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U.S. Court In Pennsylvania Holds Third-Party Claim For Indemnification Not Subject To Removal Under ERISA


HLD, v. 30, n. 5 (May 2002)

U.S. Court In Pennsylvania Holds Third-Party Claim For Indemnification Not Subject To Removal Under ERISA

Plaintiff Hospital of the University of Pennsylvania (HUP) sued defendant Bryant in state court, alleging that Bryant failed to pay incurred medical expenses. Bryant joined Aetna U.S. Healthcare (Aetna) as a third-party defendant, alleging that Aetna breached its duty to pay Bryant's medical bills. Aetna then removed the case to federal court, arguing that Bryant's claims for denial of benefits was within the scope of the civil enforcement provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Aetna then filed a motion to dismiss.

The U.S. District Court for the Eastern District of Pennsylvania held that the case was improperly removed, and remanded the case back to state court. The court noted that, after "years of debate and conflicting opinions, the ability of a third-party defendant to remove a case from state to federal court remains in doubt." However, the court determined that it need not decide the issue, because, even assuming that third-parties could remove a case, the defendant's third-party claim against Aetna in the instant action was "not separate and independent from the plaintiff's claim." The court further noted that "[m]ost federal courts have determined that a third-party defendant cannot remove a state action to federal court based on defense of ERISA preemption where the third-party claim for indemnification is not 'separate and independent' from the plaintiff's state claims." The court held that Bryant's claim was essentially a claim for indemnification against Aetna, and thus was not separate and independent from HUP's underlying claim for the unpaid medical expenses.

Hospital of the Univ. of Pa. v. Bryant, No. 01-CV-4853, 2002 WL 257852 (E.D. Pa. Feb. 22, 2002) (3 pages).

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