VILLAGOMEZ v. LINCOLN LIFE ASSURANCE COMPANY OF BOSTON

Background

Candida Villagomez alleged that her former employer, Document Technologies, fired her after she injured her hip, underwent surgery, and became temporarily disabled. She alleged that Document Technologies failed to accommodate her disability and failed to engage in the required interactive process. Because her employment contract required arbitration, she was arbitrating those claims against Document Technologies.

Villagomez separately sued Lincoln Life Assurance Company of Boston. Lincoln had contracted with Document Technologies to handle employee leave under a group disability plan. Villagomez alleged that Lincoln reviewed her medical information, placed her on long-term disability leave for two years even though her records showed that she could return to work in January 2021, and did not discuss accommodations with her. She alleged that Lincoln’s actions led Document Technologies to terminate her on November 9, 2020.

Her first amended complaint asserted three state-law claims: professional negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress. Lincoln moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that ERISA preempted the claims and that they were not plausibly pleaded.

ERISA Preemption

ERISA is a federal statute governing certain employee benefit plans. The court explained that the relevant form of preemption applies when a state-law claim has a connection with an ERISA-covered plan or refers to such a plan. The court determined that Document Technologies’ group disability plan qualified as an ERISA employee welfare benefit plan.

The court found that Lincoln was a functional fiduciary under ERISA because the plan gave Lincoln sole authority to make binding decisions about employees’ benefit eligibility. Those decisions required Lincoln to exercise discretion in determining whether, and for how long, an employee was unable to perform the substantial duties of the employee’s occupation.

The court also found that Lincoln was performing a fiduciary function when it allegedly made the misrepresentations described in the complaint. In the court’s view, those alleged misrepresentations were Lincoln’s discretionary decisions about Villagomez’s eligibility for disability leave. Because the claims challenged a plan fiduciary’s decision made while performing a fiduciary function, the claims related to the ERISA plan and were preempted.

The court separately concluded that the claims were preempted under the “reference to” analysis because they depended on the existence and terms of the ERISA-covered plan. The court rejected Villagomez’s argument that her claims concerned only Lincoln’s misinformation and not the plan itself. Describing Lincoln’s conduct as misrepresentation did not change the fact that the conduct involved Lincoln’s administration of the plan and its disability-benefit decision.

Disposition

The court granted Lincoln’s motion to dismiss without prejudice because ERISA preempted Villagomez’s claims. Any amended complaint had to be filed within four weeks and include a blackline comparing it with the operative complaint. The court stated that if no amended complaint was filed, it would enter judgment in favor of Lincoln. The order resolved ECF No. 26.