Hanna v. Fleetguard, Inc., No. C 95-3020.

CourtUnited States District Courts. 8th Circuit. Northern District of Iowa
Citation900 F. Supp. 1110
Docket NumberNo. C 95-3020.
PartiesLeAnn J. HANNA, Plaintiff, v. FLEETGUARD, INC., and Liberty Mutual Insurance Group, a/k/a Liberty Mutual Insurance Group/Boston, Defendants.
Decision Date23 August 1995

900 F. Supp. 1110

LeAnn J. HANNA, Plaintiff,
v.
FLEETGUARD, INC., and Liberty Mutual Insurance Group, a/k/a Liberty Mutual Insurance Group/Boston, Defendants.

No. C 95-3020.

United States District Court, N.D. Iowa, Central Division.

August 23, 1995.


900 F. Supp. 1111
COPYRIGHT MATERIAL OMITTED
900 F. Supp. 1112
COPYRIGHT MATERIAL OMITTED
900 F. Supp. 1113
Mark S. Soldat, Algona, Iowa, for Plaintiff

Thomas J. Bice of Johnson, Erb, Bice & Carlson, P.C., Fort Dodge, Iowa, for Defendant Fleetguard, Inc.

Iris J. Post of Grefe & Sidney, P.L.C., Des Moines, Iowa, for Defendant Liberty Mutual Insurance Group.

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION TO REMAND

BENNETT, District Judge.

 TABLE OF CONTENTS
                 I. INTRODUCTION AND BACKGROUND ............................................. 1114
                II. LEGAL ANALYSIS .......................................................... 1115
                 A. 28 U.S.C. § 1445(c) ...................................................1116
                 1. Historical background and procedural application of the statute ....1116
                 a. Historical background ...........................................1116
                 b. Procedural application ..........................................1117
                

900 F. Supp. 1114
2. Introduction to the Humphrey/Spearman analysis .....................1118 3. Hanna's claim of retaliatory discharge .............................1119 4. Hanna's claim of bad faith .........................................1123 B. The Existence Of Diversity Between Hanna and Fleetguard ...............1126 1. Tests to determine principal place of business .....................1127 2. Fleetguard's principal place of business ...........................1128 III. CONCLUSION ..............................................................1129

In the often esoteric procedural battlefield of removal-remand skirmishes, this litigation presents a rather arcane confrontation between traditional state law workers' compensation issues and federal court removal jurisdiction. One side of the battleground represents one of the traditional bases of federal jurisdiction, diversity of citizenship of the parties. The other side, however, symbolizes the important principles of comity and sovereignty, prescribing the locality of workers' compensation claims and remanding them well beyond the reach of the federal courts. This epitome of comity and sovereignty is 28 U.S.C. § 1445(c), the statute prohibiting the removal of civil actions "arising under" the workers' compensation laws. The question squarely raised here involves the parameters of this prohibition on federal court removal jurisdiction. Specifically, this motion to remand compels the court to examine the propriety of removal of two state tort claims, sisters to an underlying workers' compensation claim, in light of an express congressional limitation on this area of federal jurisdiction. Placing this procedural quandary in its appropriate context, this court has recently recognized that an initial removal-remand struggle has absolutely nothing to do with the essence of the actual dispute between the parties, but simply decides the location (state or federal) of the battleground. Iowa Comprehensive Petroleum Underground Storage Tank Fund Bd. 990C80656 v. Amoco Oil Co., 883 F.Supp. 403, 405 (N.D.Iowa 1995) (quoting University of Rhode Island v. A.W. Chesterton Co., 2 F.3d 1200, 1219 (1st Cir.1993) (Hornby, J., concurring)).

Regarding this motion, plaintiff employee originally filed suit in an Iowa state court alleging retaliatory discharge and bad faith failure to pay workers' compensation benefits against both her former employer and her employer's workers' compensation insurer, named co-defendants in this action. Defendants filed notice of removal to this court on grounds of diversity. In response, plaintiff has moved to remand the case back to state court pursuant to 28 U.S.C. § 1445(c), arguing this statute prohibited the removal of both the retaliatory discharge claim and the bad faith claim because they were "civil actions arising out of workers' compensation laws." Plaintiff has also challenged defendants' removal on the grounds that the parties' citizenship is not diverse.

