Heimann v. Nat'l Elevator Industry Pension

• Decision Date: 27 August 1999
• Docket Number: No. 97-50165,97-50165
• Parties: (5th Cir. 1999) LOUIS D. HEIMANN, Plaintiff-Appellant, v. THE NATIONAL ELEVATOR INDUSTRY PENSION FUND, and THE NATIONAL ELEVATOR INDUSTRY HEALTH BENEFIT PLAN, Defendants. LOUIS D. HEIMANN, Jr., and LOU HEIMANN, Plaintiff-Appellant, v. INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS, and Ken BURKETT, Defendants-Appellees
• Court: U.S. Court of Appeals — Fifth Circuit

Page 493

187 F.3d 493 (5th Cir. 1999)

LOUIS D. HEIMANN, Plaintiff-Appellant, v. THE NATIONAL ELEVATOR INDUSTRY PENSION FUND, and THE NATIONAL ELEVATOR INDUSTRY HEALTH BENEFIT PLAN, Defendants.

LOUIS D. HEIMANN, Jr., and LOU HEIMANN, Plaintiff-Appellant, v. INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS, and Ken BURKETT, Defendants-Appellees.

No. 97-50165

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

August 27, 1999

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[Copyrighted Material Omitted] Appeal from the United States District Court for the Western District of Texas

Before EMILIO M. GARZA, STEWART, and DENNIS, Circuit Judges,

DENNIS, Circuit Judge:

Louis Heimann and his wife, Lou Heimann, appeal from the dismissal of their case for failure to state a claim upon which relief may be granted under Fed.R.Civ.P. 12(b)(6). They contend that the district court erred in deciding that the Employee Retirement Income Security Act of 1974 ("ERISA") preempted their Texas state law claims for tortious interference with contract and intentional infliction of emotional distress. Alternatively, if the state law claims are preempted, they argue that their complaint states federal law claims upon which relief may be granted under ERISA 502 (29 U.S.C. 1132) and 510 (29 U.S.C. 1140). We affirm the district court's dismissal of the Heimanns' state law tort claims because of preemption, but reverse the dismissal of their suit entirely because their petition states actionable federal ERISA claims, and remand the case to the district court for further proceedings.

I.FACTS AND PROCEDURAL HISTORY

Louis D. Heimann, the plaintiff appellant, was employed in the elevator industry for approximately 36 years and was a member of the International Union of Elevator Constructors ("IUEC"). During his years of employment, Mr. Heimann contributed to the National Elevator Industry Pension Fund and the National Elevator Industry Health Benefit Plan ("Plans"). It is undisputed that the Plans are governed by ERISA. Mr. Heimann is a participant and Mrs. Heimann is a beneficiary of the plans. Upon retirement, Mr. Heimann began to receive pension benefits from the Pension Fund and also obtained benefits from the Health Benefit Plan. The Plans specifically provide that benefits will be suspended if the retiree engages in work defined as "disqualifying employment."

Under the facts as alleged by the Heimanns, in March 1994, Mr. Heimann, while receiving benefits from the Plans, was hired by the University of Texas as an elevator inspector. The job does not fall within the Plans' definition of disqualifying employment. Before taking the job, Mr. Heimann conferred with representatives of the Plans and was assured that it did not constitute disqualifying employment. Nevertheless, the IUEC, through its business agent, Ken Burkett, intentionally and maliciously misrepresented to the Plans that Heimann was engaging in disqualifying employment. The IEUC's actions caused the Plans to suspend Mr. Heimann's pension benefits and terminate the Heimanns' health benefits.

The Heimanns sued the Plans in federal court for wrongful termination of benefits ("Heimann I"). The Heimanns later brought suit in Texas state court against IUEC and Mr. Burkett for intentional infliction of emotional distress and tortious interference with contract ("Heimann II"). IUEC and Mr. Burkett removed Heimann II to federal court on the basis that the Heimanns' state law causes of action were preempted by ERISA. Shortly after removal, Heimann I and Heimann II were consolidated.

IUEC and Burkett moved the district court to dismiss the Heimann's state law claims on the grounds that they were preempted by ERISA and for failure to state an actionable claim under ERISA. The court adopted the recommendations of a magistrate judge and issued an "Order and Partial Judgment" dismissing Heimann II because of preemption and failure to state a claim, but retained jurisdiction over Heimann I.

