YOUNG, District Judge.
This case arises out of an alleged wrongful termination of an employee for the purpose of denying family medical benefits to the employee's seriously ill wife. The employee alleges five counts of state statutory or state common law claims against the employer. Originally commenced in the Superior Court of the Commonwealth of Massachusetts sitting in and for the County of Norfolk, the case was removed to this Court on the basis of federal question jurisdiction. The issue here is whether the case should be remanded to state court for lack of removal jurisdiction.
The plaintiff Marc Flagg ("Flagg") is a Massachusetts resident. Notice of Removal Ex. B ("Am. Compl.") ¶ 1, ECF No. 1. Ali-Med, Inc. ("Ali-Med") has its principal place of business in Massachusetts. Id. ¶ 2. Flagg was an employee of Ali-Med. His employment agreement included family medical insurance. Id. ¶¶ 3-4.
On or about February 4, 2008, Flagg was terminated from his employment with Ali-Med after eighteen years and despite good reviews. Id. ¶ 3. As a consequence of termination, Flagg's family medical insurance terminated immediately. Id. ¶ 18.
At a hearing before the Department of Unemployment Assistance, Ali-Med testified that it knew Flagg was not punching out for an extended period of time, had never fired anybody for this kind of behavior, and did not warn Flagg about it. Id. ¶ 8. The hearing officer found that Flagg's behavior was not conscious or deliberate wrongdoing. Id. ¶ 17. According to Flagg, the allegation that he was fraudulently claiming hours worked became known amongst fellow workers and the community at large. Id. ¶ 19.
Flagg's Amended Complaint includes five counts, all claiming state common law or statutory causes of action. Count I is a claim for breach of contract due to Ali-Med's wrongful termination of Flagg's employment. Am. Compl. ¶¶ 22-24. Count II is a claim for defamation due to Ali-Med's false allegations about Flagg fraudulently claiming hours worked. Id. ¶¶ 25-27. Count III alleges "unlawful practices and/or violations of certain statutes all under the jurisdiction of the Massachusetts Commission Against Discrimination, including Massachusetts General Laws chapter 151B." Id. ¶¶ 28-31. Count IV is a claim for intentional infliction of emotional distress because Ali-Med's conduct was outrageous and beyond accepted standards. Id. ¶¶ 32-34. Count V is a claim for fraud and deceit arising out of false claims by Ali-Med regarding the reasons for Flagg's termination. Id. ¶¶ 35-37.
On June 14, 2010, Ali-Med filed a Notice of Removal. Notice of Removal, ECF No. 1. On June 21, Ali-Med filed a motion to dismiss the Amended Complaint or, in the alternative, to strike portions of the Amended Complaint. The crux of Ali-Med's argument is that Counts I (breach of contract) and IV (intentional infliction of emotional distress) are preempted by the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq. ("ERISA") and that Flagg has not sufficiently pled essential elements of the remaining causes of action in Counts II, III, and V. Mem. Supp. Mot. Dismiss at 2, ECF No. 2. Ali-Med also moves to strike all references to the unemployment hearing from the Amended Complaint on the ground of privilege. Id.
On July 6, Flagg filed an opposition to Ali-Med's motion to dismiss and a motion to remand the case to state court.
According to the removal statute, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant" to federal court. 28 U.S.C. § 1441(a). One type of case over which the federal district courts have original jurisdiction is one "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.
Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (emphasis added) (internal citations omitted). See also Great N. Ry. Co. v. Alexander, 246 U.S. 276, 282, 38 S.Ct. 237, 62 L.Ed. 713 (1918) ("[T]he plaintiff may by the allegations of his complaint determine the status with respect to removability of a case.").
In his Motion to Remand, Flagg makes two arguments challenging the removal: (1) removal was not done within the thirty-day period required by 28 U.S.C. § 1446, Mot. Remand at 1-4, ECF No. 8; and (2) the Complaint does not assert any federal claims, id. at 6. Instead of focusing on the timeliness of the removal, this Court directly addresses the basis of the removal.
