Court Opinion

ID: 2964571
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:27:36.947614+00
Date Added: 2024-06-11T11:37:24.671951
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

        No. 96-1696

         CHARLENE TAGAN GOLAS, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF
                                   DONALD M. GOLAS,
                                Plaintiff, Appellant,

                                          v.

                HOMEVIEW INC. AND PAUL REVERE LIFE INSURANCE COMPANY,
                                Defendants, Appellees.

                                 ____________________
                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS
                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before
                                Stahl, Circuit Judge,
                                       _____________

                            Bownes, Senior Circuit Judge,
                                    ____________________
                              and Lynch, Circuit Judge.
                                         _____________
                                 ____________________

            John  J. Weltman, with  whom Lawson  & Weitzen  was on  brief, for
            ________________             _________________
        appellant.

            Joan  O.  Vorster,  with  whom  Joseph  M.  Hamilton  and  Mirick,
            _________________               ____________________       _______
        O'Connell, DeMallie & Lougee were  on brief, for appellee Paul  Revere
        ____________________________
        Life Insurance Company.

                                 ____________________

                                   February 7, 1997
                                 ____________________

                      LYNCH, Circuit Judge.   This is an appeal  from the
                      LYNCH, Circuit Judge.
                             _____________

            denial  of plaintiff's motion  to amend her  complaint to add

            Ellen Kaplan, an insurance  broker, as a defendant in  a suit

            arising out  of Paul Revere Life  Insurance Company's refusal

            to  pay  disability  insurance benefits  to  plaintiff's late

            husband when he was suffering from his final illness.  In her

            motion  to  amend,  plaintiff  sought  to  add  a  new  party

            defendant  on  a  state law  claim  in  an  action which  the

            district  court  was  simultaneously dismissing  against  the

            original defendants as  being preempted by  federal law.   We

            review  the  denial  of the  motion  to  amend  for abuse  of

            discretion and conclude that there is no such abuse under the

            circumstances.   We  need not and  do not reach  the issue of

            whether the state law misrepresentation claim is preempted by

            the Employee Income Security Act of 1974, 29 U.S.C.   1001 et
                                                                       __

            seq. ("ERISA").
            ____

                      In  August  1992,  plaintiff's  husband  obtained a

            disability  insurance policy  through his  employer, HomeView

            Inc.   One month later he was  diagnosed with bone cancer and

            sought  disability benefits.  His request was denied as being

            related  to  a  preexisting  condition for  which  he  sought

            treatment during the enrollment period.

                      After  her husband's death,  plaintiff brought suit

            in Massachusetts state court against Paul Revere and HomeView

            based on state law misrepresentation theories.  The complaint

                                         -2-
                                          2

            alleged  that  HomeView  supplied  its  employees,  including

            Donald  Golas,  with a  pamphlet,  prepared  by Paul  Revere,

            explaining  the  rules   governing  preexisting   conditions.

            Plaintiff  contends that  this pamphlet  was misleading.   It

            indicated that  an insured individual could obtain disability

            benefits  as long  as  the disability  was  not caused  by  a

            sickness that  required him  to consult  a doctor during  the

            three  month enrollment  period.   Plaintiff claims  that, in

            reliance  on this  statement,  her husband  visited a  doctor

            during  the enrollment  period  for  administrative  purposes

            only.  However, he was not diagnosed with bone cancer at that

            time.   It was this  visit, plaintiff alleges,  that made him

            ineligible  to  receive  benefits.   Plaintiff  argues  that,

            absent the flawed information,  her husband would have waited

            until  after the enrollment period ended  to visit the doctor

            and therefore would have been eligible for benefits.

                      Plaintiff  sought damages  in  state court  for her

            late  husband's emotional  distress and  for her own  loss of

            consortium.  Plaintiff simultaneously brought suit in federal

            court against the same  two defendants for benefits allegedly

            due  under the  disability policy  pursuant to  ERISA.   That

            ERISA  case  continues  to  be  pending  in  the  District of

            Massachusetts.   Defendants  removed  the state  law suit  to

            federal court,  arguing that those claims  were also governed

            by ERISA.  The two cases were not consolidated.

                                         -3-
                                          3

                      Once in federal court, Paul Revere moved to dismiss

            the state  law claims,  arguing that they  were preempted  by

            ERISA.1   Plaintiff countered by moving for a remand to state

            court.  While these motions were pending, plaintiff moved  to

            amend the complaint  to add Kaplan as  a defendant, asserting

            that, since  filing her  initial action, she  had "discovered

            that  critical  misrepresentations  upon  which  her  husband

            relied  were made  to him  by Ellen  Kaplan."   The complaint

            alleged that, "[p]rior to accepting disability  coverage, Mr.

            Golas  spoke to Ellen Kaplan who made false statements to him

            regarding  his  coverage under  the  disability policy,"  and

            that,  "[a]s   the  broker  responsible  for  overseeing  the

            provision  of  disability  insurance   from  Paul  Revere  to

            HomeView  employees, Ms. Kaplan owed Mr. Golas a duty to make

            sure she did nothing to interfere with his obtaining coverage

            under the policy."

                      Defendants opposed  the motion  to add Kaplan  as a

            defendant, arguing that amendment would be futile because the

            claim  against  Kaplan  would  also be  preempted  by  ERISA.

            Plaintiff argued  that a  claim against Kaplan  would not  be

            preempted  by  ERISA  because  Kaplan was  not  an  agent  of

            HomeView or Paul Revere, but an independent insurance broker.

                                
            ____________________

            1.  HomeView made its own motion to dismiss some three months
            later, incorporating by reference Paul Revere's arguments  in
            support.

                                         -4-
                                          4

                      The   district   court  adopted   the  magistrate's

            recommendation to grant  the motion to dismiss the  state law

            claims  against  HomeView  and  Paul Revere  based  on  ERISA

            preemption.    The district court went on to consider whether

            to adopt  the magistrate's recommendation to deny plaintiff's

            motion to amend the  complaint to add Kaplan as  a defendant.

