UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

 

JAMES BOBAK,

Plaintiff,

v.

BLUE CROSS BLUE SHIELD OF MICHIGAN,

Defendant.

 /

Case No. 14-14494

OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO 

DISMISS AND DISMISSING THE CASE AS MOOT

Plaintiff James Bobak initiated the instant action in state court against Defendant

Blue Cross Blue Shield of Michigan, his employer, alleging fraud in the inducement and

breach of contract. (Dkt. # 1-1, Pg. ID 7-9.) Plaintiff argues that Defendant improperly

failed to apply five years of service to his retirement vesting date, which Defendant

allegedly promised to entice Plaintiff into becoming its employee. (Id.) Defendant

removed the case to this court on the ground that Plaintiff’s claims relate to an

Employee Benefit Plan and are, therefore, removable to federal court pursuant to 29

U.S.C. § 1132(e), 28 U.S.C. § 1131, and 28 U.S.C. § 1441(a) and (b). 

Now before the court is Defendant’s Motion to Dismiss the Complaint or in the

Alternative for Summary Judgment (Dkt. # 3), contending that the court should dismiss

this case as moot. (Id. at 12.) Plaintiff responds, arguing that the court lacks subject

matter jurisdiction and requests that the court remand the matter to the Wayne County

Circuit Court. (Dkt. # 5, Pg. ID 90.) This matter is fully briefed, and no hearing is

needed. See E.D. Mich. LR 7.1(f)(2). For the reasons stated below, the court will grant

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Defendant’s motion dismiss the case as moot.

I. BACKGROUND

According to the complaint, Plaintiff was working for Medical Mutual of Ohio in

July 2002. (Dkt. # 1-1, Pg. ID 8.) Defendant allegedly sought to induce Plaintiff to join

its company by promising to credit his five years of service at Medical Mutual towards

his retirement vesting date as an employee of Defendant. (Id.) Plaintiff alleges that he

would not have joined Defendant if not for this assurance and requests—and was

provided—the promise in writing. (Id.) Plaintiff further states, however, that at the time,

Defendant knew that it would not apply the five years of service to the Plaintiff’s vesting

date. (Id.) 

Plaintiff has been working for Defendant for approximately twelve years. (Dkt. #

3, Pg. ID 18; Dkt. # 5-2, Pg. ID 101.) Upon seeking to retire from his employment with

Defendant, Plaintiff discovered that he “was five years short in his credited years of

service” and subsequently filed the instant complaint seeking to recover either credit for

the five years or, in the alternative, damages for five years of lost retirement benefits. 

(Dkt. # 1-1, Pg. ID 8.)

Defendant, however, argues that the five years of credit were promised only

toward the Plaintiff’s eligibility service date, which is the date used “to determine [a

participant’s] eligibility for benefits.” (Dkt. # 3, Pg. ID 20-21) Defendant notes that

Plaintiff’s eligibility service date differs from the date from which his benefits begin to

grow, which is the date that he was hired. (Dkt. # 6, Pg. ID 125 n. 4; Dkt. # 3-1, Pg. ID

31.) Defendant argues that granting Plaintiff five extra years of eligibility would have no

effect on Plaintiff’s benefits because the eligibility date is unrelated to the amount of

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benefits he would receive and because his benefits have already vested, making any

increase in his eligibility service date moot. (Dkt. # 3, Pg. ID 20). Plaintiff does not

contest Defendant’s description of the plan or Defendant’s and Plaintiff’s agreement in

this regard.

II. JURISDICTION

Plaintiff argues that this case was improperly removed to this court on the ground

that the court does not have subject matter jurisdiction over his claims. A “motion to

dismiss for failure to state a cause of action may be decided only after establishing

subject matter jurisdiction, since determination of the validity of the claim is, in itself, an

exercise of jurisdiction.” Moir v. Greater Cleveland Reg’l Transit Auth., 895 F.2d 266,

269 (6th Cir. 1990) (quoting Bell v. Hood, 327 U.S. 678, 682 (1946)). The court finds

that this case was properly removed to federal court as the purported state law claims

are preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29

U.S.C. § 1001 et seq. Nonetheless, the court lacks jurisdiction because Plaintiff’s

claims are moot. The court will therefore dismiss the case for lack of jurisdiction. 

