Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00885/USCOURTS-casd-3_16-cv-00885-0/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

---

– 1 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JAMES HELDT,

Plaintiff,

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

ORDER:

(1)DENYING PLAINTIFF’S 

MOTION TO REMAND; AND

(2)GRANTING DEFENDANT’S 

MOTION TO DISMISS 

[ECF Nos. 15, 16]

v.

GUARDIAN LIFE INSURANCE 

COMPANY OF AMERICA,

Defendant.

Plaintiff James Heldt commenced this action in state court against Defendant 

Guardian Life Insurance Company of America. As part of his employment, Plaintiff 

participated in a group insurance plan that provided long-term disability insurance 

benefits. He is now suing the administrator of the plan, Defendant, for breaching the 

plan and allegedly disclosing his confidential medical information without his 

consent.

Defendant removed this action to federal court, arguing this case arises under 

the Employee Retirement Income Security Act of 1974 (“ERISA”). The parties have 

since filed competing motions that dispute whether ERISA is applicable. Plaintiff 

seeks an order remanding this action to state court on the basis that this Court lacks 

subject matter jurisdiction over the dispute because ERISA does not apply. (ECF No. 

16.) Separately, Defendant moves to dismiss Plaintiff’s claims on the grounds that 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 1 of 19
– 2 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ERISA applies to this case and therefore preempts all of Plaintiff’s state law causes 

of action. (ECF No. 15.)

The Court finds these motions suitable for determination on the papers 

submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). 

For the following reasons, the Court DENIES Plaintiff’s motion to remand and 

GRANTS Defendant’s motion to dismiss.

I. BACKGROUND

A. Plaintiff’s Allegations

Plaintiff alleges he was covered by a group insurance plan administered by 

Defendant that provided long-term disability insurance benefits. (Compl. ¶ 14.) At 

some point, Plaintiff submitted a claim to Defendant for disability benefits under the 

insurance policy. (Id.) As part of the disability claims process, Plaintiff provided 

confidential information to Defendant, “including his name, personal information, 

social security number, age, address, and health information.” (Id.) 

In April 2015, Defendant hired “a private investigator to conduct a 1-2 day 

surveillance of Plaintiff.” (Compl. ¶ 17.) Plaintiff’s file with Defendant allegedly 

“contains a surveillance report and surveillance video purportedly prepared in April 

2015 by the private investigator hired by [Defendant].” (Id.) This report contains a 

description of Plaintiff’s medical diagnosis and other medical information. (Id.)

In early June 2015, Shaunte W. Austin, a Disability Management Coordinator 

with Select Medical in Birmingham, Alabama, contacted Plaintiff. (Compl. ¶¶ 10, 

18.) Ms. Austin informed Plaintiff that Defendant had requested Select Medical 

perform a functional capacity evaluation on Plaintiff—an examination that evaluates 

Plaintiff’s capacity to perform work-related activities. (See id.) This evaluation was 

to be conducted at Select Physical Therapy, a division of Select Medical located in 

San Diego, California. (Id. ¶¶ 9, 18.)

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 2 of 19
– 3 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Ms. Austin then allegedly asked Plaintiff “personal medical questions that she 

represented” were part of a questionnaire for the functional capacity evaluation. 

(Compl. ¶ 18.) She requested Plaintiff “send confidential medical documentation as 

to his condition with her.” (Id.) Plaintiff requested an accommodation for the 

evaluation on account of his disability, and Ms. Austin allegedly represented that she 

was working with Defendant and had the authority to facilitate Plaintiff’s request. 

(Id.) Plaintiff therefore provided her with “protected medical information and 

documentation.” (Id.) He asserts he “had an expectation he was working with 

[Defendant] and was not revealing private information to a party with no duty to 

protect such information.” (Id.)

Thereafter, Ms. Austin allegedly forwarded two e-mails from Plaintiff to one 

of Defendant’s employees who is a Vocational Rehabilitation Specialist on the 

Professional Resources Team in Defendant’s Group Life, Absence, and Disability 

Management Solutions Department. (Compl. ¶¶ 8, 19.) This employee then 

forwarded the e-mails to two other employees, a Long Term Disability Claims 

Administrator and a Long Term Disability Consultant. (Id. ¶¶ 4–5, 19.) The e-mails 

allegedly contained “medical information and discussion of a phone call from Austin 

to Plaintiff during which medical information was requested.” (Id. ¶ 19.) 

In addition, Plaintiff alleges one of Defendant’s employees sent to Select 

Physical Therapy the aforementioned surveillance report on Plaintiff. (Compl. ¶ 20.) 

Plaintiff alleges the “individual in the surveillance video taken by [Defendant’s] 

private investigator is not Plaintiff.” (Id.) 

Plaintiff states he “reported to Defendant the unauthorized release of Plaintiff’s 

confidential medical and personal information to Austin and Select Physical Therapy. 

