Source: https://supreme.justia.com/cases/federal/us/481/58/
Timestamp: 2019-04-21 02:55:00+00:00

Document:
Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA) provides that a participant or beneficiary may bring a civil action to, inter alia, recover benefits due him under the terms of an employee benefit plan. Under 28 U.S.C. § 1441(a), any civil action brought in state court of which the federal district courts have original jurisdiction may be removed by the defendant to the appropriate federal district court. Petitioner insurer underwrites an ERISA-covered plan set up by petitioner employer to pay benefits to salaried employees disabled by sickness or accident. After petitioners' doctors found that respondent employee was fit to resume working, his plan benefits were discontinued, his supplemental claim for benefits was denied, and his employment was terminated when he refused to return to work. He then filed suit in state court for reimplementation of his benefits and for related common law contract and tort claims, but petitioners removed the suit to federal court, alleging federal question jurisdiction over the disability claim by virtue of ERISA and pendent jurisdiction over the remaining claims. The District Court found the case properly removable, and granted summary judgment for petitioners on the merits. However, the Court of Appeals reversed on the ground that the District Court lacked removal jurisdiction, finding that the complaint purported to state only state law causes of action, and that the "well-pleaded complaint" rule, under which a cause of action "arises under" federal law for jurisdictional purposes only when the plaintiff's well-pleaded complaint raises federal law issues, did not allow removal predicated on the basis that the state law claims were subject to the federal defense of ERISA preemption. The court also held that the doctrine of Avco Corp. v. Machinists, 390 U. S. 557, which permits the removal of cases purporting to state only state law causes of action in labor cases preempted by § 301 of the Labor Management Relations Act, 1947 (LMRA), did not apply to this case.
1. Under Pilot Life Ins. Co. v. Dedeaux, ante p. 481 U. S. 41, respondent's common law contract and tort claims are preempted by ERISA, and this lawsuit falls directly under § 502(a)(1)(B), which provides an exclusive federal cause of action for resolution of suits by beneficiaries to recover benefits from a covered plan. Pp. 481 U. S. 62-63.
2. Common law causes of action filed in state court that are preempted by ERISA and come within the scope of § 502(a)(1)(B) are removable to federal court under 28 U.S.C. § 1441(b). The Avco doctrine applies in this situation to recharacterize a state law complaint displaced by § 502(a)(1)(B) as an action arising under federal law, even though the defense of ERISA preemption does not appear on the face of the complaint, as is normally required for removal by the "well-pleaded complaint" rule. That Congress meant to so completely preempt this subject area that any claim is necessarily federal in character is established by the language of § 502's jurisdictional subsection (f), which closely parallels that of § 301 of the LMRA, and statements in ERISA's civil enforcement provisions' legislative history, which indicate that § 502(a)(1)(B) suits should be regarded as "arising under" federal law in the same manner as § 301 suits. Respondent's contention that removal was improper because it was not "obvious" when he filed suit that his common law action was both preempted and displaced by ERISA is not persuasive, since the touchstone of federal courts' removal jurisdiction is not the "obviousness" of the preemption defense, but the intent of Congress. Pp. 481 U. S. 63-67.
O'CONNOR, J., delivered the opinion for a unanimous Court. BRENNAN, J., filed a concurring opinion, in which MARSHALL, J., joined, post, p. 481 U. S. 67.
In Pilot Life Ins. Co. v. Dedeaux, ante p. 481 U. S. 41, the Court held that state common law causes of action asserting improper processing of a claim for benefits under an employee benefit plan regulated by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, 29 U.S.C. § 1001 et seq., are preempted by the Act. 29 U.S.C. § 1144 (a). The question presented by this litigation is whether these state common law claims are not only preempted by ERISA, but also displaced by ERISA's civil enforcement provision, § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), [Footnote 1] to the extent that complaints filed in state courts purporting to plead such state common law causes of action are removable to federal court under 28 U.S.C. § 1441(b).
General Motors Corporation, a Delaware corporation whose principal place of business is in Michigan, has set up an employee benefit plan subject to the provisions of ERISA for its salaried employees. The plan pays benefits to salaried employees disabled by sickness or accident, and is insured by the Metropolitan Life Insurance Company (Metropolitan).
severe emotional problems. Metropolitan began paying benefits under General Motors' employee benefit plan, but asked Taylor to submit to a psychiatric examination by a designated psychiatrist. He did so, and the psychiatrist determined that Taylor was emotionally unable to work. Six weeks later, after a followup examination, however, Metropolitan's psychiatrist determined that Taylor was now fit for work; Metropolitan stopped making payments as of July 30, 1980.
Meanwhile, Taylor had filed a supplemental claim for benefits, alleging that his back injuries disabled him from continuing his work. Metropolitan again sent Taylor to be examined, this time by an orthopedist. The physician found no orthopedic problems, and Metropolitan subsequently denied the supplemental disability claim. On October 31, General Motors requested that Taylor report to its medical department for an examination. That examination took place on November 5, and a General Motors physician concluded that Taylor was not disabled. When Taylor nevertheless refused to return to work, General Motors notified him that his employment had been terminated.
"compensatory damages for money contractually owed Plaintiff, compensation for mental anguish caused by breach of this contract, as well as immediate reimplementation of all benefits and insurance coverages Plaintiff is entitled to,"
General Motors and Metropolitan summary judgment on the merits. 588 F.Supp. 562 (ED Mich.1984).
