Articles Posted in ERISA

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Minor O.D. filed a petition for approval of a settlement her parents had negotiated with car insurance companies for injuries she had suffered in a car accident. On the day of the hearing, O.D.'s health insurance coverage provider Ashley Healthcare Plan, which had a subrogation lien against the proceeds of O.D.'s claim, removed the case to federal court, arguing that Mississippi Code Section 93-13-59 (which requires chancery court approval of settlement claims) was preempted by the federal Employment Retirement Income Security Act of 1974 ("ERISA"). The federal district court held that ERISA did not preempt the state law and remanded the case to the chancery court without awarding attorney's fees to O.D. On motion from O.D.'s parents, the Pontotoc County Chancery Court awarded O.D. attorney's fees, holding that Ashley Healthcare Plan's removal to federal court was contrary to clearly established law and that it was done for the purpose of delaying litigation. Ashley Healthcare Plan appealed the grant of attorney fees. The Mississippi Supreme Court affirmed. Although O.D. could have sought recovery of attorney's fees under Rule 54 of the Federal Rules of Civil Procedure, frivolous removals to federal court were also subject to the Mississippi Litigation Accountability Act. Furthermore, Ashley Healthcare Plan's removal to federal court was contrary to two decades of case law which uniformly held that Mississippi's law requiring chancery court approval of minors' settlements was not preempted by ERISA and that Ashley Healthcare Plan was seeking a remedy in federal court that was unavailable to it under the ERISA Civil Enforcement Clause. View "In the Matter of the Guardianship of O. D." on Justia Law