Davila v. Aetna US Hlthcare, et al

REVISED OCTOBER 31, 2002
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
m 01-10831
_______________
ROBERT ROARK;
ROBERT ROARK,
ON BEHALF OF THE ESTATE OF GWEN ROARK,
Plaintiffs-Appellants,
VERSUS
HUMANA, INC.;
HUMANA HEALTH PLAN OF TEXAS, INC.,
DOING BUSINESS AS HUMANA HEALTH PLAN OF TEXAS (DALLAS),
DOING BUSINESS AS HUMANA HEALTH PLAN OF TEXAS (SAN ANTONIO),
DOING BUSINESS AS HUMANA HEALTH PLAN OF TEXAS (CORPUS CHRISTI);
HUMANA HMO TEXAS, INC.,
Defendants-Appellees.
* * * * * * * * * * * * * * *

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_______________
m 01-10891
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RUBY R. CALAD,
Plaintiff-Appellant-
Cross-Appellee,
WALTER PATRICK THORN,
Plaintiff-Cross-Appellee,
VERSUS
CIGNA HEALTHCARE OF TEXAS, INCORPORATED,
DOING BUSINESS AS HEALTHSOURCE,
DOING BUSINESS AS CIGNA CORPORATION,
Defendant-Appellee,
AETNA U.S. HEALTHCARE;
AETNA U.S. HEALTHCARE OF NORTH TEXAS, INC.,
Defendants-Appellees-
Cross-Appellants.
* * * * * * * * * * * * * * *

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_______________
m 01-10905
_______________
JUAN DAVILA,
Plaintiff-Appellant,
VERSUS
AETNA U.S. HEALTHCARE, INC.;
AETNA U.S. HEALTHCARE OF NORTH TEXAS, INC.,
Defendants-Appellees.
_________________________
Appeals from the United States District Court
for the Northern District of Texas
_________________________
September 17, 2002
Before SMITH, BENAVIDES, and PARKER,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:
This suit consolidates multiple district court
actions and appeals for consideration of com-
mon issues. Ruby Calad, Walter Thorn, Juan
Davila, and Gwen Roark sued their respective
health maintenance organizations (“HMO’s”)
for negligence under Texas state law: They
alleged that although their doctors recom-
mended treatment, the HMO’s negligently
refused to cover it. The HMO’s removed to
federal court, arguing that because each plain-
tiff received HMO coverage through his em-
ployer’s ERISA plan, the claims arose under
ERISA. The plaintiffs moved to remand.
The respective district courts denied Calad,
Davila, and Roark’s remand motions and dis-
missed their claims under FED. R. CIV. P.
12(b)(6), citing ERISA preemption. The dis-
trict court granted Thorn’s remand motion.
Roark, Calad, and Davila appeal the refusal to
remand and, in the alternative, the dismissal.
Thorn’s HMO appeals the remand. We affirm
the judgments in Roark’s and Thorn’s cases

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and reverse with respect to Calad and Davila.
I.
A. Ruby Calad
Through her husband’s employer, Calad be-
came a member of CIGNA HealthCare of Tex-
as, Inc. (“CIGNA”), a Texas HMO. Calad
underwent a hysterectomy with rectal, bladder,
and vaginal repair. The surgery was per-
formed by a CIGNA physician. Although that
doctor recommended a longer stay, CIGNA’s
hospital discharge nurse decided that the stan-
dard, one day hospital stay would be sufficient.
Calad suffered complications that returned her
to the emergency room a few days later; she
attributes these complications to her early
release.
Calad sued in state court under the Texas
Health Care Liability Act (“THCLA”),1 alleg-
ing CIGNA had failed to use ordinary care in
making its medical necessity decisions,
CIGNA’s system made substandard care more
likely, and CIGNA acted negligently when it
made its medical necessity decisions. CIGNA
removed to federal court based on ERISA
preemption. Calad moved to remand, but the
court denied the motion. The court noted
“that Calad has repeatedly made clear that,
should the Court deny her motion to remand,
she will not amend her pleading to bring an
ERISA claim and therefore requests that her
claims be dismissed.” Accordingly, the court
dismissed under rule 12(b)(6).
B. Walter Thorn
Thorn received Aetna U.S. Healthcare in-
surance through his employer. He injured his
hand in a car accident, and doctors amputated
his ring finger. The doctors said he needed
surgery in two to three days, or he would lose
his hand. An Aetna-designated specialist
scheduled the surgery for the next day.
A few hours before the scheduled surgery,
Aetna refused to authorize its surgeon to op-
erate. While Aetna reviewed the case, it sent
a physical therapist to help exercise Thorn’s
hand, so it would not deteriorate while Thorn
waited for surgery. Aetna eventually approved
the surgery, but Thorn contends that Aetna’s
delay caused scarring that has diminished his
manual mobility.
Thorn sued jointly with Calad. Initially,
Calad and Thorn alleged that CIGNA and Aet-
na were jointly and severally liable. They later
withdrew this allegation, explaining it was a
pleading error. Thus, Calad’s claims run only
against CIGNA, and Thorn’s runs only against
Aetna. CIGNA removed to federal court
(with Aetna’s consent), citing ERISA pre-
emption. Thorn moved to remand, arguing
that ERISA excludes government plans such
as his from preemption. The district court
remanded Thorn’s claim.
C. Juan Davila
Davila is a post-polio patient who suffers
from diabetes and arthritis. He received Aetna
HMO coverage through his employer’s health
plan. His primary care physician prescribed
Vioxx for Davila’s arthritis pain. Studies have
shown that Vioxx has a lower rate of gas-
trointestinal toxicity (e.g., bleeding, ulceration,
perforation of the stomach) than do the other
drugs on Aetna’s formulary. Before filling the
prescription, Aetna required Davila to enter its
“step program”: Davila first would have to try
two different medications; only if he suffered
a detrimental reaction to the medications or
failed to improve would Aetna evaluate him
for Vioxx use. 1 TEX. CIV. PRAC. & REM. CODE §§ 88.001-
88.003.

