East v. Long

• Decision Date: 04 March 1992
• Docket Number: Civ. A. No. 92-AR-0449-M.
• Parties: Janice L. EAST, Plaintiff, v. B.L. LONG, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

785 F. Supp. 941

Janice L. EAST, Plaintiff, v. B.L. LONG, et al., Defendants.

Civ. A. No. 92-AR-0449-M.

United States District Court, N.D. Alabama, M.D.

March 4, 1992.

Myron K. Allenstein, Gadsden, Ala., for plaintiff Janice L. East.

F. Michael Haney, Inzer Stivender Haney & Johnson, Gadsden, Ala., for defendant B.L. Long dba B.L. Long Ins.

Thomas M. Eden, III, Bert S. Nettles, Spain Gillon Grooms Blan & Nettles, Birmingham, Ala., for defendant Congress Life Ins. Co.

MEMORANDUM OPINION

ACKER, District Judge.

The above-entitled case originated with a complaint filed by Janice L. East in the Circuit Court of Etowah County, Alabama, CV 91-1086-WWC. East there charged that defendant, B.L. Long, individually, and as agent for Congress Life Insurance Company, the other defendant, committed fraud upon East in the sale of a policy of medical insurance. East sought both compensatory and punitive damages and demanded a trial by jury. Her complaint made no mention of the Employee Retirement Income Security Act of 1974 (ERISA) and alleged no facts which facially implicate ERISA.

On February 21, 1992, within thirty (30) days after January 24, 1992, the date upon which Congress Life alleges that it was served with the state court summons, Congress Life filed a notice of removal to this court claiming that this court had original jurisdiction under 28 U.S.C. § 1331, because East's medical coverage was issued as part of an employee group insurance plan, and that a federal question under ERISA was thus presented. The other defendant, B.L. Long, separately joined in the removal, but neither the joinder which B.L. Long filed nor Congress Life's notice of removal reflects the date upon which Long was served with the state court summons. For aught appearing in the removal papers, Long was served more than thirty (30) days before the notice of removal was filed in this court.

Contemporaneously with filing its notice of removal, Congress Life filed in this court a motion to dismiss East's action and alternative motions to strike East's claim for punitive damages and to strike her jury demand. East responded with a motion to remand the case to the Circuit Court of Etowah County.

Whether or not East simply intends to be consistent with her questioning of this court's removal jurisdiction, as indicated by her motion to remand, or wants to be gracious, she has not taken an entry of default against Long, who, unless he filed in the state court an answer that is not reflected in the removal papers, has failed to file a timely answer as required by Rule 81(c), F.R.Civ.P. Knowing that this court is bound to recognize the "super-preemption" of ERISA enunciated by the Eleventh Circuit in Brown v. Connecticut Life Ins. Co., 934 F.2d 1193 (11th Cir.1991), East probably anticipates that this court will deny her motion to remand. Based on this perhaps erroneous assumption, East has filed an alternative motion for leave to amend her complaint for the purpose of invoking ERISA to seek all relief to which ERISA may entitle her under the facts she alleges.

This court believes that the Supreme Court has spoken clearly in its recent cases pointing toward its ultimate granting of jury trials in ERISA cases. This court predicts that when and if the Supreme Court addresses the issue, jury trials in ERISA cases will become routine when monetary relief is sought. Nevertheless, for the present, this court is bound to follow the current holding of the Eleventh Circuit that plaintiffs in ERISA cases in federal court are not entitled to trial by jury. Blake v. Unionmutual Stock Life Ins. Co., 906 F.2d 1525 (11th Cir.1990). This court's arguments in favor of jury trial in ERISA cases under the Seventh Amendment appear in Blue Cross and Blue Shield of Alabama v. Lewis, 753 F.Supp. 345 (N.D.Ala.1990); Jordan v. Reliable Life Ins. Co., 716 F.Supp. 582 (N.D.Ala.1989); Jordan v. Reliable Life Ins. Co., 694 F.Supp. 822 (N.D.Ala.1988); and Whitt v. Goodyear Tire & Rubber Co., 676 F.Supp. 1119 (N.D.Ala.1987). Similar expressions from some who agree with this court on the Seventh Amendment's guaranty of the right to jury trial in ERISA cases can be found in International Union v. Midland Steel Prod., 771 F.Supp. 860 (N.D.Ohio 1991); McDonald v. Artcraft Elec. Supply Co., 774 F.Supp. 29 (D.D.C. 1991); McLean v. Carlson Companies, Inc., 777 F.Supp. 1480 (D.Minn.1991); Steeples v. Time Ins. Co., 139 F.R.D. 688 (N.D.Okl.1991); Vicinanzo v. Brunschwig & Fils, 739 F.Supp. 882 (S.D.N.Y.1990); Haywood v. Russell Corp., 584 So.2d 1291 (Ala.1991); and The Right to Jury Trial in ERISA Civil Enforcement Actions, 15 Am.J.Trial Advoc. 157 (1991).