In response, Defendant did nothing.” (Compl. ¶ 21.) Further, after he reported to 

Defendant the “improper disclosure of Plaintiff’s medical and personal information,

Plaintiff alleges that Defendant, rather than investigate the breach, wrongfully 

terminated Plaintiff’s policy with Defendant on or about June 14, 2015.” (Id. ¶ 22.)

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 3 of 19
– 4 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Based on the foregoing, Plaintiff brings claims against Defendant for: (1) 

violation of California’s Confidentiality of Medical Information Act, Cal. Civ. Code 

§§ 56–56.37; (2) breach of contract; (3) negligence; and (4) invasion of privacy. 

(Compl. ¶¶ 23–59.) 

B. The Policy

In support of its position that ERISA applies to this dispute, Defendant submits 

the following. Plaintiff was an employee of M Resort, and he therefore participated 

in M Resort’s employee welfare benefit plan. (Heffelinger Decl. ¶¶ 2–3, ECF No. 15-

2.) Defendant issued an Employer Rider (“Policy”) to M. Resort under Group Plan 

Number G-00439083-IC that was in effect during the events underlying this action. 

(Id. ¶ 1, Ex. 1.) The Policy provides for, among other things, disability income 

replacement coverage to participants in the employee welfare benefit plan. (See 

generally Policy, ECF Nos. 15-4 to 15-5.) Further, the Policy expressly provides 

employees are “entitled to certain rights and protections under the Employee 

Retirement Income Security Act of 1974 (ERISA).” (Id. at 135.) 

II. ANALYSIS

A. Subject Matter Jurisdiction

Plaintiff moves for an order remanding this action to state court for lack of 

subject matter jurisdiction. (ECF No. 16.) 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.” Federal question 

jurisdiction, one type of original jurisdiction, exists when a civil action arises “under 

the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Here, 

Defendant’s Notice of Removal invokes this type of jurisdiction. (Notice of Removal 

¶ 3, ECF No. 1.)

//

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 4 of 19
– 5 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1. Well-Pleaded Complaint Rule

Whether federal question jurisdiction exists typically “turns on the ‘wellpleaded complaint’ rule.” Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004) 

(quoting Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Tr. for S. Cal., 463 

U.S. 1, 9–10 (1983)). Under this rule, “federal jurisdiction exists only when a federal 

question is presented on the face of the plaintiff’s properly pleaded complaint.” 

Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). “In particular, the existence 

of a federal defense normally does not create statutory ‘arising under’ jurisdiction, 

and ‘a defendant may not [generally] remove a case to federal court unless 

the plaintiff’s complaint establishes that the case “arises under” federal law.’ ” 

Davila, 542 U.S. at 207 (alteration in original) (citation omitted) (citing Louisville & 

Nashville R. Co. v. Mottley, 211 U.S. 149 (1908); Franchise Tax Bd., 463 U.S. at 10). 

The well-pleaded complaint rule is not absolute, however. Davila, 542 U.S. at 

207. “ ‘[W]hen a federal statute wholly displaces the state-law cause of action through 

complete pre-emption,’ the state claim can be removed.” Id. (alteration in original) 

(quoting Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8 (2003)). Removal is 

appropriate in these circumstances because “[w]hen the federal statute completely 

pre-empts the state-law cause of action, a claim which comes within the scope of that 

cause of action, even if pleaded in terms of state law, is in reality based on federal 

law.” Id. at 207–08 (alteration in original) (quoting Anderson, 539 U.S. at 8). “ERISA 

is one of these statutes.” Id. at 208; see also Fossen v. Blue Cross & Blue Shield of 

Mont., Inc., 660 F.3d 1102, 1107 (9th Cir. 2011) (“Ordinarily, federal question 

jurisdiction does not lie where a defendant contends that a state-law claim is 

preempted by federal law. But state-law claims may be removed to federal court if 

the ‘complete preemption’ doctrine applies.” (citations omitted)). 

//

//

//

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 5 of 19
– 6 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2. Complete Preemption under ERISA

“Congress enacted ERISA to ‘protect . . . the interests of participants in 

employee benefit plans and their beneficiaries’ by setting out substantive regulatory 

requirements for employee benefit plans and to ‘provid[e] for appropriate remedies, 

sanctions, and ready access to the Federal courts.’ ” Davila, 542 U.S. at 208 (quoting 

29 U.S.C. § 1001(b)). Therefore, ERISA’s purpose “is to provide a uniform 

regulatory regime over employee benefit plans.” Id.

To accomplish this purpose, ERISA includes “expansive pre-emption 

provisions” that are designed to “ensure that employee benefit plan regulation ‘would 

be exclusively a federal concern.’ ” Davila, 542 U.S. at 208 (quoting Alessi v. 