            Having  already decided  to dismiss  the claims  against Paul

            Revere  and HomeView, the  district court  was faced  with an

            anomalous situation.   Plaintiff wished to add a defendant to

            a  case  which was  being dismissed  as  to the  two original

            defendants.  In  addition, the ERISA cause of  action against

            Paul Revere and HomeView was pending in the same court but in

            a different  action from the one in which the motion to amend

            was filed.   The district court's ultimate  decision to adopt

            the magistrate's  recommendation to deny the  motion to amend

            the complaint must be viewed in this practical and procedural

            context.

                      Golas appeals only from the denial of the motion to

            amend the complaint to add Kaplan as a defendant and not from

            the dismissal of the underlying action on preemption grounds.

            Review is for abuse of discretion.  Reid v. New Hampshire, 56
                                                ____    _____________

            F.3d 332, 342 (1st Cir. 1995);  see also Carlo v. Reed Rolled
                                            ________ _____    ___________

            Thread Die Co., 49 F.3d 790, 792 (1st Cir. 1995) (noting that
            ______________

            the appeals court will "generally defer to a district court's

            decision  to deny leave to amend where the reason is apparent

                                         -5-
                                          5

            or   declared"   (internal  quotation   marks   and  citation

            omitted)).   It  is well-settled,  as the  concurring opinion

            from  our  respected  colleague  points  out,  that,  when  a

            district court makes an error of law, by definition it abuses

            its discretion.  However, that is not the issue that concerns

            us here.  The facts and circumstances of the case necessarily

            influence our evaluation of the denial of the motion to amend

            the  complaint, and here,  they make it  unnecessary to reach

            the ERISA preemption issue.

                      We note that at the time the motion was denied, the

            two original defendants  had been dismissed and there  was no

            diversity jurisdiction over Kaplan.2  Furthermore, a parallel

            ERISA action was pending against HomeView and Paul Revere  in

                                
            ____________________

            2.  The  concurrence  argues that  the  ERISA  issue must  be
            reached  because  issues of  jurisdiction  must be  addressed
            first and, in  the absence  of diversity, there  is no  other
            basis  for  federal jurisdiction.    This is  incorrect.   We
            disagree with  the premise that  the court could  not address
            the motion to amend without first addressing the ERISA issue.
            Second, even  if the claim against Kaplan  were not preempted
            by  ERISA,   the  district  court  would   have  supplemental
            jurisdiction over the claim, because  the other two state law
            claims had properly been  before the district court.   In any
            civil  action over  which the  district courts  have original
            jurisdiction,  they also have  supplemental jurisdiction over
            all  other  claims  that  form  part  of  the  same  case  or
            controversy.    28 U.S.C.    1367.    The district  court had
            jurisdiction over  the state  law claims against  Paul Revere
            and   HomeView  under   the  complete   preemption  doctrine.
            Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
            __________________________    ______
            This  is sufficient  to confer  original jurisdiction  on the
            district courts.  Franchise  Tax Bd. v. Construction Laborers
                              __________________    _____________________
            Vacation   Trust,  463   U.S.  1,   23-24  (1983);   American
            ________________                                     ________
            Policyholders Ins. Co. v. Nyacol Prods., Inc., 989 F.2d 1256,
            ______________________    ___________________
            1263 (1st Cir. 1993).

                                         -6-
                                          6

            federal court.   Federal courts have  traditionally been more

            reluctant to exercise jurisdiction over pendent  parties than

            over pendent claims.  See, e.g., Lykins v. Pointer, Inc., 725
                                  ___  ____  ______    _____________

            F.2d 645, 649 (11th Cir. 1984).3  Under these  circumstances,

            the district court could not  have abused its discretion when

            it denied  plaintiff's motion to  amend the complaint  to add

            Kaplan  as the sole  defendant.  Even  if our review  were de
                                                                       __

            novo,  as the concurrence  suggests, we  could affirm  on any
            ____

            legal  ground supported in the  record.  See,  e.g., Eagan v.
                                                     ___   ____  _____

            United  States, 80 F.3d 13, 16 (1st Cir. 1996); Levy v. FDIC,
            ______________                                  ____    ____

            7 F.3d 1054, 1056 (1st Cir. 1993).

                      We  therefore uphold  the denial  of the  motion to

            amend, albeit on  different grounds than  those relied on  by

            the district court,  and thus  we express no  opinion on  the

            preemption issue.  This opinion does not, as  the concurrence

            claims,  uphold the district  court's preemption decision sub
                                                                      ___

            silentio.  Plaintiff may decide to attempt to add Kaplan as a
            ________

            defendant in the pending ERISA action.4  The district court's

                                
            ____________________

            3.  The   codification   of  the   supplemental  jurisdiction
            doctrine in  1990, which  makes clear that  such jurisdiction
            includes  the  joinder of  additional  parties,  28 U.S.C.   
            1367(a), does not change the prudential analysis.

            4.  It is true that the three-year statute of limitations for
            a state law based fraudulent misrepresentation claim expired,
            at the  very latest, in early  1996.  However, to  the extent
            that  plaintiff has  a viable  state law  claim (on  which we
            express  no opinion),  the  claim could  apparently still  be
            brought,  within a year of the date of this opinion, pursuant
            to Mass. Gen. Laws ch. 260,   32.

