickline v. State of California, 192 Cal. App. 3d 1630, 239

Cal. Rptr. 810, 819 (1986) (stating, in dicta, that negligent

implementation of cost containment mechanisms such as utilization
 

8 Numerous commentators have weighed in on the propriety of

liability for utilization review decisions. See e.g., Macaulay,

Health Care Cost Containment and Medical Malpractice: On a

Collision Course, 19 Suffolk U.L. Rev. 91, 106-107 (1986)

(arguing for higher standard of negligence in "Wickline suits");

Morreim, Cost Containment and the Standard of Medical Care, 75

Calif. L. Rev. 1719, 1749-50 (1987) (arguing that liability

should be limited because patient's physician makes the ultimate

decision about treatment); Note, Paying the Piper: Third Party

Payor Liability for Medical Treatment Decisions, 25 Ga. L. Rev.

861, 907-911 (1991) (by David Griner) (arguing that without

liability for negligence in utilization review decisions, third

party payors have incentives to control costs but not to use

reasonable care in the decisionmaking process); Mellas, Adapting

the Judicial Approach to Medical Malpractice Claims Against

Physicians to Reflect Medicare Cost Containment Measures, 62 U.

Colo. L. Rev. 287, 316 (1991) (liability will reduce possibility

that poor medical decisions will be made in order to cut costs).

Even if courts put their imprimatur on negligence actions

against utilization review organizations, plaintiffs would face

difficulties in proving that the organization's decision was a

significant cause of an injury. See Wickline, 239 Cal. Rptr. at

819 (decision of doctor to discharge patient after Medi-Cal

(state utilization review body) would not authorize additional

hospital stay, not decision of Medi-Cal on appropriate length of

stay, is act upon which liability should be premised); Note,

supra, 25 Ga. L. Rev. at 902-05 (discussing problem of proving

that utilization review organization's decision is proximate

cause of injury); but see Wilson, 271 Cal. Rptr. at 883 (finding

that plaintiffs had adduced enough evidence as to causal effect

of utilization review company's decision on decedent's suicide to

avoid summary judgment).

14

review can lead to liability; ERISA not implicated), cert.

granted, 727 P.2d 753, 231 Cal. Rptr. 560, review dismissed,

cause remanded, 741 P.2d 613, 239 Cal. Rptr. 805 (1987).8

In the absence of clear Louisiana authority for their

lawsuit, the Corcorans rely on Green v. Walker, 910 F.2d 291 (5th

Cir. 1990). We held in Green that Article 2315 imposes a duty of

due care upon physicians hired by employers to conduct

employment-related exams on employees. Id. at 296. The cause of

action recognized in Green, however, is not analogous to the
 

9 If the Corcorans could sue United on a negligence theory,

it would appear that they could recover damages incurred in

connection with the death of their unborn child. Danos, 402 So.

2d at 637.

15

cause of action brought against United because Green involved an

actual physical examination by a doctor hired by an employer, not

the detached decision of a utilization review company. Despite

the lack of clear Louisiana authority supporting the Corcorans'

theory of recovery against United, we can resolve the pre-emption

question presented in this appeal. The law in this area is only

beginning to develop, and it does not appear to us that Louisiana

law clearly forecloses the possibility of recovery against

United. Thus, assuming that on these facts the Corcorans might

be capable of stating a cause of action for malpractice,9 our

task now is to determine whether such a cause of action is preempted by ERISA.

B. Principles of ERISA Pre-emption

The central inquiry in determining whether a federal statute

pre-empts state law is the intent of Congress. FMC Corp. v.

Holliday, 111 S. Ct. 403, 407 (1990); Allis-Chalmers Corp. v.

Lueck, 471 U.S. 202, 208 (1985). In performing this analysis we

begin with any statutory language that expresses an intent to

pre-empt, but we look also to the purpose and structure of the

statute as a whole. FMC Corp., 111 S. Ct. at 407; Ingersoll-Rand

Co. v. McClendon, 111 S. Ct. 478, 482 (1990).

ERISA contains an explicit pre-emption clause, which

provides, in relevant part:
 

10 Statutory, decisional and all other forms of state law

are included within the scope of the preemption clause. ERISA §

514(c)(1) ("The term 'State law' includes all laws, decisions,

rules, regulations, or other State action having the effect of

law, of any State"). Section 514(b)(2)(A) exempts certain state

laws from pre-emption, but none of these exemptions is applicable

here.

 

11 The legislative history indicates that Congress intended

the preemption provision to be applied expansively. In Shaw v.

Delta Air Lines, Inc., 463 U.S. 85 (1983), the Court explained:

The bill that became ERISA originally contained a limited

pre-emption clause, applicable only to state laws relating

to the specific subjects covered by ERISA. The Conference

Committee rejected those provisions in favor of the present

language, and indicated that section's pre-emptive scope was

as broad as its language. See H.R. Conf. Rep. No. 93-1280,

p. 383 (1974); S. Conf. Rep. No. 93-1090, p. 383 (1974).

463 U.S. at 98. Senator Williams, one of ERISA's sponsors,

remarked:

It should be stressed that with the narrow exceptions

specified in the bill, the substantive and enforcement

provisions of the conference substitute are intended to

preempt the field for Federal regulations, thus eliminating

the threat of conflicting or inconsistent State and local

regulation of employee benefit plans. This principle is

intended to apply in its broadest sense to all actions of

State or local governments, or any instrumentality thereof,

which have the force or effect of law.

16

Except as provided in subsection (b) of this section, the

provisions of this subchapter and subchapter III of this

chapter shall supersede any and all State laws insofar as

they may now or hereafter relate to any employee benefit

plan described in section 1003(a). . . .

