USCA1 Opinion

United States Court of Appeals

For the First Circuit
____________________

No. 96-1696

CHARLENE TAGAN GOLAS, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE

DONALD M. GOLAS,
Plaintiff, Appellant,

v.

HOMEVIEW INC. AND PAUL REVERE LIFE INSURANCE COMPANY,

Defendants, Appellees.

____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]
___________________

____________________

Before
Stahl, Circuit Judge,
_____________

Bownes, Senior Circuit Judge,

____________________
and Lynch, Circuit Judge.
_____________
____________________

John J. Weltman, with

________________

whom Lawson & Weitzen

_________________

was on

brief,

appellant.

Joan O. Vorster,
_________________

with

whom

O'Connell, DeMallie & Lougee were

____________________________

Joseph M. Hamilton
____________________

and

on brief, for appellee Paul

Life Insurance Company.

____________________

Miri
____

Rev

February 7, 1997
____________________

LYNCH, Circuit Judge.

LYNCH, Circuit Judge.
_____________

This is an appeal

from the

denial

of plaintiff's motion

Ellen Kaplan, an insurance

arising out

to

pay

to amend her

broker, as a defendant in

of Paul Revere Life

disability

complaint to add

Insurance Company's refusal

insurance benefits

to

plaintiff's late

husband when he was suffering from his final illness.

motion

to

amend,

defendant

on

district

court

plaintiff

state law

was

review

the

denial

sought

claim

to

in

add

an

being preempted by

of the

motion

to

In her

new

party

action which

simultaneously dismissing

original defendants as

a suit

the

against

the

federal law.

We

amend

for abuse

of

discretion and conclude that there is no such abuse under the

circumstances.

We

need not and

do not reach

the issue of

whether the state law misrepresentation claim is preempted by

the Employee Income Security Act of 1974, 29 U.S.C.

1001 et
__

seq. ("ERISA").
____

In

disability

Inc.

sought

related

August

1992,

insurance policy

plaintiff's

through his

husband

obtained a

employer, HomeView

One month later he was

diagnosed with bone cancer and

disability benefits.

His request was denied as being

to

preexisting

condition for

which

he

sought

treatment during the enrollment period.

After

her husband's death,

plaintiff brought suit

in Massachusetts state court against Paul Revere and HomeView

based on state law misrepresentation theories.

-22

The complaint

alleged

that

HomeView

supplied

Donald

Golas,

with a

pamphlet,

explaining

Plaintiff

the

governing

contends that

indicated that

benefits

rules

employees,

prepared

by Paul

preexisting

this pamphlet

including

Revere,

conditions.

was misleading.

It

an insured individual could obtain disability

as long

sickness that

its

as

the disability

required him

to consult

was

not caused

a doctor during

by

the

three

month enrollment

reliance

during

only.

time.

on this

period.

statement,

the enrollment

period

her husband

for

that, in

visited a

administrative

doctor

purposes

However, he was not diagnosed with bone cancer at that

It was this

ineligible

to

visit, plaintiff alleges,

receive

benefits.

absent the flawed information,

until

Plaintiff claims

Plaintiff

that made him

argues

that,

her husband would have waited

after the enrollment period ended

to visit the doctor

and therefore would have been eligible for benefits.

Plaintiff

late

sought damages

husband's emotional

consortium.

in

state court

for her

distress and

for her own

loss of

Plaintiff simultaneously brought suit in federal

court against the same

two defendants for benefits allegedly

due

ERISA

under the

disability policy

case

to

continues

Massachusetts.

federal court,

by ERISA.

Defendants

be

pursuant to

pending

removed

in

the

the state

arguing that those claims

That

District of

law suit

to

were also governed

The two cases were not consolidated.

-33

ERISA.

Once in federal court, Paul Revere moved to dismiss

the state

ERISA.1

law claims,

were preempted

While these motions were pending, plaintiff moved

amend the complaint

that, since

to add Kaplan as

filing her

critical

relied

initial action, she

misrepresentations

were made

to him

by Ellen

upon

had "discovered

which

Kaplan."

her

husband

The complaint

coverage, Mr.

spoke to Ellen Kaplan who made false statements to him

regarding

that,

to

a defendant, asserting

alleged that, "[p]rior to accepting disability

Golas

by

Plaintiff countered by moving for a remand to state

court.

that

arguing that they

his

"[a]s

provision

HomeView

of

coverage under

the

broker

disability

the

disability policy,"

responsible

insurance

for

from

overseeing

Paul

Revere

and

the

to

employees, Ms. Kaplan owed Mr. Golas a duty to make

sure she did nothing to interfere with his obtaining coverage

under the policy."

Defendants opposed

the motion

to add Kaplan

as a

defendant, arguing that amendment would be futile because the

claim

against

Kaplan

Plaintiff argued

preempted

by

would

that a

ERISA

also be

preempted

claim against Kaplan

because

Kaplan was

not

by

ERISA.

would not

be

an

of

agent

HomeView or Paul Revere, but an independent insurance broker.

____________________

1.

HomeView made its own motion to dismiss some three months

later, incorporating by reference Paul Revere's arguments

support.

