Opinion ID: 72773
Heading Depth: 2
Heading Rank: 4

Heading: Complete Preemption And Removal Jurisdiction

Text: 39 Although we have determined that Paul Revere has a valid ERISA preemption defense to Engelhardt's fraudulent inducement claim, that determination does not establish that Engelhardt's complaint was removable to federal court. See Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 25-28, 103 S.Ct. 2841, 2854-56, 77 L.Ed.2d 420 (1983) (holding that ERISA preemption defense, without more, does not create removal jurisdiction). Engelhardt contends that, irrespective of the validity of Paul Revere's preemption defense, Count I was properly remanded to state court because the district court never acquired jurisdiction over Engelhardt's claims. We disagree. 40 Engelhardt's complaint at the time of removal purported to state only a state law claim for fraudulent inducement. Ordinarily, jurisdiction under 28 U.S.C. § 1331 is proper only if a federal question appears on the face of the plaintiff's well-pleaded complaint. 8 However, under the complete preemption doctrine, Congress may preempt an area of law so completely that any complaint raising claims in that area is necessarily federal in character and therefore necessarily presents a basis for federal court jurisdiction. Kemp v. International Bus. Mach., Corp., 109 F.3d 708, 712 (11th Cir.1997). If a state law claim is completely preempted, courts are required to recharacterize the claim as one arising under federal law for purposes of determining removal jurisdiction. Id. 41 It is well settled that Congress [ ] accomplished [ ] 'complete preemption' in 29 U.S.C. § 1132(a), which provides the exclusive cause of action for the recovery of benefits governed by an ERISA plan. Id. (emphasis supplied). As a result, claims that fall within the scope of § 1132(a) are treated as arising under federal law and thus may be removed to federal court. As explained in Kemp, removal jurisdiction in cases such as this one turns on whether the plaintiff[ ][is] seeking relief that is available under 29 U.S.C. § 1132(a). Id. 42 Even though Engelhardt's original complaint purported to raise only a state law claim for fraud, it falls within the scope § 1132(a) for three reasons. First, as discussed above, Engelhardt and Paul Revere are ERISA entities whose relationship became strained when Paul Revere denied Engelhardt's claim for benefits under the ERISA plan. Thus, Engelhardt and Paul Revere are precisely the types of parties who Congress intended to litigate under § 1132(a), and their dispute is precisely the type of dispute that the statute was intended to resolve. See 29 U.S.C. § 1132(a); 9 cf. Kemp, 109 F.3d at 714 (finding no complete preemption where plaintiff sought benefits from a non-ERISA plan). 43 Second, Engelhardt's lawsuit is essentially a challenge to Paul Revere's refusal to pay benefits. The last two paragraphs of Engelhardt's original complaint are instructive on this point: 44 As a proximate result of the fraudulent inducements by [Paul Revere], plaintiff accepted the policy. Plaintiff lost monthly disability insurance benefits and will continue to lose such benefits from January 1996 until he reaches the age of 65. 10 45 Wherefore, plaintiff demands judgment against [Paul Revere] in such amount of compensatory damages as a jury will award, a separate amount of punitive damages, and his costs. 46 (R.1-1 at 5.) Engelhardt is thus alleging, in effect, that the measure of his compensatory damages is the amount of benefits wrongfully withheld by Paul Revere. The complaint makes no reference to any benefits that Engelhardt gave up by choosing to participate in Paul Revere's plan. Section 1132(a) provides a cause of action for the recovery of plan benefits and allows for the recovery of costs in bringing such a claim. Engelhardt thus seeks relief that is available under § 1132(a). 11 47 Third, Engelhardt's original complaint did not seek recission of his contract, and Engelhardt has never attempted to terminate their ERISA relationship. Rather, Engelhardt has stood on his contract and, despite characterizing his claim as one for fraud, has pursued the contractual benefits Paul Revere promised him. His claim thus lies at the heart of § 1132(a). 12 48 Therefore, by virtue of the complete preemption doctrine, Engelhardt's state law claim must be recharacterized as an ERISA claim that was removable to federal court. 49