Summary
holding that monetary damages for the denial of short term and long term disability benefits survive the plaintiff's death
Summary of this case from Cardella v. CVS Caremark Corp.Opinion
Civil Action No: SA-04-CA-940-XR.
November 30, 2004
ORDER
On this date, the Court considered Plaintiff's Motion to Remand (docket no. 6), filed November 15, 2004, and Defendants' Response (docket no. 11). After careful consideration, the Court will DENY Plaintiff's motion to remand the breach of contract and fraud claims inasmuch as they are completely preempted by ERISA, but the Court sua sponte remands Plaintiff's Tex. Labor Code section 451 claim to the state court.
Facts and Procedural Background
On September 10, 2004, Plaintiff filed this case in the 150th Judicial District Court in Bexar County, Texas. Defendants were served on September 20 and timely removed the case to this Court on October 19, 2004, based on federal question and diversity jurisdiction. See 28 U.S.C. §§ 1132, 1331 and 1441.
In Plaintiff's Original Petition she alleges that while employed at the Harris Corporation she suffered an occupational injury and filed a claim for worker's compensation benefits. She claims that she was subsequently wrongfully discharged because she filed a claim for worker's compensation benefits. She also alleged that she was improperly denied short-term and long-term disability benefits under Harris' STD and LTD Plans, which were administered by defendant Broadspire Services, Inc. Plaintiff seeks recovery pursuant to Tex. Labor Code § 451. In addition, she alleges that Defendants breached their contractual obligations by denying her the STD and LTD benefits she claims she was entitled to receive. Finally, she claims that defendants intentionally misrepresented the STD and LTD plans and she seeks damages for the alleged fraudulent statements.
Defendants removed the case alleging diversity jurisdiction. Further, Defendants claimed the existence of a federal question because Plaintiff's claims were preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1132, et seq.
Plaintiff concedes that she has alleged, in part, an ERISA action, but argues that concurrent jurisdiction to file such a claim exists in both the state and federal courts, and that her filing in the state court precludes removal to the federal court.
Plaintiff relies upon Lederman v. Pacific Mut. Life Ins. Co., 494 F. Supp. 1020 (D.C. Cal. 1980).
Applicable Law
The jurisdictional facts must be judged as of the time the complaint is filed. In re Carter, 618 F.2d 1093, 1101 (5th Cir. 1980) ("It is a fundamental principle of law that whether subject matter jurisdiction exists is a question answered by looking to the complaint as it existed at the time the petition for removal was filed. . . . Indeed, it has often been stated that the plaintiff cannot rob the district court of subject matter jurisdiction by electing to amend away the grounds for federal jurisdiction."), cert. denied, 450 U.S. 949 (1981).Analysis
Federal courts within the Fifth Circuit that have addressed a motion to remand on the ground of the state court's concurrent jurisdiction, coupled with the plaintiff's right to choose a forum, have rejected the concept that concurrent jurisdiction precludes removal of an ERISA case. See Washington v. Fitzgeralds South, Inc., 1998 WL 930702 (N.D. Miss. 1998); McLaughlin v. General American Life Ins. Co., 1998 WL 24427 (E.D. La. Jan 21, 1998); Zelenka v. United Healthcare and Life Ins. Co., 1997 WL 411219 (E.D. La. 1997); Olsen v. Atlantic Richfield Co., 1996 WL 739039 (N.D. Tex. 1996). See also Breuer v. Jim's Concrete of Brevard, Inc., 538 U.S. 691, 699 (2003) (Fair Labor Standards Act case. "[I]t becomes just too hard to believe that a right to `maintain' an action [in state court] was ever meant to displace the right to remove."). Plaintiff's motion to remand regarding this issue is DENIED.Plaintiff next argues that Ms. Barrow has recently died, and since an ERISA cause of action cannot survive, remand is proper. However, as stated above, jurisdictional facts must be judged as of the time the complaint is filed and removal performed. In addition, the Court notes that Plaintiff still maintains her breach of contract and fraud claims regarding the LTD and STD plans, and has not sought to delete such claims. Plaintiff's motion to remand regarding this issue is DENIED.
Plaintiff makes this statement without any reference to a statute or case. As discussed below, the Court does not agree with Plaintiff's argument that an ERISA denial of benefits case cannot survive a beneficiary's death.
