Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00834/USCOURTS-casd-3_15-cv-00834-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1446 Petition for Removal- Personal Injury

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

STEVE WICKENS, individually and

on behalf of others similarly situated,

Plaintiff,

CASE NO. 15cv834-GPC(JMA)

ORDER REMANDING CASE TO

vs. STATE COURT

Blue Cross of California, Inc., d/b/a

Anthem Blue Cross; Anthem Blue

Cross Life and Health Insurance

Company,

Defendants.

Before the Court is an order to show cause why the case should not be remanded

for lack of subject matter jurisdiction. (Dkt. No. 22.) Defendants filed a response on

July 2, 2015. (Dkt. No. 23.) Plaintiff filed a reply on July 10, 2015. (Dkt. No. 24.) 

Based on the reasoning below, the Court REMANDS the case to state court for lack of

subject matter jurisdiction. 

Discussion

On March 16, 2015, Plaintiff Steve Wickens (“Plaintiff”) filed a class action

complaint against Defendants Blue Cross of California Inc. d/b/a Anthem Blue Cross;

and Anthem Blue Cross Life and Health Insurance Company in San Diego Superior

Court for state law causes of action based on Defendants’ failure to secure and

safeguard Plaintiff’s personal identifying information. 

According to the complaint, on February 4, 2015, Anthem, Inc., a related entity,

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announced that cyber hackers had gained unauthorized access to its information

technology system exposing the name, personal information, birthday, Social Security

number, health care ID number, income data, employment data, street address, email

address, and other personal details of about 80 million current and former customers

and employees. (Dkt. No. 1-2, Compl. ¶ 4.) The class action complaint alleges causes

of action for breach of contract, violation of the California Records Act, violation of

the California unfair competition laws, negligence, invasion of privacy, public

disclosure of private facts, and unjust enrichment. (Dkt. No. 1-2, Compl.) 

On April 15, 2015, Defendants removed the case to this Court under the Class

Action Fairness Act, (“CAFA”). (Dkt. No. 1, Notice of Removal at 6.) On April 24,

2015, the case was transferred to the undersigned judge pursuant to the low number

rule. See Local Civ. R. 40.1. (Dkt. No. 7.) On May 5, 2015, Plaintiff filed a motion

to remand. (Dkt. No. 8.) On May 7, 2015, Defendants filed a motion to stay, or in the

alternative, for an extension of time to respond pending ruling on transfer motion

pursuant to 28 U.S.C. § 1407. (Dkt. No. 11.) 1

On June 18, 2015, the Court denied Plaintiff’s motion to remand and granted

Plaintiff leave to file an amended complaint, and denied Defendants’ motion to stay as

moot. (Dkt. No. 20.) The Court concluded that while Defendants demonstrated that 2

there was minimal diversity to support CAFA jurisdiction because Plaintiff alleged

“residents” of California in the class description, the Court granted Plaintiff leave to

28 U.S.C. § 1407 provides in relevant parts, “(a) When civil actions involving

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one or more common questions of fact are pending in different districts, such actions

may be transferred to any district for coordinated or consolidated pretrial proceedings.

Such transfers shall be made by the judicial panel on multidistrict litigation authorized

by thissection upon its determination that transfersfor such proceedings will be for the

convenience of parties and witnesses and will promote the just and efficient conduct

of such actions.” 28 U.S.C. § 1407. 

During the pendency of the motions, on June 8, 2015, the United States

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Judicial Panel on Multidistrict Litigation (“JPML”) in the case of In Re: Anthem, Inc.

Customer Data Security Breach Litigation transferred 16 cases to the United States

District Court for the Northern District of California and assigned the case to District

Judge Luch H. Koh for coordinated or consolidated pretrial proceedings pursuant to

28 U.S.C. § 1407. (MDL Case No. 2617, Dkt. No. 262.)

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amend the complaint to change the term “residents” of California to “citizens” of

California in the class description. (Id. at 9.) While citizenship of the plaintiff class

is determined on the date the case became removable, the Court concluded that the

change from“resident” to “citizens” of California constituted a clarification and not an

amendment. (Id. at 11.) 

On June 19, 2015, Plaintiff filed an amended complaint changing the term

“residents” to “citizens” in the class description. (Dkt. No. 21.) On June 22, 2015, the

Court set an order to show cause hearing why the case should not be remanded for lack

of subject matter jurisdiction. (Dkt. No. 22.) Defendants present two arguments in

response. 

A. Complete Preemption

First, Defendants argue the Court has subject matter jurisdiction because the

breach of contract claim is completely preempted by the exclusive civil enforcement

provisions of the Employee Retirement Income Security Act (“ERISA”) because

Plaintiff is insured under an ERISA plan. Plaintiff opposes arguing that Defendants’

new allegation of federal question is untimely and not proper. Moreover, even if the

Court considered the preemption argument, it is without merit since the claims assert

an independent legal duty irrespective of the ERISA plan. 

