Opinion
Civil Action No. 02-12179-RWZ
December 18, 2002
MEMORANDUM OF DECISION AND ORDER
In 1986, defendant Frederick M. Bruno was convicted of embezzling more than $1.3 million from plaintiff East Boston Savings Bank ("Bank"). Bruno had been a participant in the Bank's pension plan and has a pension worth $54,172.52. The plan is administered by defendant Savings Banks Employees Retirement Association ("SBERA"). In its efforts to collect a civil judgment against Bruno, the Bank obtained a court order appointing a receiver to collect his pension. After SBERA refused to pay the funds to the receiver, the Bank initiated contempt proceedings in the state court against SBERA and Bruno. SBERA removed the matter to this Court, and plaintiff, pursuant to Federal Rules of Civil Procedure 12(h)(3), suggests that removal jurisdiction does not exist. Because the suit is not within this Court's original jurisdiction, the case is remanded to state court.
SBERA argues that federal jurisdiction exists because the contempt proceedings are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1001 et seq. Federal preemption is ordinarily a defense that "does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). However, removal jurisdiction does exist under the doctrine of "complete preemption" if an action under state law was preempted by ERISA and also came within ERISA's civil enforcement provisions, codified at 29 U.S.C. § 1132(a). Taylor, 481 U.S. at 64-66; Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 4-5 (1st Cir. 1999). The enforcement provisions create express causes of action for the Secretary of Labor as well as for ERISA plan participants, beneficiaries, and fiduciaries. Only participants and beneficiaries have standing to bring benefit collection actions. 29 U.S.C. § 1132(a)(1)(B). State law causes of action brought by parties without standing to sue under ERISA are simply not of such "central concern to the federal statute" as to create removal jurisdiction. Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for S. Cal., 463 U.S. 1, 25-26 (1983); Nahigian v. Leonard, ___ F. Supp.2d ___, 2002 WL 31667305, at *15 (D.Mass. Nov. 22, 2002) ("[I]f a plaintiff lacks standing to sue under Section 1132(a), his state law claims are not completely preempted . . . and the action must be remanded to state court.").
ERISA defines a "participant" as "any employee or former employee . . . who is or may become eligible to receive a benefit of any type from an employee benefit plan." 29 U.S.C. § 1002(7).
A "beneficiary" is "a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder." 29 U.S.C. § 1002(8).
SBERA argues that the present case is essentially a benefit collection action.
In the present case, the Bank or its receiver is neither a "participant" nor a "beneficiary"; rather, plaintiff is a judgment creditor, not unlike the state of California in Franchise Tax Bd., in which the Supreme Court held that no removal jurisdiction existed for an action under state law to enforce levies against the pension funds of people who owed back taxes. Franchise Tax Bd., 463 U.S. at 28; cf. Simon v. General Elec. Co., 263 F.3d 176, 177-78 (2d Cir. 2001) (finding that a creditor who was assigned a beneficiary's claim lacked standing to sue under ERISA). Because creditors have no standing to sue under ERISA, SBERA's preemption defense cannot create removal jurisdiction over plaintiff's well-pleaded complaint.
Despite the lack of removal jurisdiction, ERISA preemption may well be a valid defense to the contempt charges.
Accordingly, this action is REMANDED to the Massachusetts Superior Court for Suffolk County.