December 16, 2013
FRANCESO ISOLANI, M.D., et al., Plaintiff,
HIGHLAND GENERAL HOSPITAL, et al., Defendants.
ORDER TO SHOW CAUSE TO DEFENDANTS RE: SUBJECT MATTER JURISDICTION
JACQUELINE SCOTT CORLEY, Magistrate Judge.
Plaintiffs brought this state-law employment action against Defendants in the Superior Court of California for the County of Alameda seeking, among other things, civil penalties and back pay arising out of Defendants' alleged misclassification of Plaintiffs as independent contractors rather than employees. Defendants subsequently removed the action to this Court on the basis of federal question jurisdiction.
Defendants, as the parties seeking removal to this federal court, bear the burden of establishing that subject matter jurisdiction exists, and courts strictly construe the removal statute against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir. 1992). Further, when a case is removed to federal court, the court has an independent obligation to satisfy itself that it has federal subject matter jurisdiction. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004). The Court has reviewed the Notice of Removal and has determined that there is a significant question as to whether federal question jurisdiction exists.
"Federal question jurisdiction exists only when a federal question exists on the face of a well-pleaded complaint." ING Bank, FSB v. Pineda, 2012 WL 2077311, at *1 (N.D. Cal. June 8, 2012). The removed complaint makes only state law claims. (Dkt. No. 1, p. 5.) Specifically, Plaintiffs allege claims under the California Labor Code, the California Business and Professions Code, as well as claims for declaratory relief and breach of the implied covenant of good faith and fair dealing. ( Id. ) The Notice of Removal states that federal question jurisdiction exists pursuant to the Employee Retirement Income Security Act ("ERISA"). Defendants reason that Plaintiffs' claims are governed by ERISA because Plaintiffs allege "that Defendants willfully avoided paying Plaintiffs monetary sums owed them for medical insurance." ( Id. at p. 2.) The Court is not yet persuaded that Plaintiffs' claims for lost wages and benefits-a typical state-law wage-and-hour dispute, in other words-is governed by ERISA. See Acosta v. AJW Const., 2007 WL 4249852, at *4 (N.D. Cal. Nov. 30, 2007) (remanding action and concluding that plaintiffs' claims for accrued vacation time under the Labor Code were not governed by ERISA since defendants had not shown that the benefit plan fell within ERISA, and even if it did fall within ERISA, "Plaintiffs' claims for unpaid wages accrued during paid time off appear to require little more than cursory consultation with the collective bargaining agreement").
Accordingly, Defendants are ORDERED to SHOW CAUSE as to why this Court has subject matter jurisdiction. Defendants shall file a response in writing by January 7, 2014 that demonstrates why this Court has jurisdiction. Plaintiffs' response, if any, must be filed by January 13, 2014.
The Court also reschedules the hearing on Defendants' motions to dismiss and strike to January 16, 2014 at 9:00 a.m.
IT IS SO ORDERED.