ERISA § 514(a).10 It is by now well-established that the

"deliberately expansive" language of this clause, Pilot Life

Insurance Co. v. Dedeaux, 481 U.S. 42, 46 (1987), is a signal

that it is be construed extremely broadly. See FMC Corp., 111 S.

Ct. at 407 ("[t]he pre-emption clause is conspicuous for its

breadth"); Ingersoll-Rand, 111 S. Ct. at 482.11 The key words
120 Cong. Rec. 29933 (1974). See also Pilot Life, 481 U.S. at

46.

17

"relate to" are used in such a way as to expand pre-emption

beyond state laws that relate to the specific subjects covered by

ERISA, such as reporting, disclosure and fiduciary obligations. 

Id. at 482. Thus, state laws "relate[] to" employee benefit

plans in a much broader sense -- whenever they have "a connection

with or reference to such a plan." Shaw v. Delta Air Lines,

Inc., 463 U.S. 85, 96-97 (1983). This sweeping pre-emption of

state law is consistent with Congress's decision to create a

comprehensive, uniform federal scheme for the regulation of

employee benefit plans. See Ingersoll-Rand, 111 S. Ct. at 482;

Pilot Life, 481 U.S. at 45-46.

The most obvious class of pre-empted state laws are those

that are specifically designed to affect ERISA-governed employee

benefit plans. See Mackey v. Lanier Collection Agency & Serv.,

Inc., 486 U.S. 825, 829-30 (1988) (statute explicitly barring

garnishment of ERISA plan funds is pre-empted); Ingersoll-Rand,

111 S. Ct. at 483 (cause of action allowing recovery from

employer when discharge is premised upon attempt to avoid

contributing to pension plan is pre-empted). But a law is not

saved from pre-emption merely because it does not target employee

benefit plans. Indeed, much pre-emption litigation involves laws

of general application which, when applied in particular

settings, can be said to have a connection with or a reference to

an ERISA plan. See Pilot Life, 481 U.S. at 47-48 (common law
18

tort and contract causes of action seeking damages for improper

processing of a claim for benefits under a disability plan are

pre-empted); Shaw, 463 U.S. at 95-100 (statute interpreted by

state court as prohibiting plans from discriminating on the basis

of pregnancy is pre-empted); Christopher v. Mobil Oil Corp., 950

F.2d 1209, 1218 (5th Cir. 1992) (common law fraud and negligent

misrepresentation claims that allege reliance on agreements or

representations about the coverage of a plan are pre-empted),

petition for cert. filed 60 U.S.L.W. 3829 (U.S. May 26, 1992)

(No. 91-1881); Lee v. E.I. DuPont de Nemours & Co., 894 F.2d 755,

758 (5th Cir. 1990) (same). On the other hand, the Court has

recognized that not every conceivable cause of action that may be

brought against an ERISA-covered plan is pre-empted. "Some state

actions may affect employee benefit plans in too tenuous, remote

or peripheral a manner to warrant a finding that the law 'relates

to' the plan." Shaw, 463 U.S. at 100 n.21. Thus, "run-of-themill state-law claims such as unpaid rent, failure to pay

creditors, or even torts committed by an ERISA plan" are not preempted, Mackey, 486 U.S. at 833 (discussing these types of claims

in dicta).

C. Pre-emption of the Corcorans' Claims

Initially, we observe that the common law causes of action

advanced by the Corcorans are not that species of law

"specifically designed" to affect ERISA plans, for the liability

rules they seek to invoke neither make explicit reference to nor

are premised on the existence of an ERISA plan. Compare
 

12 Pilot Life, 481 U.S. at 47-48.

19

Ingersoll-Rand, 111 S. Ct. at 483. Rather, applied in this case

against a defendant that provides benefit-related services to an

ERISA plan, the generally applicable negligence-based causes of

action may have an effect on an ERISA-governed plan. In our

view, the pre-emption question devolves into an assessment of the

significance of these effects.

1. United's position -- it makes benefit determinations, not

 medical decisions 

United's argument in favor of pre-emption is grounded in the

notion that the decision it made concerning Mrs. Corcoran was not

primarily a medical decision, but instead was a decision made in

its capacity as a plan fiduciary about what benefits were

authorized under the Plan. All it did, it argues, was determine

whether Mrs. Corcoran qualified for the benefits provided by the

plan by applying previously established eligibility criteria. 

The argument's coup de grace is that under well-established

precedent,12 participants may not sue in tort to redress injuries

flowing from decisions about what benefits are to be paid under a

plan. One commentator has endorsed this view of lawsuits against

providers of utilization review services, arguing that, because

medical services are the "benefits" provided by a utilization

review company, complaints about the quality of medical services

(i.e., lawsuits for negligence) "can therefore be characterized

as claims founded upon a constructive denial of plan benefits." 
20

Chittenden, Malpractice Liability and Managed Health Care:

History & Prognosis, 26 Tort & Ins. Law J. 451, 489 (1991).

In support of its argument, United points to its explanatory

booklet and its language stating that the company advises the

patient's doctor "what the medical plan will pay for, based on a

review of [the patient's] clinical information and nationally

accepted medical guidelines for the treatment of [the patient's]

condition." It also relies on statements to the effect that the

ultimate medical decisions are up to the beneficiary's doctor. 

It acknowledges at various points that its decision about what

benefits would be paid was based on a consideration of medical

information, but the thrust of the argument is that it was simply

performing commonplace administrative duties akin to claims

handling.

