CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS.
CAAP-13-0000703; CIV NO. 11-1-2459.
Steven Geshell, for petitioner.
Michael Heihre and Allison Mizuo Lee, for respondent.
C.J., McKENNA, POLLACK, AND WILSON, JJ., AND NAKAYAMA J.,
CONCURRING AND DISSENTING.
W. Pollack, J.
case involves claims brought by a retired employee against
his former employer for allegedly providing inaccurate
information regarding the late enrollment penalty that
applies to Medicare Part B. The circuit court granted summary
judgment in favor of the employer concluding that the
retiree's negligent and negligent misrepresentation
claims were preempted by federal law, and the Intermediate
Court of Appeals affirmed the summary judgment on appeal. We
conclude that the record in this case does not support
federal preemption of the negligent and negligent
Wong was employed as a pilot by Hawaiian Airlines, Inc. (HAL)
until he retired at the mandatory retirement age of sixty in
1996. Upon retiring, Wong became eligible to receive medical
insurance paid for by HAL. HAL is obligated to provide
retired pilots with medical coverage pursuant to a collective
bargaining agreement between HAL and the Airline Pilots
Association (Pilots Agreement). The Pilots Agreement
contemplates coordination of the plan benefits provided by
HAL with Medicare benefits:
The Company shall continue to provide the medical, dental,
drug and vision coverage in effect as of . . . the date of .
. . Normal Retirement under the Retirement Plan for Pilots of
Hawaiian Airlines, Inc. and such pilot's spouse until age
sixty-five (65) at which time the Company shall provide
coverage, which when coordinated with Medicare benefits,
shall maintain the benefits to which the pilot would have
been entitled to had s/he not retired.
Wong became eligible for Medicare Part B in 2001, he
consulted with HAL's Director of Employee Benefits and
Compensation about whether or not he should enroll in
Medicare Part B. Wong consulted with the benefits director
regarding Medicare in part because the Medicare documents he
received instructed him to contact his former employer's
human resources department. Wong alleges that the
employee benefits director advised him that he did not need
to enroll in Medicare Part B because HAL would provide him
with his primary medical insurance and " he could switch
without penalty later."
contacted HAL's benefits director in 2010 when his wife
became eligible for Medicare Part B coverage; his email to
the director states the following:
If for some reason; I lose my medical, you mentioned that I
would be able to enroll into the Medicare program without the
penalty for both parts A & B since I was previously covered
under an equal or better program. The Social Security is
telling me that I should hold a letter that states my
existing coverage is equal or better than Medicare and should
I lose it, I can produce, that letter to allow myself and
spouse to enroll in their program without the penalties . . .
also met with the director to discuss Medicare, at which time
he asked for her assistance in enrolling in Medicare Part B.
Wong requested that the benefits director write a letter for
him to assist him in signing up for Medicare Part B. Wong
received a letter from the director confirming that she
provided Wong with inaccurate information regarding Medicare:
This is to confirm that we provided you with some incorrect
information regarding Medicare when you turned 65. I've
completed forms for Medicare in the past that requested
cancelation data so that people could apply for Medicare at a
delayed point in time when their group coverage was canceled.
Since you will remain qualified for full coverage under our
HMSA plan for your lifetime, we told you that if at some
point in time your plan was canceled, we would be able to
provide you with the necessary information in order to avoid
the late enrollment penalty. I now know that this was
Please see if Social Security is able to waive the late
enrollment penalty because of the misinformation that you
employee benefits director wrote the letter with the
understanding that the letter would serve as proof for Wong
to avoid the late enrollment penalty in enrolling in
claims that, as a result of the misinformation he received
from the benefits director, he did not complete the necessary
forms to enroll in Medicare Part B coverage in 2001 through
March of 2010. Wong brought claims of negligence,
negligent misrepresentation, and unfair or deceptive practice
(UDAP) against HAL in the Circuit Court of the First Circuit
(circuit court). Wong's complaint alleged that HAL "
had a fiduciary, statutory, and common law duty" to
provide Wong " with reasonably accurate Medicare
retirement information." Wong also alleged that HAL had
a duty to supply Wong with correct information regarding
whether he should choose to have HAL's medical plan or
Medicare Part B as his primary health care insurer. Wong
contended that HAL's conduct in providing him incorrect
information regarding Medicare Part B constituted an unfair
or deceptive trade practice pursuant to Chapter 480 of the
Hawai'i Revised Statutes (HRS), which financially injured
him. Wong asserted that he suffered over $286,846.72 in
damages as a result of the inaccurate information provided by
moved for summary judgment arguing, inter alia, that
Wong's claims for negligence and negligent
misrepresentation failed because HAL did not owe Wong a duty
of care relating to information regarding
Medicare. The circuit court denied HAL's
motion for summary judgment in part because the court found
that there were genuine issues of material fact as to whether
HAL owed Wong a duty.
later filed a second motion for summary judgment arguing that
Wong's negligence claims were preempted by federal law.