-44

in

The

district

recommendation to grant

claims

against

preemption.

to adopt

HomeView

adopted

the

magistrate's

the motion to dismiss the

and

Paul Revere

based

state law

on

ERISA

The district court went on to consider whether

the magistrate's recommendation to deny plaintiff's

motion to amend the

Having

court

complaint to add Kaplan as

already decided

to dismiss

the claims

a defendant.

against Paul

Revere

and HomeView, the

anomalous situation.

case

which was

defendants.

In

district court

was faced

with an

Plaintiff wished to add a defendant to

being dismissed

as

to the

addition, the ERISA cause of

two original

action against

Paul Revere and HomeView was pending in the same court but in

a different

action from the one in which the motion to amend

was filed.

The district court's ultimate

the magistrate's

recommendation to deny the

decision to adopt

motion to amend

the complaint must be viewed in this practical and procedural

context.

Golas appeals only from the denial of the motion to

amend the complaint to add Kaplan as a defendant and not from

the dismissal of the underlying action on preemption grounds.

Review is for abuse of discretion.

F.3d 332, 342 (1st Cir. 1995);

Reid v. New Hampshire, 56

____
_____________

see also Carlo v. Reed Rolled

________ _____
___________

Thread Die Co., 49 F.3d 790, 792 (1st Cir. 1995) (noting that
______________

the appeals court will "generally defer to a district court's

decision

to deny leave to amend where the reason is apparent

-55

or

declared"

omitted)).

from

our

It

(internal

quotation

is well-settled,

respected

colleague

marks

as the

points

and

citation

concurring opinion

out,

that,

when

district court makes an error of law, by definition it abuses

its discretion.

us here.

However, that is not the issue that concerns

The facts and circumstances of the case necessarily

influence our evaluation of the denial of the motion to amend

the

complaint, and here,

they make it

unnecessary to reach

the ERISA preemption issue.

We note that at the time the motion was denied, the

two original defendants

had been dismissed and there

diversity jurisdiction over Kaplan.2

was no

Furthermore, a parallel

ERISA action was pending against HomeView and Paul Revere

in

____________________

2.

The

reached

concurrence
because

first and, in
basis

for

argues that

issues of

the absence

the

jurisdiction

issue must

must be

of diversity, there

federal jurisdiction.

disagree with

ERISA

the premise that

This is

addressed

is no

other

incorrect.

the court could

be

We

not address

the motion to amend without first addressing the ERISA issue.

Second, even
by

if the claim against Kaplan

ERISA,

the

district

court

would

jurisdiction over the claim, because

claims had properly been
civil

action over

jurisdiction,
all

other

that

and

HomeView

part

of

1367.

the state

under

the other two state law

the

In any

have original

supplemental jurisdiction over

form

28 U.S.C.

jurisdiction over

supplemental

district courts

they also have

controversy.

have

before the district court.

which the

claims

were not preempted

the

same

The district

law claims against

complete

preemption

case

or

court had
Paul Revere
doctrine.

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).

__________________________
______
This

is sufficient

district courts.
Vacation
Trust,
________________

to confer

original jurisdiction

on the

Franchise Tax Bd. v. Construction Laborers

__________________
_____________________
463

U.S.

1,

23-24

(1983);

American
________

Policyholders Ins. Co. v. Nyacol Prods., Inc., 989 F.2d 1256,

______________________

___________________

1263 (1st Cir. 1993).

-66

federal court.

Federal courts have

traditionally been more

reluctant to exercise jurisdiction over pendent

over pendent claims.

parties than

See, e.g., Lykins v. Pointer, Inc., 725

___ ____ ______
_____________

F.2d 645, 649 (11th Cir. 1984).3

Under these

circumstances,

the district court could not

it denied

Kaplan

have abused its discretion when

plaintiff's motion to

as the sole

defendant.

novo,
____

as the concurrence

legal

ground supported in the

amend the complaint

Even

if our review

suggests, we

record.

were de
__

could affirm

See,
___

to add

on any

e.g., Eagan v.
____ _____

United States, 80 F.3d 13, 16 (1st Cir. 1996); Levy v. FDIC,

______________
____
____

7 F.3d 1054, 1056 (1st Cir. 1993).

We

therefore uphold

amend, albeit on

different grounds than

the district court,

preemption issue.

claims,

silentio.

the denial

and thus

of the

those relied on

we express no

This opinion does not, as

uphold the district

motion to

opinion on

by

the

the concurrence

court's preemption decision sub

___

Plaintiff may decide to attempt to add Kaplan as a

________

defendant in the pending ERISA action.4

The district court's

____________________

3.

The

codification

doctrine in
includes

the

of

1990, which

the

supplemental

makes clear that

joinder of

additional

jurisdiction

such jurisdiction

parties,

28 U.S.C.

1367(a), does not change the prudential analysis.

4.

It is true that the three-year statute of limitations for

a state law based fraudulent misrepresentation claim expired,

at the
that

very latest, in early

plaintiff has

express
brought,

no opinion),

a viable
the

1996.

However, to

state law

claim could

claim (on

the extent
which we

apparently still

be

within a year of the date of this opinion, pursuant

to Mass. Gen. Laws ch. 260,

32.

-77

ruling

that

any claim

presents

no bar.

effect.

If

action,

the

preemption

against

would be

preempted

It has no precedential or issue preclusive

a motion

is made

court will

have

issue anew in light

developed in discovery.

