United States District Court, N.D. California
ORDER DENYING MOTION TO REMAND Re: Dkt., No.
C. SPERO CHIEF MAGISTRATE JUDGE
Teresa Sheehan filed this action in the California Superior
Court for Contra Costa County, bringing four claims related
to the termination of her employment by Defendant Kaiser
Foundation Health Plan, Inc. (“Kaiser”), all
purportedly under state law. Kaiser removed to this Court
asserting federal subject matter jurisdiction based on
complete preemption under the Employee Retirement Income
Security Act (“ERISA”). Sheehan now moves to
remand on the basis that her claims are not subject to
complete preemption. The Court held a hearing on May 18,
2018. For the reasons discussed below, the motion to remand
Allegations of the Complaint
worked for Kaiser from December 3, 2012 until March 13, 2017,
most recently as a sales executive. Notice of Removal (dkt.
1) Ex. A (Compl.) ¶ 9. In the final months of her
employment, Sheehan candidly discussed with her supervisors
her need to care for her ailing father, including whether it
would be necessary for her to take a leave of absence to do
so. Id. ¶ 13. On January 12, 2017, Kaiser
informed Sheehan that her employment would be terminated
effective March 13 for reasons unrelated to her job
performance. Id. ¶ 10. Sheehan was fifty-six
years old at the time of her termination and had worked in
the workers' compensation field for more than thirty
years. Id. ¶ 9.
Kaiser's management and its human resources department
repeatedly told Sheehan that the termination would allow her
to spend time with her father. Id. ¶ 14.
Because Sheehan had not discussed her father's illness
with the human resources department, she believes that her
supervisors discussed it with human resources and that her
potential need for family medical leave contributed to the
decision to terminate her employment, as well as the decision
not to place Sheehan in an open senior account manager
position. Id. ¶¶ 14-15.
portion of Sheehan's compensation consisted of incentive
pay, which sales executives received one year after a deal
closed. Id. ¶ 11. Sheehan's termination
deprived her of approximately $70, 000 of incentive pay for
deals that she had substantially completed. Id. Of
particular to importance to the present motion, Sheehan also
alleges that “Kaiser timed [Sheehan's] termination
so as to occur approximately three months before the June 24,
2017, date on which [her] retirement benefits otherwise would
have vested, causing [her] enormous financial loss.”
Id. ¶ 12.
complaint includes four claims: (1) breach of the implied
covenant of good faith and fair dealing, id.
¶¶ 17-20; (2) age discrimination and harassment in
violation of the California Fair Employment and Housing Act
(“FEHA”), id. ¶¶ 21-31; (3)
discrimination, retaliation, and harassment based on family
medical leave in violation of the California Family Rights
Act (“CFRA”), id. ¶¶ 32-38;
and (4) wrongful termination in violation of public policy,
id. ¶¶ 39-45. Sheehan's first and
fourth claims are based in part on Kaiser's alleged
decision to terminate Sheehan to avoid paying pension
benefits. See Id. ¶ 18 (listing, as one form of
bad faith conduct, Kaiser “timing [Sheehan's]
termination so that such termination would be a mere
3½ months prior to the June 24, 2017, date on which
[her] Kaiser retirement benefits were scheduled to
vest”); id. ¶ 42 (listing, as one policy
violated by Sheehan's termination, “the public
policy prohibiting an employer from depriving an employee of
her retirement benefits via manipulating the employee's
termination date to occur shortly before the retirement
benefits vesting date, as set forth in the Employee
Retirement Income Security Act (‘ERISA'), 29
U.S.C.A. § 1022”).
Procedural History and Parties' Arguments
filed this action in state court on March 1, 2018. See
generally Compl. Kaiser removed to this Court on April
5, 2018, asserting that ERISA completely preempts “at
least some of [Sheehan's] claims, ” and
specifically noting Sheehan's allegations that Kaiser
terminated her for the purpose of depriving her of retirement
benefits. Notice of Removal ¶ 3.
attorney Andrea Bednarova emailed Sheehan's attorney
Daniel Bartley on Sunday, April 8, 2018 requesting the use of
his electronic signature for a stipulation that the parties
had reached but not filed while the case was in state court,
and stating that she “presume[ed] [he] had received the
Notice of Removal.” Bartley Decl. (dkt. 8) Ex. A.
Bartley responded the same day that he had been out of the
office the previous week, and asked Bednarova to email him
the removal documents, which Bednarova did the following
morning. Id. Bartley replied that afternoon with a
demand that Kaiser stipulate to remand the case
“without delay” on the grounds that Sheehan
asserted only state law claims and that “ERISA
preemption issues can be complicated, but understanding the
difference between complete and conflict preemption is
critical to the removal decision.” Id.
Bednarova responded that she was busy with other commitments
for the early part of the week but would review the cases
Bartley cited and respond by the end of the week.
Id. Bartley replied that he hoped another attorney
at Bednarova's firm could look into the issue because he
intended to file a motion to remand the next day, April 10,
which he in fact did. Id.; see generally
Mot. (dkt. 9).
present motion asserts that the case should be remanded based
on the test set forth in Aetna Health Inc. v.
Davila, 542 U.S. 200 (2004), where the Supreme Court
held that ERISA completely preempts claims where an “an
individual brings suit complaining of a denial of coverage
for medical care, where the individual is entitled to such
coverage only because of the terms of an ERISA-regulated
employee benefit plan, and where no legal duty (state or
federal) independent of ERISA or the plan terms is
violated.” Davila, 542 U.S. at 210;
see Mot. at 5. Sheehan argues that this case is
analogous to a Ninth Circuit decision holding that ERISA did
not preempt a claim for breach of contract where the
plaintiff hospital alleged that the defendant insurer failed
to honor an oral agreement to pay a certain amount for a
patient's treatment and instead paid a lower amount that
would have otherwise been due under the patient's ERISA
plan. Mot. at 5-6 (citing Marin Gen. Hosp. v. Modesto
& Empire Traction Co., 581 F.3d 941 (9th Cir.
2009)). Sheehan seeks remand and an award of reasonable
attorneys' fees. Id. at 7.
opposes remand, arguing that the Supreme Court's decision
in Ingersoll-Rand v. McClendon, 498 U.S. 133 (1990),
controls here, because the Court held in that case that a
state law claim for wrongful termination to avoid paying
retirement benefits was preempted by ERISA, and because the
Court reaffirmed the holding of Ingersoll-Rand in
its later Davila decision. Opp'n (dkt. 17) at
4-6. According to Kaiser, Sheehan's first and fourth
claims are preempted, and thus properly subject to removal,
because section 510 of ERISA prohibits terminating an
employee “‘for the purpose of interfering with
the attainment of any right to which such participant may
become entitled'” under an ERISA benefits plan.
Id. at 6 (quoting 29 U.S.C. ...