Murphy v. Wal-Mart Associates' Group Health Plan

882 F. Supp. 95, 1995 U.S. Dist. LEXIS 4658, 1995 WL 153061
CourtDistrict Court, E.D. Texas
DecidedMarch 20, 1995
Docket1:95-cr-00012
StatusPublished
Cited by1 cases

This text of 882 F. Supp. 95 (Murphy v. Wal-Mart Associates' Group Health Plan) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Murphy v. Wal-Mart Associates' Group Health Plan, 882 F. Supp. 95, 1995 U.S. Dist. LEXIS 4658, 1995 WL 153061 (E.D. Tex. 1995).

Opinion

MEMORANDUM OPINION '

COBB, District Judge.

Plaintiffs Charlie and Hazel Murphy contend that Charlie Murphy was improperly denied medical treatment under Wal-Mart Associates’ Group Health Plan and the Prudential Health Care Plan (Plans). Plaintiffs filed this suit against the above defendants for violations of the Texas Insurance Code, Texas Deceptive Trade Practices and Consumer Protection Act, breach of contract, bad faith, and other claims of fraud relating to the Plans’ refusal to provide medical treatment. Defendants Dr. Allen J. Chernov (Chernov) and the Prudential Insurance Company of America (Prudential) filed a motion to- dismiss for failure to state a claim contending that plaintiffs claims are preempted by the Employee’s Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. Defendants also contend that, as fiduciaries under the Plan, they are improper parties to this suit.

This court finds that ERISA preempts plaintiffs’ state laws claims. This court also finds that the plaintiffs have no independent cause of action against fiduciaries of a benefit plan under ERISA unless liability can be established in the individual capacity of these defendants. 29 U.S.C. § 1132(d)(l)-(2). Therefore, defendants’ Motion to Dismiss for Failure to State a Claim pursuant to Federal Rule of Civil Procedure 12(b)(6) is GRANTED, in part and defendants will remain as named parties subject to 29 U.S.C. section 1132(d).

BACKGROUND

Plaintiff Hazel Murphy works for Wal-Mart Stores, Inc. as an “associate.” As a Wal-Mart associate, Hazel Murphy purchased health care insurance for herself and plaintiff Charlie Murphy under the Wal-Mart Associates’ Group Health Care Plan (Plan). Some time after enrolling in the Plan, Charlie Murphy developed a recurrent, low grade non-Hodgkins lymphoma cancer. The treatment of this cancer was covered under the Plan pursuant to certain conditions and limitations. Early in 1992, Charlie Murphy was treated with chemotherapy at M.D. Anderson Cancer Research Center (M.D. Anderson) in Houston, Texas. In June 1994, The specialists at M.D. Anderson recommended additional specialized treatment in order to prolong Charlie Murphy’s life. This type of treatment involved harvesting bone marrow and preserving it for use after chemotherapy was completed. The recommended procedure is extremely expensive and the probability of patient recovery declines if an individual postpones treatment.

*97 The Plan contacted Dr. Alan J. Chernov and the Institutes of Quality, a division of the Prudential Health.Care Plans, to determine whether this course of treatment was medically necessary and whether the treatment involved experimental or investigatory procedures. Dr. Chernov determined that Charlie Murphy’s resistance to chemotherapy demonstrated that the treatment was not medically appropriate at this time.

Charlie Murphy’s treating physician at M.D. Anderson, Dr. Issa Khouri, appealed this finding on behalf of Mr. Murphy to the Wal-Mart Administrative Committee (Committee). The Committee denied Mr. Murphy’s appeal on the grounds that the treatment was inappropriate for his medical condition under section N of the Plan guidelines. Section N excludes coverage for experiment tal, investigative, unnecessary or inappropriate procedures.

Plaintiffs originally brought this suit in the state district court of Hardin County Texas. Defendants properly removed the case to federal court under 28 U.S.C. § 1331 and 29 U.S.C. § 1001, et seq. (ERISA). If the court determines that the Plan should be analyzed under 29 U.S.C. section 1001, et seq., plaintiffs’ complaint contends that the Plan arbitrarily and capriciously denied benefits and, in fact, abused its discretion by denying plaintiffs’ benefits. Plaintiffs also maintain that ERISA’s preemptive scope is unconstitutional. Specifically, plaintiffs’ contend that ERISA violates the Fifth Amendment because it permits the deprivation of life, liberty or property without due process.

If ERISA does not preempt the state law claims, plaintiffs then assert violations of the Texas Insurance Code, Texas Deceptive Trade Practices and Consumer Protection Act, breach of contract, bad faith and fraud. Plaintiffs also brought a claim for medical malpractice against Dr. Chernov for refusing to recommend further treatment under the Plan.

ANALYSIS

A complaint should not be dismissed under Federal Rule of Civil Procedure 12(b)(6) unless it appears beyond a doubt that plaintiffs can prove no set of facts in support of their claims which would entitle them to relief. McCartney v. First City Bank, 970 F.2d 45, 47 (5th Cir.1992). The allegations contained in plaintiffs’ complaint must be accepted as true and only those contentions within the complaint may be considered in reaching a decision. Green v. State Bar of Texas, 27 F.3d 1083, 1086 (5th Cir.1994).

In the present case, defendants Prudential and Dr. Chernov filed this motion to dismiss for failure to state a claim under Rule 12(b)(6) contending that ERISA preempts plaintiffs’ state law claims and that plaintiffs improperly included these defendants as parties to this suit.

It is well established that courts read section 514(a) of ERISA as deliberately expansive and broadly construe the preemptive scope of the statute. 1 See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987); Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1328 (5th Cir.), cert. denied, — U.S. —, 113 S.Ct. 812, 121 L.Ed.2d 684 (1992). Section 514(a) preempts state law whenever a state law has “a connection with or reference to” an employee benefit plan. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 103 S.Ct. 2890, 2899-2900, 77 L.Ed.2d 490 (1983).

In Pilot Life, the Supreme Court expressly preempted common law tort and contract actions seeking damages for improper processing of disability claims. Pilot Life, 481 U.S. at 46-48, 107 S.Ct. at 1552-53.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Murphy v. Wal-Mart Associates' Group Health Plan
928 F. Supp. 700 (E.D. Texas, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
882 F. Supp. 95, 1995 U.S. Dist. LEXIS 4658, 1995 WL 153061, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murphy-v-wal-mart-associates-group-health-plan-txed-1995.