HLD, v. 32, n. 6 (June 2004)
Sixth Circuit Says Agent Of Employer Did Not Have Standing To
Bring Suit Under ERISA
Plaintiff COB Clearinghouse Corp. sued Aetna U.S. Healthcare, Inc.,
Great West Life and Annuity Insurance Company, Blue Cross and Blue Shield of
Kansas City, and Connecticut General Life Insurance Co. (defendants) claiming
it was the agent for a number of employers that had self-funded employee benefit
plans that were governed by the Employee Retirement Income Security Act (ERISA).
Defendants provided employee healthcare benefits through non-ERISA plans to
some of the same individuals who were also insured under the employers' self-funded
ERISA plans. Plaintiff claimed the insurers were primarily liable for claims
the employers paid because of the application of coordination of benefits provisions
in the plans. Plaintiff's complaint alleged violations of ERISA, federal common
law claims, unfair and deceptive insurance practices, bad faith, and unjust
enrichment. Defendants moved to dismiss the complaint arguing plaintiff lacked
standing to bring the claims and failed to state a claim upon which relief could
be granted. The district court granted the motion on the ground plaintiff did
not have standing to bring the ERISA and federal common law claims, and dismissed
the state law claims as pre-empted by ERISA. Plaintiff appealed the dismissal
of the ERISA and federal common law claims.
The Sixth Circuit affirmed the district court's judgment because
plaintiff lacked standing to bring the claims. Plaintiff entered into agreements
with the employers to determine if the employer made payments under its healthcare
plan for which it was only secondarily liable. Plaintiff then would attempt
to collect the amounts due from the primary payor in return for a percentage
of the amount recovered. ERISA specifically allows for a suit to be brought
only by a participant, beneficiary, or fiduciary for any violations. Moreover,
courts generally have held an assignee of a participant, beneficiary, or fiduciary
may not bring a claim under ERISA.
The appeals court rejected plaintiff's argument that it could bring
suit as the agent of a fiduciary--the various employers. Even assuming the employers
qualified as fiduciaries under ERISA, "that assumption does not confer standing
on COB to sue in its own name as the Employers' agent," said the appeals court.
Thus, because plaintiff did not come within any of ERISA's specifically enumerated
parties that could bring suit, it did not have standing. Accordingly, the appeals
court affirmed the district court's judgment.
COB Clearinghouse Corp. v. Aetna U.S. Healthcare, Inc.,
No. 02-3645, 2004 WL 716804 (6th Cir. April 5, 2004).