United States District Court, Northern District of California
August 23, 1999
IN RE THE MARRIAGE OF NASCA, PETER NASCA & DENISE NASCA, PLAINTIFFS
The opinion of the court was delivered by: Walker, District Judge.
This action originated in 1994, when plaintiff Peter Nasca
filed for the dissolution of his marriage to plaintiff Denise
Nasca in Contra Costa Superior Court. California Family Code §
2337(c)(6)(A) requires that a party's retirement or pension plan
be joined as a party to a divorce proceeding. On December 10,
1997, plaintiffs joined Peter Nasca's employer, PeopleSoft, as a
party pursuant to section 2337. PeopleSoft manages Mr. Nasca's
retirement plan, which is regulated by the Employee Retirement
Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA").
On December 18, 1997, defendant removed the action to this
court. On December 23, 1997, defendant filed two motions. The
first sought to sever the pension joinder issue from the divorce
action and remand the divorce action to state court. The second
motion sought dismissal of PeopleSoft as a party pursuant to FRCP
12(b)(6) based on ERISA preemption. On January 7, 1998,
plaintiffs filed a motion to remand the entire case to state
The matter was referred to Magistrate Judge James Larson, who
heard all three motions on January 28, 1998. Magistrate Judge
Larson denied both of defendant's motions and granted plaintiffs'
motion. He also awarded to plaintiff attorney fees related to the
On February 27, 1998, defendant appealed both the fee award
order and the order regarding the substantive motions to the
Ninth Circuit. The Department of Labor filed an amicus curiae
brief in support of PeopleSoft's appeal. On January 17, 1999,
on its own motion, the Ninth Circuit found that it did not have
jurisdiction to hear the case because the parties had not
followed the procedures necessary to consent to the jurisdiction
of a magistrate judge. See Nasca v. Peoplesoft, 160 F.3d 578
(9th Cir. 1999). The Ninth Circuit therefore remanded the case to
this court for assignment to an Article III judge.
Jurisdiction in this case is controlled by ERISA. Congress
enacted ERISA in 1974 to provide minimum standards to "ensure the
continued well-being and security of millions of employees and
their dependents" who rely upon retirement plans. H.R.Conf.Rep.
No. 93-1280, at 7 (1974). One original protection, codified at
29 U.S.C. § 1056(d), prohibited the alienation or assignment of
pension benefits. As first enacted, the anti-alienation provision
afforded no way for non-employee spouses to recover pension
benefits upon the death of the employee spouse or upon divorce.
In 1984, Congress amended ERISA with the Retirement Equity Act
("REA"), which created an exception to the anti-alienation clause
permitting ERISA beneficiaries to direct their ERISA benefits to
an alternate payee, defined as a spouse, former spouse, child or
other dependent. See 29 U.S.C. § 1056(d)(3)(k). Under this
procedure, a beneficiary or alternate payee requests the change
by submitting a Domestic Relations Order ("DRO"), usually issued
by a state court, to the plan administrator. The plan
administrator then reviews the DRO to determine whether the DRO
meets the requirements for a Qualified Domestic Relations Order
("QDRO") described in 29 U.S.C. § 1056(d)(3)(B). These
requirements primarily ensure that the payee designated by the
DRO is a legitimate alternate payee and that the DRO does not
increase the payment burden on the plan or mandate the assignment
of benefits previously assigned by another QDRO. If the plan
administrator determines that the DRO is indeed a QDRO, he will
then direct payment to the alternate payee. If the plan
administrator determines that the DRO does not meet the
requirements of a QDRO, the beneficiary or alternate payee may
appeal the plan administrator's decision to a "court of competent
jurisdiction" under 29 U.S.C. § 1056(d)(3)(H)(i).
29 U.S.C. § 1132(a) creates two relevant causes of action, one
which has exclusive federal jurisdiction and one which has
concurrent jurisdiction. Section 1132(a)(1)(B) provides that:
[a] civil action may be brought by a participant or
beneficiary to recover benefits due to him under the
terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future
benefits under the terms of the plan * * *.
