Douglass v. Weyerhaeuser Co.

Decision Date08 June 1987
Docket NumberNo. CV 86-8214-ER (Kx).,CV 86-8214-ER (Kx).
Citation662 F. Supp. 147
CourtU.S. District Court — Central District of California
PartiesRodney M. DOUGLASS and Milo Douglass, Plaintiffs, v. WEYERHAEUSER CO., Defendant. WEYERHAEUSER CO., Cross-Complainant, v. Rodney M. DOUGLASS and Milo Douglass, Cross-Defendants.

Nicholas W. Hornberger, Shield & Smith, Los Angeles, Cal., for plaintiffs.

Steven M. Schneider, John A. Ashby, Mitchell Silberberg & Knupp, Los Angeles, Cal., for defendant.

AMENDED ORDER REMANDING ACTION TO STATE COURT

RAFEEDIE, District Judge.

Plaintiff filed this action in state court in 1982 naming Weyerhaeuser and several Doe defendants. On November 17, 1986, Weyerhaeuser received a Trial Setting Conference Statement which stated that the Does were voluntarily dismissed. Weyerhaeuser filed a petition removing this action to federal court on December 16, 1986 pursuant to 28 U.S.C. sections 1441 and 1332 based upon complete diversity of citizenship. The court had some questions concerning the timeliness of the removal upon diversity grounds and issued an Order to Show Cause why the action should not be remanded pursuant to 28 U.S.C. § 1446(b) for untimely removal. Both parties briefed the issue, and the court determined that diversity removal appeared timely thus vacating its Order to Show Cause.

Weyerhaeuser subsequently filed a motion for summary judgment. One of the its arguments was that the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., (hereinafter "ERISA") preempted plaintiff's state claims for breach of statutory duties to pay benefits due on discharge and for recovery of insurance benefits. This argument is well taken given the express language of ERISA and numerous court decisions including Blau v. Del Monte Corp., 748 F.2d 1348 (9th Cir.1984) and Scott v. Gulf Oil, 754 F.2d 1499 (9th Cir.1985).

Defendant's argument, however, raises a jurisdictional question that was not previously considered by the court in examining the petition removing this action to this court: If ERISA preempts some of plaintiff's claims, then should defendant have removed this action on federal question grounds within 30 days of receiving plaintiff's complaint in 1982?

Faced with this question, the court issued an oral Order to Show Cause re Improvident Removal at the hearing on defendant's Motion for Summary Judgment. The parties briefed the issue, and the matter came on for hearing before the court on April 23, 1987. Steven M. Schneider and John A. Ashby of Mitchell Silberberg & Knupp appeared for defendant Weyerhaeuser and Nicholas W. Hornberger of Shield & Smith appeared for plaintiffs. The court has reviewed the papers and pleadings on file and the applicable law and determines that this case was untimely removed and should be remanded to the state court.

"The petition for removal in a civil action ... shall be filed within thirty days after the receipt by defendant ... of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based...." 28 U.S.C. § 1446(b).

The time limitations of § 1446(b) are mandatory and the defendant must strictly comply with them. 14A Wright, Miller and Cooper, Federal Practice and Procedure, § 3732, p. 527 (2d ed. 1985); Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir.1980). If this case was not timely removed it should be remanded to the state court.

REVIVAL OF THE RIGHT TO REMOVE

Assuming for a moment that this action was removable based upon "arising under" grounds in 1982, it is evident that Weyerhaeuser failed to remove the case within thirty days of receipt of the complaint. The initial question, therefore, is whether the case became removable again when the Does were dismissed and it became clear that there was complete diversity between the parties. The answer to this question must be no. The thirty day limit bars subsequent removal of an action unless an amendment in a complaint fundamentally alters a case so as to constitute "substantially a new suit begun that day." Fletcher v. Hamlet, 116 U.S. 408, 410, 6 S.Ct. 426, 426-27, 29 L.Ed. 679 (1886); Wilson v. Intercollegiate (Big Ten) Conference Athletic Ass'n., 668 F.2d 962, 965 (7th Cir.1982); Adams v. Western Steel Buildings, Inc., 296 F.Supp. 759 (D.Colo.1969).