Inc. v.
____

Kaplan

Nadal-Ginard, 73
____________

to add

Kaplan to

the ability

of the facts

to

the ERISA

consider the

that have been

Cf. Boston Children's Heart Found.,

___ _______________________________

F.3d 429,

439-40 (1st Cir.

1996)

(absent precedent on closely related issue, the inquiry as to

whether

state law is preempted requires the court to look at

the facts of the particular case).5

The decision of the district court is affirmed.

_________

____________________

5.

At oral argument we were advised that there was discovery

taken on

the issue of whether Kaplan was an agent, either of

HomeView or of Paul Revere.

is ambiguous on this

The

proffered amended complaint

issue, although the concurrence assumes

that Kaplan was not an agent of either

deposition
that

she

company.

In Kaplan's

testimony attached to Golas' brief, Kaplan states

held an

employee

benefits

meeting for

HomeView

employees to explain the Paul Revere disability policy and an

Aetna

insurance

HomeView
Kaplan was

policy

employees.

that

was

also

This undermines

an independent broker.

being

offered

Golas' argument

The facts may

to
that

by now be

established, but
Kaplan

was

no

findings are

an agent

factual assumption

of either

before us.
of

the two

However,

companies, the

underlying the concurrence

and the resulting legal

if

is incorrect,

conclusions unjustified.

Indeed, if

Kaplan

is an agent of HomeView, the case would fall squarely

within

the ambit of Vartanian

_________

v. Monsanto Co.,
____________

14 F.3d 697

(1st Cir. 1994).

-88

BOWNES, Senior Circuit Judge, concurring.

BOWNES, Senior Circuit Judge, concurring.
____________________

I concur

in the

case

result, but, with respect,

I do not

think that this

can be disposed of by the conclusory assertion that the

district

court

plaintiff's

Kaplan as

did

not

discretion

in

denying

motion to amend her complaint so as to add Ellen

a defendant.

adopted by

abuse its

In his

the district

the following

reason

report and

recommendation,

court, the magistrate

for denying

the motion

judge stated

to amend

the

complaint:

find that Plaintiff['s] attempt to add

Ellen Kaplan as a

party defendant and to

assert

her

against

claim

for

misrepresentation would be futile because

such

claim

would

be

pre-empted

by

ERISA.

It is clear that the district court's denial of the

motion was not an

exercise of discretion, but

was compelled

by

its legal ruling that

pre-empted

by

denial of the

than

for

ERISA.
.

court

Accordingly,

motion is

abuse of

Thread Die Co.,

_______________

Supreme

the claim against

See
___

F.3d 790,

793 (1st

stated

court's

de novo,
__ ____

rather

Carlo v. Reed Rolled

_____________________

Cir.

unequivocally that

by definition abuses

error of law."

district

subject to review

discretion.

49

Court has

the

Kaplan would be

its discretion when

1995).

The

"[a] district

it makes an

Koon v. United States, 116 S. Ct. 2035, 2047

______________________

(1996) (citation omitted).

To

be sure,

whether to grant or deny

in

the ordinary

case, the

decision

a motion to amend the complaint

-9-

is

discretionary

with

the

trial

court, and

so

is

normally

reviewed for abuse of

discretion; but the case before

not ordinary

respect.

motion

was

in this

denied

because

Here it

of

conclusion that the claim against

matter

of

law,

and

his unstated

the

is clear

us is

that the

magistrate's

stated

Kaplan was pre-empted as a

but

apparent

corollary

conclusion

that, as a result,

he was deprived of discretion

(by the doctrine of futility) to grant the motion.

Thus,

district court

the question

before us

abused its discretion

is not

whether the

in denying plaintiff's

motion to amend the complaint, but whether the basis for this

ruling was legally

was erroneous,

was

correct.

as I think it

not "futile"

ground.

As

jurisdiction

If the

and should

to

district court's ruling

was, then the

not have

consequence,

the

decide

merits

the

motion to amend

been denied

district

of

on that

court

the

lacks

state-law

misrepresentation claim because, as the majority acknowledges

inferentially, the

ERISA

appeal

only basis

pre-emption.

can

be

decided

for

do not

on

federal jurisdiction

think, therefore,

principled

basis

is

that this

without

discussing the scope of ERISA pre-emption.

The majority purports to "express no opinion on the

preemption issue,"

and

suggests that

the

plaintiff

could

still pursue her claim against Kaplan by seeking to amend her

pending ERISA complaint so

as to add Kaplan as

-1010

a defendant.

The majority fails to

effect

district

of its

recognize, however, that the practical

disposition

of the

court's pre-emption

case

ruling

is to

sub silentio,
___ ________

leave the plaintiff with no recourse in any forum.

__
___

of

uphold

and

the

to

A finding

no pre-emption results in dismissal of the claim for lack

of federal jurisdiction and leaves the plaintiff free to seek

redress in state

to

address the

court.

merits of

ruling is not only

plaintiff exactly

where she started --

and with

federal court.

the district

court's pre-emption

analytically unsound, it also leaves

action subject to removal

pre-emption

In contrast, the majority's refusal

with her state-court

to federal court on the

pre-emption as

the

a bar

ground of

to recourse

in

For the reasons that

follow, I conclude that ERISA

does not pre-empt plaintiff's misrepresentation claim against

Kaplan and

case

that, therefore,

the proper disposition

of this

would be to deny plaintiff's motion for lack of federal

jurisdiction

over the purported state-law claim, leaving the

plaintiff free to pursue the claim in the state court.6

I.
I.

start my

analysis

with the

key

words of

the

statute bearing on pre-emption:

Except as provided
of this section,

in subsection

the provisions of

(b)
this

____________________

6.

