Travelers Indem. Co. v. New Orleans La. Saints, LLC.
| Decision Date | 01 May 2014 |
| Docket Number | CASE NO. SACV 13-1998-JLS (JPRx) |
| Court | U.S. District Court — Central District of California |
| Parties | THE TRAVELERS INDEMNITY COMPANY, Plaintiff, v. NEW ORLEANS LOUISIANA SAINTS, LLC., Defendant. |
Before the Court is Defendant New Orleans Louisiana Saints, LLC's Motion to Dismiss. (Mot., Doc. 11.) Plaintiff Travelers Indemnity Company opposed, and Defendant replied. (Opp'n, Doc. 14; Reply, Doc. 16). Having read the papers, heard oral argument, and taken the matter under submission, the Court GRANTS Defendant's Motion. Plaintiff's claims are DISMISSED WITHOUT PREJUDICE to seeking relief within California's workers' compensation system. The Scheduling Conference set for May 30, 2014 at 1:30 p.m. is VACATED.
Plaintiff insured the Kansas City Chiefs for workers' compensation claims. (Compl. ¶ 22, Doc. 1.) Defendant owns and operates the New Orleans Saints. (Id. ¶ 6.)
On April 1, 1984, First Horizon Insurance Company issued an insurance policy naming the New Orleans Saints Football Club as the named insured. (Id. ¶ 10, Ex. 1.) The policy, which had an effective period from April 1, 1984 to April 1, 1987, provided that it would "pay promptly when due all compensation and other benefits required of the insured by the workmen's compensation law." (Id. ¶¶ 10-11.) Plaintiff alleges the First Horizon Policy does not constitute workers' compensation insurance in California. (Id. ¶¶ 10-19.)
Jim Rourke was a professional football player for the New Orleans Saints from November 2, 1985 to September 2, 1986. (Id. ¶ 20.) Rourke played for the Kansas City Chiefs at least from October 10, 1986 until November 2, 1986. (Id.) Both the Saints and the Chiefs played some of their games in California during this time. (Id.)
Rourke filed an application for workers' compensation benefits in California based on an alleged workplace injury incurred during his employment with both the Saints and the Chiefs. (Id. ¶ 21.) Rourke made an election under California LaborCode § 5500.5(c) to have his workers' compensation claim proceed against the Chiefs only, "due to issues regarding the First Horizon Policy." (Id. ¶ 22.) On August 5, 2013, Plaintiff settled Rourke's claim for $199,999 pursuant to an Order Approving Compromise and Release issued by the California Workers' Compensation Appeals Board ("WCAB"). (Id. ¶ 22, Ex. 2.) The WCAB Order stated that it "include[d] joinder on this case of [Defendant]." (Id. Ex. 2 at 77.)
On December 26, 2013, Plaintiff filed the present action. Plaintiff brings claims for: (1) a declaratory judgment as to whether the First Horizon Policy provides workers' compensation coverage in California; (2) reimbursement under California Labor Code section 5500.5(a) for 96% of the award against Plaintiff in the workers' compensation proceeding; (3) "equitable indemnity" for the same portion of the same award; and (4) "negligence/subrogation" pursuant to California Labor Code sections 5500.5(a) and 3706, against Defendant for Rourke's injuries. (Id. at 8-11.) Defendant moved to dismiss the claims and the action under Federal Rules of Civil Procedure 12(b)(1), (3) and (6). (Mot.)
When a motion is made pursuant to Federal Rule of Civil Procedure 12(b)(1), the plaintiff has the burden of proving that the court has subject matter jurisdiction. Tosco Corp. v. Cmtys. for a Better Env't, 236 F.3d 495, 499 (9th Cir. 2001), abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77 (2010). "A jurisdictional challenge under Rule 12(b)(1) may be made either on the face of the pleadings or by presenting extrinsic evidence." Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). In other words, a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) can be facial or factual. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). "In a facial attack, the challenger asserts that the allegations contained in a complaint areinsufficient on their face to invoke federal jurisdiction." Id. "Dismissal for lack of subject matter jurisdiction is appropriate if the complaint, considered in its entirety, on its face fails to allege facts sufficient to establish subject matter jurisdiction." In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 546 F.3d 981, 984-85 (9th Cir. 2008). "By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Meyer, 373 F.3d at 1039. "In resolving a factual attack on jurisdiction, the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment." Id.
Dismissal of a complaint for failure to state a claim under Rule 12(b)(6) is not proper where a plaintiff has alleged "sufficient factual matter, accepted as true, 'to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 68 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678 (citing Twombly, 550 U.S. at 556). Thus, a complaint must (1) "contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively," and (2) "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
The Court first addresses Plaintiff's Labor Code section 5500.5(a) claims and indemnity claim, and finds the claims must be dismissed. The Court then addresses Plaintiff's claim for declaratory relief, and finds it inappropriate to hear the claim.
The California workers' compensation system has the "exclusive authority to hear claims '[f]or the recovery of [workers'] compensation, or concerning any right or liability arising out of or incidental thereto.'" United States Fidelity & Guaranty Co. v. Lee Investments LLC, 641 F.3d 1126, 1134 (9th Cir. 2011) (); see also Fremont Indem. Co. v. Superior Court, 133 Cal. App. 3d 879, 881 (1982) (); Mitchell v. Scott Wetzel Servs., Inc., 227 Cal. App. 3d 1474, 1480 (1991) (). Although these exclusivity provisions do not divest federal courts of subject matter jurisdiction, they are nonetheless "'substantive' provisions which, under Erie, a district court sitting in diversity is bound to follow." Fidelity & Guaranty Co., 641 F.3d at 1133. Thus, where California law would preclude a state court from hearing Plaintiff's claims in favor of the WCAB, it would also preclude this Court from doing so. See id.
Any worker who sustained a cumulative injury is entitled to obtain recovery from all employers that employed the worker during the last year of the cumulative injury. See Cal. Labor Code § 5500.5(a). Under section 5500.5(c), "[i]n any case involving a claim of . . . cumulative injury occurring as a result of more than one employment within the appropriate time period set forth in subdivision (a), the employee making the claim . . . may elect to proceed against any one or more of theemployers."1 Id. § 5500.5(c). "If, during the pendency of any claim . . . it should appear that there is another proper party not yet joined, the additional party shall be joined . . . but the liability of the employer shall not be determined until supplemental proceedings are instituted." Id. Under section 5500.5(e), Id. § 5500.5(e).
Section 5500.5(a) provides in part: "[i]n the event that none of the employers during [the last year of injurious exposure] are insured for workers' compensation coverage or an approved alternative thereof, liability shall be imposed upon the last year of employment exposing the employee to the . . . cumulative injury for which an employer is insured for workers' compensation coverage or an approved alternative thereof." Id. § 5500.5(a). In essence, section 5500.5(a) is a "push-back" provision. Using the example of a professional football player, ordinarily only those organizations that employed the player in the last year of the cumulative injury would be liable. However, if none of those organizations has workers' compensation insurance for that time period, liability is pushed back to an organization that employed the player in an earlier year. To avoid the unfairness of the push-back provision, section 5500.5(a) also provides that "[a]ny employer held liable for workers' compensation benefits as a result of another employer's failure to secure the payment of compensation as required by this division shall be entitled to reimbursement from the employers who were unlawfully uninsured during the lastyear of the employee's employment, and shall be subrogated to the rights granted to the employee against the unlawfully uninsured employers . . ....
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