Goepel v. National Postal Mail Handlers Union, a Div. of Liuna

• Decision Date: 25 October 1994
• Docket Number: No. 93-5657,93-5657
• Parties: 18 Employee Benefits Cas. 2046 Marilyn GOEPEL; Ronald Goepel, Appellants, v. NATIONAL POSTAL MAIL HANDLERS UNION, A DIVISION OF LIUNA, d/b/a Mail Handlers Benefit Plan.
• Court: U.S. Court of Appeals — Third Circuit

Page 306

36 F.3d 306

18 Employee Benefits Cas. 2046

Marilyn GOEPEL; Ronald Goepel, Appellants, v. NATIONAL POSTAL MAIL HANDLERS UNION, A DIVISION OF LIUNA d/b/a Mail Handlers Benefit Plan.

No. 93-5657.

United States Court of Appeals Third Circuit.

Argued Aug. 2, 1994.

Decided Sept. 27, 1994.

Sur Petition for Rehearing

Oct. 25, 1994.

Arlene G. Groch (argued), Somers Point, NJ, for appellants.

Denis F. Gordon (argued), Susan J. Pannell, Gordon & Barnett, Washington, DC, for appellee.

Before: STAPLETON and GREENBERG, Circuit Judges, and ATKINS, District Judge. ^*

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. FACTUAL AND PROCEDURAL HISTORY

A. Factual History

Appellant Ronald Goepel is a civilian employee of the United States Department of the Navy. He and his wife, appellant Marilyn Goepel, reside in Deptford, New Jersey, and have been enrolled in the Mail Handlers Benefit Plan, a fee-for-service health benefits plan, continuously since 1981. The Mail OPM has contracted with the appellee, the National Postal Mail Handlers Union, a division of the Laborers International Union of North America, AFL-CIO, for the provision of the Mail Handlers Benefit Plan, and the Union has subcontracted with Continental Assurance Company to underwrite and administer the Plan. Each year OPM and the Union negotiate the terms of the Plan and document these terms in the Plan brochure, which is included as an appendix to the contract between OPM and the Union.

Handlers Benefit Plan is one of the health insurance plans available to federal government employees and their families. These healthcare plans are established pursuant to the Federal Employees Health Benefits Act (FEHBA), 5 U.S.C. Sec. 8901 et seq., which authorizes the Office of Personnel Management (OPM) to contract with carriers to provide health benefits plans to federal employees and their families.

In January 1993, Marilyn Goepel learned that she had metastatic breast cancer. Thereafter, her consulting oncologist, Dr. David L. Topolsky of Hahnemann University, recommended that she undergo a treatment in which high doses of chemotherapy are followed by a peripheral stem cell infusion (HDC/APCR). ¹ On July 14, 1993, Dr. Topolsky wrote to the Plan requesting a determination of whether this treatment would be covered. Subsequently, on August 5, 1993, one of the Plan's customer service representatives stated in a telephone conversation that the treatment would not be covered, and indicated that it would take four to six weeks for Marilyn Goepel to receive an official notice of the Plan's denial of coverage in the mail.

The Goepels contacted Congressman Robert E. Andrews, who then sent a letter dated August 6, 1993, to OPM on their behalf. Within a week, OPM responded to Congressman Andrews' inquiry with a letter stating that page 19 of the 1993 Plan brochure "explicitly excludes benefits for HDCT/ABMT for breast cancer," and that therefore OPM had "no contractual basis to ask the Plan to provide benefits for Mrs. Goepel." ² See app. at 445. The Plan also sent a letter dated August 10, 1993, to Dr. Topolsky, denying his request for pre-authorization of benefits for HDC/APCR for Mrs. Goepel on the grounds that the terms of the 1993 Plan brochure did not cover the use of HDC/APCR for the treatment of breast cancer. The Goepels did not appeal the Plan's denial of coverage to OPM. However, the parties have stipulated that "[i]f plaintiffs were required to exhaust any right they had to seek review by OPM[,] ... that exhaustion requirement was satisfied" by Congressman Andrews' letter to the OPM on Mrs. Goepel's behalf and OPM's response to that letter. See app. at 26.

B. Procedural History

On August 19, 1993, the Goepels filed a complaint in the Superior Court of New Jersey, Law Division, alleging that: (1) the Plan violated the New Jersey Law Against Discrimination, N.J.Stat.Ann. Sec. 10:5-1 et seq. (West 1993); (2) the Plan breached its contract by refusing to certify her coverage for HDC/APCR; (3) any exclusion of coverage for HDC/APCR in the Plan brochure was unconscionable; and (4) the Plan's handling of Mrs. Goepel's claim involved unfair claim settlement practices in violation of N.J.Stat.Ann. Sec. 17B:30-13.1 (West 1985). See app. at 1-10. On these bases, the Goepels sought a declaratory judgment, injunctive relief, damages, and counsel fees. Id.