1. Timeliness of New Allegation

The Ninth Circuit has held that a defendant must state the basis for removal

jurisdiction in the petition for removal which must be filed within thirty days of

receiving the complaint. O’Halloran v. Univ. ofWashington, 856 F.2d 1375, 1381 (9th

Cir. 1988) (citing Barrow Dev. Co. v. Fulton Ins. Co., 418 F.2d 316, 317 (9th Cir.

1969) (denying leave to amend the removal petition because a removal petition cannot

be thereafter amended to allege substantial changes and can only be amended to clarify

“‘defective allegations’ of jurisdiction previously made”)).

Here, the notice of removal was timely filed on April 15, 2015. (Dkt. No. 1,

Notice of Removal ¶¶ 9-10.) Defendants removed the action under CAFA. (Id. ¶ 14.) 

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Defendants now raise a new argument not raised in the notice of removal that the Court

has subject matter jurisdiction under ERISA. Based on the cases cited, Defendants

cannot now raise a new basis for the Court’s federal jurisdiction. Defendants’

argument as to ERISA preemption is without merit. 

2. Merits of Complete Preemption

Even if the Court were to consider Defendants’ preemption argument, it still

does not demonstrate that the Court has subject matter jurisdiction. Defendants argue

that the express and implied breach of contract claim are completely preempted by

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ERISA as the claim seeks to enforce rights under an ERISA plan. Plaintiff contends

that his claims assert generally that when an entity acquires private personal

information of an individual, it has a duty to safeguard that information. 

§ 502(a)(1)(B) of ERISA provides:

A civil action may be brought—(1) by a participant or beneficiary—.

. . (B) 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). ERISA’s preemption clause states 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 purpose of ERISA is to provide

a uniform regulatory regime over employee benefit plans. Aetna Health Inc. v. Davila,

542 U.S. 200, 208 (2004)

The Ninth Circuit has adopted the two-prong “complete preemption” test

asserted in Davila. Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d

941, 946 (9th Cir. 2009). “Under Davila, a state-law cause of action is completely

preempted if (1) ‘an individual, at some point in time, could have brought [the] claim

Defendants do not affirmatively assert they are arguing complete preemption

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but because they cite to Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004), the

Court assumes they are asserting complete preemption as opposed to conflict

preemption. See Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941,

944-45 (9th Cir. 2009) (noting a clear difference and different jurisdictional

consequences that result between the two kinds of preemption). 

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under ERISA § 502(a)(1)(B),’ and (2) ‘where there is no other independent legal duty

that is implicated by a defendant’s actions.’” Id. (quoting Davila, 542 U.S. at 210.) A

state law cause of action is preempted by § 1132(a)(1)(B) only if both prongs of the test

are satisfied. Id. at 947.

While Defendants cite to Davila, they do not address the two prong test. 

Plaintiff addresses the two prong test although the argument on the first prong does not

address the issue of whether Plaintiff could have brought the claim under §

502(a)(1)(B). Because the Court concludes that the second prong has not been met, it

does not need to address the first prong. See Marin Gen. Hosp., 581 F.3d at 947 (since

two prong test is in the conjunctive, both prongs need to be satisfied). 

As to the second prong, Plaintiff asserts that his claims generally assert “that an

entity that acquires private personal information of an individual, as part of the entity’s

business, has a duty to safeguard that information. This obligation exists regardless of

whether an ERISA plan exists.” (Dkt. No. 24 at 12.) Therefore, he asserts a legal

obligation exists independent of the ERISA plan. The Court agrees. 

Plaintiff received his health insurance through Blue Cross and Blue Cross Life,

(Dkt. No. 21, FAC ¶ 1), and the parties do not dispute it is an ERISA plan. Plaintiff

asserts an express and implied breach of contract claim. (Dkt. No. 21, FAC ¶¶ 51-56.) 

Although the breach of an express contract cause of action references the health

insurance plan provided by Defendants, it does not provide any provisions of the

contract that was breached. A careful look at Plaintiff’s claim reveals that it does not

relate to benefits under the plan and does not require an interpretation of the contract

for purposes of benefits. See Davila, 542 U.S. at 213. 

“No independent legal duty exists where interpretation of the terms of the

ERISA-regulated benefits plan forms an essential part of the claim and where the

defendant’s liability exists only due to its administration ofthe ERISA-regulated plan.” 

Nielson v. UnumLife Ins. Co. of Amer., 58 F. Supp. 3d 1152, 1162 (W.D. Wash. 2014) 

(quoting Davila, 542 U.S. at 213); Marin Gen. Hosp., 581 F.3d at 950 (“Since the

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state-law claims asserted in this case are in no way based on an obligation under an

ERISA plan, and since they would exist whether or not an ERISA plan existed, they

are based on ‘other independent legal dut[ies]’ within the meaning of Davila.”). 

§ 502(a) allows a party 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, Plaintiff does

not seek recovery regarding benefits under the plan. As to enforcing his rights under

the plan, Plaintiff does not allege any express provisions of the plan that were

breached. Lastly, Plaintiff does not seek to clarify his rights to future benefits under

the plan. Plaintiff’s breach of contract claim is not based on the interpretation of the

plan for benefits but based on an independent duty of an entity to protect the personal

information of individuals if such information is required to be provided to the entity. 

