Alexander Menkes v. Prudential Insurance Co of Ame
762 F.3d 285
| 3rd Cir. | 2014Background
- Menkes and Wolfe, putative class plaintiffs, were employed by Qinetiq on a military base in Iraq in 2008.
- They were auto-enrolled in Basic Long Term Disability, Basic Life, and AD&D insurance (ERISA-governed) funded by Qinetiq.
- Plaintiffs purchased Supplemental Long Term Disability and Menkes bought Supplemental AD&D; premiums paid by plaintiffs for enhanced benefits.
- Supplemental Coverage used the same terms, exclusions, and claim procedures as Basic Policies and was described as under the Employer’s ERISA plan in Booklets/SPDs.
- Both Basic Policies and Supplemental Coverage were governed by a single group contract and shared documents; war exclusions applied to both.
- Qinetiq also carried DBA insurance for war-related injuries through a separate insurer (ICSP).
- District Court dismissed the case as ERISA-preempted and denied leave to amend; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Supplemental Coverage is ERISA-governed and part of a single plan | Menkes argues Supplemental Coverage is separate and unbundled from Basic Policies | Qinetiq/Prudential contend it is one integrated ERISA plan | Yes, Supplemental Coverage is part of the ERISA plan |
| Whether the war-exclusion can be unbundled from ERISA analysis | Safe harbor unbundling should apply to separate programs | Closely related components cannot be unbundled under ERISA | Cannot be unbundled; war exclusion relevant to plan terms and benefits |
| Whether state-law claims are preempted by ERISA | Claims arise from misrepresentations and CFA/breach independent of plan | Claims relate to plan administration and are preempted by ERISA §514(a) and §502(a) | All state-law claims preempted by ERISA; ERISA exclusive enforcement applies |
| Whether punitive damages are preempted under ERISA | Punitive damages allowed under state law | ERISA §502(a) provides exclusive remedies; punitive damages not permitted | Punitive damages preempted under ERISA |
| Whether the DBA preemption applies to Menkes' claims | DBA preemption could affect state-law claims | DBA preemption not necessary if ERISA governs | ERISA preemption controls; DBA preemption not needed to resolve |
Key Cases Cited
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (U.S. 1987) (ERISA preemption aims for uniform regulation through a single administrative regime)
- Shaver v. Siemens Corp., 670 F.3d 462 (3d Cir. 2012) (Establishes plan establishment/administration considerations under ERISA)
- Gruber v. Hubbard Bert Karle Weber, Inc., 159 F.3d 780 (3d Cir. 1998) (Whether a plan is established/maintained for long-term benefits under ERISA)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) (ERISA preemption and the scope of conflict preemption under §502(a))
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (U.S. 1987) (Express preemption and the exclusive nature of ERISA remedies)