Business Practices Act and the doctrine of informed consent are merely remedial provisions that allow a damage remedy for violation of these regulations.
This court respectfully disagrees with plaintiffs argument. The Illinois Health Maintenance Organization Act expressly incorporates Ill. Rev. Stat. ch. 73 para. 761, which prohibits misrepresentation and defamation by insurance companies. Ill. Rev. Stat. ch. 111 1/2 para. 1411.2(a). In Illinois no private right of action exists for violation of paragraph 761 of the Illinois Insurance Code. Elrad v. United Life and Accident Ins. Co., 624 F. Supp. 742, 744 (N.D. Ill. 1985); Glazewski v. Allstate Ins. Co., 126 Ill. App. 3d 401, 466 N.E.2d 1151, 1157-58, 81 Ill. Dec. 349 (Ill. App. 1st Dist. 1984), aff'd in part, rev'd in part on other grounds, 108 Ill. 2d 243, 483 N.E.2d 1263, 91 Ill. Dec. 628 (Ill. 1985). The Illinois Consumer Fraud and Deceptive Business Practices Act and the doctrine of informed consent relied upon by plaintiff Anderson thus are more than mere remedial vehicles for other statutory violations -- the laws expressly provide the plaintiff with a private right of action which would be otherwise lacking. Further, the Illinois Consumer Fraud and Deceptive Business Practices Act does not refer to other laws and specifies in detail the conduct which is actionable under its provisions. See Ill. Rev. Stat. ch. 121 1/2 para. 261 to 272. The Court therefore finds that the Illinois Consumer Fraud and Deceptive Business Practices Act are preempted by ERISA. Because Anderson has not alleged a violation of ERISA in her complaint and does not seek relief under ERISA, the defendant Humana's Motion to Dismiss the complaint of Anderson is granted.
The claims of the plaintiff Matthews are identical to those of Anderson. Matthews is an employee of the City of Chicago and receives coverage from Anchor through a "governmental plan" within the meaning of ERISA. Such a "governmental plan," which is established or maintained by the government of any state or political subdivision, is exempted from the substantive requirements of ERISA. 29 U.S.C. Sec. 1003(b)(1), 1002(32). Therefore, the claims of Matthews are not subject to ERISA and are not preempted by its provisions.
Matthews has moved to remand the proceedings to the Circuit Court of Cook County on the ground that this Court lacks subject matter jurisdiction over the case. 28 U.S.C. Sec. 1447(c). Under the removal statute, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction" may be removed by the defendant to a United States District Court. This case does not satisfy the jurisdictional requirement of Section 1441(a) because the claims of Matthews are not subject to ERISA, and the defendants have not asserted an alternative ground for this Court's original jurisdiction over Matthews' claims. Although the validity of these claims may be doubtful in light of the Court's earlier discussion of the Illinois Insurance Code, this issue must be adjudicated in a state court. Accordingly, Matthews' Motion to Remand the proceedings to the Circuit Court of Cook County is granted.
Matthews purports to represent a class of all consumers of the Anchor HMO. Rule 23 of the Federal Rules of Civil Procedure sets forth the requirements for a class action. Under Rule 23(a), representative parties may sue or he sued on behalf of a class if (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and accurately protect the interests of the class. Fed. R. Civ. P. 23(a). A plaintiff's claim is typical if the claim arises from the same event, practice, or course of conduct that gives rise to the claims of other class members and the plaintiff's claims are based on the same legal theory. De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983) (citations omitted). The typicality requirement may be satisfied even if there are factual distinctions between the claims of the named plaintiffs and those of other class members. Id.
The Court finds that Matthews could not properly represent a class of all consumers of the Anchor HMO because the typicality requirement of a class action would not be satisfied. Approximately 65 to 70 % of persons who receive coverage from Anchor are enrolled through employee benefit plans under ERISA. The claims of Matthews, unlike the claims of these consumers, will not be subject to the substantive requirements of ERISA. The typicality requirement of a class action would not be satisfied because the claims of Matthews would not be based on the same legal theory as these consumers. Upon remand, the Court directs that Matthews could only be a proper class representative of those Anchor consumers whose benefit plans are not subject to the substantive requirements of ERISA. The defendant Anchor may properly remove the claims of any plaintiff whose employee benefit plan with Anchor is subject to ERISA because the Court would have original jurisdiction over those claims. 28 U.S.C. Sec. 1441(a); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 67, 95 L. Ed. 2d 55,107 S. Ct. 1542 (1987).
For the foregoing reasons, defendants Humana, Inc., Humana Health Plan, Inc., Humana Insurance Company, The Michael Reese Health Plan, Inc., and Michael Reese Hospital Foundation's Motion to Dismiss the complaint of plaintiff Anderson is granted. The Motion to Remand the complaint of Anderson to the Circuit Court of Cook County is denied. The Motion to Remand the complaint of plaintiff Matthews to the Circuit Court of Cook County is granted. Defendants Anchor Organization for Health Maintenance, Rush-Presbyterian-St. Luke's Medical Center, and Rush-Presbyterian-St. Luke's Health Plans, Inc.'s Motion to Dismiss the Complaint of plaintiff Matthews is denied.
Wayne R. Andersen
United States District Judge
Dated: APR 26 1993
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