Noyola v. Oasis Car Wash, Inc.

• Decision Date: 14 June 2002
• Docket Number: No. Civ.A. 01:02-CV-290.,Civ.A. 01:02-CV-290.
• Citation: 220 F.Supp.2d 638
• Parties: Jessie NOYOLA and wife, Beatrice Noyola, Plaintiffs, v. OASIS CAR WASH, INC., Defendant.
• Court: U.S. District Court — Eastern District of Texas

220 F.Supp.2d 638

Jessie NOYOLA and wife, Beatrice Noyola, Plaintiffs, v. OASIS CAR WASH, INC., Defendant.

No. Civ.A. 01:02-CV-290.

United States District Court, E.D. Texas, Beaumont Division.

June 14, 2002.

Gregory F. Cox, Provost & Umphrey, Beaumont, TX, for Plaintiff.

Darryl Jan Silvera, Silvera & Associates, Dallas, TX, for Defendants.

MEMORANDUM OPINION

COBB, District Judge.

Before the court is Plaintiffs' Motion to Remand [Dkt. # 2], and the court having reviewed the motion and response on file is of the opinion that the motion be GRANTED. This case, originally filed in state court and removed to federal court by the defendant, Oasis Car Wash, Inc. (Oasis), arises out of an on-the-job injury suffered by one of the plaintiffs while employed by and working for Oasis. The plaintiffs have now filed a Motion to Remand.

I. The Burden is on Oasis to Demonstrate Entitlement to Removal

Oasis, as the party invoking federal court removal jurisdiction, bears the burden of establishing that this court has subject matter jurisdiction. See Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 365 (5th Cir.1995); Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir.1988). "[B]ecause the effect of removal is to deprive the state court of an action properly before it, removal raises significant federalism concerns...." Carpenter, 44 F.3d at 365. The court, therefore, must strictly construe the removal statute. Id. When removal is sought under 28 U.S.C. § 1441(b), as it is here, the right of removal depends on the existence of a claim or claims within the federal question jurisdiction of the court. Id. Remand is proper when there is any doubt as to the existence of federal jurisdiction. Delgado v. Shell Oil Co., 890 F.Supp. 1324, 1341 (S.D.Tex.1995); Samuel v. Langham, 780 F.Supp. 424, 427 (N.D.Tex.1992).

II. Background

According to the Original Complaint, which was filed in state court on April 1, 2002: Jessie Noyola worked for Oasis and while performing work for Oasis on March 12, 2002, he fell from a ladder when he received an electric shock. Oasis is a nonsubscriber to the Texas Workers' Compensation Act, but has established its own Employee Injury Benefit Plan. While Mr. Noyola received treatment for his injuries at the hospital, an agent of Oasis approached Beatrice Noyola, Jessie Noyola's wife, with a one-page document that the agent said needed to be signed in order for Oasis to pay Jessie Noyola's medical expenses. Mrs. Noyola questioned the purpose of the form, but the agent assured her that it was merely an insurance form that needed to be signed. Mrs. Noyola signed the form, which turned out to be only the last page of a thirty-two page document that included a waiver of worker compensation claims provision.

On April 1, 2002, the Noyolas filed suit in Texas state court against Oasis raising negligence claims and Mrs. Noyola also brought a claim for fraud. On May 8, 2002, Oasis removed the case to federal court contending that the Noyolas' claims are preempted by ERISA. Concerned with the propriety of exercising jurisdiction over this case, the court addressed a letter to the attorneys for both parties requesting briefing on the issue of jurisdiction. Presumably, in response to the court's letter, the Noyolas filed a Motion to Remand that argued ERISA did not preempt their state law claims. Oasis responded to the Motion to Remand by reurging ERISA preemption.

The Noyolas argue that their claims, negligence and fraud, are not preempted by ERISA and they cite Hook v. Morrison Milling Co., 38 F.3d 776 (5th Cir.1994) as support for their position. Naturally, Oasis disagrees with the Noyolas' view, and it contends that Hernandez v. Jobe Concrete Products, Inc., 282 F.3d 360 (5th Cir.2002) dictates that these claims are preempted and that removal is, therefore, proper.

