to avoid using the surgery center. Compl. PP 20-24. As we explain below, the first reading is preempted by ERISA, the third fails to state a claim under Indiana law, but the second survives both preemption and an attack for failure to state a claim.
Among other things, ERISA governs employee welfare benefit plans, including plans that provide "medical, surgical, or hospital care" benefits for participants and beneficiaries.
29 U.S.C. § 1002(1)(A). In order to ensure uniform regulation of benefit plans, ERISA § 514(a) declares that ERISA's provisions preempt "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a)
; New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 131 L. Ed. 2d 695, 115 S. Ct. 1671, 1677 (1995). Because ERISA § 502 creates a cause of action for recovery of benefits, 29 U.S.C. § 1132(a), state law is preempted to the extent that a beneficiary or participant relies upon it to recover benefits. Pohl v. National Benefits Consultants, Inc., 956 F.2d 126, 127 (7th Cir. 1992) (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 95 L. Ed. 2d 39, 107 S. Ct. 1549 (1987)); see also Rice v. Panchal, 65 F.3d 637, 646 n.10 (7th Cir. 1995) (explaining that complete preemption under § 502(a) necessarily entails preemption under § 514(a)).
Accordingly, the first possible reading of Grand Park's intentional interference claim--that the defendant must pay the plaintiff medical benefits under the assignments executed by the patients--is preempted as an "effort to use state law, including state common law, to obtain benefits" under the health insurance plans Pohl, 956 F.2d at 127. To the extent that Grand Park seeks to collect benefits pursuant to the assignments, the plaintiff acts as a "beneficiary" under ERISA, Kennedy v. Connecticut Gen. Life Ins. Co., 924 F.2d 698, 700 (7th Cir. 1991), and must sue under ERISA § 502(a) for recovery, Pilot Life Ins. Co., 481 U.S. at 52. At this stage of the litigation, however, we will refrain from sua sponte converting the intentional interference claim unto a § 502(a) claim; it is unclear that direct suit on the assignments of benefits is the theory pursued by the plaintiff, and the plaintiff seems to disavow this theory, see Pl.'s Resp. at 8-9. We simply hold that, to the extent the complaint purports to state a claim under Indiana law for payment of benefits under the plan, such a claim is preempted.
However, the second possible reading of the complaint--that the defendant is interfering with Grand Park's existing contracts with patients who have outstanding balances--survives preemption. Under this reading of the complaint, Grand Park does not seek benefits from Inland at all. Rather, the plaintiff alleges that certain patients have received medical treatment but have failed to pay outstanding balances, Grand Park was pursuing collection attempts in state court, see Pl.'s Resp. at 8, and Inland urges the patients not to pay. This theory of recovery does not refer to the health insurance plans. Regardless of whether the medical treatment was covered by Inland's health insurance plan, Grand Park alleges that there exists a contract between the surgery center and its patients, and that Inland declares that employees should not pay the outstanding balances.
Indeed, under this reading of the complaint, the plaintiff does not even seek recovery of the benefits from Inland; Grand Park may recover only damages in the amount caused by Inland's exhortations, not those damages caused by some other reason, and Grand Park will not necessarily recover an amount equal to the benefits covered by the health insurance plans.
Finally, we note that Inland is the named defendant, not the health insurance plans themselves, and thus any damages would be paid by Inland rather than the plans.
Thus, insofar as this action is premised on the defendant's interference with Grand Park's attempts to collect outstanding balances from the specified patients, the suit does not undermine ERISA's promotion of a uniform body of benefits law, and accordingly survives preemption.
Lastly, the third possible reading of the intentional interference with contract claim--that Inland has caused patients and surgeons to refrain from using the surgery center in the future--does not adequately state a claim. Under Indiana law, tortious interference with a contractual relationship requires: (1) the existence of a valid and enforceable contract; (2) the defendant's knowledge of the contract's existence; (3) the defendant's intentional inducement of breach of the contract; (4) the absence of justification
; and (5) damages resulting from the inducement of the breach. Winkler v. V.G. Reed & Sons, 638 N.E.2d 1228, 1235 (Ind. 1994). Because the existence of a contract is required for recovery, interference with future doctor-patient contractual relationships, or any future contractual relationship, does not state a claim for intentional interference with a contractual relationship. See Lutheran Hosp. v. Doe, 639 N.E.2d 687, 693 (Ind. Ct. App. 1994). Accordingly, we dismiss the intentional interference with contract claim insofar as it premises recovery on interference with future contractual relationships.
B. Libel and Slander (Count II)
In Count II, the plaintiff alleges that Inland committed libel and slander by announcing that the surgery center substantially overcharged patients and provided unnecessary and inappropriate medical treatment. Inland allegedly communicated the accusations to health insurance plan participants, the employees' union, other patients, non-patients, physicians, and other health care providers. Compl. PP 13, 14, 26. Because ERISA does not preempt this defamation claim, we deny the defendant's motion to dismiss this count.
Although not explicitly holding that defamation claims escape preemption by ERISA, discussion in Mackey v. Lanier Collection Agency & Serv., 486 U.S. 825, 100 L. Ed. 2d 836, 108 S. Ct. 2182 (1988), suggests that at least some defamations claims do survive. In explaining that a generally applicable state garnishment procedure could apply to benefits paid to welfare benefit plan participants, the Court described the two types of suits that can be brought against ERISA plans. First, ERISA § 502 provided for actions to enforce a plan participant's rights or to recover benefits due under a plan. Id. at 832. Second, the Court explained, there are "relatively commonplace" "lawsuits against ERISA plans for run-of-the-mill state-law claims such as unpaid rent, failure to pay creditors, or even torts committed by an ERISA plan," and these types of torts are not preempted by ERISA. Id. at 834.
To support this proposition, the Court cited three examples of cases brought in state court, id. at 833 n. 8, including Abofreka v. Alston Tobacco Co., 288 S.C. 122, 341 S.E.2d 622 (S.C. 1986). In Abofreka, a medical doctor treated two patients covered by their employer's benefit plan, and submitted claims for health insurance benefits on the patients' behalf. 341 S.E.2d at 624. The benefits plan issued and posted a memorandum, asking employees to refrain from seeking treatment from the doctor "because his treatment and chargers were 'not within the usual and customary realm of treatment and charges.'" Id. Ultimately, the doctor successfully sued the benefits plan and the employer for defamation.
Because the Court in Mackey cited Abofreka as an example of a run-of-the-mill tort suit that escapes ERISA preemption, we hold that Grand Park's defamation claim also survives. See also Pohl v. National Benefits Consultants, 956 F.2d 126, 128 (7th Cir. 1992) (citing Abofreka as example of "banana peel"-type case that survives ERISA). Although it seems that a defamation claim could present a challenge to the plan's processing of benefits,
in the instant action Grand Park sues Inland, not the plan itself, as the defendant, thus mollifying concerns that the plaintiff is trying an end-run. Cf. Memorial Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 248-49 (5th Cir. 1990). In addition, the plaintiff seeks damages for the harm done to its reputation, rather than for unpaid benefits. We thus conclude that Count II is not preempted.
For the reasons set forth above, we grant in part and deny in part the defendant's motion to dismiss. In addition, because it appears that the relevant witnesses and evidence are primarily located in the Northern District of Indiana, and that Indiana law governs this case, we order the parties to file briefs addressing the propriety of transferring this case to that district under 28 U.S.C. § 1404(a) on or before April 11, 1996. We reset the status hearing currently set for April 12, 1996 to April 23, 1996 at 10:00 a.m. It is so ordered.
MARVIN E. ASPEN
United States District Judge