Sirva Relocation, LLC v. Richie

794 F.3d 185

SIRVA RELOCATION, LLC and Aetna Life Insurance Company, Plaintiffs, Appellants

v.Charlotte Golar RICHIE, in her Official Capacity as Commissioner of the Massachusetts Commission Against Discrimination, et al., Defendants, Appellees.

No. 14–1934.

United States Court of Appeals, First Circuit.

July 20, 2015.

Jonathan C. Bond, with whom Miguel A. Estrada, Gibson, Dunn & Crutcher LLP, Stephen D. Rosenberg, and The Wagner Law Group were on brief, for Appellants.

Carrie M. Benedon, Assistant Attorney General, with whom Maura Healey, Attorney General of Massachusetts, was on brief, for Appellees.

Mala M. Rafik, S. Stephen Rosenfeld, Rosenfeld, Rafik & Sullivan, P.C., Anne L. Josephson, and Kotin, Crabtree & Strong, L.L.P. on brief for American Civil Liberties Union of Massachusetts Law Reform Institute, and National Alliance on Mental Illness of Massachusetts, amici curiae in support of appellees.

Before HOWARD, Chief Judge, SELYA and KAYATTA, Circuit Judges.

Opinion

SELYA, Circuit Judge.

In Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), the Supreme Court enunciated a doctrine of abstention. Fidelity to that doctrine requires federal courts, in the absence of extraordinary circumstances, to refrain from interfering with certain state proceedings. See id. at 43–45, 91 S.Ct. 746. The Supreme Court recently revisited the Younger doctrine, clarified its operation, and narrowed its scope. See Sprint Commc'ns, Inc. v. Jacobs, ––– U.S. ––––, 134 S.Ct. 584, 187 L.Ed.2d 505 (2013). This case affords us our first opportunity to consider the impact of Sprint on Younger abstention.

The court below, ruling with the benefit of Sprint, held that Younger abstention was appropriate here and dismissed the federal court action. See Sirva Relocation, LLC v. Tynes, No. 13–12530, 2014 WL 3892202, at *7 (D.Mass. Aug. 7, 2014). The federal plaintiffs appeal. After positioning this case within the Younger framework, considering the factors limned in Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982), and evaluating the applicability vel non of possible exceptions to Younger abstention, we affirm the district court's decision to abstain. Along the way, we clarify our own case law concerning the exception to the Younger doctrine for facially conclusive claims of preemption.

I. BACKGROUND

This appeal is the latest bout in a prolonged legal struggle concerning fringe benefits offered by plaintiff-appellant Sirva Relocation, LLC (Sirva) to its work force. We briefly rehearse the history and travel of the dispute.

Sirva (a company that provides moving and housing solutions) offers a complement of benefits to its employees through a group benefit plan. The plan, which is underwritten by plaintiff-appellant Aetna Life Insurance Company (Aetna), includes a long-term disability (LTD) component. Employees who elect LTD coverage and become totally disabled receive monthly payments equal to a portion of their pre-disability income. Pertinently, the LTD plan (the Plan) provides disparate benefits depending on the nature of an employee's disability: employees who become totally disabled prior to age 62 may receive benefits until age 65 if their disability stems from a physical impairment, whereas those who become totally disabled from a mental or psychological condition are generally entitled to receive LTD benefits for a maximum of 24 months.¹

In September of 2004, Sirva hired David Knight as director of global sales. Knight chose to participate in the benefit plan and enrolled in the LTD component. In November of that year, Knight took a leave of absence due to mental illness. Knight was subsequently found to be totally disabled and began receiving disability benefits. By May of 2005, Knight had exhausted his short-term disability benefits, and Aetna informed him that LTD payments would commence. Aetna's letter noted that if Knight's disability was in any way attributable to a mental condition, his LTD payments would cease 24 months after the onset of the disability unless he was hospitalized at that time. See supra note 1.

In December of 2006, Aetna informed Knight that he had exhausted his LTD benefits and that payments had been terminated. Aetna's letter noted that the Plan was subject to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 –1461, and that Knight had the right to seek internal review of the benefits termination. It went on to explain that if Knight was unhappy with the outcome of that review, he could sue under ERISA. See id. § 1132(a).

