Opinion
Civil No. 04-1630 (SEC).
October 1, 2004
REPORT AND RECOMMENDATION INTRODUCTION
On June 25, 2004, defendant Scotiabank of Puerto Rico, Inc. ("Scotiabank") filed a Notice of Removal from the Court of First Instance, San Juan Part of the Commonwealth of Puerto Rico, of case "Maritza Hernández Nieves, Querellante v. Scotiabank of Puerto Rico, Inc et al., Civil KPE 04-1741(506)." Scotiabank's request for removal is based on the fact that plaintiff's complaint filed in state court raised several federal questions based on her claims under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. and the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq. ( Docket No. 1).
On July 27, 2004, plaintiff filed a Motion to Remand alleging there is no federal question in this case because her claims are based exclusively on two (2) state causes of action, to wit, wrongful discharge under Act 80 of May 30, 1976, Title 29 P.R. Laws Ann. § 185 et seq., and discrimination against persons with disabilities under Act No. 44 of July 2, 1985, Title 1 P.R. Laws Ann. § 501 et seq. Furthermore, plaintiff contends she has not requested any remedy under any federal statute. Accordingly, plaintiff requests the present case be remanded to state court. (Docket No. 3).
On August 5, 2004, Scotiabank filed an Opposition to plaintiff's Motion to Remand alleging plaintiff's complaint contains federally cognizable causes of action under both the ADA and ERISA. Scotiabank also raises the issue of complete preemption under the latter federal statute and contends this case was properly removed and should not be remanded to state court. (Docket No. 4).
Plaintiff's Motion to Remand and its Opposition were referred to this Magistrate Judge for report and recommendation ( Docket No. 5).
ANALYSIS
1. Applicable Law — Grounds for Removal.
The removal statute, 28 U.S.C. § 1441, provides in pertinent part that "[a]ny civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties, or laws of the United States shall be removable without regard to the citizenship or residence of the parties." 28 U.S.C. § 1441(b). Under § 1441, "an action is removable to a federal court only if it might have been brought there originally." 14A Wright, Miller Cooper, Federal Practice and Procedure § 3721, at 189 (1985), quoted in Cervantes v. Bexar County Civil Service Commission, 99 F.3d 730, 732-33 (5th Cir. 1996). See also Mendoza v. Burgos, 31 F.Supp.2d 35, 37 (D.P.R. 1998); Ponce Roofing, Inc. v. Roumel Corp., 190 F.Supp.2d 264, 265-66 (D.P.R. 2002); Bally v. National Collegiate Athletic Association, 707 F.Supp. 57, 58 (D.Mass. 1988).
Under 28 U.S.C. § 1447(c), a party opposing removal of the action may file a motion to remand, and a remand pursuant to section 1447(c) is "not reviewable on appeal or otherwise." 28 U.S.C. § 1447(d).
A party seeking to remove a case has the burden of proving that federal jurisdiction exists. BIW Deceived v. Local S6, 132 F.3d 824, 831 (1st Cir. 1997). See also Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3rd Cir. 1990); Transport Auditing, Inc. v. Sea-Land Service, Inc., 897 F.Supp. 34, 35 (D.P.R. 1995). Furthermore, "the removal statute should be strictly construed, and any doubts about the propriety of removal should be resolved against the removal of an action."Varela-Fernandez v. Burgos, 15 F.Supp.2d 183, 185 (D.P.R. 1998).
The standard to determine whether removal is appropriate is well-established: "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, 107 S.Ct. 1542 (1987). Furthermore, it is also long-settled law that a plaintiff is the master of his own claim and can avoid removal of an action by solely relying on state law in the remedies sought. Nashoba Communications Limited Partnership No. 7 v. Town of Danvers, 893 F.2d 435, 437 (1st Cir. 1990) (quoting Taylor v. Anderson, 234 U.S. 74, 75, 34 S.Ct. 724 (1914)) ("The presence of a federal question is determined `from what necessarily appears in the plaintiff's statement of his own claim in the bill of declaration, unaided by anything alleged in anticipation of avoidance of defenses which is thought the defendant may interpose.'").
The First Circuit Court of Appeals stated in PCS 2000 LP v. Romulus Telecommunications, Inc., 148 F.3d 32, 34 (1st Cir. 1998) that "the [well-pleaded complaint] rule stipulates that, with a few exceptions, . . . a case arises under federal law only if a federally cognizable cause of action appears within the four corners of the complaint." Precedent also clearly establishes that "[a] defense is not part of the plaintiff's properly pleaded statement of his or her claim." Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 118 S.Ct. 921, 925 (1998).
