ERISA-Eighth Circuit Rules That State Law Claim Is Preempted By ERISA

In Moore v. Apple Central, LLC, No. 17-1815 (8th Cir. 2018), the Eighth Circuit Court of Appeals (the “Court”) faced an interlocutory appeal of an order of the district court.  The order dismissed plaintiff Megan Moore’s (“Moore”) state law claims against defendant Apple Central, LLC (“Apple Central”), as being preempted by the remedial provisions of ERISA.  See Aetna Health Inc. v. Davila, 542 U.S. 2004.

Moore initially filed the action in Arkansas state court.  She asserted state law claims of breach of contract, negligence, breach of fiduciary duty, and promissory estoppel and sought actual and punitive damages.  These claims were based on the failure of the employer, as plan administrator, to procure $160,000 of voluntary life insurance coverage, after deducting amounts from the pay of Moore’s husband to obtain the coverage.  Apple Central removed the action, arguing the district court has federal question jurisdiction based on ERISA preemption, and diversity jurisdiction.  Moore then filed an Amended Complaint in the district court, asserting diversity jurisdiction over her state law claims.  After ruling that the state law claims are preempted, the district court held the motion to dismiss in abeyance, giving Moore an opportunity to file a Second Amended Complaint asserting claims under ERISA.  Moore filed that complaint, which is pending in district court. Thus, a decision reversing the district court’s preemption ruling, as Moore urges, will not deprive the district court of federal jurisdiction. But this interlocutory appeal will establish whether federal or state law governs the merits of Moore’s claims.

Reviewing the issue of ERISA preemption, the Court affirmed the district court’s order. It found that an ERISA plan was involved and ERISA preemption applies, saying that allowing state law claims to proceed against the plan administrator of an ERISA plan would affect relations between primary ERISA entities and impact the administration of the plan.

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