And, section 1132(e)(1) grants concurrent jurisdiction to state
and federal courts to decide matters brought under this
Alternatively, a litigant may bring an action under
29 U.S.C. § 1132(a)(3).
A civil action may be brought by a participant,
beneficiary, or fiduciary (A) to enjoin any act or
practice which violates any provision of this
subchapter or the terms of the plan, or (B) to obtain
other appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provisions of
this subchapter or terms of the plan.
Federal district courts have exclusive jurisdiction of actions
brought under this section. See 29 U.S.C. § 1132(e)(1).
The issue before the court concerns the application of these
provisions in light of plaintiffs' motion to remand. In opposing
a motion to remand, the defendant carries the burden of
establishing that removal was proper. See Westinghouse Elec.
Corp. v. Newman & Holtzinger, P.C., 992 F.2d 932, 934 (9th Cir.
1993). The removal statute is strictly construed against removal
jurisdiction. See Gaus v. Miles, 980 F.2d 564, 566 (9th Cir.
1992). In areas of law that are traditionally fields of state
regulation, claims are addressed
"with the starting presumption that Congress did not intend to
supplant state law." New York Conf. of Blue Cross v. Travelers
Ins. Co., 514 U.S. 645, 655, 115 S.Ct. 1671, 131 L.Ed.2d 695
Where federal jurisdiction is premised on the
existence of a federal question, removal is proper
only (1) where a federal question appears on the face
of the plaintiff's well-pleaded complaint or (2)
where federal law so completely preempts the
plaintiff's state law cause of action that the
complaint necessarily arises under federal law.
Emard v. Hughes Aircraft Co., 153 F.3d 949, 961 (9th Cir. 1998)
(citations omitted). The validity of a removal is normally
analyzed under this two-pronged test. In this instance, the
questions raised by both prongs merge into a single question:
whether the Nascas' joinder of PeopleSoft can properly be
characterized as falling under ERISA's civil enforcement
Part one of the test is referred to as the "well pleaded
complaint rule." Under this standard, federal courts have
jurisdiction to hear, "originally or by removal, only those cases
in which a well-pleaded complaint establishes either that federal
law creates the cause of action or that plaintiff's right to
relief necessarily depends on resolution of a substantial
question of federal law." Franchise Tax Board v. Construction
Laborers Vacation Trust, 463 U.S. 1, 27, 103 S.Ct. 2841, 77
L.Ed.2d 420 (1983).
Plaintiffs join defendant in this action under state law in
accordance with Cal. Fam.Code § 2337(6)(A), which requires that
"[prior to the entry of judgment] the party's retirement or
pension plan shall be joined as a party to the proceeding for
dissolution." Defendant argues, however, that the joinder is
actually an ERISA claim covered by 29 U.S.C. § 1132(a), and that
"there is no such thing as an ERISA claim (artfully pled or
otherwise) over which the federal courts lack jurisdiction." Def.
Supp. Mem. at 7. Defendant cites the Supreme Court's decision in
Metropolitan Life v. Taylor, 481 U.S. 58, 66, 107 S.Ct. 1542,
95 L.Ed.2d 55 (1987), for the proposition that "Congress has
clearly manifested an intent to make causes of action within the
scope of [29 U.S.C. § 1132(a)] removable to federal court." To
decide whether plaintiff's case warrants removal under the
well-pleaded complaint rule, then, the court must determine
whether it may be fairly characterized as an action pursued under
Under the second, alternative prong of the test, the court must
consider whether federal law completely preempts plaintiffs'
cause of action. Preemption is not sufficient to justify removal
— complete preemption is required.
The difference between preemption and complete
preemption is important. When the doctrine of
complete preemption does not apply, but the
plaintiff's state claim is arguably preempted under
section [1144(a)], the district court, being without
removal jurisdiction, cannot resolve the dispute
regarding preemption. It lacks power to do anything
other than remand the issue to state court where the
preemption issue can be addressed and resolved.