Because it was merely performing claims handling functions

when it rejected Dr. Collins's request to approve Mrs. Corcoran's

hospitalization, United contends, the principles of Pilot Life

and its progeny squarely foreclose this lawsuit. In Pilot Life,

a beneficiary sought damages under various state-law tort and

contract theories from the insurance company that determined

eligibility for the employer's long term disability benefit plan. 

The company had paid benefits for two years, but there followed a

period during which the company terminated and reinstated the

beneficiary several times. 481 U.S. at 43. The Court made

clear, however, that ERISA pre-empts state-law tort and contract

actions in which a beneficiary seeks to recover damages for
21

improper processing of a claim for benefits. Id. at 48-49. 

United suggests that its actions here were analogous to those of

the insurance company in Pilot Life, and therefore urges us to

apply that decision.

2. The Corcorans' position -- United makes medical

 decisions, not benefit determinations

The Corcorans assert that Pilot Life and its progeny are

inapposite because they are not advancing a claim for improper

processing of benefits. Rather, they say, they seek to recover

solely for United's erroneous medical decision that Mrs. Corcoran

did not require hospitalization during the last month of her

pregnancy. This argument, of course, depends on viewing United's

action in this case as a medical decision, and not merely an

administrative determination about benefit entitlements. 

Accordingly, the Corcorans, pointing to the statements United

makes in the QCP booklet concerning its medical expertise,

contend that United exercised medical judgment which is outside

the purview of ERISA pre-emption.

The Corcorans suggest that a medical negligence claim is

permitted under the analytical framework we have developed for

assessing pre-emption claims. Relying on Sommers Drug Stores Co.

Employee Profit Sharing Trust v. Corrigan Enterprises, Inc., 793

F.2d 1456 (5th Cir. 1986), cert. denied, 479 U.S. 1034 (1987),

they contend that we should not find the state law under which

they proceed pre-empted because it (1) involves the exercise of

traditional state authority and (2) is a law of general

application which, although it affects relations between
 

13 Amicus curiae Louisiana Trial Lawyers Association (LTLA)

argues that United is not an ERISA fiduciary, and that therefore

the tort claims against it cannot be pre-empted. The parties,

however, agree that United is a fiduciary, and we have no reason

to dispute this. United's contract with Bell would appear to

give it "discretionary authority or discretionary control

respecting management of [the] plan" or "authority or control

respecting management or disposition of its assets. . . [,]" thus

satisfying the statutory definition of a fiduciary. 29 U.S.C. §

1002(21)(A)(i). In any event, all courts of appeals to have

considered the issue have held that ERISA pre-emption may apply

regardless of whether the defendant is a plan fiduciary. 

Consolidated Beef Indus., Inc. v. New York Life Ins. Co., 949

F.2d 960, 964 (8th Cir. 1991); Gibson v. Prudential Ins. Co., 915

F.2d 414, 417-18 (9th Cir. 1990); Howard v. Parisian, Inc., 807

F.2d 1560, 1564 (11th Cir. 1987). Despite the suggestion in

Howard that this circuit so held in Light v. Blue Cross and Blue

Shield of Alabama, 790 F.2d 1247 (5th Cir. 1986), there is no

indication that the defendant in Light was not a fiduciary, and

even if it was not, no part of the opinion considers the precise

question whether ERISA pre-empts suits against nonfiduciaries.

22

principal ERISA entities in this case, is not designed to affect

the ERISA relationship.13

3. Our view -- United makes medical decisions incident to

 benefit determinations

We cannot fully agree with either United or the Corcorans. 

Ultimately, we conclude that United makes medical decisions --

indeed, United gives medical advice -- but it does so in the

context of making a determination about the availability of

benefits under the plan. Accordingly, we hold that the Louisiana

tort action asserted by the Corcorans for the wrongful death of

their child allegedly resulting from United's erroneous medical

decision is pre-empted by ERISA.

Turning first to the question of the characterization of

United's actions, we note that the QCP booklet and the SPD lend

substantial support to the Corcorans' argument that United makes
23

medical decisions. United's own booklet tells beneficiaries that

it "assess[es] the need for surgery or hospitalization and . . .

determine[s] the appropriate length of stay for a

hospitalization, based on nationally accepted medical

guidelines." United "will discuss with your doctor the

appropriateness of the treatments recommended and the

availability of alternative types of treatments." Further,

"United's staff includes doctors, nurses, and other medical

professionals knowledgeable about the health care delivery

system. Together with your doctor, they work to assure that you

and your covered family members receive the most appropriate

medical care." According to the SPD, United will "provid[e] you

with information which will permit you (in consultation with your

doctor) to evaluate alternatives to surgery and hospitalization

when those alternatives are medically appropriate."

United makes much of the disclaimer that decisions about

medical care are up to the beneficiary and his or her doctor. 

While that may be so, and while the disclaimer may support the

conclusion that the relationship between United and the

beneficiary is not that of doctor-patient, it does not mean that

United does not make medical decisions or dispense medical

advice. See Wickline, 239 Cal. Rptr. at 819 (declining to hold

Medi-Cal liable but recognizing that it made a medical judgment);

Macaulay, Health Care Cost Containment and Medical Malpractice:

On a Collision Course, 19 Suffolk U.L. Rev. 91, 106-107 (1986)

("As illustrated in [Wickline], an adverse prospective
24

determination on the 'necessity' of medical treatment may involve

complex medical judgment.") (footnote omitted). In response,

United argues that any such medical determination or advice is

made or given in the context of administering the benefits

available under the Bell plan. Supporting United's position is

the contract between United and Bell, which provides that

"[United] shall contact the Participant's physician and based

upon the medical evidence and normative data determine whether

the Participant should be eligible to receive full plan benefits

for the recommended hospitalization and the duration of

benefits." 

