King v. Marriott Intern. Inc.

• Decision Date: 28 July 2003
• Docket Number: No. 02-2139.,02-2139.
• Citation: 337 F.3d 421
• Parties: Karen Bauries KING, Plaintiff-Appellant, v. MARRIOTT INTERNATIONAL, INCORPORATED; Karl I. Fredericks, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

337 F.3d 421

Karen Bauries KING, Plaintiff-Appellant, v. MARRIOTT INTERNATIONAL, INCORPORATED; Karl I. Fredericks, Defendants-Appellees.

No. 02-2139.

United States Court of Appeals, Fourth Circuit.

Argued: June 5, 2003.

Decided: July 28, 2003.

ARGUED:

William Barnett Schultz, Civil Division, Appellate Staff, United States Department of Justice, Washington, D.C., for Appellant. Todd James Horn, Venable, Baetjer & Howard, L.L.P., Baltimore, Maryland, for Appellees.

ON BRIEF:

Steven M. Salky, Zuckerman, Spaeder, L.L.P., Washington, D.C.; Robert B. Fitzpatrick, Fitzpatrick & Associates, Washington, D.C., for Appellant.

Before WILKINSON, LUTTIG, and SHEDD, Circuit Judges.

Vacated and remanded by published opinion. Judge LUTTIG wrote the opinion, in which Judge WILKINSON and SHEDD joined.

OPINION

LUTTIG, Circuit Judge:

Karen King, the plaintiff-appellant, brought suit in Maryland state court against Marriott International, Inc., her former employer, and Karl I. Fredericks, her immediate supervisor, for wrongful discharge under Maryland state law, asserting in particular that she was discharged for complaining about and for refusing to violate the Employment Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). The defendants removed the case to federal district court, alleging that ERISA completely preempted her state cause of action. After the district court denied King's motion for remand, the district court granted summary judgment in favor of the defendants, concluding that King had failed to present sufficient proof of a causal link between her termination and her complaints about the management of Marriott's benefits plan.

King appeals, contending that the district court erred by concluding that her wrongful discharge claim was completely preempted by ERISA. We agree with King, and so vacate the district court's judgment and remand for further proceedings.

I.

Karen King was employed in Marriott's benefits department for many years, and was by all accounts an excellent employee prior to 1999. In late 1998 or early 1999, however, a series of events began that threw King into conflict with her supervisors. First, King learned that defendant Fredericks, the Senior Vice President of Compensation and Benefits, recommended that Marriott transfer millions of dollars from its medical plan into its general corporate reserve account. King doubted the appropriateness of this transfer and accordingly expressed her concern to coworkers and to Fredericks.

By late 1999, King had been promoted by Fredericks and given responsibilities regarding benefit plan finances. At this time, she learned that the proposal to transfer the reserve funds had been revived. She again objected to the transfer, fearing that such a transfer would violate ERISA. She registered her objection with Fredericks, as well as with two in-house attorneys, going so far as to request an opinion letter from one of the in-house attorneys.

Also, in September 1999, Fredericks announced a restructuring of responsibilities within the benefits department. King was promoted to Vice President of Benefits Resources, and the responsibilities in the benefits department were divided between King and a Ms. Brookbank. This division of responsibilities apparently was unsatisfactory to the two subordinates, and the two began a disruptive feud. This feud significantly affected the functioning of the benefits department, even causing several employees to seek transfers.

In early 2000, Marriott proposed another transfer of funds from the medical plan, and again King objected, both verbally and in writing to Fredericks. In late March 2000, Fredericks fired both King and Brookbank, for the purported reason that their continuing feud hindered the operation of the benefits department.

King then brought suit against Marriott and Fredericks in Maryland state court, alleging that her termination was wrongful and violative of public policy under Maryland law. Defendants promptly removed the case to federal district court in Maryland, contending that ERISA preempted her wrongful termination claim. King moved to remand, or in the alternative to amend her complaint to allege a variety of new claims, including an explicit ERISA anti-retaliation claim. The district court denied King's motion to remand, and granted her motion to amend her complaint. Thereafter, however, the district court granted summary judgment to defendants on all claims. On the ERISA anti-retaliation claim and the state wrongful discharge claim, the district court concluded that King had failed to establish a causal link between her termination and her complaints regarding the management of the ERISA plan. King now appeals, contending that the district court erred by denying her motion to remand her wrongful discharge claim.

