Miller v. Carelink Health Plans, Inc.

• Decision Date: 21 January 2000
• Docket Number: No. Civ.A. 2:99-0966.,Civ.A. 2:99-0966.
• Citation: 82 F.Supp.2d 574
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Elizabeth A. MILLER, Plaintiff, v. CARELINK HEALTH PLANS, INC., Defendant.

82 F.Supp.2d 574

Elizabeth A. MILLER, Plaintiff, v. CARELINK HEALTH PLANS, INC., Defendant.

No. Civ.A. 2:99-0966.

United States District Court, S.D. West Virginia, Charleston Division.

January 21, 2000.

Keith Jones, Charleston, WV, Michael W. Carey and Pamela C. Deem, Carey, Scott & Douglas, Charleston, WV, for plaintiff.

Stephen A. Weber, William F. Foster II, and Hannah B. Curry, Kay, Casto & Chaney, Charleston, WV, for defendant.

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending are Plaintiff's motions to remand and for sanctions for improper removal. The Court GRANTS these motions, holding Plaintiff's state law causes of action are not preempted by ERISA.¹

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Elizabeth Miller is a registered professional nurse who was employed on July 21, 1997 as a nurse case manager by Defendant Carelink. Carelink is a health maintenance organization ("HMO"), organized and licensed under the West Virginia HMO Act, W.Va.Code §§ 33-25A-1, et seq., which administers ERISA benefit plans. Prior to Miller's employment by Carelink, the HMO had approved as medically necessary "Patient Doe's" purchase of a specialized bed. In late 1997 and early 1998, after Carelink learned Patient Doe had decided to change his coverage to another health care provider, Miller was ordered by her supervisors to write a policy and procedure allowing repossession of certain items of medical equipment, previously purchased as covered items under patients' insurance plans. Miller also was ordered to implement the policy retroactively by informing Patient Doe he would be required to return the specialized bed to Carelink as a result of changing health care plans. Miller refused to follow these orders. She informed Carelink that doing so would violate substantial public policies of the State of West Virginia governing both HMOs and nurses. Miller was then summoned to a meeting with her supervisors and suspended without pay for a week. On this basis, Miller filed her original Complaint in Kanawha County Circuit Court on March 27, 1998, after which she alleges she was subjected to retaliation and was constructively discharged.²

Carelink avers that during the deposition of one of Plaintiff's experts³ on September 30, 1999 it learned that Plaintiff's claim actually is

one for the recovery of punitive damages under a State law action to punish Carelink Health Plans, Inc. for its alleged breach of an employee benefit plan on the grounds that the beneficiaries of the plan are precluded from bringing a State law action and seeking such remedies by the preemption of ERISA.

(Notice of Removal ¶ 3.) Carelink alleges removal is both timely and proper because Plaintiff avoided invoking federal question jurisdiction through artful pleading, (id. ¶ 1), and Carelink removed this action on October 29, 1999, within 30 days of discovering that Plaintiff's civil action was completely preempted by federal law (id.). The case was scheduled for trial in state court beginning December 13, 1999. Plaintiff now moves to remand and for sanctions for improper removal.

II. DISCUSSION

A. Remand for Absence of ERISA Complete Preemption

A defendant may remove any civil action, brought in a state court, "of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). Federal courts "have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The party seeking to remove a case to federal court has the burden of establishing federal jurisdiction. See Mulcahey v. Columbia Organic Chem. Co., Inc., 29 F.3d 148, 151 (4th Cir.1994). If federal jurisdiction is doubtful, a remand is necessary. Id.

Under the so-called "well-pleaded complaint rule," "a cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (citations omitted); see also Franchise Tax Bd. of the State of Cal. v. Constr. Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 10-11, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). Federal courts may acquire removal jurisdiction where "a right or immunity created by the Constitution or laws of the United States [is] an element, and an essential one, of the plaintiff's cause of action." Gully v. First National Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 81 L.Ed. 70 (1936).