Raybestos–Manhattan, Inc., 451 U.S. 504, 523 (1981)). Further, ERISA provides a 

comprehensive civil enforcement mechanism that is the “exclusive remedy for rights 

guaranteed under ERISA.” Ingersoll–Rand Co. v. McClendon, 498 U.S. 133, 144 

(1990). “This integrated enforcement mechanism, ERISA § 502(a), 29 U.S.C. § 

1132(a), is a distinctive feature of ERISA, and essential to accomplish Congress’ 

purpose of creating a comprehensive statute for the regulation of employee benefit 

plans.” Davila, 542 U.S. at 208. In summarizing ERISA § 502(a), the Supreme Court

noted:

the detailed provisions of § 502(a) set forth a comprehensive civil 

enforcement scheme that represents a careful balancing of the need for 

prompt and fair claims settlement procedures against the public interest 

in encouraging the formation of employee benefit plans. The policy 

choices reflected in the inclusion of certain remedies and the exclusion 

of others under the federal scheme would be completely undermined if 

ERISA-plan participants and beneficiaries were free to obtain remedies 

under state law that Congress rejected in ERISA. “The six carefully 

integrated civil enforcement provisions found in § 502(a) of the statute 

as finally enacted . . . provide strong evidence that Congress 

did not intend to authorize other remedies that it simply forgot to 

incorporate expressly.”

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987) (quoting Mass. Mut. Life Ins. 

Co. v. Russell, 473 U.S. 134, 146 (1985)). “Therefore, any state-law cause of action 

that duplicates, supplements, or supplants the ERISA civil enforcement remedy 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 6 of 19
– 7 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

conflicts with the clear congressional intent to make the ERISA remedy exclusive 

and is therefore pre-empted.” Davila, 542 U.S. at 209.

To illustrate, in Aetna Health Inc. v. Davila, 542 U.S. 200, 205–06 (2004), the 

plaintiffs brought separate suits in Texas state court against the administrators of 

ERISA-regulated employee benefit plans. Both plaintiffs suffered injuries allegedly 

arising from the plan administrators’ decisions to not provide coverage for treatment

or services recommended by the plaintiffs’ treating physicians. Davila, 542 U.S. at 

204–05. The plaintiffs claimed the administrators failed to exercise ordinary care in 

handling coverage decisions in violation of a duty imposed by the Texas Health Care 

Liability Act, Tex. Civ. Prac. & Rem. Code Ann. §§ 88.001–88.003. Id. at 204–05.

The plan administrators removed the cases to federal court, arguing that the plaintiffs’ 

causes of action fell under the scope of ERISA’s enforcement mechanism, ERISA § 

502(a), and were therefore completely preempted. Id. at 205. 

A unanimous Supreme Court agreed. Davila, 542 U.S. at 204. The Supreme 

Court reasoned that the only relationship between the plaintiffs and the defendants

was the defendants’ administration of the employee benefit plans in which the 

plaintiffs participated. Id. at 211. Further, the Court rejected the plaintiffs’ contention 

that “the complained-of actions violate legal duties that arise independently of ERISA 

or the terms of the employee benefit plans at issue.” Id. at 212. The plaintiffs’ claims 

did not implicate legal duties that arise independently of ERISA because, although 

the plaintiffs sued under a state statute, “interpretation of the terms of [the plaintiffs]’

benefit plans forms an essential part of their [state law] claim, and [state law] liability 

would exist here only because of [the defendants]’ administration of ERISAregulated benefit plans.” Id. at 213–14. 

The Supreme Court also disapproved of the Fifth Circuit’s emphasis on 

whether the plaintiffs’ claims sounded in tort or contract. Davila, 542 U.S. at 214. It 

rationalized that “distinguishing between pre-empted and non-pre-empted claims 

based on the particular label affixed to them would ‘elevate form over substance and 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 7 of 19
– 8 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

allow parties to evade’ the pre-emptive scope of ERISA simply ‘by relabeling their 

contract claims as claims for tortious breach of contract.’ ” Id. (quoting AllisChalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985)). “Nor can the mere fact that the 

state cause of action attempts to authorize remedies beyond those authorized by 

ERISA § 502(a) put the cause of action outside the scope of the ERISA civil 

enforcement mechanism.” Id. at 214–15. Accordingly, the Supreme Court held 

ERISA completely preempted the plaintiffs’ claims, and the cases were therefore 

removable to federal court. Id. at 215–22. 

Thus, Davila demonstrates that complete preemption under ERISA § 502 is 

more of a jurisdictional doctrine, as opposed to simply a preemption doctrine. Marin 

Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 945–47 (9th Cir. 2009).

A defendant seeking to justify removal on this basis must show that at least one of 

the state law causes of action is completely preempted by ERISA § 502(a). See id. at 

945; see also Abraham v. Norcal Waste Sys., Inc., 265 F.3d 811, 819 (9th Cir. 2001) 

(“Plaintiffs’ complaint did not facially assert any federal claim; therefore, the original 

subject matter jurisdiction required to support removal exists only if ERISA 

completely preempted any of the state law claims.”), abrogated by Davila, 542 U.S. 

at 214 n.4, 217–18, on other grounds as recognized by Fossen, 660 F.3d at 1112.