2. Plaintiff's Complaint Establishes an ERISA claim.
In its Opposition to the Motion to Remand, Scotiabank proffers plaintiff's complaint establishes an ERISA claim because the plan at issue is an "employee welfare benefit plan," as defined by § 3(1) of ERISA, 29 U.S.C. § 1002(1). Accordingly, Scotiabank claims plaintiff's real underlying claim is her long term disability benefits under her ERISA covered plan. In support of its contentions, Scotiabank indicates plaintiff included in her complaint specific allegations of her long term disability benefits and her claim under her ERISA covered plan. ( Docket 1, Exh. 2, ¶¶ 10, 17, 18, 19, 20, 21, 22, 23, 25, 30 and 32(f)). Furthermore, Scotiabank included in its Opposition a copy of the Insurance Policy for Long Term Income Protection Benefits of Canada Life for Scotiabank. (Docket No. 4, Exh. 1).
A review of the record shows plaintiff has not filed a reply to Scotiabank's Opposition to the Motion To Remand even though it was filed almost two (2) months ago. (Docket No. 4).
ERISA, as amended, 29 U.S.C. §§ 1001- 1461, allows a civil action to be brought by a participant or beneficiary of a plan "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B).
ERISA governs "employee benefit plans." 29 U.S.C. § 1001. It comprehensively regulates, among other things, employee welfare benefit plans that, "through the purchase of insurance or otherwise," provide medical, surgical, or hospital care, or benefits in the event of sickness, accident, disability, or death. § 3(1), 29 U.S.C. § 1144(a).
It is clearly established in the First Circuit that disability and medical benefit plans provided to employees by an employer are welfare benefits subject to ERISA. Johnson v. Watts Regulator Co., 63 F.3d 1129, 1133 (1st Cir. 1995) (group insurance programs for accidental death, dismemberment, and permanent disability qualified as a program of employee benefits under ERISA); Toledo v. Ayerst-Wyeth, 852 F.Supp. 91, 98 (1st Cir. 1993) (court found medical benefits plans and short and long term benefit plans in question were welfare benefits governed by ERISA); Sarraf v. Standard Ins. Co., 102 F.3d 991 (9th Cir. 1996) (long term disability plan was an "employee welfare benefit plan" within the meaning of ERISA); Chiles v. Ceridian Corp., 95 F.3d 1505 (10th Cir. 1996) (long-term disability plan is an "employee welfare benefit plan" since disability insurance are considered welfare, not pension, benefits). See also Cintrón Parrilla v. Lilly del Caribe, Inc., 32 F.Supp. 2d 35 (D.P.R. 1998).
In order to establish an ERISA claim, the plan in question must be a "welfare benefit plan" as defined under 29 U.S.C. § 1002(1) of ERISA. Toledo, 852 F.Supp. 91 at 98. A welfare benefit plan is made up of five (5) elements: "(1) a `plan, fund, or program' (2) established or maintained (3) by an employer or by an employee organization, or by both, (4) for the purpose of providing medical, surgical, hospital care, sickness, accident, disability, death, unemployment or vocation benefits, day care centers, scholarship funds, prepaid legal services, or severance benefits (5) to participants or their beneficiaries." 29 U.S.C. § 1002(1); Toledo, 852 F.Supp. at 98; Donovan v. C.H. Dillingham, 688 F.2d 1367, 1371 (11th Cir. 1982).
The case at hand, does in fact, meet the prima facie elements necessary to establish an ERISA claim. The insurance policy for long term benefits in question and the allegations of the complaint show the insurance policy in issue is a plan established by plaintiff's employer (Scotiabank) for all full-time employees, thus establishing the first three (3) elements of an ERISA claim. 29 U.S.C. § 1002(1); Toledo, 852 F.Supp. at 98; Donovan, 688 F.2d at 1371. The fourth element is met because the suit was brought by plaintiff for the purpose of reinstating her benefits as granted by the Bank. (Docket No. 1, Exh. 2). The fifth and final element requires the plan to benefit a "participant" or "beneficiary." Id. "Participant" is defined as any employee or former employee who has become eligible to receive benefits of any type from an employee benefit plan or whose beneficiaries may be eligible to collect benefits from the plan. 29 U.S.C. § 1002(6); Donovan, 688 F.2d at 1371. Based on this definition, the fifth element is met inasmuch plaintiff is an employee of Scotiabank who has become eligible to receive benefits under the plan. (Docket No. 1, Exh. 2).
Moreover, we cannot obviate the fact plaintiff, in the allegations of the complaint, expressly recognizes Scotiabank has a long term benefits plan and that she is a participant in the plan and as such, she requested disability payments under the Bank's long term disability benefits plan and the Bank allegedly discriminated against her for doing so. (Docket 1, Exh. 2, ¶¶ 10, 18, 22, 30 and 32(f)). These claims clearly fall under ERISA.