The district court dismissed the plaintiffs' claims in Heimann I, concluding that the Plans did not act wrongfully in terminating the Heimanns' benefits. Subsequently, the parties settled the claims involved in Heimann I. The Heimanns appealed from the district court's Rule 12(b)(6) dismissal of their claims against IUEC and Mr. Burkett in Heimann II.

II.ERISA COMPLETE PREEMPTION JURISDICTION

"[E]very federal appellate court has a special obligation to 'satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review,' even though the parties are prepared to concede it. Mitchell v. Maurer, 293 U.S. 237, 244 (1934). Juidice v. Vail, 430 U.S. 327, 331-332 (1977) (standing)." (internal quotations omitted); Steel Co. v. Citizens For A Better Environment, --- U.S. ---, 118 S.Ct. 1003, 1012 (1998) (quoting Arizonans for Official English v. Arizona, 520 U.S. 43, 70 (1997)) (quoting Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986)).

"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. 1441(a). The district courts have original jurisdiction over "federal question" cases; that is, those cases "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. 1331. It is well settled that a cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law. Gully v. First National Bank, 299 U.S. 109 (1936); Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149 (1908).

One oft-cited, yet often confused, corollary to the well-pleaded complaint doctrine "developed in the case law . . . is that Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 63 (1987). As this court has recently pointed out, confusion arises in distinguishing between the "complete preemption" described in Metropolitan Life which creates federal removal jurisdiction and the more common ordinary preemption which does not.¹ See McClelland v. Gronwaldt, 151 F.3d 507, 515 (5th Cir. 1998).

Ordinarily, the term federal preemption refers to ordinary preemption, which is a federal defense to the plaintiff's suit and may arise either by express statutory term or by a direct conflict between the operation of federal and state law. Being a defense, it does not appear on the face of a well-pleaded complaint, and, thus, does not authorize removal to a federal court. Id. at 516. By way of contrast, complete preemption is jurisdictional in nature rather than an affirmative defense to a claim under state law. Id., see also Giles v. NYLCare Health Plans, Inc., 172 F.3d 332 (5th Cir. 1999). As such, it authorizes removal to federal court even if the complaint is artfully pleaded to include solely state law claims for relief or if the federal issue is initially raised solely as a defense. See Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (1998).

Historically, the doctrine of complete preemption has been narrowly applied. In general, to demonstrate that there has been complete preemption justifying federal removal jurisdiction over an otherwise purely state law claim, a petitioner must show (1) the statute contains a civil enforcement provision that creates a cause of action that both replaces and protects the analogous area of state law (2) there is a specific jurisdictional grant to the federal courts for enforcement of the right and (3) there is a clear Congressional intent that claims brought under the federal law be removable. Aaron v. National Union Fire Insurance Co., 876 F.2d 1157 (5th Cir. 1989). This test should be "applied with circumscription to avoid difficult issues of federal-state relations", and accordingly few federal statutes can meet such an exacting standard. Id. at 1161 (citing United Jersey Banks v. Parell, 783 F.2d 360, 368 (3rd Cir.) cert. denied 476 U.S. 1170 (1986)).

As the Supreme Court has noted, claims under the Labor- Management Relations Act of 1947 ("LMRA") have long qualified for complete preemption. Metropolitan Life, 481 U.S. at 63-64 ("For 20 years, this Court has singled out claims pre-empted by 301 of the LMRA for such special treatment.")( citing Gully v. First National Bank, supra.) (citing Avco Corp. v. AERO Lodge No. 735, 390 U.S. 557 (1968)) (quoting Franchise Tax Board of Cal. v. Const. Laborers Vacation Trust, 463 U.S. 1, 23 (1983) ("The necessary ground of decision [in Avco] was that the preemptive force of 301 is so powerful as to displace entirely any state cause of action 'for violation of contracts between an employer and a labor organization.' Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of 301."(footnote omitted))).

In Franchise Tax Board the Court held that ERISA preemption under 514, without more, does not meet this standard and thus does not convert a state claim into an action arising under federal law (i.e., it is mere ordinary preemption). Id. at 25-27. That Court suggested, however, that a state action that was not only preempted by ERISA under 514, but that also came "within the scope of 502(a) [the civil enforcement provision] of ERISA[,]" might fall within the Avco rule. Franchise Tax Board, 463 U.S. at 24-25. In Metropolitan Life, 481 U.S. at 64, the Court had opportunity to address a claim which, "unlike the state tax collection suit in Franchise Tax Board, is within the scope of 502(a)." In so doing, the Court noted that:

[T]he language of the jurisdictional subsection of ERISA's civil enforcement provisions...