I. INTRODUCTION AND BACKGROUND

Plaintiff LeAnn Hanna filed this lawsuit against Defendants Fleetguard, Inc. ("Fleet-guard") and Liberty Mutual Insurance Co., a/k/a Liberty Mutual Insurance Group/Boston ("Liberty Mutual") in the Iowa District Court in Winnebago County on February 7, 1995. In Count One of her Petition, Hanna claims she sustained workers' compensation injuries while employed by Fleetguard, and Liberty Mutual insured Fleetguard for her injuries. (Pl.'s Pet. ¶ 1-2). Hanna claims Liberty Mutual acted in bad faith with respect to allowing her workers' compensation benefits for her injuries by delaying payment of such benefits and that Fleetguard participated in the denial of payment of such benefits by concert of action. (Pl.'s Pet. ¶ 3). In Count Two of her Petition, Hanna asserts a claim of retaliatory discharge against Fleetguard, alleging she was discharged from employment in response to and as a result of making workers' compensation claims for the injuries she sustained while employed by Fleetguard. (Pl.'s Pet. ¶ 10). Hanna further alleged that Liberty Mutual participated in this retaliatory discharge by concert of action. (Pl.'s Pet. ¶ 10). Both Fleetguard and Liberty Mutual denied the material allegations of the charges of retaliatory discharge and bad faith denial of workers' compensabenefits

900 F. Supp. 1115
in separate answers dated February 24, 1995, and March 7, 1995, respectively

On March 13, 1995, Fleetguard and Liberty Mutual filed a Notice of Removal in the United States District Court for the Northern District of Iowa pursuant to 28 U.S.C. § 1441(a), alleging the federal district court had original jurisdiction over these two claims pursuant to 28 U.S.C. § 1332(a) due to the diversity of the adverse parties in this lawsuit. In their Notice of Removal, Fleetguard and Liberty Mutual claimed Hanna is a resident of Iowa, Fleetguard is a corporation incorporated in Indiana with its principal place of business in Nashville, Tennessee, and Liberty Mutual is a corporation incorporated in Massachusetts with its principal place of business in Boston, Massachusetts. This case was referred to United States Magistrate Judge John A. Jarvey on March 14, 1995, pursuant to 28 U.S.C. § 636(b)(1)(A) & (B), who was scheduled to hear and determine any and all pretrial matters regarding this case including dispositive motions.

On March 27, 1995, Hanna filed a Motion to Remand to state court, alleging three grounds for the remand. First, Hanna asserts that her retaliatory discharge claim against Fleetguard and Liberty Mutual is a claim arising under Iowa Code § 85.18, a statute which is part of Iowa's workers' compensation law. 28 U.S.C. § 1445(c) precludes removal of any civil action in state court arising under the workers' compensation laws of such state. Therefore, Hanna argues this retaliatory discharge claim cannot be removed to federal court. Secondly, Hanna alleges that her bad faith claim against Fleetguard and Liberty Mutual is a claim arising under Iowa Code § 85.27, a statute which is also a part of Iowa's workers' compensation law. In accordance with the statutory mandate of 28 U.S.C. § 1445(c), Hanna argues this bad faith claim cannot be removed to federal court. Finally, Hanna contends complete diversity does not exist between the adverse parties in this case because Hanna is a resident of Iowa, and Fleetguard's principal place of business or "nerve center" is in Iowa, making Fleetguard a citizen of Iowa under 28 U.S.C. § 1332(c)(1). (Pl.'s Mot. to Remand ¶ 6). Based on these grounds, Hanna is seeking a remand of this case to the Iowa District Court.

Fleetguard and Liberty Mutual each filed a separate Resistance to Hanna's Motion to Remand on April 10, 1995. Both parties argued Hanna's claims of retaliatory discharge and bad faith did not arise under Iowa's workers' compensation laws and as such, should not be remanded pursuant to 28 U.S.C. § 1445(c). In addition, both Fleetguard and Liberty Mutual argued that Fleetguard's principal place of business is in Nashville, Tennessee, not in Iowa; therefore, the adverse parties are completely diverse pursuant to 28 U.S.C. § 1332(c)(1), and this case has been properly removed to federal court pursuant to 28 U.S.C. § 1441(a). Accompanying its Resistance to Hanna's Motion to Remand and its corresponding brief, Fleetguard filed an affidavit by its Secretary, Mark R. Gerstle, regarding the location of Fleetguard's corporate activities for purposes of supporting its claim of diversity between Hanna and Fleetguard. On August 8, 1995, I issued an order withdrawing the referral of this motion to Judge John A. Jarvey and reassigning the motion to me. Before examining the merits of this controversy, the court turns first to the historical background and the procedural principles that accompany 28 U.S.C. § 1445(c), the statutory provision at issue in this case.

