Removing a Preempted Action to Federal Court

Posted By Stephen D. Rosenberg In Removal
0 Comments
Permalink | print this article

Removal should be easy. If a complaint filed in state court shows federal jurisdiction, the case can be removed. You file your papers, pay your fees, and you get the plusher courthouses of the federal system (and whatever other benefits from removal you think will accrue to you from your decision).

ERISA cases filed in state court can pose a little twist on this, however. This is because a plaintiff can plead a cause of action under state law against the plan or its administrator without ever referencing or relying on ERISA. In so doing, the face of the complaint ends up alleging only state law causes of action, and does not reflect a basis for federal jurisdiction. However, the state law claim is often preempted by ERISA and therefore cannot proceed. Federal courts have developed a body of law on the subject of removal that resolves this problem, and allows such a lawsuit, despite the absence of any express federal cause of action, to be removed to federal court. The United States District Court for the District of Puerto Rico recently summed up the rules on this in a nice tidy package, in Beniquez v. Pfizer Corp., 2006 WL 752994 (D.Puerto Rico Mar 21, 2006) (NO. CIV. 05-1269 (HL)). The court stated:

Ordinarily, the determination of whether a particular case arises under federal law turns on the "well-pleaded complaint" rule. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 9-10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). Under the well-pleaded complaint rule, jurisdiction is ascertained from the face of the state court complaint that triggered the removal. Danca v. Private Health Care Systems, Inc., 185 F.3d 1, 4 (1st Cir.1999) (citing Franchise Tax Bd., 463 U.S. at 9-10.). However, there is an exception to the well-pleaded complaint rule. "Where a claim, though couched in the language of state law, implicates an area of federal law for which Congress intended a particularly powerful preemptive sweep, the cause is deemed federal no matter how pleaded." Id. (citing Taylor, 481 U.S. at 63-64). In other words, " 'when a federal statute wholly displaces the state-law cause of action through complete pre-emption,' the state claim can be removed." Aetna Health Inc. v. Davila, 542 U.S. 200, 124 S.Ct. 2488, 2495, 159 L.Ed.2d 312 (2004). ERISA is precisely one of these federal statutes. Id.; see also Hotz v. Blue Cross & Blue Shield of Mass., Inc., 292 F.3d 57, 59 (1st Cir.2002) (ERISA's civil enforcement provisions, ERISA 502(a), have been interpreted to establish federal removal jurisdiction over any state law claims that in substance seek relief that is otherwise within the scope of those ERISA remedy provisions.)