Federal Court Blocks Tribal Court Action Over ERISA-Governed Life Insurance Benefits

In Metropolitan Life Insurance Company,  et al. v. Mundahl, et al., No. 3:24-CV-03029-RAL, 2025 WL 2682509 (D.S.D. Sept. 19, 2025), the U.S. District Court for the District of South Dakota recently granted a preliminary injunction preventing beneficiaries from pursuing claims in the Cheyenne River Sioux Tribal Court over disputed life insurance proceeds. The court held that because the benefits arose under an ERISA-governed plan, federal jurisdiction was exclusive and tribal courts lacked authority to adjudicate the dispute.

Background

Joye Braun, an employee of the Indigenous Environmental Network and member of the Cheyenne River Sioux Tribe, participated in a group life and accidental death plan sponsored by her employer through TriNet and insured by MetLife. The plan provided $40,000 in life insurance and $40,000 in AD&D coverage.

During open enrollment in November 2022, Braun designated her two children as beneficiaries. However, she passed away shortly thereafter, on November 13, 2022, before the new plan year began. MetLife ultimately paid the $40,000 life insurance benefit to Braun’s husband, Floyd, pursuant to the plan’s default distribution rules. Braun’s children disputed this payment and filed suit in Cheyenne River Sioux Tribal Court, asserting state-law claims including breach of contract, fraud, and bad faith.

MetLife and TriNet then sought relief in federal court, arguing the claims were governed by ERISA and preempted by state and tribal law. They asked the district court to enjoin the tribal proceedings.

The Court’s Analysis

ERISA Preemption

The court found that the life insurance coverage was part of an ERISA employee welfare benefit plan. While the defendants pointed to TriNet enrollment materials suggesting the plan was “voluntary” and not ERISA-covered, the court emphasized that official plan documents control. Because the benefits were tied to Braun’s employment and premiums were deducted from payroll, the plan fell squarely within ERISA.

Under ERISA’s broad preemption clause, state or tribal common law claims “arising from the administration of benefits” cannot proceed outside ERISA’s remedial framework.

Tribal Court Jurisdiction

The court further held that ERISA does not vest jurisdiction in tribal courts. Unlike state courts, which share concurrent jurisdiction with federal courts for certain ERISA actions, tribal courts are not included in ERISA’s jurisdictional grant. Allowing tribal courts to hear ERISA disputes, the court explained, would undermine Congress’s intent to ensure a uniform federal forum for employee benefit claims.

Although principles of comity often require federal courts to defer to tribal courts, one exception applies where an action would be “patently violative of express jurisdictional prohibitions.” Because ERISA expressly precludes tribal court jurisdiction, abstention was inappropriate.

Injunction Factors

Applying the Dataphase factors, the court concluded:

• Likelihood of success: Plaintiffs showed strong grounds that ERISA preempted the tribal court claims.
• Irreparable harm: Forcing them to litigate in a court without jurisdiction would violate due process and expose them to remedies not allowed under ERISA.
• Balance of equities: Defendants could still pursue their claims in federal court, whereas plaintiffs faced unlawful proceedings in tribal court.
• Public interest: Federal law favors uniform regulation of employee benefit plans and access to a federal forum.

The court therefore granted a preliminary injunction and required plaintiffs to post a $40,000 bond, the amount of the disputed life insurance benefit

What Does This Decision Mean?

This decision underscores that ERISA preemption is powerful and far-reaching. Even where beneficiaries bring state or tribal law claims in a forum sympathetic to their interests, federal courts will intervene if the dispute centers on benefits under an ERISA-governed plan. For insurers and plan administrators, the ruling reaffirms that federal courts remain the proper forum for resolving these disputes and that ERISA’s uniform regulatory framework shields them from varying state or tribal remedies such as punitive damages.