Court Opinion

ID: 9004832
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:23:41.001896+00
Date Added: 2024-06-11T17:11:15.552775
License: Public Domain

RYAN, Circuit Judge,
dissenting.
The majority leaves to one side the issue of whether the district court had subject matter jurisdiction over Fisher’s claims. Because I believe that the court is obliged to determine its jurisdiction and because I conclude that the court lacks jurisdiction over Fisher’s claims, I respectfully dissent.
Although neither party addressed the jurisdictional issue in their briefs on appeal, the matter was raised at oral argument. Moreover, because federal courts have limited jurisdiction,
every federal appellate court has a special obligation to “satisfy itself not only of its own jurisdiction, but also that of the lower courts in a case under review,” even though the parties are prepared to concede it. “And if the record discloses that the lower court was without jurisdiction this court will notice the defect, although the parties make no contention concerning it. [When the lower federal court] lack[s] jurisdiction, we have jurisdiction on appeal, not of the merits but merely for the purpose of correcting the error of the lower court in entertaining the suit.”
Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d 501 (1986) (citations omitted). Because the district court lacked jurisdiction, the majority errs by reaching the merits of Fisher’s claims.
Fisher originally filed his suit in a Tennessee state court. Combustion Engineering removed the suit to federal court, asserting jurisdiction under ERISA and on the basis of diversity of citizenship. Because the record does not support either of these bases of federal jurisdiction, I would vacate the judgment of the district court and remand the case with instructions to the district court to dismiss the action for want of jurisdiction.
The majority opinion concludes broadly that “Fisher’s state law claims are preempted by ERISA because they ‘relate to’ the company’s ERISA plan.” Maj. op. at 297. This conclusion is based upon the Supreme Court’s observation that “the express pre-emption provisions of ERISA are deliberately expansive....” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45-46, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987). ERISA preempts, with certain specified exceptions, “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan_” 29 U.S.C. § 1144(a). As the majority opinion notes, the expansiveness of ERISA preemption stems from the broad meaning that has been given to the phrase “relate to,” which has been construed so that a state law cause of action is preempted if “ ‘it has connection with or reference to’ ” an ERISA plan. Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272, 1275 (6th Cir.1991) (citations omitted), cert. dismissed, — U.S. -, 113 S.Ct. 2, 120 L.Ed.2d 931 (1992).
The breadth of ERISA, however, is topical, not temporal. Although ERISA preemption applies to any state law cause of action relating to a pension plan, its temporal dimensions are expressly limited:
This section shall not apply with respect to any cause of action which arose, or any act or omission which occurred, before January 1, 1975.
29 U.S.C. § 1144(b)(1).
Courts that have construed this section have read these two clauses disjunctively, thus creating two separate inquiries: 1) when did the cause of action arise; and 2) when did the relevant act or omission occur. See, e.g., Rodriguez v. MEBA Pension Trust, 872 F.2d 69 (4th Cir.), cert. denied, 493 U.S. 872, 110 S.Ct. 202, 107 L.Ed.2d 155 (1989). The first issue is resolved easily because courts have held uniformly that “[a]n ERISA cause of action does not accrue until a claim of benefits has been made and formally denied.” Id. at 72 (citing cases from four other circuits).