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As part of the step program, Davila first
was given naprosyn (a cheaper pain reliever).
After three weeks, he was rushed to the emer-
gency room. The doctors reported he suffered
from bleeding ulcers, which caused a near
heart attack and internal bleeding. The doc-
tors gave Davila seven units of blood and kept
him in critical care for five days. Now he can-
not take any pain medication that is absorbed
through the stomach.
Davila sued in state court under the
THCLA, alleging Aetna had failed to use or-
dinary care in making medical necessity deci-
sions, Aetna’s systems made substandard care
more likely, and Aetna acted negligently in
making its medical necessity decisions. Aetna
removed to federal court, citing ERISA pre-
emption.
Davila moved to remand. The court con-
cluded that some of Davila’s claims were com-
pletely preempted under ERISA § 502(a) and
thus denied remand. The court noted that
normally it would dismiss Davila’s state law
claims and grant him leave to file an amended
complaint under ERISA. But, because Davila
had informed the court he would not pursue an
ERISA claim, it instead dismissed with preju-
dice under rule 12(b)(6).
D. Gwen Roark
In 1990, Roark was bitten by what was be-
lieved to be a brown recluse spider. The bite
damaged the skin, muscle, and bone of her left
leg, requiring antibiotics, three skin graft op-
erations, and two surgeries to create “free
flaps” over her wound. In 1997, Roark began
using a vacuum-assisted closure device
(“VAC”) to circulate blood to the skin’s sur-
face and quicken healing. Each day, a nurse
came to Roark’s home and spent two hours
scraping the wound with a scalpel; Roark wore
the VAC for the other twenty-two hours of the
day.
Later that year, Humana Health Plan of
Texas (“Humana”) became the Roarks’ HMO.
Roark’s primary care physician recommended
she continue using the VAC and authorized
treatment. In 1998, Humana delayed the VAC
treatments and home nursing several times; up-
on each delay, Roark filed an immediate appeal
or grievance. The primary care physician told
Humana that without the VAC and home
nursing case, Roark could lose her leg. Huma-
na eventually approved the VAC for ninety
days. Humana periodically delayed VAC and
home nursing treatment until December 1998,
when it cancelled home nursing altogether.
Humana agreed to pay only for visits to a local
hospital’s wound center.
In February 1999, Roark developed a seri-
ous infection that required the doctors to am-
putate her leg that March. While Roark was
convalescing, Humana again denied her VAC
treatment that may have helped heal the ampu-
tation wound. In January 2000, the doctors
performed an additional amputation treatment
on her leg.
Roark and her husband Robert sued in state
court under the THCLA, the Texas Deceptive
Trade Practices Act (“DTPA”),2 the Texas In-
surance Code,3 and common law breach of
good faith, fair dealing, and contract. Humana
removed to federal court, citing ERISA pre-
emption. The Roarks moved to remand. The
court found that the Roarks’ DTPA and insur-
2 TEX. BUS. & COM. CODE § 17.46(a), (b)(5),
(b)(12).
3 TEX. INS. CODE art. 21.21 §§ 4(1), (2),
(11)(a), (11)(c).

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ance claims were completely preempted under
ERISA § 502(a) and thus denied the motion.
The Roarks then amended their complaint
to allege only violations of the THCLASSthat
Humana had failed to use ordinary care when
it made its medical necessity decisions, Huma-
na’s system made substandard care more like-
ly, and Humana was negligent in making its
medical necessity decisionsSSand filed a sec-
ond remand motion. The court held that
ERISA § 502(a) preempts the THCLA claim
as well, denied the Roarks’ motion to remand,
and dismissed under rule 12(b)(6).
The court gave the Roarks thirty days to re-
plead under ERISA § 502(a), failing which
their case would be dismissed with prejudice
under rule 12(b)(6). The Roarks declined and
filed this appeal challenging the second remand
order. The district court never entered the
final order dismissing the case with prejudice
under rule 12(b)(6), but it did list the case
closed for statistical purposes. The Roarks’
notice of appeal also states that they will not
replead under ERISA.
II.
A. Calad’s and Davila’s remand motions
With exceptions not relevant here, “any civ-
il action brought in a State court of which the
district courts of the United States have origi-
nal jurisdiction, may be removed by the defen-
dant or the defendants, to the district court of
the United States for the district and division
embracing the place where such action is pend-
ing.” 28 U.S.C. § 1441(a). If, before final
judgment, it appears the case was not properly
removed because it was not within the federal
courts’ original jurisdiction, the district court
must remand. 28 U.S.C. 1447(c).
The “well-pleaded complaint rule” limits
federal courts’ original jurisdiction to those
cases in which the plaintiff’s complaint states
a cause of action arising under federal law; a
federal defense will not do. Franchise Tax Bd.
v. Constr. Laborers Vacation Trust, 463 U.S.
1, 9-10 (1983) (citing Louisville & Nashville
R.R. v. Mottley, 211 U.S. 149 (1908)).
“[S]ince 1887 it has been settled law that a
case may not be removed to federal court on
the basis of a federal defense, including the de-
fense of preemption, even if the defense is
anticipated in the plaintiff’s complaint, and
even if both part ies admit that the defense is
the only question truly at issue in the case.”
Franchise Tax Bd., 463 U.S. at 13-14.
Calad and Davila advance only state law
causes of action; a straightforward application
of the well-pleaded complaint rule would de-
prive the federal courts of original and removal
jurisdiction over their claims. But, we rec-
ognize an exception to the well-pleaded com-
plaint rule for those few statutes whose “pre-
emptive force . . . is so powerful as to displace
entirely any state causes of action.” Id. at 23.
Where “a federal cause of action completely
preempts a state cause of action, any com-
plaint that comes within the scope of the fed-
eral cause of action necessarily ‘arises under’
federal law.” Id. at 24. Such actions are ex-
cepted from the well-pleaded complaint rule
and confer original and removal jurisdiction.
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58,
65-66 (1987); Giles v. NYLCare Health Plans,
Inc., 172 F.3d 332, 336 (5th Cir. 1999). The
Supreme Court first recognized this exception
for § 301 of the Labor-Management Relations
Act (“LMRA”)4 and has extended the rule to
4 Avco Corp. v. Aero Lodge No. 735, 390 U.S.
557 (1968); see also Franchise Tax Bd., 463 U.S.
at 23.

