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BUTLER v. WU

April 22, 1994

EDWARD M. BUTLER, Administrator Ad Prosequendum for the Heirs-at-Law of EDWARD J. BUTLER, deceased and as Administrator of the Estate of EDWARD J. BUTLER, deceased and individually, Plaintiffs,
v.
JACK WU, M.D.; U.S. HEALTHCARE, INC.; and JOHN DOE, M.D., Defendants



The opinion of the court was delivered by: JOSEPH E. IRENAS

 IRENAS, District Judge:

 Plaintiff filed a medical malpractice action against a health maintenance organization ("HMO") and one of its participating physicians, alleging that the negligence of the physician had contributed to the death of plaintiff's decedent. Defendant U.S. Healthcare ("USH") now moves to dismiss the complaint against it, alleging that plaintiff's state-law claims are preempted by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., and that to the extent plaintiff's claims are not preempted by ERISA, the New Jersey HMO Act ("HMO Act"), N.J.S.A. 26:2J-1 et seq., renders USH immune from suit. Plaintiffs oppose the motion and move for remand. Because we find that plaintiff's state law claims are preempted by ERISA, defendant's motion will be granted. In addition, because the remaining action is a state-law malpractice suit over which we lack subject matter jurisdiction, plaintiff's cross-motion to remand will be granted.

 A. Factual Background

 Defendant U.S. Healthcare, Inc. is a health maintenance organization governed by the ERISA and the New Jersey HMO Act. USH maintains a wholly owned subsidiary known as the Health Maintenance Organization of New Jersey ("HMO-NJ"), which contracts with independent physicians to provide health care services to employees of its contracted member groups. *fn1" Plaintiff's decedent, Edward J. Butler ("Butler"), was a participant in HMO-NJ by means of his employment with the Orleans Group.

 On January 15, 1991, Butler went to Dr. Jack Wu because of a sore throat and difficulty swallowing. Complaint at P 10. Butler continued to feel discomfort and on March 19, 1991, Dr. Wu referred him to Dr. Angello S. Agro for his throat problems. Id. at P 12. Dr. Agro diagnosed Butler as suffering from a swelling of the epiglottis with erythema, *fn2" a jugulodigastric node on the left side of the neck, and a supraglottic neoplasm. Butler subsequently underwent a laryngoscopy and tracheostomy on March 24, 1991. Id. at P 13. He died on June 26, 1992. Id. at P 16.

 B. Procedural Background

 On March 19, 1993, plaintiff brought suit in the Superior Court of New Jersey, Law Division, Camden County, against Dr. Wu, USH, and other unnamed physicians, alleging causes of action for negligence, constructive misrepresentation, malpractice, breach of warranty, and wrongful death. Plaintiff contended that Dr. Wu's inaction caused his decedent to suffer severe pain, permanent injury, and disfigurement, and ultimately led to Butler's death. Plaintiff also argued that USH was liable for failing to supervise the care and medical treatment provided by Dr. Wu.

 USH filed a notice of removal to the United States District Court for the District of New Jersey, asserting that plaintiff's claims "related to" an employee benefit plan as that term is defined by ERISA, and were therefore subject to federal jurisdiction. The petition for removal was granted on August 13, 1993.

 On November 3, 1993, USH filed a motion to dismiss for failure to state a cause of action pursuant to Fed. R. Civ. P. 12(b)(6), and in the alternative moved for summary judgment pursuant to Fed. R. Civ. P. 56. The gist of the defendant's submission was that the plaintiff's state-law tort claims against USH were preempted by ERISA, and, that to the extent they were not preempted, the HMO Act rendered it immune from suit. Plaintiff filed a cross-motion for remand, contending that ERISA did not apply to the facts of this case and therefore the federal courts did not have subject matter jurisdiction.

 II. LEGAL ANALYSIS

 A. Standard of Review

 Under Fed. R. Civ. P. Rule 56(c), "summary judgment is proper 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" ...


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