II.

Defendants argue in support of the district court's denial of the motion to remand the case solely on the grounds that King's claims were completely preempted by ERISA. They thus present the question whether, despite King's attempt to plead a state law cause of action, King has actually pled a federal cause of action.

Although the plaintiff is generally the "master of his complaint," Custer v. Sweeney, 89 F.3d 1156, 1165 (4th Cir.1996), the federal removal statute allows a defendant to remove certain claims originally brought in state court into federal court. 28 U.S.C. § 1441. Removal is appropriate, however, only where the civil action is one over which "the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). Hence, to determine if King's state wrongful discharge claim was removable, we must analyze whether her claim could have been brought originally in federal district court.

A civil action "arising under the Constitution, laws, or treaties of the United States" can be brought originally in federal district court. 28 U.S.C. § 1331. Under the venerable well-pleaded complaint rule, jurisdiction lies under section 1331 only if a claim, when pleaded correctly, sets forth a federal question; in other words, whether "a case is one arising under the Constitution or a law or treaty of the United States, in the sense of the jurisdictional statute, ... must be determined from what necessarily appears in the plaintiff's statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may interpose." Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914); see Gully v. First Nat'l Bank, 299 U.S. 109, 112-13, 57 S.Ct. 96, 81 L.Ed. 70 (1936) ("[A] right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action."); Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908). Thus, ordinarily courts "look no further than the plaintiff's complaint in determining whether a lawsuit raises issues of federal law capable of creating federal-question jurisdiction under 28 U.S.C. § 1331." Custer, 89 F.3d at 1165. In particular, a claim in which the federal question arises only as a defense to an otherwise purely state law action does not "arise under" federal law, and hence jurisdiction would not lie under section 1331. See Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 12, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983).

There is one corollary to the well-pleaded complaint rule. "Federal preemption is ordinarily a federal defense to the plaintiff's suit." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). Therefore, a defendant's raising of the defense of federal preemption is, under the well-pleaded complaint rule, insufficient to allow the removal of the case to federal court. See Gully, 299 U.S. at 116, 57 S.Ct. 96 ("By unimpeachable authority, a suit brought upon a state statute does not arise under an act of Congress or the Constitution of the United States because prohibited thereby."). But, in some cases, federal law so completely sweeps away state law that any action purportedly brought under state law is transformed into a federal action that can be brought originally in, or removed to, federal court. See Metropolitan Life, 481 U.S. at 63-64, 67, 107 S.Ct. 1542. The operation of this rule has come to be known as the doctrine of "complete preemption." The Supreme Court recently summarized the doctrine in Beneficial National Bank v. Anderson, ___ U.S. ___, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003). There, the Court emphasized that the touchstone of complete preemption is "whether Congress intended the federal cause of action" to be "the exclusive cause of action" for the type of claim brought by a plaintiff. Id. at 2060.

In cases of complete preemption, however, it is misleading to say that a state claim has been "preempted" as that word is ordinarily used. In such cases, in actuality, the plaintiff simply has brought a mislabeled federal claim, which may be asserted under some federal statute. See, e.g., Darcangelo v. Verizon Communications, Inc., 292 F.3d 181, 195 (4th Cir.2002) ("[W]hen a claim under state law is completely preempted and is removed to federal court because it falls within the scope of § 502 [of ERISA], the federal court should not dismiss the claim as preempted, but should treat it as a federal claim under § 502."). Thus, a vital feature of complete preemption is the existence of a federal cause of action that replaces the preempted state cause of action. Where no discernable federal cause of action exists on a plaintiff's claim, there is no complete preemption, for in such cases there is no federal cause of action that Congress intended to be the exclusive remedy for the alleged wrong.

We have found that ERISA does completely preempt many state law claims. In particular, "when a complaint contains state law claims that fit...