This section contains the nature of the case and procedural background.

Carle Clinic Association, P. C., Health Alliance Medical Plans, Inc., and Carle Health Insurance Management Co., Inc. (D) function as a health maintenance organization (HMO) organized for profit. Its owners are physicians providing prepaid medical services to participants whose employers contract with Carle to provide such coverage. P was covered by Carle through her husband's employer, State Farm Insurance Company. Dr. Pegram (D), examined P, who was experiencing pain in the midline area of her groin. Six days later, Dr. Pegram (D) discovered a six-by-eight-centimeter inflamed mass in P's abdomen. Dr. Pegram (D) did not order an ultrasound diagnostic procedure at a local hospital but decided that P would have to wait eight more days for an ultrasound, to be performed at a facility staffed by Carle more than 50 miles away. P's appendix ruptured, causing peritonitis. P sued Ds in state court for medical malpractice and two counts of state-law fraud. Ds removed the case to federal court claiming ERISA preempted the fraud counts. Ds then sought summary judgment on the state-law fraud counts. The District Court granted their motion as to the second fraud count but granted P leave to amend the one remaining. P claimed that medical services under the terms of the HMO rewarded its physician owners for limiting medical care, and that entailed an inherent or anticipatory breach of an ERISA fiduciary duty since these terms created an incentive to make decisions in the physicians' self-interest, rather than the exclusive interests of plan participants. P sought relief under 29 U.S.C. § 1109(a). The trial court dismissed the claim holding that Carle (D) was not 'involved [in these events] as' an ERISA fiduciary. The original malpractice counts were then tried by a jury, and P prevailed on both, receiving $35,000 in damages. P then appealed the dismissal of the ERISA claim. It held that Carle (D) was acting as a fiduciary when its physicians made the challenged decisions and that P's allegations were sufficient to state a claim. Ds appealed.

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