I, of course,

intimate no

plaintiff's state-law claim.

opinion as to

the merits

of

-1111

subchapter

and

subchapter

III of

this

chapter 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) (emphasis added).

For purposes of this section:

(1)

The

includes
rules,

term

"State

all laws,

decisions,

regulations,

State action

law"

or

other

having the effect

of law, of any State.

29 U.S.C.

1144(c)(1).

The

provision of

Supreme

Court

teaches

that

the pre-emption

514(a),

codified at 29 U.S.C.

1144(a), was

intended

to

ensure that

would

be subject

benefits
the

plans and

law; the

to a

among

to minimize

financial burden

between States

Government.

of plan

the

to the

beneficiaries. .

Particularly disruptive
for conflict

and the

Otherwise,

inefficiencies created could work

detriment

of

with conflicting directives

States or

Federal

uniform body

goal was

administrative and

of complying

plan sponsors

. .

is the potential

in substantive law.

It is

foreseeable that state courts, exercising

their

common

law powers,

might develop

different

substantive

applicable to the same

requiring

the

the law

employer conduct,

tailoring

employer conduct to the

of each

standards

of

plans

and

peculiarities of

jurisdiction.

Such an

outcome is fundamentally at odds with the

goal of uniformity

that Congress

sought

to implement.

Ingersoll-Rand Co. v. McClendon, 498

_________________________________

(citations omitted).

-1212

U.S. 133,

142 (1990)

In

concluding

that plaintiff's

claims were pre-empted, the

magistrate judge relied on Carlo

_____

v. Reed Rolled Thread Die Co.,

_______________________________

stated

misrepresentation

49 F.3d 790.

In

Carlo we
_____

-1313

the ERISA pre-emption doctrine as follows:

Section 514 of
and all
now or

ERISA supersedes

State laws

insofar as

hereafter relate to
______ __

benefit plan. . . ."

(emphasis

added).

"any

they may

any employee

29 U.S.C.

1144(a)

"The term 'State Law'

includes

all

laws,

decisions,

rules,

regulations, or other State action having

the

effect of

U.S.C.

law, of

1144(c)(1).

any State."
The

Supreme Court

has established that "a law

an employee benefit
a

29

'relates to'

plan . . . if it has

connection with or reference to such a

plan."

Ingersoll-Rand Co. v. McClendon,

________________________________

498 U.S.

133, 139, 111 S.

Ct. 478, 483,

112 L. Ed. 2d 474 (1990) (quoting Shaw v.

_______
Delta Air Lines, Inc., 463 U.S.
______________________
97, 103 S. Ct.
490 (1983)).
sense

2890, 2900, 77 L.

to' a benefit plan,

even

specifically

Ed. 2d

"Under this 'broad common-

meaning,' a state

empted,

85, 96-

law may 'relate

and thereby

if

the

designed

law
to

be preis

not

affect

such

plans, or the

effect is only

Id.
___

Pilot Life Ins. Co. v.

__________________________

(quoting

Dedeaux,
_______

481 U.S.

41,

47,

indirect."

107 S.

1549, 1553, 95 L. Ed. 2d 39 (1987)).

Id. at 793 (footnote omitted).

___

Ct.

Carlo, a leading case in this circuit on ERISA pre_____

emption, see Degnan v. Publicker Indus., Inc., 83 F.3d 27, 29

___ ________________________________

(1st

Cir. 1996),

held that

ERISA pre-empted

misrepresentation claims because they had "a

or reference to" an employee benefit plan.

794-95.

law

But

the state-law

connection with

Carlo, 49 F.3d at
_____

we have never held that Carlo sweeps all state_____

misrepresentation claims

into the

because an employee benefit plan exists.

-1414

ERISA

corner merely

In Boston Children's Heart Found., Inc. v. Nadal________________________________________________

Ginard, 73 F.3d 429

______

(1st Cir. 1996), we reviewed

ERISA pre-

emption cases, including Carlo, and concluded:

_____

State
"tenuous,

laws

that

remote,

connection with a

have

merely

or

peripheral

covered benefit

may not be preempted by ERISA.

plan"

Rosario________

Cordero v. Crowley Towing & Transp. Co.,

________________________________________
46

F.3d

(citation

[120,]
and

123

[1st

Cir.

1995]

internal quotation

marks

omitted).

Such is normally the case with

respect to laws of general applicability.

See
___

District of Columbia
v. Greater
____________________________________

Washington Board of Trade, 506

___________________________
130 n.1, 113 S.

U.S. at

Ct. at 583 n.1; Rosario________

Cordero v. Crowley Towing & Transp. Co.,

________________________________________
46 F.3d

at 123;

Combined Mgt., Inc. v.

_______________________

Superintendent
of
the
Bureau
of
_________________________________________
Insurance, 22 F.3d 1, 3 (1st Cir.), cert.
_________
_____
denied,, ___
_______

U.S. ___,

115 S. Ct.

130 L. Ed. 2d 306 (1994).

conclude

that

350,

A court cannot

state law

is

one

of

general applicability, and as such is not

preempted by ERISA, based
label of the law,

on the form or

however.