Dukes v. U.S. Healthcare, Inc., 57 F.3d 350
, 354 (3d Cir.
1995). See also Caterpillar, Inc. v. Williams, 482 U.S. 386
398, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) ("The fact that an
employer * * * might ultimately prove that an employee's claims
are pre-empted does not establish that they are removable.");
Metropolitan Life, 481 U.S. at 64, 107 S.Ct. 1542 ("ERISA
preemption, without more, does not convert a state claim into an
action arising under federal law."); Warner v. Ford Motor Co.,
46 F.3d 531
, 534 (6th Cir. 1995) ("removal and preemption are two
While section 1144(a) remains a preemptive umbrella which
mandates that ERISA provisions "shall supersede any and all state
laws insofar as they may now or hereafter relate to any [ERISA]
benefit plan," the complete ERISA preemption requisite for
removal to federal court exists only for civil actions brought
pursuant to section 1132(a). See Geweke Ford v. St. Joseph's
Omni Preferred Care Inc., 130 F.3d 1355, 1358 (9th Cir.
1997) ("state law claims are preempted by ERISA only if they fall
within the scope of ERISA's civil enforcement provision,
29 U.S.C. § 1132(a)"); Harris v. Provident Life & Accident Ins.
Co., 26 F.3d 930, 934 (9th Cir. 1994) (where plaintiff's claims
"are not within the scope of section 1132(a) [they are] not
completely preempted."); Dukes, 57 F.3d at 355 ("State law
claims which fall outside the scope of section [1132(a)] are
still governed by the well-pleaded complaint rule and, therefore,
are not removable under the complete preemption principles
established in Metropolitan Life."); Allstate Ins. Co. v. 65
Security Plan, 879 F.2d 90, 93-94 (3rd Cir. 1989) (holding that
section 1144 preemption will not justify removal unless the claim
falls within the scope of section 1132(a)); Levy, 1999 WL 66511
at *3 ("Claims falling outside the scope of § 1132(a), even if
preempted by § 1144(a), do not provide a basis for federal
The complete preemption requisite to warrant removal under the
second prong of the test, therefore, requires the same finding as
that under the first prong: that plaintiff's joinder is a section
1132(a) action in disguise. Consequently, the court's removal
jurisdiction is entirely dependent on this finding.
In the past, the Supreme Court read ERISA provisions broadly
and recognized ERISA legislation as being endowed with potent
preemptive force. See Metropolitan Life, 481 U.S. at 62, 107
S.Ct. 1542. Recently, however, the Court has narrowed its view of
ERISA preemption. See Toumajian v. Frailey, 135 F.3d 648, 654
n. 3 (9th Cir. 1998) ("Recently the scope of this broad `relate
to' preemption was markedly narrowed") (referring to Blue Cross
v. Travelers, supra); Blue Cross v. Levy, 1999 WL 66511, *6
(N.D.Cal. 1999) ("Both Bast and Geweke suggest that the reach
of ERISA preemption is not as broad as the Court's order in
Mullens might suggest, and that the appropriate focus is the
intent of Congress to regulate ERISA-protected relationships").
In Blue Cross v. Travelers, 514 U.S. at 655, 115 S.Ct. 1671,
the Court held that courts should consider the Congressional
objectives of ERISA as a guide to the breadth of state law that
Congress intended to preempt. The Court has also directed the
courts to look "to the nature of the effect of the state law on
ERISA plans." California Div. of Labor Standards Enforcement v.
Dillingham Constr., Inc., 519 U.S. 316, 325, 117 S.Ct. 832, 136
L.Ed.2d 791 (1997).
As noted above, Congress enacted ERISA to provide workers with
a federal means of enforcing their rights to benefits against
pension plans. In Metropolitan Life, the Court recognized that
this was reflected in ERISA's legislative history:
Senator Williams, a sponsor of ERISA, emphasized that
the civil enforcement section would enable
participants and beneficiaries to bring suit to
recover benefits denied contrary to the terms of the
plan and that when they did so it is intended that
such actions will be regarded as arising under the
laws of the United States.
