*1 Individually GOLAS, Tagan Charlene of Donald of the Estate
as Executrix Plaintiff, Appellant, Golas,
M. Paul Revere Life INC. and
HOMEVIEW Defendants, Company,
Insurance
Appellees.
No. 96-1696. Appeals, Court of
United States
First Circuit. 7, 1996.
Heard Nov. Feb.
Decided Weltman, Boston, MA, with whom
John J. brief, plaintiff- Lawson & Weitzen was on appellant. Vorster, Worcester, MA, O.
Joan Mirick, Joseph M. Hamilton and whom brief, O’Connell, Lougee were on DeMallie & defendani>-appellee Paul Revere Life In- Company. surance BOWNES, STAHL, Judge, Before Circuit LYNCH, Judge, Circuit Senior Circuit Judge.
LYNCH, Judge. Circuit plain- appeal denial of This is an from the complaint to add tiffs motion amend broker, as a de- Kaplan, an insurance Ellen arising Paul Revere in a suit out of fendant Company’s pay dis- Insurance refusal Life late ability insurance benefits final suffering from his when he was husband amend, plaintiff In her motion to illness. on a party defendant sought to add new district in an action which the state law claim *2 simultaneously dismissing against allegedly disability policy pur- court was due under the original bеing preempted defendants suant to ERISA. That case contin- by pending law. review the denial of federal We ues to be the District of Massa- for motion to amend abuse discretion and chusetts. Defendants removed the state law court, arguing conclude that there is no such abuse under suit to federal those governed by need not and do not the circumstances. We claims were also ERISA. The reach the issue of whether the state law two cases were not consolidated. misrepresentation preempted by claim is court, Once in federal Paul Revere moved Employee Security Retirement Income Act claims, arguing to dismiss the state law (“ERISA”). seq. 1001 et preempted by were ERISA.1 Plaintiff August husband moving ob- сountered for a remand to state disability policy through a pending, tained court. While these motions were employer, his HomeView Inc. One month moved to amend the diagnosed defendant, that, later Kaplan asserting he was with bone cancer and add as a sought disability action, request fifing benefits. His was since her initial she had “discov- being preexisting denied as related to a con- misrepresentations ered that critical upon during dition for which he treatment which her husband him relied were made to period. Kaplan.” the enrollment complaint alleged Ellen that, “[p]rior accepting disability coverage, death, plaintiff After her husband’s spoke Mr. Kaplan Golas to Ellen who made brought suit in Massaсhusetts state court regarding false statements to him his cover- against Paul Revere and HomeView based on age that, disability policy,” under the state law theories. The responsible “[a]s the broker overseeing for complaint alleged supplied that HomeView provision disability insurance from Golas, employees, including its Donald with a Paul employees, Revere to HomeView Ms. Revere, pamphlet, prepared by Paul explain- Kaplan duty owed Mr. Golas a to make sure ing rules governing preexisting condi- she nothing did to interfere with his obtain- tions. Plaintiff pamphlet contends that this ing coverage policy.” under the misleading. was It indicated that an insured disability individual could obtain benefits as oppоsed Defendants the motion to add long disability defendant, as the was not Kaplan caused arguing as a that amend- required sickness that him to consult a doc- ment would be futile because the claim during tor peri- the three month against Kaplan enrollment preempted by would also be that, od. Plaintiff claims reliance on argued this ERISA. Plaintiff that a claim statement, her husband visited a against Kaplan doctor dur- preempted by would not be ing period the enrollment for administrative agent was not an purposes only. However, he diag- Revere, was not HomeView or Paul indepen- but an nosed with bone cancer at that time. It was dent insurance broker. visit, plaintiff alleges, that made him The district court adoptеd magistrate’s ineligible to receive benefits. Plaintiff ar- grant recommendation to the motion to dis- that, gues information, absent the flawed miss the state law claims HomeView husband would have waited until after the and Paul Revere based on preemp- period enrollment ended to visit the doctor tion. The district court went on to consider and therefore eligible would have been adopt magistrate’s whether to recommen-
benefits.
deny plaintiffs
dation to
motion to amend the
sought damages
in state court
to add
as a defendant.
her late husband’s emotional distress
Having already
and for
decided to dismiss the claims
her own loss of consortium.