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some, but not all, cases under ERISA.5
ERISA provides two types of preemption:
complete preemption under § 502(a) and con-
flict preemption under § 514. Giles, 172 F.3d
at 336; McClelland v. Gronwaldt, 155 F.3d
507, 515-17 (5th Cir. 1998). “Section 502, by
providing a civil enforcement cause of action,
completely preempts any state cause of action
seeking the same relief.” Id. at 337.
Section 502(a) complete preemption is a
slight misnomer, for it does not involve tradi-
tional preemption analysis. McClelland, 155
F.3d at 516 (“Co mplete preemption is less a
principle of substantive preemption than it is a
rule of federal jurisdiction.”). We do not ask
whether the state law conflicts with or frus-
trates a congressional purpose, but whether
the state law duplicates or “falls within the
scope of” an ERISA § 502(a) remedy. Taylor,
481 U.S. at 64; McClelland, 155 F.3d at 518.
If Calad and Davila could have brought their
claims under ERISA § 502(a), the claims
would be completely preempted, and the dis-
trict court would have been correct to exercise
jurisdiction.
Section 514, in contrast, provides for ordi-
nary conflict preemption.6 State law claims
that fall outside § 502(a), even though pre-
empted by § 514, follow the well-pleaded
complaint rule and do not confer original or
removal jurisdiction. Franchise Tax Bd., 463
U.S. at 23-27; Giles, 172 F.3d at 337.
We review the district court’s preemption
analysis, which formed the basis for its subject
matter jurisdiction, de novo. McClelland v.
Gronwaldt, 155 F.3d 507, 511 (5th Cir. 1998).
Because we conclude that § 502(a) does not
displace Calad’s or Davila’s claims, the district
court should have remanded.
The enforcement provisions listed in
ERISA § 502(a)(5)-(9) do not provide a cause
of action for participants and beneficiaries; be-
cause Davila is an ERISA participant7 and Cal-
ad is an ERISA beneficiary,8 neither could
have asserted a claim that falls within these
subsections.9 Subsections 502(a)(1)(A) and
(4) deal with plan administrators’ duties to
supply information; they too are irrelevant.
Section 502(a)(3) indicates equitable remedies
are generally available under ERISA; it in-
cludes only “those categories of relief that
were typically available in equity,” Great-West
Life & Annuity Ins. Co. v. Knudson, 122 S. Ct.
708, 712 (2002), not the damages claims Cal-
ad and Davila bring, id. at 713. This leaves
only two enforcement provisions of
§ 502(a)10SS§ 502(a)(2) and (a)(1)(b)SS
5 Metropolitan Life, 481 U.S. at 64-65.
6 ERISA § 514(a) preempts “all State laws in-
sofar as they may now or hereafter relate to any
employee benefit plan described in section 1003(a)
of this title and not exempt under section 1003(b)
of this title.” 29 U.S.C. § 1144(a).
7 See 29 U.S.C. § 1002(7) (“The term ‘partici-
pant’ means any employee or former employee of
an employer, or any member or former member of
an employee organization, who is or may become
eligible to receive a benefit of any type from an em-
ployee benefit plan which covers employees of such
employer or members of such organization”).
8 See 29 U.S.C. § 1002(8) (“The term ‘benefi-
ciary’ means a person designated by a participant,
or by the terms of an employee benefit plan, who is
or may become entitled to a benefit thereunder”).
9 Cf. McClelland, 155 F.3d at 518.
10 In its entirety, § 502(a) reads,
(continued...)

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neither of which preempts Calad’s or Davila’s
claims.
1. § 502(a)(2)
Calad and Davila argue that their HMO’s
were not acting as plan fiduciaries when de-
nying them medical treatment, so § 502(a)(2)
cannot cover (or completely preempt) their
10(...continued)
(a) Persons empowered to bring a civil
action
A civil action may be broughtSS
(1) by a participant or beneficiarySS
(A) for the relief provided for in sub-
section (c) of this section, or
(B) to recover benefits due to him un-
der the terms of his plan, to enforce his
rights under the terms of the plan, or to
clarify his rights to future benefits un-
der the terms of the plan;
(2) by the Secretary, or by a participant,
beneficiary or fiduciary for appropriate re-
lief under section 1109 of this title;
(3) by a participant, beneficiary, or fiduci-
ary (A) to enjoin any act or practice which
violates any provision of this subchapter or
the terms of the plan, or (B) to obtain other
appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provi-
sions of this subchapter or the terms of the
plan;
(4) by the Secretary, or by a participant, or
beneficiary for appropriate relief in the case
of a violation of 1025(c) of this title;
(5) except as otherwise provided in subsec-
tion (b) of this section, by the Secretary
(A) to enjoin any act or practice which vio-
lates any provision of this subchapter, or
(B) to obtain other appropriate equitable re-
lief (i) to redress such violation or (ii) to
enforce any provision of this subchapter;
(6) by the Secretary to collect any civil pen-
alty under paragraph (2), (4), (5), or (6) of
(continued...)
10(...continued)
subsection (c) of this section or under sub-
section (i) or (l) of this section;
(7) by a State to enforce compliance with a
qualified medical child support order (as de-
fined in section 1169(a)(2)(A) of this title);
(8) by the Secretary, or by an employer or
other person referred to in section 1021-
(f)(1) of this title, (A) to enjoin any act or
practice which violates subsection (f) of sec-
tion 1021 of this title, or (B) to obtain
appropriate equitable relief (i) to redress
such violation or (ii) to enforce such subsec-
tion; or
(9) in the event that the purchase of an in-
surance contract or insurance annuity in
connection with termination of an individ-
ual's status as a participant covered under a
pension plan with respect to all or any por-
tion of the participant’s pension benefit un-
der such plan constitutes a violation of
part 4 of this title or the terms of the plan,
by the Secretary, by any individual who was
a participant or beneficiary at the time of the
alleged violation, or by a fiduciary, to obtain
appropriate relief, including the posting of
security if necessary, to assure receipt by
the participant or beneficiary of the amounts
provided or to be provided by such insur-
ance contract or annuity, plus reasonable
prejudgment interest on such amounts.
29 U.S.C. 1132(a).