As master of the Amended Complaint, Flagg chose not to bring any federal claims, only state statutory and common law claims. By not presenting a federal question on the face of the Amended Complaint, Flagg is entitled to "avoid federal jurisdiction by exclusive reliance on state law." Caterpillar, 482 U.S. at 392, 107 S.Ct. 2425. In its memorandum of law supporting its motion to dismiss, Ali-Med does not dispute the state law nature of all five of Flagg's causes of action.
It is important to distinguish between conflict preemption and complete
In the ERISA context, the scope of conflict preemption is not contiguous with the scope of complete preemption—the latter is understandably much narrower.
In Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists and Aerospace Workers, 390 U.S. 557, 560, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968), the Supreme Court ruled that section 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185, triggers complete preemption. Id. at 560, 88 S.Ct. 1235. "The necessary ground of decision [in Avco] was that the preemptive force of § 301 is so powerful as to displace entirely any state cause of action `for violation of contracts between an employer and a labor organization.'" Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 23, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). Relying on the close linguistic parallels between section 301 of the LMRA and section 502(a) of ERISA, as well as the clear congressional intent "to make causes of action
Due to its conflation of complete preemption and conflict preemption, Ali-Med does not address the essential issue of whether Flagg's state law claims fall within the scope of section 502(a). Ali-Med's conflation of the two categories of preemption also causes it to contend that Flagg's breach of contract
Sonoco Prods. Co. v. Physicians Health Plan, 338 F.3d 366, 371 (4th Cir.2003). See also Andrews-Clarke, 984 F.Supp. at 55 n. 24 ("Not every state law claim that is preempted by section 514(a) of ERISA, 29 U.S.C. § 1144(a), is subject to removal to federal court under the complete preemption exception to the well-pleaded complaint rule.") (citing Taylor, 481 U.S. at 63-66, 107 S.Ct. 1542). A separate analysis needs to be conducted to determine if Flagg's state law claims fall within the scope of section 502(a). As the following discussion shows, they do not.
Section 502(a) lays out the numerous causes of action arising under ERISA. 29 U.S.C. § 1132(a). Flagg's state law claims clearly do not fall within the scope of any of these causes of action. See 29 U.S.C. § 1132(a)(1)(A) (failure to provide requested information or annual report); § 1132(a)(2) (breach of fiduciary duty); § 1132(a)(3) (equitable
The only ERISA provision that appears to cover Flagg's wrongful termination and breach of contract claim (Count I) is section 510, 29 U.S.C. § 1140. Section 510 of ERISA is an anti-retaliation provision which makes it "unlawful for any person to
In oral argument, Ali-Med's counsel attempted to draw parallels between this case and an earlier decision of this Court, Andrews-Clarke v. Travelers Ins. Co., 984 F.Supp. 49 (D.Mass.1997). In that case, an ERISA plan participant brought various state law claims
As the master of its Amended Complaint, Flagg chose not to present any federal claims. Further, Flagg's state law claims fall outside the scope of section 502(a) of ERISA and are therefore not transformed into federal claims by that section's "extraordinary pre-emptive power." Accordingly, this Court lacks removal jurisdiction over the present case. Flagg's Motion to Remand [ECF No. 8] is
SO ORDERED.
In a recent article, Peter Stris quoted "[a] now-infamous memorandum written by a disability insurance executive," which neatly illustrates the effect of ERISA preemption:
Peter K. Stris, ERISA Remedies, Welfare Benefits, and Bad Faith: Losing Sight of the Cathedral, 26 Hofstra Lab. & Emp. L.J. 387, 389 n. 14 (2008) (citing Memorandum from Jeff McCall to IDC Mgmt. Group & Glenn Felton (Oct. 2, 1995), available at http://www.erisa-claims.com/library/Provident% 20memo.pdf).