As stated by Plaintiff, the essence of the first amended complaint concerns the

obligation of Defendants to protect confidential and sensitive personal information

when such information is provided to Defendants upon enrolling in a plan. This is an

independent legal duty that would exist with or without the ERISA plan. See Marin

Gen. Hosp., 581 F.3d at 950. Accordingly, the Court concludes that since the second

prong has not been met, there is no complete preemption by ERISA. Therefore,

Defendants’ argument on complete preemption fails. 

B. Amendment to the Complaint

Second, Defendants argue that the Court’s prior ruling allowing Plaintiff to

amend the complaint based on Weight v. Active Network, Inc., 29 F. Supp. 3d 1289,

1293 (S.D. Cal. 2014) , is not consistent with subsequent NinthCircuit authority. They

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argue that federal jurisdiction is only determined at the time of removal and nothing

filed afterwards affects jurisdiction. They also argue that Weight was based on the

In Weight, District Judge Janis L. Sammartino concluded that the Plaintiff’s 4

revision from “residents of California” to “citizens of California” in an amended

complaint was a clarification rather than an amendment. Weight v. Active Network,

Inc., 29 F. Supp. 3d 1289, 1293 (S.D. Cal. June 26, 2014).

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Ninth Circuit’s former rule that there is a strict presumption against removal. Plaintiff

opposes. 

Defendants cite to Doyle v. OneWestBank, FSB, 764 F.3d 1097, 1098 (9th Cir.

2014), a case decided after Weight, in support but that case only addresses a general

proposition and does not address any of the issues in this case. In Doyle, after all

parties agreed to sever one plaintiff’s claim and transfer them to another court, the

remaining plaintiff was directed by the court to file a second amended complaint to

reflect the severance. Id. Then, the remaining plaintiff moved to remand the case to

state court under one of the exceptions to CAFA. Id. The district court granted the

motion to remand based on the allegations of citizenship alleged in the second amended

complaint. Id. The Ninth Circuit held that the district court’s determination of citizen

based on the second amended complaint, filed after the action had been removed, was

error. Id. The Ninth Circuit vacated and remanded the district court’s order remanding

the case to state court to allow the court to determine whether, considering the plaintiff

class as pleaded at the time of removal, any of the exceptions to CAFA applies. Id. 

Doyle did not address any amendment or clarification by Plaintiff to support federal

jurisdiction or an exception to the rule that jurisdiction is determined at the time of

removal.

Contrary to Defendants’ assertion that there is an absolute ban on looking at

post-removal filings or eventsto determine jurisdiction, the Ninth Circuit held recently

that a party is allowed to amend the complaint in order to clarify certain jurisdictional

facts related to the “local controversy” exception to CAFA. See Benko v. Quality Loan

Serv. Corp., –F.3d –, 2015 WL 3772885 (9th Cir. 2015) (“Where a defendant removes

a case to federal court under CAFA, and the plaintiffs amend the complaint to explain

the nature of the action for purposes of our jurisdictional analysis [local controversy

exception], we may consider the amended complaint to determine whether remand to

the state court is appropriate.”). While the Ninth Circuit has not specifically addressed

clarification or amendment to facts supporting minimal diversity post-removal, it has

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allowed post-removal amendments to clarify jurisdictional issues. 

In addition, Defendants argue that Weight is not consistent with Dart Cherokee

Operation Co. LLC v. Owens, 135 S. Ct. 547, 554 (2014) where the Supreme Court

held that there is no longer a strong presumption against removal jurisdiction in CAFA

cases. Defendants argue that since Weight stated the pre-Dart Cherokee rule on

presumption, then necessarily the court’s ultimate conclusion fails. The Court

disagrees. Despite the change in presumption under Dart Cherokee for CAFA cases,

the presumption does not appear to have been a key factor in the ruling in Weight. 

The Court reiteratesits conclusion that the change from“residents” to “citizens”

of California in the class description is a clarification of the Court’s jurisdiction and

can be the basis to amend the complaint especially in this case where the Complaint

alleges claims against California based Defendants, alleges only California law causes

of action, and the class was intended to be limited to individuals who entered into

contracts with California corporations for future services in California. This is even

acknowledged by Defendants in the Notice of Removal. (Dkt. No. 1, Notice of

Removal ¶ 17 (“Apparently seeking to avoid this Court’s jurisdiction, the Complaint

does not name Anthem as a defendant.”) Accordingly, Defendants’ argument does not

compel the Court to alter its prior ruling. 

Conclusion

Based on the above, the Court REMANDS the case to state court for lack of

subject matter jurisdiction. The hearing date set for July 17, 2015 shall be vacated.

The Clerk of Court shall close the case. 

IT IS SO ORDERED. 

DATED: July 14, 2015

HON. GONZALO P. CURIEL

United States District Judge

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