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U.S. Court in Pennsylvania Rules That ERISA Does Not Apply Extraterritorially

 
 

HLD, v. 28, n. 12 (December 2000)

U.S. Court in Pennsylvania Rules That ERISA Does Not Apply Extraterritorially

After being injured in a high speed boating accident, American Corey Snyder was rushed to a Montreal hospital and came under the care of Dr. Gilles Maurais. Snyder participated in a group healthcare plan issued to his employer, Highway Marines Services, by The Guardian Life Insurance Company ("Guardian"). After obtaining authorization for certain surgical procedures on Snyder, Maurais treated Snyder. Snyder was later transferred to a hospital in Philadelphia. Maurais sent a bill to Guardian for professional services in the amount of $75,750. After several months, Guardian sent a check to Snyder for $38,002, with an explanation of benefits stating that the payment concerned medical services provided by Maurais. Snyder deposited the check into his own account and used the funds for personal needs. Maurais sued Snyder and Guardian in federal district court in Pennsylvania, asserting claims against Snyder for implied contract, quantum meruit, unjust enrichment, conversion, and punitive damages, and against Guardian for implied contract and negligent misrepresentation. Guardian moved to dismiss the two state law claims against it for failure to state a claim, arguing that Snyder's plan with Guardian was governed by the Employee Retirement Income Security Act ("ERISA"), which pre-empted the state law claims.

The U.S. District Court for the Eastern District of Pennsylvania denied the motion, holding that ERISA did not have extraterritorial application and was therefore inapplicable under the facts of this case. The court cited the EEOC v. Arabian Am. Oil Co., 499 U.S. 244 (1991), in which the U.S. Supreme Court found that Title VII did not apply to American citizens employed by American employers outside of the United States. In Arabian, the Court reasoned that "[i]t is a longstanding principle of American law 'that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.'" According to the Supreme Court, this creates a presumption against extraterritoriality unless there is a clearly expressed intent on the part of Congress to the contrary. In the instant case, the court found no language in ERISA that evinced a congressional intent to apply the statute extraterritorially; thus, the court determined that the presumption against extraterritoriality controlled. Because this case concerned an American citizen operated on in Canada by a Canadian surgeon, the court concluded that ERISA was inapplicable. Thus, the court denied Guardian's motion to dismiss.

Maurais v. Snyder, No. 00-2133, 2000 WL 1368024 (E.D. Pa. Sept. 14, 2000) (10 pages).

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