United States District Court, N.D. Illinois, Eastern Division
June 8, 2005.
SHARON TAWSE, Plaintiff,
DHL AIRWAYS and THE PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA, Defendants.
The opinion of the court was delivered by: JOHN GRADY, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Sharon Tawse has brought this action against DHL
Airways, her former employer, and Prudential Life Insurance
Company seeking to recover long-term disability benefits
allegedly owed to her under an employee benefits plan covered by
the Employee Retirement Income Security Act of 1974,
29 U.S.C. §§ 1001, et seq. ("ERISA"). The plan was underwritten by
Prudential and administered by DHL. The amended complaint alleges
an ERISA claim for wrongful denial of benefits against both
defendants (Count I), an ERISA claim for wrongful failure to
provide plan documents against DHL (Count II), a claim under
Section 155 of the Illinois Insurance Code, 215 ILCS 5/155, for
"vexatious and unreasonable" denial of benefits against
Prudential (Count III), and an Illinois common law "bad faith"
claim against both defendants (Count IV).
Prudential has filed a motion to dismiss the state law counts under Fed.R.Civ.P. 12(b)(6) on the ground that the
claims are preempted under ERISA. The motion is not contested.
Section 514(a) of ERISA preempts "any and all State laws insofar
as they may now or hereafter relate to any employee benefit
plan." 29 U.S.C. § 1144(a); see also Egelhoff v. Egelhoff
ex. rel. Breiner, 532 U.S. 141, 146 (2001) ("this broadly worded
provision is clearly expansive"); Pilot Life Ins Co. v.
Dedeaux, 481 U.S. 41 (1987) (preemption provision is
"deliberately expansive"). A state law will "relate to" an
employee benefit plan if that law "has a connection with or
reference to such a plan," District of Columbia v. Greater
Washington Bd. of Trade, 506 U.S. 125, 129 (1992), or if the
court's "inquiry must be directed to the plan." Ingersoll-Rand,
Co. v. McClendon, 498 U.S. 133, 139 (1990).
We have no trouble concluding that the state claims pled here
are preempted. Count III alleges that Prudential acted
"vexatious[ly] and unreasonabl[y]" in violation of Section 155
when it denied Tawse's claim for benefits under the plan. And
Count IV states that defendants, in rejecting her claim, breached
their duty to "deal fairly and in good faith." Because neither of
these claims can be decided without "reference to" the plan, they
are clearly superseded by ERISA. See Klassy v. Physicians Plus
Ins. Co., 371 F.3d 952, 957 (7th Cir. 2004) ("ERISA provides a
remedy for plan participants wrongly denied benefits. However, such claims
must be brought under ERISA and creatively pleading a denial of benefits claim as a state law claim does not defeat the broad
preemptive force of ERISA."); see also Tomczyk v. Blue Cross
& Blue Shield of Wisconsin, 951 F.2d 771, 777 (7th Cir. 1991)
(state claim for bad faith preempted); Dwyer v. UNUM Life Ins.
Co., 2003 WL 22844234, at *5 (N.D. Ill. Dec. 1, 2003) (claim
under § 155 of the Illinois Insurance Code preempted).
Prudential's motion to dismiss Counts III and IV [23-1] is
granted. Count IV is also dismissed, sua sponte, as to
defendant DHL. The discovery stay entered on February 16, 2005 is
hereby lifted. Discovery is to proceed forthwith on Counts I and
II and a status hearing is set for July 13, 2005 at 10:30.
© 1992-2005 VersusLaw Inc.