CATES v. INTEGRIS HEALTH, INC.
2017 OK 54
| Okla. | 2017Background
- Plaintiff Elizabeth Cates (individually and as putative class) sued INTEGRIS Health, Inc. for breach of contract, Oklahoma Consumer Protection Act violations, deceit, specific performance, and punitive damages arising from hospital billing and an alleged in‑network discount obligation.
- INTEGRIS alleged ERISA complete preemption because Cates was an ERISA plan beneficiary and the dispute concerned amounts tied to an insurer–provider agreement; the case was removed to federal court.
- The U.S. District Court (W.D. Okla.) initially denied remand (Judge Heaton), citing ERISA preemption; the Tenth Circuit’s subsequent Salzer decision prompted reconsideration.
- Judge Friot (W.D. Okla.) later granted remand, applying Salzer’s framework that a provider‑agreement dispute may not be ERISA‑preempted when the ERISA plan is only part of the factual backdrop and the claim primarily hinges on the provider contract.
- The Oklahoma Supreme Court reversed the earlier ruling denying remand and remanded to state district court, letting Judge Friot’s federal‑court analysis govern subsequent proceedings in the case; the Court expressly declined to rule on the class‑action issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cates’s state‑law claims are completely preempted by ERISA | Cates: Claims enforce a hospital–provider discount as a third‑party beneficiary and do not require ERISA civil‑enforcement resolution | INTEGRIS: Cates’s entitlement depends on interpretation of ERISA plan terms, so ERISA preempts and federal courts have jurisdiction | Court: Remanded — applying Salzer, the plan is at most part of the factual backdrop; claims not necessarily ERISA‑preempted |
| Whether plaintiff’s third‑party beneficiary status is independent of ERISA | Cates: Status arises from the hospital contract and patient expectations; enforceable under state law | INTEGRIS: Status depends on plaintiff’s participation in an ERISA plan, tying claim to ERISA enforcement scheme | Court: Third‑party beneficiary claim here is not necessarily dependent on ERISA; remand appropriate |
| Whether federal courts should retain jurisdiction over related state claims once one claim invokes ERISA | Cates: Even if coverage is referenced, state remedies should proceed in state court | INTEGRIS: An ERISA‑based claim supports federal jurisdiction over the entire case | Court: Followed Salzer — a single ERISA issue does not automatically preempt all related state claims; remanded to state court |
Key Cases Cited
- Salzer v. SSM Health Care of Oklahoma Inc., 762 F.3d 1130 (10th Cir. 2014) (distinguishes claims that primarily hinge on provider agreements from ERISA preemption; plan may be mere factual backdrop)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (articulates ERISA preemption and two‑part civil‑enforcement/preemption analysis)
- Arizona v. California, 460 U.S. 605 (1983) (prior federal decisions governing legal questions in subsequent stages of the same case should continue to govern)