Cigna Health Care v. Calad, No. 03-83, andAetna Health Care v. Davila, No. 02-1845, U.S. Supreme Court (filed Jan. 22, 2004).

On Nov. 3, the Court granted cert in two consolidated cases involving the tort liability of HMO’s under state statute. In Calad, plaintiff, a member of the Cigna HMO, underwent a hysterectomy performed by a Cigna doctor. Despite the doctor’s recommendation of a longer stay, Cigna discharged her after one day. She suffered complications that required her readmission to the emergency room. In Davila, plaintiff, a post-polio patient suffering diabetes and arthritis, belonged to Aetna’s HMO. His doctor prescribed Vioxx for arthritis. Aetna required that plaintiff try two cheaper medications first, and would pay for Vioxx only if they caused adverse reactions. Plaintiff suffered bleeding ulcers that caused a near heart attack and internal bleeding requiring five days of critical care.

Both plaintiffs sued in state court under the Texas Health Care Liability Act, alleging that the HMOs failed to use ordinary care in making medical necessity decisions. Defendants removed to federal court, alleging that the state law claims were preempted by ERISA, and moved to dismiss. The district court granted the motions. The Fifth Circuit reversed in part, holding that plaintiffs’ actions were not completely preempted by ERISA. The court held that plaintiff’s state law claims based on breach of fiduciary duty and failure to use ordinary care in making decisions concerning the quality of benefits (as opposed to pure eligibility decisions) were not foreclosed by ERISA.

The Supreme Court granted review on the issue of ERISA preemption. In AAJ’s amicus brief, Senior Amicus Counsel Jeffrey White urged the Court to define the scope of the implied preemption narrowly and argued that holding HMOs accountable for the harms they cause by failing to exercise due care will not result in inordinate litigation or higher insurance costs.

AAJ's Amicus Curiae Brief: Cigna Health Care v. Calad and Aetna Health Care v. Davila