Harris v. Pacificare Life & Health Ins. Co.

• Decision Date: 28 September 2007
• Docket Number: Civ. Act. No. 2:06cv956-ID.
• Parties: Romie HARRIS, Jr., et al., Plaintiffs, v. PACIFICARE LIFE & HEALTH INS. CO., et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

514 F.Supp.2d 1280

Romie HARRIS, Jr., et al., Plaintiffs, v. PACIFICARE LIFE & HEALTH INS. CO., et al., Defendants.

Civ. Act. No. 2:06cv956-ID.

United States District Court, M.D. Alabama, Northern Division.

September 28, 2007.

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James Matthew Stephens, Rodney. Eugene Miller, Robert G. Methvin, Jr., McCallum Methvin & Terrell PC, Birmingham, AL, L. Cooper Rutland, Jr., Rutland & Braswell, Union Springs, AL, for Plaintiffs.

George Bryan Harris, Philip Henry Butler, William Claude McGowin, Bradley Arant Rose & White, LLP, Montgomery, AL, John K. Edwards, Paula Denney, Jackson Walker, L.L.P., Houston, TX, for Defendants.

Robert D. Bell, Albany, GA, Pro se.

Elizabeth R. Clark, Birmingham, AL, pro se.

Willie C. Tillis, Opp, AL, Pro se.

MEMORANDUM OPINION AND ORDER

IRA DE MENT, Senior District Judge.

I. INTRODUCTION

Before the court is a motion to remand, which is accompanied by a memorandum of law, filed by Plaintiffs Romie Harris, Jr., Amy Harris, Ruby Francis Fowler Mary Lois Green, James Thomas, Lula Thomas and Janie Buford ("Plaintiffs"). (Doc. Nos. 7-8.) The motion includes a request for an award of costs and attorney's fees. (Id.) Defendant Pacificare Life and Health Insurance Company ("Pacificare"), the removing defendant, opposes Plaintiffs' motion. (See Doc. Nos. 12-13.) Plaintiffs originally filed their complaint in the Circuit Court of Bullock County, Alabama, accusing Pacificare and its agents of fraud and other state common-law violations in connection with the purchase of one of Pacificare's Medicare insurance policies. Although the complaint does not refer to any federal law, Pacificare removed this case to the United States District Court for the Middle District of Alabama pursuant to 28 U.S.C. § 1331 and 1441(b), arguing that this case arises under the Medicare Act, 42 U.S.C. § 1395w-21 — w28, as amended by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA"), by virtue of the MMA's preemption clause, codified at 42 U.S.C. 1395w-26(b)(3). Plaintiffs challenge Pacificare's jurisdictional ground and move to remand this lawsuit back to state court. Plaintiffs argue that removal was procedurally defective and that their state common-law claims are not completely preempted. After careful consideration of the arguments of counsel, the relevant law and the record as a whole, the court finds that Plaintiffs' motion to remand is due to be granted, but that Plaintiffs' request for costs and attorney's fees is due to be denied.

II. STANDARD OF REVIEW

Pacificare, as the party removing this action to federal court, has the burden of establishing federal jurisdiction. See Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (11th Cir.2002); Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996). Federal district courts are "`empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,' and which have been entrusted to them by a jurisdictional grant authorized by Congress." Univ. of South Alabama v. The American Tobacco Co., 168 F.3d 405, 409 (11th Cir.1999) (quoting Taylor v. Appleton, 30 F.3d 1365 (11th Cir.1994)). Accordingly, the federal removal statutes must be "construed narrowly," and, generally speaking, all doubts about removal must be resolved in favor of remand. Allen v. Christenberry, 327 F.3d 1290, 1293 (11th Cir.2003).

III. BACKGROUND

Seven Plaintiffs, adult citizens of Bullock County, Alabama, filed this lawsuit on September 21, 2006, in the Circuit Court of Bullock County, Alabama.¹ (Compl. ¶¶ 1-5 (Doc. No. 1-3).) The complaint alleges the following facts.

At various times during 2006, Plaintiffs enrolled in a Medicare Advantage plan offered by Pacificare. Pacificare's plan is called the Secure Horizons Direct, which is a "Private Fee for Service Health Plan." (Id. ¶ 13.) The individual Defendants are "agents" of Pacificare who sold Plaintiffs the plans at issue. (Id. ¶¶ 7-9.) Plaintiffs allege that Defendants "acted in concert" to contact "all Medicare recipients" in Bullock County, Alabama, including Plaintiffs. (Id. ¶ 14.) As part of their concerted efforts, Defendants misrepresented that Plaintiffs "were required to enroll in Secure Horizons Direct under the federal government's new prescription drug program," (id. ¶ 15), and misrepresented that Defendants, in actuality, were "dis-enrolling Plaintiffs from their Medicare coverage and enrolling them" in Secure Horizons Direct's private Medicare Advantage plan. (Id. ¶ 16.) Consequently, Plaintiffs contend that their "benefits and healthcare coverage through Medicare was drastically reduced" and that, in most cases, medical care previously provided to Plaintiffs was "summarily denied by Pacificare," causing Plaintiffs to suffer physical injury and mental distress and to incur large medical bills. (Id. ¶¶ 17-19.)