Furthermore, we cannot ignore the fact plaintiff has failed to dispute Scotiabank's contention that the long term benefits plan it offers to its employees qualifies as a program of employee benefits under ERISA. Accordingly, this fact is undisputed.
Finally, we note plaintiff alleges in her Motion to Remand that her claims are based exclusively on two (2) state causes of action, to wit, wrongful discharge under Act 80, Title 29 P.R. Laws Ann. § 185 et seq., and discrimination against persons with disabilities under Act No. 44, Title 1 P.R. Laws Ann. § 501 et seq. Plaintiff's assertion could be understood as a waiver of plaintiff's federal claims to avoid removal. Nonetheless, we give no credit to plaintiff's contention because it is clear from the complaint, as explained above, that plaintiff included federal claims when she could have filed her claim exclusively under state law. It is long-settled law that a plaintiff is the master of his own claim and can avoid removal of an action by solely relying on state law in the remedies sought. Nashoba, 893 F.2d at 437.
As such, we find Scotiabank's Long Term Disability plan is an "employee welfare benefit plans" governed by ERISA and its benefits, or denial thereof, are the central claim of plaintiffs' complaint. Therefore, plaintiff's claims fall squarely within the elements of an ERISA claim and this case was properly removed to this Court.
3. ERISA Preemption.
The doctrine of complete preemption as to ERISA's civil enforcement provisions provides for federal removal jurisdiction over any state law claims that in substance seek relief that is otherwise within the scope of ERISA remedy provisions. 29 U.S.C. § 1132(a). See Metro Life Ins. Co. v. Taylor, 481 U.S. 58, 63-67, 107 S.Ct. 1542 (1987). ERISA permits a federal action by a beneficiary "to recover benefits due . . . under the terms of [the] plan, to enforce . . . rights under the terms of the plan, or to clarify . . . rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B).
Moreover, the Supreme Court has determined that an "ERISA claim preempts all state claims that `relate to' employee benefit plans," regardless of state law claims that may exist in the absence of ERISA.Tolton v. American Biodyne, 48 F.3d 937, 942 (6th Cir. 1995) (citingFMC Corp. v. Holliday, 498 U.S. 52, 58, 111 S.Ct. 403 (1990)).
The Supreme Court has held that ERISA's "preemptive force `is so powerful as to displace entirely any state cause of action . . .'" Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44,107 S.Ct. 1549 (1987) (quotingFranchise Tax Bd. v. Construction Laborers Vac. Trust, 463 U.S. 1, 23, 103 S.Ct. 2841, 2853 (1983)); FMC Corp. v. Holiday, 498 U.S. 52, 58, 111 S.Ct. 403 (1990) ("the [ERISA] preemption clause is conspicuous for its breadth"). "Section 1144(a) of ERISA has the effect of preempting any state statute dealing with benefit plans covered under ERISA `even if the law is not specifically designed to affect such plans, or the effect is only indirect.'" Cintrón, 32 F.Supp.2d at 35, n. 1 (quoting District of Columbia v. Greater Washington Bd. Of Trade, 506 U.S. 125, 113 S.Ct. 580 (1992)).
As explained above, plaintiff's complaint sets forth a claim under ERISA which falls within the preemptive powers explained above, therefore making its removal proper. Accordingly, plaintiff's request for remand is without merit and should BE DENIED.
4. ADA.
A review of plaintiff's Complaint shows plaintiff admits in paragraph 25 that the Scotiabank discriminated against her in violation of the ADA making direct reference to this statute. (Docket No. 1, Exh. 2, ¶ 25). More importantly, plaintiff alleges in paragraph under the section entitled "Causes of Action" that she has a right to recover damages under the ADA, making express reference to the ADA. ( Docket No. 1, Exh. 2, ¶ 32).
In view of the foregoing, plaintiff unambiguously makes an ADA claim and requests a remedy under the ADA. Hence, a federal question is raised making removal appropriate and the Motion to Remand without merit.
CONCLUSION
Due to the fact plaintiff's complaint raises claims under ERISA and the ADA, removal in this case was appropriate. Accordingly, it is recommended that plaintiff's Motion to Remand BE DENIED.
Plaintiff's claims under state law may be litigated before this Court under supplemental jurisdiction.
IT IS SO RECOMMENDED.
The parties have ten (10) days to file any objections to this report and recommendation. Failure to file same within the specified time waives the right to appeal this order. Henley Drilling Co. v. McGee, 36 F.3d 143, 150-151 (1st Cir. 1994); United States v. Valencia, 792 F.2d 4 (1st Cir. 1986). See Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec. Co., 840 F.2d 985, 991 (1st Cir. 1988) ("Systemic efficiencies would be frustrated and the magistrate's role reduced to that a mere dress rehearser if a party were allowed to feint and weave at the initial hearing, and save its knockout punch for the second round").