                                         -7-
                                          7

            ruling  that  any claim  against  Kaplan  would be  preempted

            presents  no bar.  It has no precedential or issue preclusive

            effect.   If  a motion  is made  to add  Kaplan to  the ERISA

            action,  the  court will  have  the ability  to  consider the

            preemption  issue anew in light  of the facts  that have been

            developed in discovery.   Cf. Boston Children's Heart Found.,
                                      ___ _______________________________

            Inc. v.  Nadal-Ginard, 73  F.3d 429,  439-40 (1st Cir.  1996)
            ____     ____________

            (absent precedent on closely related issue, the inquiry as to

            whether  state law is preempted requires the court to look at

            the facts of the particular case).5

                      The decision of the district court is affirmed.
                                                            _________

                                
            ____________________

            5.  At oral argument we were advised that there was discovery
            taken on  the issue of whether Kaplan was an agent, either of
            HomeView or of Paul Revere.  The  proffered amended complaint
            is ambiguous on this  issue, although the concurrence assumes
            that Kaplan was not an agent of either  company.  In Kaplan's
            deposition  testimony attached to Golas' brief, Kaplan states
            that  she  held an  employee  benefits  meeting for  HomeView
            employees to explain the Paul Revere disability policy and an
            Aetna  insurance  policy  that  was  also  being  offered  to
            HomeView  employees.   This undermines  Golas' argument  that
            Kaplan was  an independent broker.   The facts may  by now be
            established, but  no  findings are  before us.   However,  if
            Kaplan  was  an agent  of either  of  the two  companies, the
            factual assumption  underlying the concurrence  is incorrect,
            and the resulting legal  conclusions unjustified.  Indeed, if
            Kaplan  is an agent of HomeView, the case would fall squarely
            within  the ambit of Vartanian  v. Monsanto Co.,  14 F.3d 697
                                 _________     ____________
            (1st Cir. 1994).

                                         -8-
                                          8

                      BOWNES, Senior Circuit Judge, concurring.  I concur
                      BOWNES, Senior Circuit Judge, concurring.
                              ____________________

            in the  result, but, with respect,  I do not  think that this

            case  can be disposed of by the conclusory assertion that the

            district  court  did  not  abuse its  discretion  in  denying

            plaintiff's  motion to amend her complaint so as to add Ellen

            Kaplan as  a defendant.   In his  report and  recommendation,

            adopted by  the district  court, the magistrate  judge stated

            the following  reason  for denying  the motion  to amend  the

            complaint:

                      I  find that Plaintiff['s] attempt to add
                      Ellen Kaplan as a  party defendant and to
                      assert   against   her   a    claim   for
                      misrepresentation would be futile because
                      such  a  claim  would  be  pre-empted  by
                      ERISA.

                      It is clear that the district court's denial of the

            motion was not an  exercise of discretion, but  was compelled

            by  its legal ruling that  the claim against  Kaplan would be

            pre-empted  by  ERISA.   Accordingly,  the  district  court's
                                 .

            denial of the  motion is  subject to review  de novo,  rather
                                                         __ ____

            than  for  abuse of  discretion.   See  Carlo v.  Reed Rolled
                                               ___  _____________________

            Thread  Die Co.,  49  F.3d 790,  793 (1st  Cir.  1995).   The
            _______________

            Supreme  Court has  stated  unequivocally that  "[a] district

            court  by definition abuses  its discretion when  it makes an

            error of law."  Koon v.  United States, 116 S. Ct. 2035, 2047
                            ______________________

            (1996) (citation omitted).  

                      To  be sure,  in  the ordinary  case, the  decision

            whether to grant or deny  a motion to amend the complaint  is

                                         -9-
                                          9

            discretionary  with  the  trial  court, and  so  is  normally

            reviewed for abuse of  discretion; but the case before  us is

            not ordinary  in this  respect.   Here it  is clear  that the

            motion  was  denied   because  of  the   magistrate's  stated

            conclusion that the claim against  Kaplan was pre-empted as a

            matter  of  law,  and  his unstated  but  apparent  corollary

            conclusion  that, as a result,  he was deprived of discretion

            (by the doctrine of futility) to grant the motion.  

                      Thus,  the question  before us  is not  whether the

            district court  abused its discretion  in denying plaintiff's

            motion to amend the complaint, but whether the basis for this

            ruling was legally  correct.  If the  district court's ruling

            was erroneous,  as I think it  was, then the  motion to amend

            was  not "futile"  and should  not have  been denied  on that

            ground.     As  a  consequence,  the   district  court  lacks

            jurisdiction  to   decide   the  merits   of  the   state-law

            misrepresentation claim because, as the majority acknowledges

            inferentially, the  only basis  for  federal jurisdiction  is

            ERISA  pre-emption.   I  do not  think, therefore,  that this

            appeal  can   be  decided  on  a   principled  basis  without

            discussing the scope of ERISA pre-emption.  

                      The majority purports to "express no opinion on the

            preemption issue,"  and  suggests that  the  plaintiff  could

            still pursue her claim against Kaplan by seeking to amend her

            pending ERISA complaint so  as to add Kaplan as  a defendant.

                                         -10-
                                          10

            The majority fails to  recognize, however, that the practical

            effect  of its  disposition  of the  case  is to  uphold  the

            district  court's pre-emption  ruling  sub silentio,  and  to
                                                   ___ ________

            leave the plaintiff with no recourse in any forum.  A finding
                                     __             ___

            of  no pre-emption results in dismissal of the claim for lack

            of federal jurisdiction and leaves the plaintiff free to seek

            redress in state  court.  In contrast, the majority's refusal

            to  address the  merits of  the district  court's pre-emption

            ruling is not only  analytically unsound, it also leaves  the

            plaintiff exactly  where she started --  with her state-court

            action subject to removal  to federal court on the  ground of

            pre-emption  and with  pre-emption as  a bar  to recourse  in

            federal court.       

                      For the reasons that  follow, I conclude that ERISA

            does not pre-empt plaintiff's misrepresentation claim against

            Kaplan and  that, therefore,  the proper disposition  of this

            case  would be to deny plaintiff's motion for lack of federal

            jurisdiction  over the purported state-law claim, leaving the

            plaintiff free to pursue the claim in the state court.6 

                                          I.
                                          I.

                      I  start my  analysis  with the  key  words of  the

            statute bearing on pre-emption:

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

                                
            ____________________

            6.  I, of course,  intimate no  opinion as to  the merits  of
            plaintiff's state-law claim.

                                         -11-
                                          11

                      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
                      _________________________________________
                      . . . . 

