In litigation involving benefit denials under an ERISA health plan sponsored by the National Football League (NFL), the Fifth Circuit held that ERISA completely preempted health providers' state-law tortious interference claim against the NFL (Advanced Physicians, S.C. v. Nat'l Football League, 859 F. App'x 695 (5th Cir. July 1, 2021)).

The health providers in this case began furnishing medical treatment to NFL players in 2007. The players, who were covered participants under a plan sponsored by the NFL, assigned their rights to benefits under the plan to the providers (see Standard Clause, SPD Language, Anti-Assignment Provision (Health Plan)). Although the plan covered medically necessary expenses, it excluded coverage for expenses related to:

Although the provider was properly reimbursed for treating players for several years, the plan's health insurer eventually stopped paying the providers. According to the providers, this was because the plan sponsor instructed the insurer to deny all of the provider's claims as work-related (and therefore excluded under the plan).

The provider sued the plan sponsor in state court for tortious interference in violation of Illinois law. The plan sponsor removed the case to federal court on the grounds that ERISA completely preempted the provider's claim (see Practice Notes, ERISA Litigation: Preemption of State Laws: Complete Preemption Analysis and ERISA Litigation: Preemption of Select State Laws: Tort Claims). The federal district court in Illinois upheld the removal and transferred the case to a federal district court in Texas, where the provider was litigating similar claims against the insurer. The Texas district court agreed that ERISA completely preempted the state-law claims. After the provider declined to amend its complaint to assert claims under ERISA, the Texas district court dismissed and the provider appealed.

On appeal, the Fifth Circuit affirmed. The Fifth Circuit applied the Supreme Court's two-part test (under its Davila ruling) for determining whether ERISA completely preempts a state-law claim (see Practice Note, ERISA Litigation: Preemption of State Laws (Overview): Two-Part Test for Complete Preemption Under ERISA (Davila)). Under the Davila test, ERISA completely preempts a state-law claim if:

Regarding the first prong of the Davila test, the Fifth Circuit reasoned that the provider's claim essentially alleged that the plan sponsor "wrongfully facilitated a coverage denial," and therefore the provider could have brought a claim to recover benefits under ERISA Section 502(a)(1)(B) (see Practice Note, ERISA Litigation: Causes of Action and Remedies Under ERISA Section 502 for Benefit and Fiduciary Breach Claims: Claims for Benefits Under Plan Terms (ERISA Section 502(a)(1)(B))).

As to the second prong of Davila, the court concluded that interpreting the plan terms, especially the exclusions for work-related injuries, was essential to the provider's tortious interference claim. This was because the claim hinged on the providers' ability to demonstrate their professional relationship with the player-participants, which hinged on the participants' coverage under the plan and ability to assign plan benefits.

Accordingly, ERISA completely preempted the providers' claim.

As this case illustrates, ERISA's broad preemption—and particularly its complete preemption rules for causes of action that duplicate ERISA's remedial provisions—can be a powerful tool in the litigation context. However, both prongs of the Supreme Court's Davila test must be satisfied for a claim to be completely preempted by ERISA. At least some courts have declined to hold that a state-law tort claim is completely preempted where a claim does not require interpretation of the governing plan terms. For more information, see Practice Note, ERISA Litigation: Preemption of State Laws: Second Prong of Davila Test and ERISA Litigation Toolkit.