Taylor-Sammons v. Bath, No. 2:05-CV-740.

• Decision Date: 25 October 2005
• Docket Number: No. 2:05-CV-740.
• Citation: 398 F.Supp.2d 868
• Parties: Tami TAYLOR-SAMMONS, Plaintiff, v. Dr. Manraj BATH.
• Court: U.S. District Court — Southern District of Ohio

398 F.Supp.2d 868

Tami TAYLOR-SAMMONS, Plaintiff, v. Dr. Manraj BATH.

No. 2:05-CV-740.

United States District Court, S.D. Ohio, Eastern Division.

October 25, 2005.

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Aaron Robert Conrad, Lancaster, OH, for Plaintiff.

Jan Elizabeth Hensel, Buckingham Doolittle & Burroughs, Columbus, OH, for Defendant.

OPINION AND ORDER

GRAHAM, District Judge.

This is an action filed by plaintiff Tami Taylor-Sammons against defendant Dr. Manraj Bath, her former employer. The complaint includes claims under Ohio law for breach of an employment contract; promissory estoppel; sex discrimination in violation of Ohio Rev.Code Chapter 4112, including disparate treatment, creating a hostile work environment, and wrongful termination; intentional infliction of emotional distress; and fraud. The action was originally filed in the Court of Common Pleas of Fairfield County, Ohio on June 29, 2005. On August 3, 2005, the defendant filed a notice of removal of the action to this court based on the theory that plaintiff's claims are completely preempted under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. This matter is now before the court on plaintiff's motion to remand the action to state court.

I. Requirements for Complete Preemption under ERISA

The provisions of 28 U.S.C. § 1441 permit a defendant to remove an action from state to federal court when the federal district court has "original jurisdiction founded on a claim or right arising under" federal law. 28 U.S.C. § 1441(b). Peters v. Lincoln Electric Co., 285 F.3d 456, 465 (6th Cir.2002). The removing defendant bears the burden of proving that the plaintiff's claims are preempted by ERISA. Pascack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 401 (3d Cir.2004).

In determining whether an action is removable under § 1441(b), the "well-pleaded complaint rule" usually applies. Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998). Under this rule, "a cause of action arises under federal law only when the plaintiffs' well-pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). For removal to be appropriate, a federal question must appear on the face of the complaint. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983).

However, a "complete preemption exception" to the "well-pleaded complaint rule" has been recognized in cases where Congress' intent in enacting a federal statutory scheme was to completely preempt state law and create federal jurisdiction under 28 U.S.C. § 1331. Peters, 285 F.3d at 467-68. Under this exception, a complaint may be removed to federal court and will be treated as alleging a federal cause of action for purposes of removal even though the complaint, on its face, alleges only a state law cause of action. Id. at 468 n. 11.

In regard to the removal of claims allegedly preempted by ERISA, the Supreme Court held in Taylor that the "complete preemption exception" applies to a state law claim which meets two requirements: (1) the claim "relates to" an ERISA plan within the meaning of 29 U.S.C. § 1144(a), ERISA's preemption provision; and (2) the claim falls within the scope of ERISA's enforcement provision, 29 U.S.C. § 1132(a). Taylor, 481 U.S. at 66, 107 S.Ct. 1542; Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 24, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). If the state law claim both "relates to" an ERISA plan within the meaning of § 1144(a) and falls within the scope of ERISA's civil enforcement provisions found in § 1132(a), then the state law claim is completely preempted by ERISA and converted to a federal question for purposes of removal jurisdiction. Taylor, 481 U.S. at 66, 107 S.Ct. 1542.

The mere fact that ERISA preemption under § 1144(a) may be raised as a defense, or is in actuality a defense, does not confer jurisdiction or authorize removal. Taylor, 481 U.S. at 64-67, 107 S.Ct. 1542 (even if state law claim "relates to" an ERISA plan and is preempted by § 1144(a), complaint is not removable unless it is also encompassed within ERISA's civil enforcement scheme). Removal and preemption are two distinct concepts, and the mere fact that a claim is preempted by ERISA under § 1144 does not mean that it is automatically removable. Wright v. General Motors Corp., 262 F.3d 610, 614 (6th Cir.2001); Warner v. Ford Motor Co., 46 F.3d 531, 534-5 (6th Cir.1995). Section 1144 preemption does not create a federal cause of action itself, and cannot convert a state cause of action into a federal cause of action under the well-pleaded complaint rule. Wright, 262 F.3d at 614; Warner, 46 F.3d at 534.

