Metropolitan Life Insurance Company v. Taylor General Motors Corporation v. Taylor, s. 85-686

• Decision Date: 06 April 1987
• Docket Number: 85-688,Nos. 85-686,s. 85-686
• Citation: 481 U.S. 58,107 S.Ct. 1542,95 L.Ed.2d 55
• Parties: METROPOLITAN LIFE INSURANCE COMPANY, Petitioner, v. Arthur TAYLOR. GENERAL MOTORS CORPORATION, Petitioner, v. Arthur TAYLOR
• Court: U.S. Supreme Court

481 U.S. 58

107 S.Ct. 1542

95 L.Ed.2d 55

METROPOLITAN LIFE INSURANCE COMPANY, Petitioner,

v Arthur TAYLOR.

GENERAL MOTORS CORPORATION, Petitioner,

v. Arthur TAYLOR.

Nos. 85-686, 85-688.

Argued Jan. 21, 1987.

Decided April 6, 1987.

Syllabus

Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA) provides that a participant or beneficiary may bring a civil action to, inter alia, recover benefits due him under the terms of an employee benefit plan. Under 28 U.S.C. § 1441(a), any civil action brought in state court of which the federal district courts have original jurisdiction may be removed by the defendant to the appropriate federal district court. Petitioner insurer underwrites an ERISA-covered plan set up by petitioner employer to pay benefits to salaried employees disabled by sickness or accident. After petitioners' doctors found that respondent employee was fit to resume working, his plan benefits were discontinued, his supplemental claim for benefits was denied, and his employment was terminated when he refused to return to work. He then filed suit in state court for reimplementation of his benefits and for related common law contract and tort claims, but petitioners removed the suit to federal court alleging federal question jurisdiction over the disability claim by virtue of ERISA and pendent jurisdiction over the remaining claims. The District Court found the case properly removable and granted summary judgment for petitioners on the merits. However, the Court of Appeals reversed on the ground that the District Court lacked removal jurisdiction, finding that the complaint purported to state only state law causes of action, and that the "well-pleaded complaint" rule, under which a cause of action "arises under" federal law for jurisdictional purposes only when the plaintiff's well-pleaded complaint raises federal law issues, did not allow removal predicated on the basis that the state law claims were subject to the federal defense of ERISA pre-emption. The court also held that the doctrine of Avco Corp. v. Machinists, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126, which permits the removal of cases purporting to state only state law causes of action in labor cases pre-empted by § 301 of the Labor Management Relations Act, 1947 (LMRA), did not apply to this case.

Held:

1. Under Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39, respondent's common law contract and tort claims are pre-empted by ERISA, and this lawsuit falls directly under § 502(a)(1)(B), which provides an exclusive federal cause of action for resolution of suits by beneficiaries to recover benefits from a covered plan. Pp. 62—63.

2. Common law causes of action filed in state court that are pre-empted by ERISA and come within the scope of § 502(a)(1)(B) are removable to federal court under 28 U.S.C. § 1441(b). The Avco doctrine applies in this situation to recharacterize a state law complaint displaced by § 502(a)(1)(B) as an action arising under federal law, even though the defense of ERISA pre-emption does not appear on the face of the complaint, as is normally required for removal by the "well-pleaded complaint" rule. That Congress meant to so completely pre-empt this subject area that any claim is necessarily federal in character is established by the language of § 502's jurisdictional subsection (f), which closely parallels that of § 301 of the LMRA, and statements in ERISA's civil enforcement provisions' legislative history, which indicate that § 502(a)(1)(B) suits should be regarded as "arising under" federal law in the same manner as § 301 suits. Respondent's contention that removal was improper because it was not "obvious" when he filed suit that his common law action was both pre-empted and displaced by ERISA is not persuasive, since the touchstone of federal courts' removal jurisdiction is not the "obviousness" of the pre-emption defense but the intent of Congress. Pp. 63-67.

763 F.2d 216 (CA6 1985), reversed.

O'CONNOR, J., delivered the opinion for a unanimous Court. BRENNAN, J., filed a concurring opinion, in which MARSHALL, J., joined, post, p. ----.

David M. Davis, Detroit, Mich., for petitioner.

Peter Edward Scheer, Washington, D.C., for respondent.

Justice O'CONNOR delivered the opinion of the Court.

In Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987), the Court held that state common law causes of action asserting improper processing of a claim for benefits under an employee benefit plan regulated by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, 29 U.S.C. § 1001 et seq., are pre-empted by the Act. 29 U.S.C. § 1144(a). The question presented by this litigation is whether these state common law claims are not only pre-empted by ERISA, but also displaced by ERISA's civil enforcement provision, § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B),¹ to the extent that complaints filed in state courts purporting to plead such state common law causes of action are removable to federal court under 28 U.S.C. § 1441(b).

I

General Motors Corporation, a Delaware corporation whose principal place of business is in Michigan, has set up an employee benefit plan subject to the provisions of ERISA for its salaried employees. The plan pays benefits to salaried employees disabled by sickness or accident and is insured by the Metropolitan Life Insurance Company (Metropolitan).

General Motors employed Michigan resident Arthur Taylor as a salaried employee from 1959-1980. In 1961 Taylor was involved in a job-related automobile accident and sustained a back injury. Taylor filed a workers' compensation claim for this injury, and he eventually returned to work. In May 1980, while embroiled in a divorce and child custody dispute, Taylor took a leave of absence from his work on account of severe emotional problems. Metropolitan began paying benefits under General Motors' employee benefit plan, but asked Taylor to submit to a psychiatric examination by a designated psychiatrist. He did so and the psychiatrist determined that Taylor was emotionally unable to work. Six weeks later, after a followup examination, however, Metropolitan's psychiatrist determined that Taylor was now fit for work; Metropolitan stopped making payments as of July 30, 1980.

Meanwhile, Taylor had filed a supplemental claim for benefits alleging that his back injuries disabled him from continuing his work. Metropolitan again sent Taylor to be examined, this time by an orthopedist. The physician found no orthopedic problems and Metropolitan subsequently denied the supplemental disability claim. On October 31, General Motors requested that Taylor report to its medical department for an examination. That examination took place on November 5 and a General Motors physician concluded that Taylor was not disabled. When Taylor nevertheless refused to return to work, General Motors notified him that his employment had been terminated.

Six months later Taylor filed suit against General Motors and Metropolitan in Michigan state court praying for judgment for "compensatory damages for money contractually owed Plaintiff, compensation for mental anguish caused by breach of this contract, as well as immediate reimplementation of all benefits and insurance coverages Plaintiff is entitled to," App. to Pet. for Cert. in No. 85-688, pp. 28a-29a. Taylor also asserted claims for wrongful termination of his employment and for wrongfully failing to promote him in retaliation for the 1961 worker's compensation claim. Id., at 25a-26a. General Motors and Metropolitan removed the suit to federal court alleging federal question jurisdiction over the disability benefits claim by virtue of ERISA and pendent jurisdiction over the remaining claims. Id., at 30a. The District Court found the case properly removable and granted General Motors and Metropolitan summary judgment on the merits. 588 F.Supp. 562 (ED Mich.1984).

The Court of Appeals reversed on the ground that the District Court lacked removal jurisdiction. 763 F.2d 216 (CA6 1985). Noting a split in authority on the question among the federal courts,² the Court of Appeals found that Taylor's complaint stated only state law causes of action subject to the federal defense of ERISA pre-emption, and that the "well-pleaded complaint" rule of Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908), precluded removal on the basis of a federal defense. 763 F.2d, at 219. The Court of Appeals further held that the established doctrine permitting the removal of cases purporting to state only state law causes of action in labor cases pre-empted by § 301 of the Labor Management Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U.S.C. § 185, did not apply to this case. 763 F.2d, at 220. We granted certiorari, 475 U.S. 1009, 106 S.Ct. 1182, 89 L.Ed.2d 299 (1986), and now reverse.

II

Under our decision in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39, Taylor's common law contract and tort claims are pre-empted by ERISA. This lawsuit "relate[s] to [an] employee benefit plan." § 514(a), 29 U.S.C. § 1144(a). It is based upon common law of general application that is not a law regulating insurance. See Pilot Life Ins. Co. v. Dedeaux, at 48-51, 107 S.Ct. at ---- - ----. Accordingly, the suit is pre-empted by § 514(a) and is not saved by § 514(b)(2)(A). Id., at 48, 107 S.Ct. at ----. Moreover, as a suit by a beneficiary to recover benefits from a covered plan, it falls directly under § 502(a)(1)(B) of ERISA, which provides an exclusive federal cause of action for resolution of such disputes. Id., at 56, 107 S.Ct. at ----.

III

The century-old jurisdictional framework governing removal of federal question cases from state into federal courts is described in Justice BRENNAN's opinion for a unanimous Court in Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463...