Cox v. Gannett Co.

• Decision Date: 12 April 2016
• Docket Number: No. 1:15-cv-02075-JMS-DKL,1:15-cv-02075-JMS-DKL
• Parties: TIMOTHY J. COX, Plaintiff, v. GANNETT COMPANY, INC., INDIANAPOLIS NEWSPAPERS, INC., PACIFIC SOUTHERN CO., INC., Defendants.
• Court: U.S. District Court — Southern District of Indiana

TIMOTHY J. COX, Plaintiff, v. GANNETT COMPANY, INC.,

INDIANAPOLIS NEWSPAPERS, INC.,

PACIFIC SOUTHERN CO., INC., Defendants.

No. 1:15-cv-02075-JMS-DKL

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

April 12, 2016

ORDER ON MOTION TO REMAND

Presently pending before the Court is Plaintiff Timothy J. Cox's Motion to Remand. [Filing No. 14.] Defendants Gannett Company, Inc. ("Gannett"), Indianapolis Newspapers, Inc., and Pacific Southern Co., Inc. (collectively "Defendants") oppose Mr. Cox's remand request. [Filing No. 23.] The parties dispute whether Mr. Cox's state law employment-related claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), such that this Court has federal jurisdiction over Mr. Cox's action. For the reasons that follow, the Court concludes that Defendants were entitled to remove Mr. Cox's action to federal court, and the Court denies Mr. Cox's Motion to Remand without prejudice. [Filing No. 14.]

I.STANDARD OF REVIEW

A party that removes a state court case to federal court has the burden of establishing federal jurisdiction. Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 758 (7th Cir. 2009); see also Walker v. Trailer Transit, Inc., 727 F.3d 819, 824-25 (7th Cir. 2013) ("The removing defendant has the burden of proving the jurisdictional predicates for removal."). "[F]ederal courts should interpret the removal statute narrowly, resolving any doubt in favor of the plaintiff's choice of forum in state court." Schur, 577 F.3d at 758. "If at any time . . . it appears that the district court lacks subject matter jurisdiction, the case shall be remanded" to state court. 28 U.S.C. § 1447(c). "[B]oth the Supreme Court and [the Seventh Circuit Court of Appeals] have noted time and again that subject matter jurisdiction is a fundamental limitation on the power of a federal court to act." Del Vecchio v. Conseco, Inc., 230 F.3d 974, 980 (7th Cir. 2000). Thus, "[f]ederal courts are obligated to inquire into the existence of jurisdiction sua sponte . . . [and] a court in doubt of its own jurisdiction generally is well-advised to solicit the parties' views on the subject." Evergreen Square of Cudahy v. Wisconsin Hous. & Econ. Dev. Auth., 776 F.3d 463, 465 (7th Cir. 2015).

II.BACKGROUND

On December 30, 2015, Defendants removed this action from state to federal court, alleging that this Court has federal question jurisdiction pursuant to ERISA over Mr. Cox's employment-related claims. [Filing No. 1.] Mr. Cox's Complaint alleges that he worked for Gannett "from 1997 to 2014 as a newspaper carrier and . . . [a]s a condition of employment, [Mr. Cox] was required to sign lengthy form contracts that mischaracterized him as an independent contractor." [Filing No. 1-1 at 12.] Mr. Cox contends that these "form contracts were designed to conceal the true relationship of Gannett and Plaintiff of employer and employee." [Filing No. 1-1 at 12.] Mr. Cox asserts that based on his actual working conditions, he was an employee of Gannett, not an independent contractor. [Filing No. 1-1 at 12-13.] Mr. Cox contends that Gannett's alleged misclassification of him "has caused him to be denied the benefits of employment, including but not limited to overtime wages, workers' compensation, unemployment insurance, income tax withholding, meal and rest breaks, contributions to retirement plans, reimbursement for business expenses, and health insurance benefits." [Filing No. 1-1 at 14.]

Mr. Cox asserts five claims: 1) failure to pay overtime wages pursuant to Indiana Code §§ 22-2-2-4 and 22-2-2-9; 2) unlawful deductions from wages pursuant to Indiana Code § 22-2-6-2; 3) violation of Indiana's Wage Payment Statute pursuant to Indiana Code §§ 22-2-5-1 and 22-2-5-2; 4) fraud; and 5) unjust enrichment. [Filing No. 1-1 at 14-17.] Mr. Cox's requested relief includes compensatory damages, interest, reasonable attorneys' fees, and "[s]pecial damages, including, but not limited to, wages, salary, employment benefits, and other compensation denied or lost due to Defendants' above-described acts and omissions." [Filing No. 1 at 3.]

