407 F. App'x 348
10th Cir.2011Background
- Carroll, employed at Los Alamos National Laboratories, migrated from UC to LANS in 2006 with option to join TCP1 or TCP2.
- TCP1 and TCP2 required Social Security and Medicare contributions, which Carroll had been exempt from as a state employee.
- LANS indicated TCP2 would include reimbursement for those contributions; Carroll relied on this assurance.
- Reimbursement program existed only for TCP1 participants, not TCP2, discovered months after Carroll chose TCP2.
- Carroll asserted state-law negligent misrepresentation alongside ERISA and ADEA claims; district court granted summary judgment to LANS on all claims, including negligent misrepresentation.
- On appeal, the issue centers on whether Carroll can prove damages causally connected to the misrepresentation and whether ERISA preempts any state-law damages analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Damages from misrepresentation | Carroll claims out-of-pocket loss from Social Security/Medicare contributions ($40,500). | Damages are based on benefit-of-the-bargain; TCP2 provided overall greater value. | Damages follow benefit-of-the-bargain; no recoverable out-of-pocket loss. |
| ERISA preemption | State-law damages analysis may be preempted if it relates to ERISA plans. | ERISA preemption is limited; analyzing plan value for damages is permissible. | ERISA preemption does not require striking the damages analysis; preemption not triggered here. |
| Reliance and causation | There was genuine reliance on TCP2 reimbursement representation; this caused damages. | Carroll could not show damages causally tied to the misrepresentation. | No damages proved due to misrepresentation; reliance not shown to yield actionable loss. |
Key Cases Cited
- First Interstate Bank of Gallup v. Foutz, 764 P.2d 1307 (N.M. 1988) (damages in negligent misrepresentation measured by out-of-pocket loss or reliance)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (U.S. 1983) (ERISA preemption scope ‘relates to’ plan breadth)
- Hospice of Metro Denver v. Group Health Ins. of Oklahoma, Inc., 944 F.2d 752 (10th Cir. 1991) (premises for when damages based on potential plan benefits do not implicate administration)
- Coldesina v. David P. Coldesina, D.D.S., P.C., Emp. Profit Sharing Plan & Trust, 407 F.3d 1126 (10th Cir. 2005) (ERISA preemption categories; four-category framework)
- Forbus v. Sears Roebuck & Co., 30 F.3d 1402 (11th Cir. 1994) (preemption not triggered merely by damages linked to plan benefits)