By Jeff Birren, Senior Writer
The NFL’s Collective Bargaining Agreement gives players various medical benefits by way of an NFL Player Insurance Plan (“Plan”) and the NFL Management Council administers it. The Management Council delegated its authority to administer and interpret the Plan and process claims to Cigna Health and Life Insurance Company. In 2007 the medical group Advanced Physicians, S.C. (“Advanced”) began treating retired NFL players.
Advanced is primarily a chiropractic clinic, but it provides various types of care including rehabilitation and pain management. It currently has five offices in West Chicago suburbs. Advanced claims it provided services to over 200 retired NFL players and their dependents. It was “out of network,” but Advanced would submit the bills to Cigna and Cigna paid the claims.
That process continued until 2015 when Cigna began denying Advanced claims, Cigna insisted, “because of irregularities discovered by Cigna’s random audit team” (Advanced Physicians, S.C. v. National Football League, U.S. District Court, N. D. Texas, Dallas Division, Case No. 3:19-CV-2432-G, (8-14-20) (“Advanced Physicians”) at2).
Advanced believed “the NFL told Cigna to deny Advanced’s claims because some of the players that Advanced treated were using Advanced’s diagnostic tests “as evidence of disability and requesting disability pay under the NFL’s disability plan” (Id. at 3). According to Advanced, the NFL retaliated “against Advanced by directing Cigna to deny” its claims, and thus, the “NFL interfered with Advanced’s ‘reasonable expectation that it would continue to treat (Advanced’s) patients who were and are beneficiaries of the plan’” (Id.). Naturally, litigation followed.
Let the Litigation Games Begin
The first case was filed by Advanced on June 24, 2016 against Cigna and “other related entities” in the 116th Judicial District Court of Dallas County, Texas. Advanced alleged state law tort causes of action to recover for the claims Cigna allegedly wrongfully denied. The defendants removed the case to Dallas Federal Court that August and it was assigned to Judge A. Joe Fish.
Advanced filed a motion to have the case sent back to state court. That was denied due to complete diversity (Advanced Physicians S.C. v. Connecticut Gen. Life Ins. Co. (Cigna), NFL Insurance Plan, et al, (“Advanced I”) Memorandum Opinion and Order, N.D. Texas, Case No. 3:16-CV-2355-G, (12-8-16) at 5). The defendants filed motions to dismiss and the Court granted in part and denied in part as to the Third Amended Complaint (Advanced I, Memorandum Opinion and Order (10-27-17) at 25). The last motion to dismiss, against Advanced’s Fourth Amended Complaint, was granted in part and denied in part in March 2018 (Advanced I, No. 2018 WL 1509120, N.D. Texas, (3-27-18) at 3).
Eventually Advanced was “seeking relief exclusively under the Employer Retirement Income Security Act” (“ERISA”) (29 U.S.C. Sec. 1000 et seq) (Advanced Physicians at 3). In January the Court granted in part a motion to compel brought by Advanced against the defendants, overruling the objections as to attorney client privilege except as to the defense of the litigation (Advanced I, Memorandum Opinion and Order (1-3-20) at 19). The case continues, and summary judgment motions must be filed by Sept. 21, 2020 (Doc. #212). Those motions will be fully briefed before Thanksgiving and Judge Fish will likely rule sometime in the first half of 2021. Unless those motions dispose of the case, Advanced I could go to trial sometime later in 2021.
Advanced II (Advanced Physicians) Begins
In 2019 Advanced sued the NFL in Illinois state court, asserting a single claim “for interference with prospective economic advantage” (Advanced Physicians at 3). The lawsuit was filed on March 15, 2020 in Cook County Circuit Court. Advanced then released a public statement that claimed the NFL instructed “Cigna to deny medical claims filed by former players.” This was supposedly done “in order to prevent players from being eligible for benefits under the 2016 concussion settlement” because “the NFL did not want Advanced Physicians S.C. to provide diagnostic disabilities.” As a result, Advanced “suffered both increased operational and financing costs, as well as a loss of financing” (https://advantagenews.com, “Suit accuses NFL of attempt to deny concussion benefits to former players” (5-8-19)).
On May 2, 2019 the NFL removed the case to Federal Court for the Northern District of Illinois. It was assigned to Judge Manish Shah. A week later the NFL filed a motion to dismiss for failure to state a claim and a motion to transfer the case to Dallas Federal Court where Advanced I is pending. Judge Shah set a briefing schedule in early June 2019 (Advanced Physicians v. NFL, (“A.P. v. NFL”) Case No. 1:2019-cv-02959 (ilnd), Doc. No. 24).
