Lind v. Aetna Health, Inc., 10th Cir. (2006)

F I L E D
United States Court of Appeals

Tenth Circuit
PUBLISH
October 31, 2006
UNITED STATES CO URT O F APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
JA M ES D . LIN D and LIN D A

STILLW E LL-LIN D ,
Plaintiffs-Appellants,
v.
No. 05-5055
AETNA HEALTH, IN C.,

Defendant-Appellee.
A PPE AL FR OM T HE UNITED STATES DISTRICT COURT

FO R TH E NO RTH ERN DISTRICT O F O K LAH O M A
(D .C . N O. 04-C V-494-K )
Jason B. Aamodt of M iller Keffer Bullock Pedigo, Tulsa, Oklahoma, and M orris
D. Bernstein, Tulsa, Oklahoma, for Appellants.
Timothy A. Carney of G able and G otwals, Tulsa, Oklahoma, for Appellees.
Before BR ISC OE, M cCO NNELL, and SILER, * Circuit Judges.
M cCO NNELL, Circuit Judge.
The Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001,

can be a fruitless and thorny ground for plaintiffs, and many seek to avoid it
*
The H onorable Eugene E. Siler, Senior Circuit Judge, United States Court
of Appeals for the Sixth Circuit, sitting by designation.
entirely by bringing their insurance claims under state law. The Supreme Court
has increasingly circumscribed such state-law claims, however, finding the preemptive sweep of ERISA to be so extraordinary that it bars all claims of close
relation. M etropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
Nonetheless, James D. Lind (Lind) and Linda Stillwell-Lind sought to bring
claims against their insurer, Aetna Health, Inc. (Aetna), under Oklahoma
comm on law. The Linds believe that their tort and contract claims are not preempted by ERISA , because they challenge not the insurance plan itself, but
actions by Aetna that Appellants claim are outside the scope of that plan. In the
alternative, the Linds seek leave to amend their complaint to include claims under
ERISA for compensatory and punitive damages. The private-action provisions of
ERISA have been narrowly construed, however, to exclude most forms of makewhole relief.
The Linds fall in a long and growing line of plaintiffs who find
themselves squeezed between the broad preemptive sweep of ERISA and narrow
construction of remedies under the Act itself. W e find that the Linds have viable
claims neither inside ERISA nor outside it, and we AFFIRM the district courts
grant of summary judgement and denial of leave to amend the claim.
I. Facts and Procedural Background
James D . Lind, a construction manager, was covered by Aetna under his
wifes health insurance plan. In July 2002, he was diagnosed with M ultiple
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Sclerosis (M S). His symptoms, including recurrent and severe headaches,

dizziness, and depression, left him unable to w ork. Shortly after the diagnosis,
Aetna referred M r. Lind to Dr. Jorge Gonzalez, a neurologist, for treatment. Dr.
Gonzalez prescribed a three-drug regime Copaxone, Provigil, and Klonopin
which successfully reversed M r. Linds symptoms, allowing him to return to
work.
In February 2003, M r. Lind went to a pharmacy to pick up his Provigil
renewal, only to be told by the pharmacist that no further renewals had been
authorized. M r. Lind informed Dr. Gonzalez of the denial, who in turn informed
Aetna of his vigorous objections to the change. Aetna told D r. Gonzalez that M r.
Lind must first try Ritalin, a step drug, before the company would authorize
payment for further Provigil prescriptions. Dr. Gonzalez, after protesting, wrote
M r. Lind a prescription for Ritalin. M r. Lind filled the prescription, began taking
the drug, and almost immediately experienced a renewal of his symptoms. Aetna
re-authorized payment for Provigil several days later, but the new symptoms
proved irreversible, and M r. Lind remains disabled and unable to work. * *
On M ay 21, 2004, the Linds filed a petition in the District Court of Tulsa
County, Oklahoma, against Aetna, alleging medical negligence, medical
**
Appellants also raise claims stemming from a second alleged incident of

misconduct by Aetna, two months later. Because those claims were never before
the lower court, we decline to examine them here. In re Walker, 959 F.2d 894,
896 (10th Cir. 1992).
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negligence under respondeat superior, tortious interference with doctor/patient

relationship, reckless endangerment, loss of consortium, and punitive damages.
Aetna removed the action to the United States D istrict Court for the N orthern
D istrict of O klahoma pursuant to 28 U.S.C. 1331 and 28 U.S.C. 1446(a). On
June 21, 2004, the day Aetnas answer w as due, the U nited States Supreme Court
issued its decision in Aetna Health, Inc. v. Davila, 542 U.S. 200 (2004), which
reaffirmed a broad interpretation of ERISA s preemptive scope. Aetna filed a
motion to dismiss, based largely on Davila, and the Linds moved to amend their
complaint to include claims under ERISA. The district court granted A etnas
motion and denied the Linds. The Linds appeal both rulings.
II. Preemption of state-law claims
W e begin by addressing whether the Linds state-law claims are barred by
ERISA , which preempts all state laws that relate to employee benefit plans. 29
U.S.C. 1144(a). It is undisputed that the Linds original claims are based on
state law and that Aetnas plan is an employee benefit plan; the issue is whether
the claims relate to the A etna plan. This court reviews the district courts
determination of preemption de novo. Airparts Co. v. Custom Benefit Servs. of
Austin, Inc., 28 F.3d 1062, 1064 (10th Cir. 1994).
Both the language of the statute and its legislative history indicate that
Congress intended ERISA to sw eep with broad force. The Acts stated purpose is
to protect the participants in employee benefit plans by providing for
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appropriate remedies, sanctions, and ready access to the Federal courts. 29

