ERISA = No Jury Trial

Most people who find themselves in court like to think they are entitled to a jury trial.  Claims against ERISA insurance policies is one of those places where a jury trial is not permitted.  A recent Southern District, Houston Division opinion illustrates this.  The opinion is styled, Deo G. Shanker v. United of Omaha Life Insurance Company.

The attorney for Shanker in this case tried to be creative in asserting a state law declaratory judgment action in order to get a jury trial.

This is an insurance coverage case. Shanker suffered a heart attack and underwent open heart surgery.  After the attack, he was unable to perform his routine job duties, including driving, using fine motor skills, lifting medium and large loads, and standing for extended periods of time.  Shanker submitted a claim to Omaha for long term disability benefits.  After an exchange of documents, Omaha ultimately denied the claim.  Shanker sued Omaha alleging Omaha disregarded relevant medical information and improperly denied coverage.

The insurance plan at issue is an ERISA plan.  Shanker claims Omaha violated its contractual duties under ERISA and seeks a declaration that he is entitled to coverage and benefits, pursuant to the Texas Uniform Declaratory Judgment Act under Texas Civil Practices & Remedies Code, Chapter 37 and the Federal Declaratory Judgment Act, 28 U.S.C. 2201 – 2202.  Omaha pointed out that Shanker is not entitled to a jury trial and Shanker ultimately agreed.

ERISA’s preemption mechanisms leave no room for Shanker’s state law claims.  ERISA is a comprehensive federal scheme designed to protect the participants and beneficiaries of employee benefit plans, and supercedes any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.  There is no dispute that the Policy is an employee benefit plan.  Because Shanker seeks relief under the TUDJA to enforce its interpretation of the Policy, the Texas state law is related to the employee benefit plan.  The TUDJA does not fall within the narrow category of laws excluded from ERISA preemption pursuant to 29 U.S.C. 1144(b)(2)(A).  Therefore, state law is preempted.

ERISA and TUDJA have overlapping goals.  The purpose of TUDJA “is to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations” pursuant to Section 37.002(b).  ERISA also enables a plaintiff to gain certainty as to coverage: “A civil action may be brought by a participant or beneficiary to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan” pursuant to 29 U.S.C. 1132(a)(1)(B).  ERISA already provides Plaintiff with a mechanism to enforce and clarify his rights under the Policy.

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