Advanced responded with an opposition and a motion to remand the case to Illinois state court. The parties “fully briefed the motions” (Advanced Physicians at 4). Judge Shah ruled on October 10, 2019. He began with Advanced’s motion to remand and stated the “intentional and unjustified interference” element “of the tort requires an “assessment of whether the plan covered the claims” (A.P. v. NFL, Memorandum Opinion and Order, Doc. No. 36, at 3). “Advanced’s tort claim is still completely preempted because the ‘reasonable expectation’ elements requires plan interpretation” and “removal was therefore proper. The motion to remand is denied” (Id. at 4).
Judge Shah granted the NFL’s motion to transfer. “Advanced has been actively litigating similar, if not the same, ERISA claims against different defendants in the Northern District of Texas since August 2016.” “Due to the considerable amount of time” the Texas Court spent on the case, “the interest of justice weighs in favor of transferring this case” and Advanced’s “lead counsel is based in Texas” (Id. at 5). Judge Shah did not “reach the NFL’s motion to dismiss.” The “transferee court is in a better position to manage the next steps in this litigation” (Id.). The case was consequently transferred to the Dallas Federal Court on 10-16-19, (Doc. No. 37), its third court since March.
After jurisdiction was out of the Illinois Federal Court, Advanced filed a motion there to certify the order denying remand. In November, weeks after transferring the case to Dallas, Judge Shah “held a hearing where he denied the motion for want of jurisdiction” (Advanced Physicians at 5). Advanced asked Judge Shah to “dismiss [the case] with prejudice.” Advanced also stated that Judge Shah’s ruling was now “law of the case” for the Dallas Federal Court “who will not sit in judgment of your order” (Id. at 5). Judge Shah responded that “even if his court had jurisdiction, he would deny the motion ‘because plaintiff has conceded that the court’s preemption ruling should result in a dismissal with prejudice, terminating the case’” (Id.). Judge Shah issued a “Minute Entry” that reiterated that Advanced’s “motion to certify order denying remand is denied. The court relinquished jurisdiction over the case when it transferred it, and no appealable order was in place before the transfer.” Furthermore, even if the Court had jurisdiction it “would deny certification of an interlocutory appeal” as it would “not expedite resolution” (A.P. v. NFL, Minute Entry, Doc. No. 42, (11-13-19)).
In the Correct Court
In Dallas, Judge Fish granted the NFL’s motion for leave to file an amended motion to dismiss, gave the NFL 14 days to do so, and denied Advanced’s “motion to re-transfer” (Advanced Physicians, Memorandum Opinion and Order (4-13-20)). The NFL filed its amended motion in April, Advanced responded in May, the NFL replied on June 2, 2020, and with that, the NFL’s motion “is now ripe for decision” (Advanced Physicians at 5). The Court “must determine whether Advanced’s Illinois state law claim against the NFL is preempted by ERISA” (Id.).
The Court’s Analysis
The Court stated that when a court decides upon a rule of law, the decision should govern those issues in subsequent stages of a case, citing two Fifth Circuit decisions (Advanced Physicians at 5/6). When a case is transferred, “the transferee court does not directly review either the transfer order or other rulings of the transferor court” (Id. at 6) (emphasis in the original). Judge Fish quoted Judge Shah’s opinion: “ERISA completely preempts Advanced’s state-law claim, and removal was therefore proper” (Id. at 6). Advanced acknowledged that the case had already been transferred to Dallas, but nevertheless asked Judge Shah to “dismiss the case with prejudice and let us go straight to an appeal in the Seventh Circuit” (Id. at 7).
The question was whether the doctrine of law of the case applied to Judge Shah’s ruling. Judge Fish cited a Northern District of Texas case that in such a circumstance, the doctrine applied, quoting a Supreme Court opinion that said otherwise “‘private and public resources’ would be wasted” (Id at 8). Since Judge Shah found that “Advanced’s claims are preempted by ERISA” so too did Judge Fish, applying the law of the case doctrine.