The second inquiry is more difficult— what conduct amounts to an “act or omission” so that ERISA does not apply to claims related to that conduct. Stated differently, does ERISA apply where a plaintiff’s claim for pension benefits is made and denied after ERISA’s effective date, but the act or omission on which that denial *299is based occurred before ERISA’s effective date? Although this court has not addressed the issue, other circuits have addressed it and have reached different results. Three circuits, the Third, the Fourth, and the Fifth, have held that a pension plan trustee’s ultimate denial of a claim for benefits is the relevant act or omission and ERISA therefore applies as long as the denial occurred post-ERISA, even if the denial was the inevitable result of an act that occurred pre-ERISA. Id.; Degan v. Ford Motor Co., 869 F.2d 889, 894 (5th Cir.1989); Tanzillo v. Local 617, Int’l Bhd. of Teamsters, 769 F.2d 140, 144 (3d Cir.1985); Woodfork v. Marine Cooks & Steward Union, 642 F.2d 966, 971 (5th Cir.1981). Three other circuits, the First, the Second, and the Ninth, have held that ERISA does not apply where a post-ERISA denial of benefits is the inevitable result of a pre-ERISA act or omission. LaMontagne v. United Wire, Metal & Mach. Pension Fund, 869 F.2d 153, 156-57 (2d Cir.), cert. denied, 493 U.S. 818, 110 S.Ct. 72, 107 L.Ed.2d 39 (1989); Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1501 (9th Cir.1984); Quinn v. Country Club Soda Co., 639 F.2d 838, 841 (1st Cir.1981).
I agree with these latter courts. The relevant statutory language provides that ERISA preemption does “not apply with respect to any cause of action which arose, or any act or omission which occurred, before January 1, 1975.” 29 U.S.C. § 1144(b)(1) (emphasis added). The word “or” is generally understood in the disjunctive sense. Thus, under this section, ERISA does not preempt state law . when either one of two circumstances obtain— when the cause of action arose before January 1, 1975, or when any act or omission occurred before that date. To interpret the “act or omission” language as covering the same circumstances as the “cause of action” language would render the former superfluous.
Although the ERISA preemption provisions are not addressed specifically to the scope of jurisdiction granted to federal courts, they indicate the legislative intent with respect to this issue. ERISA provides that a plan participant or beneficiary may bring a civil action to recover benefits under the terms of a pension plan and that federal district courts have concurrent jurisdiction over such claims with state courts of competent jurisdiction. 29 U.S.C. §§ 1132(a)(1)(B) and (e). Under section 1144, however, ERISA does not apply to “any cause of action which arose, or any act or omission which occurred, before January 1, 1975.” 29 U.S.C. § 1144(b)(1). Where the substantive provisions of ERISA do not apply, there is no reason to provide a federal forum. I agree with the Ninth Circuit’s reasoning in Menhorn that “[sjections 1132 and 1144 read together reflect no congressional intent to burden the federal courts with a new class of actions having nothing to do with federal law.” 738 F.2d at 1503. Thus, I would find that where the substantive provisions of ERISA do not apply to the plaintiff’s claims, there is no federal jurisdiction under ERISA.
In this case, Combustion Engineering ultimately denied Fisher’s claim for benefits based on the 1958 service date in 1985, when Fisher retired and long after the effective date of ERISA. Fisher’s cause of action thus arose after ERISA’s effective date. Combustion Engineering’s denial of Fisher’s claim was based, however, on an act that occurred long before January 1, 1975. When Fisher’s employment with Combustion Engineering was terminated in 1961, he signed a waiver indicating that he elected to have his interest under Combustion Engineering’s pension plan transferred to U.S. Pipe and that he waived “any and all benefits” under the CE plan.
The denial of Fisher’s claim for benefits based on a 1958 start date was the inevitable consequence of the termination of Fisher’s employment in 1961. As a result, ERISA does not apply to Fisher’s claims, and the district court did not have jurisdiction over those claims under ERISA.
In its petition to remove, Combustion Engineering also asserted diversity of citizenship as a basis for jurisdiction. The record, however, does not support this basis of jurisdiction either. In its removal petition, Combustion Engineering conceded that its *300principal place of business is in Tennessee. For purposes of determining diversity of citizenship, a corporation is “deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.... ” 28 U.S.C. § 1332(c)(1). Fisher is also a citizen of Tennessee. The parties to this dispute are therefore not of diverse citizenship, and the district court lacked diversity jurisdiction over Fisher’s claim. 28 U.S.C. § 1332(a)(1).
Because the record reveals that the district court lacked jurisdiction over Fisher’s claims, I would vacate the district court's judgment and remand with instructions that the district court dismiss the case for lack of jurisdiction.