Metropolitan Life, 481 U.S. at 66, 107 S.Ct. 1542.
Moreover, Congress intended the anti-alienation provisions to
protect workers against their plans, not against other
individuals with claims to the benefits under state property law.
In enacting ERISA, Congress intended to safeguard the
rights of plan participants and beneficiaries as
against employers, insurers, and administrators of
employee benefit plans. ERISA therefore preempts
state laws that concern these matters. But we see no
indication that Congress intended to safeguard an
individual beneficiary's rights as against another
person claiming superior rights, under state law, to
those proceeds. Absent
specific contrary provisions in ERISA, an action
intended to enforce such individual rights against a
beneficiary does not fall within the scope of §
1132(a), and state laws on which such an action
relies are not barred by ERISA preemption.
Emard, 153 F.3d at 957. See also General American Life Ins.
Co. v. Castonguay, 984 F.2d 1518
, 1521 (9th Cir. 1993) ("The key
to distinguishing between what ERISA preempts and what it does
not lies * * * in recognizing that the statute comprehensively
regulates certain relationships: for instance, the relationship
between plan and plan member, between plan and employer, between
employer and employee * * *, and between plan and trustee.").
The Ninth Circuit recently considered these goals when it
redefined its view of ERISA in Emard. Following the Supreme
Court's lead, the Ninth Circuit adopted a decidedly narrower view
of ERISA and ERISA preemption. See Emard, 153 F.3d at 961
("ERISA's preemption clause no longer has the power to transmute
into a federal question every issue that brushes against the
periphery of an ERISA plan. We must identify instead Congress'
purposes in enacting ERISA to determine in what fields state law
is preempted."). As part of its new interpretation of ERISA, the
Ninth Circuit carefully defined the boundaries of section 1132 by
distinguishing between actions where the existence or calculation
of ERISA benefits are in dispute, and those that address the
ownership of benefits whose nature or quantity are not themselves
at issue. Actions of the latter kind are brought pursuant to
state property laws and do not fall under section 1132.
An action falls within the scope of [section 1132(a)]
only where the plaintiff seeks to recover benefits
due to him under the terms of his plan. Emard's
claims do not implicate the terms of the plan. There
is no dispute regarding the amount or nature of the
benefit or whether the benefit is properly payable.
This dispute concerns only the ultimate ownership of
the proceeds. That dispute can be decided without
reference to the terms of the plan or the provisions
Emard, 153 F.3d at 957. This distinction is consistent with
Congress's intent because it provides a federal cause of action
enabling workers to enforce their rights vis a vis their pension
plans without requiring federal courts to venture into the
state-controlled domains of property and family law. See Mackey
v. Lanier Collection Agency & Serv. Inc., 486 U.S. 825
, 833, 108
S.Ct. 2182, 100 L.Ed.2d 836 (1988) (ERISA does not preempt
"run-of-the-mill state law claims" even when the suits affect and
involve the plan); Shaw v. Delta Air Lines, 463 U.S. 85
, 100 n.
21, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983) (no preemption of state
law claims that affect employee benefit plans in "too tenuous,
remote, or peripheral a manner"); Emard, 153 F.3d at 960 ("A
state's community property law can regulate ERISA relationships
by changing the identity of an ERISA beneficiary.")
The Third Circuit has limited section 1132 along similar lines.
In Dukes, the plaintiff sued an ERISA-regulated plan for
medical negligence, asserting that the plan's failure to provide
necessary medical care resulted in plaintiff's death. The
defendant plan attempted to remove the action to federal court,
claiming ERISA preemption. The court found that plaintiff's cause
of action did not fall under section 1132(a) despite the fact
that the plan was regulated by ERISA.