Knight did not pursue further claims review but, rather, filed a charge of discrimination with the Massachusetts Commission Against Discrimination (MCAD) in September of 2007. He complained that the appellants (Sirva and Aetna) had discriminated against him on the basis of disability in violation of Massachusetts General Laws chapter 151B and the Americans with Disabilities Act of 1990(ADA), 42 U.S.C. §§ 12101 –12213. The crux of his complaint was that the appellants paid disparate LTD benefits depending on whether an employee suffered from a physical or a mental impairment.

The appellants promptly moved to dismiss Knight's complaint. They argued that the chapter 151B claim was preempted by ERISA and that the ADA claim failed on the merits. The MCAD did nothing until April of 2010, when the Investigating Commissioner denied the appellants' motion without prejudice. Her rescript asserted, without meaningful elaboration, that factual questions concerning both ERISA coverage and the merits precluded dismissal.

The appellants filed a timely answer and position statement reiterating their defenses. The MCAD took no further action for nearly two years. At that time, an MCAD investigator requested from the appellants documents concerning both ERISA coverage and the merits of Knight's complaint. The appellants quickly supplied the requested information.

In October of 2012, the Investigating Commissioner found that probable cause existed to credit Knight's allegations and ordered the parties to participate in a conciliation conference, warning that failure to attend could result in sanctions or immediate certification of the charge for a public hearing. A summary of the MCAD's investigation accompanied the finding. The appellants sought reconsideration of the probable cause finding, renewing their argument that the chapter 151B claim was preempted and, therefore, the MCAD lacked jurisdiction to proceed. The MCAD denied reconsideration and ordered the parties to proceed with discovery.

In May of 2013—almost six years after the commencement of the MCAD proceeding—the Investigating Commissioner certified the case for public hearing and added the MCAD's name to the caption. Following a pre-hearing conference, the MCAD scheduled the public hearing for January of 2014.

At that juncture, the appellants repaired to the United States District Court for the District of Massachusetts. Their federal complaint named as defendants the Commonwealth of Massachusetts, the MCAD, its commissioners (in their official capacities), and Knight. The complaint entreated the district court to declare that ERISA preempted the chapter 151B claim and any further MCAD investigation of the charge. On that basis, the appellants asked the court to enjoin the MCAD proceeding. The MCAD and Knight moved to dismiss the complaint, exhorting the district court to abstain.

While the case was pending, the Supreme Court decided Sprint. The district court secured supplemental briefing and then heard oral arguments. The court reserved decision and, in a thoughtful memorandum, ruled that abstention was required. See Sirva, 2014 WL 3892202, at *4–7. Consequently, it dismissed the case. See id. at *7. This timely appeal ensued.

II. ANALYSIS

The appellants attack the district court's decision to abstain on three fronts. First, they claim that the MCAD proceeding is not the sort of proceeding to which Younger applies. Second, they claim that even if the proceeding comes within Younger's orbit, the Middlesex factors defeat abstention. Third, they claim that, in all events, an exception to Younger for facially conclusive allegations of preemption permits a federal court to enjoin the MCAD proceeding. All of these claims were rejected by the district court, and that court's rulings engender de novo review. See Rio Grande Cmty. Health Ctr., Inc. v. Rullan, 397 F.3d 56, 68 (1st Cir.2005).

A. The Evolution of the Younger Doctrine.

Unpacking the appellants' asseverational array requires some exploration of the evolution of the Younger doctrine. We start from the settled premise that the pendency of a state-court action generally does not preclude a federal court from addressing the same subject matter. See Co. River Water Conserv. Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). This is consistent with the tenet that federal courts have a “virtually unflagging obligation ... to exercise the jurisdiction given them.” Id. Nevertheless, this obligation is not absolute—and the Supreme Court has developed a small cluster of doctrines that either require or allow federal courts to defer to state proceedings in particular circumstances. See Quackenbush v. Allstate Ins. Co. , 517 U.S. 706, 716–18, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996). Younger abstention reflects one such doctrine.

In Younger, the Justices held that principles of equity and comity demand that a federal court abstain from entertaining a suit that seeks to enjoin a state criminal prosecution as violative of federal law so long as the state proceeding affords an adequate opportunity to raise the federal defense and abstention will not cause irreparable harm. See 401 U.S. at 43–46, 91 S.Ct. 746. In a companion case, the Justices made pellucid that the same principles encumber a federal court's ability to order declaratory relief. See Samuels v. Mackell, 401 U.S. 66, 69–70,...