In 2010, Chief Justice John Roberts observed that that ERISA is “an enormously complex and detailed statute.” Conkright v. Frommert, 559 U.S. 506, 509 (2010).
Some things don’t change. A recent decision out of the District Court of New Jersey exemplifies how even the most seemingly mundane procedural act — removal — implicates procedural and legal nuances with which courts continue to grapple.
In Newton v. South Jersey Paper Products Company, Inc., No. 1:19-cv-17289-NLH-KMW, 2020 WL 7396258 (D.N.J. Dec. 17, 2020) (“Newtown II”), the District Court rejected a plaintiff’s bid for attorney’s fees incurred in seeking and obtaining a remand of the plaintiff’s claims — which the defendant had removed to federal court on the basis of ERISA preemption — back to New Jersey state court. In rendering its decision to deny the plaintiff’s fee motion, the District Court recognized “the unique complexity of ERISA preemption issues and the resulting reluctance of courts in this district to impose attorneys’ fees on defendants who have made failed preemption arguments…” Newton II, 2020 WL 7396258, at *4.
In her complaint, the plaintiff alleged that her employer, the defendant, had terminated her long term disability benefits plan without informing her, but nevertheless continued to take weekly paycheck deductions towards plan premiums for nearly two years post-termination. According to the complaint, the plaintiff first learned of the plan’s termination when she applied for long term disability benefits under the plan, and was advised by her employer that no disability coverage was in effect. The plaintiff alleged that she was initially approved for New Jersey’s Temporary Disability Insurance, and that she was subsequently deemed permanently disabled by the Social Security Administration, but that she was deprived of the opportunity to seek and obtain long term disability insurance as a result of her employer failing to notify her of its cancellation or termination of the employer-sponsored plan towards which it continued to deduct her pay. Plaintiff sued her employer in New Jersey state court and claimed that she was entitled to relief under four state common law theories: (1) conversion of plaintiff’s withheld pay; (2) breach of contract for terminating promised insurance coverage for which the employer continued to charge the plaintiff; (3) fraudulent concealment of the fact that long term disability coverage had terminated; and (4) breach of the employer’s fiduciary duty, in its alleged capacity as policyholder and administrator of the long term disability plan, to the plaintiff.
The employer removed the complaint and its four common law claims to federal court on the grounds that they related to an employee benefit plan, thus subjecting them to complete ERISA preemption under 29 U.S.C. § 1144(a). The employer then moved for dismissal of the claims on the basis of such preemption.
The plaintiff opposed the employer’s motion to dismiss, and separately filed a motion for remand on the basis that her claims were not covered by ERISA. Addressing the motion for remand, the District Court concluded that the plaintiff was not a “participant or beneficiary” within the meaning of ERISA, and therefore was “not the type of party that can bring...
