Shea v. Esensten, 208 F.3d 712 (8th Cir. 2000)- Shea appealed the district court's finding of ERISA preemption of her state tort claim of negligent misrepresentation against her late husband's doctors. Her husband died at the age of 40, after his physicians persuaded him to trust their judgment that neither his age nor his symptoms justified a visit to a cardiologist. This court found that Minnesota's law of negligent misrepresentation did not "relate to" an ERISA plan, and thus there was no preemption of Shea's claim.
In
reaching this conclusion, this court turned to the factors set out in Arkansas
Blue Cross & Blue Shield v. St. Mary's Hosp., Inc.,
947 F.2d 1341, 1344-45 (8th Cir. 1991).
The court summarized that case as holding that "allowing a
state tort claim to proceed against a physician for failure to disclose a
conflict of interest would not impact the structure, administration, or
economics of any ERISA plan." The
court reasoned that since state professional ethics laws cover physician
conflicts of interest, the existence of an ERISA plan is "peripheral to the
ultimate issue of whether the physicians violated the state ethical duty." The Supreme Court made a similar finding in Pegram
v. Herdrich, __ U.S. __, 2000 U.S. LEXIS 3964 (June 12, 2000).
This holding is in contrast to prior litigation ("Shea I"), where the Eighth Circuit found that ERISA preempted Mrs. Shea's state law wrongful death claim against Medica, her late husband's HMO. Shea v. Esensten, 107 F.3d 625, 629 (8th Cir.), cert. denied, 522 U.S. 914 (1997). Shea had alleged that Medica's contract with Mr. Shea's physicians contained financial incentives designed to minimize referrals to specialists, and that had her husband known this, he would have sought a specialist on his own. After the preemption finding, she amended her claims against the HMO in terms of breach of fiduciary duty under ERISA for failure to disclose. This allowed Shea to obtain a settlement from Medica. In light of the Pegram v. Herdrich, __ U.S. ___, n.8 2000 U.S. LEXIS 3964 * 8 (June 12, 2000) decision, defendant made a wise decision to settle Shea I.