United argues that the decision it makes in this, the

prospective context, is no different than the decision an insurer

makes in the traditional retrospective context. The question in

each case is "what the medical plan will pay for, based on a

review of [the beneficiary's] clinical information and nationally

accepted medical guidelines for the treatment of [the

beneficiary's] condition." See QCP Booklet at 4. A prospective

decision is, however, different in its impact on the beneficiary

than a retrospective decision. In both systems, the beneficiary

theoretically knows in advance what treatments the plan will pay

for because coverage is spelled out in the plan documents. But

in the retrospective system, a beneficiary who embarks on the

course of treatment recommended by his or her physician has only

a potential risk of disallowance of all or a part of the cost of

that treatment, and then only after treatment has been rendered. 
 

14 It is the medical decisionmaking aspect of the

utilization review process that has spawned the literature

assessing the application of malpractice and other negligencebased doctrines to hold these entities liable for patient

injuries. See Blum, supra, at 199 ("The overriding incentive for

[utilization review] may be cost containment, but the process

itself is triggered by a medical evaluation of a particular case,

25

In contrast, in a prospective system a beneficiary may be

squarely presented in advance of treatment with a statement that

the insurer will not pay for the proposed course of treatment

recommended by his or her doctor and the beneficiary has the

potential of recovering the cost of that treatment only if he or

she can prevail in a challenge to the insurer's decision. A

beneficiary in the latter system would likely be far less

inclined to undertake the course of treatment that the insurer

has at least preliminarily rejected.

By its very nature, a system of prospective decisionmaking

influences the beneficiary's choice among treatment options to a

far greater degree than does the theoretical risk of disallowance

of a claim facing a beneficiary in a retrospective system. 

Indeed, the perception among insurers that prospective

determinations result in lower health care costs is premised on

the likelihood that a beneficiary faced with the knowledge of

specifically what the plan will and will not pay for will choose

the treatment option recommended by the plan in order to avoid

risking total or partial disallowance of benefits. When United

makes a decision pursuant QCP, it is making a medical

recommendation which -- because of the financial ramifications --

is more likely to be followed.14
an evaluation that requires a clinical judgment.") (footnote

omitted); Tiano, supra, at 80 ("The patient faces conflicting

judgments by two medical professionals: the treating physician

and the utilization review consultant"); Chittenden, supra, at

476 ("negligent implementation of cost-control mechanisms may

affect the medical judgment of the physician or other provider

resulting in physical injury to the patient").

26

Although we disagree with United's position that no part of

its actions involves medical decisions, we cannot agree with the

Corcorans that no part of United's actions involves benefit

determinations. In our view, United makes medical decisions as

part and parcel of its mandate to decide what benefits are

available under the Bell plan. As the QCP Booklet concisely puts

it, United decides "what the medical plan will pay for." When

United's actions are viewed from this perspective, it becomes

apparent that the Corcorans are attempting to recover for a tort

allegedly committed in the course of handling a benefit

determination. The nature of the benefit determination is

different than the type of decision that was at issue in Pilot

Life, but it is a benefit determination nonetheless. The

principle of Pilot Life that ERISA pre-empts state-law claims

alleging improper handling of benefit claims is broad enough to

cover the cause of action asserted here.

Moreover, allowing the Corcorans' suit to go forward would

contravene Congress's goals of "ensur[ing] that plans and plan

sponsors would be subject to a uniform body of benefit law" and

"minimiz[ing] the administrative and financial burdens of

complying with conflicting directives among States or between

States and the Federal Government." Ingersoll-Rand Co., 111 S.
27

Ct. at 484; see also Fort Halifax Packing, 482 U.S. at 9-10. 

Thus, statutes that subject plans to inconsistent regulatory

schemes in different states, thereby increasing inefficiency and

potentially causing the plan to respond by reducing benefit

levels, are consistently held pre-empted. See Alessi v.

Raybestos-Manhattan, Inc., 451 U.S. 504, 524 (1981) (striking

down law which prohibited plans from offsetting benefits by

amount of worker compensation payments); Shaw, 463 U.S. at 105

n.25 (striking down law which prohibited plans from

discriminating on basis of pregnancy); FMC Corp., 111 S. Ct. at

408 (striking down law which eliminated plans' right of

subrogation from claimant's tort recovery). But in IngersollRand, the Court, in holding pre-empted the Texas common law of

wrongful discharge when applied against an employer who allegedly

discharged an employee to avoid contributing to the employee's

pension plan, made clear that a state common law cause of action

is equally capable of leading to the kind of patchwork scheme of

regulation Congress sought to avoid:

It is foreseeable that state courts, exercising their common

law powers, might develop different substantive standards

applicable to the same employer conduct, requiring the

tailoring of plans and employer conduct to the peculiarities

of the law of each jurisdiction. Such an outcome is

fundamentally at odds with the goal of uniformity that

congress sought to implement.

111 S. Ct. at 484. Similarly, although imposing liability on

United might have the salutary effect of deterring poor quality
 

15 See Comment, A Cost Containment Malpractice Defense:

Implications for the Standard of Care and for Indigent Patients,

26 Hous. L. Rev. 1007, 1021 (1989) (by Leslie C. Giordani).

 

16 We find Independence HMO, Inc. v. Smith, 733 F. Supp.

983 (E.D. Pa. 1990), cited by the Corcorans, distinguishable on

its facts. In Smith, the district court did not find pre-empted

a state court malpractice action brought against an HMO by one of

its members. The plaintiff sought to hold the HMO liable, under

a state-law agency theory, for the alleged negligence of a

surgeon associated with the HMO. The case appears to support the

Corcorans because the plaintiff was attempting to hold an ERISA

entity liable for medical decisions. However, the medical

decisions at issue do not appear to have been made in connection

with a cost containment feature of the plan or any other aspect

of the plan which implicated the management of plan assets, but

were instead made by a doctor in the course of treatment.

