Opinion
Case No. 01-2309-JWL
September 26, 2001
MEMORANDUM ORDER
Plaintiffs Julie and George Donner filed suit against defendant Lawrence Paper Company ("Paper Company") in the District Court of Douglas County, Small Claims Division. Plaintiffs allege that defendant failed to properly reimburse them under the Paper Company's medical plan for expenses incurred on medical care and prescriptions. Defendant removed the lawsuit to federal court arguing that the plaintiffs' cause of action falls under ERISA and is preempted by federal law. This matter is presently before the court on "Plaintiffs' Response to Defendant's Notice of Removal," which the court will construe as a motion to remand. (Doc. 4). For the reasons set forth below, the court denies the motion.
According to the small claims court petition, plaintiffs seek reimbursement for expenses incurred for medical care and prescriptions that allegedly fall under the Paper Company's medical plan. Defendant removed the lawsuit to federal court pursuant to 28 U.S.C. § 1441. Defendant alleges this is proper because plaintiffs' claim is actionable, if at all, exclusively under § 502(a)(1)(B) of ERISA because the claim is "to recover benefits due" under the terms of the Paper Company's ERISA medical plan. See 29 U.S.C. § 1132 (a)(1)(B). Under § 502(e)(1) of ERISA, 28 U.S.C. § 1132 (e)(1), and 28 U.S.C. § 1331, the United States District Courts are given original jurisdiction over claims for medical benefits. In the plaintiffs' motion to remand, plaintiffs resist removal alleging that the language in the Paper Company's medical plan permits them to file suit in state court and removing the case to federal court would violate their rights. Additionally, plaintiffs allege that removal is improper because the Paper Company's plan is not an ERISA plan because it is not a cafeteria plan and does not include retirement securities. In the plaintiff's reply, they continue to allege that the language in the Paper Company's medical plan should foreclose the defendant from removing the case to federal court. Plaintiffs apparently abandon their argument that the Paper Company's plan is not an ERISA plan.
Although the plaintiffs do not raise the issue in their reply, the court finds the defendant's response was filed in a timely manner under Local Rule 7.1(b) for the reasons stated in the defendant's response brief.
"The plaintiffs may agree with the defendants that under both federal statute and United States Supreme Court case law, that a claim may be removed to federal court. The opposition to this fact is the fact that the defendants state in their plan book that the policy holder have the choice as to which court they wish to take it to." Plaintiff's Reply at p. 2.
Removal is proper here. By statute "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the strict court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441 (a). In other words, a civil action is removable only if it could have been brought in federal court originally. A category of cases which the district courts do have jurisdiction over are "federal question" cases. Federal question cases are those cases "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.
It is clear that a cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 107 S.Ct. 1542, 1546-47, 95 L.Ed. 55 (1987) (citing Louisville Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908)). Federal preemption is ordinarily a federal defense to the plaintiff's suit, and as a defense, it does not appear on the face of a well-pleaded complaint and does not authorize removal to federal court. Id. (citing Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936)). One corollary of the well-pleaded complaint rule is where Congress has completely preempted a particular area of the law, and in that area any civil complaint raising a claim in that area is necessarily federal in character. Id. at 64. The Supreme Court has held that one area of law that is completely preempted is ERISA's civil enforcement provisions. Id. A state law claim will convert into a federal claim if the claim is preempted by ERISA and within the scope of ERISA's civil enforcement provisions. Id.; Carland v. Metropolitan Life Ins. Co., 935 F.2d 1114, 1119 (10th Cir. 1991). The civil enforcement provision of ERISA states that a participant or beneficiary may bring a civil action to recover benefits due them under the terms of their plan, to enforce their rights under the terms of their plan, or to clarify their rights to future benefits under the terms of their plan. 29 U.S.C. § 1132 (a)(1)(B). Plaintiffs meet the requirements of section 502(a)(1)(B). Therefore, plaintiff's claim for past benefits under their ERISA plan must be characterized as a claim under section 502(a)(1)(B) of ERISA.
The caption to the plaintiffs' small claims court petition could be interpreted to include Mr. Goodrich, personally, in this lawsuit. The body of the petition, however, does not provide facts that could form the basis for any cause of action against him. If the plaintiffs want to include Mr. Goodrich in this lawsuit they should file a motion to amend their petition and allege facts implicating him personally.
Plaintiffs allege that language in the Paper Company's plan should preclude removal. The language the plaintiffs point to states: "If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court." See Exhibit A of Motion to Remand and Exhibit A of Plaintiffs' Reply. The court believes this statement is intended to inform plan participants they may file a cause of action in federal or state court. This language does not, however, limit a defendant's ability to remove a case to federal court. If a federal question is present on the face of a complaint or the area of law is preempted by federal law, the defendant has the right to remove the case to federal court regardless of the dollar amount the plaintiff is seeking to recover. Because the plaintiffs' claim is properly before the court on federal question jurisdiction, the court is not permitted to remand the case to small claims court.
The court sympathizes with the plaintiff's frustration in having to engage in motion practice in federal court on a $1,700 claim when it has likely cost the defendant more than that in legal expenses to litigate these motions in federal court. Nonetheless, if federal jurisdiction exists then the defendant has the right to remove the case to federal court.
IT IS THEREFORE ORDERED BY THE COURT that the defendant's motion to remand is denied.
IT IS SO ORDERED.