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Dukes v. U.S. Healthcare

filed: June 19, 1995.

CECILIA DUKES, TRUSTEE AD LITEM OF THE ESTATE OF DARRYL DUKES, DECEASED, APPELLANT
v.
U.S. HEALTHCARE, INC.; GERMANTOWN HOSPITAL & MEDICAL CENTER; WILLIAM W. BANKS, M.D.; CHARLES R. DREW MENTAL HEALTH CENTER; EDWARD B. HOSTEN, M.D. SERENA MARY VISCONTI, DECEASED, BY LINDA AND RONALD VISCONTI, AS ADMINISTRATORS OF THE ESTATE OF SERENA MARY VISCONTI, DECEASED; LINDA VISCONTI; RONALD VISCONTI, IN THEIR OWN RIGHT, APPELLANTS V. U.S. HEALTH CARE, A/K/A THE HEALTH MAINTENANCE ORGANIZATION OF PENNSYLVANIA/NJ



On Appeal From the United States District Court For the Eastern District of Pennsylvania. (D.C. Civil Action No. 93-cv-00577). (D.C. Civil Action No. 93-cv-06495).

Before: Stapleton, Roth and Lewis, Circuit Judges.

Author: Stapleton

Opinion OF THE COURT

STAPLETON, Circuit Judge:

The plaintiffs in these two cases filed suit in state court against health maintenance organizations ("HMOs") organized by U.S. Healthcare, Inc., claiming damages, under various theories, for injuries arising from the medical malpractice of HMO-affiliated hospitals and medical personnel. The defendant HMOs removed both cases to federal court, arguing (1) that the injured person in each case had obtained medical care as a benefit from a welfare-benefit plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461 (1988), (2) that removal is proper under the Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987), "complete preemption" exception to the "well-pleaded complaint rule," and (3) that the plaintiffs' claims are preempted by § 514(a) of ERISA, 29 U.S.C. § 1144(a). The district courts agreed with these contentions and dismissed the plaintiffs' claims against the HMOs. The plaintiffs appeal those rulings and ask that their claims against the HMOs be remanded to state court.

We hold that on the record before us, the plaintiffs' claims are not claims "to recover [plan] benefits due . . . under the terms of [the] plan, to enforce . . . rights under the terms of the plan, or to clarify . . . rights to future benefits under the terms of the plan" as those phrases are used in § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B). Accordingly, we hold that Metropolitan Life 's "complete preemption" exception is inapplicable and that removal of these claims from state court was improper. We will reverse the judgments of the district courts and will remand each case to district court with instructions to remand the cases to the state courts from which they were removed.

I.

A.

Suffering from various ailments, Darryl Dukes visited his primary care physician, defendant Dr. William W. Banks, M.D., who identified a problem with Darryl's ears. A few days later, Banks performed surgery and prepared a prescription ordering that blood studies be performed. Darryl presented that prescription to the laboratory of Germantown Hospital and Medical Center but the hospital refused to perform the tests. The record does not reveal the reasons for the hospital's refusal.

The next day, Darryl sought treatment from defendant Dr. Edward B. Hosten, M.D. at the Charles R. Drew Mental Health Center, who also ordered a blood test. This time, the test was performed. Darryl's condition nevertheless continued to worsen and he died shortly thereafter. Darryl's blood sugar level was extremely high at the time of his death. That condition allegedly would have or could have been diagnosed through a timely blood test.

Darryl received his medical treatment through the United States Health Care Systems of Pennsylvania, Inc., a federally qualified health maintenance organization organized by U.S. Healthcare. As a qualified HMO under the federal Health Maintenance Organization Act of 1973, 42 U.S.C. §§ 300e-300e-17 (1988), this U.S. Healthcare HMO provides basic and supplemental health services to its members on a pre-paid basis.*fn1 As is often the case, Darryl received his membership in the HMO through his participation in an ERISA-covered welfare plan sponsored by his employer.

Darryl's wife, Cecilia Dukes, brought suit in state court alleging medical malpractice and other negligence against numerous defendants, including Banks, Hosten, the Germantown Hospital, and the Drew Center. She also brought suit against the HMO, alleging that as the organization through which Darryl received his medical treatment, it was responsible, under a Pennsylvania state law ostensible agency theory (the "agency theory"), for the negligence of the various doctors and other medical-service providers. See Boyd v. Albert Einstein Medical Ctr., 377 Pa. Super. 609, 547 A.2d 1229, 1234-35 (Pa. Super. Ct. 1988) (holding that an HMO may be held liable for malpractice under an ostensible agency theory where a patient looks to the HMO for care and the HMO's conduct leads the patient to reasonably believe that he or she is being treated by an employee of the HMO). She alleged further that the HMO failed to exercise reasonable care in selecting, retaining, screening, monitoring, and evaluating the personnel who actually provided the medical services (the "direct negligence theory").

The HMO removed the case to district court pursuant to the Metropolitan Life complete-preemption exception to the "well-pleaded complaint rule." In its notice of removal, it claimed that the HMO is part of -- or at least plays a role in -- the ERISA plan to provide health benefits and that Dukes' claims, properly construed, "are directed to the structure and operation of the employer benefit plan." (Dukes app. at 31.) In its view, Dukes' claims therefore "relate to" the welfare plan and accordingly are preempted under ERISA § 514(a), 29 U.S.C. § 1144(a).

Dukes moved for a remand and the HMO moved to dismiss. The district court denied Dukes' motion and granted the HMO's, explaining that Dukes' claims "related to" an ERISA plan -- and thus were preempted -- because (1) "any ostensible agency claim must be made on the basis of what the benefit plan provides and is therefore 'related' to it" and (2) "the treatment received must be measured against the benefit plan and is therefore also 'related' to it." Dukes v. United States Health Care Sys., Inc., 848 F. Supp. 39, 42 (E.D. Pa. 1994). It remanded to state court the remainder of Dukes' claims against the other defendants. Id. at 43.

B.

Ronald and Linda Visconti are the biological parents of Serena Visconti, who was stillborn. During the third trimester of her pregnancy with Serena, Linda apparently developed symptoms typical of preeclampsia. The Viscontis claim that Linda's obstetrician, Dr. Wisniewski, negligently ignored these symptoms and that this negligence caused Serena's death.

Like Darryl Dukes, Linda received her medical treatment through a federally qualified HMO organized by U.S. Healthcare. This HMO was called the Health Maintenance Organization of Pennsylvania/New Jersey. The Viscontis received their membership in the HMO through an ERISA-covered welfare plan.

Ronald Visconti, as administrator of Serena's estate, and Ronald and Linda, in their own right (collectively, "the Viscontis"), brought suit in the Philadelphia County Court of Common Pleas. They attempted to hold the HMO liable for Dr. Wisniewski's malpractice under ostensible and actual agency theories, alleging that when Linda became pregnant, the HMO held out Dr. Wisniewski as a competent and qualified participating obstetrician/gynecologist. They also sued the HMO under a direct negligence theory, claiming, among other things, that the HMO was negligent in its selection, employment, and oversight of the medical personnel who performed the actual medical treatment.

The HMO removed the case to federal court, asserting that the Viscontis' claims were completely preempted by ERISA. It then filed a motion to dismiss, and the Viscontis filed a motion to remand, contending that removal was improper and that ERISA did not preempt their state law claims. The district court denied the Viscontis' motion but granted the HMO's motion to ...


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