## Facts

- Florence Corcoran, a South Central Bell employee, was covered by a self-funded employee welfare benefit plan governed by ERISA and administered by Blue Cross.
- During a high-risk pregnancy, Mrs. Corcoran’s obstetrician recommended hospitalization with continuous fetal monitoring.
- Under the plan’s Quality Care Program, participants needed pre-certification for inpatient admissions and concurrent review for continued hospital stays to avoid reduced benefits.
- United Healthcare, contracted to perform utilization review for the plan, determined extended hospitalization was not medically necessary and authorized a shorter inpatient stay followed by limited home nursing care.
- Mrs. Corcoran was discharged when additional inpatient days were not authorized; while at home and without a nurse present, the fetus went into distress and died.
- The Corcorans sued United and Blue Cross in state court for wrongful death and emotional distress, alleging negligent utilization review that overrode the treating physician’s recommendations.
- Defendants removed to federal court; the district court granted summary judgment on ERISA preemption and lack of extra-contractual damages under ERISA.

## Issues

1. Whether ERISA § 514(a) preempts state-law wrongful death and malpractice claims challenging a utilization reviewer’s medical-necessity determinations made in administering benefits under an ERISA plan.
2. Whether ERISA’s civil enforcement provision, § 502(a)(3), permits recovery of emotional distress or other extra-contractual damages as “appropriate equitable relief.”

## Decision

- The Fifth Circuit affirmed summary judgment for United and Blue Cross.
- ERISA preempted the state-law malpractice/wrongful-death claims because the alleged negligence arose from utilization review performed as part of plan benefit administration.
- Emotional distress and other extra-contractual damages were not recoverable under ERISA § 502(a)(3) because they are not “appropriate equitable relief.”

## Legal Principles

- ERISA § 514(a) broadly preempts state laws and state-law causes of action that have a connection with or reference to an ERISA plan, including claims targeting benefit-related utilization review decisions.
- A utilization reviewer’s use of medical judgment does not avoid preemption when that judgment is exercised to determine coverage and medical necessity under the plan’s benefit structure.
- ERISA’s remedial scheme is limited; § 502(a)(3) authorizes traditional equitable relief and does not allow compensatory damages for emotional distress or other extra-contractual harms.

## Conclusion

The court held that claims alleging negligent utilization review, when tied to benefit determinations under an ERISA plan, are displaced by ERISA’s preemption clause, and that ERISA does not provide emotional distress or similar extra-contractual damages even where the utilization decision allegedly contributed to severe injury or death.


Corcoran v. United Healthcare, Inc., 965 F.2d 1321 (5th Cir. 1992)