Reed Rolled Thread Die Co.,

___________________________
794 n.3;

49 F.3d

at

Zuniga v. Blue Cross and Blue

_______________________________

Shield of Michigan,
___________________
(6th Cir.

See Carlo v.
___ ________

1995).

52 F.3d

1395, 1401

Absent precedent

on a

closely related problem, the inquiry into

whether a state law "relates to" an ERISA

plan

or is

merely "tenuous,

remote, or

peripheral"

requires a court

to look at

the facts

of [sic] particular case.

See
___

Rosario-Cordero
v. Crowley
Towing &
_________________________________________
Transp. Co., 46 F.3d at 125 n.2.
___________

Boston Children's Heart Found., 73 F.3d at 439-40.

______________________________

In

(1st Cir.

Johnson v. Watts Regulator Co., 63

________________________________

1995), we

pointed out

flow from ERISA pre-emption:

the consequences

It "may cause

F.3d 1129

that may

potential state-

law remedies to vanish, or may change the standard of review,

-1515

or may affect the admissibility of evidence, or may determine

whether

jury

trial

is

available."

Id.
___

at

1131-32

(citations omitted).

recent

Supreme

Court

decision

bearing on the scope of ERISA pre-emption.

has

direct

In New York State

______________

Conference of Blue Cross & Blue Shield Plans v. Travelers

_____________________________________________________________

Ins. Co.,
_________

115

insurers,

acting

S.

Ct.

as

1671

(1995),

fiduciaries

of

several

ERISA

commercial

plans

they

administered, joined with their trade associations

the

claimed

provision"

brought

Court against

surcharge

authority

of

ERISA's

actions in

the

state officials

statutes.

Court, Justice

Id. at
___

preemption

United States

District

to invalidate three

hospital

1675.

Souter made a

general

Writing

for a unanimous

number of observations

scope of ERISA pre-emption:

Our past cases have

the Supremacy Clause,
VI,

by

implication,

U.S. Const.,

express
or

by

variety

a conflict

of these

federal

preeminence,

assumed

lightly

derogated

that

Art.

of state law

provision,

federal and state law.

the

recognized that

may entail pre-emption

either

by

between

And yet, despite

opportunities for
we

have

never

Congress

state regulation,

has

but instead

have addressed claims of pre-emption with

the

starting

and "[o]n

presumption that

Congress

on the

does

not intend

to supplant

Indeed,

in cases

federal

law is said

in

fields

of

like

state law.

this one,

to bar state action

traditional

regulation,

we

have

worked

assumption

that

the

historic

powers of

the

where

States

were

state
on

not

the

police
to

be

superseded by the Federal Act unless that

-1616

was

the

Congress.

clear and

manifest

purpose of

Id. at 1676 (citations and internal quotation marks omitted).

___

The Court commented on

the statutory pre-emption language of

514(a), "all state laws insofar as they . . . relate to any

employee benefit

plan," pointing out that

were

extend

taken

to

indeterminacy,

would never

then for

run its

to

the

furthest

all practical

course."

"[i]f 'relate to'

stretch

simply must

text

and

Id. at
___

1677.

go beyond

the unhelpful

the frustrating

difficulty of

defining its key

term, and look

instead

to the objectives of the ERISA statute as

a

guide to

the scope

of the

state law

that Congress understood would survive.

Id.
___

its

purposes pre-emption

concluded:

We

of

The

Court

The Court, in the course of its analysis, stated:

Indeed,
provision

to

as

read

the

pre-emption

displacing all

state laws

affecting costs and charges on the theory

that

they

indirectly

relate

to

ERISA

plans that purchase insurance policies or

HMO

memberships

services,

that

would

would cover

effectively

limiting language in

basic

principles

our

prior

of the

statutory

not be

pronouncement

[p]reemption does not occur

state law

the

would violate

of

interpretation and could

with

read

514(a) out

statute, a conclusion that

such

squared
that

. . . if the

has only a tenuous, remote, or

peripheral connection with covered plans,

as is the case

with many laws of general

applicability.

-1717

Id.
___

at

1679-80

(citation

and

internal

quotation

marks

omitted) (alteration in original).

In discussing

Travelers
_________

Court pointed

that Congress

mandate[]

the sweep of

to three

ERISA pre-emption

categories of

intended to pre-empt: first,

employee

administration,"

id. at

benefit

the

state laws

"state laws that

structures

or

their

1678; second, "state laws providing

___

alternate enforcement

that

bind plan

1679.

See
___

1457, 1468-69

id.; third,
___

administrators to

thus function as a

at

mechanisms,"

state

a "particular

regulation of an ERISA plan

laws

choice and

itself," id.
___

also Coyne & Delaney Co. v. Selman, 98 F.3d

____ _______________________________

(4th Cir. 1996).

It is obvious

that none of

these state-law categories are implicated here.

The

surcharges had

made

by

Court

held

that

the

only "an indirect economic

insurance

buyers,

including

therefore, there was no pre-emption.

Two

made.

New

other

observations

First, it was decided seven

York

statutory

effect on choices

ERISA

plans"

and,

Travelers at 1679-80.
_________

about Travelers
_________

must

weeks after Carlo.

be

This

_____ _____

means,

of

benefit

course, that

of the

Second, none

the Carlo
_____

Court's latest

panel

views on

did not

have the

ERISA pre-emption.

of the ERISA pre-emption cases

decided in this

circuit subsequent to Travelers have cited it.

