Opinion
Civ. No. H-95-1463.
August 1999.
MEMORANDUM AND ORDER
This civil action was filed in this Court more than four years ago. There have been extensive prior proceedings, all of which were concluded more than eight months ago.
In its Opinion of February 23, 1996, this Court granted plaintiffs' motion for summary judgment on the ground that ERISA preempted the Maryland Insurance regulation at issue. American Medical Sec., Inc. v. Bartlett, 915 F. Supp. 740 (D. Md. 1996) (Bartlett I). Defendant appealed, and the Fourth Circuit affirmed this Court's decision. American Med. Sec., Inc. v. Bartlett, 111 F.3d 358 (4th Cir. 1997) (Bartlett II). The Supreme Court thereafter denied certiorari. Larsen v. American Medical Sec., Inc., 118 S.Ct. 2340 (1998). Plaintiffs then moved for awards of attorneys' fees, expenses and costs. In an Opinion filed on December 7, 1998, this Court denied plaintiffs' amended motion for attorneys' fees and expenses but awarded plaintiffs costs in the amount of $9,246.14. American Med. Sec., Inc. v. Larsen, 31 F. Supp.2d 502 (D. Md. 1999).
Within the past several weeks, the parties on both sides have attempted to litigate in this case new issues which arose recently and which were not previously addressed in the pleadings. In his motion for clarification or relief from judgment, defendant asked this Court to render an advisory opinion as to whether a new Maryland statute would violate this Court's final judgment. That motion was denied by this Court's Order of July 6, 1999. Plaintiffs have now filed a motion seeking an Order requiring defendant to show cause why he should not be held in contempt and for an Order further enforcing the permanent injunction previously entered by the Court. Memoranda and exhibits in support of that motion have been filed by the parties. Recently, the United States Secretary of Labor has filed a motion seeking leave to file a brief as amicus curiae in support of defendant's opposition to plaintiffs' pending motion.
Following its review of the pleadings and memoranda, this Court has concluded that no hearing is necessary for a ruling on the pending motions. See Local Rule 105.6. For the reasons stated herein, plaintiffs' motion for the entry of a Show Cause Order and for an Order enforcing the Court's permanent injunction will be denied, and the motion of the United States Secretary of Labor for leave to file a brief as amicus curiae will also be denied.
Plaintiffs' pending motion arises as a result of the enactment by the Maryland Legislature of Maryland House Bill 1086, which became effective June 1, 1999. That Bill added § 15-126 to the Insurance Article of the Annotated Code of Maryland. This new statute contains a definition of "stop-loss insurance" and prohibits insurers from issuing certain types of stop-loss insurance policies.
In their motion, plaintiffs have asked the Court to enter an Order requiring defendant Larsen in his capacity as the Maryland Insurance Commissioner to show cause why he should not be held in contempt of the permanent injunction entered by this Court on March 12, 1996. According to the plaintiffs, the Commissioner has violated the aforesaid permanent injunction "by enacting" § 15-126. Plaintiffs also ask the Court to enter an Order enjoining the State's enforcement of § 15-126 against plaintiff United Wisconsin Life Insurance Company ("UWLIC"). The Court is satisfied on the record in this case that plaintiffs are not entitled to the relief requested in their motion.
Plaintiffs ignore the true nature of the suit brought by them. In this civil action, they have challenged a regulation promulgated by the Insurance Commissioner. Both this Court's original Opinion and the Opinion of the Fourth Circuit make this abundantly clear. See Bartlett I, 915 F. Supp. at 741; Bartlett II, 111 F.3d at 360. The complaint did not allege that a then-existing Maryland statute had been preempted by ERISA, and the complaint of course could not have challenged § 15-126 which was enacted more than four years after this suit was instituted. The only defendant in this case is the Maryland Insurance Commissioner. He can hardly be held in contempt for "enacting" § 15-126 which became law when it was passed by the Maryland Legislature and signed by the Governor.
Plaintiffs point to Paragraph 5.a of the Court's Judgment of March 12, 1996 which they say prohibits the State of Maryland from enacting a statute which affects attachment points for stop-loss insurance policies purchased by self-funded or self-insured employee benefit plans covered by ERISA. But the language in question refers to the Insurance Commissioner, who is the only defendant in this case. The State of Maryland is not a defendant in this case, and the Court's Judgment Order can hardly be construed as enjoining the Maryland Legislature from enacting a statute relating to stop-loss insurance. The injunction issued by the Court on March 12, 1996 prohibited the Insurance Commissioner from enforcing any then-existing regulation or statute. It can hardy be construed as prohibiting the Maryland Legislature from enacting at any time in the future a statute which sought to regulate stop-loss insurance in a manner which would attempt to comply with the decisions of this Court and the Fourth Circuit. Indeed, in its Opinion, the Fourth Circuit specifically recognized the right of Maryland to enact a statute like § 15-126, stating: "This is not to say that Maryland may not regulate stop-loss insurance policies. Such regulation is clearly reserved to the States."
Since there is nothing in the record to indicate that defendant Larsen has violated the Court's permanent injunction, plaintiffs are not entitled to an Order requiring him to show cause why he should not be held in contempt. Nor are plaintiffs entitled to an Order enforcing the Court's permanent injunction by prohibiting the Commissioner from taking administrative enforcement action against UWLIC under § 15-126.
This four year old civil action is hardly the proper case for determining whether a brand new Maryland statute is preempted by ERISA. In their memoranda, plaintiffs challenge the newly enacted statute and the administrative action taken under it by the Insurance Commissioner. None of those events have been addressed in the pleadings, and it is obviously much too late to now amend the complaint in this case. If one or more of the plaintiffs would want to challenge § 15-126, they should pay the filing fee and institute a new civil action. Only after the pertinent facts have been developed by discovery and after the issues raised by the new pleadings have been addressed by the parties' motions for summary judgment would the Court be in a position to determine whether § 15-126 is preempted by ERISA. That question cannot and will not be addressed at this time in this case. Since the Court has decided that the question of whether § 15-126 is preempted by ERISA is not before it for decision in this case, the motion of the United States Secretary of Labor for leave to file a brief asamicus curiae will be denied.
For the reasons stated, it is this ______ day of August, 1999 by the United States District Court for the District of Maryland,
ORDERED:
1. That plaintiffs' motion for an Order requiring defendant to show cause why he should not be held in contempt and for an Order further enforcing permanent injunction is hereby denied; and
2. That the motion of the United States Secretary of Labor for leave to file a brief as amicus curiae in support of defendant is hereby denied.