Plastic Surgery Center, P.A. v. Aetna Life Insurance Co
967 F.3d 218
| 3rd Cir. | 2020Background
- Two Aetna-insured patients (J.L. and D.W.) required specialized surgeries unavailable in-network; the Plastic Surgery Center (out-of-network) sought Aetna’s assurance of payment before providing care.
- Aetna allegedly agreed orally to pay: for J.L., a “reasonable amount according to the terms of the Plan”; for D.W., payment at the “highest in-network level.”
- The Center performed the surgeries; Aetna paid only a fraction of the billed amounts and refused full payment.
- The Center sued in New Jersey state court (breach of contract, promissory estoppel, unjust enrichment); Aetna moved to dismiss as preempted by ERISA §514(a).
- The District Court dismissed all claims as preempted and denied leave to amend; the Third Circuit reviewed de novo.
- The Third Circuit held the breach of contract and promissory estoppel claims survive dismissal (not preempted at this stage) but affirmed dismissal of unjust enrichment claims as preempted; it vacated the denial of leave to amend and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of contract and promissory estoppel claims by an out-of-network provider are preempted under ERISA §514(a) | Claims enforce independent oral promises by Aetna to pay for services not covered in-network; liability flows from insurer’s promise, not the ERISA plans | Claims effectively seek plan benefits or depend on plan terms (so they "reference" or require construing ERISA plans) | Not preempted at motion-to-dismiss: pleadings plausibly allege independent promises; only cursory plan review—claims may proceed |
| Whether unjust enrichment claim is preempted | Provider: Aetna received benefit (discharge of insurer’s obligation) and retention is unjust | Aetna: Any benefit arises from insurer’s plan duties so claim is premised on an ERISA plan | Preempted: unjust enrichment requires proving a plan-based benefit/discharge of plan duties; dismissed |
| Whether denial of leave to amend (D.W.) was proper given preemption ruling | Amendment could cure pleadings to state non-preempted claims | Denial justified because claims were futile and preempted | Reversed: denial was based on erroneous preemption ruling; remand for further proceedings |
Key Cases Cited
- Shaw v. Delta Air Lines, 463 U.S. 85 (1983) (framework: state law "reference to" or "connection with" ERISA plans)
- Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990) (ERISA’s civil enforcement scheme and preemption of claims premised on plans)
- Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (2016) (limits of §514(a): "reference to" vs "connection with")
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) (state-law claims that enforce plan benefits are preempted)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (ERISA §502(a) remedies are exclusive for participants/beneficiaries)
- Menkes v. Prudential Ins. Co. of Am., 762 F.3d 285 (3d Cir. 2014) (Third Circuit standard for assessing express preemption)
- Nat’l Sec. Sys., Inc. v. Iola, 700 F.3d 65 (3d Cir. 2012) ("cursory" plan examination does not trigger preemption)
- McCulloch Orthopaedic Surgical Servs., PLLC v. Aetna Inc., 857 F.3d 141 (2d Cir. 2017) (out-of-network provider’s claims can be independent of plan duties)
- Access Mediquip L.L.C. v. UnitedHealthcare Ins. Co., 662 F.3d 376 (5th Cir. 2011) (distinguishes misrepresentation/contract claims from unjust enrichment/quantum meruit tied to plan benefits)
- Mem’l Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236 (5th Cir. 1990) (early Fifth Circuit decision allowing provider claims not governed by ERISA plans)