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August 2012

Brady v. United of Omaha Life Insurance Co. ? Injunctive Relief Claims Dismissed Because Duplicative of Benefits Claim and Preempted by ERISA.

District Court Dismissed Plaintiff's Requests for Injunctive Relief Because They Were either Preempted by ERISA, Unworkable and Incurably Imprecise, or Duplicative of Plaintiff's Benefits Claim.

2012 U.S. Dist. LEXIS 117434 (N.D. Cal. Aug. 20, 2012)

In a case involving a claim for long term disability benefits from an insurer of an ERISA governed plan, the United States District Court for Northern California dismissed Plaintiff’s claims for injunctive relief.

Plaintiff, through the sponsorship of her employer, was enrolled in a long term disability plan (“the Plan”) administered by Defendant United of Omaha Life Insurance Company (“United of Omaha”).  She made a claim for long term disability benefits on the basis she was unable to perform her job duties due to symptoms of Multiple Sclerosis.  United of Omaha denied Plaintiff’s claim and her appeal, which prompted Plaintiff to file a complaint against United of Omaha.

Plaintiff’s complaint asserted two causes of actions.  The first cause of action was for benefits under 29 U.S.C. section 1132(a)(1)(B) and for attorneys’ fees and costs under Section 1132(g).  The second cause of action was for various forms of injunctive relief under Section 1132(a)(3) (ERISA’s equitable relief provision).  In the second cause of action, Plaintiff sought: 1) an injunction barring United of Omaha from relying on an interpretation of “total disability” different from that required under California law; 2) an injunction barring United of Omaha from obtaining input from medical consultants who were not appropriately trained or experience; 3) money damages equal to attorneys’ fees and costs; and 4) a judgment enjoining United of Omaha from terminating benefits.

United of Omaha filed a motion to dismiss Plaintiff’s second cause of action for equitable relief pursuant to Federal Rule of Civil Procedure 12(b)(6).  United of Omaha contended the equitable relief sought by Plaintiff was not permissible under ERISA, or that the relief requested was duplicative of Plaintiff’s cause of action under Sections 1132(a)(1)(B) and (g).

The Court dismissed with prejudice all of the equitable remedies sought in Plaintiff’s second cause of action.  The Court found the relief sought by Plaintiff barring United of Omaha from denying benefits based on an interpretation of “total disability” different from that required under California law failed to state a claim as a matter of law because the California law was preempted by ERISA.  The Court held Plaintiff’s request for an injunction barring United of Omaha from obtaining input from medical consultants who were not appropriately trained or experience was unworkable and incurably imprecise because it failed to give adequate notice as to what would be sufficient for future compliance.  The Court also found that, as it sought relief for the benefit of all Plan participants, the claim should have been brought as a class action.  The Court held Plaintiff’s requests for injunctive relief relating to attorneys’ fees and United of Omaha terminating her benefits were duplicative of the Section 1132(a)(1)(B) and (g) claims asserted in the first cause of action.

Please click here for the opinion.

This decision may be cited now as persuasive non-precedential authority.  The decision may be modified by further proceedings in the district court or on appeal.

This and other case bulletins, as well as other publications of Gordon & Rees LLP, may be found at www.gordonrees.com.

ERISA

Courtney Culwell Hill



ERISA
Insurance
Life, Health & Disability