            29 U.S.C.   1144(a) (emphasis added).

                      For purposes of this section:
                           (1)    The  term   "State  law"
                           includes  all laws,  decisions,
                           rules,  regulations,  or  other
                           State action  having the effect
                           of law, of any State.

            29 U.S.C.   1144(c)(1).

                      The  Supreme  Court  teaches  that  the pre-emption

            provision of   514(a),  codified at 29 U.S.C.    1144(a), was

            intended

                      to  ensure that  plans and  plan sponsors
                      would  be subject  to a  uniform body  of
                      benefits  law; the  goal was  to minimize
                      the  administrative and  financial burden
                      of complying  with conflicting directives
                      among  States or  between States  and the
                      Federal   Government.     Otherwise,  the
                      inefficiencies created could work  to the
                      detriment  of plan  beneficiaries. .  . .
                      Particularly disruptive  is the potential
                      for conflict  in substantive law.   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. 

            Ingersoll-Rand  Co. v.  McClendon, 498  U.S. 133,  142 (1990)
            _________________________________

            (citations omitted). 

                                         -12-
                                          12

                      In  concluding  that plaintiff's  misrepresentation

            claims were pre-empted, the  magistrate judge relied on Carlo
                                                                    _____

            v. Reed  Rolled Thread  Die Co.,  49 F.3d 790.   In  Carlo we
            _______________________________                      _____

            stated 

                                         -13-
                                          13

            the ERISA pre-emption doctrine as follows:

                         Section 514 of  ERISA supersedes  "any
                      and all  State laws  insofar as  they may
                      now or  hereafter relate to  any employee
                                        ______ __
                      benefit plan. . . ."  29 U.S.C.   1144(a)
                      (emphasis  added).  "The term 'State Law'
                      includes  all   laws,  decisions,  rules,
                      regulations, or other State action having
                      the  effect of  law, of  any State."   29
                      U.S.C.    1144(c)(1).  The  Supreme Court
                      has established that "a law  'relates to'
                      an employee benefit  plan . . . if it has
                      a  connection with or reference to such a
                      plan."  Ingersoll-Rand Co.  v. McClendon,
                              ________________________________
                      498 U.S.  133, 139, 111 S.  Ct. 478, 483,
                      112 L. Ed. 2d 474 (1990) (quoting Shaw v.
                                                        _______
                      Delta Air  Lines, Inc., 463 U.S.  85, 96-
                      ______________________
                      97, 103 S. Ct.  2890, 2900, 77 L.  Ed. 2d
                      490 (1983)).   "Under this 'broad common-
                      sense  meaning,' a state  law may 'relate
                      to' a benefit plan,  and thereby  be pre-
                      empted,   even   if   the  law   is   not
                      specifically  designed   to  affect  such
                      plans, or the  effect is only  indirect."
                      Id.  (quoting  Pilot  Life  Ins.  Co.  v.
                      ___            __________________________
                      Dedeaux,  481 U.S.  41,  47,  107 S.  Ct.
                      _______
                      1549, 1553, 95 L. Ed. 2d 39 (1987)).

            Id. at 793 (footnote omitted).
            ___

                      Carlo, a leading case in this circuit on ERISA pre-
                      _____

            emption, see Degnan v. Publicker Indus., Inc., 83 F.3d 27, 29
                     ___ ________________________________

            (1st  Cir. 1996),  held that  ERISA pre-empted  the state-law

            misrepresentation claims because they had "a  connection with

            or reference to" an employee benefit plan.  Carlo, 49 F.3d at
                                                        _____

            794-95.  But  we have never held that Carlo sweeps all state-
                                                  _____

            law  misrepresentation claims  into the  ERISA  corner merely

            because an employee benefit plan exists.

                                         -14-
                                          14

                      In Boston Children's  Heart Found., Inc. v.  Nadal-
                         ________________________________________________

            Ginard, 73 F.3d 429  (1st Cir. 1996), we reviewed  ERISA pre-
            ______

            emption cases, including Carlo, and concluded:
                                     _____

                           State  laws  that   have  merely   a
                      "tenuous,    remote,     or    peripheral
                      connection with a  covered benefit  plan"
                      may not be preempted by ERISA.   Rosario-
                                                       ________
                      Cordero v. Crowley  Towing & Transp. Co.,
                      ________________________________________
                      46  F.3d  [120,]  123  [1st   Cir.  1995]
                      (citation  and  internal quotation  marks
                      omitted).  Such is normally the case with
                      respect to laws of general applicability.
                      See  District  of  Columbia   v.  Greater
                      ___  ____________________________________
                      Washington  Board of  Trade, 506  U.S. at
                      ___________________________
                      130 n.1, 113 S.  Ct. at 583 n.1; Rosario-
                                                       ________
                      Cordero  v. Crowley Towing & Transp. Co.,
                      ________________________________________
                      46 F.3d  at 123;  Combined Mgt.,  Inc. v.
                                        _______________________
                      Superintendent    of   the    Bureau   of
                      _________________________________________
                      Insurance, 22 F.3d 1, 3 (1st Cir.), cert.
                      _________                           _____
                      denied,, ___  U.S. ___,  115 S. Ct.  350,
                      _______
                      130 L. Ed. 2d 306 (1994).  A court cannot
                      conclude  that  a  state law  is  one  of
                      general applicability, and as such is not
                      preempted by ERISA, based  on the form or
                      label of the law,  however.  See Carlo v.
                                                   ___ ________
                      Reed Rolled Thread  Die Co.,  49 F.3d  at
                      ___________________________
                      794 n.3;  Zuniga v.  Blue Cross and  Blue
                                _______________________________
                      Shield  of Michigan,  52 F.3d  1395, 1401
                      ___________________
                      (6th Cir.  1995).  Absent precedent  on a
                      closely related problem, the inquiry into
                      whether a state law "relates to" an ERISA
                      plan  or is  merely "tenuous,  remote, or
                      peripheral"  requires a court  to look at
                      the facts  of [sic] particular case.  See
                                                            ___
                      Rosario-Cordero   v.  Crowley   Towing  &
                      _________________________________________
                      Transp. Co., 46 F.3d at 125 n.2.
                      ___________