We also find Eurine v. Wyatt Cafeterias, No. 3-91-0408-H

(N.D. Tex. Aug. 21, 1991), cited in the Corcorans' reply brief,

irrelevant to this case. In Eurine, an employee of Wyatt

Cafeterias sued after she slipped and fell at work. Wyatt had

opted out of Texas's workers' compensation scheme, but provided

benefits for injured employees pursuant to an ERISA plan. The

court held that a tort suit against the employer for its

negligence in failing to maintain the floor in a safe condition

had nothing to do with the ERISA relationship between the

parties, but instead arose from their distinct employer-employee

relationship. 

Finally, to the extent that two other decisions cited by the

28

medical decisions,15 there is a significant risk that state

liability rules would be applied differently to the conduct of

utilization review companies in different states. The cost of

complying with varying substantive standards would increase the

cost of providing utilization review services, thereby increasing

the cost to health benefit plans of including cost containment

features such as the Quality Care Program (or causing them to

eliminate this sort of cost containment program altogether) and

ultimately decreasing the pool of plan funds available to

reimburse participants. See Macaulay, supra, at 105.16
Corcorans, Kohn v. Delaware Valley HMO, Inc., No. 91-2745 (E.D.

Pa. Dec. 20, 1991 and Feb. 5, 1992), and Cooney v. South Central

Bell Tel. Co., No. 91-3870 (E.D. La. March 5, 1992), conflict

with our holding, we decline to follow them.

29

It may be true, as the Corcorans assert, that Louisiana tort

law places duties on persons who make medical judgments within

the state, and the Louisiana courts may one day recognize that

this duty extends to the medical decisions made by utilization

review companies. But it is equally true that Congress may preempt state-law causes of action which seek to enforce various

duties when it determines that such actions would interfere with

a carefully constructed scheme of federal regulation. See Pilot

Life, 481 U.S. at 48. The acknowledged absence of a remedy under

ERISA's civil enforcement scheme for medical malpractice

committed in connection with a plan benefit determination does

not alter our conclusion. While we are not unmindful of the fact

that our interpretation of the pre-emption clause leaves a gap in

remedies within a statute intended to protect participants in

employee benefit plans, see Shaw, 463 U.S. at 90; Firestone Tire

& Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989), the lack of an

ERISA remedy does not affect a pre-emption analysis. Memorial

Hosp., 904 F.2d at 248 & n.16; Lee, 894 F.2d at 757. Congress

perhaps could not have predicted the interjection into the ERISA

"system" of the medical utilization review process, but it

enacted a pre-emption clause so broad and a statute so

comprehensive that it would be incompatible with the language,
30

structure and purpose of the statute to allow tort suits against

entities so integrally connected with a plan.

We are not persuaded that Sommers Drug, on which the

Corcorans rely heavily, commands a different outcome. In Sommers

Drug, we observed that courts are less likely to find pre-emption

when the state law involves an exercise of traditional state

authority than when the law affects an area not traditionally

regulated by the states. Id. at 1467. The Corcorans contend

that they easily pass this hurdle, as tort law traditionally has

been reserved to the states, but this victory only puts them back

at the starting line again. We went on to say in Sommers Drug

that we were "not convinced" that the traditional or

nontraditional nature of the state law properly bears upon the

initial question whether it is pre-empted by § 514(a), because

the distinction had no support in the statutory language. Id. at

1468. We continue to adhere to this view. As cases such as

Ingersoll-Rand and Christopher illustrate, the fact that states

traditionally have regulated in a particular area has functioned

as no impediment to ERISA pre-emption. See Ingersoll-Rand, 111

S. Ct. at 483 (wrongful discharge action pre-empted);

Christopher, 950 F.2d at 1218 (fraud action pre-empted). ERISA's

pre-emption section itself contains an explicit exemption for

state laws that regulate in at least one area of traditional

state function -- insurance. ERISA § 514(b)(2)(A). There is no

reason to believe that Congress intended implicitly to exempt a
31

whole range of state laws when it showed itself perfectly capable

of carving out specific exemptions.

The second factor identified in Sommers Drug as bearing on

pre-emption -- whether the state law affects relations among

principal ERISA entities -- continues to be relevant in this

circuit, see Memorial Hospital Systems v. Northbrook Life

Insurance Co., 904 F.2d 236, 245, 248-50 (5th Cir. 1990), but it

does not help the Corcorans. In the case before us, of course,

the cause of action affects relations between principal ERISA

entities. Nevertheless, the Corcorans argue, Sommers Drug holds

that the claim will not be pre-empted where the state law is one

of general application and it does not affect relations among the

principal ERISA entities "as such," but in their capacities as

entities in another kind of relationship. They analogize to

Sommers Drug, where we held that a pension plan, acting in its

"non-ERISA" capacity as a shareholder in a company, could invoke

the state common law of corporate fiduciary duty against an

officer and director of the company and a plan fiduciary to

redress an alleged breach of fiduciary duty. 793 F.2d at 1468-

70. The short answer to this argument is that the cause of

action in this case is not between parties acting in the kind of

non-ERISA context we found in Sommers Drug. Although the claims

in Sommers Drug nominally affected relations between ERISA

entities, the lawsuit had nothing to do with the plan. Here,

however, the central purpose of the lawsuit is to hold United

liable for actions it took in connection with its duties under
32

the plan. Sommers Drug does not mitigate the pre-emptive force

of ERISA § 514(a).

