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ROACH v. MAIL HANDLERS BENEFIT PLAN

United States District Court, Northern District of California


August 21, 2003

LISA ROACH, PLAINTIFF,
v.
THE MAIL HANDLERS BENEFIT PLAN, ET AL., DEFENDANTS

The opinion of the court was delivered by: James Larson, Magistrate Judge

REMAND TO STATE COURT

Introduction

Plaintiff's Motion to Remand to State Court came on for hearing on August 20, 2003. Douglas C. Fladseth, LAW OFFICES OF DOUGLAS C. FLADSETH, appeared for Plaintiff. William F. Horsey, DUNN, ROGASKI, PREOVOLOS, WEBER & PATTERSON, LLP, appeared for Defendant. The written pleadings and oral arguments of counsel have been fully considered and good cause appearing, it is hereby ordered that the motion is granted.

Background

Lisa Roach ("Plaintiff"), who now uses her married name of Clinton, was employed as a firefighter with the U.S. Forest Service from 1991 through 1999. Mail Handlers Benefit Plan provided her health insurance pursuant to the Federal Employee Health Benefits Act [ Page 2]

("FEHBA"). Access Health, Inc. contracted with Mail Handlers to provide a medical advice line for plan subscribers. (Collectively "Defendants")

On January 16, 1998, Plaintiff injured her ankle while jogging. The following morning her ankle was still swollen and she considered going to an emergency room. To locate the nearest hospital, she called Mail Handlers and spoke with an advice nurse. The nurse advised Plaintiff that she had likely sprained her ankle and should use painkillers and ice. The nurse advised Plaintiff to consult a doctor if the ankle did not improve. The nurse also offered to call Plaintiff back in two days to check on her condition but Plaintiff declined, since she would be traveling and not easily accessible by phone. She did not request, and the nurse did not refuse, authorization for an emergency room visit. In fact, certification was unnecessary because Plaintiff did not intend to be hospitalized.

The following day, Plaintiff left for Hawaii where she bicycled and hiked for 10 days. She then returned to California for two days during which time she did not seek treatment for the ankle injury. She then traveled to Ecuador to hike and volunteer in the rainforest for 30 days.

Plaintiff's ankle still bothered her when she returned to work. She consulted a doctor who diagnosed a fracture. Over the next few months she visited other doctors, one of whom performed surgery. Mail Handlers reimbursed her for the surgery and other costs. However, she remains unable to perform her duties as a firefighter, which require top physical condition.

Plaintiff filed suit in Sonoma County Superior Court July 16, 1999, alleging causes of action for: medical negligence; breach of contract; breach of the implied covenant of good faith and fair dealing; fraud; negligence; and negligent infliction of emotional distress. Plaintiff did not raise any federal claims. Defendants removed the case to federal district court August 30, 1999, by asserting federal question jurisdiction: that the provisions of FEHBA preempted the breach of contract claims.

This court granted Defendants' motion for summary judgment January 3, 2001 on the grounds that plaintiff failed to exhaust her administrative remedies, sued the wrong [ Page 3]

parties, and that all of Plaintiff's state law claims were preempted. Plaintiff appealed on February 8, 2001. On August 1, 2002, the U.S. Court of Appeals for the Ninth Circuit reversed and remanded solely as to Plaintiff's medical malpractice claim. The appellate court concluded:

"We reverse the district court's summary judgment as to Roach's medical malpractice claim, the sole remaining claim in the case. This means that the case, at least for the time being, remains in federal court. Yet, the only remaining claim is under state law. Removal of the case to federal court was proper because at that time the complaint contained a breach of contract claim which was completely preempted by the FEHBA. That breach of contract claim, however, has been dismissed. Therefore, assuming no other basis for federal jurisdiction exists, the district court may wish to consider remanding this case to state court. We leave that decision to the district court." Roach v. Mail Handlers Ben. Plan, 298 F.3d 847, 851 (9th Cir. 2002)

Defendants filed a motion for summary judgment that undisputed evidence establishes that Defendants' conduct was appropriate and within the applicable standard of care. Plaintiff then moved to remand the case to state court.

Argument

Plaintiff

Plaintiff moves to remand this case to state court because all federal causes of action have been dismissed and only the medical malpractice claim remains. The medical malpractice claim arises under state law. Thus, Plaintiff argues, this court has authority to remand this case to state court pursuant to 28 U.S.C. § 1447(c).

