Brooks v. Pacific, CIVIL ACTION NO. 16-0676

Decision Date21 March 2017
Docket NumberCIVIL ACTION NO. 16-0676
PartiesCHARLES BROOKS v. GEORGIA PACIFIC, L.L.C. HOURLY PENSION PLAN, ET AL.
CourtU.S. District Court — Western District of Louisiana

JUDGE ROBERT G. JAMES

MAG. JUDGE KAREN L. HAYES
REPORT AND RECOMMENDATION

Before the undersigned Magistrate Judge, on reference from the District Court pursuant to 28 U.S.C. § 636(b)(1)(B), is a motion to dismiss for lack of subject matter jurisdiction [doc. # 30], filed by defendant, Georgia Pacific, L.L.C. Hourly Pension Plan, pursuant to Fed.R.Civ.P. 12(b)(1), 12(c), and 12(h)(3). For reasons detailed below, it is recommended that the motion be DENIED.

Background

The Georgia Pacific, L.L.C. Hourly Pension Plan ("GP" or the "Plan") is an employee welfare benefit plan under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. See Amend. Compl., ¶¶ 1-3; Answer, ¶¶ 1-3. From approximately 2005 until 2015, Charles Brooks received disability benefits as a beneficiary or participant under the Plan. Id. In 2015, Brooks reached retirement age, and, according to him, accepted an offer to receive a monthly retirement benefit in the amount of $903.59. (Amend. Compl., ¶¶ 3-6). In the months that followed, however, he failed to receive benefits in the agreed upon amount. Id.

Accordingly, on September 29, 2015, Brooks sent a letter to the Koch Retirement Solutions Center1 requesting a copy of the benefit plan and an explanation as to why he did not receive the agreed upon monthly retirement benefits. (Amend. Compl., ¶¶ 9-10, Answer, ¶¶ 9-10). On December 1, 2015, Brooks sent Koch Retirement Solutions Center another letter reiterating his request for a copy of the plan and an explanation. Id. However, he did not receive a response to either letter. (Amend. Compl., ¶¶ 9-10).

Thus, on March 2, 2016, Brooks filed the instant complaint against GP in the 4th Judicial District Court for the Parish of Morehouse, State of Louisiana. (Compl.). The original complaint sought an order requiring GP to provide Brooks with a copy of the benefit plan and an explanation for his reduced retirement benefits. Id. Brooks also asked for penalties of $100 per day pursuant to § 502(c) of ERISA, 29 U.S.C. § 1132(c), plus reasonable attorney's fees. Id.

On May 16, 2016, GP removed the case to federal court on the basis of federal question jurisdiction, 28 U.S.C. § 1331. (Notice of Removal). On June 6, 2016, GP filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted, Fed.R.Civ.P. 12(b)(6). [doc. # 8]. In response to the motion, Brooks filed an amended complaint that, inter alia, joined defendant Koch Industries, Inc., d/b/a Koch Retirement Solutions Center, as the Plan Administrator. (Amend. Compl. [doc. # 19]).2 Thereafter, GP filed an answer and withdrew its motion to dismiss. See doc. #s 22-27.

On February 23, 2017, GP filed the instant motion to dismiss for lack of subject matterjurisdiction. Invoking last year's Supreme Court decision in Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S.Ct. 1540, 1547(2016), GP contends that Brooks failed to allege that he suffered a concrete injury sufficient to support standing, thereby depriving the court of Article III jurisdiction. Plaintiff filed his opposition brief on February 28, 2017. [doc. # 34]. GP filed its reply on March 13, 2017. [doc. # 40]. Thus, the matter is ripe.

Analysis
I. Rules 12(b)(1), 12(c), 12(h)(3), or 28 U.S.C. § 1447(c)

In an apparent abundance of caution (or indecision), GP invoked Rules 12(b)(1), 12(c), and 12(h)(3) in support of its motion to dismiss. As an initial matter, it is manifest that a defect in Article III standing deprives the federal court of subject matter jurisdiction. Cadle Co. v. Neubauer, 562 F.3d 369, 374 (5th Cir.2009) (citation omitted). Paradoxically, however, as the party invoking federal jurisdiction in this removed case, GP bears the burden of establishing standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 2136 (1992). Moreover, if a federal court lacks Article III standing in a case removed from state court, the remedy is not dismissal, but remand. McAfee, Inc. v. Wilmer, Cutler, Pickering, Hale & Dorr, L.L.P., 2008 WL 3852704 (E.D. Tex. Aug. 14, 2008) (citations omitted). Ordinarily, then, lack of standing must be given effect pursuant to 28 U.S.C. § 1447(c), which provides, in pertinent part, that "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."