U.S.C. 1001(b). The conference report shows that such language was intended
to parallel that of the Labor-M anagement Relations Act of 1947, which
pre-empts any state-law claim [whose resolution] is substantially dependent
upon the analysis of the terms of an agreement made between the parties in a
labor contract. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 55 (1987) (quoting
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985)). As a result, the
Supreme Court has found ERISA to preempt nearly all state claims relating to
causes of action against covered health insurers, even when the elements of the
state cause of action [do] not precisely duplicate the elements of an ERISA
claim. Davila, 542 U.S. at 216.
Appellants face an unenviable task in distinguishing their case from
Davila, in which the Supreme Court found preemption on similar claims and
nearly identical facts. Juan Davilas treating physician prescribed Vioxx to
remedy M r. Davilas arthritis, but Aetna refused to authorize payment until M r.
Davila tried a step drug, Naprosyn, first. Davila, 542 U.S. at 205; Roark v.
Humana, Inc., 307 F.3d 298, 303 (5th Cir. 2002). W hen M r. Davila began taking
Naprosyn, he suffered a severe reaction that required extensive treatment and
hospitalization. Davila, 542 U.S. at 205. He brought claims to recover his
medical costs against Aetna under the Texas Health Care Liability Act, which
provided for broader remedies than did ERISA. Id. The Court held that M r.
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Davilas claims were entirely pre-empted: [A]ny state-law cause of action that
duplicates, supplements, or supplants the ERISA civil enforcement remedy
conflicts with the clear congressional intent to make the ERISA remedy exclusive
and is therefore pre-empted. Id. at 209.
The Linds make several attempts to distinguish their case from Davila,
none of which we find persuasive. First, they argue that this case is distinct
because, rather than deny coverage within the plans rules, Aetna misapplied, or
acted outside of the plan when it did not follow appropriate notification
procedures in declining to renew M r. Linds prescription. That, however, is a
distinction without a difference. Davila is clear that ERISA applies whenever
respondents complain . . . about denials of coverage promised under the terms of
ERISA -regulated employee benefit plans, or to rectify a wrongful denial of
benefits. Id. at 211, 214. The language of ERISA itself makes clear that it
includes civil actions to recover benefits due . . . under the terms of [the] plan.
29 U.S.C. 1132(a)(1)(B). ERISA applies to denials of coverage that are either
proper under the plans rules or improper under the plans rules.
Appellants also argue that their claims for medical negligence and
respondeat superior are outside the scope of Davila. They claim that a Dr. Jane
Doe, employed by Aetna, made the determination that Ritalin rather than
Provigil was the appropriate drug to treat Linds M S. Aetna then imposed this
determination upon Linds treating physician. Appellants Br. 10. In support of
-6-
this claim, the Linds cite Pacificare of Oklahoma, Inc. v. Burrage, 59 F.3d 151
(10th. Cir 1995), in which a patient sued his doctor for medical malpractice and
included a claim for respondeat superior against the doctors employer, a health
maintenance organization. Id. at 153. The Pacificare Court found for the
plaintiff, holding that respondeat superior claims against insurer-employers for
medical malpractice survive ERISA. Id. at 155. Pacificare carves out a very
narrow exception, however. The Court made clear that its holding was based on
the fact that the present claim does not involve the administration of benefits or
the level or quality of benefits promised by the plan; the claim alleges negligent
care by the doctor and an agency relationship between the doctor and the HM O.
Id. This type of claim arises when an HM O plan elects to directly provide
medical services or leads a participant to reasonably believe that it has, rather
than simply arranging and paying for treatment. Id. (quoting Haas v. Group
Health Plan, Inc., 875 F.Supp. 544, 548 (S.D. Ill. 1994)). Such is not the case
here. Dr. Jane Doe was not acting as a treating physician, nor is M r. Lind
alleging medical negligence against his actual treating physician, Dr. G onzalez.
M oreover, there is no agency relationship between Dr. Gonzalez an outside
provider and Aetna for the purposes of prescribing medication. In fact, the
Linds claims are specifically precluded by the language of Pacificare itself,
which allows for claims only where the administration of benefits is not
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involved. Id. Appellants medical negligence claim is unavoidably linked to, and
is therefore preempted by, ER ISA.
III. ERISA claims
W e now turn to whether the Linds were properly denied leave to amend
their complaint to include ERISA claims. W e have held that, under Fed. R. Civ.
P. 15(a), leave to amend shall be given freely, although the district court may
deny leave to amend w here amendment would be futile. A proposed amendment
is futile if the complaint, as amended, would be subject to dismissal. Bradley v.
