Monday, September 20, 2010

ERISA Preemption of State Malpractice Claim

Erisa In Taylor v. UAW-GM, a plaintiff alleged legal malpractice based on a plan attorney's denial of benefits.  The district court held that the state malpractice claim was preempted by ERISA because it was dependent upon her entitlement to benefits under that act:

Despite their different captions, all three claims allege that Defendants denied Plaintiff the legal services she was entitled to under the Plan...It is not the label placed on a state law claim that determines whether it is preempted, but whether in essence such a claim is for recovery of an ERISA plan benefit...This is not to say that all common law legal malpractice or quantum meruit claims against plan attorneys would be preempted by ERISA.  But the thrust of Plaintiff's allegations in this case is that she was improperly denied benefits under the Plan.

Hat Tip:  Alex Long


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To provide some context, it is important to note that the employee benefit plan here was a legal services plan (i.e., the alleged malpractice was committed in the course of providing the plan's benefits, legal services), thus distinguishing the many cases that have found state professional negligence claims against plan attorneys to not be preempted by ERISA even though the alleged malpractice involves services to a plan. See, e.g. Custer v. Sweeney, 89 F.3d 1156, 1167 (4th Cir. 1996); Gerosa v. Savasta & Co., Inc., 329 F.3d 317, 328 (2d Cir. 2003); Arizona State Carpenters Pension Trust Fund v. Citibank, 125 F.3d 715, 724 (9th Cir. 1997).

Posted by: kpj | Sep 21, 2010 2:24:11 PM

It's also worth noting that this case is obviously wrong with respect to the malpractice claim (and it's unpublished, and it was brought by a pro se litigant, so maybe it doesn't merit being put in the spotlight on this blog). State professional malpractice claims against attorneys who provide services (or don't) pursuant to a legal services plan are no more preempted than are state medical malpractice claims against doctors who provide services pursuant to a health plan -- the Supreme Court essentially stated as much in Pegram v. Herdrich, 530 U.S. 211, 236-37 (2000) when it rejected the proposition that health plan doctors are ERISA fiduciaries subject to ERISA's fiduciary duties.

Posted by: kpj | Sep 21, 2010 3:09:39 PM

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