II. LEGAL ANALYSIS

A primary principle of removal jurisdiction is that defendants may initiate removal to the federal district court for the district in which the state court action is pending, if the federal court has original jurisdiction, unless an Act of Congress expressly provides otherwise. Humphrey v. Sequentia, Inc., 58 F.3d 1238, 1242 (8th Cir.1995) (citing 28 U.S.C. § 1441(a)). In this case, Fleetguard and Liberty Mutual removed Hanna's state court action to federal district court on the grounds that the parties' citizenship was diverse pursuant to 28 U.S.C. § 1332(a). In her motion for remand, Hanna argues that removal of Hanna's retaliatory discharge and bad faith claims was expressly prohibited by

900 F. Supp. 1116
28 U.S.C. § 1445(c). In addition, Hanna alleges that diversity of citizenship does not exist between the parties, thereby defeating federal...

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16 practice notes
  • Roberts v. Beaulieu of America, Inc., Civil Action No. CV-95-S-2782-NE.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • June 25, 1996
    ...furnace and welded into the framework of a state's statutory workers' compensation scheme. Id.; see also Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1118 (N.D.Iowa 1995) (infra note C. The Eighth Circuit In Humphrey v. Sequentia Inc., 58 F.3d 1238 (8th Cir.1995), the Eighth Circuit held a ......
  • Kuykendall v. Gulfstream Aerospace Tech., No. 97,036.
    • United States
    • Supreme Court of Oklahoma
    • December 17, 2002
    ...Co., see note 33, supra. 38. Cruz v. Liberty Mut. Ins. Co., 119 N.M. 301, 889 P.2d 1223, 1226 (1995). 39. Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1123-24 (N.D.Iowa 1995); Travelers Ins. Co. v. Savio, see note 33 at 1264, supra; Markgraf v. Douglas Corp., see note 33, supra; Boy v. Frem......
  • Quality Refrigerated Services, Inc. v. City of Spencer, No. C 95-4061.
    • United States
    • United States District Courts. 4th Circuit. Northern District of West Virginia
    • November 2, 1995
    ...of the corporation's business activities, but the corporation's activities are "far flung' and varied." See Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1127-28 (N.D.Iowa 1995). Here, because Quality Refrigerated's activities are neither far flung or varied, the "nerve center" test is inapp......
  • Hanson v. Hancock County Memorial Hosp., No. C 95-3041-MWB.
    • United States
    • United States District Courts. 8th Circuit. Northern District of Iowa
    • August 15, 1996
    ...her right to confidentiality of her hospitalization. This court is also familiar with such claims. See, e.g., Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1119-23 (N.D.lowa 1995); Reedy, 890 F.Supp. at 1431-35. Recent decisions of the Iowa Supreme Court are in accord with the principles thi......
  • Request a trial to view additional results
16 cases
  • Roberts v. Beaulieu of America, Inc., Civil Action No. CV-95-S-2782-NE.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • June 25, 1996
    ...furnace and welded into the framework of a state's statutory workers' compensation scheme. Id.; see also Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1118 (N.D.Iowa 1995) (infra note C. The Eighth Circuit In Humphrey v. Sequentia Inc., 58 F.3d 1238 (8th Cir.1995), the Eighth Circuit held a ......
  • Kuykendall v. Gulfstream Aerospace Tech., No. 97,036.
    • United States
    • Supreme Court of Oklahoma
    • December 17, 2002
    ...Co., see note 33, supra. 38. Cruz v. Liberty Mut. Ins. Co., 119 N.M. 301, 889 P.2d 1223, 1226 (1995). 39. Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1123-24 (N.D.Iowa 1995); Travelers Ins. Co. v. Savio, see note 33 at 1264, supra; Markgraf v. Douglas Corp., see note 33, supra; Boy v. Frem......
  • Quality Refrigerated Services, Inc. v. City of Spencer, No. C 95-4061.
    • United States
    • United States District Courts. 4th Circuit. Northern District of West Virginia
    • November 2, 1995
    ...of the corporation's business activities, but the corporation's activities are "far flung' and varied." See Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1127-28 (N.D.Iowa 1995). Here, because Quality Refrigerated's activities are neither far flung or varied, the "nerve center" test is inapp......
  • Hanson v. Hancock County Memorial Hosp., No. C 95-3041-MWB.
    • United States
    • United States District Courts. 8th Circuit. Northern District of Iowa
    • August 15, 1996
    ...her right to confidentiality of her hospitalization. This court is also familiar with such claims. See, e.g., Hanna v. Fleetguard, Inc., 900 F.Supp. 1110, 1119-23 (N.D.lowa 1995); Reedy, 890 F.Supp. at 1431-35. Recent decisions of the Iowa Supreme Court are in accord with the principles thi......
  • Request a trial to view additional results

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