A state law claim is removable to federal court only if it is completely preempted. Warner, 46 F.3d at 534. In order to come within the well-pleaded complaint rule, the state law claim must be capable of being characterized as an ERISA enforcement action under § 1132(a). Id. Thus, state law claims outside the scope of § 1132(a)(1)(B) are not subject to removal even though the state law at issue may "relate to" an ERISA plan so as to be preempted under § 1144(a). Wright, 262 F.3d at 614.

If both conditions for complete preemption are not met, the federal court does not have subject matter jurisdiction and the case must be remanded to state court. Toumajian v. Frailey, 135 F.3d 648, 654 (9th Cir.1998). In a case involving state claims not covered by § 1132(a), even if the defendant has a defense of "conflict preemption" within the meaning of § 1144(a), the district court, being without subject matter jurisdiction, cannot rule on the preemption issue and must remand the case to state court where the preemption issue can be addressed and resolved. Id. at 655; Wright, 262 F.3d at 615 (declining to rule on § 1144(a) preemption issue, noting that state courts are competent to decide whether ERISA has preempted the state law claims); Warner, 46 F.3d at 535 (federal preemption defense in nonremovable cases decided in state court).

II. Statutory Preemption under 29 U.S.C. § 1144(a)

The first requirement for complete preemption is that the claim fall within the scope of ERISA's preemption provision, which states that ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" as defined by ERISA. 29 U.S.C. § 1144(a). ERISA preempts state laws relating to "employee benefit plans," not simply "employee benefits." Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 7, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987). An "employee benefit plan" includes "any plan ... or program ... maintained by an employer ... for the purpose of providing ... medical ... benefits, or benefits in the event of sickness [] 29 U.S.C. § 1002(1).

For preemption to occur, there must be an ERISA plan implicated in the action. However, the mere existence of an ERISA plan is not enough for preemption; the state law in question must make reference to or function with respect to the ERISA plan. Forbus v. Sears Roebuck & Co., 30 F.3d 1402 (11th Cir.1994). This court must determine whether plaintiff's complaint seeks to enforce an ERISA agreement or asserts rights to future benefits under an ERISA plan. Wright, 262 F.3d at 613-14.

A law "relates to" an employee welfare plan if it has a connection with or reference to such a plan. FMC Corp. v. Holliday, 498 U.S. 52, 68, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990); Shaw v. Delta Air Lines, 463 U.S. 85, 96-97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). State law includes "all laws, decisions, rules, regulations, or other State action having the effect of law[.]" 29 U.S.C. § 1144(c)(1). Thus, a state law may relate to a benefit plan for preemption purposes even if the law is not specifically designed to affect such plans or the effect is only indirect. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990).

However, state law claims whose effect on employee benefit plans is merely tenuous, remote or peripheral are not preempted. Shaw, 463 U.S. at 100 n. 21, 103 S.Ct. 2890; Cromwell, 944 F.2d at 1276. In deciding whether state law claims are preempted by ERISA, courts focus on the remedy sought by plaintiff. Lion's Volunteer Blind Indus., Inc. v. Automated Group Admin., Inc., 195 F.3d 803, 806 (6th Cir.1999).

A state law claim only peripherally affects a plan where a plaintiff refers to a benefit plan to support an employment discrimination claim, or where a plaintiff simply refers to specific, ascertainable damages by citing a life insurance contract. Marks v. Newcourt Credit Group, Inc., 342 F.3d 444, 452 (6th Cir.2003). In Marks, the court held that plaintiff's claim for wrongful rejection of his termination notice to avoid paying him funds he would otherwise be entitled to under an employee benefit plan was not preempted where plaintiff simply sought damages equaling the benefits he would have received under the plan, and where the reference to plan benefits was only a way to articulate specific, ascertainable damages. Id. at 453.

In Peters, the court held that a wrongful discharge claim which included incidental damages for loss of benefits under an ERISA-based plan was not preempted because all that was needed was a simple mathematical calculation of benefits, and the claimed damages thus related only peripherally to the ERISA plan. Peters, 285 F.3d at 469.

In Wright, 262 F.3d at 615, the court noted that plaintiff's reference to defendant's life insurance plan was simply a reference to specific, ascertainable damages she claimed to have suffered as a proximate result of her discriminatory termination. The court concluded that plaintiff's case was not one alleging the wrongful withholding of ERISA covered plan benefits, but instead was a lawsuit claiming...