Following Davila, the Ninth Circuit has “distilled a two-part test for 

determining whether a state-law claim is completely preempted by ERISA § 502(a).” 

Fossen, 660 F.3d at 1107. A state-law claim is completely preempted if (1) “an 

individual, at some point in time, could have brought the claim under ERISA § 

502(a)(1)(B),” and (2) “there is no other independent legal duty that is implicated by 

a defendant’s actions.” Id. at 1107–08 (quoting Marin Gen. Hosp., 581 F.3d at 946). 

“Because this ‘two-prong test . . . is in the conjunctive[,] [a] state-law cause of action 

is preempted by § 502(a)(1)(B) only if both prongs of the test are satisfied.’ ” Id. at 

1108 (alterations in original) (quoting Marin Gen. Hosp., 581 F.3d at 947). Further, 

although Davila discussed complete preemption under ERISA “by reference to § 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 8 of 19
– 9 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

502(a)(1)(B) but not the other subparts of § 502(a),” the “doctrine applies to the other 

subparts of § 502(a) as well.” Id. (citing Metro. Life, 481 U.S. at 66).

Here, Defendant argues that removal was proper because all of Plaintiff’s state 

law claims are completely preempted by ERISA. (ECF No. 15 at 1:22–3:28.) As 

indicated, federal question jurisdiction exists if at least one of Plaintiff’s claims is 

completely preempted. See Fossen, 660 F.3d at 1109. Thus, the Court must “apply 

the two-part Davila test to determine whether ERISA § 502(a) completely preempts” 

any of Plaintiff’s claims. See id.; see also Melamed v. Blue Cross of Cal., 557 F. 

App’x 659, 661 (9th Cir. 2014) (“We evaluate whether an individual claim is 

completely preempted. If it is, the existence of other nonpreempted claims will not 

save the case from federal removal jurisdiction.”).

a. Breach of Contract

(1) First Davila Prong

The Court starts with Plaintiff’s breach of contract claim because the Court 

ultimately concludes only this claim is completely preempted by ERISA. “The 

question under the first prong of Davila is whether a plaintiff seeking to assert a statelaw claim ‘at some point in time, could have brought [the] claim under ERISA § 

502(a)(1)(B).’ ” Marin Gen. Hosp., 581 F.3d at 947 (alteration in original) (quoting 

Davila, 542 U.S. at 210). This provision of ERISA provides that a plan participant or 

beneficiary may bring a civil action “to recover benefits due to him under the terms 

of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to 

future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). 

Here, the Court finds Plaintiff could have brought his breach of contract claim 

under ERISA § 502(a)(1)(B). In pleading his breach of contract claim, Plaintiff first 

incorporates all of the factual allegations that the Court summarizes above. (Compl. 

¶ 37.) He then alleges:

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 9 of 19
– 10 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

(1) “Plaintiff and Defendant entered into an agreement titled the ‘Guardian Group 

Insurance Plan Benefits’ (the ‘Agreement’)”; 

(2) “Plaintiff has performed all of the conditions of the Agreement”; 

(3) “Pursuant to the Agreement, Defendant promises and is required to obtain 

current signed authorizations for the release of Plaintiff’s medical data”; 

(4) “Defendant is in violation of the Agreement” because it “wrongfully failed and 

refused to obtain a release and/or authorization signed by Plaintiff specific to 

[the] release of medical information to Select Physical Therapy and/or Austin 

with Select Medical”; and 

(5)Plaintiff was harmed by Defendant’s breach of the Agreement. 

(Id. ¶¶ 38–43.) As seen, Plaintiff’s breach of contract claim is expressly for breach of 

the Policy that Defendant is responsible for administering. There is no dispute that 

ERISA governs this Policy. See 29 U.S.C. § 1002(1) (defining covered plans to 

include “any plan . . . established or maintained by an employer . . . for the purpose 

of providing for its participants or their beneficiaries, through the purchase of 

insurance or otherwise . . . benefits in the event of . . . disability”). Further, Plaintiff 

was a “participant” under the Policy. See Id. § 1002(7) (defining “participant” as “any 

employee . . . who is or may become eligible to receive a benefit of any type from an 

employee benefit plan”). Thus, Plaintiff—a participant under an ERISA-governed 

plan—is seeking to enforce an alleged contractual right under the plan—his right to 

have Defendant not disclose his medical information without first obtaining a signed 

authorization. (See Compl. ¶¶ 14, 38–42.)

