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Cynthia Ford v. Cigna Corporation

November 27, 2012

CYNTHIA FORD, PLAINTIFF,
v.
CIGNA CORPORATION, CIGNA GROUP INSURANCE AND LIFE INSURANCE COMPANY OF NORTH AMERICA, DEFENDANTS.



The opinion of the court was delivered by: Jeremiah C. Lynch United States Magistrate Judge

Plaintiff Cynthia Ford ("Ford") brings this action against Defendants CIGNA Corporation and CIGNA Group Insurance and Life Insurance Company of North America (collectively "CIGNA") seeking to recover long-term disability insurance benefits she claims are due her under an employee welfare benefit plan. plan. Ford asserts claims under Montana law and the Employee Retirement Income Security Act of 1974 ("ERISA), 29 U.S.C. § 1001 et seq. CIGNA moves to dismiss Ford's state law claims on ERISA preemption grounds. For the reasons set forth below, CIGNA's motion is granted.

ORDER

I. Background*fn1

Ford's former employer, San Francisco Federal Savings & Loan Company, purchased a long-term disability policy (the "Plan") from CIGNA. Beginning in August 1994, Ford qualified for long-term disability benefits under the Plan.*fn2

CIGNA paid Ford long-term benefits under the Plan until October 2010, at which time it advised Ford that her claim had been closed and no further benefits were payable.

After an unsuccessful administrative appeal, Ford commenced this action in state court. In September 2012, CIGNA removed the case to this Court asserting federal question jurisdiction based on complete preemption under ERISA and, alternatively, diversity jurisdiction. Ford does not challenge the propriety of removal.

Ford's complaint expressly alleges a claim for benefits under § 502(a) of ERISA, and seeks compensatory and punitive damages under state law for alleged violations of Montana's Unfair Trade Practices Act, breach of contract, and breach of the covenant of good faith and fair dealing. CIGNA has moved to dismiss Ford's state law claims on the ground that they are preempted by ERISA.

II. Applicable Legal Standards

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

To survive a Rule 12(b)(6) motion, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In determining whether this standard is satisfied, the court must accept all factual allegations in the complaint as true and construe them in the light most favorable to the plaintiffs. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005).

III. Discussion

ERISA provides "a uniform regulatory regime over employee benefit plans" and "includes expansive preemption provisions." Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004). There are two basic types of ERISA preemption: (1) "conflict preemption" under § 514(a) of 29 U.S.C. § 1144(a); and (2) "complete preemption" under § 502(a) of ERISA, 29 U.S.C. § 1132(a). Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944-45 (9th Cir. 2009). "All of these preemption provisions defeat state-law causes of action on the merits." Fossen, 660 F.3d at 1107.

Conflict, or express preemption arises under § 514(a), which states that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a). Section 514(a) thus requires two things: (1) the policy or plan at issue must constitute an "employee benefit plan," and (2) the plaintiff's state law claims must "relate to" that employee benefit plan.

Complete preemption, on the other hand, applies in those "select cases where the preemptive force of federal law is so extraordinary that it converts state common law claims into claims arising under federal law for purposes of jurisdiction." K2 America Corp. v. Roland Oil & Gas, LLC, 653 F.3d 1024, 1029 (9th ...


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