IV. EXTRACONTRACTUAL DAMAGES

The Corcorans argue in the alternative that the damages they

seek are available as "other appropriate equitable relief" under

ERISA § 502(a)(3). That section provides:

(a) A civil action may be brought --

. . .

(3) by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any provision

of this subchapter or the terms of the plan, or (B) to

obtain other appropriate equitable relief (i) to

redress such violations or (ii) to enforce any

provisions of this subchapter or the terms of the plan;

. . .

Although the Corcorans did not assert a cause of action under §

502(a)(3) in their original state court complaint, they asked the

district court in their motion for reconsideration to award

damages pursuant to this section. The defendants agreed at oral

argument that the issue was properly raised and preserved for

appeal, and we proceed to consider it.

Section 502(a)(3) provides for relief apart from an award of

benefits due under the terms of a plan. When a beneficiary

simply wants what was supposed to have been distributed under the

plan, the appropriate remedy is § 502(a)(1)(B). See, e.g.,

Cathey v. Dow Chemical Co. Medical Care Program, 907 F.2d 554,

555 (5th Cir. 1990), cert. denied, 111 S. Ct. 964 (1991). 

Damages that would give a beneficiary more than he or she is
 

17 Section 502(a)(2) permits "the Secretary. . .a

participant, beneficiary or fiduciary" to sue for appropriate

relief under § 409.

33

entitled to receive under the strict terms of the plan are

typically termed "extracontractual." Section 502(a)(3) by its

terms permits beneficiaries to obtain "other appropriate

equitable relief" to redress (1) a violation of the substantive

provisions of ERISA or (2) a violation of the terms of the plan. 

Although the Corcorans have neither identified which of these two

types of violations they seek to redress nor directed us to the

particular section of the Plan or ERISA which they claim was

violated, we need not determine this in order to resolve the

issue before us. As outlined below, we find that the particular

damages the Corcorans seek -- money for emotional injuries --

would not be an available form of damages under the trust and

contract law principles which, the Corcorans urge, should guide

our interpretation of ERISA's remedial scheme. Thus, we hold

that even under the interpretation of § 502(a)(3) urged by the

Corcorans, they may not recover.

The question whether extracontractual or punitive damages

are available to a beneficiary under § 502(a)(3) has been left

open by the Supreme Court ever since Massachusetts Mutual Life

Insurance Co. v. Russell, 473 U.S. 134 (1985). In Russell, the

beneficiary of a plan sought compensatory and punitive damages

under ERISA §§ 502(a)(2) and 409(a)17 for the improper processing

of her claim for disability benefits. Id. at 136, 138. The

Court rejected the argument that such damages were available
34

under § 409(a), holding that § 409(a) (1) authorized only actions

on behalf of the plan as a whole, not individual beneficiaries,

for losses to the plan; and (2) provided no implied cause of

action for extracontractual damages caused by improper claims

processing. Russell, 473 U.S. at 140, 147. Because the

beneficiary expressly disclaimed reliance on § 502(a)(3),

however, the Court had no occasion to consider whether the

damages the plaintiff sought were available under that section. 

Id. at 139 n.5.

In a concurrence joined by three other Justices, Justice

Brennan emphasized that he read the Court's reasoning to apply

only to § 409(a), and that the legislative history of ERISA

suggested that courts should develop a federal common law in

fashioning "other appropriate equitable relief" under §

502(a)(3). Id. at 155-56 (Brennan, J., concurring in the

judgment). Justice Brennan argued that Congress "intended to

engraft trust-law principles onto the enforcement scheme" of

ERISA, including the principle that courts should give to

beneficiaries of a trust the remedies necessary for the

protection of their interests. Id. at 156-57. Consequently, he

encouraged courts faced with claims for extracontractual damages

first to determine to what extent state and federal trust and

pension law provide for the recovery of damages beyond any

benefits that have been withheld, and second to consider whether

extracontractual relief would conflict with ERISA in any way. 

Id. at 157-58. With respect to the first inquiry he indicated
 

18 Drinkwater v. Metropolitan Life Ins. Co., 846 F.2d 821

(1st Cir.), cert. denied, 488 U.S. 909 (1988); Harsch v.

Eisenberg, 956 F.2d 651 (7th Cir. 1992), petition for cert.

filed, 60 U.S.L.W. 3816 (U.S. May 11, 1992) (No. 91-1835); Novak

v. Andersen Corp., No. 91-1957 (8th Cir. April 9, 1992); Sokol v.

Bernstein, 803 F.2d 532 (9th Cir. 1986); Bishop v. Osborn

Transp., Inc., 838 F.2d 1173 (11th Cir.), cert. denied, 488 U.S.

832 (1988).

35

that any deficiency in trust law in the availability of makewhole remedies should not deter courts from authorizing such

remedies under § 502(a)(3), for Congress intended in ERISA to

strengthen the requirements of the common law of trusts as they

relate to employee benefit plans. Id. at 157 n.17. Finally,

Justice Brennan suggested, courts should keep in mind that the

purpose of ERISA is the "enforcement of strict fiduciary

standards of care in the administration of all aspects of pension

plans and promotion of the best interests of participants and

beneficiaries." Id. at 158.

