Behrens v. Bmo Harris Bank, N.A., 16-cv-09949
| Decision Date | 31 July 2017 |
| Docket Number | No. 16-cv-09949,16-cv-09949 |
| Parties | BYRON BEHRENS, Plaintiff, v. BMO HARRIS BANK , N.A., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Defendant BMO Harris Bank, N.A., removed this case from the Circuit Court of Cook County, and plaintiff Byron Behrens has filed a motion to remand, contending that there is no basis for federal jurisdiction. For the following reasons, the Court grants plaintiff's motion.
Plaintiff Byron Behrens worked for BMO Harris Bank, N.A., ("BMO") for more than thirty years, from mid-1969 until mid-2004, when he retired from his position as "vice president of the probate division/estate administration." After retiring, plaintiff requested to return to work on a part-time basis, and in July 2004, he signed an independent contractor agreement with BMO. (See id. ¶¶ 40-42.) As an independent contractor, he lacked "direct signing authority on behalf of" BMO and "generally did not take new accounts for administration," but he assumed largely the same employment duties he had performed before he retired. (See id. ¶¶ 44-48.) Plaintiff remained at BMO as an independent contractor for twelve years under three successive independent contractor agreements. Plaintiff's final employment with BMO ended in February of 2016.
Plaintiff originally filed this case in state court, alleging that during his post-retirement employment with BMO he was mischaracterized as an independent contractor, causing damages in the form of lost compensation and employee benefits. Based on these allegations, plaintiff asserts claims against BMO for violating the Illinois Wage Payment and Collection Act, common-law intentional mischaracterization as an independent contractor, and unjust enrichment. Moreover, plaintiff has brought this action on behalf of a putative class of similarly situated people asserting the same claims. BMO removed the action to this Court, claiming that this Court has federal question jurisdiction because plaintiff seeks damages partially based on amounts BMO should have contributed on his behalf under two retirement benefit plans governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). BMO argues that the complete preemption power of ERISA engulfs plaintiff's claims, even though plaintiff pleads only state-law claims.
Plaintiff moves to remand, arguing that he is seeking merely "the value of the contributions that [BMO] would have made on [Behrens's] behalf to the plan had he been properly classified, but does not, and could not, bring a claim under ERISA § 5021 for benefits." (Mot. to Remand at 2, ECF No. 17.)
A state-court defendant may remove a civil action to a federal court if the federal court has original jurisdiction over the action. 28 U.S.C. § 1441(a) (). Federal courts have original jurisdiction of an action either based on diversity of citizenship under 28 U.S.C. § 1332, or if the civil action "aris[es] under the . . . laws . . . of the United States" pursuant to 28 U.S.C. § 1331. The removing party bears the burden of proving that federal jurisdiction is proper. Walker v. Trailer Transit, Inc., 727 F.3d 819, 825 (7th Cir. 2013).
BMO argues that this Court has jurisdiction and its removal of this case was proper because (a) ERISA completely preempts plaintiff's claims and (b) plaintiff's state law claims raise a federal question because he seeks FICA contributions under the Internal Revenue Code.
To determine whether removal is proper based on §1441(a), federal courts generally apply the "well-pleaded complaint" rule, which provides that "a defendant may not [generally] remove a case to federal court unless the plaintiff's complaint establishes that the case 'arises under' federal law." Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 493 U.S. 1, 9-10 (1983). However, Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004) (quoting Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8 (2003)).
Under ERISA § 502, an action may be brought "by a participant or beneficiary . . . 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 plan." 29 U.S.C. § 1132(a)(1)(B). The Supreme Court has articulated a two-pronged test for determining whether ERISA § 502completely preempts a plaintiff's state-law claim: "if an individual, at some point in time, could have brought his claim under ERISA § 502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant's actions, then the individual's cause of action is completely preempted by ERISA § 502(a)(1)(B)." Davila, 542 U.S. at 210.
1. Davila's First Prong: Whether Plaintiff Could Have Brought His Claim Under ERISA § 502
The first prong of Davila requires the Court to assess whether plaintiff could have brought his claim under ERISA § 502. There are two steps to this inquiry: "First, we consider whether the plaintiff is the type of party that can bring a claim pursuant to § 502(a)(1)(B); and second, we consider whether the actual claim that the plaintiff asserts can be construed as a colorable claim for benefits pursuant to § 502(a)(1)(B)." Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 328 (2d Cir. 2011).2
ERISA § 502(a)(1)(B) permits "a participant or beneficiary" to bring a civil action to recover benefits or enforce his rights under ERISA. ERISA defines a "participant" as "any employee or former employee . . . who is or may become eligible to receive a benefit." 29 U.S.C. § 1002(7). The Supreme Court has interpreted the definition to include "'either employees in, or reasonably expected to be in, currently covered employment, or former employees who have . . . a reasonable expectation of returning to covered employment or who have a colorable claim to vested benefits.'" See Panaras v. Liquid Carbonic Indus. Corp., 74F.3d 786, 789-90 (7th Cir. 1996) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117-18 (1989)).
To determine if a plaintiff qualifies as an "employee" under ERISA, the Court must analyze whether the plaintiff would have been classified as an employee under the common law, which requires weighing the following factors:
"the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party."
Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323-24 (1992). An employer's classification of a plaintiff as an independent contractor rather than an employee does not, by itself, determine that the plaintiff is not an "employee or former employee" with standing to sue as a "participant" under ERISA § 502. See Coon-Retelle v. Verizon New Eng. Inc., No. 16-11530, 2017 U.S. Dist. LEXIS 35497, at *8 (D. Mass. Mar. 10, 2017).
In this case, plaintiff alleges in his complaint that, even when he was nominally an independent contractor, he worked exclusively for BMO during normal business hours, used a company email address, had security clearance to access the company building, and conducted almost the same work duties as a W-2 employee, among other things. BMO argues that, based on these allegations, plaintiff qualifies as a "former employee" and therefore a "participant," assuming that he has a "colorable claim to vested benefits" under ERISA. See id.; Cox v. Gannett Co., Inc., No. 15 CV 2075, 2016 WL 1425525, at *5-6 (S.D. Ind. Apr. 12, 2016).
The Court agrees with BMO that these allegations are sufficient to demonstrate that he is at least arguably a "former employee" and the type of party that can bring a claim pursuant to ERISA § 502(a)(1)(B), at least at this early stage of the case. See in re Fedex Ground PackageSys. Inc., Emp't Practices Litig., No. 3:05-MD-527 (MDL-1700), 2007 WL 3027405, at *24-25 (N.D. Ind. Oct. 15, 2007) () (citing Harzewski, 489 F.3d at 804). The Court proceeds to consider whether plaintiff raises a "colorable claim for vested benefits."
The second step of the first prong of the Davila test requires the Court to assess whether "the actual claims that [plaintiff] asserts can be construed as colorable claims for benefits pursuant to § 502(a)(1)(B)." Montefiore, 642 F.3d at 330. The Seventh Circuit has characterized the colorable claim requirement as a "low threshold" to clear. See Panaras, 74 F.3d at 790-91 (citing Andre v. Salem Technical Servs., 797 F. Supp. 1416, 1421 (N.D. Ill. 1992)). Plaintiff alleges that his misclassification resulted in a loss of contributions to ERISA-governed retirement plans, as...
To continue reading
Request your trial