Accordingly, Plaintiff could have brought his breach of contract claim under 

ERISA § 502(a)(1)(B). As mentioned, this section allows a plan participant like 

Plaintiff to bring a civil action “to enforce his rights under the terms of the plan.” See 

29 U.S.C. § 1132(a)(1)(B); see also Davila, 542 U.S. at 210 (noting that under ERISA 

§ 502(a)(1)(B), “[a] participant or beneficiary can also bring suit generically to 

‘enforce his rights’ under the plan”). ERISA § 502(a)(1)(B) essentially “allows an 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 10 of

 19
– 11 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

action in the form of breach of contract, the contractual instrument being the [Policy]”

that Plaintiff alleges Defendant breached. See Nunez v. Monterey Peninsula Eng’g, 

867 F. Supp. 895, 906 (N.D. Cal. 1994). Plaintiff’s breach of contract claim seeks to 

enforce one of his alleged rights under the terms of the Policy, and his claim therefore 

falls under the scope of ERISA § 502(a)(1)(B). See 29 U.S.C. § 1132(a)(1)(B).

(2) Second Davila Prong

Under the second prong of the Davila test, the court “must determine whether 

the state-law claim[] ‘arise[s] independently of ERISA or the plan terms.’ In other 

words [the court] must ask whether or not an ‘independent legal duty . . . is implicated 

by [the] defendant’s actions.’ ” Fossen, 660 F.3d at 1110 (citation omitted) (last 

alteration in original) (quoting Davila, 542 U.S. at 210, 212). This determination

“requires a practical, rather than a formalistic, analysis because ‘[c]laimants simply 

cannot obtain relief by dressing up an ERISA benefits claim in the garb of a state law 

tort.’ ” Fossen, 660 F.3d at 1110–11 (alteration in original) (quoting Cleghorn v. Blue 

Shield of Cal., 408 F.3d 1222, 1225 (9th Cir. 2005)).

Here, Plaintiff’s breach of contract claim does not “arise independently of 

ERISA or the plan terms.” See Davila, 542 U.S. at 212. Plaintiff cannot plead a cause 

of action for breach of contract under California state law without alleging the 

existence of a contract and the breach of the contract. See, e.g., Acoustics, Inc. v. 

Trepte Constr. Co., 14 Cal. App. 3d 887, 913 (1971). Hence, Plaintiff alleges the 

Policy is the contract between Plaintiff and Defendant and that its terms were violated

by Defendant. (Compl. ¶¶ 38, 41–42.) His claim does “not merely reference the 

ERISA plan, [it] require[s] its construction because the contract allegedly breached 

is the ERISA plan itself.” See Bui v. Am. Tel. & Tel. Co. Inc., 310 F.3d 1143, 1152 

(9th Cir. 2002). Consequently, this claim does not arise independently of ERISA or 

the plan terms—satisfying the second Davila prong. Because both prongs of the 

Davila test are satisfied, this claim is completely preempted. See Fossen, 660 F.3d at 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 11 of

 19
– 12 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1108; see also, e.g., Bui, 310 F.3d at 1152 (holding ERISA preempts breach of 

contract claim predicated on the plan itself); Dewalt v. G.E. Fin., No. 04-cv-1293-

WDM-BNB, 2005 WL 6332668, at *2 (D. Colo. Aug. 4, 2005) (exercising removal 

jurisdiction over plaintiff’s “claim for breach of a privacy contract” because the claim 

sought “to enforce his rights under the terms of the ERISA plan, the only contract 

alleged to exist between the parties”).1

Nevertheless, Plaintiff argues his breach of contract claim is not preempted 

because it is “based on an independent duty of [Defendant] to protect the personal 

information of individuals.” (ECF No. 16-1 at 17:8–18:13.) Although this argument 

may hold true for Plaintiff’s tort and statutory claims, this argument is unpersuasive 

for his contract claim. A breach of contract claim must seek to enforce a duty created 

by the contract; therefore, any duty created by the Policy that Plaintiff seeks to 

enforce through a breach of contract claim does not arise independently of the

ERISA-governed Policy. 

Accordingly, because Plaintiff’s breach of contract cause of action seeks 

enforcement of the terms of the Policy, the legal duty it seeks to enforce does not 

“arise independently of ERISA or the plan terms.” See Davila, 542 U.S. at 212. 

Hence, the second Davila prong is satisfied for Plaintiff’s breach of contract claim, 

and this claim is completely preempted by ERISA.

//

//

//

 

1 The Court distinguishes Providence Health Plan v. McDowell, 385 F.3d 1168 (9th Cir. 

2004) for the same reasons discussed by the district court in GoDaddy.com LLC v. Monson, --- F. 

Supp. 3d ---, 2016 WL 5109906, at *2 (D. Ariz. 2016). “[T]he McDowell Court addressed two 

independent breach of contract claims but did not distinguish between them in its analysis. In 

contrast to McDowell where the contract claim also sought to enforce the secondary contract 

between the insureds and their attorneys, [Plaintiff’s] claim asserts only a breach of the plan itself.” 

See GoDaddy.com LLC, 2016 WL 5109906, at *2. Thus, because here Plaintiff alleges only a 

breach of the Policy itself, and not also a secondary contract, the Court concludes McDowell does 

not compel a different conclusion in these circumstances.

