Claim Under Montana’s Unfair Trade Practices Act for Overcharge on Medical Bill is Preempted by ERISA

In Meyer v. United Healthcare, Ins. Co., No. 20-35407, __F.App’x__, 2021 WL 930258 (9th Cir. Mar. 11, 2021), the Ninth Circuit affirmed the district court’s decision that Plaintiff-Appellant’s claim that UnitedHealthcare violated Montana’s Unfair Trade Practices Act (UTPA) when it overcharged him for treatment after a life-threatening ski accident is preempted by ERISA.

Before the district court, Meyer argued that his claim is not preempted by ERISA because: (1) a United inhouse attorney emailed Meyer’s attorney stating that Meyer is on a small group non-ERISA plan and he filed suit based on that representation; and (2) the UTPA falls under ERISA’s express-preemption provision because it regulates insurance.

The court rejected both arguments because ERISA covers Meyer’s insurance plan: his previous employer engaged United to provide health insurance for its employees, the employer had to ensure a minimum number of employee plan participants, and it paid a portion of the employees’ premiums. Conflict preemption under 29 U.S.C. § 1132(a) applies when a state law’s enforcement mechanism conflicts with ERISA’s comprehensive scheme of civil remedies. When conflict preempted, a state-law claim cannot be brought. The court found that Montana’s UTPA civil enforcement provision “provides damages above and beyond those provided in ERISA,” and Meyer’s suit is focused exclusively on a claim-payment dispute covered by ERISA’s civil enforcement scheme. Thus, the UTPA claim is preempted by § 1132.