The Corcorans urge us to apply Justice Brennan's concurrence

and hold that the damages they seek amount to "other appropriate

equitable relief." The defendants, on the other hand, urge us to

interpret "other appropriate equitable relief" to include only

declaratory and injunctive relief. Under the defendants' view of

§ 502(a)(3), which has been adopted by a number of circuits,18 no

money damages would be awardable and our discussion would be at

an end. However, even assuming that Justice Brennan's view of

"other appropriate equitable relief" as potentially encompassing

make-whole relief is a proper construction of that section, the

damages the Corcorans seek would not be available.
36

The characterization of equitable relief as encompassing

damages necessary to make the plaintiff whole may well be

consistent with the trust law principles that were incorporated

into ERISA and which guide its interpretation. See Firestone,

489 U.S. at 110-11 (because ERISA is largely based on trust law,

those principles guide interpretation); H.R. Rep. No. 533, 93d

Cong., 1st Sess. (1973), reprinted in 1974 U.S. Code Cong. &

Admin. News 4639; S. Rep. No. 127, 93d Cong., 1st Sess.,

reprinted in 1974 U.S. Code Cong. & Admin. News 4838 (indicating

intent to incorporate the law of trusts into ERISA). Section 205

of the Restatement (Second) of Trusts allows for monetary damages

as make-whole relief, providing that a beneficiary has "the

option of pursuing a remedy which will put him in the position in

which he was before the trustee committed the breach of trust" or

"of pursuing a remedy which will put him in the position in which

he would have been if the trustee had not committed the breach of

trust." In the context of the breach of a trustee's investment

duties, "the general rule [is] that the object of damages is to

make the injured party whole, that is, to put him in the same

condition in which he would have been if the wrong had not been

committed. . . . Both direct and consequential damages may be

awarded." G. Bogert & G. Bogert, The Law of Trusts and Trustees

§ 701, at 198 (2d ed. 1982). See also Estate of Talbot, 141 Cal.

App. 309, 296 P.2d 848 (1956); In re Cook's Will, 136 N.J. Eq.

123, 40 A.2d 805 (1945).
37

This view may also be consistent with the common law

contract doctrine which assists us in interpreting ERISA. As the

Court observed in Russell, ERISA was enacted "to protect

contractually defined benefits." 473 U.S. at 148. Prior to the

enactment of ERISA, the rights and obligations of pension

beneficiaries and trustees were governed not only by trust

principles, but in large part by contract law. Firestone, 489

U.S. at 112-13; see also Rochester Corp. v. Rochester, 450 F.2d

118, 120-21 (4th Cir. 1971); Audio Fidelity Corp. v. Pension

Benefit Guaranty Corp., 624 F.2d 513, 517 (4th Cir. 1980); Hoefel

v. Atlas Tack Corp., 581 F.2d 1, 4-7 (1st Cir. 1978). It is

well-established that contract law enables an aggrieved party to

recover such damages as would place him in the position he would

have occupied had the contract been performed, Restatement

(Second) of Contracts § 347 & comment a (1981), including those

damages that could reasonably have been foreseen to flow from the

breach. Id. § 351; see Warren v. Society Nat. Bank, 905 F.2d

975, 980 (6th Cir. 1990) (§ 502(a)(3) allows for recovery of

beneficiaries' increased tax liability after plan administrators

failed to follow instructions regarding distribution), cert.

denied, 111 S. Ct. 2556 (1991).

However, the Corcorans seek a form of extracontractual

damages that is never, as far as we can tell, awarded for breach

of trust duties, and is granted only in the most limited of

circumstances for a breach of contract. Certainly, patients and

their physicians can enter into contracts and physicians may
 

19 See J. Calamari & J. Perillo, The Law of Contracts §§

14-3, 14-5(b), at 595-96 (3d ed. 1987); 11 W. Jaeger, Williston

on Contracts § 1341, at 214 (3d ed. 1968); 5 Corbin on Contracts

§ 1076, at 426 (2d ed. 1964).

38

incur liability for breach. The cases are uniform, however, in

holding that there can be no recovery against a physician on a

contractual theory, as opposed to the usual recovery on a tort

theory of medical negligence, unless there is an express

agreement to perform a particular service or to achieve a

specific cure. E.g., Bobrick v. Bravstein, 497 N.Y.S.2d 749,

751, 116 A.D.2d 682 (App. Div. 1986); Cirafici v. Goffen, 85 Ill.

App. 3d 1102, 407 N.E.2d 633, 635, 41 Ill. Dec. 135 (1980);

Depenbrok v. Kaiser Foundation Health Plan, Inc., 79 Cal. App. 3d

167, 144 Cal. Rptr. 724, 726 (1978). In a few cases, courts,

recognizing a distinction between commercial contracts and

contracts for the performance of personal services, have found

inapplicable the general rule that emotional distress damages are

not available in contract actions19 and have allowed damages for

emotional injuries within the contemplation of the parties. 

Stewart v. Rudner, 349 Mich. 459, 84 N.W.2d 816, 824 (1957) ("the

parties may reasonably be said to have contracted with reference

to the payment of [emotional distress] damages therefor in event

of breach"); Sullivan v. O'Connor, 363 Mass. 579, 296 N.E.2d 183,

188-89 (1973) (although mental anguish damages are not available

for breach of a commercial contract, psychological injury may be

contemplated in a contract for an operation) (citing Stewart). 

The Stewart rule, however, has not been widely adopted, and the
39

Michigan courts recently have characterized its holding

concerning damages as applying only to contracts involving deep,

personal relationships, Chrum v. Charles Heating & Cooling, Inc.,

121 Mich. App. 17, 327 N.W.2d 568, 570 (1982), and contracts to

perform very specific acts. Penner v. Seaway Hosp., 169 Mich.

