A common tactic employed by insurance companies when reviewing a claim for disability benefits is the use of video surveillance (learn more about this here). The surveillance is conducted in hopes of “catching” an insured doing activities that they either claimed they couldn’t do or that differ from the level of physical ability they report to their doctors and/or on claim forms. Naturally, anyone would take offense to the idea of having their “privacy invaded” by someone hired by an insurance company to follow them around and videotape them, but is there anything that can be done about it? Does ERISA prevent someone from trying to sue an insurance company for “invading their privacy.”
In the case of Dreczka v. Hartford, a Wisconsin Federal Court reiterated a long standing principle that State Law based legal actions brought under disability policies governed by ERISA are pre-empted. This means that ERISA essentially eliminates your rights to bring a claim for invasion of privacy.
What is Pre-Emption in an ERISA case?
Any legal action due to some dispute under a disability policy governed by ERISA is subject to federal jurisdiction and federal law. This means that a lawsuit filed under an ERISA governed policy can only be brought in federal court and can only assert legal causes of action available under ERISA. So, if a lawsuit pertaining to an ERISA governed policy is filed in a state court, it will be “removed” to a Federal Court and any State based legal cause of action will be pre-empted by ERISA, or in other terms, will be dismissed.
In Dreckza, the claimant and her husband filed a lawsuit in State Court alleging that Hartford’s claim investigation, which resulted in the termination of Ms. Dreckza’s claim was overly invasive. Specifically, she alleged that Hartford hired an investigator to “stalk” her and videotape her over the course of two days. Ms. Dreckza alleged that when she learned she had been “spied on” she suffered severe emotional distress and was paranoid about leaving her house.
Ms. Dreckza’s complaint against Hartford for its conduct during the investigation of her claim was filed in Wisconsin state court and alleged five separate causes of action under Wisconsin state law: unreasonable surveillance and trespassing, offence to a reasonable person, invasion of privacy, intentional infliction of emotional distress and loss of companionship. As her policy was governed by ERISA, Hartford “removed” the case to Federal Court.
After the case was properly removed to Federal Court, the Court made a determination that Ms. Dreckza’s Wisconsin state law causes of actions were directly related to her claim for benefits under the policy, Hartford’s investigation of her claim, and the subsequent denial of her benefits and therefore governed by ERISA. The Court swiftly noted that her Wisconsin state law causes of action were not allowed to be argued under ERISA and promptly dismissed her case.
Your Insurance Carrier Can Spy On You If You Are in Public View
This case serves as a reminder that any rights you may have under State law do not apply to a legal action brought under ERISA. In essence, the laws created by your State do not afford you any additional protection against the powerful Federal law of ERISA. When you step out your door and enter into the public you no longer have any reasonable expectation of privacy from the prying eyes of your insurance carrier.