Complete preemption is an important exception to the well-pleaded complaint rule because, where Congress completely preempts a particular area, any civil complaint raising this select group of claims is necessarily federal in character. See Metropolitan, 481 U.S. at 63-64, 107 S.Ct. 1542. Complete preemption substitutes a federal cause of action for the state claim, making it one which arises under federal law, and conferring removal jurisdiction.⁴ While complete preemption is rare, the Supreme Court has held some ERISA claims completely preempt actions brought in state court and so arise under federal law. See id. at 65, 107 S.Ct. 1542. Relying on legislative history and Congressional intent,⁵ the Supreme Court found actions brought under the civil enforcement provisions of ERISA Section 502(a) arise under laws of the United States, and therefore, provide federal court removal jurisdiction. See id. at 65, 107 S.Ct. 1542. ERISA Section 502(a) actions, however, may be brought only by a plan participant, beneficiary, or fiduciary, or by the Secretary of Labor. See 29 U.S.C. § 1132(a).

Elizabeth Miller's case for retaliatory suspension and discharge is a state common law cause of action commenced by an employee against her employer. Although the parties do not dispute that her employer Carelink provides services to members of employer-sponsored ERISA plans, Miller is not suing Carelink as a plan participant, beneficiary, or fiduciary. She is suing as a former employee. Therefore, complete ERISA preemption is unavailable to Carelink as a basis for removal to this Court. Accordingly, the Court GRANTS Plaintiff's motion to remand this action to the Circuit Court of Kanawha County.

B. Sanctions for Improper Removal

Plaintiff also seeks an award of sanctions, attorney fees and costs, pursuant to Rule 11(c)(1)(A). See Fed.R.Civ.P. 11(c)(1)(A). The removal statute, however, is the appropriate vehicle for Plaintiff's request. The statute provides, in pertinent part, "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c). This Court has previously noted, "[t]he trend among the circuits construing the amended version of § 1447(c) ... is to award attorney fees without reference to a particular state of mind or improper purpose [on the part of the removing party]." Gibson v. Tinkey, 822 F.Supp. 347, 349 (S.D.W.Va.1993) (citations omitted). The purpose instead appears to be "to reimburse Plaintiffs who have incurred expenses in attacking improper removals." See Liebig v. DeJoy, 814 F.Supp. 1074, 1077 (M.D.Fla.1993). Assessing fees and costs also deters improper removal. Circle Indus. USA, Inc. v. Parke Constr. Group, Inc., 183 F.3d 105, 108 (2d Cir.1999) (explaining improper removal exposes a plaintiff to unnecessary expense to "appear in federal court, prepare motion papers and litigate, merely to get the action returned to the court where the plaintiff initiated it").

Defendant Carelink failed to distinguish ordinary Section 514 preemption from Section 502 complete preemption, relying on ERISA Section 514 preemption for removal. (See Notice of Removal ¶ 4 (relying on Section 514 preemption, citing 29 U.S.C. § 1144(a)).) The ordinary/complete ERISA preemption distinction is of fairly recent origin, the Supreme Court having addressed the issue in 1987, Metropolitan, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55, and courts note the Court has "not yet had an opportunity to ... distinguish carefully between ordinary preemption and `complete preemption.'" Warner, 46 F.3d at 534. If Carelink had simply misidentified the nature of ERISA preemption, correctly discerning an ordinary Section 514 preemption defense, but failing to recognize the lack of removal jurisdiction, sanctions might not be in order.

As noted above, ERISA Section 514 preemption is broad, preempting any and all state laws that relate to an ERISA plan, and giving the phrase "relate to" its "broad common-sense meaning." Metropolitan, 471 U.S. at 739, 105 S.Ct. 2380. Nevertheless, some state laws may have "too tenuous, remote, or peripheral" an effect on a benefit plan to fall within the statute's preemptive force. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). The Supreme Court has further elucidated the "forbidden connection" created by the statutory "relate to" language. New York State Conference of Blue Cross Blue Shield v. Travelers Ins. Co., 514 U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995). Three types of laws relate to ERISA plans so as to invoke ordinary preemption: 1) laws that "mandate employee benefits structures or their administrations," id. at 658, 115 S.Ct. 1671; 2) laws that purport to bind plan administrators to particular choices, or to preclude uniform administrative practice, id. at 659-61, 115 S.Ct. 1671; and 3) laws that provide "alternative enforcement mechanisms" by which participants or beneficiaries may obtain benefits under the terms of the plan, id. at 658, 115 S.Ct. 1671. See also Coyne & Delany v. Selman, 98 F.3d 1457, 1468 (4th Cir.1996).

Although Elizabeth Miller's former employer administers ERISA plans, her state law causes of action in no way interfere with the internal operation of the plan itself, affecting only its decisions as employer. This is well-settled law, easily discerned from the face of the Complaint. Carelink could not, therefore, have relied on ...