This court does not know what to make of enigmatic footnote 7 in McRae v. Seafarers' Welfare Plan, 920 F.2d 819, 821 n. 7 (11th Cir.1991), which arguably rejects this court's reading of Ingersoll-Rand Co. v. McClendon, ___ U.S. ___, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990), as explained in Lewis, supra, a reading which several other courts have joined. The Eleventh Circuit has not yet explained what it believes Justice O'Connor and her fellow justices meant in Ingersoll-Rand when, after finding the state law claims preempted by ERISA, they said:

It is clear that the relief requested here compensatory and punitive damages for tortiously terminating a plan participant's employment is well within the power of federal courts to provide.

111 S.Ct. at 486. This court has attempted to find out what has happened in Ingersoll-Rand in the Texas courts after its remand by the Supreme Court but thus far has been unable to ascertain whether or not the Texas courts will find that the defendant will be exposed to the possibility of extracontractual damages as an ERISA remedy. This court cannot bring itself to believe that the Eleventh Circuit, repudiating Ingersoll-Rand, intends to hold that because ERISA preempts state law claims, a federal court cannot provide a remedy similar in character to the preempted state law claim. As stated above, it is abundantly clear from the materials filed by Congress Life with its notice of removal that the instant case is governed by ERISA and therefore that any remedy East may have is not a remedy provided by state law but rather is an ERISA remedy. This court acknowledges that a few courts have simplistically concluded that, if the remedy cannot be found within the express language of ERISA, the remedy does not exist. Most courts, including the Eleventh Circuit, have not gone this far. They can hardly take such an extreme position after Ingersoll-Rand. What the Supreme Court said in Ingersoll-Rand is made more understandable and binding, if that is possible, by the graphic language employed in Franklin v. Gwinnett County Public Schools, ___ U.S. ___, 112 S.Ct. 1028, 117 L.Ed.2d 208 (1992), which reinforced the idea, if it needs any reinforcement, that absent clear Congressional direction to the contrary, the federal courts have the power to forge appropriate relief in causes of action brought pursuant to federal statutes where the statutes themselves are silent as to the parameters of relief to be afforded. This latest Supreme Court pronouncement is set out in the margin.¹ Perhaps the "dicta" in Gwinnett County will come as a "surprise" to the Sixth Circuit.

The most recent example of judicial agony over Ingersoll-Rand comes from a panel of the Seventh Circuit in Harsch v. Eisenberg, 956 F.2d 651 (7th Cir.1992). In Harsch the Seventh Circuit was not as generous to Justice O'Connor and her brothers as this court was in Lewis. The Seventh Circuit described as "dicta" and as "surprising" Justice O'Connor's pointed statement that state law extracontractual relief which in Ingersoll-Rand was admittedly preempted by ERISA "is well within the power of federal courts to provide" and that "there is no basis in § 502(a)'s language for limiting ERISA actions to only those which seek `pension benefits'". This court finds it more "surprising" that the Seventh Circuit went so far as to say in the teeth of Justice O'Connor's opinion that "the Supreme Court has never addressed the availability of extracontractual damages under section 502(a)(3)". It is as if two ships passed in the night. This court disagrees totally with the Seventh Circuit's characterization of Justice O'Connor's holding as "dicta". Rather, her statement of principle was an important, if not the central, point of her rationale.

Although ERISA has carved out an area of exclusive federal concern, ERISA did not purport to destroy the concurrent jurisdiction of the state courts to try ERISA cases. In other words, unless removed from the state court in strict compliance with the statutes for effecting a removal, an ERISA case, if first filed in the state court, happily remains in the state court. Therefore, before having to decide whether East is entitled to claim punitive and/or extracontractual compensatory damages for any misrepresentations which may have been made by Long, in addition to recovering any benefits owed her by contract or as a proximate consequence of any breach of an ERISA-recognized fiduciary obligation, the court must rule on East's motion to remand. Even if there were no motion to remand, this court is obligated sua sponte to examine its own jurisdiction to see if the removing defendants complied with the removal statutes. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Fitzgerald v. Seaboard System R.R., 760 F.2d 1249 (11th Cir.1985); Sadat v. Mertes, 615 F.2d 1176 (7th Cir.1980); Robinson v. Quality Ins. Co., 633 F.Supp. 572 (S.D.Ala. 1986).

The threshold inquiry, therefore, narrows to the court's need to know the date upon which Long was served the summons in the state court. It is only the acquisition of this knowledge, thus far conspicuously undisclosed, which can demonstrate whether this removal occurred within thirty (30) days after the case could first have been removed. East's motion to...