HAL argued that Wong's negligence claims were preempted
by the Railroad Labor Act (RLA) because any duty HAL owed to
Wong would be derived from HAL's obligations to retired
pilots under the Pilots Agreement. In support of its motion,
HAL maintained that it was obligated to provide Wong with
medical benefits to be coordinated with Medicare under the
Pilots Agreement. HAL also maintained that any obligation to
provide information about health benefits would flow from its
duty to provide such benefits under the Pilots Agreement.
With regard to Wong's UDAP claim, HAL argued that the
claim failed because the alleged conduct did not occur "
in the conduct of any trade or commerce" as required by
HRS Chapter 480.
maintained that his negligence and negligent
misrepresentation claims had no relation to the Pilots
Agreement and that " torts like this are independent of
the contract." In response to HAL's arguments
regarding the UDAP claim, Wong argued that HAL " was
engaged in transportation business, and part of that business
was providing information to its retirees."
court granted HAL's second motion for summary judgment,
concluding that Wong's negligence and negligent
misrepresentation claims were preempted by the RLA. The court
also ruled in favor of HAL on the UDAP claim because the
alleged unfair or deceptive act did not occur in " the
conduct of any trade or commerce." The circuit
court's June 6, 2013 Final Judgment included an award of
costs in the amount of $11,855.30 in favor of HAL.
appealed the circuit court's order granting HAL's
second motion for summary judgment and the court's Final
Judgment to the Intermediate Court of Appeals (ICA), Wong
argued that his negligence claims are independent of the
Pilots Agreement and " there is no need to interpret the
contract in this case" with regard to his claims. HAL
responded that " [w]hen negligence claims are premised
on actions taken by an employer pursuant to CBA-imposed
duties, resolution of negligence claims often requires
interpretation of the CBA to evaluate the reasonableness of
the employers actions." HAL asserted that " Wong
cannot avoid the RLA's mandatory arbitral mechanism by
omitting references to the Pilots Agreement in his Complaint
and by characterizing HAL's actions solely by reference
to state-law torts."
affirmed the circuit court's granting of HAL's second
motion for summary judgment. The ICA concluded that
Wong's negligence claims were preempted by the RLA
because HAL's duty to Wong arose from its duties under
the Pilots Agreement. In reaching this conclusion, the
ICA's analysis seems to assume that HAL's duty to
Wong under the Pilots Agreement was to act with reasonable
care to ensure that its representatives did not provide him
with misinformation about retirement benefits. The ICA also
concluded that it was not error for the circuit court to
dismiss Wong's UDAP claim because HAL's provision of
medical coverage information to Wong did not occur in a
" business context." Additionally, the ICA affirmed
the circuit court's grant of costs to HAL.
filed an Application for Writ of Certiorari requesting that
this court review the ICA Judgment on Appeal. Wong contends
that the ICA erred in holding that his negligence and
negligent misrepresentation claims were preempted by the RLA,
in holding that his UDAP claim failed because the claim did
not occur in the conduct of trade or commerce, and in
affirming taxation of costs.
regard to the RLA preemption determination, Wong argues that
he " alleged and proved facts supporting his negligence
and negligent misrepresentation claims against" HAL.
Wong maintains that these state law claims are independent of
the Pilots Agreement, do not involve interpretation of the
agreement, and therefore they are not preempted by the RLA.
Wong contends that HAL owed him a " duty to act
reasonably under the facts and circumstances of this
case." He asserts that Hawai'i courts recognize the
tort of negligent misrepresentation as set forth in the
Restatement Second of Torts " particularly where [the
defendant] undertook to misinform Plaintiff."
also contends that the ICA's holding that the alleged
conduct did not occur in trade or commerce is flawed and that
the Court was clearly in error in granting summary judgment
upon his UDAP claim.
maintains that the ICA did not err in affirming the circuit
court's granting of summary judgment in favor of HAL on
Wong's negligence claims. HAL argues that " any duty
owed by HAL to provide information to Wong about Medicare
Part B penalties and its interaction with the medical
coverage provided by HAL arose from and was intertwined with
HAL's CBA-obligation to provide medical coverage to
retired pilots." HAL also argues that " the ICA
correctly recognized that Wong's negligence-based claims