            Boston Children's Heart Found., 73 F.3d at 439-40.
            ______________________________

                      In  Johnson v.  Watts Regulator  Co., 63  F.3d 1129
                          ________________________________

            (1st Cir.  1995), we  pointed out  the consequences  that may

            flow from ERISA pre-emption:  It "may cause  potential state-

            law remedies to vanish, or may change the standard of review,

                                         -15-
                                          15

            or may affect the admissibility of evidence, or may determine

            whether   a  jury  trial  is  available."    Id.  at  1131-32
                                                         ___

            (citations omitted).

                      A  recent  Supreme  Court  decision  has  a  direct

            bearing on the scope of ERISA pre-emption.  In New York State
                                                           ______________

            Conference of  Blue Cross &  Blue Shield  Plans v.  Travelers
            _____________________________________________________________

            Ins.  Co.,  115  S.   Ct.  1671  (1995),  several  commercial
            _________

            insurers,  acting  as   fiduciaries  of   ERISA  plans   they

            administered, joined with their trade associations  and "[o]n

            the   claimed   authority  of   ERISA's   general  preemption

            provision"  brought  actions in  the  United States  District

            Court against  state officials  to invalidate three  hospital

            surcharge  statutes.  Id. at  1675.  Writing  for a unanimous
                                  ___

            Court, Justice  Souter made a  number of observations  on the

            scope of ERISA pre-emption:

                           Our past cases have  recognized that
                      the Supremacy Clause,  U.S. Const.,  Art.
                      VI,  may entail pre-emption  of state law
                      either    by   express    provision,   by
                      implication,  or  by  a conflict  between
                      federal and state law.   And yet, despite
                      the  variety  of these  opportunities for
                      federal   preeminence,   we  have   never
                      assumed   lightly   that   Congress   has
                      derogated  state regulation,  but instead
                      have addressed claims of pre-emption with
                      the  starting  presumption that  Congress
                      does  not intend  to supplant  state law.
                      Indeed,  in cases  like  this one,  where
                      federal  law is said  to bar state action
                      in    fields    of   traditional    state
                      regulation,   we   have  worked   on  the
                      assumption   that  the   historic  police
                      powers of  the  States  were  not  to  be
                      superseded by the Federal Act unless that

                                         -16-
                                          16

                      was  the  clear and  manifest  purpose of
                      Congress.

            Id. at 1676 (citations and internal quotation marks omitted).
            ___

            The Court commented on  the statutory pre-emption language of

              514(a), "all state laws insofar as they . . . relate to any

            employee benefit  plan," pointing out that  "[i]f 'relate to'

            were   taken  to  extend  to  the  furthest  stretch  of  its

            indeterminacy,  then for  all practical  purposes pre-emption

            would never  run its  course."     Id. at  1677.   The  Court
                                               ___

            concluded:

                      We  simply must  go beyond  the unhelpful
                      text  and  the frustrating  difficulty of
                      defining its key  term, and look  instead
                      to the objectives of the ERISA statute as
                      a  guide to  the scope  of the  state law
                      that Congress understood would survive.

            Id.
            ___

                      The Court, in the course of its analysis, stated:

                           Indeed,  to   read  the  pre-emption
                      provision  as  displacing all  state laws
                      affecting costs and charges on the theory
                      that  they  indirectly  relate  to  ERISA
                      plans that purchase insurance policies or
                      HMO  memberships  that  would cover  such
                      services,  would   effectively  read  the
                      limiting language in   514(a) out  of the
                      statute, a conclusion that  would violate
                      basic     principles     of     statutory
                      interpretation and could  not be  squared
                      with   our   prior   pronouncement   that
                      [p]reemption does not occur  . . . if the
                      state law  has only a tenuous, remote, or
                      peripheral connection with covered plans,
                      as is the case  with many laws of general
                      applicability.

                                         -17-
                                          17

            Id.  at  1679-80  (citation  and   internal  quotation  marks
            ___

            omitted) (alteration in original).

                      In discussing  the sweep of  ERISA pre-emption  the

            Travelers  Court pointed  to three  categories of  state laws
            _________

            that Congress  intended to pre-empt: first,  "state laws that

            mandate[]    employee    benefit    structures    or    their

            administration,"  id. at  1678; second, "state laws providing
                              ___

            alternate enforcement  mechanisms,"  id.; third,  state  laws
                                                 ___

            that  bind plan  administrators to  a "particular  choice and

            thus function as a  regulation of an ERISA plan  itself," id.
                                                                      ___

            at  1679.  See  also Coyne &  Delaney Co. v.  Selman, 98 F.3d
                       ___  ____ _______________________________

            1457, 1468-69  (4th Cir. 1996).   It is obvious  that none of

            these state-law categories are implicated here.

                      The  Court   held  that  the  New   York  statutory

            surcharges had  only "an indirect economic  effect on choices

            made  by  insurance  buyers,  including  ERISA   plans"  and,

            therefore, there was no pre-emption.  Travelers at 1679-80.
                                                  _________

                      Two  other  observations  about Travelers  must  be
                                                      _________

            made.   First, it was decided seven  weeks after Carlo.  This
                                                       _____ _____

            means,  of  course, that  the Carlo  panel  did not  have the
                                          _____

            benefit  of the  Court's latest  views on  ERISA pre-emption.

