Monk v. Performance Contractors Inc

MICHAEL MONK

v.PERFORMANCE CONTRACTORS, INC.

DOCKET NO. 10-CV-1137

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

DATED: December 6, 2010

JUDGE MINALDI MAGISTRATE JUDGE KAY

MEMORANDUM ORDER

For the reasons stated herein, plaintiff's motion to remand [doc. 6] is DENIED.

Facts and Summary of Arguments

This suit was originally brought on June 3, 2010, in the Fourteenth Judicial District Court, Calcasieu Parish, State of Louisiana. Doc. 1, att. 2. In the original complaint, plaintiff Michael Monk sought relief against defendant Performance Contractors, Inc. (Performance) for injuries allegedly sustained when plaintiff was "rear-ended in Calcasieu Parish on Interstate 10." Id. at p. 2. The vehicle that plaintiff was driving when the accident occurred was owned by Performance and plaintiff was on his way home from work. Id.; doc. 6, att. 1, p. 1.

In his complaint, plaintiff alleges two theories of contractual liability. First, plaintiff alleges that while he was being treated in the hospital emergency room, two Performance employees-Jeremy Cooper (Performance's Operation Manager) and Patrick Vincent (Performance's Superintendant)-"each agreed, on behalf of Performance," that Performance would "pay all of plaintiffs medical bills" that he would incur as a result of the accident. Doc. 1, att. 2, p. 2. According to plaintiff, when he began submitting his medical bills to Performance, however, Performance breached the contract by refusing to pay. Id. at 3. Second, plaintiff alleges that the employment contract between him and Performance included a clause stating that Performance would provide health insurance to its employees. Id. According to plaintiff's complaint, Performance failed to fulfill this obligation as well. Id.

Performance filed a notice of removal with this court on July 13, 2010, pursuant to 28 U.S.C. §§ 1440 and 1446. Doc. 1. In its removal notice, Performance asserted federal jurisdiction pursuant to 28 U.S.C. § 1331 et seq., "inasmuch as lanitiff asserts claims which, if true, are preempted completely by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq:" Id. at 1-2. Specifically, Performance asserts that, under both theories of breach, because plaintiff is seeking damages for medical services provided while he assumed that he was covered by an employee insurance plan, plaintiffs claims "relate to" an employee benefit plan within the meaning of ERISA and are thereby completely preempted by the federal statute. Id. at 2.

Plaintiff filed a motion to remand, the motion now before the court [doc. 6], on August 12, 2010. In this motion, plaintiff argues that his claims "do not seek benefits from any ERISA plan and do not involve, in any way, application or interpretation of any federal law." Id. at 2. In the alternative, plaintiff requests leave of court to strike from its original complaint any allegations that could be construed to state a claim for employment benefits under an ERISA plan. Id.

Law and Analysis

Defendants are free to remove to the appropriate federal district court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction...." 28 U.S.C. § 1441(a). The propriety of removal depends on whether the case originally could have been filed in federal court. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) ("Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant[;] absent diversity of citizenship, federal-question jurisdiction is required."). The burden of proof for establishing removal jurisdiction is placed on the party seeking removal. Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (1921)). "If the right to remove is doubtful, the case should be remanded." Case v. ANPAC Louisiana Ins. Co., 466 F.Supp.2d 781, 784 (E.D. La. 2006); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) (removal is to be construed narrowly and in favor of remand to state court); Perkins v. State of Miss., 455 F.2d 7 (5th Cir. 1972) (same). Here, Performance, the removing party, bears the burden of demonstrating the proprietary of removal. Gaitor v. Peninsular & Occidental S. S. Co., 287 F.2d 252, 253-54 (5th Cir. 1961).