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 12 of

 19
– 13 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

b. Plaintiff’s Tort and Statutory Claims

Plaintiff also brings claims for: (1) violation of California’s Confidentiality of 

Medical Information Act, Cal. Civ. Code §§ 56–56.37; (2) negligence, and (3) 

invasion of privacy. Unlike Plaintiff’s breach of contract claim, these claims are not 

completely preempted by ERISA. 

This conclusion is justified because the second Davila prong is not satisfied

for any of these claims. As mentioned above, under this prong, the court “must 

determine whether the state-law claims ‘arise independently of ERISA or the plan 

terms.’ In other words [the court] must ask whether or not an ‘independent legal duty 

. . . is implicated by [the] defendant’s actions.’ ” Fossen, 660 F.3d at 1110 (citation 

omitted) (last alteration in original) (quoting Davila, 542 U.S. at 210, 212). 

Starting with the invasion of privacy claim, Plaintiff alleges Defendant 

violated his “right to privacy under [the] California Constitution, Article 1, Section 

1” by using his “private information properly obtained for a specific purpose for 

another purpose, or the disclosure of it to some third party.” (Compl. ¶ 55(c).) See 

also Hill v. National Collegiate Athletic Ass’n, 7 Cal. 4th 1, 39–40 (1994) 

(enumerating the elements of an invasion of privacy claim under the California 

Constitution, including “a legally protected privacy interest”). In addition to invoking 

his state constitutional right to privacy, Plaintiff invokes California tort law, including 

two of the common variations of the invasion of privacy tort adopted by the 

Restatement Second of Torts: (i) intrusion into private affairs and (ii) public 

disclosure of private facts. (Compl. ¶¶ 55(a)–(b).) See also Hill, 7 Cal. 4th at 24 

(noting “California common law has generally followed Prosser’s classification of 

privacy interests as embodied in the Restatement”). Thus, Plaintiff’s invasion of 

privacy claim is based on an independent legal duty: Defendant’s duty to not violate 

Plaintiff’s right to privacy that is protected by both tort law and the state’s 

constitution. See Garrett v. Young, 109 Cal. App. 4th 1393, 1410 (2003) (analyzing 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 13 of

 19
– 14 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

invasion of privacy cause of action based on disclosure of medical information by 

medical provider). 

Further, the Court finds Plaintiff is not simply “dressing up an ERISA benefits 

claim in the garb of a state law tort.” See Fossen, 660 F.3d at 1111. Plaintiff’s 

invasion of privacy claim is not seeking ERISA benefits, which in this instance would 

be long-term disability benefits, or damages resulting from an adverse benefits 

determination. Rather, he seeks damages for an alleged invasion into his privacy 

interest. Thus, his claim is unlike the claims in Davila, where the plaintiffs were 

alleging an injury caused by a decision to not provide benefits under their respective

plans. See Davila, 542 U.S. at 204–05. Consequently, the Court concludes the second 

Davila prong is not satisfied for Plaintiff’s invasion of privacy claim. Accordingly, 

ERISA does not completely preempt this claim. 

For the same reasons, the Court concludes the second Davila prong is not 

satisfied for Plaintiff’s negligence claim. This claim, too, is based on Defendant’s 

obligation under California tort law to not breach its duty of care to Plaintiff by 

disclosing his confidential medical information without his consent. The Court

similarly concludes this claim is not simply “an ERISA benefits claim” that has been 

dressed up “in the garb of a state law tort.” See Fossen, 660 F.3d at 1111. Plaintiff is

not seeking plan benefits or damages resulting from a denial of benefits via his 

negligence claim. Therefore, the Court finds this claim is not completely preempted 

by ERISA because the second Davila prong is not satisfied. 

Last, Plaintiff alleges Defendant violated California’s Confidentiality of 

Medical Information Act (“CMIA”), Cal. Civ. Code §§ 56–56.37. The CMIA “is 

intended to protect the confidentiality of individually identifiable medical 

information obtained from a patient by a health care provider, while at the same time 

setting forth limited circumstances in which the release of such information to 

specified entities or individuals is permissible.” Brown v. Mortensen, 51 Cal. 4th 

1052, 1070 (2011) (citing Loder v. City of Glendale 14 Cal. 4th 846, 859 (1997); 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 14 of

 19
– 15 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Heller v. Norcal Mut. Ins. Co. 8 Cal. 4th 30, 38 (1994)). Given that Defendant is an 

insurance company and not a “provider of health care,” Defendant disputes whether 

the CMIA even applies to it. See Cal. Civ. Code § 56.05(m) (providing that the

CMIA’s definition of a “Provider of health care” does not “include insurance 

institutions as defined in” California’s insurance code). That said, assuming for the 

sake of argument that the CMIA is applicable, the statutory duty imposed by the 

CMIA is an independent legal duty, like those imposed by California tort law and the 

California constitution. See Garrett, 109 Cal. App. 4th at 1410 (noting the protections 

provided by the CMIA are “[i]n addition to any other remedies available at law . . . 