_________

circuits.

now turn

In

to

case the

post-Travelers decisions
_________

Fourth

-1818

by other

Circuit described

as

"garden-variety

professional

malpractice

claim" the

court

held:

In

light of

(and

the Supreme

narrowing)

scope

of

Court's recent

interpretation

ERISA preemption

in

of

the

New York
________

State Conference of Blue Cross & Blue

_________________________________________
Shield Plans v. Travelers, --_________________________
115

S.

Ct.

1671,

131 L.

Ed.

U.S. ---,
2d

695

(1995), we hold that Delany's malpractice

claim
not

is not

the

it does

"relate to" an employee benefit plan

within the meaning of

ERISA's preemption

provision, 29 U.S.C.

1144(a).

Coyne & Delany Co., 98

___________________

for

preempted because

proposition

F.3d at 1466-67.

that

courts

Quoting Travelers
_________

"'address

claims

of

preemption with the

not

intend

to

starting presumption that

supplant

(citations

omitted), the

especially

true in

state

Fourth Circuit

cases

involving

state regulation, including

In

the course of its

plaintiff's

administrator

F.3d

at

1467

added, "[t]his

was

is

traditional

common law tort liability,"

claim

since

98

fields of

opinion the Fourth

malpractice

at all

law,'"

Congress does

id.
__

Circuit noted that

"not aimed

the defendants

at

plan

[were] sued

in

their capacities as insurance professionals for actions taken

in that capacity."

Id.
___

at 1471.

This case is

analogous to

the one before us.

Morstein v. National Ins. Servs., Inc., 93 F.3d 715

______________________________________

(11th

Cir. 1996)

(en banc),

cert. denied,

1996 WL

693349

__ ____

(U.S.

Jan. 21,

analogous

to

1997)

the case

_____ ______

(No. 96-764),

at

bar.

is

even more

Plaintiff

closely

Morstein

was

-1919

president, director, and sole stockholder of a small company.

She met with an insurance broker for the purpose of obtaining

a replacement

and

the

policy of major medical

company's other

administered

meeting

by National

with the

broker,

employee.

treatment

condition.

that the

as

policy

to

any

issued,

Over a year

plaintiff

surgery.

National

Insurance

claim for

payment on the ground

preexisting condition which

her application.

At the

him that

preexisting

the broker

replacement policy would provide

was

Inc.

to be

any

unacceptable if it excluded from

alleged that

her existing policy.

policy was

plaintiff informed

related

Plaintiff

The

Insurance Services,

replacement policy would be

coverage

insurance for herself

had

assured her

the same coverage

after the replacement

total

hip

Services refused

replacement

to pay

that the surgery was

plaintiff had

93 F.3d at 716-17.

medical

her

for a

not disclosed

on

Plaintiff filed

negligence,

contract.

malfeasance,

Defendants

an action in

state court alleging

misrepresentations, and

removed the case

the basis of ERISA pre-emption.

breach of

to federal court

on

Id. at 717.
___

In Morstein, the Eleventh Circuit, sitting en banc,

________
__ ____

characterized the Supreme

Court's decision

having "essentially turned the tide

emption doctrine."

Id. at 721.
___

Circuit bears quoting:

-2020

in Travelers
_________

as

on the expansion of pre-

The holding of the Eleventh

Allowing preemption of a fraud claim

against
will

an

not

ERISA.

individual
serve

As

insurance

agent

Congress's purpose

we have

for

discussed, Congress

enacted ERISA to protect the interests of

employees
employee

and

other

benefit

insurance agents
for

plans.

fraudulent

objective.

beneficiary's
for

To

of

immunize

from personal liability

misrepresentation

regarding ERISA plans

this

beneficiaries

would not

If ERISA

preempts

potential cause

misrepresentation,

beneficiaries,

and

among various

plans

employers
will no

promote
a

of action
employees,
choosing
longer

be

able

to rely

on the

the insurance agent

of

the

plan.

Congress

regarding the

These

sought

themselves

representations of

to

unable

terms

employees,

whom

protect, will

find

to

make

informed

choices regarding available benefit plans

where state law places the duty on agents
to deal honestly with applicants.

Id. at 723-24 (citation omitted).

___

In

Central States, Southeast and Southwest Areas

_______________________________________________

Health and Welfare Fund v. Pathology Lab. of Ark., P.A., 71

_________________________________________________________

F.3d 1251, 1253

(7th Cir.

1995), cert. denied,

_____ ______

116 S.

1876 (1996), the Seventh Circuit, citing Travelers, held:

_________

Nothing

in

ERISA

professionals from

prevents

medical

submitting--and state

courts from enforcing--bills for services

that are
plans.
that

not covered by

welfare benefit

Although ERISA preempts state law

"relates to"

plans,

29

U.S.C.

Ct.

1144(a), that clause does not annul state

laws

of

because

general

applicability

just

they affect the price of medical

care.

