Fifth Circuit Court Cases - Case Law and Opinions from the 5th Circuit Federal Court - Court of Appeals

	ROMINGER LEGAL
		Fifth Circuit Court of Appeals Opinions - 5th Circuit
					Need Legal Help?
					Need Legal Help?
LEGAL RESEARCH CENTER
LEGAL RESEARCH CENTER			LEGAL HEADLINES - CASE LAW - LEGAL FORMS	NOT FINDING WHAT YOU NEED? -CLICK HERE

This opinion or court case is from the Fifth Circuit Court or Appeals. Search our site for more cases - CLICK HERE

LEGAL RESEARCH

COURT REPORTERS

PRIVATE INVESTIGATORS

PROCESS SERVERS

DOCUMENT RETRIEVERS

EXPERT WITNESSES

Find a Private Investigator

Find an Expert Witness

Find a Process Server

Case Law - save on Lexis / WestLaw.

Legal News - Legal Headlines

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 98-20940

CORPORATE HEALTH INSURANCE, INC.; AETNA HEALTH PLANS OF TEXAS,
INC.; AETNA HEALTH PLANS OF NORTH TEXAS, INC.; AND AETNA LIFE
INSURANCE COMPANY,
Plaintiff - Appellees - Cross-Appellants,
versus
TEXAS DEPARTMENT OF INSURANCE,
Defendant - Cross-Appellee,
JOSE MONTEMAYOR, Commissioner of the Texas Department of Insurance;
JOHN CORNYN, Attorney General, State of Texas,
Defendants - Appellants - Cross-Appellees.

Appeals from the United States District Court
For the Southern District of Texas

December 16, 2002
ON REMAND FROM THE UNITED STATES SUPREME COURT
Before HIGGINBOTHAM, Circuit Judge, and ATLAS, District Judge.1
Per Curiam:
1 District Judge of the Southern District of Texas, sitting by designation.
This matter is being decided by a quorum, 28 U.S.C. § 46(d).

This case is before us on remand from the Supreme Court,2 for
further consideration in light of Rush Prudential HMO, Inc. v.
Moran.3 Although the Court vacated our opinion in its entirety,
only one holding of our opinion in Corporate Health v. Texas
Department of Insurance4 was affected by the Court's opinion in
Moran: that the provisions of the Texas statute allowing
independent review of HMO's medical necessity determinations are
preempted by ERISA.
In determining that the independent review organization
provisions of the Texas statute were preempted, this court made a
three step inquiry. We began with a determination that the IRO
provisions "related to" ERISA, and were therefore preempted.5 We
then determined that the IRO provisions were insurance regulations
under ERISA's saving clause.6 Finally, we determined that the IRO
provisions were nonetheless preempted because they conflicted with
a substantive provision of ERISA.7 Specifically, we held that the
IRO "creates an alternative mechanism through which plan members
may seek benefits due them ... the identical relief offered under
2 Montemayor v. Corporate Health Ins., -- U.S. --, 122 S. Ct. 2617 (2002).
3 -- U.S. --, 122 S. Ct. 2151 (2002).
4 215 F.3d 526 (5th Cir. 2000).
5 Id. at 537.
6 Id. at 538.
7 Id. at 539.
2

§ 1132(a)(1)(B) of ERISA."8 We concluded: "As such, the
independent review provisions conflict with ERISA's exclusive
remedy and cannot be saved by the saving clause."9
Moran made the same three inquiries in examining a similar
Illinois statute. As we found in examining the Texas statute,
Moran found that the Illinois statute related to ERISA, but was an
insurance regulation under the ERISA saving clause.10 However, in
examining whether the statute was preempted as conflicting with
ERISA's exclusivity of remedy, the Court held that it was not.
While Moran recognized that any state law that created a new cause
of action or alternative ultimate remedy would be preempted by
ERISA, it held that the independent review provision did not offer
a new cause of action or ultimate remedy:
But this case addresses a state regulatory scheme that
provides no new cause of action under state law and
authorizes no new form of ultimate relief. While
independent review under § 4-10 [of the Illinois statute]
may well settle the fate of a benefit claim under a
particular contract, the state statute does not enlarge
the claim beyond the benefits available in any action
brought under § 1132(a). And although the reviewer's
determination would presumably replace that of the HMO as
to what is "medically necessary" under this contract, the
relief ultimately available would still be what ERISA
authorizes in a suit for benefits under § 1132(a).11
8 Id.
9 Id.
10 Moran, 122 S. Ct. at 2159, 2164.
11 Id. at 2167 (internal citations omitted, emphasis added).
3

It is at this juncture that Moran parts company with our
holding, unless the Texas statute differs in a relevant way from
the Illinois statute at issue in Moran. As our description of the
Texas statute made clear, there are no relevant differences between
the statutes.12
On remand, Corporate Health argues that the IRO provisions of
the Texas statute are preempted as they apply to self-funded ERISA
plans and federal employees under FEHBA. It is correct on both
counts. First, application of the Texas statute to self-funded
ERISA plans is preempted. Again, the Court in Moran found, as did
we with the Texas statute, that the independent review provisions
"related to" ERISA plans and were thus generally preempted. Moran
also notes that ERISA's saving clause does not apply to self-funded
ERISA plans.13 Therefore, ERISA forecloses application of the Texas
IRO provisions to self-funded ERISA plans.
Second, Moran did not examine FEHBA preemption, and nothing in
the Moran opinion casts doubt upon our opinion regarding FEHBA
preemption. Like ERISA, FEHBA also has a preemption clause for
state laws that "relate to" FEHBA plans.14 However, unlike ERISA,
12 One such difference would be the creation of a new cause of action.
However, we specifically held that the Texas statute does not create a cause of
action for the denial of benefits. See Corporate Health, 215 F.3d at 534, 539.
On remand, Corporate Health concedes that there are no relevant differences
between the statutes and that the Moran opinion dictates that we find that the
IRO provisions are not preempted.
13 Moran, 122 S. Ct. at 2162 n.6.
14 5 U.S.C. § 8902(m)(1) (1999).
4

there is no saving clause for insurance regulation in FEHBA, and
therefore FEHBA preempts the IRO provisions.
In sum, the Moran opinion requires that our opinion be
modified in part. We hold that the IRO provisions of the Texas
statute are not preempted by ERISA because they are within the
saving clause of ERISA and do not offer an additional remedy in
conflict with ERISA's exclusive remedy. Because self-funded ERISA
plans are not covered by ERISA's saving clause, ERISA preempts any
application of the IRO provisions to self-funded plans.
Accordingly, we REINSTATE our opinion as modified herein.
5