HomeView,
Plaintiff simul-
Paul Revere and
the dis-
taneously brought
suit
in federal court
trict court was faced with an anomalous situ-
against the same two defendants for benefits
ation. Plaintiff wished to add a defendant to
1. HomeView made its
arguments
own motion to dismiss
support.
ence Paul Revere’s
later, incorporating by
some three months
refer-
being
which was
dismissed as to
case
We note that at the time the mo
addition,
original
denied,
two
defendants.
original
was
the two
defendants
ERISA cause of action
Paul Revere
had been dismissed and there was no diversi
pending in
and HomeView was
the same
ty jurisdiction
Kaplan.2 Furthermore,
over
in a
court but
different action from the one in parallel ERISA action
pending against
*3
which the motion to amend was filed. The HomeView and Paul Reverе in federal court.
adopt
district court’s ultimate
decision
the Federal
traditionally
courts have
been more
magistrate’s
deny
recommendation to
jurisdiction
reluctant
to exercise
pen
over
complaint
motion to amend the
must be
parties
See,
dent
than
pendent
over
claims.
practical
procedural
viewed in this
con-
Pointer, Inc.,
e.g., Lykins
645,
725 F.2d
text.
(11th Cir.1984).3
649
Under these circum
stances,
the district court could not have
appeals only
Golas
from the denial of the
abused its discretion when it
plain
denied
complaint
motion to
Kap-
amend
to add
tiffs motion to
amend the
to add
lan as a defendant and not from the dismissal
Kaplan as the sole defendant. Even if our
underlying
preemption
action on
novo,
review were de
as the concurrence
grounds. Review is for abuse of discretion.
suggests, we
any
could affirm on
legal
332,
Reid v. New Hampshire, 56 F.3d
342
ground
See,
supported in the record.
e.g.,
(1st Cir.1995); see also Carlo v. Reed Rolled
States,
Eagan
(1st
13,
v. United
80 F.3d
(1st
790,
Thread Die
49 F.3d
Cir.
Cir.1996);
FDIC,
Levy
1054,
7 F.3d
1995) (noting
appeals
court will
(1st Cir.1993).
“generally
defer to
district court’s decision
deny
leave to amend where the reason is
We
(internal
uphold
therefore
apparent
the denial of
quotation
or declared”
amend,
omitted)).
motion to
grounds
albeit on different
marks and citation
It
is well-
court,
than
settled,
those relied on
the district
concurring opinion
as the
from our
express
out, that,
opinion
thus we
no
respectеd colleague points
preemp
when
opinion
not,
tion issue.
district court
This
does
makes an error of
as the
claims,
However,
uphold
it
concurrence
definition
abuses its discretion.
the district
preemption
court’s
is
the issue that concerns us
decision sub
here.
silentio.
The facts and circumstances of
decide to attempt
Kap-
the case nec
to add
essarily
our
lan as a
pending
influence
evaluation of the denial
defendant
complaint,
of the motion to
ruling
amend the
action.4 The district
any
court’s
here, they
unnecessary
make it
reach the
preempted
issue.
presents no
precedential
bar.
It has no
argues
2. The concurrence
that the ERISA issue
chise Tax Bd. v. Construction Laborers Vacation
jurisdiction
must be reached because
Trust,
issues of
1, 23-24,
2841,
463 U.S.
103 S.Ct.
2853-
and,
must be addressed first
in the absence of
54,
(1983);
Policyhold-
firmed.
apparent
matter of
and his
but
unstated
that,
corollary
result,
conclusion
as a
he was
BOWNES,
Judge,
Senior Circuit
deprived
(by
of discretion
the doctrine of
concurring.
futility)
grant
to
the motion.
result, but,
respect, I
I concur in the
with
Thus,
question
before us is
wheth-
not
disposed
do not think that this case can be
er the district court
abused its discretion
by
conclusory assertion that the district
denying plaintiffs motion to amend the com-
denying
its discretion in
did
abuse
plaint,
ruling
but whether the basis for this
plaintiffs
complaint
to amend her
so
motion
legally
was
If
correct.
the district court’s
Kaplan as
defendant.
