Self-Insurance Institute of America, Inc. v. Korioth
| Decision Date | 17 June 1993 |
| Docket Number | SELF-INSURANCE,No. 92-8444,92-8444 |
| Parties | 17 Employee Benefits Cas. 1751, Pens. Plan Guide P 23880G INSTITUTE OF AMERICA, INC., Plaintiff-Appellant, v. Claire KORIOTH, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Louis K. Bonham, Honigman, Miller, Schwartz & Cohn, Houston, TX, Stephen Wasinger, Honigman, Miller, Schwartz & Cohn, Detroit, MI, for plaintiff-appellant.
John M. Hohengarten, Asst. Atty. Gen., William E. Storie, Austin, TX, for defendants-appellees.
Appeal from the United States District Court For the Western District of Texas.
Before, REYNALDO G. GARZA, WILLIAMS and JONES, Circuit Judges.
Self-Insurance Institute of America, Inc. ("SIIA"), initiated this declaratory judgment action under 28 U.S.C. §§ 2201-02 requesting the district court to enjoin the enforcement of certain provisions in the Texas Insurance Code on the ground that they were preempted by ERISA. The case was dismissed because the district court determined that it lacked subject matter jurisdiction under 29 U.S.C. § 1132, and that SIIA lacked standing.
We find that the district court had general federal question jurisdiction under 28 U.S.C. § 1331, and we conclude that SIIA has associational standing. Consequently, we REVERSE the order of the district court and REMAND for a determination as to the merits of the plaintiffs' case.
SIIA is a California not-for-profit trade association organized to promote the general advancement of the self-insurance industry. Members of SIIA include both employer/plan sponsors and contract administrators of self-insured ERISA plans.
In July 1991, SIIA filed a declaratory judgment action in the Western District of Texas requesting that the district court enjoin enforcement of two provisions in the Texas Insurance Code, which are codified at Tex.Ins.Code arts. 4.11A and 21.07-6. SIIA also sought tax refunds for contract administrators who had paid the taxes required by art. 21.07-6. 1
Article 4.11A imposes a tax on contract administrators and a back-up tax on the underlying plan if the administrator does not pay. Article 21.07-6 requires contract administrators both to pay a $1,000 application fee for a certificate of authority and to pay a 1% maintenance tax on fees for services.
Article 21.07-6 also imposes on employer/plan sponsors and contract administrators many obligations. SIIA claims that the statutes conflict with comparable provisions of ERISA and, thus, are void because of ERISA's broad preemption clause
In August 1991, the defendants filed a motion to dismiss for lack of subject matter jurisdiction, claiming that SIIA lacked standing to bring the declaratory action. In October 1991, SIIA responded by filing its motion either for partial summary judgment or for preliminary injunction. The district court issued a stay in this case and denied all motions without prejudice because the United States Supreme Court had issued a stay of a similar case pending its appeal from the Fifth Circuit. See E-Systems, Inc. v. Pogue, 929 F.2d 1100 (5th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 585, 116 L.Ed.2d 610 (1991).
In December 1991, after the Supreme Court denied certiorari in E-Systems, the district court lifted the stay. Shortly thereafter, SIIA filed a renewed motion for summary judgment or preliminary injunction, and the defendants filed their motion to dismiss for lack of subject matter jurisdiction.
In early 1992, SIIA answered the defendants' first set of interrogatories. The district court subsequently ordered SIIA to submit further facts to prove that it had standing to pursue its action. On July 21, 1992, the district court denied SIIA's motions and granted the defendants' motion to dismiss the case for lack of subject matter jurisdiction and standing. 2 SIIA then timely appealed. 3
On appeal we need only confront two issues: (i) did the district court have jurisdiction to entertain the case; and (ii) did the plaintiff have the requisite associational standing in order to wage this action. We conclude that the district court improperly dismissed the case for lack of subject matter jurisdiction. Further, we conclude that the plaintiff has standing to bring this action. Consequently, we remand the case back to the district court so that the case may proceed to the merits.
