United States District Court, D. Kansas
MEMORANDUM AND ORDER
RICHARD D. ROGERS, District Judge.
This case is now before the court upon a motion to dismiss or stay for failure to exhaust tribal remedies. The motion is brought by defendant Sac & Fox Casino Healthcare Plan. This motion asks the court to rule as a matter of comity that before bringing a claim in this court, plaintiff must bring an ERISA action for recovery of insurance benefits under the casino's nongovernmental plan in tribal court. We assume for purposes of this order that plaintiff is not a member of the Sac & Fox Tribe and that the Plan is not a "governmental plan" as defined in ERISA. We hold that Congress has preempted the tribe's adjudicatory authority over ERISA claims and, therefore, exhaustion of tribal remedies is not required.
I. PLAINTIFF'S ALLEGATIONS
The amended complaint in this case alleges as follows. Plaintiff was an employee of the Sac & Fox Casino. In the summer of 2011, plaintiff, while still an employee of the casino, incurred substantial medical expenses in relation to a pregnancy and the birth of a premature baby. Plaintiff asserts that some or all of these expenses charged to her are the responsibility of defendant Sac & Fox Casino Healthcare Plan, which, she alleges, is an employee welfare benefit plan governed by ERISA. Defendant Benefit Management, Inc., an Oklahoma company, is alleged to be the Plan supervisor that administers claims for Plan benefits. The Plan had group health insurance through American Fidelity Assurance in 2011. Defendants have refused to pay what plaintiff asserts is owed pursuant to the provisions of the Plan. Plaintiff asserts that she has exhausted her administrative remedies under the Plan and, specifically, that defendants Benefit Management, Inc. and the Plan have denied plaintiff's claims for payment. Plaintiff asserts, pursuant to ERISA, 29 U.S.C. § 1132(a)(1)(B), that defendants have wrongfully denied her claim for medical insurance benefits and seeks an order requiring their payment as well as other relief.
Plaintiff further alleges in response to the motion to dismiss that the Plan states that a Plan member may file a claim for benefits "in a state or federal court" and that there is no reference to tribal courts in the Plan. This allegation is not disputed in defendant Plan's reply brief.
II. DEFENDANT PLAN'S ALLEGATIONS
Defendant Sac and Fox Casino Healthcare Plan has submitted the following statements of fact in support of its motion to dismiss or to stay. The Sac and Fox Nation of Missouri in Kansas and Nebraska is a federally-recognized Indian tribe. The Sac & Fox Casino is a non-corporate operating arm of the tribe. The casino maintained a self-funded plan of healthcare benefits. Money to fund the plan came from the casino's general operating expenses. The Plan was managed by the tribe's council members who hired defendant Benefits Management Inc. as a third-party administrator. A judgment against the plan would likely come directly from the tribal treasury or the casino's general operating fund.
III. PROCEDURAL POSTURE
Defendant Plan presents its motion as a FED.R.CIV.P. 12(b)(6) motion. Matters outside the pleadings have been presented by both sides. Therefore, pursuant to FED.R.CIV.P. 12(d), the motion will be treated in effect as one for summary judgment. We assume that there is no issue with this procedural approach.
Our ruling hinges primarily upon the legal force of ERISA's preemptive provisions, not issues of fact or the burden of proof. Nevertheless, we note that the Supreme Court has stated that the burden rests upon an Indian tribe to establish its authority over the activities of nonmembers of the tribe. Plains Commerce Bank v. Long Family Land and Cattle Co. , 554 U.S. 316, 330 (2008). We further note that exhaustion issues are often treated as affirmative defenses and, as such, the burden of proving the defense rests on the defendant. See Jones v. Bock , 549 U.S. 199, 212 (2007)("the usual practice under the Federal Rules is to regard exhaustion as an affirmative defense").
The ERISA law provides that a participant or beneficiary in the ERISA plan may bring an action to recover benefits due under the plan. 29 U.S.C. § 1132(a)(1)(B). State courts and federal district courts have concurrent jurisdiction over actions brought under § 1132(a)(1)(B). 29 U.S.C. § 1132(e). This section does not reference tribal courts.
ERISA does not regulate so-called "governmental plans." 29 U.S.C. § 1003(b)(1). "Governmental plans" are defined to include "a plan which is established and maintained by an Indian tribal government... a subdivision of an Indian tribal government... or an agency or instrumentality of either, and all of the participants of which are employees of such entity substantially all of whose services as such an employee are in the performance of essential governmental functions but not in the performance of commercial activities (whether or not an essential government function)." 29 U.S.C. § 1002(32). The motion to ...