defendants' activity with respect to the Accident Plan does not constitute endorsement of the plan, and with defendants arguing that it does.
The facts of record before this court suggest that defendants did not simply confine the insurer to publicizing the Accident Plan. Rather, the Accident Plan was presented to employees as a plan belonging to Westinghouse's benefits package and specifically endorsed by Westinghouse. Defendants' Memorandum, Exhibit "A". Moreover, Westinghouse did not only collect the insurance premiums and forward them to the insurer; as with the Insurance Plan, it also, (a) provided employees the opportunity to discuss the plan with their supervisors and (b) processed claims. Id., Affidavit of John W. McCrea.
Accordingly, the Accident Plan is not excluded from the status of employee welfare plan by Regulation 2510.3-1(j). This plan is thus a plan established by an employer pursuant to Section 1002(1). See also Donovan v. Dillingham, 688 F.2d 1367 (11th Cir. 1982) (establishment of plan can be determined from the surrounding circumstances); Hamberlin v. VIP Insurance Trust, 434 F. Supp. 1196 (D. Ariz. 1977). Thus, the claims against the Accident Plan are also preempted by ERISA for the reasons announced in Section 2 above.
Defendants' argument as to Westinghouse falls roughly into two parts. Defendants first contend that plaintiff's claims against Westinghouse, while again styled as violations of duties under the insurance contracts, are essentially claims for a breach of fiduciary duty in Westinghouse's role as a plan administrator for both plans. Defendants' Memorandum at 13-14. For defendants, therefore, Section 1144(a) preempts the entire field of fiduciary obligations relating to ERISA plans. Id. at 14 (citing Russell v. Massachusetts Mutual Life Insurance Co., 722 F.2d 482 (9th Cir. 1983)). Defendants then argue that a claim for a breach of fiduciary duty cannot arise under Section 1132(a)(1)(B) but only under (a)(2). Pursuant to Section 1132(e)(1), defendants point out, federal courts have exclusive jurisdiction over actions brought under Section 1132(a)(2). Accordingly, in defendants' view, because the state court never had jurisdiction over the claims against Westinghouse, this court can neither acquire derivative jurisdiction over those claims nor return them to the state court, but must dismiss them. Id. at 16 (citing Lambert Run Coal Co. v. Baltimore & Ohio Railroad Co., 258 U.S. 377, 66 L. Ed. 671, 42 S. Ct. 349 (1922)).
I agree with defendants that the substance of plaintiff's complaint against Westinghouse is for its breach of fiduciary duty as plan administrator under ERISA for both plans -- not for a breach of any duty under the insurance contracts. This means that the "savings clause" of Section 1144(b)(2)(A) is without application, and that the claims against Westinghouse are preempted by Section 1144(a). See Powell, No. 85-1072, slip op. at 10-11.
I do not, however, agree with defendants' further contention that the claims against Westinghouse could only be brought under Section 1132(a)(2), and hence lay outside the state court's concurrent jurisdiction, were not removable to this court, and must be dismissed. Section 1132 establishes several causes of action to promote enforcement of ERISA. A participant or a beneficiary may bring an action under Section 1132(a)(1)(B) to recover benefits under the plan or for other appropriate relief. A participant or a beneficiary may also bring an action under Section 1132(a)(2) for appropriate relief under Section 1109, which deals with liability for breach of fiduciary duty. Other provisions of Section 1132 provide still other causes of action.
A plaintiff's action, therefore, may fall into one of the provisions of Section 1132 depending upon the relief the plaintiff is seeking. Thus, although the substance of plaintiff's claims against Westinghouse refers to a breach of fiduciary duty as plan administrator under ERISA, plaintiff is essentially attempting to recover benefits due to her under the terms of the plans. Accordingly, her action would fall under Section 1132(a)(1)(B), not under (a)(2).
A recent Supreme Court case, Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 105 S. Ct. 3085, 3093, 87 L. Ed. 2d 96 (1985), supports this interpretation of Section 1132. In Russell, a beneficiary sued her employer, an insurance company that had provided an ERISA plan, alleging ERISA and various state law claims because the employer had improperly refused to pay benefits under the plan. Although originally denied benefits, plaintiff later received them, and her suit was thus based upon an improper refusal to pay benefits between the time of denial and that of reinstatement. Id. at 3087.
As the Court in Russell observed, a plaintiff has a choice among the civil enforcement provisions of Section 1132. If a beneficiary is denied benefits, she can bring an action pursuant to Section 1132(a)(1)(B) to recover the benefits or for other appropriate relief. Id. at 3093. If the refusal to pay benefits is part of a "larger systematic breach of fiduciary obligations," a beneficiary can bring an action under Section 1132(a)(2). Id. The Court noted that, in drafting Section 1109, enforced by Section 1132(a)(2), Congress intended to prevent the misuse of plan assets, which would protect the "entire plan," and was not concerned with protecting the "rights of an individual beneficiary." Id. at 3090 (footnote omitted).
Because the thrust of plaintiff's claims against Westinghouse, while referring to its fiduciary duty under ERISA, is to recover benefits due her under the plans, these claims could properly have been brought under Section 1132(a)(1)(B). Since, pursuant to Section 1132(e)(1), state courts have concurrent jurisdiction over such a suit, the claims against Westinghouse were properly removable to this court.