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THCLA claims. We agree.
Section 502(a)(2) allows a plan participant
or beneficiary to sue “for appropriate relief un-
der section 1109 of this title.” 29 U.S.C.
§ 1132(a)(2). Section 1109(a) in turn pro-
vides:
Any person who is a fiduciary with re-
spect to a plan who breaches any of the
responsibilities, obligations, or duties
imposed upon fiduciaries by this sub-
chapter shall be personally liable to
make good to such plan any losses to
the plan resulting from each such breach
. . . .
29 U.S.C. § 1109(a).
In Pegram v. Herdrich, 530 U.S. 211
(2000), the Court decided that under § 502-
(a)(2), a patient cannot hold his HMO vicari-
ously liable for its physician’s medical malprac-
tice. Although Pegram did not decide the
precise question before us—whether, under
§ 502(a)(2), a patient can hold his HMO di-
rectly liable for its own medical malprac-
tice—its holding is broad enough to apply
here.
In Herdrich, the plaintiff became a patient
of Pegram’s through her HMO. When Pegram
discovered an inflamed mass in Herdrich’s ab-
domen, she did not order an immediate ultra-
sound; instead, she decided Herdrich would
have to wait eight days to be examined at a
center fifty miles away; in the meantime, Herd-
rich’s appendix ruptured.
Herdrich sued Pegram for medical malprac-
tice and sued both Pegram and her HMO
under ERISA §§ 502(a)(2) and 1109, alleging
that the HMO’s medical rationing scheme, by
which it “reward[ed] its physician owners for
limiting medical care, entailed an inherent
breach of an ERISA fiduciary duty, because
these terms created an incentive to make
decisions in the physicians’ self-interest rather
than in the exclusive interest of the plan partici-
pants.” Pegram, 530 U.S. at 216.
The Court unanimously ruled that Herdrich
did not state a cause of action under § 502(a).
The Court first categorized Herdrich’s claim.
HMO’s, it explained, made three types of deci-
sions—eligibility decisions, treatment deci-
sions, and mixed eligibility and treatment de-
cisions. Id. at 228-29. Eligibility decisions
“turn on the plan’s coverage of a particular
condition or medical procedure for its treat-
ment.” Id. at 228.
Pure eligibility decisions, “simple yes-or-no
questions, like whether appendicitis is a cov-
ered condition,” are likely rare. Id. Treatment
decisions, “by contrast, are choices about how
to go about diagnosing and treating a patient’s
condition.” Id. Herdrich’s case, the Court
concluded, involved “the more common”
mixed decision, such as “whether one treat-
ment option is so superior . . . and needed so
promptly, that a decision to proceed would
meet the medical necessity requirement.” Id.
at 228-29. Claims regarding such “mixed eli-
gibility and treatment decisions,” the Court
held, do not fall within § 502(a)(2). Id. at
231-32.
It seems beyond dispute that Calad’s and
Davila’s claims involve such mixed decisions.
CIGNA agrees its plan covers hospital stays
after a hysterectomy, and Aetna agrees its plan
includes a range of arthritis drugs, so we are
not presented with simple yes-or-no coverage
questions. Instead, we are presented with the
type of “when and how” medical necessity

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questionsSSwhether Calad was provided
enough treatment (enough days in the hospital)
and whether Davila was prescribed the correct
treatment (naprosyn instead of Vioxx)SSthat
fall within Pegram’s rule. Id. at 228-29.
Pegram is distinguishable in one regard:
Herdrich claimed her doctor made the errone-
ous medical decision; Calad and Davila claim
their HMO’s did. But Pegram’s reasoning in-
dicates this distinction is immaterial to the
§ 502(a)(2) analysis.
The Pegram Court expressed doubt that
“that Congress would ever have thought of a
mixed eligibility decision as fiduciary in na-
ture.” Id. at 231. It contrasted fiduciaries,
who must “act solely in the interest of the
patient without possibility of conflict,” id. at
233, with HMO’s, whose entire purpose is to
balance costs against patient welfare, id. at
231-32. “Since inducement to ration care goes
to the very point of any HMO scheme,” id. at
221, treating HMO’s as ERISA fiduciaries
would entail “nothing less than the elimination
of the for-profit HMO,” id. at 233.
The Pegram Court went on to note the
potential “mischief” the alternative holding
would entail. Id. at 236. Such a rule would
create a federal body of malpractice law appli-
cable against HMO’s and physicians. Id. at
235-36. And, because ERISA § 502(a) pre-
empts any overlapping state law, this would
create “a puzzling issue of preemption”; it
“would seem to be a prescription for preemp-
tion of state malpractice law.” Id. at 236.
This could not be so, the Court explained, for
“in the field of health care, a subject of tradi-
tional state regulation, there is no ERISA pre-
emption without clear manifestation of con-
gressional purpose,” id. at 237 (citing N.Y.
State Conference of Blue Cross & Blue Shield
Plans v. Travelers Ins. Co., 514 U.S. 645,
654-55 (1995)), and it was unimaginable that
Congress intended ERISA to create a federal
common law of medical malpractice. Id.
These factors apply with equal force to a
claim that an HMO breached its fiduciary duty
in denying care. Such a claim demands that
the HMO forego its core purpose—rationing
care—and act only in the patient’s interest.
And, such a claim would create a federal body
of malpractice law applicable against HMO’s.
Because Pegram is indistinguishable, § 502-
(a)(2) does not completely preempt Calad’s
and Davila’s THCLA claims.
2. § 502(a)(1)(B)
The Supreme Court has declined to decide
whether § 502(a)(1)(B) displaces a medical
malpractice claim involving “mixed decisions,”
Pegram, 530 U.S. at 229 n.9, and this circuit
has not yet confronted the question.11 We
11 In Corcoran v. United Healthcare, Inc., 965
F.2d 1321 (5th Cir. 1992), we held that § 514 pre-
empted a patient’s claim that her HMO was med-
ically negligent for refusing to hospitalize her.
Section 502(a) preemption is a subset of § 514
preemption. Although any claim that falls within
§ 502(a) necessarily falls within § 514, claims that
fall under § 514 do not necessarily fall under
§ 502(a). McClelland, 155 F.3d at 517. Thus,
Corcoran does not decide our question.
In Corporate Health Ins., Inc. v. Tex. Dep’t of
Ins., 215 F.3d 526, 535 (5th Cir. 2000), vacated
on other grounds by Montemayor v. Corporate
Health Ins., 122 S. Ct. 2617 (2002), we ruled that
§ 514 (and thus § 502(a)(1)(B)) does not preempt
a THCLA suit holding an HMO vicariously liable
for its doctor’s negligence. But we cannot auto-
matically extend Corporate Health’s holding to
suits directly against an HMO. The Corporate
(continued...)

