SEPTEMBER 2006 BAD FAITH CASES ERISA PRE-EMPTS PENNSYLVANIA’S BAD FAITH STATUTE (Philadelphia Federal)

In Olick v. Kearney, the United States District Court for the Eastern District of Pennsylvania dismissed Defendant Aetna Life Insurance Company.  Plaintiff’s complaint consisted of eight counts, including a bad faith claim under Pennsylvania’s bad faith statute, all arising from an employment dispute resulting in ineligibility for group health insurance.  The Court noted that although there is a private right of action directly under Pennsylvania’s bad faith statute, those claims are still pre-empted by ERISA.  The United States Supreme Court has declared that any state-law cause of action that duplicates, supplements or supplants the ERISA civil enforcement remedy conflicts with the clear Congressional intent to make the ERISA remedy exclusive and is therefore pre-empted.  The Court also noted that the Third Circuit specifically held that ERISA pre-empts Pennsylvania’s bad faith statute. 

Date of Decision:  September 11, 2006

Olick v. Kearney, United States District Court for the Eastern District of Pennsylvania , Civil Action No. 06-1531, 2006 U.S. Dist. LEXIS 64580 (E.D. Pa. 2006) (Katz, J.)