The plaintiffs are not attempting to define new
"rights under the terms of the plan"; instead they
are attempting to assert their already existing
rights under the generally applicable state law of
agency and tort. Inherent in the phrases "rights
under the terms of the plan" and "benefits due under
the terms of the plan" is the notion that the plan
beneficiaries will receive something to which they
would not otherwise be entitled.
Dukes, 57 F.3d at 358
In addition, there is authority for the proposition that ERISA
not prevent a state court order from mandating payment by an
ERISA-regulated pension plan to a non-beneficiary. See Mackey,
486 U.S. at 837, 108 S.Ct. 2182 (while "state-law contract or
tort claims are relatively commonplace, ERISA does not provide an
enforcement mechanism for collecting judgments won in either type
of action. In lieu of such a provision, state-law collection
methods, including garnishment, remain undisturbed by ERISA.");
American Telephone and Telegraph Co. v. Merry, 592 F.2d 118,
121 (2d Cir. 1979) (state garnishment of a spouse's pension
income to enforce alimony and support orders is not pre-empted).
Ablamis v. Roper, 937 F.2d 1450, 1455 (9th Cir. 1991) ("REA
provides expressly that * * * state courts may issue a QDRO on
behalf of an alternate payee and may afford marital property
rights to such a payee"); Board of Trustees of Laborers Pension
Trust Fund v. Levingston, 816 F. Supp. 1496 (N.D.Cal. 1993)
(state court may order a ERISA-regulated plan to direct payment
to an alternate payee via a QDRO).
The common theme in cases that courts have declined to find
subject to complete ERISA preemption is that they involve
disputes as to the ultimate ownership of ERISA benefits, not
their quality, nature or existence. This court recently
recognized this theme in The Manufacturers Life Insurance Co. v.
East Bay Restaurant and Tavern Retirement Plan, 57 F. Supp.2d 921,
924 (N.D.Cal.), when it noted that there is no preemption in
garnishment cases if "the amount of plan assets is unaffected by
whether the money is distributed to the beneficiary or the
beneficiary's creditor." Such cases are distinguishable from
matters which courts recognize as exercises of ERISA's civil
enforcement provisions, where beneficiaries sue their plans to
recover benefits which the plan has denied. See, e.g.,
Metropolitan Life, 481 U.S. at 63, 107 S.Ct. 1542 (state
common-law causes of action asserting improper processing of a
claim for benefits was removable to federal court); Sofo v.
Pan-American Life Insurance Co., 13 F.3d 239, 240-41 (7th Cir.
1994) (plaintiff's state court claim against insurance company
for wrongful denial of benefits removable); Lister v. Stark,
890 F.2d 941, 943 (7th Cir. 1989) (plaintiff's state law claim
challenging the calculation of his time of uninterrupted service
for the purposes of calculating pension benefits was removable).
No federal court has considered the question whether the
joining of an ERISA plan to a state divorce proceeding falls
within section 1132(a) in light of Emard. The language of
section 1132(a), on its face, would appear to encompass any
action seeking to secure benefits governed by ERISA. Magistrate
Judge Larson, in reviewing this matter before the Emard
decision, found the joinder to constitute a section 1132(a)(1)(B)
action. The current landscape of ERISA preemption, however, is
markedly different from that surveyed by Magistrate Judge Larson.
As noted above, current analysis imposes a narrower view of ERISA
preemption focusing on the objectives of Congress in enacting
ERISA. See, e.g., Estate of Egelhoff v. Egelhoff, 93 Wn. App. 314,
968 P.2d 924, 930 (1998) ("The Supreme Court's recent cases
indicate that ERISA preemption has been much too broadly
construed in the past and must be narrowed; Emard follows that
directive in a principled, logical manner. Although Emard
addresses only life insurance, the same principle should apply to
pension fund benefits"). And, while section 1132(a) may facially
encompass the joinder action, this action does not implicate the
goals or concerns embodied in ERISA.