In
as to add Ellen
erroneous,
was,
ruling was
as I think it
then
recommendation, adopted by
report
his
and
the motion to amend was not “futile” and
court,
magistrate judge
stat-
district
ground.
should not have been denied on that
denying
following
ed the
reason for
the mo-
consequence,
As a
the district court lacks
complaint:
tion to amend the
jurisdiction to decide the merits of the state-
attempt
I
that
to add El-
Plaintiff[’s]
find
because,
misrepresentation
claim
as the
party
Kaplan
len
defendant and to
majority acknowledges inferentially,
only
misrepresen-
her a
assert
claim
jurisdiction
pre-
basis for federal
is ERISA
tation
be futile
such a claim
think, therefore,
emption.
I do not
that this
by
pre-empted
would be
ERISA.
appeal can
principled
be decided on a
It is clear that the district court’s denial of
discussing
without
pre-
discretion,
the motion
not an exercise of
was
emption.
compelled by
legal ruling
but was
its
that the
majority purports
“express
opin-
to
no
Kaplan
claim
issue,”
ion on the
suggests
and
Accordingly,
ERISA.
the district court’s de-
plaintiff
subject
pursue
that the
could
nial of
is
to
still
her claim
the motion
review de
novo,
against Kaplan by seeking
than for
to amend
rather
abuse
discretion.
pending
Kap-
See Carlo v. Reed Rolled Thread Die
so as to add
Cir.1995).
(1st
lan
majority
F.3d
as a defendant. The
fails to
however,
unequivocally
recognize,
Court has stated
that
practical
dis-
that
“[a]
effect
disposition
trict court
definition abuses its discretion
uphold
of its
of the case is to
when it makes an error of law.” Koon v.
district
pre-emption ruling
court’s
sub silen-
argument
being
5. At oral
we were advised that
employees.
there
was also
offered to HomeView
discovery
was
argument
Kaplan
taken on the issue of whether
This undermines Golas’
that
Kaplan
agent,
independent
was an
either of HomeView
or of
was an
broker. The facts
established,
proffered
Paul
findings
Revere. The
amended
now be
but no
are before us.
issue,
However,
ambiguous
although
Kaplan
agent
on this
the concur-
if
was an
of either of the
agent
companies,
assumption
rence
underly
assumes that
not an
two
the factual
incorrect,
Kaplan's deposition
company.
ing
either
testimo-
concurrence
and the result
brief,
Indeed,
ny
ing legal
unjustified.
Kap-
attached to Golas'
states that
conclusions
if
HomeView,
meeting
agent
she held an
benefits
for Home-
lan is an
the case would fall
employees
View
explain
squarely
the Paul Revere dis-
within the
ambit Vartanian v. Mon
ability policy
(1st Cir.1994).
policy
and an Aetna insurance
that
santo
I.
and all State
they may
laws insofar as
now
or
any employee
hereafter relate to
benefit
my analysis
key
start
with the
words of
1144(a)
plan-”
§
29 U.S.C.
(emphasis
bearing
pre-emption:
the statute
on
added). “The term ‘Statе Law' includes all
(b)
Except
provided
as
in subsection
of
laws, decisions, rules, regulations, or other
section,
subchap-
of this
law,
having
State action
any
effect of
subchapter
ter and
III
chapter
of this
shall
1144(c)(1).
§
State.” 29 U.S.C.
The Su
supersede any and all State laws insofar
preme Court has established that “a law
they may
now
any
or
relate to
hereafter
employee
‘relates to’ an
benefit
...
if
plan ....
benefit
it has a connection with or reference to
added).
§
(emphasis
29 U.S.C.
plan.”
such
Ingersoll-Rand
a
Co. v.
purposes
For
of this section:
McClendon,
133, 139,
498 U.S.
111 S.Ct.
(1)
laws,
The term “State law”
all
includes
478, 483,
(1990)
112
(quoting
L.Ed.2d 474
decisions, rules, regulations, or other State
Lines, Inc.,
85,
Shaw v. Delta Air
463 U.S.
having
action
the effect of
96-97, 103
2890, 2900,
S.Ct.