A. ERISA Preemption

Pursuant to 28 U.S.C. § 1331, federal district courts “have original jurisdiction of

all civil actions arising under the Constitution, laws, or treaties of the United States.” On

its face, the complaint asserts state law claims of fraud in the inducement and breach of

contract. However, the complaint seeks to enforce an alleged right to five years of

credit under Plaintiff’s retirement plan with Defendant. ERISA provides that it

“supersede[s] any and all State laws insofar as they may now or hereafter relate to any

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employee benefit plan described in section 1003(a) of this title . . . .” 29 U.S.C. 

§ 1144(a). According to 29 U.S.C. § 1003(a)(1), ERISA applies to any employee benefit

plan that “is established or maintained by any employer engaged in commerce or in any

industry or activity affecting commerce.” It is undisputed that ERISA applies to the

benefits plan between Plaintiff and Defendant. (Dkt. # 5, Pg. ID 97.) 

The court has exclusive federal question jurisdiction over purported state law

claims that are completely preempted by ERISA—that is, claims that fall within ERISA’s

preemption provision, 29 U.S.C. § 1144, and which seek benefits the arise under

ERISA’s civil enforcement provision, 29 U.S.C. § 1132(a)(1)(B). See Wright v. General

Motors Corp., 262 F.3d 610, 614 (6th Cir. 2001). The Supreme Court has observed that

ERISA’s preemption provision is “clearly expansive,” and that “a state law relates to an

ERISA plan if it has a connection with or reference to such a plan.” Egelhoff v. Egelhoff,

532 U.S. 141, 146-47 (2001) (internal quotation marks and citations omitted). The Sixth

Circuit has further explained that “[i]t is not the label placed on a state law claim that

determines whether it is preempted, but whether in essence such a claim is for the

recovery of an ERISA plan benefit.” Lion’s Volunteer Blind Indus., Inc. v. Automated

Grp. Admin., Inc., 195 F.3d 803, 808 (6th Cir. 1999) (quoting Cromwell v. EquicorEquitable HCA Corp., 944 F.2d 1272, 1276 (6th Cir. 1991)). Furthermore, “the preemption clause is not limited to ‘state laws specifically designed to affect employee

benefit plans.’” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987) (quoting Shaw

v. Delta Air Lines, 463 U.S. 85, 98 (1983)).

Plaintiff argues that his claims do not relate to the ERISA plan and that ERISA

therefore does not preempt his claim. (Dkt. # 5, Pg. ID 96.) Specifically, Plaintiff argues

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that ERISA does not preempt his claims because his claims concern the negligent

representations that his employer made to him rather than the terms of the plan or its

administration. (Id.) That is, Plaintiff argues that he has sued the Defendant not to

recover denied benefits or for improperly administering the plan, but rather, “for giving

false information inducing plaintiff to join defendant company.” (Id. at 97.) However,

ERISA provides that “[a] civil action may be brought . . . 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. § 1332(a)(1)(B).

Moreover, the Supreme Court has found that claims of fraud in the inducement and

breach of contract which relate to Plaintiff receiving benefits under an employee benefit

plan “undoubtedly meet the criteria for pre-emption.” See Pilot Life, 481 U.S. at 48. 

Plaintiff’s complaint alleges that Defendant induced Plaintiff into an employment

contract by misrepresenting aspects of an employee benefits plan and subsequently

breaching an alleged agreement to provide Plaintiff with an additional five years of

service under the employee benefits plan. (Dkt. # 1-1, Pg. ID 6-9.) These allegations

fall within § 1332(a)(1)(B). See Easa v. Florists’ Transworld Delivery Ass’n, 963 F.