Here, as in Emard, there is no dispute about the amount or
nature of the benefits due under the plan; the state court is
asked only to decide which party will receive the benefits upon
payment. Joinder of the plan is merely "a precursor to the state
court issuing a domestic relations order," whereby the state
court will allocate the pension benefits according to state
property and family law. Def's Supp. Brief at 5. Defendant does
not, and cannot, point to any question of ERISA
law raised by this allocation. If the state court orders
defendant to pay benefits to plaintiffs in a manner that
defendant believes to be inconsistent with federal law, i.e., if
the DRO is not a QDRO, defendant may then have a valid claim that
the state order is in conflict with federal law and that
controversy may be removable under conflict preemption. See
29 U.S.C. § 1132(e). Until such a conflict is apparent, however,
there is no question of ERISA interpretation and no basis for
Moreover, policy concerns, fairness, and Congress' intent in
enacting the REA compel this conclusion. When it enacted the REA,
"Congress sought to protect the rights of nonemployee spouses and
dependents by allowing state courts to make equitable divisions
of property in a divorce or dissolution." Oddino, 16 Cal.4th at
75, 65 Cal.Rptr.2d 566, 939 P.2d 1266; see also H.R.Rep. No.
655, 98th Congress 2d Sess. p. 25 (REA's primary goals include
providing "adequate safeguards for spouses not employed outside
the home."). An interpretation of ERISA supporting removal to
federal court would frustrate this purpose by needlessly
complicating the process by which a nonemployee spouse may obtain
pension benefits. See Oddino, 16 Cal.4th at 76, 65 Cal.Rptr.2d 566,
939 P.2d 1266 quoting In re Marriage of Levingston,
12 Cal.App.4th 1303, 1306, 16 Cal.Rptr.2d 100 (1993) (removal to
federal court "would cause undue hardship, expense and delay to
the affected party, and impose an unnecessary workload on already
overburdened federal courts."). Allowing removal pursuant to a
finding of ERISA preemption or concurrent jurisdiction would
therefore be contrary to Congress's intent in passing the REA.
A finding of exclusive jurisdiction would force California
citizens to delay their state family court actions pending
federal court consideration of any award of ERISA benefits to an
alternate beneficiary. Likewise, a finding of concurrent
jurisdiction would require federal courts to adjudicate the
merits of abstention on a case by case basis. ERISA was not
intended to saddle federal courts with a Hobson's choice between
holding state court litigants hostage in a parallel proceeding
and requiring federal courts to perform the functions of state
family courts through an exercise of supplemental jurisdiction.
Such a regime would impose an undue burden on state court
litigants and would draw federal courts into innumerable state
court proceedings which do not implicate the concerns of ERISA in
Nonetheless, defendant cites the California Supreme Court's
decision in In re Marriage of Oddino, 16 Cal.4th 67,
65 Cal.Rptr.2d 566, 939 P.2d 1266 (1997), for the proposition that
mere joinder of an ERISA plan to a divorce proceeding constitutes
a claim for benefits under 29 U.S.C. § 1132(a)(1)(b). See
Defendant's appellate brief at p. 22. In the Oddino divorce
proceeding, the plaintiff sought recalculation of the benefits
due under her former husband's pension plan pursuant to an
existing QDRO. Such an action differs from the present case in
two fundamental ways.
First, the Oddino action involved a dispute between a plan
administrator and a beneficiary as to the amount of the
benefits due under the plan. The plaintiff contended that the
plan had erroneously applied an actuarial reduction of her
husband's benefits. As explained above, disputes as to the proper
calculation of ERISA benefits, like disputes as to the existence
of ERISA benefits, directly implicate ERISA's concerns and,
therefore, constitute actions under section 1132(a).
Second, Oddino differs from the present matter in that the
plaintiff sought to enforce a QDRO rather than to obtain a DRO.
The plaintiff sought to enforce a state court qualification of a
DRO despite the ERISA plan administrator's claim that the state
court's qualification of the DRO violated ERISA. Such a dispute,
unlike the present action, requires an interpretation of ERISA
and, therefore, squarely implicates ERISA's preemption
provisions. Accordingly, the Oddino court found the enforcement
of the QDRO, as opposed to
the joinder, to be an action pursuant to section 1132(a)(1)(b).
