Opinion
Case No. 3:05CV7142.
July 19, 2005
ORDER
Plaintiffs, September Winds Motor Coach, Inc., Kathy Tobis, Steve Tobis, and Jaime Tobis, bring this action against defendant Medical Mutual of Ohio for violation of R.C. § 3923.14, bad faith, breach of contract, and unjust enrichment in connection with cancellation of an insurance policy. Pending is plaintiffs' motion to remand. For the following reasons, plaintiffs' motion shall be granted.
Background
Defendant originally removed this case on February 25, 2002, alleging federal question jurisdiction. Finding that ERISA did not apply, I remanded this case to the state court. While this case was pending in state court, the Supreme Court decided Yates v. Hendon, 541 U.S. 1 (2004), which overruled the Sixth Circuit precedent on which my earlier remand order had relied and held that working owners are considered "employees" under ERISA.
Following a change of judges in the state court, defendants moved for reconsideration of an earlier order denying partial summary judgment. The new judge reversed that earlier decision and held that ERISA applied to the case, in effect reversing my remand order as well. Defendants then removed the case a second time. Pending is plaintiffs' motion to remand.
Discussion
This case presents an unusual procedural quandary. I am persuaded that my original decision to remand, while correct under then-prevailing Sixth Circuit precedent, is not the decision I would reach in light of the Supreme Court's superceding Yates opinion.
Yates overruled Fugarino v. Hartford Life Acc. Ins. Co., 969 F.2d 178 (6th Cir. 1992) and Agrawal v. Paul Revere Life Ins. Co., 205 F.3d 297 (6th Cir. 2000), on which my earlier opinion rested. It held that working owners in an ERISA plan are to be considered "employees" for ERISA purposes. While Yates appeared in the bankruptcy setting, the Court made clear that there is no reason to confine its holding to that arena as plaintiffs' urge. "This case concerns the definition and coverage provisions of Title I, though those provisions, indicating who may participate in an ERISA-sheltered plan, inform each of ERISA's four titles." Yates, 541 U.S. at 2.
Plaintiffs also attempt to distinguish Yates on the grounds that an employee who was a member of the plan subsequently left the plan, leaving only the employee-owners participating in the plan. "The mere fact that [a] company no longer has several employees does not transform what was already an ERISA plan into a non-ERISA plan." Int'l Res., Inc. v. N.Y. Life Ins. Co., 950 F.2d 294, 298 (6th Cir. 1991). Similarly, a benefits plan does not change back and forth from an ERISA plan to a non-ERISA plan. This is what the statute means when it defines an employee benefit plan as one "established or maintained by an employer." 29 U.S.C. § 1002(1).
The Supreme Court's decision in Yates clearly overruled the cases on which I relied in my earlier holding. Because working owners are now considered employees under ERISA, I would reach a different holding today than in my earlier remand order.
Normally, my decisions are for me to reconsider and the Sixth Circuit Court of Appeals to review. Because this was a remand order under 28 U.S.C. § 1447(c), however, these options are unavailable. The court of appeals may not review a remand order issued pursuant to § 1447(c), nor may I consider a Rule 60(b) motion on such a remand order. Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 531 (6th Cir. 1999). Likewise, a later removal may not serve as "the functional equivalent of a motion to review or reconsider." Brierly, 184 F.3d at 532.
Nevertheless, it is highly inappropriate, both under the removal rules and under principles of federalism, for a state court judge, in all practical effect, to reverse my decisions. Allowing state court judges to act in a manner that reverses federal remand orders would create a jurisdictional limbo, as cases ping-ponged from state to federal court. Such war between forums is simply impermissible. Remand orders, erroneous or not, are final. Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 343 (1976).
Furthermore, a case may not be removed twice on the same grounds. See, e.g., St. Paul C. Ry. Co. v. McLean, 108 U.S. 212 (1883). While some exceptions exist to this rule, none apply here. For instance, "[a] defendant who fails in an attempt to remove on the initial pleadings can file a second removal petition when subsequent pleadings or events reveal a new and different groun d for removal." One Sylvan Road North Assoc. v. Lark Int'l, Ltd., 889 F. Supp. 60, 62 (D. Conn. 1995). "New grounds," however, means a different set of facts, not a new legal theory or subsequent caselaw. See O'Bryan v. Chandler, 496 F.2d 403, 410 (10th Cir. 1974).
When it is the law that is in dispute, the rule is clear: "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise. . . . " 28 U.S.C. § 1447(d). A district court's remand order for lack of subject matter jurisdiction is conclusive, for better or worse, as to the issues decided. See, e.g., Gravit v. Sw. Bell Tel. Co., 430 U.S. 723, 724 (1977).
Conclusion
Because this court's earlier remand order is conclusive and final as to the issues determined, it is hereby
ORDERED THAT plaintiffs' motion to remand be, and the same hereby is granted.
So ordered.