Nunez v. Wyatt Cafeterias, Inc.

• Decision Date: 21 August 1991
• Docket Number: Civ. A. No. 4-91-484-A.
• Citation: 771 F. Supp. 165
• Parties: Armando Jose NUNEZ, Plaintiff, v. WYATT CAFETERIAS, INC., Defendant.
• Court: U.S. District Court — Northern District of Texas

771 F. Supp. 165

Armando Jose NUNEZ, Plaintiff, v. WYATT CAFETERIAS, INC., Defendant.

Civ. A. No. 4-91-484-A.

United States District Court, N.D. Texas, Fort Worth Division.

August 21, 1991.

Travis Richard Alley, Alley & Alley, Fort Worth, Tex., for plaintiff.

Kent Royce Smith, Bettye S. Springer, Haynes & Boone, Fort Worth, Tex., for defendant.

MEMORANDUM OPINION AND ORDER

McBRYDE, District Judge.

The court has determined, sua sponte, that the above-styled and numbered action should be remanded to state court due to lack of subject matter jurisdiction. Because of the limited nature of federal court jurisdiction, there is a presumption against its existence. See Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 2403, 57 L.Ed.2d 274 (1978); McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936). A party who seeks to invoke federal court jurisdiction has the burden to demonstrate that subject matter jurisdiction exists. McNutt, 298 U.S. at 178, 56 S.Ct. at 780; Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921). Defendant has failed to make such a showing in this action.

Procedural History

This common law negligence action was instituted in state court for recovery by Armando Jose Nunez, plaintiff, from Wyatt Cafeterias, Inc., defendant, of judgment compensating him for damages he allegedly sustained by reason of injuries he suffered as the result of a slip-and-fall accident he had on defendant's premises while he was engaged in work as an employee of defendant. Plaintiff alleges as his grounds of liability against defendant that defendant failed to provide him a safe place to work and failed to properly train him in his job duties. He alleges that by reason of the accident he (i) has suffered severe and painful bodily injuries, which caused him to have debilitating conditions and ill effects that are permanent and will affect him during his entire life, (ii) will incur future expenses for his medical care and attention, and (iii) has suffered a loss in wages.

Defendant filed a notice of removal, removing the action to this court on July 5, 1991. Plaintiff has not moved to remand. The only basis for federal court subject matter jurisdiction suggested by the defendant's notice is preemption under the Employee Retirement Income Security Act of 1974, as amended, ("ERISA"), 29 U.S.C. § 1001-1461. The predicate for the preemption claim is said to be the existence of a plan entitled "Wyatt's Cafeterias, Inc. and Subsidiaries Employee Injury Benefit Plan" (hereinafter "Plan"), a copy of which is attached to the notice as Exhibit A.

Contemporaneously with the filing of its notice of removal, defendant filed its motion to dismiss and supporting brief in which it states with greater specificity the basis of its claim of preemption. It acknowledges that the action is a negligence action and points out that it is not a subscriber to a policy of workers' compensation insurance of a kind contemplated by Texas law. Then, defendant notes that the recovery sought by plaintiff in this action includes elements, in the form of medical expenses and lost wages, that are treated in the Plan. From there, defendant reasons that the preemption section of ERISA, 29 U.S.C. § 1144(a), operates on plaintiff's action and thereby causes there to be federal question subject matter jurisdiction.

The Plan and its "Relationship" to the Texas Workers' Compensation/Employers' Liability System

The Plan undoubtedly is a part of the ongoing effort¹ of the business community to find a means of avoiding without undue financial risk what it views to be an abominable workers' compensation/employers' liability system in Texas. If defendant were to prevail on its preemption theory, the Plan and its like would in all probability administer the coup de grace to the Texas system.

The court is assuming for the sake of discussion in this opinion that the Plan is an "employee welfare benefit plan", as that term is defined in 29 U.S.C. 1002(1), and an "employee benefit plan" and "plan", as those words are defined in 29 U.S.C. § 1002(3).² The conclusion then follows that if the laws of Texas that give plaintiff a right to institute and prosecute a personal injury action against defendant "relate to" the Plan, in the sense contemplated by § 1144, those laws have been superseded (preempted) by the provisions of ERISA.