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11
now conclude that § 502(a)(1)(B) does not
preempt Calad’s and Davila’s THCLA claims.
Section 502(a)(1)(B) allows a plan partici-
pant or beneficiary to bring a civil action “to
recover benefits due him under the terms of his
plan, to enforce his rights under the terms of
the plan, or to clarify his rights to future ben-
efits under the terms of the plan.” 29 U.S.C.
§ 1132(a)(1)(B). Calad’s and Davila’s claims
of HMO medical malpractice differ fundamen-
tally from the § 502(a)(1)(B) claims we have
recognized. Section 502(a)(1)(B), we have
held, creates a cause of action for breach of
contract: When a plan administrator incor-
rectly interprets the plan to deny benefits, the
patient may sue to recover the benefits.12 By
contrast, Calad and Davila assert tort claims;
they have not sued their ERISA plan adminis-
trator, nor do they challenge his interpretation
of the plan.
Dowden v. Blue Cross & Blue Shield, Inc.,
126 F.3d 641 (5th Cir. 1997) (per curiam), is
on point. The plaintiff’s health insurer refused
to cover the expenses she incurred treating
complications from breast implants. The in-
surance policy limited coverage to only “medi-
cally necessary” treatments, and the plan ad-
ministrator concluded that Dowden’s treat-
ment did not fit the plan’s definition. Id. at
644. Dowden sued under § 502(a)(1)(B),
claiming “the plan administrator abused its
discretion in interpreting the term ‘medically
necessary’ as expressly defined in the insur-
ance contract,” and wrongfully withheld ben-
efits owed to her. Id. at 643.
Superficially, this claim resembles Calad’s
and Davila’s: Like Calad and Davila, Dowden
claimed she was wrongfully denied medically
necessary treatment. But, Dowden asserted a
contract claim for contract damages; Calad
and Davila assert a tort claim for tort damages.
Calad and Davila are not seeking reimburse-
ment for benefits denied them: Calad is not re-
questing the value of an extra night at the hos-
pital, and Davila is not requesting reimburse-
ment for the more expensive drug the HMO
denied.
In deciding Dowden’s claim, we were lim-
ited to the plan and its definition of “medically
necessary.” For Calad and Davila, the word-
ing of their plans is immaterial; they invoke an
external, statutorily imposed duty of “ordinary
care.”
Furthermore, this court has treated as given
that ERISA provides no cause of action for
medical malpractice claims against an HMO.
In Corcoran we noted the troubling result of
our holding that ERISA § 514 bars states from
providing such remedies: “The result ERISA
compels us to reach means that the [plaintiffs]
have no remedy, state or federal, for what
11(...continued)
Health court held that when a doctor denies treat-
ment, he makes a quality-of-care decision, which
escapes ERISA preemption. By contrast, when an
HMO denies treatment, it makes a coverage deci-
sion, and claims over such a decision are pre-
empted by ERISA. Id. at 534-35 & n.24. But cf.
Pegram, 530 U.S. at 228-30 (indicating courts
should look to the substance of the decision, not the
identity of the decisionmaker, in determining
whether ERISA applies).
12 See, e.g., Gosselink v. Am. Tel. & Tele-
graph, Inc., 272 F.3d 722, 726-28 (5th Cir.
2001); Wildbur v. ARCO Chem. Co., 974 F2d
631, 636 (5th Cir.), modified, 979 F.2d 1013
(5th Cir. 1992).

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12
might have been a serious mistake.”13 Nor
have we ever recognized a claim of HMO
medical negligence under § 502(a)(1)(B).
The Third Circuit has reached the same
conclusion. In Dukes v. U.S. Healthcare, Inc.,
57 F.3d 350, 352 (3d Cir. 1995), the court
held that claims that an HMO had failed to
exercise reasonable care in providing medical
treatment are not completely preempted by
§ 502(a)(1)(B). The plaintiff complained that
her hospital provider had acted negligently in
delaying her husband’s blood test. This delay
led to a late diagnosis of his condition and, she
argued, his untimely death. Id. Her HMO,
she asserted, was vicariously liable for the
hospital’s malpractice and directly liable for
negligence in selecting its medical service
providers.
Such a claim, the court explained, was not
completely preempted, because it “merely at-
tacked the quality of benefits received.” Id. at
356. “Nothing in the complaints indicates that
the plaintiffs are complaining about their
ERISA welfare plans’ failure to provide bene-
fits due under the plan. Dukes does not allege,
for example, that the Germantown Hospital re-
fused to perform blood studies on [her hus-
band] because the ERISA plan refused to pay
for the studies.” Id. at 357.
The Third Circuit’s more recent decision in
Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d
266 (3d Cir. 2001), reaffirms this conclusion.
The plaintiff claimed, inter alia, that her HMO
“‘negligently and carelessly delayed in giving
its approval for the necessary surgery which
the plaintiff . . . urgently needed.’” Id. at 270
(alterations in original). Although the court
held that ERISA § 502(a)(1)(B) completely
preempted this claim, it grounded its holding in
its finding that the claim involved “core admin-
istrative function,” the type of “pure eligibility
decision” as defined by Pegram, not the type
of treatment decision involved in Dukes. Id. at
274.
CIGNA and Aetna cite Pilot Life Ins. Co.
v. Dedeaux, 481 U.S. 41 (1987), for the prop-
osition that Congress intended § 502(a)(1)-
(B)’s contract action to be the sole remedy
available. They argue that patients must pay
for services ahead of time and, if the plan ad-
ministrator denies benefits, sue for reimburse-
ment under § 502(a)(1)(B). Although Pilot
Life includes some expansive language that
arguably supports CIGNA and Aetna’s read-
ing,14 the Supreme Court’s most recent word
on the matter, Rush Prudential HMO, Inc. v.
Moran, 122 S. Ct. 2151 (2002), indicates Pilot
Life does not sweep so broadly.
In Pilot Life, an ERISA participant who
was denied benefits sued in state court, assert-
ing common law contract claims. The Court
held § 502(a)(1)(B) preempted the claim.
ERISA provides a means of collecting benefits
and set forth an exclusive list of remedies;
states could not create alternative causes of
action for collecting benefits that expanded up-
13 Corcoran, 965 F.2d at 1338; accord id. at
1333; Note, Recent Cases, 114 HARV. L. REV.
1406, 1409 (2001).
14 See, e.g., Pilot Life, 481 U.S. at 54 (“[Con-
gress’s] inclusion of certain remedies and exclusion
of others . . . would be completely undermined if
ERISA-plan participants and beneficiaries were
free to obtain remedies under state law that Con-
gress rejected in ERISA . . . . ‘Congress did not
intend to authorize other remedies that it simply
forgot to incorporate expressly’” (quoting Mass.
Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146
(1985)).

