Roux v. Lovelace Health System, Inc.
| Citation | 947 F.Supp. 1534 |
| Decision Date | 15 October 1996 |
| Docket Number | Civ. No. 96-991 LCS/WWD. |
| Parties | Anastasia ROUX, Plaintiff, v. LOVELACE HEALTH SYSTEM, INC., d/b/a Lovelace Healthcare Systems and Lovelace Health Plan, d/b/a Lovelace Health Systems, d/b/a Lovelace Health Plan, Defendants. |
| Court | U.S. District Court — District of New Mexico |
David B. Martinez, Eaton, Martinez & Hart, P.C., Albuquerque, NM, for plaintiff.
A. Brent Bailey, Ned S. Fuller, Sharp, Jarmie & Scholl, Albuquerque, NM, for defendants.
SMITH, United States Magistrate Judge, Sitting as Presiding Judge with Consent of the Parties.
THIS MATTER having come for consideration upon Plaintiff's Motion to Remand, and the parties having consented to proceed before a United States Magistrate, and an Order of Reference to the undersigned, United States Magistrate Leslie C. Smith, having been filed of record herein on September 5, 1996, and the Court having reviewed the pleadings and considered the arguments of the parties, and being otherwise well informed as to the matters at issue, has determined that Plaintiff's Motion to Remand is well taken and should be granted, as this Court does not have subject matter jurisdiction over this cause of action.
Plaintiff filed a Complaint for Declaratory Judgment against Defendants Lovelace Health Systems, Inc. et al. (hereinafter "Defendant"), in the Second Judicial District Court of the State of New Mexico (CV 96-5953), on June 11, 1996. On July 12, 1996, within thirty (30) days of receiving service of the Complaint, Defendant filed a Notice of Removal, averring that the federal district court had subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1441, and 1446.1 The Notice indicated that Plaintiff's claims are governed by federal regulations. The existence of this issue of federal law is the only basis for federal jurisdiction identified by Defendant. Concurrent with the Notice of Removal, Defendant filed an Answer in the federal district court action alleging four affirmative defenses, including that the contract at issue "is governed by the provisions of the Federal Acquisition Regulation and the Federal Employees Health Benefits Acquisition Regulation and thus, (sic) state law is preempted by the federal law governing the contract." (Answer at 6-7). On August 15, 1996, Plaintiff filed a Motion to Remand on the ground that the federal district court does not have jurisdiction over Plaintiff's cause of action. (Pl.'s Motion to Remand at 3). Defendant's Response to Plaintiff's Motion to Remand made no further reference to the Federal Acquisition Regulations, which have no bearing on the decision at issue. Cf., 48 C.F.R. Chapter 1 et seq.
The parties agree on the relevant facts. Plaintiff was injured in an automobile accident allegedly caused at least in part by the negligence of an uninsured motorist. ). Pursuant to a contract of insurance between Plaintiff and her automobile insurance carrier. Plaintiff was awarded uninsured motorist benefits in compensation for her injuries and resultant damages. (Compl., ¶ 19). While the parties disagree about the procedural status of Defendant's claim against those benefits, they agree that Defendant claims a contractual or equitable subrogation right in the amount of $7,418.36, for medical expenses paid by Defendant due to Plaintiff's injuries suffered in the accident. (Compl., ¶¶ 14, 20, 26-27; Answer at 7). Defendant incurred these expenses because Plaintiff had selected Defendant's medical plan as a benefit of her federal employment. Plaintiff and the federal government shared the cost for the plan.
Plaintiff's Complaint alleges that any contractual provision under which Defendant claims a subrogation interest in the proceeds of Plaintiff's award of uninsured motorist benefits is unconscionable (¶ 29), void as against public policy and contrary to state law regulating uninsured motorist insurance (¶ 31), and constitutes a contract of adhesion (¶ 35). Plaintiff's Complaint also seeks to distinguish subrogation rights arising from a claim against the negligent third party from rights arising from her uninsured motorist claim (¶ 37). Plaintiff's Complaint makes various other equitable and contractual allegations and arguments which are not central to the resolution of the question at issue.
