Sep 26, 2017

More Serbonian Bog


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11/17/2008
Brian S. King
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I posted a comment about the Eckelberry case some weeks ago in which Judge Goodwin of the federal district court for the Southern District of West Virginia referenced the mythical serbonian bog first described by Greek and Roman travelers as an analogy to sloppy or falacious legal reasoning. Hard on the heels of Judge Goodwin comes Chief Judge Mark W. Bennett’s decision in Van Natta v. Sara Lee Corp., 2006 U.S. Dist. LEXIS 44606 (N.D. Iowa 2006) in which there is yet another allusion to a legal serbonian bog and the need to avoid it. The problem frustrating Judge Bennett is the same one many who are familiar with ERISA have described: the gutting of meaningful remedies for plan participants due to preemption of state law. David Van Natta went to work at Sara Lee on September 20, 2004. He signed up for health benefits provided by his employer. He was told by Sara Lee representatives that his common law wife, Jean, was also eligible for health benefits and Sara Lee deducted the costs of coverage for the family out of David’s paychecks. About a month and a half later, Jean was injured in an accident and submitted bills to the ERISA plan sponsored by Sara Lee. The plan denied the claims because Jean did not meet the definition of “spouse” or “dependent” under the plan. The Van Nattas sued in Iowa state court alleging they had relied on Sara Lee's representations of coverage for Jean and that Sara Lee should be prevented from going back on its promise. Sara Lee removed the case to federal court alleging ERISA governed the rights and obligations between the parties. It then moved to dismiss the Van Nattas case arguing ERISA preempted the state law claims the Van Nattas asserted based on bad faith breach of contract and violations of insurance trade practices. The judge ruefully granted the motion but not before spending a great deal of energy to make clear that ERISA simply does not provide adequate remedies to the people it was enacted to protect when they are damaged by the wrongful acts of employers and insurers. Judge Bennett refers to ERISA’s remedies, which I blogged about here, as being “meager, and often inadequate . . . compensation” where “virtually all state law remedies are preempted but very few federal substitutes are provided.” The court joins the “rising judicial chorus urging that Congress and the Supreme Court revisit what is an unjust and increasingly entangled ERISA regime.”

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