It is undisputed that Mr. Cox's Complaint does not reference ERISA or any other federal statute. Defendants removed this action to federal court, however, on the basis of ERISA preemption. [Filing No. 1.] Specifically, Defendants contend that since Gannett provided eligible employees with certain employment benefits under ERISA benefit plans during the relevant time and Mr. Cox alleges that he should have been classified as an employee instead of as an independent contractor, which allegedly resulted in his denial of employment benefits (among other damages), this Court has federal jurisdiction. [Filing No. 1 at 3-5.]

Because Mr. Cox's Complaint did not reference ERISA or any other federal statute, the Court issued a jurisdictional order soliciting the parties' views on the existence of federal jurisdiction. [Filing No. 12.] The Court cited case law detailing the well-pleaded complaint rule and the ERISA preemption exception and ordered Mr. Cox to file a statement of claims "setting forth the legal basis for each of his claims against the Defendants. If [Mr. Cox] does not intend to bring any federal claims or seek any benefits under ERISA benefit plans that were available to Gannett employees at the relevant time, he should expressly state so." [Filing No. 12 at 4.]

On January 20, 2016, Mr. Cox filed his Statement of Claims, asserting that he is pursuing state law claims against the Defendants for failure to pay him overtime (Count I (citing IndianaCode § 22-2-2-4(k)); unlawful deductions from his wages (Count II (citing Indiana Code § 22-2-6-2)); Wage Payment Statute violations (Count III (citing Indiana Code § 22-2-5-2)); common law fraud (Count IV); and unjust enrichment (Count V). [Filing No. 13.] Mr. Cox acknowledged that his Complaint requested employment benefits as relief, but he asserts that he "does not seek the recovery of benefits per se under any employee benefit plan that may have been maintained by Defendants. Because he was never classified as an employee by defendants, Mr. Cox was never provided any information about employee benefits that Gannett may have offered its employees and has no way of knowing what benefits he may have missed out on until he can conduct discovery in his suit." [Filing No. 13 at 2-3.]

The same day that he filed his Statement of Claims, Mr. Cox filed a Motion to Remand his action back to state court. [Filing No. 14.] Defendants oppose that motion, [Filing No. 23], which is now fully briefed and ready for the Court's consideration, [Filing No. 24; Filing No. 34].

III.DISCUSSION

The parties dispute whether Mr. Cox's employment-related claims are preempted by ERISA, such that it was proper for Defendants to remove this case to federal court. The Court will set forth generally applicable law regarding ERISA preemption before addressing the parties' specific arguments.

A. ERISA Preemption

A removing defendant bears the burden of proving that federal jurisdiction is proper. Walker v. Trailer Transit, Inc., 727 F.3d 819, 825 (7th Cir. 2013). "Ordinarily, determining whether a particular case arises under federal law turns on the 'well-pleaded complaint' rule." Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004) (citation omitted). The existence of a federal defense normally does not create federal jurisdiction, and a defendant generally may not remove acase to federal court "unless the plaintiff's complaint establishes that the case arises under federal law." Id. (original emphasis).

An exception to the well-pleaded complaint rule exists, however, "when a federal statute wholly displaces the state-law cause of action through complete pre-emption." Id. The rationale for that rule is "because when the federal statute completely preempts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law." Id. at 207-08. Put another way, complete preemption "confers exclusive federal jurisdiction in certain instances where Congress intended the scope of a federal law to be so broad as to entirely replace any state-law claim." Franciscan Skemp Healthcare, Inc. v. Cent. States Joint Bd. Health & Welfare Trust Fund, 538 F.3d 594, 596 (7th Cir. 2008). "Complete preemption permits 'recharacterization' of a plaintiff's state law claim as a federal claim so that removal is proper." Speciale v. Seybold, 147 F.3d 612, 615 (7th Cir. 1998).

"[T]he ERISA civil enforcement mechanism is one of those provisions with such 'extraordinary pre-emptive power' that it 'converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.'" Franciscan, 538 F.3d at 596 (quoting Davila, 542 U.S. at 209). ERISA's preemption provision provides that it "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a). "Congress chose this aggressive form of preemption in order to knock out any effort to use state law, including state common law, to obtain benefits under such a plan." Sharp Elecs. Corp. v. Metro. Life Ins. Co., 578 F.3d 505, 514 (7th Cir. 2009) (citation omitted). While ERISA's preemption provision is "broad . . . it does not sweep all state law off the table." Id. "If the connection between a state law claim and the benefit plan is too tenuous, remote, or peripheral, ERISA's preemption provision may not apply." Id. That said, "[a]rtfulpleading on the part of a plaintiff to disguise federal claims by cleverly dressing them in the clothing of state-law theories will not succeed in keeping the case in state court. In these instances, the federal law has effectively displaced any potential state-law claims" and the claims are removable to federal court. Franciscan, 538 F.3d at 596.

The United States Supreme...