Friday, February 20, 2015

Same Sex Spouse Lacked Standing to Pursue COBRA Claims

A federal court in New Jersey ruled Wednesday that a nurse's same-sex spouse can't sue the nurse's former employer for failing to provide notice of continued health-care coverage under COBRA. See Sacchi v. Luciani, 2015 BL 41040, No. 3:14-cv-03130-FLW-LHG (D.N.J. 2/18/15). According to the court, the nurse's spouse, John Sacchi, lacked standing to assert claims under the Employee Retirement Income Security Act ("ERISA") because the nurse, Stephen J. Simoni, never named him as a beneficiary under his employer-sponsored health plan. By way of background, Sacchi alleged that he had “but for” standing under ERISA, because he was “eligible to join the plan” and would've done so “but for Defendants' wrongful conduct.” In dismissing Sacchi's suit, the court said it rejected this “novel, but meritless, theory of standing.” In so ruling, the court distinguished a 1993 decision of the U.S. Court of Appeals for the Third Circuit, Bixler v. Central Penn. Teamsters Health & Welfare Fund, 12 F.3d 1292 (3d Cir. 1993), which recognized a “narrow" exception to ERISA standing for individuals who lost their status as plan beneficiaries as a result of wrongdoing by the plan administrator. According to the court, the Bixler plaintiff differed from Sacchi because she had been validly designated as a beneficiary of the relevant plan. “Plaintiff's theory of standing is made of whole cloth: ERISA simply does not permit any person to sue because he/she could be an eligible beneficiary—without having been so designated by the plan participant in the first instance."
Blogger's comment - while this may seem like an unfair or inequitable result, it does appear to be in conformity with the state of the law. As an aside, the same-sex spouse likely would have been found to have standing to pursue a claim for pension benefits, because ERISA has specific provisions that address spousal rights to pension benefits and that essentially automatically designate spouses as beneficiaries absent some waiver. But the right to sue for a failure to provide a COBRA notice falls outside the pension framework, as COBRA benefits are welfare benefits.