6 evidence, may wheth- sibility determine they had claims at jury Id. 1131-32 trial is available.” to” an em- er reference with-or “a connection (citations Carlo, at 49 F.3d 794- plan. ployee benefit we reviewed into the Nadal-Ginard, 95. sweeps all state-law cluding Rolled Thread Die remote, Superintendent Zuniga v. Blue Cross Michigan, 52 F.3d ly lated covered benefit nied, merely requires a court to look ed Cordero v. U.S. applicability. applicability, L.Ed.2d 306 quotation marks clude n. In Boston Children’s ley Greater ance, state law “relates to” 1995). State the case But we ERISA, Towing [(1st [125] Carlo, problem, the 121 L.Ed.2d — that a state law ERISA. benefit Absent laws “tenuous, remote, Washington Board Cir.1995)] (citation at 130 n. however. See U.S. Crowley Towing & and concluded: based on the peripheral 123; have never (1994). See District plan exists. Transp. comer plan” precedent on Rosario-Cordero respect to laws of —, omitted). Such is normal of as such F.3d 429 misrepresentation claims Combined have Co., 1, 113 3 inquiry into whether the Bureau 1395, 1401 may an A court (1st Cir.), 115 S.Ct. and Blue Shield merely because an 49 F.3d at merely a connection with a [(1992)]; Rosario- at the facts of is one of ERISA held that Carlo S.Ct. at form or label of not be Carlo v. Found., Inc. v. or not (1st Cir.1996), Mgt., Inc. v. Columbia Transp. cannot con peripheral” Trade, closely cases, in of “tenuous, (6th preempt cert. [580] v. Crow 794 n. internal general general Insur [120,] Reed or [sic] Cir. de re 3; Ins. Blue Cross & mous brought actions in the United States emption. direct of ERISA’s three surers, associations L.Ed.2d of observations emption: Court worked And A recent was the clear and have never assumed have police powers of superseded traditional law is said to bar state has portunities for federal by express provision, Supremacy Congress. *6 a conflict between federal deed, in does not intend Our Co., administered, Court, derogated bearing on the hospital surcharge statutes. starting entail yet, despite addressed acting past cases have on cases Supreme Court decision Justice general New York State Cоnference of U.S. —, Blue Clause, as fiduciaries state at presumption state assumption like “[o]n claims Shield joined, supplant state law. Federal Souter made several regulation, we preemption provision” regulation, but officials scope of ERISA States were not to lightly manifest by implication, variety Writing for a recognized that 115 S.Ct. one, of state law Plans action in fields of claimed preeminence, with their trade Const., that the historic Act commercial in that and state that where federal ERISA, to invalidate of these v. Travelers purpose unless that Congress Congress authority Art. number District instead Id. unani has a either plans byor have with pre pre law. VI, op- In- we be at particular case. Sеe Rosario-Cordero (citations at —, at 1676 Id. S.Ct. Co., Transp. F.3d Crowley Towing & at quotation internal marks 125 n. 2. statutory pre-emp commented Court Found., 73 F.3d Boston at Children’s language § “all state laws 439-40. they ... insofar as relate Regulator plan,” pointing “[i]f out that ‘relate
In 63 benefit to’ Johnson Watts (1st Cir.1995), pointed out were taken to to the furthest we extend stretch F.3d may practical then for all consequences indeterminacy, that flow from ERISA of its potential purposes pre-emption would never run its pre-emption: “may It cause state- at —, vanish, may change Id. 1677. The or course.” remedies review, concluded: affect the admis- Court standard go beyond simply unhelpful must means, We weeks course, Carlo. This after frustrating difficulty text аnd the of defin- that panel the Carlo did not have the benefit term, ing key and look its instead to the the Court’s latest views on pre- objectives emption. Second, guide of the ERISA statute as a none of the scope Congress emption of the state law that cases decided in this circuit subse- quent understood would survive. to Travelers have cited it.
Id.
post-Travelers
now turn to
decisions
other circuits.
In a case the Fourth Circuit
Court,
analysis,
the course of its
described as a “gardenvariety professional
stated:
malpractice claim” the court held:
Indeed,
to read the
provi-
light
Court’s recent
displacing
affecting
sion as
all state laws
(and narrowing) interpretation of
charges
theory
costs аnd
that
preemption
in New York State
indirectly
plans
pur-
relate to ERISA
that
Blue Cross & Blue Shield
Conference of
policies
chase insurance
or HMO member-
Travelers,
Plans v.
ships
services,
that would cover such
1671, 131
L.Ed.2d 695
we hold
effectively
limiting
read the
language in
Delany’s
that
malpractice claim is not
statute,
§
out of the
a conclusion
preempted because it does not “relate to”
principles
that would violate basic
of statu-
an
benefit
within the mean
tory interpretation, and could not be
ing of
preemption
ERISA’s
provision, 29
squared
prior pronouncement
with our
1144(a).
U.S.C.