J.E. Val-M ejias, 379 F.3d 892, 901 (10th Cir. 2004) (quoting Jefferson County
Sch. Dist. v. M oodys Investors Serv., 175 F. 3d 848, 859 (10th Cir. 1999)). W e
review a denial of permission to amend a complaint for abuse of discretion. See
Foman v. Davis, 371 U.S. 178, 182 (1962).
The Linds proposed amended complaint included claims for equitable
relief under ERISA 502(a)(3). That provision mandates that any relief granted
be equitable, 29 U.S.C. 1132(a)(2), which the Supreme Court has found to
preclude most forms of make-whole monetary restitution. In Great-West Life &
Annuity Ins. v. Knudson, 534 U.S. 204 (2002), the Court held that the restitution
of tort proceeds to an insurer w as not an equitable form of relief. Id. at 214. In
the process, the Court laid out a framework for such determinations: In the days
of the divided bench, restitution was available in certain cases at law , and in
certain others in equity. Id. at 212. [F]or restitution to lie in equity, the action
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generally must seek not to impose personal liability on the defendant, but to
restore to the plaintiff particular funds or property in the defendant's possession.
Id. at 214.
Justice Ginsburg and others have noted the lopsided results this
interpretation produces: Because the Court has coupled an encompassing
interpretation of ERISA s preemptive force with a cramped construction of the
equitable relief allow able under 502(a)(3), a regulatory vacuum exists:
[V]irtually all state law remedies are preempted but very few federal substitutes
are provided. Davila, 542 U.S. at 222 (Ginsburg, J., concurring) (internal
quotation marks omitted). She goes on to suggest the remedy that the Appellants
here seek: a broader interpretation of equitable relief under 502(a)(3). She
notes that the respondents in Davila declined the opportunity to amend their
complaints to state claims for relief under 502(a), but offers that such a course
would be an effective remedy others similarly circumstanced might fruitfully
pursue. Id. at 223-24.
Notwithstanding this suggestion, our interpretation of 502(a) has
continued to follow the narrow path laid out by Great-West. In M illsap v.
M cDonnell D ouglas Corp., 368 F.3d 1246 (10th Cir. 2004), we held that while
equitable monetary relief may take the form of accrued benefits due, it could not,
as requested by the plaintiffs, include back-pay: Backpay is compensatory
because the award is measured by an employees loss rather than an employer's
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gain. Id. at 1253. In Callery v. U.S. Life Ins., 392 F.3d 401 (10th Cir. 2004), w e
held that equitable relief does not encompass a claim for proceeds of a lifeinsurance policy. These holdings also accord with our pre-Great-West
interpretation of 502(a)(3). See Sage v. Automation, Inc. Pension Plan & Trust,
845 F.2d 885, 888 n. 2 (10th Cir. 1988) (punitive damages not an appropriate
form of equitable relief); Lafoy v. HM O Colo., 988 F.2d 97, 99-101 (10th Cir.
1993) (compensatory damages not equitable).
The claims here mirror those in Great-West, M illsap, and Callery. The
Linds are seeking compensatory damages for restitution of lost wages,
exacerbation of M r. Linds medical condition, and pain and suffering, as well as
punitive damages. These claims do not seek to restore to the plaintiff particular
funds or property in the defendant's possession, but rather to impose personal
liability. Great-West, 534 U.S. at 214. As such, they fall squarely within the
category of legal remedies and cannot be entertained in this action under
502(a)(3).
This is not to say that the Linds, or similarly situated individuals, are
entirely without remedy. Had the Linds paid for the Provigil out of pocket, they
could have then sued for reimbursement or a reinstatement of coverage. Callery
suggests that, under some circumstances, policyholders might also have an
actionable claim for the refund of insurance premiums. Callery, 392 F.3d at 406.
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But the claims appellants wished to raise in their proposed amended complaint
are entirely legal in nature, and thus are not actionable under the statute.
IV. Conclusion
The Linds original claims are entirely preempted by ERISA, and we
A FFIR M their dismissal by the district court. Because appellants offered no
new, non-frivolous claims, we AFFIRM the district courts denial of leave to
amend the complaint.
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F I L E D

United States Court of Appeals

October 31, 2006

UNITED STATES CO URT O F APPEALS

JA M ES D . LIN D and LIN D A

AETNA HEALTH, IN C.,

A PPE AL FR OM T HE UNITED STATES DISTRICT COURT

Before BR ISC OE, M cCO NNELL, and SILER, * Circuit Judges.

M cCO NNELL, Circuit Judge.

The Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001,

Sclerosis (M S). His symptoms, including recurrent and severe headaches,

Appellants also raise claims stemming from a second alleged incident of

negligence under respondeat superior, tortious interference with doctor/patient

appropriate remedies, sanctions, and ready access to the Federal courts. 29

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