Generally, worker's compensation retaliation claims are not removable. Plaintiff does not directly raise this issue. The Court nevertheless will consider the issue because it has a duty to evaluate its jurisdiction.
Plaintiff does not contest that the LTD and STD Plans are ERISA plans and that she is arguing she was wrongfully denied benefits under the plans. Further, she does not contest that the fraud and breach of contract claims relate to her status as a beneficiary of the plans. Accordingly, the fraud and breach of contract claims are completely preempted by ERISA, and the claims fall within the federal court's jurisdiction and are removable pursuant to 28 U.S.C. § 1441(b). Hernandez v. Jobe Concrete Prods., Inc., 282 F.3d 360, 362 (5th Cir. 2002) (citing Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 67 (1987)) (holding causes of action falling within ERISA's enforcement provisions, codified at 29 U.S.C. § 1132, are removable under complete preemption doctrine).
The question then becomes what of Plaintiff's worker's compensation retaliatory discharge claim under Tex. Labor Code § 451. Defendant argues that the 451 claim is "nothing more than artful pleading done in an attempt to avoid federal jurisdiction." A review of Plaintiff's Original Petition clearly states two differing claims. One claim states that Plaintiff was denied ERISA based benefits. The other claim states that Plaintiff was discharged because she filed a claim for worker's compensation benefits. Defendants urge the Court to treat this remand issue as a summary judgment proceeding and take notice of Harris managers' affidavits that state Plaintiff never informed them she suffered an occupational injury and was seeking worker's compensation benefits. The fact remains, however, that notwithstanding any defense Defendants may be able to present, Plaintiff has articulated a 451 claim, and that claim is not completely preempted by ERISA.
Given that Plaintiff's 451 claim survives, the question is then can this Court exercise its supplemental jurisdiction and maintain that claim in this federal court. 28 U.S.C. § 1445(c) prevents the removal of a civil action arising under the workmen's compensation laws of a state. A 451 claim is an action arising under the Texas worker's compensation statute and is not removable when the basis of jurisdiction is diversity jurisdiction. Sherrod v. American Airlines, Inc., 132 F.3d 1112, 1118 (5th Cir. 1998). In addition, in Sherrod, the Fifth Circuit held that where the worker's compensation retaliatory discharge claim was removed along with an Age Discrimination in Employment Act (ADEA) claim, § 1445(c) prohibits removal of state worker's compensation claims regardless of whether jurisdiction is based on diversity or federal question. Id. at 1118-1119. Further, the Fifth Circuit concluded that the district court erred by failing to sever and remand the state worker's compensation claim. Id. at 1119. This case is controlled by Sherrod. The section 451 claim is SEVERED and REMANDED to the 150th Judicial District Court, Bexar County, Texas.
Finally, because it has been brought to the Court's attention that Ms. Barrow has died, the Court must also determine whether the ERISA denial of benefits claim survives Ms. Barrow's death. U.S. Parole Comm'n v. Geraghty, 445 U.S. 388 (1980) (identifying two aspects of mootness: "[W]hen the issues presented are no longer `live' or the parties lack a legally cognizable interest in the outcome."). The mootness issue implicates this Court's jurisdiction. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 90 (1998). Plaintiff seeks monetary damages for the unpaid STD and LTD benefits denied. Therefore, plaintiff's damage claim is not extinguished by Ms. Barrow's death. Harrow v. Prudential Ins. Co. of America, 279 F.3d 244 (3d Cir. 2002) (beneficiary's action alleging improper denial of benefits was not rendered moot by beneficiary's death during course of proceedings, even though claims for injunctive and declaratory relief were mooted by death, since beneficiary had also asserted claim for money damages which administratrix of beneficiary's estate could still pursue); Hall v. Unum Life Ins. Co. of America, 300 F.3d 1197 (10th Cir. 2002).
Conclusion
For the reasons stated above, the Court DENIES Plaintiff's motion to remand the breach of contract and fraud claims inasmuch as they are completely preempted by ERISA. The Court, however, SEVERS the Texas Labor Code section 451 claim and REMANDS that claim to the 150th Judicial District Court, Bexar County, Texas.Plaintiff is ORDERED to file a response to Defendants' motion to dismiss within 11 days of this Order. Further, Plaintiff is ORDERED to file a motion for substitution pursuant to Fed.R.Civ.P. 25(a) within 90 days of the Court's November 15, 2004 Order, or Plaintiff's remaining claims shall be dismissed.