Monday, November 18, 2002
Medical Negligence Claim Not Preempted by ERISA, Ninth Circuit Rules
By a MetNews Staff Writer
A widow’s claim that her husband’s employer negligently advised him to seek medical treatment in Saudi Arabia rather than return immediately to the United States is not preempted by ERISA, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The court reinstated most of Nga Bui’s suit against Lucent Technologies; its predecessor AT&T, and International SOS Assistance, Inc., which had a contract with AT&T and Lucent to provide emergency assistance to overseas workers.
Bui’s husband, Hung M. Duong, died in Jeddah, Saudi Arabia, in August 1996. About a week before his death, he learned he was critically ill and contacted Lucent, which had spun off from AT&T, and SOS.
Bui’s complaint alleges that a doctor employed by Lucent, as well as SOS, advised Duong that Erfan Hospital in Jeddah had adequate facilities, and that having surgery performed there would be less risky than attempting evacuation to this country.
A Lucent employee allegedly told Duong that it would take a week or two to have his passport—which he and his co-employees were required to surrender upon arrival in the kingdom—returned to him.
The complaint, filed in the U.S. District Court for the District of Oregon, charged the three companies with negligence in advising Duong to remain in Saudi Arabia and in failing to respond to his requests for further information on evacuation. It also alleged that AT&T and Lucent negligently chose to do business with SOS, and that they breached the terms of their employee insurance plan.
U.S. Magistrate Judge Dennis James Hubel granted summary judgment, holding that all of the claims were preempted by the Employee Retirement Income Security Act of 1974.
But Judge Thomas G. Nelson, writing for the Ninth Circuit, said that ERISA’s preemption clause, while broadly worded, should be pragmatically interpreted as barring only those state-law claims that relate to plan administration and not those that deal with traditional subjects of state regulation.
“We join the Third, Fifth, and Tenth Circuits in holding that ERISA’s preemption clause...does not preempt actions involving allegations of negligence in the provision of medical care, even if the patient procures the care through an ERISA plan,” Nelson wrote. “...If a claim involves a medical decision made in the course of treatment, ERISA does not preempt it; but if a claim involves an administrative decision made in the course of administering an ERISA plan, ERISA preempts it.”
Applying that standard, Nelson said the district judge was correct in dismissing the breach-of-contract claims, since they related directly to the plan. Similarly, he explained, Duong’s employers cannot be sued for retaining SOS, since that was an administrative decision.
But the widow can proceed with all claims for negligent advice and breach of duty concerning medical treatment, Nelson said.
The case is Bui v. American Telephone and Telegraph Company Incorporated, 01-35509.
Copyright 2002, Metropolitan News Company