Opinion ID: 1104139
Heading Depth: 2
Heading Rank: 3

Heading: Is the Plan deemed to be an insurance company?:

Text: Even if subrogation laws were state laws that regulated insurance, our inquiry would not end. We must consider the application of the deemer clause, which prohibits employee benefit plans from being deemed to be in the business of insurance and subject to state insurance regulations. Federal courts have consistently held that, by virtue of the deemer clause, state laws purporting to regulate insurance may not apply to self-funded employee benefit plans. See, e.g., Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). Therefore, as the Copeland Plan is self-funded, state laws purporting to regulate insurance are not applicable. We also note that federal courts have consistently concluded that state subrogation laws must bow to ERISA: Application of differing state subrogation laws to plan providers throughout the United States would frustrate ERISA's uniform treatment of benefit plans. Baxter by and through Baxter v. Lynn, 886 F.2d 182, 186 (8th Cir.1989). (See also FMC Corporation v. Holliday, supra, where the Supreme Court held that provisions of Pennsylvania's Motor Vehicle Financial Responsibility Law which precluded subrogation were preempted by ERISA; and Electro-Mechanical Corporation v. Ogan, 9 F.3d 445 (6th Cir.1993), where the Sixth Circuit concluded that ERISA preempted the Tennessee Medical Malpractice Act to the extent that it prevented a self-funded health plan from seeking to recover costs of a plan participant's expenses from settlement proceeds.) As our analysis reveals that subrogation laws are preempted by ERISA, the discussion of Louisiana law on legal or conventional subrogation in the majority opinion is unnecessary because those laws have been preempted by federal law. The application of our Civil Code articles on conventional or legal subrogation to the facts before us is inappropriate because whether a Plan is properly subrogated to a participant's rights is an issue within the exclusive purview of ERISA. After concluding that the state laws at issue are preempted by ERISA, we then proceed to determine whether we have jurisdiction to apply the federal law of ERISA. The majority concludes that we do not, because this is not a claim by a participant or a beneficiary to recover benefits or enforce or clarify rights under the Plan, which are the only claims over which state courts have jurisdiction concurrent with federal district courts. I agree with this conclusion, noting that the United States Fifth Circuit in Hermann Hospital v. MEBA Medical and Benefits Plan, 959 F.2d 569 (5th Cir.1992) refused to consider a hospital which was the assignee of the patient's rights to receive payment under his Plan as a beneficiary for purposes of ERISA. In conclusion, I agree with my brother Justice's concurrence that our decision in Kelty, supra, should have been discussed in the majority opinion, in my view to provide clarification to a federal district court in the event this matter is filed in that jurisdiction. Further, I agree with the majority's ultimate conclusion that this matter is preempted by ERISA, and under ERISA federal district courts have exclusive jurisdiction over a claim such as that brought by Copeland against the PCF. I believe that such conclusion is buttressed by this analysis of the applicable state laws and ERISA's preemptive effect upon those laws. Having performed the preemption analysis, I conclude that the state laws raised here are indeed preempted and thus, under ERISA, state courts are without jurisdiction to adjudicate this claim. Therefore, I respectfully concur.