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Sixth Circuit Says Agent Of Employer Did Not Have Standing To Bring Suit Under ERISA

 
 

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).

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