Opinion
No. 1:99CV-372-B-A
May 22, 2000
Memorandum Opinion
This cause comes before the court on the plaintiffs' motion to dismiss and remand. The court has duly considered the parties' memoranda and is ready to rule.
The plaintiffs request that this cause be dismissed and remanded to state court. Since dismissal is not the appropriate procedure for remand of an action, the court construes the instant motion as a motion to remand.
This cause was removed from state court on the ground of federal question jurisdiction under 28 U.S.C. § 1331. The notice of removal alleges that the plaintiffs' state law claims arise from an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974 [ERISA], 29 U.S.C. § 1001 et seq. The complaint alleges state law claims for compensatory and punitive damages for bad faith denial of medical insurance coverage under an employee health care plan on the part of plaintiff Jerome Richardson's former employer and insurer. The plaintiffs concede that the subject insurance plan is an ERISA plan.
The issue is whether the allegations in the complaint invoke federal jurisdiction. It is undisputed that the complaint does not expressly raise an issue of federal law. Under the well-pleaded complaint rule, a federal question must appear on the face of the plaintiff's properly pleaded complaint to establish federal question jurisdiction. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 96 L.Ed.2d 318, 327 (1987). As a corollary to the well-pleaded complaint rule, the doctrine of complete preemption converts a state common law claim into a federal claim. McClelland v. Gronwaldt, 155 F.3d 507, 512, 517 (5th Cir. 1998) (citing Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 95 L.Ed.2d 55, 64 (1987)). The jurisdictional issue involves a two-prong analysis of ordinary preemption and complete preemption. McClelland, 155 F.3d at 516-17 ("[O]rdinary preemption is a necessary — but obviously not a sufficient — precondition to complete preemption in the context of ERISA.").
The Supreme Court explained:
One corollary of the well-pleaded complaint rule . . . is that Congress may so completely pre-empt a particular area, that any civil complaint raising this select group of claims is necessarily federal in character.Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 95 L.Ed.2d 55, 63 (1987)).
29 U.S.C. § 1144(a) preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." A state law relates to an ERISA plan "`if it has a connection with or reference to such a plan.'" See Kramer v. Smith Barney, 80 F.3d 1080, 1083 (5th Cir. 1996) (citations omitted). All the parties to this action are ERISA entities. In their capacity as ERISA participant/beneficiaries, the plaintiffs seek to recover ERISA benefits from a former employer and an ERISA administrator/fiduciary. The plaintiffs' state law claims based on entitlement to contractual benefits have a connection to and therefore relate to an ERISA plan, giving rise to the § 1144(a) defense of federal preemption.
"Because ordinary preemption almost invariably arises as a defense, and thus does not appear on the face of the plaintiff's well-pleaded complaint, section 514(a) [1144(a)] preemption typically cannot serve as the basis for removal jurisdiction." McClelland v. Gronwaldt, 155 F.3d 507, 516 n. 26 (5th Cir. 1998) (citing Taylor, 481 U.S. at 63, 95 L.Ed.2d at 63).
Plaintiff Jerome Richardson is an ERISA participant, as defined in 29 U.S.C. § 1002(7), and all the plaintiffs are ERISA beneficiaries, as defined in 29 U.S.C. § 1002(8) .
The Fifth Circuit has observed:
We have found [ordinary] preemption of a state law claim if (1) the claim addresses areas of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan, and (2) the claim directly affects the relationship among the traditional ERISA entities (i.e., plan administrators/fiduciaries and plan participants/beneficiaries).Hook v. Morrison Milling Co., 38 F.3d 776, 781 (5th Cir. 1994) (citations omitted).
"[C]omplete preemption not only displaces substantive state law, but also `recharacterizes' preempted state law claims as `arising under' federal law for the purposes of determining federal question jurisdiction." McClelland, 155 F.3d at 516 (footnote omitted); Cook-Fort Worth Children's Medical Center v. Wal-Mart Associates Group Health Plan, 823 F. Supp. 418, 420 (N.D.Tex. 1993) (The complete preemption doctrine does not operate "unless federal law also supplants state law with a federal claim."). The Supreme Court has held that state law claims within the scope of 29 U.S.C. § 1132(a)(1)(B), one of ERISA's civil enforcement provisions, are completely preempted. Taylor, 481 U.S. at 66-67, 95 L.Ed.2d at 65, cited in McClelland, 155 F.3d at 517. Since the plaintiffs seek to recover benefits under the terms of an ERISA plan, their contract and tort claims clearly fall within the scope of § 1132(a)(1)(B) and are therefore completely preempted by ERISA.
The Fifth Circuit has held that state law claims within the scope of any civil enforcement provision contained in 29 U.S.C. § 1132(a) are completely preempted. McClelland, 155 F.3d at 517 n. 34 (citations omitted).
29 U.S.C. § 1132(a)(1)(B) authorizes, inter alia, a civil action by a participant or beneficiary "to recover benefits due to him under the terms of the plan." The Supreme Court in Taylor held that the plaintiff's state common law contract and tort claims in an action to recover ERISA benefits were completely preempted under section 1132(a)(B)(1) and removable. 481 U.S. at 62-67, 95 L.Ed.2d at 62-65.
The underlying rationale of complete preemption is to preclude ERISA-plan participants and beneficiaries from obtaining "`remedies under state law that Congress rejected in ERISA.'" Taylor, 481 U.S. at 64-65, 95 L.Ed.2d at 63-64 (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 95 L.ED.2d 39, 52 (1987)).
For the foregoing reasons, the court finds that the plaintiffs' state law claims are federal in character and are thus removable. Since this court has federal question jurisdiction over this action, the instant motion to remand should be denied.
An order will issue accordingly.