## Facts

- Two consolidated state-court tort actions were brought by HMO enrollees’ estates against HMOs affiliated with U.S. Healthcare and against medical providers and facilities.
- In one action, Darryl Dukes allegedly received negligent treatment and testing related to ear problems and later died; his estate alleged malpractice by providers and liability by the HMO for provider conduct and its own conduct.
- In the other action, Serena Visconti allegedly received negligent prenatal and obstetric care and died; her estate and parents asserted similar theories against the HMO.
- The complaints asserted state law theories including provider malpractice, HMO vicarious liability based on ostensible agency, and HMO direct negligence in selecting, monitoring, and structuring the delivery of medical services.
- The HMO coverage was offered through employer-sponsored welfare benefit plans governed by ERISA.
- The HMOs removed the cases to federal court, asserting ERISA “complete preemption” under § 502(a)(1)(B) and arguing the claims were also preempted under ERISA § 514(a).
- The district courts denied remand and dismissed the claims against the HMOs on ERISA preemption grounds.
- Plaintiffs appealed the denial of remand and dismissal.

## Issues

1. Whether the state tort claims against the HMOs fell within ERISA § 502(a)(1)(B) so as to be completely preempted and therefore removable to federal court.
2. If removal was improper, whether ERISA § 514(a) nonetheless substantively preempted the state law claims.

## Decision

- The Third Circuit reversed the district courts’ judgments and ordered the cases remanded to state court.
- The court held the claims were not completely preempted under ERISA § 502(a)(1)(B) because they did not seek to recover plan benefits, enforce plan rights, or clarify rights to future benefits.
- Because federal jurisdiction was absent, the federal courts should not have reached any § 514(a) preemption defense; those arguments could be addressed in state court on remand.

## Legal Principles

- Complete preemption permitting removal applies only when a state claim falls within ERISA § 502(a)(1)(B)’s civil enforcement provision (benefits due, enforcement of plan rights, or clarification of future benefits).
- Claims challenging the quality of medical treatment received, or an HMO’s negligence in arranging or supervising medical care, are not converted into § 502(a)(1)(B) claims merely because the care was provided through an ERISA plan.
- Under the well-pleaded complaint rule, ordinary ERISA preemption asserted as a defense (including § 514(a) “relate to” preemption) does not create federal-question jurisdiction and does not authorize removal absent complete preemption.

## Conclusion

The Third Circuit held that state law malpractice-based claims against HMOs focused on the quality and supervision of medical care do not fall within ERISA § 502(a)(1)(B), making removal improper; the cases were returned to state court for further proceedings, including any consideration of § 514(a) defenses.


Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir. 1995)