The Court Performs Its Own Analysis
The Court immediately stated its conclusion: Advanced’s state law “claim is in fact preempted” (Id.). To bring a claim under the relevant ERISA section, §502(a)(1)(B), a plaintiff must be a “participant or beneficiary” of the plan, and to either be attempting to “recover benefits due” under the terms of the plan, “to enforce his rights under the terms of the plan, or to clarify his rights to future benefits” (Id. at 9). In “its normal course of business, Advanced would treat NFL players and the players would assign their rights to Advanced.” This language came from Advanced and taking it “as true” the Court “concludes that Advanced would have standing to bring a lawsuit under ERISA” (Id. at 9/10). Furthermore, Judge Shah “determined that, under Seventh Circuit law, Advanced ‘qualifies as a beneficiary’ that could bring a lawsuit under ERISA §502(a)(1)” (Id. at 10). The Court then turned to the next part of the test: whether Advanced was “attempting to recover benefits due to it under the plan and thus whether Advanced’s claim is completely preempted under ERISA” (Id.).
The question “is whether Advanced has ‘a reasonable expectancy’ of treating more NFL players in the future” (Id at 11). To decide this the Court would have to examine the Plan to determine the rights assigned to Advanced. The Court “cannot conclude whether Advanced has a reasonable expectancy of treating” players in the future “without first determining whether Advanced has the right (via assignment from the players) to receive reimbursement from the plan.” Moreover, Advanced’s contention that it could not have brought such a claim under ERISA “belies the fact that Advanced has brought, and continues to litigate, a very similar claim in Advanced I” (Id.).
The NFL also had to show that there was no “other independent legal duty that is implicated” by its actions (Id.). To the Court, Advanced’s claim “hinges on two assertions: first, that it had a ‘reasonable expectancy’ of being able to treat” future players and thus receive benefits, and, second, that “the NFL’s interference was intentional and unjustified” (Id. at 12).
However, the first prong of the test is an essential part of the claim and “necessarily involves the ‘interpretation of the terms’” of the plan. Furthermore, whether the interference was intentional and unjustified “also requires an interpretation of the terms of the plan.” The Court could not answer these questions “without first determining whether Advanced has a right to receive reimbursement under the plan” (Id.). Thus, “disposition” of the state law claim, “would require the court to interpret the terms of the plan” and thus the claim for tortious interference” is preempted by ERISA (Id.).
Was the NFL a “Proper Defendant”?
The NFL’s “final contention” was that such a claim “may not be brought against a plan sponsor” (Id. at 13). While the case was in Illinois Federal Court, “the parties debated whether the NFL could be a proper defendant to an ERISA case.” The Court stated that although that section of ERISA “makes no mention of the outer limits of who may be sued under the Act,” nevertheless a “civil action for benefits due under an ERISA plan must be brought against the plan, rather than the plan sponsor.” Such a claim is permissible if the plan has no “meaningful existence apart from the employer” and the employer “made the decision to deny benefits.” Advanced “argues that the NFL” made the decision to deny Advanced’s claim benefits (Id.).
However, that rule did not apply because “the NFL is not actually the employer of the players or retired players, the individual teams are” and, moreover, “Advanced has an ongoing suit in this court against the plan itself, proving that the plan has a meaningful existence apart from the employer” (Id. at 14). Consequently, the claim “is completely preempted by ERISA” and “Advanced has failed to establish that the NFL is a proper defendant.” The Court granted the motion to dismiss and gave Advanced “14 days from entry of this order to amend its complaint to allege facts showing that the NFL is a proper defendant in this action, and to assert any ERISA claims Advanced may have against the NFL,” or “judgment will be entered dismissing this case with prejudice” (Id.). Advanced “declined to file an amended complaint” and thus “the case was dismissed with prejudice” and judgment was “entered on behalf of” the NFL (Advanced Physicians, Judgment, Doc. #55, 9-1-20).
Conclusion
ERISA preemption has perplexed many lawyers and Advanced is hardly the first nor the last litigant to stumble over ERISA’s intricacies. Advanced should not have been surprised that Advanced Physicians was removed to federal court, given the history of Advanced I. Advanced declined to pursue an ERISA claim against the NFL that is similar to what it is seeking Advanced I. It must now decide if it will appeal Judge Fish’s ruling to the Fifth Circuit, or walk away. Advanced wanted to appeal to the Seventh Circuit but now that won’t happen. Neither prospect is what Advanced had in mind when it sued the NFL. One also wonders what sort of services chiropractors were providing that related in a meaningful way to concussion diagnostics, but that must be for a different day.