The district court found that it had no jurisdiction under ERISA, 29 U.S.C. § 1132. Section 1132(a) limits the power to bring a civil action under ERISA to participants, beneficiaries, and fiduciaries of an ERISA plan. The district court requested that SIIA present affidavits proving that its members were enumerated parties under § 1132. The affidavits that SIIA submitted merely stated that SIIA members were employer/plan sponsors or contract administrators, who had contacts with Texas. The district court found that such a cursory description did not prove that the SIIA members were fiduciaries. Consequently, the district court concluded that it lacked subject matter jurisdiction.
SIIA contends that although the suit is not expressly authorized under § 1132, the district court had general federal question jurisdiction The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States.
pursuant to 28 U.S.C. § 1331. Section 1331 states
28 U.S.C. § 1331.
SIIA argues that arts. 4.11A and 21.07-6 violate the Supremacy Clause of the United States Constitution by virtue of the broad preemption provision in ERISA, which is codified at 29 U.S.C. § 1144. Consequently, SIIA asserts that federal common law governs the outcome and, thus, this case "aris[es] under the ... laws ... of the United States" for jurisdictional purposes. 4 In support of its jurisdictional contentions, SIIA relies on Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). In Shaw, employer/plan sponsors claimed that certain state laws were preempted by ERISA, and the Shaw Court noted:
It is beyond dispute that federal courts have jurisdiction over suits to enjoin state officials from interfering with federal rights. See Ex Parte Young, 209 U.S. 123, 160-62 [28 S.Ct. 441, 454-55, 52 L.Ed. 714] (1908). A plaintiff who seeks injunctive relief from state regulation on the ground that such regulation is pre-empted by a federal statute which, by virtue of the Supremacy Clause of the Constitution, must prevail, thus presents a federal question which the federal courts have jurisdiction under 28 U.S.C. § 1331 to resolve.
Id. at 96 n. 14, 103 S.Ct. at 2899 n. 14. (citations omitted); see also Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 64-67, 107 S.Ct. 1542, 1546-48, 95 L.Ed.2d 55 (1987) (); Provident Life & Accident Ins. Co. v. Waller, 906 F.2d 985, 988-91 (4th Cir.1990) (); Northeast Dep't ILGWU Health & Welfare Fund v. Teamsters Local Union No. 229, 764 F.2d 147, 154-59 (3d Cir.1985) (Becker, J.) (same). See generally Federal Jurisdiction over Declaratory Suits Challenging State Action, 79 Colum.L.Rev. 983 passim (1979). Moreover, because there is no underlying state court action involved in this litigation the preemption issue is particularly amenable to a federal forum.
In Braniff Int'l, Inc. v. Florida Pub. Serv. Comm'n, 576 F.2d 1100 (5th Cir.1978), this court was faced with an identical jurisdictional issue. Six air carriers filed suit for declaratory and injunctive relief contending that state regulation of interstate air carriers violated the supremacy clause. The court expressly held when a party seeks injunctive and declaratory relief based upon the unconstitutionality of a state statute, and "there are no other concrete impediments to the proper exercise of federal question jurisdiction," the availability of state administrative remedies does not deprive a federal court of jurisdiction. See id. at 1106. Implicitly, the court held that general federal question jurisdiction exists in cases seeking both declaratory and injunctive relief. See id.; see also ANR Pipeline Co. v. Corporation Comm'n of Okla., 860 F.2d 1571, 1575-77 (10th Cir.1988) (), cert. denied, 490 U.S. 1051, 109 S.Ct. 1967, 104 L.Ed.2d 435 (1989); cf. Lowe v. Ingalls Shipbuilding, 723 F.2d 1173, 1180-81 n. 7 (5th Cir.1984) ().
The defendants further contend that indirect jurisdiction under § 1331 would render meaningless the limiting language of § 1132, and they distinguish Shaw by pointing out that the plaintiffs in Shaw exercised discretionary authority, which made them fiduciaries and brought them within § 1132. We reject this contention because well-settled principles of standing serve to guard against this concern. Further, just because the plaintiffs in Shaw were able to exercise The defendants contend that the district court lacked subject matter jurisdiction because Fifth Circuit authority states that ERISA standing is exclusively vested in the entities specifically enumerated in § 1132. See Hermann Hosp. v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1287 (5th Cir.1988). The defendants argue that the district court should not infer subject matter jurisdiction without a clear legislative mandate.
§ 1132 jurisdiction does not preclude federal common law jurisdiction in this suit
Hermann Hospital is inapplicable in the current context. In Hermann Hospital we noted...
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