[preemption
does not occur ...
if the
Coyne
Delany
tenuous,
remote,
F.3d at
state law has
1466-67.
Quoting
propositiоn
Travelers for the
peripheral connection
plans,
with covered
courts ‘“address
claims of
many
general
is the case with
laws of
starting presumption
Congress
applicability.
does
”
law,’
supplant
intend to
98 F.3d at
(cita
at —,
Id.
Id. at 723-24
pre-emption.
restricted the
ERISA
States,
and South
In Central
Southeast
Pathology
Fund v.
west Areas Health and Welfare
II.
Ark., P.A.,
bs.
71 F.3d
La
(7th Cir.1995),
denied,
I turn now to what I consider to be the
cert.
panel:
before the
whether
way avoiding issue. gized for the error and offered to let him working position. continue at the same Car Normally in a case the start- accept eаrly lo did not offer and took facts, ing point is an examination of the but protest. subsequently retirement under He way much in the of facts- here. there is not brought in suit Massachusetts state court for allegations All know is derived from the we negligent misrepre breach of contract and complaint, purported in the amended which sentation. Id. at 792. We found ERISA stage accepted must be as true at this of the pre-emption. allegations only be con- litigation. These can stating misrep- strued as made Carlo, plaintiff participant had in been husband, plaintiffs Donald resentations and one of the issues was Golas, give failed to him correct infor- monthly and/or pay amount of due him retirement eligibility the conditions of mation about provisions plan. under the of the substantive participation policy. in the Insurance Revere Here, contrast, was not a Donald Golas complaint alleges The amended covered and none of the issues an insurance broker. I take that implicate the substantive poli- insurance mean she “sold” Revere’s plan. allegations solely are cy Although Kaplan to HomeView. is linked misrepresentations regarding concerned with alleged to HomeView and Revere as to the eligibility to a covered em- Golas’s become misrepresentations, no claim that there is ployee. agent for on behalf of
Kaplan acted as
analysis
Children’s
used
Boston
eithеr or both of the other two defendants.
Found,
has much
v. Nadal-Ginard
construed,
broadly
complaint,
The amended
it.
In Boston Children’s Heart
recommend
alleges
a common-law
Found.,
brought
suit was
against Kaplan individually.
defendant,
who
federal district
disability
plaintiff nonprofit corporation
in-
Strictly speaking, the ERISA
worked for
alleged that
implicated
is not
an officer and director. The suit
surance
duty by
fiduciary
misrepresentation claim. Donald
nev-- defendant breached his
Golas
instead,
misappropriating plaintiffs funds. The basis
employee;
er became
covered
failure to disclose
alleged misrepre-
focuses on the
of the suit was defendant’s
*9
corporation
im-
plaintiff alleges
which
were the
to the other directors of
sentations
portant
concerning provisions of
being
excluded from insur-
information
cause Golas’s
(the
Plan)
plan
Banks
he
coverage.
ance
Neither the extent of insur-
a severance-benefit
plan was terminated
coverage
ance
nor the amount of benefits is
had devised. When the
initiative,
more
eligibility requirements
on defendant’s
he received
involved. Even the
$4,000,000
On
dispute;
in
than
in severance benefits.
themselves are not
it is
spe-
that ERISA
alleged misrepresentations
eligi-
appeal
those
defendant contended
about
(4)
type
cifically exempted the
of severance ben
tween ERISA entities.
None of the three
fiduciary duty
categories
from its
of state laws that Travelers holds
efits
at issue
Congress
pre-empt
implicat-
pre-empted
application
intended to
are
and
(5)
misrepre-
fiduciary law.
rеsponsible any money damages awarded (3) plaintiff. Defendant is not an entity, alleged misrep- nor does the relationship
resentation claim affect the be- pre-empted by simply also that the would hold district court erred ERISA." He assumed recommendation, adopting magistrate's that, pre-empted if ERISA the claim Re- considering application without of ERISA to HomeView, pre-empt vere and it must likewise individual, light as an of the differ- against Kaplan. the claim Given the distinctions status ences between her vis-a-vis ERISA and Kaplan’s entity between status as an ERISA Instead, magis- that of the other defendants. defendants, that of the other this failure to con- said, merely trate “For the reason stated ... against Kaplan sider the claim on its own merit ...,” [regarding Paul and HomeView] Revere legal also constituted error. plaintiff's against Kaplan also “be