.” (quoting Cal. Civ. Code § 56.35)). Accordingly, this claim implicates an 

independent legal duty like Plaintiff’s invasion of privacy and negligence claims. The 

Court again notes that this claim is not a disguised benefits claim. See Fossen, 660 

F.3d at 1110–11. The Court thus concludes the second Davila prong is not satisfied 

for Plaintiff’s CMIA claim, and it is not completely preempted by ERISA. 

In sum, Plaintiff’s breach of contract claim is completely preempted by 

ERISA, but his remaining three claims are not. Because ERISA completely preempts 

Plaintiff’s state law breach of contract cause of action, this claim, although “pleaded 

in terms of state law, is in reality based on federal law.” See Davila, 542 U.S. at 207–

08 (quoting Anderson, 539 U.S. at 8). Therefore, this Court has original jurisdiction 

over this case because it arises “under the Constitution, laws, or treaties of the United 

States,” see 28 U.S.C. § 1331, and Defendant has met its burden of demonstrating 

removal was proper, see 28 U.S.C. § 1441(a). Consequently, the Court exercises 

jurisdiction over this action and denies Plaintiff’s motion to remand. See 28 U.S.C. § 

1441(a).

B. Failure to State a Claim—Conflict Preemption

Having exercised jurisdiction over this case, the Court turns to whether 

Defendant’s motion to dismiss Plaintiff’s claims should be granted. ERISA has two 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 15 of

 19
– 16 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

separate preemption doctrines—complete preemption and conflict preemption. 

Marin Gen. Hosp., 581 F.3d at 944–45. Complete preemption, which has a 

jurisdictional effect, is the doctrine the Court applied above to conclude remanding 

this action is not appropriate. “If complete preemption is present under a Davila

analysis, and the case is properly in federal court, the next step is to determine 

whether the state law claims upon which federal jurisdiction has been conferred 

survive so-called ‘conflict preemption’ under ERISA § 514(a).” Lodi Mem’l Hosp. 

Ass’n v. Tiger Lines, LLC, No. 2:15-cv-00319-MCE, 2015 WL 5009093, at *5 (E.D. 

Cal. Aug. 20, 2015) (citing 29 U.S.C. § 1144(a)); see also Retail Prop. Tr. v. United 

Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 948 (9th Cir. 2014) (explaining 

the distinction between complete preemption and conflict preemption). 

Conflict preemption under ERISA arises from section 514(a) of the statute. 

Marin Gen. Hosp., 581 F.3d at 944–45. This provision is “one of the broadest 

preemption clauses ever enacted by Congress.” Joanou v. Coca-Cola Co., 26 F.3d 

96, 99 (9th Cir. 1994). It provides that ERISA “shall supersede any and all State laws 

insofar as they may now or hereafter relate to any employee benefit plan . . . .” 29 

U.S.C. § 1144(a). “The Supreme Court has criticized the ‘unhelpful text’ of this 

ERISA preemption provision,” Paulsen v. CNF Inc., 559 F.3d 1061, 1081 (9th Cir. 

2009) (quoting Cal. Div. of Labor Standards Enf’t v. Dillingham Constr., N.A., Inc., 

519 U.S. 316, 324 (1997)), and the Ninth Circuit has “similarly remarked that the 

‘relate to’ language has been the source of great confusion and multiple and slightly 

differing analyses,” id. (citing Abraham, 265 F.3d at 819). That said, “the Supreme 

Court has instructed that a law relates to an employee benefit plan if it has either a 

‘connection with’ or ‘reference to’ such a plan. This is a two-part inquiry.” Id. at 

1081–82 (citing Ingersoll-Rand Co., 498 U.S. at 139; Dillingham Constr., 519 U.S. 

at 324). 

The first part of this inquiry is whether the state law has a “reference to” an 

employee benefit plan. Paulsen, 559 F.3d at 1082. “To determine whether a law has 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 16 of

 19
– 17 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

a forbidden ‘reference to’ ERISA plans,” the court considers “whether (1) the law 

‘acts immediately and exclusively upon ERISA plans,’ or (2) ‘the existence of ERISA 

plans is essential to the law’s operation.’ ” Id. at 1082 (quoting Golden Gate Rest. 

Ass’n v. City & Cty. of S.F., 546 F.3d 639, 657 (9th Cir. 2008)).

The second part of this inquiry is whether the state law has a “connection with” 

an employee benefit plan. Paulsen, 559 F.3d at 1082. “[T]o determine whether a state 

law has the forbidden connection,” the court examines both “the objectives of the 

ERISA statute as a guide to the scope of the state law that Congress understood would 

survive, as well as to the nature of the effect of the state law on ERISA plans.” Id.

(quoting Dillingham, 519 U.S. at 325). The Ninth Circuit has “employed a 

‘relationship test’ in analyzing ‘connection with’ preemption, under which a state law 

claim is preempted when the claim bears on an ERISA-regulated relationship, e.g., 

the relationship between plan and plan member, between plan and employer, [or] 

between employer and employee.” Id. (quoting Providence Health Plan v. 