Defense counsel appears to have conceded as much at the hearing
before Magistrate Judge Larson. See Hrg. Tr., Jan. 28, 1998, at
4 ("Until you get someone making an initial determination that an
order is a QDRO, neither Levingston nor Oddino really come
In fact, the Oddino court specifically noted that the REA did
not create a cause of action for a spouse like Mrs Nasca, who
does not yet have a QDRO:
The QDRO provisions added to ERISA by REA do not
independently provide former spouses or dependents
with rights to any retirement benefits. Rather, they
constitute only an exception to the general
anti-alienation rule of section 1056(d)(1), allowing
plan administrators to make payments, under specified
circumstances, to alternate payees if ordered to do
so by a state court.
Oddino, 16 Cal.4th at 77, 65 Cal.Rptr.2d 566, 939 P.2d 1266. As
the Oddino decision suggests, the REA did not create a new
federal cause of action. Rather, the REA carved out an exception
to the anti-alienation provisions that previously stood in the
way of state family law actions which sought to direct benefits
to a former spouse or other alternate payee. The fact that
Congress removed this barrier does not transform the underlying
property dispute into a federal question. Plaintiffs' motion to
remand must, therefore, be GRANTED.
Plaintiffs move for attorney fees associated with the removal.
28 U.S.C. § 1447(c) provides that "[a]n order remanding the case
may require a payment of just costs and any actual expenses,
including attorney's fees, incurred as a result of the removal."
The court "retains jurisdiction [to award attorney fees] even
after being divested of jurisdiction on the merits." See Moore
v. Permanente, 981 F.2d 443, 445 (9th Cir. 1992). "Congress has
unambiguously left the award of fees to the discretion of the
district court." Id. at 445. The courts have not established
precise criteria by which to make this determination, but at
least one court of appeals has approved of "a test of overall
fairness given the nature of the case, the circumstances of the
remand, and the effect on the parties." Morgan Guaranty Trust
Co. v. Republic of Palau, 971 F.2d 917, 924 (2d Cir. 1992).
The Nascas filed for divorce nearly five years ago. Since that
time, they have navigated a judicial obstacle course in which
they had nothing to gain and that has not afforded them a
determination in their marriage dissolution. In its review of
this matter, the Ninth Circuit noted that "we are sensitive to
the hardship that this ruling will inflict upon the Nascas, who,
through no fault of their own, have had their divorce proceeding
held hostage in federal court." Nasca, 160 F.3d at 580 n. 2. By
contrast, PeopleSoft, as an administrator of ERISA plans, stood
to gain on a scale much larger than this case by establishing
ERISA preemption in this arena. The court therefore finds that
PeopleSoft should bear the expense of the removal.
Section 1447(c) authorizes the court to order payment of actual
costs, rather than costs which the court determines to be
reasonable. Ann Riley, attorney for plaintiff Peter Nasca,
submits an affidavit detailing attorney fees and costs billed to
Mr Nasca in conjunction with the removal are $60,514.01. See
Decl. of Ann Riley at 2. Karen Johnson, attorney for plaintiff
Denise Nasca, submits an affidavit detailing costs billed to Mrs
Nasca total $5,396.25. See Decl. of Karen Johnson, exh. A.
PeopleSoft does not dispute these totals. The court therefore
orders defendant to pay attorney fees and costs in the amount of
$60,514.01 to plaintiff Peter Nasca and attorney fees of
$5,396.25 to plaintiff Denise Nasca.
For the reasons stated above, plaintiff's motion to remand
(Doc. 8) is GRANTED, and defendant's motion for dismissal (Doc.
3) is DENIED. The clerk shall enter
judgment in accordance with this order with attorney fees and
costs to plaintiffs.
IT IS SO ORDERED.
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