Plaintiffs' complaint alleges state common-law causes of action against Pacificare and the individual Defendants. In Count I, a fraud claim, Plaintiffs contend that Defendants "misrepresented themselves as signing up people for the government's new prescription drug program." (Id. ¶¶ 22-26.) In Count II — an unjust, enrichment claim predicated upon averments that Defendants "fraudulently diverted Plaintiffs' Medicare premiums" to Pacificare's Medicare Advantage plan — Plaintiffs seek "disgorgement of all premiums paid by Plaintiffs and a permanent injunction against Defendants barring them from contacting others in Bullock County." (Id. ¶¶ 28-29.) Counts III, IV and V set forth claims under Alabama law for negligent infliction of emotional distress, wantonness, and outrage based upon averments that Defendants "lie[d]" about the terms and conditions of Pacificare's Medicare Advantage plan "to exploit the old and infirm for profit" and compromised Plaintiffs' healthcare needs. (Id. ¶¶ 30-41.) Compensatory and punitive damages are sought. (Id. at 3-5.)

IV. DISCUSSION

Because this lawsuit began in state court, the court's jurisdiction depends on the propriety of removal. Pacificare predicates federal-question removal jurisdiction on the doctrine of complete preemption. Pacificare relies on 42 U.S.C. § 1395w-26(b)(3) as the statutory vehicle through which complete preemption of Plaintiffs' state common-law claims is accomplished.² (See Pacificare Not. of Removal ¶¶ 3, 5 (Doc. No. 1-1)); (Pacificare Resp. to Pls. Mot. Remand at 4 (¶ 2.5) (Doc. No. 12)); 28 U.S.C. §§ 1331, 1441(b).

Plaintiffs' arguments opposing removal and urging remand are twofold. First, Plaintiffs assert that removal was procedurally defective because Pacificare failed to join Defendant Robert Bell ("Bell") in the removal action. (Pls. Mot. ¶ 4 (Doc. No. 7).) Second, Plaintiffs argue that Pacificare has not met its burden of demonstrating a basis for federal-question removal jurisdiction. (Id. ¶¶ 5-6); (Pls. Mem. of Law at 3-4 (Doc. No. 8).)

In Section A, below, the court rejects Plaintiffs' argument that removal was procedurally defective. In Section B, the court explains why Pacificare has not met its burden of proving that Plaintiffs' state common-law claims arise under federal law through the doctrine of complete preemption so as to support removal jurisdiction. In Section C, the court addresses the removal jurisdiction doctrine which is premised on the existence of a substantial question of federal law and explains that, to the extent Pacificare has raised this doctrine as a separate ground for removal jurisdiction, its argument fails. Finally, in Section D, the court explains the reasons for denying an award of costs and attorney's fees, pursuant to 28 U.S.C. § 1447(c).

A. Defect in the Removal Procedure

Relying on the Eleventh Circuit's "unanimity requirement," Plaintiffs argue that Pacificare's removal is procedurally defective because Bell did not join in the removal of this lawsuit from state to federal court. (Pls. Mem. of Law at 2 (Doc. No. 8).) Pacificare, however, contends that, on the date of removal, Bell had not been properly served in accordance with state procedural rules and that, therefore, Bell's consent was not required for removal and the unanimity rule was not violated. (Doc. No. 1 § 9.) The court agrees with Pacificare, but for slightly different reasons from those it has urged.

The "unanimity" rule requires that where there are multiple defendants, all defendants must either join in or consent to removal, Russell Corp. v. Am. Home Assur. Co., 264 F.3d 1040, 1044 (11th Cir.2001). Derived from 28 U.S.C. § 1446, which sets out the procedure for removal, the unanimity rule governs in this circuit. See id.; Loftis v. UPS, 342 F.3d 509, 516 (6th Cir.2003). "Like all rules governing removal, this unanimity requirement must be strictly interpreted and enforced because of the significant federalism concerns arising in the context of federal removal jurisdiction." Russell Corp., 264 F.3d at 1049. The unanimity rule, however, is not violated when the alleged offender of the rule has not been served at the time the removal petition is filed: "[A] defendant that has not been served with process need not join in or consent to removal." GMFS, L.L.C. v. Bounds, 275 F.Supp.2d 1350, 1354 (S.D.Ala.2003); Retirement Systems of Alabama v. Merrill Lynch & Co., 209 F.Supp.2d 1257, 1262 n. 8 (M.D.Ala.2002) (Albritton, J.) (noting that there are three exceptions to the unanimity rule, the first being when "a co-defendant has not been served at the time the removal petition was filed").

It is undisputed that Bell did not join in or consent to the removal of this case from state to federal court. Whether he was required to join in or consent to removal is disputed. The answer to this disputed issue depends upon whether Bell properly was served.

In support of their contention that they properly served Bell by certified mail, Plaintiffs rely on the certified mail, return receipt form (PS Form 3811), which...