United States District Court, M.D. Alabama, Northern Division
STEPHANIE M. DESSELLE, Plaintiff,
IVY CREEK HEALTHCARE LLC, d/b/a Physical Express LLC, Defendant.
H. THOMPSON UNITED STATES DISTRICT JUDGE
Stephanie M. Desselle filed this lawsuit against her former
employer defendant Ivy Creek Healthcare LLC, doing business
as Physical Express LLC, charging violations under the
Employee Retirement Income Security Act of 1974
(“ERISA”), as amended, 29 U.S.C. §§
1001-1461. She asserts three claims: interference with her
ERISA rights, retaliation for exercising her rights, and
wrongful denial of benefits. The court has subject-matter
jurisdiction pursuant to 28 U.S.C. § 1331 (federal
question) and 29 U.S.C. § 1132(e)(1) (ERISA
lawsuit is before the court on Ivy Creek's motion to stay
the proceedings and compel arbitration. For the reasons that
follow, the court will grant the motion as to Desselle's
interference and retaliation claims and deny the motion as to
her denial-of-benefits claim.
Creek employed Desselle as a medical assistant beginning in
early 2014. Desselle alleges that, on August 1, 2018, despite
being offered a raise for her “performance and
dedication” to Ivy Creek a few months prior, she was
terminated. Compl. (doc. no. 1) at ¶ 11. She asserts
that Ivy Creek terminated her employment to prevent her from
using health-insurance benefits to cover her son's
scheduled heart surgery.
also claims that her former employer denied her continuing,
post-termination healthcare benefits. Her allegations
relevant to this claim are as follows: Desselle's son was
scheduled for heart surgery at Children's Hospital on
August 21, 2018. Prior to that date, she twice inquired of
Ivy Creek as to the status of her post-termination health
insurance and received no response. On August 16, the
hospital called and informed her that her insurance was
cancelled as of July 31--the day before she was terminated.
She then made two more inquiries of Ivy Creek about her
post-termination insurance coverage. On August 30, she
received post-termination coverage documentation and the next
day she express-mailed the completed paperwork and payment.
On September 6, the hospital informed her that her insurance
was still not active. She called the insurance office and was
informed that the payment was received, but that Ivy Creek,
which is self-insured, had not processed the request.
Sometime later, the insurance representative told she that
Ivy Creek denied coverage for the policy.
first executed an application for enrollment in healthcare
benefits in August 2016. The application contained a clause
mandating arbitration of disagreements with an exception for
“a claim for benefits under section 502(a) of ERISA,
” which is codified at 29 U.S.C. §
1132(a). Defendant's Motion to Stay Proceedings
and Compel Arbitration (doc. no. 11) at Ex. 1. The parties do
not dispute that the contract and this mandatory arbitration
provision are enforceable. Instead, the dispute raised by
this motion turns on the scope of the arbitration agreement
and whether the last of Desselle's claims, her
denial-of-benefits claim, falls into the exception to the
contract involving commerce, the parties' arbitration
agreement is governed by the Federal Arbitration Act, 9
U.S.C. §§ 1-16. The Supreme Court has interpreted
§ 2 of the Act, which mandates enforcement of agreements
to arbitrate, to reflect a “liberal federal policy
favoring arbitration.” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 339 (2011) (quoting Moses
H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24 (1983)). However, “the arbitrability of the
merits of a dispute depends upon whether the parties agreed
to arbitrate that dispute, ” First Options of
Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995), and
parties may “agree to limit the issues subject to
arbitration.” AT&T Mobility LLC, 563 U.S.
at 344 (citation omitted). Because arbitration is “a
matter of contract ... courts must place arbitration
agreements on an equal footing with other contracts ... and
enforce them according to their terms.” Id. at
339 (citations omitted).
complaint, Desselle asserts three claims: interference,
retaliation, and wrongful denial of benefits. The first two
claims are bought under the ERISA provision that makes it
unlawful to “discharge ... a participant ... for
exercising any right to which he is entitled under the
provisions of an employee benefit plan.” 29 U.S.C.
§ 1140. The parties agree that the interference and
retaliation claims are subject to their binding arbitration
sole issue is whether the terms of the agreement also require
arbitration of Desselle's third claim, which alleges
wrongful denial of benefits under the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”), 29 U.S.C.
§§ 1161-1168. Desselle asserts that this is
“a claim for benefits under section 502(a) of ERISA,
” which, as stated, is codified at 29 U.S.C. §
1132(a), and thus is the type of disagreement explicitly
excepted from the arbitration provision.
court agrees. First, unlike Desselle's other claims,
which seek to enforce rights other than the payment
of benefits, this claim alleges a denial of
benefits. Ivy Creek itself characterizes this claim
as alleging that “health insurance benefits for her
son's surgery were denied ....” Defendant's
Brief (doc. no. 23) at ¶ 4. The remedy Desselle seeks in
this claim is ...