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13
on ERISA’s remedies. Pilot Life, 481 U.S. at
54-55; Rush Prudential, 122 S. Ct. at 2166.
Since Pilot Life, the Supreme Court has
“found only one other state law to ‘conflict’
with [§ 502(a)] in providing a prohibited
alternative remedy.” Rush Prudential, id. In
Ingersoll-Rand Co. v. McClendon, 498 U.S.
133 (1990), the Court held that “Texas’s tort
of wrongful discharge, turning on an employ-
er’s motivation to avoid paying pension bene-
fits, conflicted with ERISA enforcement.”
Rush Prudential, 122 S. Ct. at 2166. The
Rush Prudential Court explained its holding in
Ingersoll-Rand: “[The] state law duplicated
the elements of a claim available under ERISA,
it converted the remedy from an equitable one
under § 1132(a)(3) (available exclusively in
federal district courts) into a legal one for
money damages (available in a state tribunal).”
Rush Prudential, id.
We glean from Rush Prudential that Pilot
Life’s rule is a narrow one: States may not
duplicate the causes of action listed in ERISA
§ 502(a). This is, essentially, the test em-
ployed for “complete preemption.” Because
the THCLA does not provide an action for
collecting benefits, it is not preempted by
§ 502(a)(1)(B) under Pilot Life.
Any doubts we might have are eliminated
by Pegram’s admonition that ERISA should
not be interpreted to preempt state malpractice
laws or to create a federal common law of
medical malpractice. See Pegram, 530 U.S. at
236-37. We decline, two years after the Court
expressed disbelief that Congress would fed-
eralize medical malpractice law under § 502-
(a)(2), to hold that Congress has done so un-
der § 502(a)(1)(B). Having concluded that
§ 502(a) does not completely preempt Calad’s
and Davila’s THCLA claims, we vacate and
remand to the district court for proceedings
consistent with this decision.
B. Thorn’s motion to remand
Aetna cross-appeals the decision to remand
Thorn’s claims to state court. Except for
those cases removed pursuant to 28 U.S.C.
§ 1443, “[a]n order remanding a case to the
State court from which it was removed is not
reviewable on appeal or otherwise.” 28
U.S.C. § 1447(d). On its face, this statute
seems to deprive us of jurisdiction over Aet-
na’s cross-appeal. But we read § 1447(d) in
conjunction with § 1447(c)’s command that
“[i]f at any time before final judgment it ap-
pears that the district court lacks subject mat-
ter jurisdiction, the case shall be remanded.”
28 U.S.C. § 1367(c). Accordingly, § 1447(d)
applies only where a district court remands for
lack of subject matter jurisdiction; we may re-
view remands based on other grounds. Things
Remembered v. Petrarca, 516 U.S. 124, 127-
28 (1995); Giles, 172 F.3d at 336.
Reviewable remand orders are a narrow
class of cases, meaning we review a remand
order only if the district court ‘clearly and af-
firmatively’ relies on a non-§ 1447(c) basis.”
Giles, 172 F.3d at 336. The district court ex-
plained that it had supplemental jurisdiction
over Thorn’s claim, but it was exercising its
discretion under 28 U.S.C. § 1441(c) to re-
mand. As in Giles, “the court affirmatively
gave a non-§ 1447(c) reason for remanding
and gave no indication that it believed it lacked
subject matter jurisdiction.” Id. Accordingly,
“we review the district court’s exercise of its
discretion to remand supplemental . . . state
law claims.” Id.
The district court held that even though
Thorn stated only state law causes of action, it
had supplemental jurisdiction over his claims,

