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Childs v. Life Insurance Company of North America

August 12, 2010


The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge


(Doc. No. 18)

Presently before the Court is Defendant Prometheus Laboratories, Inc.'s motion for judgment on the pleadings. (Doc. No. 18.) Plaintiff opposes this motion and Defendant has replied. (Doc. Nos. 20 & 21.) Having fully considered this motion, the Court GRANTS the motion for judgment on the pleadings and also GRANTS Plaintiff leave to amend.


Plaintiff brings this action against his former employer, Prometheus Laboratories, Inc., and the company who underwrote and administered the life insurance policy obtained through that employment, Life Insurance Company of North America (LICNA). (Doc. No. 1, Ex. A (Compl.) ¶ 6.) Plaintiff claims that when he became disabled LICNA improperly denied his claim. (Id. ¶ 9.) Moreover, Plaintiff alleges that Defendant Prometheus acted in various ways which deprived Plaintiff of the disability benefits to which he was entitled. (See Id. ¶¶ 16, 20, & 22.)


"After the pleadings are closed, but within such time as not to delay the trial, any party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings attacks the legal sufficiency of the claims alleged in the complaint and requires the moving party to establish that there is no issue of material fact and that it is entitled to judgment as a matter of law. Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). "The standard for granting a Rule 12(c) motion for judgment on the pleadings is identical to that of a Rule 12(b)(6) motion for failure to state a claim." Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001); accord Spivey v. Ohio, 999 F. Supp. 987, 991 (N.D. Ohio 1998) (where motion for judgment on the pleadings raises a Rule 12(b)(6) defense, court properly applies the standard for a Rule 12(b)(6) motion). This Court must construe "all material allegations of the non-moving party as contained in the pleadings as true, and [construe] the pleadings in the light most favorable to the [non-moving] party." Doyle v. Raley's Inc., 158 F.3d 1012, 1014 (9th Cir. 1998).



One of Plaintiff's claims in this case arises under the Employee Retirement Income Security Act of 1974 (ERISA). Congress enacted ERISA to "protect . . . the interests of participants in employee benefit plans and their beneficiaries[] by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts." 29 U.S.C. § 1001(b); see also Aetna Health Inc. v. Davila, 542 U.S. 200 (2004). "To this end, ERISA includes expansive pre-emption provisions, which are intended to ensure that employee benefit plan regulation would be "'exclusively a federal concern.'" Aetna Health, 542 U.S. at 208 (citations omitted). Under this pre-emption scheme, "any 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 (citation omitted).

"There are two strands of ERISA preemption: (1) 'express' preemption under ERISA § 514(a), 29 U.S.C. § 1144(a); and (2) preemption due to a 'conflict' with ERISA's exclusive remedial scheme set forth in 29 U.S.C. § 1132(a), notwithstanding the lack of express preemption." Paulsen v. CNF Inc., 559 F.3d 1061, 1081 (9th Cir. 2009) (citing Cleghorn v. Blue Shield of Cal., 408 F.3d 1222, 1225 (9th Cir. 2005)). The first of these preempts Plaintiff's state-law claims against Prometheus.

This strand "expressly preempts 'any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.'" Id. (citation omitted). "[T]he Supreme Court has instructed that a law relates to an employee benefit plan if it has either a 'connection with' or 'reference to' such a plan." Id. at 1082 (citing Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990)). "To determine whether a law has a forbidden 'reference to' ERISA plans, we ask whether (1) the law 'acts immediately and exclusively upon ERISA plans,' or (2) 'the existence of ERISA plans is essential to the law's operation.' " Golden Gate Rest. Ass'n v. City & County of S.F., 546 F.3d 639, 657 (9th Cir. 2008) (quoting Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 325 (1997)).

"[T]o determine whether a state law has the forbidden connection [with an ERISA plan], we look both to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive, as well as to the nature of the effect of the state law on ERISA plans." Dillingham, 519 U.S. at 325 (internal citations and quotation marks omitted). In this context, the Ninth Circuit has "recognized that [t]he basic thrust of the pre-emption clause [is] to avoid a multiplicity of regulation in order to permit the nationally uniform administration of employee benefit plans."*fn1 Paulsen, 559 F.3d at 1082 (quoting Rutledge v. Seyfarth, Shaw, Fairweather & Geraldson, 201 F.3d 1212, 1216 (9th Cir. 2000)) (quotation marks omitted). With this type of preemption, "a state law claim is preempted when the claim bears on an ERISA-regulated relationship, e.g., the relationship between plan and plan member, between plan and employer, between employer and employee" at least to the extent an employee benefit plan is involved. Id. (citing Providence Health Plan v. McDowell, 385 F.3d 1168, 1172 (9th Cir.2004)); see also Gen. Am. Life Ins. Co. v. Castonguay, 984 F.2d 1518, 1521 (9th Cir. 1993).

Plaintiff's state-law claims against Defendant Prometheus are for intentional interference with an economic relationship, negligent interference with an economic relationship, and willful misconduct. (See Compl. ΒΆΒΆ 12--22.) In light of this, the Court can quickly determine that these claims are not forbidden under the "reference" part of the preemption test. It is clear that these laws do not act "immediately and exclusively" upon ERISA plans and that the existence of an ERISA plan is not essential to these laws' operations. Golden Gate, ...

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