Pegram v. Herdrich

Cynthia Herdrich (plaintiff) was an enrollee of Carle Clinic Association (“Carle”) (defendant), a health maintenance organization (“HMO”) owned by physicians who provided prepaid medical services. A Carle HMO physician, Dr. Lori Pegram (defendant) examined Herdrich for pain in Herdrich’s groin. Six days later, Pegram discovered a mass in Herdrich’s abdomen. Despite Herdrich’s noticeable inflammation, Pegram chose not to order an ultrasound at that time, and instead, decided that Herdrich needed to wait eight days before obtaining an ultrasound at an Carle-staffed facility more than 50 miles away. Before the eight days were up, Herdrich’s appendix ruptured, causing peritonitis. Herdrich thereafter brought suit against Pegram and Carle in state court for medical malpractice and later amended her complaint to add a state law fraud claim. Carle and Pegram argued that the Employment Retirement Income Security Act of 1974 (ERISA) preempted Herdrich’s causes of action and removed the case to federal court. The district court granted Carle and Pegram summary judgment on one of Herdrich’s claims but allowed the other claim to be amended. Herdrich then added a claim alleging Pegram and Carle breached an ERISA fiduciary duty which was dismissed by the district court. After a jury held for Herdrich on her initial malpractice claims, she appealed the district court’s dismissal of the ERISA claim to the court of appeals. The court of appeals reversed and Pegram and Carle sought certiorari to the U.S. Supreme Court.