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

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.)