Nonetheless, some courts decline to remand cases for lack of subject matter jurisdiction, when the federal court enjoys exclusive jurisdiction over the cause of action. See Herman v. Salomon Smith Barney, Inc., 266 F. Supp.2d 1208, 1213 (S.D. Cal.2003) (in the absence ofArticle III standing, the court dismissed the suit in lieu of remand); Express Tel. Servs., Inc. v. Sw. Tel. Co., L.P., Civ. Action No. 02-1082, 2002 WL 32360295, at *6 (N.D. Tex. Oct. 16, 2002) (where federal courts have exclusive jurisdiction, jurisdiction would never be proper in state court; thus dismissal, not remand, is appropriate). Here, of course, Brooks' cause of action lies exclusively with the district courts of the United States. See 29 U.S.C. § 1132(e)(1); ACS Recovery Servs., Inc. v. Griffin, 723 F.3d 518, 523 (5th Cir.2013) (ERISA grants federal courts exclusive jurisdiction). Thus, the court finds that if GP were to prevail on its motion, the appropriate remedy is dismissal, not remand.

Furthermore, because the absence of Article III standing deprives the court of subject matter jurisdiction, Rule 12(c), which employs the same standard as a Rule 12(b)(6) motion,3 is inapplicable. In addition, when subject matter jurisdiction is challenged by a party, it typically is raised via motion filed under Rule 12(b)(1). Thommassie v. Antill Pipeline Const. Co., Inc., Civ. Action No. 12-2750, 2014 WL 2520051, at *2 (E.D. La. June 4, 2014). Conversely, when the court questions subject matter jurisdiction sua sponte, it must do so under Rule 12(h)(3). Williams v. J.B. Hunt Transp., Inc., 132 F. Supp.3d 858, 862 (S.D. Tex.2015), aff'd, 826 F.3d 806 (5th Cir.2016). Either way, however, dismissal for lack of subject matter jurisdiction is without prejudice. Ruiz v. Brennan, ___ F.3d ___, 2017 WL 1032586 (5th Cir. Mar. 16, 2017) (citation omitted).4

II. Subject Matter Jurisdiction
a) General Principles

"A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998) (quoting Nowak v. Ironworkers local 6 Pension Fund, 81 F.3d 1182, 1187 (2nd Cir. 1996)). Pursuant to Rule 12(b)(1), "the district court has the power to dismiss for lack of subject matter jurisdiction on any one of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Willoughby v. U.S. ex rel. U.S. Dep't of the Army, 730 F.3d 476, 479 (5th Cir. 2013) (citation and internal quotation marks omitted). Furthermore, a district court should dismiss where "it appears certain that the plaintiff cannot prove a plausible set of facts that establish subject-matter jurisdiction." Venable v. Louisiana Workers' Comp. Corp., ___ F.3d ___, 2013 WL 6857992 (5th Cir. Dec. 30, 2013) (citations omitted).

As courts of limited jurisdiction, the federal courts may exercise only that authority bestowed upon them by the Constitution and the Congress. Save the Bay, Inc. v. U.S. Army, 639 F.2d 1100, 1102 (5th Cir. 1981). The United States Constitution limits federal courts' jurisdiction to "cases" and "controversies." Sample v. Morrison, 406 F.3d 310, 312 (5th Cir.2005) (citing U.S. CONST. ART. III, § 2). To give meaning to the Constitution's "case or controversy" requirement, the courts have developed "justiciability doctrines," - one of which is standing, the principle at issue here. See United Transp. Union v. Foster, 205 F.3d 851, 857 (5th Cir.2000); see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130 (1992).Because standing is a necessary component of federal subject matter jurisdiction, it may be raised at any time by a party or the court. Sample, supra (citation omitted).

b) Standing and Spokeo

Standing is comprised of three essential elements. Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S.Ct. 1540, 1547 (2016) (citation omitted). "The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Id. (internal citations omitted).

At issue in this case is the injury-in-fact element, which requires plaintiff to show that "he or she suffered 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural or hypothetical.'" Id. (citing Lujan, 504 U.S., at 560, 112 S.Ct. 2130). "For an injury to be 'particularized,' it 'must affect the plaintiff in a personal and individual way.'" Id.

The "concrete" requirement is distinct from the "particularized" requirement. Spokeo, supra. To be "concrete," the injury must be "de facto," that is, it must actually exist. Id. "Concrete" injuries can be tangible or intangible. Id. Both history and the judgment of Congress play important roles in determining whether an intangible harm constitutes injury in fact. Id.5 Although Congress "may elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law," that does not mean that a "plaintiffautomatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue...

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