Case of the Day: Francisco S. v. Aetna
Posted on April 23, 2020
The case of the day is Francisco S. v. Aetna Life Insurance Co. (D. Utah 2020). Francisco S. was an employee of the World Bank. The Bank provided him with health benefits under a self-funded employee benefits plan. Aetna was the third-party administrator. Aetna denied a claim submitted for Francisco’s daughter, and Francisco sued Aetna and the World Bank plan.
I’m going to skip a bunch of procedural complexity and some not-so-good arguments that the parties fleshed out and get right to the main point. We know that under Jam, international organizations like the World Bank are not absolutely immune from suit, but are immune on the same terms as foreign sovereigns. Under the commercial activity exception to foreign sovereign immunity, there is no immunity if the case is based on the defendant’s commercial activity in the United States. Here, the parties agreed that the case was based on the denial of insurance coverage. The court denied the World Bank’s motion to dismiss on the grounds that “health insurance is a commercial activity provided for in large part through one’s employer, public or private.” I think this is basically right given the parties’ agreement that the action was based upon the denial of insurance coverage. The only gloss I would give is that if the action were based upon Francisco’s employment, which is another possible view, then the question would be whether he was a commercial employee, e.g., a clerical worker or the like, or someone with governmental or official duties (these terms don’t translate perfectly from the foreign sovereign context to the international organization context, of course).
The case is like Merlini, the case I wrote about earlier this week. And in fact it cites Merlini and a few other cases in support of its conclusion. In light of Merlini, the World Bank would have been better off arguing that the case wasn’t based on the failure to provide coverage, but rather its decision not to provide coverage, if that decision could be characterized as in some way official or part of the World Bank’s mission. But I’m not sure that argument would have been possible on the facts.