Court Opinion

ID: 9480926
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:02:57.424297+00
Date Added: 2024-06-11T17:48:00.328524
License: Public Domain

SCHROEDER, Circuit Judge,
Concurring in Part and Dissenting in Part:
I agree with the per curiam opinion’s conclusion that a person who is not related either to the insured or to the insured’s lawful spouse is not a “child” within the meaning of the insurance policy. No court in any state has ever reached a contrary decision. The authority upon which Judge Boochever relies, In re Bordeaux’ Estate, 37 Wash.2d 561, 225 P.2d 433 (1950), deals with the phrase “child or step-child,” and in a tax rather than an insurance policy context.
I dissent from the per curiam opinion’s further holding, however, that ERISA requires us to develop, on our own, an entirely new federal common law of insurance contract interpretation. This case presents a garden variety question of the meaning of a word in an insurance policy, and the state courts have been deciding such questions routinely for generations. The possibility of departing from state law to create a new federal common law was never even raised by the parties in this case.
It is of course correct that because of ERISA’s broad preemption provisions, this case arises under federal law, and state law does not automatically apply. The question, however, is whether as a matter of federal law we choose to follow the state law of contract interpretation. See United States v. Kimbell Foods, Inc., 440 U.S. 715, 728-29, 99 S.Ct. 1448, 1458-59, 59 L.Ed.2d 711 (1979). The majority’s approach invites federal lawsuits to reconsider every issue of insurance contract interpretation that has ever been litigated in the state courts. In this era of an overburdened federal judiciary, we should not do that unless the congressional mandate is clear. It is not. Indeed there is every indication that Congress did not intend to displace established state law principles of insurance contract construction. See 29 U.S.C. § 1144(b) (mandating compliance with state laws regulating insurance).
The authorities cited in the per curiam opinion do not support the conclusion that we must reject state law and develop a new federal common law. Those cases do not concern the interpretation of a word or phrase in a contract as this case does. The portion of the Kanne case quoted in the majority opinion holds only that to the extent that a claim was based on application of California contract law principles, the entire claim was preempted by federal law. Kanne v. Connecticut Gen. Life Ins. Co., 867 F.2d 489, 494 (9th Cir.1988), cert. denied, — U.S. -, 109 S.Ct. 3216, 106 L.Ed.2d 566 (1989). The case does not purport to deal with creating a new federal common law of insurance contract interpretation.
Sampson v. Mutual Benefit Life Insurance Co., 863 F.2d 108 (1st Cir.1988), deals with problems of administering a health insurance policy and reviewing the trustee’s interpretation under an ERISA plan. It concerns ERISA’s civil enforcement procedures set forth in 29 U.S.C. § 1132(a), not contract interpretation.
Finally, the considerations which led to the development of a federal common law *1443interpreting collective bargaining agreements in Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), do not apply in this situation. The Court in Lincoln Mills was concerned about the policies underlying collective bargaining agreements which differed dramatically from the policies underlying any comparable body of state law; thus there was no readily available body of developed labor relations law to which federal courts could turn. The same cannot be said about insurance policies.
I would affirm the district court on the basis of the settled principles of insurance contract interpretation applied by the district court.