The stated purpose of the Plan is expressed in its paragraph 1.2:

1.2 Purpose. The purpose of the Plan is to provide (i) medical benefits for Participants who sustain an Injury; (ii) short-term wage replacement benefits for those Participants; (iii) dismemberment benefits to Participants who sustain an Injury; and (iv) death benefits to the estate of a deceased Participant who sustains an Injury.

Plan at 1. The term "Injury", as it is used in the "Purpose" clause, means "an on-the-job injury which occurs in the course and scope of employment, and in the furtherance of the business of the Employer." Id. at 2. Defendant is an "Employer" under the terms of the Plan. The court assumes for the purpose of this memorandum opinion that plaintiff is a "Participant", as that term is used in the Plan.

The Plan does not mention common law actions that might be brought by a participant against the employer. On its face it appears to be nothing more than a program to provide, on the bases described in the Plan, limited medical and wage replacement, and specified dismemberment and death, benefits for a participant who suffers an on-the-job injury under circumstances described in the Plan. There is nothing about plaintiff's personal injury action against defendant that is inconsistent with, or contravenes, any provision of the Plan. The action is not predicated, premised or based on the Plan or anything having to do with it.

Plaintiff's action is based on common law principles that find their origins in Texas case law dating back to the 1870's. See generally International & Great Northern Railroad Co. v. Doyle, 49 Tex. 190 (1878). When the Texas Legislature put a workers' compensation law into effect in 1917 it, for all practical purposes, abolished the right of an employee to bring a common law action against an employer having workers' compensation insurance coverage. See Tex.Rev.Civ.Stat.Ann. art. 8306, § 3a (Vernon 1967) (now repealed). However, the Legislature preserved the common law right of action for the employees of an employer who elected not to carry workers' compensation insurance coverage, and enhanced those rights by a statutory provision that prevented an employer in such an action from asserting defenses that theretofore had been available to employers. See Id. §§ 1 & 4. In other words, as an incentive to encourage employers to become subscribers under the workers' compensation laws, the Texas Legislature stripped non-subscribers of the defenses of contributory negligence, negligence of a fellow employee, and assumed risk of the employee, which had existed under common law. This same statutory scheme was brought forward into the 1989 revision of the Texas Workers' Compensation Act, which became effective January 1, 1991. See Tex.Rev.Civ.Stat.Ann. art. 8308-3.03 & 3.04 (Vernon Pam.1991).

By the bringing of this action plaintiff has but exercised his common law rights, as those rights have been enhanced by the workers' compensation laws of Texas, to recover from defendant, a non-subscriber, if he is able to prove that defendant failed to comply with its common law duties to plaintiff. The rights plaintiff asserts in this action are entirely independent of the Plan. They would exist, and plaintiff presumably would assert them, even if the Plan were not in existence.

The only potential financial relationship between the Plan and this action is that plaintiff's recovery in this action could be reduced by collection of benefits under the Plan inasmuch as the Plan does not constitute a collateral source. See Tarrant County Waste Disposal, Inc., 737 S.W.2d at 611. However, the court judicially knows that plans such as this have been adopted by employers in lieu of workers' compensation insurance coverage in order to avoid the high cost of workers' compensation insurance while, at the same time, providing sufficient benefits to an injured employee that he might be discouraged from contacting an attorney in reference to the possibility of bringing a common law action against the employer. Defendant's request is that the effect of the Plan be stretched to the point of destroying such a possibility.

The Laws of Texas that Govern Plaintiff's Action Against Defendant do Not "Relate to" the Plan Within the Contemplation of 28 U.S.C. § 1144

Defendant has invited the court to seek guidance on the preemption issue from the decision of the Second Circuit in Aetna Life Insurance Co. v. Borges, 869 F.2d 142 (2nd Cir.1989), cert. denied, 493 U.S. 811, 110 S.Ct. 57, 107 L.Ed.2d 25 (1989). Brief in Support of Motion to Dismiss at 3-4. Specifically, defendant urges the court to fit this action into the "provide alternative cause of action to employees to collect benefits protected by ERISA" category identified by the Second Circuit as one of the categories of claims that have been ruled to have been preempted by ERISA. Borges, 869 F.2d at 146. Defendant read...