The Supreme Court has not determined the existence or extent of federal question jurisdiction over private disputes relating to a contract subject to the Federal Employee Health Benefit Act (hereinafter "FEHB"). The Tenth Circuit has held that claims requiring interpretation of benefit provisions within FEHB contracts do not confer federal question jurisdiction, but has not addressed whether federal question jurisdiction exists where the plaintiff seeks a determination of the validity or applicability of a subrogation provision of a FEHB contract. Since the Tenth Circuit decided that federal district courts have no jurisdiction over a FEHB dispute between private parties, several Supreme Court cases have found federal question jurisdiction over private party disputes based upon complete federal pre-emption, a doctrine not explored in the Tenth Circuit's decision. To address the precise question presented, the restrictive nature of federal question jurisdiction recognized by the Tenth Circuit must be considered in light of the Supreme Court's decisions supporting removal where a state law cause of action is completely pre-empted by applicable federal law.
A review of the case law from the Supreme Court and the Tenth Circuit demonstrates that federal question jurisdiction does not exist in this case. The cause must therefore be remanded to the State court for determination.
By statute, federal district court jurisdiction for removal of civil actions from state courts is identical to federal district court original jurisdiction. Where removal is based upon federal question jurisdiction, a federal question must be present on the face of the plaintiff's well-pleaded complaint, or the complaint must state a cause of action that is essentially federal. A complaint will state an essentially federal cause of action where federal law is determined to completely preempt the state law claims plead. Where the complaint does not arise under federal law under either the well-pleaded complaint rule or the complete pre-emption doctrine, no federal question jurisdiction exists even if the only question in dispute is one of federal law. Each of these propositions is discussed in detail in the subsections that follow.
Title 28 U.S.C. § 1441 allows a defendant to remove a pending state civil action to the local federal district court if the federal district courts have original jurisdiction over the action. 28 U.S.C. § 1331 gives "original jurisdiction of all civil cases arising under the Constitution, laws or treaties of the United States" to the federal district courts. If an action involves both federal questions for which jurisdiction exists and state law questions for which the court lacks original jurisdiction, the district court may exercise pendent jurisdiction over the state law claims and determine all of the issues presented, or may exercise its discretion and remand "all matters in which state law predominates." 28 U.S.C. § 1441. The determination of what civil cases arise under "the Constitution, laws or treaties of the United States" is the subject of extensive case law.
The Supreme Court has a duty to ensure that the jurisdiction of the inferior federal courts, "defined and limited by statute, is not exceeded." Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 151, 29 S.Ct. 42, 43, 53 L.Ed. 126 (1908). The Court has developed two primary doctrines to aid the federal courts in properly exercising this limited jurisdiction: the "well-pleaded complaint rule", and the "complete pre-emption doctrine".
"The `well-pleaded complaint rule' is the basic principle marking the bounds of the federal question jurisdiction of the federal courts." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 62, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987) (citation omitted). In Louisville & Nashville R.R., the Complaint plead issues of federal law in anticipation of a defense based upon federal law, but alleged a state law claim for breach of contract. 211 U.S. at 151, 29 S.Ct. at 43. The Supreme Court noted that the need to decide a federal question in order to make a final determination of a claim does not mean that the plaintiff's cause of action arises out of federal law, and is therefore insufficient to confer federal question jurisdiction. Id. The Supreme Court refused to decide any of the questions raised by the parties on appeal and on its own motion reversed the judgment and remanded the case to be dismissed for lack of jurisdiction. Id. at 153, 29 S.Ct. at 43-44.
The Supreme Court has continued to apply the well-pleaded complaint rule to find federal question jurisdiction lacking where a plaintiff's properly plead complaint does not present a federal question on its face. See e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 391, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987); Franchise Tax Board of Cal. v. Constr. Laborers Vacation Trust for So. Cal., 463 U.S. 1, 8, 103 S.Ct. 2841, 2846, 77 L.Ed.2d 420 (1983); Skelly Oil Co. v. Phillips Petroleum Co., 339...
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...reviewing decisions of the OPM for arbitrariness, but nevertheless finds Howard to continue to be good law. Roux v. Lovelace Health System, 947 F.Supp. 1534, 1541, n. 6 (D.N.M.1996). The Roux court reasoned that the critical statutory provisions, 5 U.S.C. §§ 8902(m)(1) and 8912, on which Ho......