III. Statutory Background

A. The Texas Workers' Compensation Act

The Texas Workers' Compensation Act (TWCA) governs the distribution of benefits to workers who are injured on the job. The TWCA provides that any benefits distributed pursuant to it are an employee's exclusive remedy for any work-related injuries or death. TEX.LAB.CODE ANN. § 406.034 (Vernon 1996). This statute is different from most other states in that it gives employers the option not to carry insurance under the TWCA. TEX.LAB.CODE ANN. § 406.002 (Vernon 1996). If an employer chooses not to carry TWCA coverage, the employer is referred to as a nonsubscriber. A non-subscriber's employees retain the right to sue their employer in state court, and the employer is deprived of traditional common law defenses. TEX. LAB.CODE ANN. § 406.033 (Vernon 1996).

B. ERISA

On Labor Day 1974, President Gerald Ford signed the Employee Retirement Income Security Act of 1974 (ERISA) into law, enacting the first federal legislation protecting the rights of America's workers who earn pension benefits. ERISA: A COMPREHENSIVE GUIDE 1 (Martin Wald & David Kenty, eds.1991). Congress's goal in passing ERISA was to replace the patchwork of state laws governing this area with a uniform body of federal law. See N.Y. Conference of Blue Cross v. Travelers Ins., 514 U.S. 645, 656-57, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995); Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987). One of the tools Congress placed into ERISA to accomplish this goal was a preemption provision. See Wald & Kenty, supra at 249 ("The preemption by ERISA of state laws was designed to create a uniform national law governing employee benefit plans that would, among other things, permit the uniform administration of plans covering employees in several states.").

ERISA's preemption clause specifies, in pertinent part, that the provisions of ERISA "supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." ERISA § 514(a), 29 U.S.C. § 1144(a); Christopher v. Mobil Oil Corp., 950 F.2d 1209, 1217 (5th Cir.1992) cert. denied, 506 U.S. 820, 113 S.Ct. 68, 121 L.Ed.2d 35 (1992). The Supreme Court has repeatedly stressed that this "relate to" standard must be interpreted expansively, and that the words are to be given their "broad common-sense meaning." Egelhoff v. Egelhoff, 532 U.S. 141, 146, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001); Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987); Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). Any state law which has a connection with or reference to an employee benefit plan is generally preempted. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). However, "[s]ome state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law `relates to' the plan." Id. at 100 n. 21, 103 S.Ct. 2890. Lawsuits against ERISA plans for "run-of-the-mill" state law claims, including certain tort actions, are therefore not preempted by ERISA, despite the fact that they plainly affect and involve employee benefit plans. See Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 833, 108 S.Ct. 2182, 100 L.Ed.2d 836 (1988).

According to the Supreme Court, a law relates to an ERISA plan if it: 1) has a connection with or 2) reference to such a plan. California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 324, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997). When a law acts "immediately and exclusively" upon an ERISA plan or where the existence of an ERISA plan is "essential" to the law's operation, the law makes reference to an ERISA plan. Id. at 325, 117 S.Ct. 832. To determine if a law has a connection with an ERISA plan, the Court instructed lower courts to look at "the objectives of the ERISA statute as a guide to the scope of the state law Congress understood would survive" and at "the nature of the effect of the state law on ERISA plans." Id. The Court has stated that state-law claims that are preempted by ERISA and came within the scope of ERISA's civil enforcement provision could be recharacterized as arising under federal law, and as such, are removable to federal court. Metropolitan Life, 481 U.S. at 64-67, 107 S.Ct. 1542; see also Ramirez v. Inter-Continental Hotels, 890 F.2d 760, 762 (5th Cir.1989).

The Fifth Circuit has developed a two-prong test to aid courts in their preemption inquiry. Memorial Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 244 (5th Cir.1990). The Fifth Circuit has found preemption of state law claims when: 1) the claim addresses areas of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan, and 2) the claim directly affects the relationship among the traditional ERISA entities (i.e., plan administrators/fiduciaries and plan participants/beneficiaries). Id. at 245.

IV. Reviewing Hook v. Morrison Milling Company

In Hook, the Fifth Circuit affirmed a district court's remand of the plaintiff's negligence action against her employer. Hook, 38 F.3d at 778. In this case, Roxanne Hook, began working for Morrison Milling Company (MMC) in October 1990. Id. at 779. MMC had elected to discontinue workers' compensation insurance under the TWCA and it began offering its own employee benefit plan. Id. at 778. In December 1990, Hook fell down a staircase and suffered injuries. Id. at 779. She filed a claim under the plan with MCC and received benefits. Id. In February 1992, Hook filed a wrongful discharge and negligence action against MCC in Texas state court. Id. MMC removed the case to federal court arguing that ERISA preempted the wrongful discharge claim. Id. Hook filed a motion to remand, which the district court denied. Id. Hook then amended her complaint and dropped the wrongful discharge claim — leaving only the negligence claim pending —...