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Philadelphia Business Lawyers: Breach of Contract and Insurance Fraud Claims Preempted by ERISA

In Butler v. Liberty Mutual, the Third Circuit ruled that The Employee Retirement Income Security Act of 1974 (“ERISA”) preempts state law claims like breach of contract and insurance fraud involving employee benefit plans. No. 16-1316, 2016 WL 3346067, at *1 (3d Cir. June 16, 2016). In this case, Plaintiff Andre Butler suffered an injury while employed at Home Depot in 2011. Plaintiff subsequently filed for short-term disability benefits with Defendant, Liberty Life Assurance Company of Boston, from which he received benefits for a limited period of time. The policy was sponsored by Home Depot. After Defendant determined Plaintiff was ineligible to continue receiving support, it denied Plaintiff further benefits. Plaintiff proceeded to file a workers’ compensation suit which ultimately dismissed before filing suit alleging that his denial of benefits was insurance fraud and a breach of contract. After the suit was dismissed in the District Court, Plaintiff appealed to the Third Circuit.

The Third Circuit affirmed the District Court’s ruling to Dismiss Plaintiff’s Complaint due to the fact that Plaintiff’s claims for breach of contract and fraud fall within the scope of ERISA preemption because they relate to an ERISA-governed benefits plans.

For more information, call Philadelphia business lawyers at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.