            Second, none  of the ERISA pre-emption cases  decided in this

            circuit subsequent to Travelers have cited it.
                                  _________

                      I  now turn  to  post-Travelers decisions  by other
                                            _________

            circuits.   In  a  case the  Fourth  Circuit described  as  a

                                         -18-
                                          18

            "garden-variety  professional  malpractice  claim" the  court

            held:

                      In  light of  the Supreme  Court's recent
                      (and  narrowing)  interpretation  of  the
                      scope  of  ERISA preemption  in  New York
                                                       ________
                      State  Conference of  Blue  Cross &  Blue
                      _________________________________________
                      Shield Plans v. Travelers, ---  U.S. ---,
                      _________________________
                      115  S.  Ct.  1671,  131 L.  Ed.  2d  695
                      (1995), we hold that Delany's malpractice
                      claim  is not  preempted because  it does
                      not  "relate to" an employee benefit plan
                      within the meaning of  ERISA's preemption
                      provision, 29 U.S.C.   1144(a).  

            Coyne  & Delany Co., 98  F.3d at 1466-67.   Quoting Travelers
            ___________________                                 _________

            for  the   proposition  that  courts   "'address  claims   of

            preemption with the  starting presumption that  Congress does

            not  intend  to  supplant  state   law,'"  98  F.3d  at  1467

            (citations  omitted), the  Fourth Circuit  added, "[t]his  is

            especially  true in  cases  involving  fields of  traditional

            state regulation, including  common law tort liability,"  id.
                                                                      __

            In  the course of its  opinion the Fourth  Circuit noted that

            plaintiff's  malpractice  claim  was  "not aimed  at  a  plan

            administrator  at all  since  the defendants  [were] sued  in

            their capacities as insurance professionals for actions taken

            in that capacity."  Id.  at 1471.  This case is  analogous to
                                ___

            the one before us.

                      Morstein v. National Ins. Servs., Inc., 93 F.3d 715
                      ______________________________________

            (11th  Cir. 1996)  (en banc),  cert. denied,  1996 WL  693349
                                __ ____    _____ ______

            (U.S.  Jan. 21,  1997)  (No. 96-764),  is  even more  closely

            analogous  to  the case  at  bar.    Plaintiff  Morstein  was

                                         -19-
                                          19

            president, director, and sole stockholder of a small company.

            She met with an insurance broker for the purpose of obtaining

            a replacement  policy of major medical  insurance for herself

            and  the  company's other  employee.   The  policy was  to be

            administered  by National  Insurance Services,  Inc.   At the

            meeting  with the  broker,  plaintiff informed  him that  any

            replacement policy would be  unacceptable if it excluded from

            coverage   treatment  related  to   any  preexisting  medical

            condition.   Plaintiff  alleged that  the broker  assured her

            that the  replacement policy would provide  the same coverage

            as  her existing policy.   Over a year  after the replacement

            policy  was  issued,  plaintiff  had  total  hip  replacement

            surgery.   National  Insurance  Services refused  to pay  her

            claim for  payment on the ground  that the surgery was  for a

            preexisting condition which  plaintiff had  not disclosed  on

            her application.  93 F.3d at 716-17.

                      Plaintiff filed  an action in  state court alleging

            negligence,  malfeasance,  misrepresentations, and  breach of

            contract.  Defendants  removed the case  to federal court  on

            the basis of ERISA pre-emption.  Id. at 717.
                                             ___

                      In Morstein, the Eleventh Circuit, sitting en banc,
                         ________                                __ ____

            characterized the Supreme  Court's decision  in Travelers  as
                                                            _________

            having "essentially turned the tide  on the expansion of pre-

            emption doctrine."   Id. at 721.  The holding of the Eleventh
                                 ___

            Circuit bears quoting:

                                         -20-
                                          20

                           Allowing preemption of a fraud claim
                      against  an  individual  insurance  agent
                      will  not  serve  Congress's purpose  for
                      ERISA.   As  we have  discussed, Congress
                      enacted ERISA to protect the interests of
                      employees  and   other  beneficiaries  of
                      employee  benefit  plans.    To  immunize
                      insurance agents  from personal liability
                      for      fraudulent     misrepresentation
                      regarding ERISA plans  would not  promote
                      this  objective.    If ERISA  preempts  a
                      beneficiary's  potential cause  of action
                      for     misrepresentation,     employees,
                      beneficiaries,  and   employers  choosing
                      among various  plans  will no  longer  be
                      able  to rely  on the  representations of
                      the insurance agent  regarding the  terms
                      of  the  plan.    These  employees,  whom
                      Congress  sought  to  protect, will  find
                      themselves   unable   to  make   informed
                      choices regarding available benefit plans
                      where state law places the duty on agents
                      to deal honestly with applicants.

            Id. at 723-24 (citation omitted).
            ___

                      In  Central States,  Southeast and  Southwest Areas
                          _______________________________________________

            Health and Welfare Fund  v. Pathology Lab. of Ark.,  P.A., 71
            _________________________________________________________

            F.3d 1251, 1253  (7th Cir.  1995), cert. denied,  116 S.  Ct.
                                               _____ ______

            1876 (1996), the Seventh Circuit, citing Travelers, held:  
                                                     _________

                      Nothing   in   ERISA   prevents   medical
                      professionals from  submitting--and state
                      courts from enforcing--bills for services
                      that are  not covered by  welfare benefit
                      plans.  Although ERISA preempts state law
                      that  "relates to"  plans,  29  U.S.C.   
                      1144(a), that clause does not annul state
                      laws   of   general  applicability   just
                      because  they affect the price of medical
                      care.