In Boyle v. Anderson, 68 F.3d 1093 (8th Cir. 1995),

_________________

cert.
_____

denied, 116
______

challenge to

S. Ct.

1266 (1996),

certain provisions

-2121

a case

involving a

of a Minnesota

health care

reform statute

Travelers
_________

known as

in holding

stating, "In

Travelers and
_________

MinnesotaCare, the court

that there

the context of

was no

relied on

ERISA pre-emption,

the MinnesotaCare

the other precedents cited

legislation,

in this litigation

compel this court not to preempt a state's effort to serve as

a 'laboratory

of democracy' in

the realm

of health

care."

Id. at 1109.
___

The

rejecting an

Seventh

Circuit also

relied on

ERISA pre-emption claim in Safeco Life Ins. Co.

____________________

v. Musser, 65 F.3d 647 (7th Cir. 1995).

_________

by

Travelers in
_________

The case was brought

a health insurer who challenged the fees assessed against

such

whose

insurers

to

provide health

physical and

mental

insurance

conditions

obtaining

insurance in

case, the

Second Circuit, relying on

held

that ERISA did not

the private

to individuals

prevented them

market.

In a

from

similar

Travelers, inter alia,

_________ _____ ____

pre-empt a Connecticut statute that

imposed surcharges on hospital bills of patients with private

health

insurance to

subsidize

medical care

Connecticut Hosp. Ass'n v. Weltman, 66

_____________________________________

1995).

Corp.,
_____

See
___

68

for the

F.3d 413

poor.

(2d Cir.

also Greenblatt v. Delta Plumbing & Heating

____ __________________________________________

F.3d

561,

573-74 (2d

Cir.

1995)

limiting gloss put on the broad language of

(noting

the

514(a) of ERISA

by Travelers).
_________

As these cases

recognize, Travelers has restricted

_________

the scope of ERISA pre-emption.

-2222

II.
II.

I turn

before the panel:

now to what I consider to be the sole issue

whether the district court erred in ruling

that ERISA pre-emption

to

rendered "futile" plaintiff's

amend her complaint to

The question of ERISA

add Ellen Kaplan

recognize that the standard of review for

to allow an amendment

discretion.

as a defendant.

pre-emption is reviewed de novo.

__ ____

Degnan v. Publicker Indus., Inc., 83

___________________________________

refusal

motion

F.3d

at 28-29.

a district court's

to the complaint

This standard is not

See
___

is abuse of

applicable here, however,

because the root issue -- stated by the district court as the

basis for its decision -- is ERISA pre-emption, a question of

law.

See
___

792-93.

Carlo v. Reed Rolled Thread Die Co., 49 F.3d

_____________________________________

Moreover, if there

courts are bereft of

is no pre-emption,

jurisdiction.

Thus, in my

is no way of avoiding the pre-emption issue.

at

the federal

view, there

Normally in

a pre-emption case

the starting point

is an examination of the facts,

but there is not much in the

way

know

of

facts

here.

All

we

is

derived

from

the

allegations in the purported amended complaint, which must be

accepted

as true

at this

stage of

the litigation.

These

allegations can only be construed as stating that Kaplan made

misrepresentations

and/or

failed

conditions of

to

to give

plaintiff's

him

correct

eligibility for

husband,

Golas,

information about

participation

-2323

Donald

in the

the

Revere

Insurance policy.

The

amended complaint alleges that Kaplan

was an insurance broker.

Revere's insurance

linked

to

I take that to mean that she "sold"

policy to

HomeView

and

misrepresentations, there

agent for

or on behalf

defendants.

alleges

The

HomeView.

Revere

is no

amended

alleged

claim that Kaplan

acted as

individually.

both of the

complaint,

a common-law misrepresentation

to

Kaplan is

the

of either or

as

Although

broadly

other two

construed,

claim against Kaplan

Strictly speaking, the

plan

is

claim.

not

implicated

Donald

instead,

Golas

the

in

ERISA disability

plaintiff's

never

complaint

became

extent of insurance

involved.

not

focuses

on

about

those

plaintiff's

thus

coverage nor the

it is

only the

eligibility

cause of

alleged

were the cause of

Neither the

amount of benefits

is

requirements themselves are

alleged misrepresentations

requirements

action.

employee;

the

insurance coverage.

Even the eligibility

in dispute;

misrepresentation

covered

misrepresentations which plaintiff alleges

Golas's being excluded from

insurance

that

give

Plaintiff's burden

rise

to

of proof

goes to whether her husband would have been eligible to

join the plan if Kaplan had not made misrepresentations as to

his eligibility.

See Coyne & Delaney Co., 98

___ ____________________

F.3d at 1462

n.4.

-2424

This case is markedly different from Carlo, 49 F.3d

_____

790.

In

Carlo,

the plaintiff

was

a former

employee

of

_____

defendant

Reed and

Plaintiff

Carlo elected

monthly

participant in

early

benefits he was told

monthly benefits

him.

retirement on

plan.

the basis

he would receive.

he received

the amount promised

its retirement

were twenty percent

of

The actual

less than

Defendant apologized for the error

and offered to let him continue working at the same position.

Carlo did

not accept

under protest.

state

court

the offer

and

took early

retirement

He subsequently brought suit in Massachusetts

for

misrepresentation.

In Carlo,
_____

breach

of

Id. at 792.
___

contract

and

negligent

We found ERISA pre-emption.

plaintiff had been a

participant in the

plan

and one

of

retirement pay

the plan.

employee

the

due him

issues

was

Here, by contrast, Donald

and none

with

amount

under the substantive

of the

of

monthly

provisions of

Golas was not a covered

issues implicate

provisions of the insurance plan.

concerned

the

the substantive

The allegations are solely

misrepresentations

regarding

Golas's

eligibility to become a covered employee.

