Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00885/USCOURTS-casd-3_16-cv-00885-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JAMES HELDT,

Plaintiff,

Case No. 16-cv-00885-BAS-NLS

ORDER REGARDING SUBJECT 

MATTER JURISDICTION

v.

GUARDIAN LIFE INSURANCE 

COMPANY OF AMERICA,

Defendant.

This action arises out of Defendant Guardian Life Insurance Company of 

America allegedly disclosing Plaintiff James Heldt’s confidential medical 

information without his consent. Previously, the Court exercised jurisdiction over 

this case because it determined Plaintiff’s claim for breach of an employee benefit 

plan was completely preempted by the Employee Retirement Income Security Act of 

1974 (“ERISA”). (ECF No. 24.) The Court also dismissed this claim with leave to 

amend. (Id.) Plaintiff then filed a First Amended Complaint, but he declined to amend 

his breach of contract claim or plead a claim under ERISA. (See ECF No. 25.) Rather, 

Plaintiff’s amended pleading eliminates the breach of contract claim that provided a 

basis for federal question jurisdiction under ERISA’s complete preemption doctrine. 

(See id.) Consequently, the Court ordered the parties to show cause as to why it 

should not remand Plaintiff’s remaining claims to state court. (ECF No. 29.) As 

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explained below, the Court concludes it lacks the ability to remand these claims and 

therefore orders Defendant to respond to Plaintiff’s amended pleading. 

Under 28 U.S.C. § 1441(a), a defendant may remove to federal court “any civil 

action brought in a State court of which the district courts of the United States have 

original jurisdiction.” “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). This remand provision, however, does not require the court to remand state 

law claims if the basis for federal jurisdiction is eliminated before trial following 

removal. See Albingia Versicherungs A.G. v. Schenker Int’l Inc., 344 F.3d 931, 936 

(9th Cir. 2003) (“Where removal was proper, but the federal question claim is 

defeated on the merits, the district court nevertheless may in its discretion retain 

supplemental jurisdiction over the state law claims.”), amended at 350 F3d 916. 

Rather, the court has “discretion either to retain jurisdiction to adjudicate the 

[supplemental] state claims or to remand them to state court.” Harrell v. 20th Century 

Ins. Co., 934 F.2d 203, 205 (9th Cir. 1991); accord Carlsbad Tech., Inc. v. HIF Bio, 

Inc., 556 U.S. 635, 639 (2009).

That said, the court does not have discretion to remand state law claims if there 

is an independent basis for subject matter jurisdiction over the claims—such as 

diversity jurisdiction. See Williams v. Costco Wholesale Corp., 471 F.3d 975, 977 

(9th Cir. 2006) (per curiam); see also, e.g., Ramirez v. Bank of Am. Corp., No. CV

09-07788 DDP SSX, 2009 WL 5184480, at *1 (C.D. Cal. Dec. 22, 2009); Charles 

Alan Wright et al., Federal Practice and Procedure § 3739 (4th ed. 2017) 

(“Nevertheless, the exercise of jurisdiction over claims supported by an independent 

basis of federal subject-matter jurisdiction in removed cases ordinarily is mandatory, 

so that discretionary remand of such claims ordinarily is prohibited.”). Further, after 

“a case has been properly removed, the district court has jurisdiction over it on all 

grounds apparent from the complaint, not just those cited in the removal notice.” 

Williams, 471 F.3d at 977. In addition, “post-removal pleadings must be treated just 

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as they would be in a case originally filed in federal court.” Id. Thus, if an amended 

pleading in a properly removed case presents “an independent jurisdictional basis for 

the state law claims,” the district court has “no discretion to remand these claims to 

state court.” Id.

In this case, Defendant argues for the first time in its response to the Court’s 

order to show cause that diversity jurisdiction provides an independent basis for

subject matter jurisdiction over Plaintiff’s remaining state law claims. (ECF No. 30.) 

To support this position, Defendant provides a stipulation between the parties that 

“the amount in controversy” in this case “exceeds the sum or value of $75,000.” (ECF 

No. 30-2.)1 Defendant also submits that it is incorporated in the State of New York,

and the company’s principal place of business is also in New York because that is 

where Defendant’s “senior management . . . direct, control, and coordinate” its

activities. (Mineo Decl. ¶ 1, ECF No. 30-3.)

The Court agrees that diversity provides a basis for jurisdiction over Plaintiff’s 

remaining state law claims in his First Amended Complaint. The issue before the 

Court is not whether jurisdiction existed at the time of removal—the Court already 

concluded removal was proper based on complete preemption under ERISA. Rather, 

now that Plaintiff has filed an amended pleading and has eliminated the claim that 

served as a basis for federal question jurisdiction, the Court must determine whether 

an independent basis for jurisdiction over Plaintiff’s remaining claims currently 

exists. See Williams, 471 F.3d at 977 (“Any post-removal pleadings must be treated 

just as they would be in a case originally filed in federal court.”). It does. The parties 

agree that the amount in controversy exceeds $75,000, and there is complete diversity 

of citizenship because Plaintiff is a citizen of California and Defendant is only a 

 

1 Defendant also includes with its response a settlement communication from Plaintiff’s 

counsel indicating Plaintiff believes the amount in controversy significantly exceeds $75,000. (See 

Nalty Decl. ¶ 1, Ex. A, ECF No. 30-6.) 

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citizen of New York. (See Mineo Decl. ¶ 1; First Am. Compl. ¶¶ 1–2.) Thus, the 

requirements for diversity jurisdiction are satisfied. See 28 U.S.C. § 1332(a); see also, 

e.g., Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). Because the Court has 

diversity jurisdiction over the state law claims asserted in Plaintiff’s First Amended 

Complaint, the Court has “no discretion” to decline to exercise jurisdiction over and 

“remand these claims to state court.” See Williams, 471 F.3d at 977.

Further, Plaintiff’s objection to Defendant’s response to the Court’s order to 

show cause does not change this outcome. Plaintiff argues Defendant’s response 

improperly raises “issues already decided by the Court,” given that the Court 

previously forecast that it would remand Plaintiff’s remaining state law claims if he 

filed a pleading that did not raise a federal issue. (ECF No. 31.) The Court 

acknowledges this inconsistency. But the parties did not raise the issue of diversity 

jurisdiction in their prior motions regarding subject matter jurisdiction, and the Court 

similarly did not examine the issue until it was considering remanding the claims 

presented in Plaintiff’s First Amended Complaint. Recognizing that it may have 

diversity jurisdiction over Plaintiff’s remaining claims, the Court issued an order to 

show cause in lieu of remanding Plaintiff’s claims sua sponte. Now that diversity 

jurisdiction has been established, the Court “has a virtually unflagging obligation to 

exercise the jurisdiction conferred upon [it].” See Williams, 471 F.3d at 977 (internal 

quotation marks omitted). Accordingly, notwithstanding that the Court previously 

forecast otherwise, the Court will not remand the claims raised in Plaintiff’s First 

Amended Complaint.

In light of the foregoing, the Court ORDERS Defendant to file a response to 

Plaintiff’s First Amended Complaint no later than June 12, 2017.

IT IS SO ORDERED.

DATED: June 5, 2017

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