Defendants

Defendants urge this Court to exercise its discretion to retain jurisdiction over the medical malpractice cause of action in the interests of judicial economy and fairness. The case has been before this Court for almost three years and the parties have conducted discovery. Defendants also claim Plaintiff is still attempting to assert federal claims in spite [ Page 4]

of this court's previous ruling which was affirmed by the Ninth Circuit. The court has scheduled a settlement conference for December 9, 2003 and trial February 16, 2004.

Analysis

In this case, federal jurisdiction exists because all three requirements — personal jurisdiction, subject matter jurisdiction, and venue — are satisfied.

The requirements of federal personal jurisdiction in this district are met because Defendants had "minimum contacts" with California. International Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945) ("due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice").

In this case, Defendants are non-citizens but have "minimum contacts" with California because they contract with California residents to provide health insurance and medical services. Federal subject matter jurisdiction is satisfied by the parties' diversity of citizenship. 28 U.S.C. § 1332. Defendants originally removed to federal court by asserting federal question jurisdiction — the applicability of FEHBA — an issue that was later dropped on summary judgment. The sole remaining claim (for medical malpractice) arises under state law. Diversity provides another basis for federal subject matter jurisdiction. Plaintiff resides in California, all Defendants are non-residents, and the amount in controversy is greater than $75,000. Id.

Venue is proper because "a substantial part of the events or omissions giving rise to the claim occurred" in the Northern District of California. 28 U.S.C. § 1391(b)(2). Plaintiff injured her ankle, and the alleged medical malpractice transpired, within this district.

This court may remand this case to state court even though federal jurisdiction exists. When a federal case contains both state and federal claims, 28 U.S.C. § 1441(c) permits the district court to hear the whole case or, at its discretion, "remand all matters in which State law predominates." In the case at bar, all federal claims have been decided [ Page 5]

against Plaintiff on summary judgment and the sole remaining claim arises under state law. Thus, remanding the state claim transfers the entire case from this court.

Plaintiff incorrectly bases her remand motion on § 1447(c). This provision is only applicable where there is a lack of federal subject matter jurisdiction or improper removal procedure. In this case, federal subject matter jurisdiction exists by the parties' diversity of citizenship. The case was properly removed on the basis that FEHBA preempted the contract claims.

The correct basis for remanding this case to state court is § 1441(c) provides. Under this statute, this Court has discretion to decide whether to rule on the pendent state claims or remand them. This Court's decision to remand is guided by the principles of "economy, convenience, fairness, and comity." Carnegie-Mellon University v. Cohill, 484 U.S. 343, 357 (1988). The Court found that "in the usual case" the balance of factors will weigh toward remanding any remaining pendent state claims to state court. Id. at 350 n. 7.

With respect to judicial economy, although this Court is familiar with the general facts of this case, there has only been one substantive proceeding, the motion for summary judgment. The first case management conference was in February of 2000, this Court ruled on the motion for summary judgment on January 3, 2001, and the next eighteen months were consumed by the appeal. The parties have conducted discovery on the medical malpractice claim, but this bears little if any relationship to the issues decided in the previous motion for summary judgment. The parties would not have to duplicate any effort, and the state court judge would probably have to expend the same effort that this Court would to become familiar with the medical malpractice issues. Judicial economy favors remand.

Plaintiff's brief reference to "rationing" availability of health care in her opposition to Defendants' motion for summary judgment is insufficient to raise concerns about lingering federal claims. The state court will be able to interpret previous rulings by this court and the Ninth Circuit regarding federal issues, should any arise. [ Page 6]

With respect to fairness, Plaintiff filed this action initially in state court in the county where she lives and courts generally favor a plaintiffs choice of forum. Defendants inserted the federal question in their removal petition, as distinguished from the Harrell case, where the Ninth Circuit panel found that a plaintiff could not reasonably complain if a district court kept jurisdiction of their state law claims after they dismissed their federal claims. Harrell v. 20th Century Ins. Co., 934 F.2d 203 (9th Cir. 1991) (holding that plaintiff should not assert parallel federal right if he desires to remain in state court.) Id. at 205.

In the case at bar, Plaintiff did not assert any federal claims in her state court complaint; Defendants raised the FEHBA connection for the first time in their removal petition. Plaintiff should not be charged with seeking federal jurisdiction. Fairness also favors remand.

Finally, as a matter of comity, federal courts should avoid needless decisions of state law. Comity also favors remand.

For all the above reasons, Plaintiff's Motion to Remand to State Court is granted. Defendants' Motion for Summary Judgment is denied without prejudice and may be brought again before the state court. All dates in this case are hereby vacated.

IT IS SO ORDERED. [ Page 1]

20030821

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