Background
Valley Children’s Hospital sued an employee-benefit trust in Madera County, alleging that the trust independently agreed to pay for medical services. The trust removed the case and argued that ERISA converted the hospital’s implied-contract claim into a federal claim.
The Court’s Holding
The court held that the claim rested on an obligation independent of the patient’s benefit plan and therefore was not completely preempted by ERISA’s civil-enforcement provision. Because no federal question appeared, the court lacked subject-matter jurisdiction, remanded the action, and denied the trust’s dismissal motion as moot.
Key Takeaways
- A provider’s independent agreement with a plan can support a state-law claim outside ERISA’s exclusive remedy.
- The source of the alleged duty—not simply the presence of an ERISA plan—controls complete preemption.
- Binding Ninth Circuit precedent continues to protect qualifying provider contract theories.
Why It Matters
This is directly useful to California hospitals, benefit plans, and reimbursement counsel. Communications about authorization and payment should clearly identify whether the plan is making a separate promise, because that distinction can determine both the governing law and the forum.
Read the full opinion (PDF) · Court docket