Supp. 624, 625 (E.D. Mich. 1997) (holding that a plaintiff’s claims of breach of contract,

misrepresentation, and promissory estoppel were preempted by ERISA where the

claims were “for benefits to which he believes he is entitled under [an employees’

pension plan],” and where the claims are “based on [] incorrect information he was

given, and upon which he relied, relat[ed] to benefits that it was ‘estimated’ he would

receive under the [p]lan.”). Thus, Plaintiff’s claims of fraud in the inducement and

breach of contract are preempted by ERISA, and the case was properly removed

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pursuant to 28 U.S.C. § 1441.

B. Mootness

While Plaintiff’s claims were properly removed, the court does not have

jurisdiction because the claims are non-justiciable based on a straightforward

application of the mootness doctrine. “Article III [of the United States Constitution]

conditions the exercise of federal judicial power on the existence of a live, ongoing case

or controversy.” Pettrey v. Enter. Title Agency, Inc., 584 F.3d 701, 703 (6th Cir. 2009)

(citing Lewis v. Cont’l Bank Corp., 494 U.S. 472, 477 (1990)). When a federal case

loses its character as a live, ongoing case or controversy, the court must declare the

claim moot and no longer within the courts’ jurisdiction. Id. “Simply stated, a case is

moot when the issues presented are no longer ‘live’ or the parties lack a legally

cognizable interest in the outcome.” Id. (quoting UAW v. Dana Corp., 697 F.2d 718,

720-21 (6th Cir. 1983)). In other words, a case is moot when “there is nothing left for

the plaintiffs to win.” Id. 

Here, Plaintiff states that Defendant promised him “that his years of service at

Medical Mutual of Ohio would be applied to his retirement vesting date at Blue

Cross/Blue Shield of Michigan.” (Dkt. # 1-1, Pg. ID 8.) The complaint requests that

Plaintiff’s five years of prior service with Medical Mutual of Ohio be credited to his years

of service under the retirement plan, or, in the alternative, that he be paid for five years

of credited service. (Id. at 8-9.)

It is undisputed that Plaintiff’s benefits plan vested in June 2005. (Dkt. # 3, Pg.

ID 18; Dkt. # 5, Pg. ID 95.) Defendant contends that plaintiff’s eligibility serve date plays

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no part in calculating the amount of Plaintiff’s benefits under the employee retirement

benefits plan, but rather is used “solely” to determine when Plaintiff became eligible to

receive those benefits. (Dkt. # 3, Pg. ID 21.) Plaintiff acknowledges that “Defendant

agues that there is no economic loss in the case at bar and since there is no economic

loss this case should be dismissed.” (Dkt. # 5, Pg. ID 95.) However, Plaintiff does not

contest Defendant’s characterization of the eligibility services date or the impact (or lack

thereof) of the agreement to credit five years of employment on the actual benefits

received. Instead, Plaintiff responds that “[d]amages in fraud in the inducement cases

are tort damages, not contract damages.” (Id.) Plaintiff does not, however, seek any

tort damages in his complaint. The complaint seeks only that Plaintiff be credited five

years of service or, in the alternative, to be paid for five years of credited service. (Dkt.

# 1-1, Pg. ID 8.) 

Because it is uncontested that Plaintiff’s plan has vested and because Plaintiff

does not contest that the remedy sought would not affect any other aspect of his

retirement benefits, the court finds that “there is nothing left for [plaintiff] to win.” 

Pettrey, 584 F.3d at 703. Accordingly, the case will be dismissed as moot.

III. CONCLUSION

IT IS ORDERED that Defendant Blue Cross Blue Shield of Michigan’s Motion to

Dismiss the Complaint or in the Alternative for Summary Judgment (Dkt. # 3) is

GRANTED.

IT IS FURTHER ORDERED that the case is DISMISSED as moot.

 s/Robert H. Cleland 

ROBERT H. CLELAND

UNITED STATES DISTRICT JUDGE

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Dated: June 30, 2015

I hereby certify that a copy of the foregoing document was mailed to counsel of record

on this date, June 30, 2015, by electronic and/or ordinary mail.

 s/Lisa Wagner 

Case Manager and Deputy Clerk

(313) 234-5522

S:\Cleland\JUDGE'S DESK\C1 ORDERS\14-14494.BOBAK.dismissmoot.dk.dmi.RHC.wpd

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