App. 502, 427 N.W.2d 584, 587 (1988).

The strictness with which courts have viewed doctor-patient

contracts thwarts the Corcorans' claim that emotional distress

damages would be available here under a make-whole interpretation

of § 502(a)(3). The existence of a true doctor-patient

relationship between Mrs. Corcoran and United which could support

a contractual theory of recovery is dubious at best. Related to

this problem is the lack of an express agreement for a particular

service or for a particular result that serves as a prerequisite

to a contract-based recovery. Even assuming that United's

booklet could be considered an aspect of the "plan," breach of

which would give rise to a cause of action under § 502(a)(3), it

cannot be construed as making an agreement to perform any

particular medical procedure or to arrive at any result. At most

it makes promises to act in accordance with accepted standards of

medical care. But courts have not recognized these sorts of

promises as creating contractual duties between physicians and

patients. Cirafici, 407 N.E.2d at 635-36 (failure to perform

with requisite skill and care leads to action for negligence, not

breach of contract); Awkerman v. Tri-County Orthopedic Group,

P.C., 143 Mich. App. 722, 373 N.W.2d 204, 206 (1985) (physician's
40

breach of express or implied promise to act in accordance with

standard of care not actionable in contract). Indeed, the

Massachusetts Supreme Judicial Court has emphasized that in an

action seeking damages under Sullivan, one of the leading cases

allowing mental distress damages for a breached medical contract,

recovery is not for the doctor's failure to live up to the

standard of care but solely for a failure to perform the specific

promise contained in the agreement. Salem Orthopedic Surgeons,

Inc. v. Quinn, 377 Mass. 514, 386 N.E.2d 1268, 1271 (1979). See

also Murray v. University of Pennsylvania Hosp., 490 A.2d 839,

841 (Pa. Super. 1985) (action for breach of contract to achieve

particular result may lie even if doctor has exercised highest

degree of skill and care).

The fact that courts regularly view doctors and their

patients as standing in a fiduciary relationship, e.g., Black v.

Littlejohn, 312 N.C. 626, 325 S.E.2d 469, 482 (1985);

Liebergesell v. Evans, 93 Wash. 2d 881, 613 P.2d 1170, 1176

(1980); State ex rel. Stufflebaum v. Appelquist, 694 S.W.2d 882,

885 (Mo. App. 1985), also is of no avail. Although a plan

beneficiary certainly may sue under § 502(a)(3) for a breach of

the fiduciary duties set forth in § 404, the lack of a true

doctor-patient relationship between Mrs. Corcoran and United

undermines this ground of recovery. In any event, courts have

not held that patients may sue their doctors under any

independent "breach of fiduciary duty" theory. The remedies are

limited to contract actions (where an express agreement has been
 

20 We note that, were the Corcorans able to recover against

United under state law, the contract between Bell and United

indicates that United would bear the cost. However, the general

application of a liability system to utilization review companies

would ultimately result in increased costs to plans such as the

Bell plan as it became more expensive for companies such as

United to do business.

41

made) and, in the vast majority of cases, tort actions for

negligence. Assuming without deciding, therefore, that §

502(a)(3) permits the award of make-whole relief as "other

appropriate equitable relief," we hold that the emotional

distress and mental anguish damages sought here by the Corcorans

are not recoverable.

* * *

The result ERISA compels us to reach means that the

Corcorans have no remedy, state or federal, for what may have

been a serious mistake. This is troubling for several reasons. 

First, it eliminates an important check on the thousands of

medical decisions routinely made in the burgeoning utilization

review system. With liability rules generally inapplicable,

there is theoretically less deterrence of substandard medical

decisionmaking. Moreover, if the cost of compliance with a

standard of care (reflected either in the cost of prevention or

the cost of paying judgments) need not be factored into

utilization review companies' cost of doing business, bad medical

judgments will end up being cost-free to the plans that rely on

these companies to contain medical costs.20 ERISA plans, in
42

turn, will have one less incentive to seek out the companies that

can deliver both high quality services and reasonable prices.

Second, in any plan benefit determination, there is always

some tension between the interest of the beneficiary in obtaining

quality medical care and the interest of the plan in preserving

the pool of funds available to compensate all beneficiaries. In

a prospective review context, with its greatly increased ability

to deter the beneficiary (correctly or not) from embarking on a

course of treatment recommended by the beneficiary's physician,

the tension between interest of the beneficiary and that of the

plan is exacerbated. A system which would compensate the

beneficiary who changes course based upon a wrong call for the

costs of that call might ease the tension between the conflicting

interests of the beneficiary and the plan.

Finally, cost containment features such as the one at issue

in this case did not exist when Congress passed ERISA. While we

are confident that the result we have reached is faithful to

Congress's intent neither to allow state-law causes of action

that relate to employee benefit plans nor to provide

beneficiaries in the Corcorans' position with a remedy under

ERISA, the world of employee benefit plans has hardly remained

static since 1974. Fundamental changes such as the widespread

institution of utilization review would seem to warrant a

reevaluation of ERISA so that it can continue to serve its noble

purpose of safeguarding the interests of employees. Our system,

of course, allocates this task to Congress, not the courts, and
43

we acknowledge our role today by interpreting ERISA in a manner

consistent with the expressed intentions of its creators.

V. CONCLUSION

For all the foregoing reasons, we find that ERISA pre-empts

the Corcorans' tort claim against United and that the Corcorans

may not recover damages for emotional distress under § 502(a)(3)

of ERISA. Accordingly, the judgment of the district court is

AFFIRMED.