State v. Phys. Health Servs. of Conn., Inc.,
No. 00-7986 (2d Cir. Mar. 27, 2002)

The United States Court of Appeals for the Second Circuit held that the State of Connecticut did not have standing to bring suit, under ERISA, on behalf of the enrollees of a managed care provider. The State sought an order to enjoin the managed care organization from using a pre-approved drug formulary that allegedly deprived enrollees of medically necessary drugs. The court held that the State had no standing to bring suit as assignee of the enrollees' claims because it has no concrete, private interest in the outcome of the case. The court also held that the State did not have parens patriae standing (i.e., standing to step in on behalf of its citizens who cannot protect themselves) since ERISA specifically authorizes only participants, beneficiaries, and fiduciaries to bring suit, which the State is not.