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ERISA Preemption Debate Continues in Keystone State
A Legal Intelligencer story said it is still unclear
whether the US 3rd Circuit Court of Appeals will take up
the issue or let it percolate a while — or if the conflict
in the Eastern District will simply resolve itself.
The flurry of activity began in July when Senior US
District Judge Clarence Newcomer handed down Rosenbaum v.
UNUM Life Insurance Co. — a decision that pleased
plaintiffs’ lawyers because it held that ERISA does not
pre-empt a bad-faith claim.
New Trend?
Newcomer found that two recent decisions from the US
Supreme Court had effectively set a “new trend in the
federal law” that called for a more liberal application of
ERISA’s “savings clause,” which exempts a law from
pre-emption if it “regulates insurance.” (see
Federal Judges
Disagree on ERISA Pre-Emption
)
In August fellow jurist US District Ronald Buckwalter
handed down Sprecher v. Aetna US Healthcare. There
Buckwalter found that even if Pennsylvania’s bad-faith
statute qualified for the savings clause, it was
nonetheless pre-empted because it adds to ERISA’s carefully
limited list of allowable remedies (see
Federal Judges
Disagree on ERISA Pre-Emption
).
.
Earlier this month US District Judge Harvey Bartle III
handed down Kirkhuff v. Lincoln Technical Institute, a
decision that aligned itself with Buckwalter. In
Kirkhuff, the court found that since Pennsylvania’s
bad-faith law allows plaintiffs to pursue punitive damages,
it “conflicts with the carefully crafted and exclusive
remedial scheme of ERISA and is pre-empted.”
More Support
Now two more Eastern District judges — Jay Waldman and
Michael Baylson — have jumped into the middle of this
legal fray with opinions essentially adopting Buckwalter’s
view.
Baylson, in Bell v. UNUM Provident Corp., found that the
bad-faith claim does not qualify for the savings clause.
In the meantime, the plaintiffs’ lawyers in the cases
before Buckwalter and Bartle have asked the two jurists to
OK an immediate appeal to the 3rd Circuit. A 3rd Circuit
decision would settle the issue for future cases in federal
courts in the Pennsylvania-New Jersey area and would be
considered advisory for federal trial courts in other areas
of the country.