                      In Boyle v. Anderson, 68 F.3d 1093 (8th Cir. 1995),
                         _________________

            cert.  denied, 116  S. Ct.  1266 (1996),  a case  involving a
            _____  ______

            challenge to  certain provisions  of a Minnesota  health care

                                         -21-
                                          21

            reform statute  known as  MinnesotaCare, the court  relied on

            Travelers  in holding  that there  was no  ERISA pre-emption,
            _________

            stating, "In  the context of  the MinnesotaCare  legislation,

            Travelers and  the other precedents cited  in this litigation
            _________

            compel this court not to preempt a state's effort to serve as

            a 'laboratory  of democracy' in  the realm  of health  care."

            Id. at 1109.
            ___

                      The  Seventh  Circuit also  relied on  Travelers in
                                                             _________

            rejecting an  ERISA pre-emption claim in Safeco Life Ins. Co.
                                                     ____________________

            v. Musser, 65 F.3d 647 (7th Cir. 1995).  The case was brought
            _________

            by  a health insurer who challenged the fees assessed against

            such  insurers  to  provide health  insurance  to individuals

            whose  physical and  mental  conditions  prevented them  from

            obtaining  insurance in  the private  market.   In a  similar

            case, the  Second Circuit, relying on  Travelers, inter alia,
                                                   _________  _____ ____

            held  that ERISA did not  pre-empt a Connecticut statute that

            imposed surcharges on hospital bills of patients with private

            health  insurance to  subsidize  medical care  for the  poor.

            Connecticut  Hosp.  Ass'n v.  Weltman, 66  F.3d 413  (2d Cir.
            _____________________________________

            1995).   See  also Greenblatt  v.  Delta Plumbing  &  Heating
                     ___  ____ __________________________________________

            Corp.,  68  F.3d  561,  573-74 (2d  Cir.  1995)  (noting  the
            _____

            limiting gloss put on the broad language of   514(a) of ERISA

            by Travelers).
               _________

                      As these cases  recognize, Travelers has restricted
                                                 _________

            the scope of ERISA pre-emption.

                                         -22-
                                          22

                                         II.
                                         II.

                      I turn  now to what I consider to be the sole issue

            before the panel:  whether the district court erred in ruling

            that ERISA pre-emption  rendered "futile" plaintiff's  motion

            to  amend her complaint to  add Ellen Kaplan  as a defendant.

            The question of ERISA  pre-emption is reviewed de novo.   See
                                                           __ ____    ___

            Degnan  v. Publicker  Indus.,  Inc., 83  F.3d  at 28-29.    I
            ___________________________________

            recognize that the standard of review for  a district court's

            refusal  to allow an amendment  to the complaint  is abuse of

            discretion.   This standard is not  applicable here, however,

            because the root issue -- stated by the district court as the

            basis for its decision -- is ERISA pre-emption, a question of

            law.  See  Carlo v. Reed  Rolled Thread Die  Co., 49 F.3d  at
                  ___  _____________________________________

            792-93.   Moreover, if there  is no pre-emption,  the federal

            courts are bereft of  jurisdiction.  Thus, in my  view, there

            is no way of avoiding the pre-emption issue.

                      Normally in  a pre-emption case  the starting point

            is an examination of the facts,  but there is not much in the

            way  of  facts  here.   All  we  know  is  derived  from  the

            allegations in the purported amended complaint, which must be

            accepted  as true  at this  stage of  the litigation.   These

            allegations can only be construed as stating that Kaplan made

            misrepresentations  to  plaintiff's  husband,  Donald  Golas,

            and/or  failed  to give  him  correct  information about  the

            conditions of  eligibility for  participation  in the  Revere

                                         -23-
                                          23

            Insurance policy.  The  amended complaint alleges that Kaplan

            was an insurance broker.  I take that to mean that she "sold"

            Revere's insurance  policy to  HomeView.  Although  Kaplan is

            linked   to   HomeView  and   Revere   as   to  the   alleged

            misrepresentations, there  is no  claim that Kaplan  acted as

            agent for  or on behalf  of either or  both of the  other two

            defendants.     The  amended  complaint,  broadly  construed,

            alleges  a common-law misrepresentation  claim against Kaplan

            individually.

                      Strictly speaking, the  ERISA disability  insurance

            plan  is  not  implicated  in  plaintiff's  misrepresentation

            claim.    Donald  Golas  never  became  a  covered  employee;

            instead,    the    complaint   focuses    on    the   alleged

            misrepresentations which plaintiff alleges  were the cause of

            Golas's being excluded from  insurance coverage.  Neither the

            extent of insurance  coverage nor the  amount of benefits  is

            involved.   Even the eligibility  requirements themselves are

            not  in dispute;  it is  only the  alleged misrepresentations

            about  those  eligibility  requirements  that  give  rise  to

            plaintiff's  cause of  action.   Plaintiff's burden  of proof

            thus  goes to whether her husband would have been eligible to

            join the plan if Kaplan had not made misrepresentations as to

            his eligibility.   See Coyne  & Delaney Co., 98  F.3d at 1462
                               ___ ____________________

            n.4.

                                         -24-
                                          24

                      This case is markedly different from Carlo, 49 F.3d
                                                           _____

            790.   In  Carlo,  the plaintiff  was  a former  employee  of
                       _____

            defendant  Reed and  a  participant in  its retirement  plan.

            Plaintiff  Carlo elected  early  retirement on  the basis  of

            monthly  benefits he was told  he would receive.   The actual

            monthly benefits  he received  were twenty percent  less than

            the amount promised  him.  Defendant apologized for the error

            and offered to let him continue working at the same position.

            Carlo did  not accept  the offer  and  took early  retirement

            under protest.  He subsequently brought suit in Massachusetts

            state  court   for   breach   of   contract   and   negligent

            misrepresentation.  Id. at 792.   We found ERISA pre-emption.
                                ___

                      In Carlo,  plaintiff had been a  participant in the
                         _____

            plan  and one  of  the  issues  was  the  amount  of  monthly

            retirement pay  due him  under the substantive  provisions of

            the plan.  Here, by contrast, Donald  Golas was not a covered

            employee  and none  of the  issues implicate  the substantive

            provisions of the insurance plan.  The allegations are solely

            concerned    with   misrepresentations    regarding   Golas's

            eligibility to become a covered employee.