The Court of Appeals reversed on the ground that the District Court lacked removal jurisdiction. 763 F.2d 216 (CA6 1985). Noting a split in authority on the question among the federal courts, [Footnote 2] the Court of Appeals found that Taylor's complaint stated only state law causes of action subject to the federal defense of ERISA preemption, and that the "well-pleaded complaint" rule of Louisville & Nashville R. Co. v. Mottley, 211 U. S. 149 (1908), precluded removal on the basis of a federal defense. 763 F.2d at 219. The Court of Appeals further held that the established doctrine permitting the removal of cases purporting to state only state law causes of action in labor cases preempted by § 301 of the Labor Management Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U.S.C. § 185, did not apply to this case. 763 F.2d at 220. We granted certiorari, 475 U.S. 1009 (1986), and now reverse.
a covered plan, it falls directly under § 502(a)(1)(B) of ERISA, which provides an exclusive federal cause of action for resolution of such disputes. Ante at 481 U. S. 56.
"any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending."
28 U.S.C. § 1441(a). One category of cases over which the district courts have original jurisdiction are "federal question" cases; that is, those cases "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. It is long-settled law that a cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law. Gully v. First National Bank, 299 U. S. 109 (1936); Louisville & Nashville R. Co. v. Mottley, supra. The "well-pleaded complaint rule" is the basic principle marking the boundaries of the federal question jurisdiction of the federal district courts. Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal., supra, at 9-12.
in character. For 20 years, this Court has singled out claims preempted by § 301 of the LMRA for such special treatment. Avco Corp. v. Machinists, 390 U. S. 557 (1968).
"The necessary ground of decision [in Avco] was that the preemptive force of § 301 is so powerful as to displace entirely any state cause of action 'for violation of contracts between an employer and a labor organization.' Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301."
Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal., supra, at 463 U. S. 23 (footnote omitted).
There is no dispute in this litigation that Taylor's complaint, although preempted by ERISA, purported to raise only state law causes of action. The question therefore resolves itself into whether or not the Avco principle can be extended to statutes other than the LMRA in order to recharacterize a state law complaint displaced by § 502(a)(1)(B) as an action arising under federal law. In Franchise Tax Board, the Court held that ERISA preemption, without more, does not convert a state claim into an action arising under federal law. Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. at 463 U. S. 25-27. The court suggested, however, that a state action that was not only preempted by ERISA, but also came "within the scope of § 502(a) of ERISA" might fall within the Avco rule. Id. at 463 U. S. 24-25. The claim in this case, unlike the state tax collection suit in Franchise Tax Board, is within the scope of § 502(a), and we therefore must face the question specifically reserved by Franchise Tax Board.
were free to obtain remedies under state law that Congress rejected in ERISA."
"The district courts of the United States shall have jurisdiction, without respect to the amount in controversy or the citizenship of the parties, to grant the relief provided for in subsection (a) of this section in any action."
those brought under section 501 of the Labor-Management Relations Act of 1947."
"[i]t is intended that such actions will be regarded as arising under the laws of the United States, in similar fashion to those brought under section 301 of the Labor Management Relations Act."
120 Cong.Rec. 29933 (1974). See also id. at 29942 (remarks of Sen. Javits) (federal substantive law to "deal with issues involving rights and obligations under private welfare and pension plans").
Taylor argues strenuously that this action cannot be removed to federal court, because it was not "obvious" at the time he filed suit that his common law action was both preempted by § 514(a), 29 U.S.C. § 1144(a), and also displaced by the civil enforcement provisions of § 502(a). See Brief for Respondent 14-21. But the touchstone of the federal district court's removal jurisdiction is not the "obviousness" of the preemption defense, but the intent of Congress. Indeed, as we have noted, even an "obvious" preemption defense does not, in most cases, create removal jurisdiction. In this case, however, Congress has clearly manifested an intent to make causes of action within the scope of the civil enforcement provisions of § 502(a) removable to federal court. Since we have found Taylor's cause of action to be within the scope of § 502(a), we must honor that intent, whether preemption was obvious or not at the time this suit was filed.
* Together with No. 85-688, General Motors Corp. v. Taylor, also on certiorari to the same court.
"(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."
Compare Clorox Co. v. United States District Court, 779 F.2d 517, 521 (CA9 1985); Roe v. General American Life Ins. Co., 712 F.2d 450, 452 (CA10 1983); Leonardis v. Local 282 Pension Trust Fund, 391 F.Supp. 554, 556-557 (EDNY 1975); Tolson v. Retirement Committee of the Briggs & Stratton Retirement Plan, 566 F.Supp. 1503, 1504 (ED Wis.1983) (all finding removal jurisdiction), with Taylor v. General Motors Corp., 763 F.2d 216, 219-220 (CA6 1985); Powers v. South Central United Food & Commercial Workers Unions, 719 F.2d 760, 763-767 (CA5 1983) (no removal jurisdiction).
I write separately only to note that today's holding is a narrow one. The Court rejects the position, urged by respondent, that removal jurisdiction exists only when the complaint states a claim that is "obviously" preempted by state law -- that is, when a federal statute has obviously preempted state law, or when a decision of this Court has construed an ambiguous federal statute to preempt state law. The Court instead focuses on the "intent of Congress," ante at 481 U. S. 66, to make respondent's cause of action removable to federal court. This intent to preempt became effective when ERISA became law. Consequently, although preemption was not obvious under respondent's standard at the time of removal,* the District Court did in fact have jurisdiction over respondent's preempted claim.
"Congress has clearly manifested an intent to make causes of action . . . removable to federal court." Ibid. (emphasis added). In future cases involving other statutes, the prudent course for a federal court that does not find a clear congressional intent to create removal jurisdiction will be to remand the case to state court.
* In the understated words of a prior case which this Court repeats today, the preemption provisions of ERISA "perhaps are not a model of legislative drafting,'" Pilot Life Ins. Co. v. Dedeaux, ante at 481 U. S. 46, quoting Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 471 U. S. 739 (1985). Accordingly, before today's decision in Pilot Life, the answer to the question whether ERISA preempted state claims of the sort at issue here was not obvious.

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