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John Muir Health v. Cement Masons Health & Welfare Trust Fund for Northern California

United States District Court, N.D. California

September 24, 2014

JOHN MUIR HEALTH, Plaintiff,
v.
CEMENT MASONS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA, Defendant

Page 1011

For John Muir Health, a California non-profit public benefit corporation, Plaintiff: Ellen B. Kamon, LEAD ATTORNEY, Stephenson, Acquisto & Colman, Burbank, CA USA; Susannah Dasha Dahlberg, LEAD ATTORNEY, Barry Sullivan, Karlene Jasmine Rogers-Aberman, Melanie Joy Young, Richard Alan Lovich, Law Offices of Stephenson, Acquisto & Colman, Inc., Burbank, CA USA.

For Cement Masons Health And Welfare Trust Fund For Northern California, Defendant: Edward Douglas Winchester, LEAD ATTORNEY, Ronald Lee Richman, Bullivant Houser Bailey PC, San Francisco, CA USA; Susan J. Olson, LEAD ATTORNEY, Bullivant Hoser Bailey PC, San Francisco, CA USA.

Page 1012

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

THELTON E. HENDERSON, United States District Judge.

Plaintiff John Muir Health has moved to remand its case against Defendant Cement Masons Health and Welfare Trust Fund for Northern California. After carefully considering the parties' submissions and oral arguments, the court now GRANTS Plaintiff's motion to remand for the reasons set forth below.

Page 1013

BACKGROUND

On May 29, 2014, Plaintiff filed suit against Defendant in the Superior Court of the State of California, County of Contra Costa, for damages based on the state-law claims quantum meruit and breach of statutory duties (California Health & Safety Code Section 1371.4). On July 9, 2014, Defendant removed this matter to federal court under 28 U.S.C. § 1441 for putative federal question jurisdiction, on the basis that Plaintiff's claims are preempted by the Employment Retirement Income Security Act of 1974 (" ERISA" ). Notice of Removal (Docket No. 1). On August 8, 2014, Plaintiff filed a motion to remand the case to state court, contending that it asserts only state-law based causes of action that are independent of any ERISA-preempted claim for benefits. Mot. at 3-4 (Docket No. 10).

LEGAL STANDARD

When a case " of which the district courts of the United States have original jurisdiction" is initially brought in state court, a defendant may remove it to federal court under 28 U.S.C. § 1441(a). " If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). The district court may remand the case sua sponte or on the motion of a party; the party who invoked the federal court's removal jurisdiction has the burden of establishing federal jurisdiction. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921)). To protect the jurisdiction of state courts, removal jurisdiction is strictly construed in favor of remand. Harris v. Bankers Life and Cas. Co., 425 F.3d 689 (9th Cir. 2005). Any doubt as to the right of removal must be resolved in favor of remand to state court. Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992).

DISCUSSION

In the matter now before the Court, Defendant removed Plaintiff's claim on the mistaken belief that it gave rise to federal question jurisdiction. 28 U.S.C. § § 1331(a), 1441(a). Generally, the existence of federal jurisdiction must be determined on the face of the plaintiff's complaint. See Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). A " cause of action arises under federal law only when the plaintiff's well pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1973). However, the well-pleaded complaint rule does not apply where ERISA's complete preemption provision is implicated. Instead, where a complaint alleges only state-law claims, and those claims are entirely encompassed by ERISA's civil enforcement scheme under ERISA section 502(a), the complaint is converted from " an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Id. at 65-66. While the Court agrees with the Defendant that ERISA includes this exception to the well-pleaded complaint rule for complete preemption, it disagrees with Defendant's assertion that Plaintiff's causes of action are completely preempted.

A. Complete Preemption under ERISA

Traditionally, federal preemption is merely an affirmative defense to the enforcement of state law claims, displacing state law but does not providing federal question jurisdiction. Id. at 58, 63. ERISA offers such " conflict

Page 1014

preemption," in section 514(a). ERISA's conflict preemption provision preempts state laws that " relate to" ERISA-regulated employee benefit plans, except for state laws " regulating insurance." ERISA § 514(a). Like most preemption provisions, section 514(a) does not confer federal jurisdiction.

Conversely, section 501(a) of ERISA provides for the " complete preemption" of causes of action that allege violations of the statute. Unlike conflict preemption, complete preemption is " really a jurisdictional rather than a preemption doctrine, [as it] confers exclusive federal jurisdiction in certain instances where Congress intended the scope of a federal law to be so broad as to entirely replace any state-law claim." Franciscan Skemp Healthcare, Inc. v. Cent. States Joint Bd. Health & Welfare Trust Fund, 538 F.3d 594, 596 (7th Cir. 2008). In the seminal case of Metropolitan Life Insurance Co., the Supreme Court articulated the nature of complete preemption under section 502(a), explaining that Congress intended to " so completely pre-empt" this particular area of law, " that any civil complaint raising this select group of claims is necessarily federal in character." 481 U.S. at 63-64. Accordingly, complete preemption renders facially state-law based claims removable to federal court. Id. at 66. In deciding whether to remand this case to state court, the Court must determine whether Plaintiff's claims are completely preempted.

The analytical framework for complete ERISA preemption was provided by the Supreme Court in Aetna Health Inc. v. Davila, 542 U.S. 200, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004). In Davila, participants and beneficiaries of an ERISA-regulated employee benefit plan brought a state-law based suit in state court in response to the plan's denial of benefits. The plan removed the suit to federal court, arguing that the claims " fit within the scope of, and were therefore completely pre-empted by," section 502(a) of ERISA. Id. ...


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