A suit "aris[es] under" federal law within the meaning of § 1331 if "a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. of State of Cal. v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 27-28 (1983)). The decision to provide a federal forum for resolving significant federal issues embedded in state-law claims rests on policy considerations that have prevented the Supreme Court "from stating a single, precise, all-embracing test." See Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005) (internal quotation omitted). The Court has, however, provided some guidance:

[T]he federal issue will ultimately qualify for a federal forum only if federal jurisdiction is consistent with congressional judgment about the sound division of labor between state and federal courts governing the application of § 1331.... [T]he question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.

Id. at 314; see also Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 19 (1987) ("ERISA preemption analysis must be guided by respect for the separate spheres of governmental authority preserved in our federalist system.").

I. ERISA Claim

Here, a state claim for breach of contract is the core of plaintiff's complaint. Thus, the question to be decided is whether any potential ERISA claims involved "necessarily raise" an "actually disputed and substantial" stated federal issue, which would give this court jurisdiction "without disturbing any congressionally approved balance of federal and state judicial responsibilities." Grable & Sons Metal Prod., 545 U.S. at 314.

Congress enacted ERISA as a comprehensive system to regulate employee benefit plans. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989). ERISA contains a preemption clause which states that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employer benefit plan." 29 U.S.C. § 1144(a). The Supreme Court has held that congress intended the ERISA preemption clause to be interpreted in the broadest possible manner. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987). ERISA preemption applies not only to state laws but to all forms of state action dealing with the subject matters covered by the statute. 29 U.S.C. § 1144(c)(1). Accordingly, when a suit alleges a state common-law or statutory cause of action relating to an ERISA plan, the suit may be preempted in favor of federal law. Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-67 (1987).

Under the test articulated by the Fifth Circuit,

ERISA preempts a state law claim if a two-prong test is satisfied: (1) The state law claim addresses an area of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan; and (2) the claim directly affects the relationships among traditional ERISA entities-the employer, the plan and its fiduciaries, and the participants and beneficiaries.

Mayeaux v. Louisiana Health Service and Indem. Co., 376 F.3d 420, 432 (5th Cir. 2004) (citing Smith v. Texas Children's Hosp., 84 F.3d 152, 155 (5th Cir. 1996) and Hubbard v. Blue Cross & Blue Shield Ass'n, 42 F.3d 942, 945 (5th Cir. 1995)).

Here, the second prong is easily met. On the face of the complaint, plaintiffs' state law breach of contract claims against Performance arise from Performance's alleged failure to provide plaintiff with insurance and other medical coverage as promised. Since the alleged contracts are between an employer and an employee-the traditional ERISA plan provider and the traditional plan beneficiary-the second prong is easily fulfilled. E.I. DuPont de Nemours & Co. v. Sawyer, 517 F.3d 785, 800 (5th Cir. 2008).

As to the first prong, the court must ascertain whether a plan "(1) exists; (2) falls within the safe-harbor provision established by the Department of Labor; and (3) satisfies the primary elements of an ERISA 'employee benefit plan'"-that is, whether there exists "the right to receive benefits under the terms of an ERISA plan." Meredith v. Time Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993); Mayeaux, 376 F.3d at 432.

a. Existence of an ERISA Plan

The court must first decide whether an "ERISA plan" existed at all. See Capro v. Securitas Sec. Services USA, Inc., No. 08-5227, 2009 WL 3231770, *3 (E.D. La. Oct. 2, 2009) ("[I]t is clear that if an ERISA plan never existed preemption would not be possible."). ERISA defines an "ERISA plan" as

any plan, fund, or program... established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment....

29 U.S.C. § 1002(1). "To qualify as a plan, fund, or program, ERISA does not necessarily require a formal written arrangement." Cantrell v. Currey, 407 F.Supp.2d 1280, 1286 (M.D. Ala. 2005) (citing Donovan v. Dillingham, 688 F.2d 1367, 1372 (11th Cir. 1982)); see also Whitfield v. Torch Oper. Co., 935 F.Supp. 822, 828 (E.D. La. 1996) ("A formal document...