The Plan immediately removed the case to the United States District Court for the District of New Jersey. In its notice of removal,

the Plan stated that the case was removable pursuant to 28 U.S.C. Secs. 1441(b) and (c), because the Goepels' breach of contract claim "arises under the laws of the United States," and their other state law claims were "inextricably intertwined" with the breach of contract claim. Subsequently, the Goepels filed a motion to remand the case to the state court on the grounds that their breach of contract claim did not raise a federal question, as it was merely a private contractual dispute between an insured and a health care insurer. However, the district court denied the motion to remand. See Goepel v. Mail Handlers Benefit Plan, No. 93-3711 (D.N.J. Sept. 10, 1993). Subsequently, the district court tried the case on the merits pursuant to a joint stipulation of the facts, and entered judgment in favor of the Plan on all counts of the complaint. See Goepel v. Mail Handlers Benefit Plan, No. 93-3711, 1993 WL 384498 (D.N.J. Sept. 24, 1993).

II. DISCUSSION

In denying the Goepels' motion to remand this case to New Jersey Superior Court, the district court held that the case was removable pursuant to 28 U.S.C. Sec. 1441(b) because "the matter [wa]s one 'arising under' the laws of the United States." See Goepel v. Mail Handlers Benefit Plan, No. 93-3711, at 2 (D.N.J. Sept. 10, 1993). Section 1441(b) provides in relevant part that

[a]ny civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties.

The Goepels argue that the Plan improperly removed the case because they base their claims exclusively on state law, and thus do not raise any "federal questions" over which the district court would have original jurisdiction pursuant to 28 U.S.C. Sec. 1331 and removal jurisdiction pursuant to 28 U.S.C. Sec. 1441(b). We confine our review of the district court's subject matter jurisdiction to whether it had federal question removal jurisdiction over the Goepels' claims, as the Plan removed the case to district court on this basis alone, and it does not contend that it could have removed the case on the basis of diversity of citizenship. See 28 U.S.C. Secs. 1332, 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987) ("Absent diversity of citizenship, federal-question jurisdiction is required [for removal].").

" '[F]ederal question' cases ... [are] those cases 'arising under the Constitution, laws, or treaties of the United States.' " Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987) (quoting 28 U.S.C. Sec. 1331). "The presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal question jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. at 392, 107 S.Ct. at 2429 (citing Gully v. First Nat'l Bank, 299 U.S. 109, 112-13, 57 S.Ct. 96, 97-98, 81 L.Ed. 70 (1936)). " 'The rule makes the plaintiff the master of the claim,' " as generally " 'he or she may avoid federal jurisdiction' " by drafting a complaint which relies exclusively on state law. Krashna v. Oliver Realty, Inc., 895 F.2d 111, 113 (3d Cir.1990) (quoting Caterpillar, Inc. v. Williams, 482 U.S. at 392, 107 S.Ct. at 2429).

The Goepels' complaint does not purport to rely on federal law. Two of their its claims, namely the claims alleging violations of New Jersey's Law Against Discrimination, N.J.Stat.Ann. Sec. 10:5-1 et seq., and New Jersey's law against unfair claim settlement practices, N.J.Stat.Ann. Sec. 17B:30-13.1, are based expressly on New Jersey statutes. See app. at 1-4, 8-10. Moreover, although the Goepels' breach of contract and unconscionability claims do not rely expressly on either state or federal law, in the absence of any indication that the Goepels intended to invoke federal common law, we conclude that "on their face" these claims are grounded exclusively on New Jersey common law. ³

Nevertheless, the Plan argues that the Goepels' complaint "raises a federal question on its face" because it "seeks to enforce rights under a contract made by OPM pursuant to authority conferred by FEHBA," and "construction of that federal contract is governed exclusively by federal law." See br. at 32. Although the nature of the contract that the Goepels are seeking to enforce ultimately may lead a court to find that their state claims are preempted, their complaint does not "raise a federal question on its face" merely by virtue of the fact that it alludes to a federal contract. ⁴ Thus, if the "well-pleaded complaint rule" were an unqualified bar to federal question jurisdiction, our analysis would end here, as on its face the Goepels' complaint does not raise a federal question. However, as we recognized in United Jersey Banks v. Parell, 783 F.2d 360, 366 (3d Cir.), cert. denied, 476 U.S. 1170, 106 S.Ct. 2892, 90 L.Ed.2d 979 (1986), "the issue is not as straightforward as the black letter law appears."

In Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983), the Supreme Court "referred to two situations where federal jurisdiction could be available even though plaintiff based its claim in state court on state law: (1) when 'it...