The amendments in this case — dropping Doe defendants — surely do not fundamentally alter the nature of plaintiff's action; in fact, they do not alter the substance of the complaint in any respect. Thus, if this action was removable on "arising under" grounds when it was filed, defendant waived its right to remove the action by failing to file a Petition of Removal within thirty days, and this right has not been revived. "If a Defendant is desirous of litigating an action in federal court, he must seize the first opportunity to do so by removing the case to federal court within the prescribed thirty-day period. If the Defendant does not remove the case upon the first opportunity, the Defendant has waived his right to remove at a later time." Hubbard v. Union Oil Co. of California, 601 F.Supp. 790, 795 (S.D.W.Va.1985)

REMOVAL BASED UPON ERISA PREEMPTION

The issue therefore is whether plaintiff's initial complaint for recovery of job related benefits was completely preempted by ERISA at the time that this complaint was served in 1982 so as to have been removable at that time.1

ERISA creates federal causes of action for recovery of benefits due under pension and welfare plans. See 29 U.S.C. § 1132(a)(1)(B). ERISA has broad preemptive effect over state laws and "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.... This section shall take effect on January 1, 1975." 29 U.S.C. § 1144(a).

The term "employee benefit plan" includes "employee welfare benefit plans." 29 U.S.C. § 1002(3). An "employee welfare benefit plan" is defined as:

... any plan, fund, or program which was ... established or maintained by an employer ... to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment ... or (B) any benefit described in § 302(c) of the Labor Management Relations Act, 1947 29 U.S.C. § 186(c) (other than pensions on retirement or death, and insurance to provide such pensions).

"The effect of citing to § 186(c) is `to include within the definition of "welfare plan" those plans which provide holiday and severance benefits, and benefits which are similar ...'" Blau v. Del Monte Corp., 748 F.2d 1348, 1352 (9th Cir.1984) (citations omitted); Scott v. Gulf Oil Corp., 754 F.2d 1499, 1502 (9th Cir.1985).

Defendant Weyerhaeuser's Motion for Summary Judgment makes clear that its "Employee Benefit Package" as it is called in plaintiff's initial complaint comes within the above ERISA coverage, and that ERISA preempts the state causes of action. Blau, supra; Scott, supra.

Defendant argues that because plaintiff's complaint only alleges causes of action under state law the case is not removable. Such a position is untenable, begs the question, and fails to take the "artful pleading" doctrine into account. The mere fact that the complaint alleges claims solely under state law does not end the inquiry. If the law creating plaintiff's causes of action is state law, "original federal jurisdiction is unavailable unless it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims, or that one or the other claim is `really' one of federal law." Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 13, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983).

Where a plaintiff brings a state claim in state court removal is not appropriate where the preempting federal law is only defensive against plaintiff's causes of action. Defensive preemption occurs where the federal law prohibits a plaintiff from bringing an action based upon state law. It is only where the federal law preempts the field and provides the plaintiff with a federal remedy that removal based upon preemption is allowed. Hunter v. United Van Lines, 746 F.2d 635 (9th Cir.1984).

As the Ninth Circuit has succinctly stated:

The distinction between an artfully pled complaint and one that is preempted, but not removable, lies in whether ... "the facts alleged were sufficient to state a federal cause of action" on the face of the complaint.

Garibaldi v. Luck Food Stores, Inc., 726 F.2d 1367, 1370 n. 5 (9th Cir.1984) (cite omitted).

Where the facts alleged in the complaint sufficiently state a federal claim, there is complete preemption and the action is removable on "arising under" grounds. Garibaldi makes it clear that a state cause of action may be "recharacterized" as a federal claim only where the state cause of action is preempted and where it is clear from a review of the complaint that federal law provides the plaintiff with a right to relief. Hunter, 746 F.2d at 642-3.

ERISA not only displaces the state laws which provide plaintiff in this action with a right to relief, but ERISA replaces that state law and provides plaintiff with a remedy. Plaintiff's claims for severance benefits and medical insurance benefits can only be made under ERISA which displaces state law and provides the plaintiff with a remedy. Therefore the mere fact that plaintiff pled his claims under state law does not preclude removal based upon ERISA preemption.2

While it is true that ERISA does not preempt all state claims that in any way relate to employee benefit plans, see e.g. Powers v. South Central United Food & Commercial Workers Unions, 719 F.2d 760 (5th Cir.1983), it is equally clear to this court that ERISA does preempt plaintiff's claims in this action. Blau, ...

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