American Journal of Law & Medicine

ERISA: states lack statutory standing to bring claims on behalf of residents--Connecticut v. Health Net, Inc.(Select Recent Court Decisions)

ERISA: States Lack Statutory Standing to Bring Claims on Behalf of Residents--Connecticut v. Health Net, Inc. (1)--The U.S. Court of Appeals for the Eleventh Circuit held that states lack standing under the Employee Retirement Income Security Act ("ERISA") (2) to assert claims of ERISA violations on behalf of its citizens unless the state can show that it suffered an actual or imminent injury. (3) Plaintiff, the state of Connecticut, filed suit in federal court against eight managed care companies after Connecticut received assignments of ERISA rights from four of its citizens who had been enrolled in Defendants' ERISA plans. Connecticut alleged that Defendants violated ERISA by obstructing enrollees' access to prescription drugs, failing to make timely payments to providers, failing to disclose health insurance plan information to enrollees, failing to respond to enrollees' letters and phone calls, and denying enrollees' coverage based on arbitrary guidelines. The Eleventh Circuit affirmed the lower court decision that Connecticut lacked standing to bring suit and thereby did not reach whether the allegations against Defendants amounted to ERISA violations. (4)

Connecticut based its legal theory of standing on the principle that the four citizens assigned their ERISA rights to the state for the purposes of the lawsuit against the managed care companies. (5) Alternatively, Connecticut invoked the common law doctrine of parens patriae where a state obtains standing to sue on behalf of its citizens under the exceptional circumstance that a "separate, sovereign interest will be served by the suit. …

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