DENVER - A Durango couple's lawsuit against their health insurance company is back in court for a third time after a
federal appeals court handed them a small victory last week.
The case could affect how the law treats employees of tribal-owned companies like the Southern Ute Growth Fund.
Stephen Dobbs worked for the Southern Ute Indian Tribe when he tried to get treatment for his son's rare skull
condition. Anthem Blue Cross, the tribe's insurance company, initially forced Dobbs and his wife, Naomi, to pay
expensive out-of-network rates for the specialist who treated their son. Their out-of-pocket costs reached
The boy's surgery was successful, and Anthem eventually repaid much of the money. But the Dobbses alleged shoddy
treatment by Anthem, so they sued the company to make it think twice about treating others in the same way.
Anthem argued that the lawsuit is blocked by a federal law known as ERISA, a law that attempts to set up a single
standard for employee benefits nationwide. It also makes it difficult to sue insurance companies.
The Dobbses argued that because Stephen Dobbs worked for the tribe - a sovereign government - ERISA does not apply.
Last week, the U.S. 10th Circuit Court of Appeals decided that the couple should have a chance to prove their case in
district court. It will be the third time the case goes to district court.
It's a very Pyrrhic victory for us," said Shawn Mitchell, lawyer for the Dobbs family. It means we have our day in
court to show the Dobbses' plan is a governmental plan," and not subject to ERISA.
But doing that will be difficult, lawyers said.
Congress adopted a very narrow definition of what counts as a governmental plan in 2006, Mitchell said.
Congress said that in order to escape regulation by ERISA, most of the employees of an Indian tribe have to be doing
governmental work, not the kinds of commercial enterprises run by the Southern Ute tribe. Dobbs, for example, worked as
a geologist for the tribe's Red Willow Production Co.
That will make it hard for the Dobbses to prove their case, said Tom Shipps, lawyer for the Southern Ute tribe.
It seems it will be difficult, if not impossible, to conclude the benefit programs administered by the tribe meet that
test," Shipps said.
The tribe filed a brief in the case to make sure the appeals court paid attention to tribal sovereignty, but it is not
a plaintiff or defendant.
The final outcome of the Dobbs case could help determine whether tribal employees' insurance and benefit plans are
subject to federal law, Shipps said.
Despite the difficulty for the Dobbs family, Shipps thinks most employees would welcome federal oversight because the
law is set up to protect their benefits.
Anthem lawyer John Mann was in court Tuesday and not available to comment.