Opinion ID: 721469
Heading Depth: 2
Heading Rank: 5

Heading: Jurisdiction Over Jass' Claim Against Margulis

Text: 23 In her complaint, Jass alleged a negligence claim against Margulis. Specifically, she alleged that Margulis, who was a registered nurse, had the duty to manage, control and determine the medical care required by the Plaintiff to treat her medical condition as herein described and that Margulis was negligent in her duty because she negligently and carelessly failed to see that the Plaintiff received appropriate therapy subsequent to her surgery; negligently and carelessly secured the discharge of the Plaintiff from the hospital on January 18, 1992; and negligently and carelessly abandoned the Plaintiff. And that this negligence caused ... permanent damage and injury to her right knee.... 24 Jass argues that her claim against Margulis is purely a state law medical negligence claim and that she has not alleged a cause of action under any federal law nor has she sought damages or compensation under federal law. Therefore, Jass argues, her claim against Margulis cannot be completely preempted by ERISA. 25 While Jass presented her claim against Margulis as a state law negligence claim, [w]e know that if [Plaintiff's] state law claim is within the scope of § 502(a) it is completely preempted regardless of how [s]he has characterized it. Rice, 65 F.3d at 642. We also know that a plaintiff cannot avoid complete preemption, and thereby deny a defendant access to federal court if the actual nature of the complaint is federal, Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir.1993), by artfully pleading a complaint so as to omit facts that indicate federal jurisdiction. Franchise Tax, 463 U.S. at 22, 103 S.Ct. at 2852-53. See also Burda v. M. Ecker Co., 954 F.2d 434, 438 n. 3 (7th Cir.1992) (A plaintiff also may not artfully omit facts that indicate federal jurisdiction.). Therefore, a federal court may, in some situations, look beyond the face of the complaint to determine whether a plaintiff has artfully pleaded his suit so as to couch a federal claim in terms of state law. Id. at 438. Such a situation exists where, as here, federal law displaces an area of state law and the plaintiff frames her complaint in such a way as to avoid the appearance of complete preemption. Shannon v. Shannon, 965 F.2d 542, 546 (7th Cir.1992) (removal of complaint is proper even if federal jurisdiction under ERISA § 502(a) is not evident from the complaint); Rice, 65 F.3d at 645 n. 8 (Of course, this decision does not give plaintiffs license to avoid complete preemption by artful pleading.). Cf. Oglesby v. RCA Corp., 752 F.2d 272, 278 (7th Cir.1985) (holding that the court properly looked beyond the complaint to determine if a claim was subject to complete preemption under the Labor Management Relations Act). 26 The question, then, is whether Jass' claim against Margulis is really based on ERISA, Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073, 1075 (7th Cir.1992), or in other words whether the claim is best recharacterized as a 502(a)(1)(B) claim to recover benefits due under the terms of the plan. Taylor, 481 U.S. at 64, 107 S.Ct. at 1547 (question is whether complaint that raises only state law causes of action is properly recharacterized as an action arising under federal law); Rice, 65 F.3d at 641 (the question is whether plaintiff's claim against defendant is within the scope of § 502(a), even though the complaint alleged only state common law contract and tort claims). This question requires us to apply the factors set forth in Rice, as listed above. See supra at 1488. And in applying these factors, as noted above, we are not limited by the complaint, but may look beyond it to assure ourselves that the plaintiff has not by 'artful pleading' sought to defeat defendant's right to a federal forum. Oglesby, 752 F.2d at 277-78 (quoting Salveson v. Western States Bankcard Assoc., 525 F.Supp. 566, 572 (N.D.Cal.1981)). 27 The Rice factors all support the conclusion that Jass' claim against Margulis is really a § 502(a) denial of benefits claim. First, as a plan participant Jass was entitled to bring suit under § 502(a). In fact, the record contains an earlier complaint that Jass filed arising out of the same events. In that complaint against Margulis and PruCare, Jass sought recovery for PruCare's denial of benefits concerning rehabilitation treatment. 28 Second, Jass' claim against Margulis is in effect a claim for denial of benefits. Jass alleged that Margulis determined that said course of treatment was not medically necessary and she then proceeded to secure the discharge of the Plaintiff from the hospital on January 18, 1992. This was a determination of benefits within the meaning of ERISA. See Corcoran, 965 F.2d at 1331-32 (utilization review nurse's determination, while including a medical determination, was nonetheless a benefits determination); Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 357 (3d Cir.1995) (Section 502(a)(1)(B) claim to recover benefit due under the plan is concerned exclusively with whether or not the benefits due under the plan were actually provided). 29 Jass attempts to obscure the federal nature of this case by alleging that Margulis voluntarily assumed a duty to manage, control and determine the medical care required by the Plaintiff to treat her medical condition as herein described. Jass also attempts to present her claim against Margulis as something other than a denial of benefits claim by creating the impression that Margulis provided her with medical services. She does this by stressing the fact that Margulis was a registered nurse. What Jass artfully omits, however, is that Margulis was a utilization review administrator for PruCare who, pursuant to the position, determined the appropriate health benefits due Jass under the Certificate of Insurance. 30 The record also reveals that Margulis' only contact with Jass was in her capacity as an administrator for PruCare; the record includes an affidavit of Margulis stating that at all the times alleged in Jass' complaint she acted as a registered nurse in the course and scope of my employment with The Prudential and I have never taken any action regarding plaintiff other than through my responsibilities as an employee of The Prudential. She further stated that her sole and exclusive contact with plaintiff was participating in the determination of benefits due to plaintiff under the terms of the applicable ERISA plan. Jass cannot avoid complete preemption by deceptively alleging that Margulis voluntarily assumed duties which are identical to her duties as a utilization review administrator for PruCare (especially in the wake of her earlier complaint that asserted pretty much the opposite). 31 Third, Jass' negligence claim against Margulis cannot be resolved without interpreting the benefits contract because that contract provided the benefits to which Jass was entitled. See Rice, 65 F.3d at 644 (where state law creates a quality standard by which performance of the contract is evaluated then that state law is completely preempted.) As the Supreme Court stated in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56, 107 S.Ct. 1549, 1557-58, 95 L.Ed.2d 39 (1987), Congress ... ma[d]e clear its intention that all suits brought by beneficiaries or participants asserting improper processing of claims under ERISA-regulated plans be treated as federal questions governed by § 502(a). 32 In response, Jass argues that she is not availing herself of the ERISA statute, but is merely seeking a state law remedy. In so arguing, Jass misses the import of ERISA complete preemption--the preemptive force of ERISA is so powerful that it converts a state law claim into an action arising under federal law, even if the plaintiff does not want relief under ERISA. Taylor, 481 U.S. at 64, 107 S.Ct. at 1547. This is true even though the same facts might be sufficient to state a state law cause of action for negligence. Taylor, 481 U.S. at 66-67, 107 S.Ct. at 1547-48 (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 ... though [the suit] purports to raise only state law claims....). Such a claim that is within the civil enforcement provisions of 502(a) is completely preempted. Id. And since ERISA provides the exclusive remedies for beneficiaries to recover benefits from a covered plan, id. at 62-63, 107 S.Ct. at 1545-46, Jass' negligence claim against Margulis, a utilization review administrator for the plan, is properly recharacterized as a claim arising under federal law. Id. Therefore, the district court had subject matter jurisdiction over this claim. 5 33