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14
because they were joined to Calad’s claims.
Thus, the court’s jurisdiction over Thorn’s
claims depended on its removal power over
Calad’s claims.15 But, as we have explained,
the district court never had removal jurisdic-
tion over Calad’s claims. Consequently, it
never had subject matter over Thorn’s claims,
so remand was mandatory, not discretionary.16
C. The Roarks’ motion to remand
The Roarks’ original complaint, filed in
state court , stated claims under the THCLA,
the DTPA, the Texas Insurance Code, and
common law breach of good faith, fair dealing,
and contract. Humana removed, citing ERISA
preemption, and the Roarks moved to remand.
Only after the district court affirmed the re-
moval, concluding ERISA § 502(a) completely
preempted the Roarks’ DTPA and insurance
claims, did the Roarks amend their complaint
to state only THCLA claims. The Roarks
made a second motion to remand, which the
district court again denied; the Roarks appeal
only the second denial.
If, at the time of removal, the complaint
stated at least one cause of action completely
preempted by § 502(a), the district court could
have asserted jurisdiction over the entire case,
including and claims only conflict-preempted
by ERISA § 514 and any state law claims. See
28 U.S.C. § 1441(c)17; Giles, 172 F.3d at 337-
38.18 Although the Roarks do not appeal the
initial holding that § 502(a) completely pre-
empts some of their original claims, we must
examine it on our own initiative, because this
question determines whether the district court
had subject matter jurisdiction. McClelland,
155 F.3d at 511, 518 n.39. We review this
preemption question de novo, id. at 511, and
conclude the district court did have jurisdic-
tion.
15 See 28 U.S.C. § 1441(c) (hinging removal of
supplemental claims on the existence of “a separate
and independent claim or cause of action within the
jurisdiction conferred by section 1331”).
16 Avitts v. Amoco Prod. Co., 53 F.3d 690, 693
(5th Cir. 1995) (explaining that if district court
never had original jurisdiction over any federal
claim, it could not have exercised supplemental
jurisdiction over the joined state claims and was
required to remand).
17 Section 1447(c) provides,
Whenever a separate and independent
claim or cause of action within the jurisdic-
tion conferred by section 1331 of this title is
joined with one or more otherwise non-re-
movable claims or causes of action, the en-
tire case may be removed and the district
court may determine all issues therein, or, in
its discretion, may remand all matters in
which State law predominates.
28 U.S.C. § 1447(c).
18 In Giles we explained,
Hence, when a complaint raises state
causes of action that are completely pre-
empted, the district court may exercise re-
moval jurisdiction. When a complaint con-
tains only state causes of action that the de-
fendant argues are merely conflict-preempt-
ed, the court must remand for want of sub-
ject matter jurisdiction. When a complaint
raises both completely-preempted claims
and arguably conflict-preempted claims, the
court may exercise removal jurisdiction over
the completely-preempted claims and sup-
plemental jurisdiction (formerly known as
“pendant jurisdiction”) over the remaining
claims.
Giles, 172 F.3d at 337-38.

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15
Count six of the Roarks’ original complaint
alleges breach of contract: “By virtue of the
policies provided to the Plaintiffs, Defendants
assumed obligations, as outlined in the Mem-
ber Materials and other documents provided to
policy enrollees like the Roarks, to provide
medically necessary treatment . . . . Defen-
dants breached this promise to Mrs. Roark,
causing her to suffer direct and serious dam-
age.” The Roarks assert that the plan’s term
“medically necessary treatment” includes VAC
treatments.
The answer turns on interpreting the plan’s
language, not on applying an external, statuto-
rily imposed standard of ordinary care. Be-
cause this is precisely the type of contract
claim we recognize under § 502(a)(1)(B), see
supra part II.A.2, this claim is completely
preempted under ERISA.
This establishes that the district court had
the power to entertain the Roarks’ suit; it does
not necessarily mean the court acted properly
in doing so. The Roarks amended their com-
plaint to state only THCLA claims, then filed
a second remand motion, arguing that because
all federal claims had been dismissed, 28
U.S.C. § 1367 required the court to remand
the remaining supplemental state law claims.
The district court ruled that the THCLA
claims also were completely preempted under
ERISA, so it had original jurisdiction over
them and retained the case.
Because ERISA does not completely pre-
empt the Roarks’ THCLA claims, see supra
part II, the district court had only supplemen-
tal, not original, jurisdiction over the Roarks’
THCLA claims. “We review a district court’s
decision to retain jurisdiction over pendant
[i.e, supplemental] state law claims for abuse
of discretion.” McClelland, 155 F.3d at 519;
see also § 1367.
Section 1367(3) allows a district court to
“decline to exercise supplemental jurisdiction
over a claim . . . if . . . the district court has
dismissed all claims over which it has original
jurisdiction.” 28 U.S.C. § 1367(3). The dis-
trict court should evaluate whether remand
furthers “the values of economy, convenience,
fairness, and comity.” Carnegie-Mellon Univ.
v. Cohill, 484 U.S. 343, 351 (1988); accord
Brown v. Southwestern Bell Tel. Co., 901 F.2d
1250, 1254-55 (5th Cir. 1990).
III. Dismissal of the Roarks’ claims
The district court dismissed the Roarks’
THCLA claims under rule 12(b)(6), citing
ERISA § 514 preempt ion. We review a rule
12(b)(6) dismissal de novo. E.g., Oliver v.
Scott, 276 F.3d 736, 740 (5th Cir. 2002).
ERISA § 514 preempts “all State laws in-
sofar as they may now or hereafter relate to
any employee benefit plan described in section
1003(a) of this title and not exempt under sec-
tion 1003(b) of this title.” 29 U.S.C. § 1144-
(a). We have spilled much ink over the past
few decades trying to interpret this statute. By
contrast, our answer today is short and direct:
Our decision in Corcoran v. United Health-
care, Inc., 965 F.2d 1321 (5th Cir. 1992), is
on point. Although the Supreme Court has
since cast doubt on Corcoran’s validity, we do
not write on a clean slate. Our rule of orderli-
ness prevents one panel from overturning the
decision of a prior panel, so any relief for the
Roarks must come from an en banc panel of
this court or the Supreme Court. Teague v.
City of Flower Mound, 179 F.3d 377, 383 (5th
Cir. 1999).