McDowell, 385 F.3d 1168, 1172 (9th Cir. 2004)). 

Here, the Court already concluded above that Plaintiff’s breach of contract 

claim is completely preempted by ERISA. This claim is also conflict preempted by 

ERISA because, although California state contract law does not reference employee 

benefit plans, Plaintiff’s breach of contract claim has a connection with an employee 

benefit plan—the Policy. The claim alleges Defendant breached the terms of the 

Policy, and it requires an analysis of the Policy’s terms. See, e.g., Or. Teamster 

Employers Tr., 800 F.3d at 1156 (holding the district court properly concluded a 

breach of contract claim was conflict preempted where an “analysis of the terms of 

the ERISA plan” was required and the complaint alleged the defendant “breached the 

terms of the ERISA plan—not separate agreements”). Moreover, under the Ninth 

Circuit’s relationship test, this claim is preempted because it bears on an ERISAregulated relationship—the relationship between Plaintiff, a plan member, and 

Defendant, the plan administrator. See Paulsen, 559 F.3d at 1082. Plaintiff’s breach 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 17 of

 19
– 18 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

of contract claim is therefore conflict preempted by ERISA under the second part of 

the test for conflict preemption. 

In sum, because Plaintiff’s breach of contract claim has a forbidden connection 

with an ERISA plan, it is preempted. Consequently, Plaintiff’s claim fails to state a 

claim upon which relief can be granted, and the Court grants Defendant’s request to 

dismiss this claim. See Fed. R. Civ. P. 12(b)(6). That said, the Court will grant 

Plaintiff leave to amend this claim. See Fed. R. Civ. P. 15(a); Schreiber Distrib. Co. 

v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).

* * *

The Court has dismissed Plaintiff’s one claim that provides a basis for federal 

jurisdiction. Under 28 U.S.C. § 1367, the Court may “decline to exercise 

supplemental jurisdiction” over Plaintiff’s remaining claims if it “has dismissed all 

claims over which it has original jurisdiction.” See also, e.g., Sanford v. 

MemberWorks, Inc., 625 F.3d 550, 561 (9th Cir. 2010) (“[I]n the usual case in which 

all federal-law claims are eliminated before trial, the balance of factors to be 

considered under the pendent jurisdiction doctrine . . . will point toward declining to 

exercise jurisdiction over the remaining state-law claims.”). Having dismissed 

Plaintiff’s claim that is completely preempted by ERISA, the Court declines to 

exercise supplemental jurisdiction over Plaintiff’s state law invasion of privacy,

negligence, and California CMIA claims. See 28 U.S.C. § 1367(c). Accordingly, the 

Court dismisses these claims without prejudice.

Further, if Plaintiff files an amended complaint that does not allege a claim 

under ERISA or otherwise present a federal issue—such as a state law claim that is 

completely preempted by ERISA—the Court will sua sponte remand this action to 

state court. See 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears 

that the district court lacks subject matter jurisdiction, the case shall be remanded.”); 

see also Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 338 (5th Cir. 1999) 

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 18 of

 19
– 19 – 16cv0885

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

(providing “a district court has discretion to remand a case involving solely arguably 

conflict-preempted causes of action” because those claims alone are not a basis for 

federal jurisdiction); Lee T. Polk, 2 ERISA Practice and Litigation § 11:46 Removal 

from State Court (2017) (discussing amendments to complaints that have been 

removed under ERISA’s complete preemption doctrine and the impact of these 

amendments on subject matter jurisdiction).

III. CONCLUSION

In sum, Plaintiff’s breach of contract claim is completely preempted by 

ERISA. This claim is completely preempted because (i) Plaintiff could have brought 

the claim under ERISA, and (ii) the claim seeks to enforce a duty stemming from the 

terms of the Policy. Because this claim is completely preempted by ERISA, the Court 

has jurisdiction over this action. Consequently, the Court DENIES Plaintiff’s motion 

to remand (ECF No. 16). 

In addition, Plaintiff’s breach of contract cause of action fails to state a claim 

because it is conflict preempted by ERISA. The claim has a forbidden connection 

with an ERISA plan because it requires an analysis of the Policy’s terms and bears 

on an ERISA-regulated relationship. The Court therefore dismisses this claim with 

leave to amend. Further, the Court declines to exercise supplemental jurisdiction over 

Plaintiff’s remaining claims for invasion of privacy, negligence, and violation of 

California’s CMIA. These three claims are dismissed without prejudice. 

Accordingly, the Court GRANTS Defendant’s motion to dismiss (ECF No. 15). If 

Plaintiff chooses to file a First Amended Complaint, he must do so no later than 

April 3, 2017. 

IT IS SO ORDERED.

DATED: March 13, 2017

Case 3:16-cv-00885-BAS-NLS Document 24 Filed 03/13/17 PageID.<pageID> Page 19 of

 19