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The civil enforcement provision of the Employee Retirement Income Security Act of 1974, 29 U.S.C.S. § 1132, does not authorize recovery for wrongful death, personal injury, or other consequential damages caused by an improper refusal of an insurer or utilization review provider to authorize treatment.
Diane Andrews-Clarke, an employee of AT&T, maintained a family health insurance policy with Travelers Insurance Co. through her AT&T employee benefit plan. Her husband and children were named beneficiaries of that policy. Richard Clarke drank to excess. Despite the fact that the Travelers' insurance policy held by Andrews-Clarke specifically stated that each insured beneficiary was entitled to at least one thirty-day inpatient rehabilitation program per year, Greenspring - the utilization review provider that must pre-approve treatment under the terms of Clarke's health plan - on several occasions, refused to authorize Clarke’s enrollment in such a program. Clarke was found lifeless in November 1994. Subsequent to Clarke's death, Diane Andrews-Clarke commenced the present action against Travelers and Greenspring, individually and as administratrix of Clarke's estate and as next friend of their four minor children. Andrews-Clarke asserted that her husband's death was the direct and foreseeable result of the improper refusal of Travelers and its agent Greenspring to authorize appropriate medical and psychiatric treatment during Clarke's repeated hospitalizations for alcoholism in 1994. She brought claims against them for breach of contract, medical malpractice, wrongful death, loss of parental and spousal consortium, intentional and negligent infliction of emotional distress, and specific violations of the Massachusetts consumer protection laws. In their motion to dismiss, Travelers and Greenspring asserted that Andrews-Clarke’s complaint failed to state a claim upon which relief could have been granted because Mass. Gen. Laws ch. 176D, § 3 and Mass. Gen. Laws ch. 175, § 47B, did not confer private rights of action, and § 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), codified at 29 U.S.C.S. § 1144(a), preempted Andrews-Clarke’s remaining claims.
Did Andrew-Clarke’s complaint fail to state a claim upon which relief could have been granted, thereby warranting the grant of the motion to dismiss filed by the insurer and its agent?
The district court concluded that all of Andrews-Clarke’s cognizable state law causes of action arose out of the alleged improper processing of her husband's claims for benefits under the ERISA employee benefit plan and were therefore preempted. In addition, the civil enforcement provision set forth in § 502 of ERISA, codified at 29 U.S.C.S. § 1132, did not authorize recovery for wrongful death, personal injury, or other consequential damages caused by the improper refusal of an insurer or utilization review provider to authorize treatment. The court held that the practical impact of ERISA was to immunize the insurer and its agent from any potential liability for the consequences of their denial of benefits. Accordingly, the district court granted the motion to dismiss.