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16
Corcoran is factually indistinguishable from
the Roarks’ case. There, the HMO ignored its
doctor’s recommendation to hospitalize Mrs.
Corcoran or monitor her pregnancy around the
clock; instead it provided the less expensive
treatment of ten hours a day of home nursing.
Corcoran, 965 F.2d at 1324. While no nurse
was on duty, Corcoran miscarried. Id. She
sued her HMO, alleging its negligence caused
her baby’s wrongful death. Id.
We rejected both the HMO’s “position that
no part of its actions involve[d] medical deci-
sions” and Corcoran’s position “that no part of
[her HMO’s] actions involve[d] benefit deter-
minations.” Id. at 1332. In actuality, we ex-
plained, the HMO “makes benefit determina-
tions as part and parcel of its mandate to de-
cide what benefits are available under the
[ERISA] plan.” Id. “[F]rom this perspective,
it becomes apparent that the Corcorans are
attempting to recover for a tort allegedly com-
mitted in the course of handling a benefit deter-
mination.” Id.
Such a claim, we reluctantly concluded,
was preempted under § 514. We recognized
the possible harm our ruling created: ERISA
provided no cause of action for medical mal-
practice; if ERISA also preempted all state
medical malpractice claims, patients such as
the Corcorans would be left with no remedy
for potentially serious mistakes. Id. at 1338.
But, we were bound by Supreme Court prece-
dent, which at that time articulated an expan-
sive view of ERISA preemption.
For example, we cited Ingersoll-Rand for
the proposition that § 514’s broad “relates to”
language negated the normal rules of preemp-
tion. We would not assume that preemption
was less likely in areas of “traditional state au-
thority.”19 And, based on the broad language
of Pilot Life, Ingersoll-Rand, and Shaw v.
Delta Air Lines, Inc., 463 U.S. 85 (1983), we
concluded that even attenuated and indirect ef-
fects on an ERISA plan are enough to bring a
statute within § 514 preemption. Corcoran,
965 F.2d at 1328-29, 1338 n.20.
Since then, the Supreme Court has curtailed
the scope of § 514 preemption, most notably
in a “trilogy” of cases between 1995 and 1997.
The first case, N.Y. State Conference of Blue
Cross & Blue Shield Plans v. Travelers Ins.
Co., 514 U.S. 645 (1995), involved a New
York statute requiring hospitals to collect sur-
charges from patients insured by a commercial
carrier but exempting HMO’s that provided
open enrollment coverage. The Second
Circuit had held that such surcharges “related
to” ERISA plans: Many of these HMO’s
contracted with ERISA plans, and the
surcharge, by affecting these HMO’s’
economic incentives, had an impact on plan
structures.
The Court reversed in a unanimous opinion.
The state statute’s “indirect economic in-
fluence,” the Court explained, “does not bind
plan administrators to any particular choice.”
Id. at 659. It only alters “the relative costs of
competing insurance to provide them,” id. at
660, and this does not run afoul of ERISA
preemption.
Two years later, a unanimous Court handed
down Cal. Div. of Labor Standards
Enforcement v. Dillingham Constr., N.A.,
Inc., 519 U.S. 316 (1997). California had
19 Corcoran, 965 F.2d at 1334; see also
Somers Drug Stores Co. Employee Profit Sharing
Trust v. Corrigan Enters., Inc., 793 F.2d 1456,
1468 (5th Cir. 1986).

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17
enacted a law that required payment of
prevailing wages to employees in
apprenticeship non-state approved programs
but allowed lower wages for apprentices
participating in state approved programs. The
Court held that because the law was indifferent
to ERISA coverage (state-approved programs
did not have to be ERISA programs), the law
did not make “reference to” such plans. Id. at
325.
The fact that “most state-approved appren-
ticeship programs . . . appear to be ERISA
programs” was immaterial. Id. at 327 n.5.
Nor did California’s law have a “connection
with” ERISA plans. It did not bind plans,
legally or practically, to a given result; it only
provided economic incentives to alter their
structure. Id. at 329. Most notably, the Court
explicitly returned to a traditional preemption
analysis: ERISA’s “relates to” language did
not “alter [the] ordinary assumption that the
historic police powers of the States were not
to be superseded by the Federal Act.” Id. at
331 (internal quotation marks omitted).20
The last of the trilogy, De Buono v. NYSA-
ILA Med. & Clinical Servs. Fund, 520 U.S.
806 (1997), held that ERISA did not preempt
New York’s tax on gross receipts for patient
services at health care facilities. The Court ac-
knowledged that the tax had a direct effect on
ERISA plans (in fact, it eschewed any dis-
tinction between direct and indirect effects),
but still upheld the statute.
The trilogy undermines Corcoran in two
important ways. First, the Court established
that traditional preemption rules apply under
ERISA. Thus, courts should presume ERISA
does not preempt areas such as “general health
care regulation, which historically has been a
matter of local concern.” Travelers, 514 U.S.
at 661. Second, the Court held that a state
law’s economic impact (direct or indirect) on
plan structures is not enough to trigger § 514
preemption.
The Court’s dictum in Pegram gives further
reason to doubt that ERISA preempts medical
malpractice claims such as the Roarks’. In
holding that the plaintiff did not state a claim
under § 502(a)(2), the Court, 530 U.S. at 236-
37, expressed disbelief that ERISA preempts
such claims:
To be sure [Travelers] throws some
cold water on the preemption theory;
there, we held that, in the field of health
care, a subject of traditional state
regulation, there is no ERISA
preemption without clear manifestation
of congressional purpose. But in that
case the convergence of state and
federal law was not so clear as in the
situation we are positing; the state-law
standard had not been subsumed by the
standard to be applied under ERISA.
Pegram, 530 U.S. at 236-37.
Furthermore, after Pegram, Corcoran’s
rule creates perverse incentives for HMO’s. If
a doctor fails to recommend treatment, the pa-
tient may sue the doctor and HMO under state
law. Id. at. If the doctor recommends
treatment, and the HMO denies coverage, the
patient has no remedy. Corcoran, 965 F.2d at
1338. In this circuit, HMO’s can escape all
20 Justice Scalia, in a concurrence in which
Justice Ginsburg joined, urged the Court to “ac-
knowledge[] that our first take on this statute was
wrong; that the ‘relate to’ clause . . . is meant, not
to set forth a test for pre-emption, but rather to
identify the field in which ordinary field pre-
emption applies.” Id. at 336 (Scalia, J.,
concurring).

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18
liability if they instruct their doctors to
recommend every possible treatment and leave
the real decision to HMO administrators. It is
difficult to believe that one of Congress’s
goals in passing ERISA was to shift medical
judgments from doctors to plan administrators.
If we were writing on a clean slate, or de-
ciding this en banc, the Roarks would have a
strong case against ERISA preemption. But,
as a panel we are bound by Corcoran.
Accordingly, we affirm with respect to the
Roarks.
In summary, the judgment in No. 01-10831,
regarding the Roarks, is AFFIRMED. The
judgment in No. 01-10891 is REVERSED in
regard to Calad and AFFIRMED in regard to
Thorn. The judgment in No. 01-10905 is
REVERSED in regard to Davila. All these
matters are REMANDED to the respective
district courts for further proceedings, if any,
that may be called for by this opinion.

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