                      The analysis used in Boston Children's Heart Found.
                                           ______________________________

            v.  Nadal-Ginard  has  much  to  recommend  it.    In  Boston
            ________________                                       ______

            Children's Heart  Found., 73 F.3d  429, suit  was brought  in
            ________________________

            federal  district  court against  defendant,  who worked  for

                                         -25-
                                          25

            plaintiff nonprofit corporation  as an officer and  director.

            The suit  alleged that defendant breached  his fiduciary duty

            by misappropriating plaintiff's funds.  The basis of the suit

            was defendant's failure to disclose to the other directors of

            the corporation important  information concerning  provisions

            of a severance-benefit plan (the Banks Plan) he  had devised.

            When the  plan was  terminated on defendant's  initiative, he

            received  more than  $4,000,000  in severance  benefits.   On

            appeal defendant  contended that ERISA  specifically exempted

            the  type  of  severance  benefits  plan at  issue  from  its

            fiduciary duty provisions  and pre-empted the  application of

            state fiduciary law.  73 F.3d at 438.  We held:

                      Here,  the  alleged  breach of  fiduciary
                      duty relates to Nadal-Ginard's  action in
                      establishing   the  Banks   Plan  without
                      disclosing   information  that   a  self-
                      interested fiduciary would be required to
                      reveal  to his fellow  directors.  Nadal-
                      Ginard's  misconduct preceded  the formal
                      adoption   of  the   plan.     The  legal
                      determination that Nadal-Ginard's conduct
                      constitutes a fiduciary  breach does  not
                      require  the  resolution  of any  dispute
                      about      the     interpretation      or
                      administration of the plan.  Further, the
                                                   ____________
                      application of state law in this instance
                      _________________________________________
                      does   not   raise   the   core   concern
                      _________________________________________
                      underlying ERISA preemption.  Indeed, the
                      ___________________________
                      fact  that  Nadal-Ginard  chose an  ERISA
                      plan  rather  than  some  other  form  of
                      compensation   is   peripheral   to   the
                      underlying   claim    that   Nadal-Ginard
                      breached his corporate responsibilities.

                           This  being the  case, it  cannot be
                      said  that  Massachusetts  fiduciary  law
                      must be preempted in this instance. 

                                         -26-
                                          26

            Id. at 440 (emphasis added). 
            ___

                      Based  upon our own  circuit cases, the restriction

            of the scope  of pre-emption  under   514(a)  of the  statute

            established in  Travelers, and  the  post-Travelers cases  in
                            _________                 _________

            other circuits,  it is evident  that ERISA does  not pre-empt

            the misrepresentation claim against  Ellen Kaplan.  There are

            eight  reasons,  gleaned  from  the  cited  cases,  for  this

            conclusion.   (1) No ERISA  benefits are sought  and no ERISA

            rights  or obligations  are asserted.   (2)  Defendant Kaplan

            would be personally responsible for any money damages awarded

            to plaintiff.   (3) Defendant Kaplan is not an  ERISA entity,

            nor  does the  alleged  misrepresentation  claim  affect  the

            relationship between  ERISA entities.  (4) None  of the three

            categories  of  state  laws  that  Travelers  holds  Congress
                                               _________

            intended  to pre-empt  are  implicated.   (5) The  common-law

            claim  of  misrepresentation  is   a  state  law  of  general

            application.  Moreover, tort  law in general is traditionally

            an area of state  regulation.  It is therefore  unlikely that

            Congress intended  to intrude into this  area by pre-emption.

            (6)  Congress  did  not  intend to  shield  tortfeasors  from

            liability for misrepresentation where ERISA benefits, rights,

            obligations, and core concerns are not implicated.  (7) State

            common law imposes a duty of care relative to representations

            made by  insurance professionals which  does not  in any  way

            depend   upon  ERISA.    (8)  The  alleged  misrepresentation

                                         -27-
                                          27

            occurred prior to  the time  when the ERISA  plan would  have

            taken effect.

                      I would  hold, therefore, that  the district  court

            committed reversible error  in denying plaintiff's  motion to

            amend on the ground  that the claim raised therein  "would be

            pre-empted  by ERISA."7  Because ERISA  does not pre-empt the

            claim asserted against  Ellen Kaplan, and because there is no

            diversity of  citizenship between the parties,  nor any other

            basis for  federal jurisdiction, the motion  should have been

            denied for lack of federal jurisdiction.  Plaintiff should be

            left to pursue her  misrepresentation claim against Kaplan in

            the Massachusetts state courts.  

                      Although the  majority and I agree  on the ultimate

            result, we disagree as to the proper path to take in reaching

            it.   Because  I  think that  this  is a  case  in which  the

            procedural path  is  important, I  must respectfully  concur,

            rather than join the majority opinion.

                                
            ____________________

            7.  I  would  also hold  that  the  district court  erred  in
            adopting the magistrate's recommendation, without considering
            the application of ERISA to Kaplan as an individual, in light
            of  the differences  between her  status vis-a-vis  ERISA and
            that of the other defendants.  Instead, the magistrate merely
            said, "For the reason stated . . . [regarding Paul Revere and
            HomeView] . . .," plaintiff's claim against Kaplan would also
            "be pre-empted by ERISA."   He simply assumed that,  if ERISA
            pre-empted  the claim  against Revere  and HomeView,  it must
            likewise  pre-empt  the  claim  against Kaplan.    Given  the
            distinctions between  Kaplan's status as an  ERISA entity and
            that of  the other defendants,  this failure to  consider the
            claim  against Kaplan on its own merit also constituted legal
            error.

                                         -28-
                                          28