The analysis used in Boston Children's Heart Found.

______________________________

v. Nadal-Ginard
________________

has

much

to

Children's Heart Found., 73 F.3d

________________________

federal

district

court against

-2525

recommend

it.

In

Boston
______

429, suit

was brought

in

defendant,

who worked

for

plaintiff nonprofit corporation

The suit

as an officer and

alleged that defendant breached

by misappropriating plaintiff's funds.

director.

his fiduciary duty

The basis of the suit

was defendant's failure to disclose to the other directors of

the corporation important

information concerning

of a severance-benefit plan (the Banks Plan) he

When the

plan was

terminated on defendant's

provisions

had devised.

initiative, he

received

more than

appeal defendant

the

type

of

$4,000,000

contended that ERISA

severance

benefits

fiduciary duty provisions

state fiduciary law.

Here,

in severance

plan at

issue

and pre-empted the

alleged

We held:

fiduciary

duty relates to Nadal-Ginard's

action in

disclosing

the

Banks

Plan

information

that

without
a

self-

interested fiduciary would be required to

reveal
Ginard's
adoption

to his fellow

directors.

misconduct preceded
of

the

plan.

Nadal-

the formal
The

legal

determination that Nadal-Ginard's conduct

constitutes a fiduciary
require
about

the
the

resolution

breach does
of any

interpretation

administration of the plan.

from

its

application of

breach of

establishing

On

specifically exempted

73 F.3d at 438.

the

benefits.

not

dispute
or

Further, the
____________

application of state law in this instance

_________________________________________
does
not
raise
the
core
concern
_________________________________________

underlying ERISA preemption.

___________________________
fact

that

Nadal-Ginard

plan

rather

compensation
underlying

than

some

is

Indeed, the

chose an
other

peripheral

claim

that

ERISA

form
to

of
the

Nadal-Ginard

breached his corporate responsibilities.

This
said

that

being the

case, it

Massachusetts

cannot be

fiduciary

must be preempted in this instance.

-2626

law

Id. at 440 (emphasis added).

___

Based

of the scope

upon our own

of pre-emption

circuit cases, the restriction

under

established in

Travelers, and
_________

other circuits,

it is evident

the

514(a)

of the

statute

post-Travelers cases
_________

that ERISA does

in

not pre-empt

the misrepresentation claim against

Ellen Kaplan.

There are

eight

cited

for

reasons,

conclusion.

rights

gleaned

from

(1) No ERISA

or obligations

the

cases,

benefits are sought

are asserted.

(2)

this

and no ERISA

Defendant Kaplan

would be personally responsible for any money damages awarded

to plaintiff.

nor

does the

(3) Defendant Kaplan is not an

alleged

misrepresentation

claim

ERISA entity,

affect

the

relationship between

categories

intended

claim

of

of

state

to pre-empt

laws

are

that

Moreover, tort

an area of state

Congress intended

Congress

did

(4) None

Travelers
_________

implicated.

misrepresentation

application.

(6)

ERISA entities.

regulation.

is

holds

(5) The

state

law

Congress

common-law

of

general

law in general is traditionally

It is therefore

to intrude into this

not

of the three

intend to

unlikely that

area by pre-emption.

shield

tortfeasors

from

liability for misrepresentation where ERISA benefits, rights,

obligations, and core concerns are not implicated.

(7) State

common law imposes a duty of care relative to representations

made by

insurance professionals which

depend

upon

ERISA.

(8)

The

does not

alleged

in any

way

misrepresentation

-2727

occurred prior to

the time

when the ERISA

plan would

have

taken effect.

I would

hold, therefore, that

committed reversible error

amend on the ground

the district

court

in denying plaintiff's

motion to

that the claim raised therein

"would be

pre-empted

by ERISA."7

claim asserted against

diversity of

basis for

Because ERISA

does not pre-empt the

Ellen Kaplan, and because there is no

citizenship between the parties,

federal jurisdiction, the motion

denied for lack of federal jurisdiction.

left to pursue her

nor any other

should have been

Plaintiff should be

misrepresentation claim against Kaplan in

the Massachusetts state courts.

Although the

majority and I agree

on the ultimate

result, we disagree as to the proper path to take in reaching

it.

Because

procedural path

think that

is

this

important, I

is a

in which

must respectfully

rather than join the majority opinion.

____________________

case

the

concur,

7.

would

also hold

that

the

district court

erred

in

adopting the magistrate's recommendation, without considering

the application of ERISA to Kaplan as an individual, in light
of

the differences

between her

that of the other defendants.

status vis-a-vis

ERISA and

Instead, the magistrate merely

said, "For the reason stated . . . [regarding Paul Revere and

HomeView] . . .," plaintiff's claim against Kaplan would also
"be pre-empted by ERISA."
pre-empted
likewise

the claim
pre-empt

distinctions between
that of
claim

He simply assumed that,

against Revere

the

claim

and HomeView,

against Kaplan.

Kaplan's status as an

the other defendants,

if ERISA
it must

Given

the

ERISA entity and

this failure to

consider the

against Kaplan on its own merit also constituted legal

error.

-2828