: : Nationwide Class Action Discovery Permitted Against LTD Carrier In Recoupment Dispute

“[T]he only issue before the Court is whether discovery regarding potential class members outside of the state of Pennsylvania is relevant to Plaintiff’s claims under ERISA. Aetna argues that this discovery is irrelevant because Plaintiff’s asserts claims only under state law.

 But Aetna misconstrues the allegations in the second amended complaint, which clearly assert that Aetna violated both Pennsylvania law and the terms of the policy…”
Wolff v. Aetna Life Insurance Company (M.D. Pa. 2021)

In this plan reimbursement case, the defendant, Aetna, had sought reimbursement of monies paid out on an LTD policy after its insured obtained a personal injury settlement.

“Plaintiff also, however, settled with the other driver involved in the accident and received compensation. Aetna subsequently sought reimbursement from Plaintiff’s settlement under the terms of the insurance policy.”

The Pennsylvania Motor Vehicle Financial Responsibility Law

Pennsylvania is an anti-subrogation state – so the insured brought an action against Aetna.

Plaintiff then initiated this action under the Employment Retirement Income Security Act of 1974. . . . Plaintiff asserts that, by seeking reimbursement from Plaintiff’s settlement, Aetna violated both the terms of the policy and Pennsylvania law. Plaintiff now seeks discovery of a list of all persons who were issued policies under the same long-term disability plan that Plaintiff’s policy was based on.

Discovery Dispute

Aetna contended that the plaintiff’s discovery requests were too broad on the grounds that the plaintiff’s claims arose under Pennsylvania law. Thus, it argued that any class-based discovery should be limited to state residents.

Holding For The Plaintiff

The court held for the plaintiff, stating that “Aetna misconstrues the allegations in the second amended complaint, which clearly assert that Aetna violated both Pennsylvania law and the terms of the policy.” So the insured could assert violations of the state statute by virtue of the ERISA savings clause – and of the policy itself under ERISA (on behalf of a nationwide class).

Note: The U.S. Supreme Court addressed the Pennsylvania statute in a similar context in the seminal case, FMC Corp. v. Holliday , 498 U.S. 52 (1990).

Savings Clause – “The savings clause provides that . . . ‘nothing in [ERISA’s preemption provisions] shall be construed to exempt or relieve any person from any law of any state which regulates insurance, banking or securities.’ 29 U.S.C. § 1144(b)(2)(A) (emphasis added).” Levine v. United Healthcare Corp., 402 F.3d 156 (3rd Cir. 2005)

Prior Proceedings – For additional context, see the district court opinion here.