2) If any claims are identified under question 1 as a basis for removal, what would be the basis for this court's jurisdiction (1) over the claims which are not preempted and replaced by ERISA and/or (2) over the parties against whom only state law claims have been stated ?
Because the claims against the plans and Westinghouse are preempted by ERISA, there remain only the claims against Equitable, which are without dispute state law claims. The question then becomes whether this court can hear these claims pursuant to its "pendent party" jurisdiction.
The foremost decision on "pendent party" jurisdiction, Aldinger v. Howard, 427 U.S. 1, 49 L. Ed. 2d 276, 96 S. Ct. 2413 (1976), cautioned courts against a too ready extension of the jurisdiction of the federal courts under this concept. Id. at 18; 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3567.2 (1984). In Aldinger, the plaintiff had brought a Section 1983 suit against a county treasurer and county commissioners, but was unable to include the county itself within the suit because of the Section 1983 jurisprudence applicable at that time. Accordingly, she sought to bring the county into the suit on a "pendent party" theory by filing state law claims against it, although there was no independent basis for federal jurisdiction over the county. 427 U.S. at 4-5.
In refusing to allow joinder of the county as a "pendent party," the Court in Aldinger focused upon the interplay between Section 1343(3), which conferred jurisdiction upon the district courts for causes of action arising under Section 1983, and Section 1983 itself. Id. at 16-17. The Court observed that the scope of the "civil action" over which the courts were given jurisdiction pursuant to Section 1343(3) would have to be read in conjunction with Section 1983 jurisprudence. According to the Court, once viewed in this light, Section 1343(3) in the Section 1983 context should not allow courts to assert jurisdiction over a party, against whom only state law claims were alleged, when this party was excluded from liability under the very federal statute that provided the cause of action to which federal jurisdiction was extended by Section 1343(3). Id. at 17.
The Aldinger Court, however, limited its holding on "pendent party" jurisdiction to claims brought under Sections 1343(3) and 1983. It observed that "other statutory grants and other alignments of parties and claims might call for a different result." Id. at 18. Cautioning the courts that the "pendent party" area was "subtle and complex," the Court was reluctant to "lay down any sweeping pronouncement upon the existence or exercise of such jurisdiction." Id. The Court did, however, offer two guidelines: 1) a serious obstacle to such jurisdiction might exist if the party sought to be joined is not otherwise subject to federal jurisdiction; 2) the court should consider whether the statutory scheme "expressly or by implication" forbids the assertion of such jurisdiction. Id.
With respect to the first Aldinger guideline, defendants have suggested that diversity of citizenship between plaintiff and Equitable exists. The pleadings, however, are not adequate to support a finding that there is such diversity. They allege that plaintiff resides in Pennsylvania and that Equitable is an insurance carrier with a principal place of business in New York, but neither of these allegations serves to establish citizenship. See 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure §§ 3611, 3623 (1984).
Defendants also seem to suggest that Equitable is subject to federal jurisdiction because Westinghouse and the Insurance Plan have asserted cross-claims against this party. It is true that the assertion of cross-claims against a co-party pursuant to Rule 13(g) is within a court's ancillary jurisdiction; thus no independent ground of federal jurisdiction is needed. 6 C. Wright & A. Miller, Federal Practice and Procedure § 1433 (1971). However, to argue, as here, that a particular defendant is subject to federal jurisdiction because cross-claims have been asserted against it by a co-defendant, when there is no apparent basis for federal jurisdiction over plaintiff's claims against this defendant, is truly to put the cart before the horse.
Admittedly, the "pendent party" concept is applied in the situation when a plaintiff attempts to assert a claim -- over which a federal court would have no independent jurisdiction -- against a third-party defendant. See, e.g., Potter v. Rain Brook Feed Co., 530 F. Supp. 569 (E.D. Ca. 1982). Yet the applicability of this concept seems restricted to the situation where the third-party defendant is already in the suit before the assertion of plaintiff's claim against him. Id. at 570-71; see generally 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3567.2 (1984).
Because defendants have not overcome the "serious obstacle" to jurisdiction, as stated in the first Aldinger guideline, yet because they have implied that an independent jurisdictional basis for plaintiff's claims against Equitable might exist, I am reluctant at this time either to exercise this court's jurisdiction over these claims or to remand them to the state court. On the assumption that defendants can provide additional facts that would enable this court to conclude that there is diversity of citizenship between plaintiff and Equitable, I will give defendants twenty (20) days to file further submissions on this issue.
In making their further submissions, defendants would be well advised also to provide this court with material that would aid it in following the second Aldinger guideline: that this court satisfy itself that Congress, in promulgating the statutes conferring jurisdiction on ERISA matters, "has not expressly or by implication negated" the existence of "pendent party" jurisdiction. Although defendants have touched upon this issue in their earlier submission, they have not adequately briefed this court on the relevant legislative history and case law.
Finally, once a court determines that it has the power to permit the joinder of a pendent party, it must still determine whether such joinder is appropriate. See 13B C. Wright, A. Miller & E. Cooper, § 3567.2, at 160. In making this determination, a court should take into consideration the same factors that apply in the case of pendent claim jurisdiction, factors outlined by the Court in United Mine Workers of America v. Gibbs, 383 U.S. 715, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966). Although defendants raised the Gibbs factors in its earlier submissions -- a discussion I found persuasive, they would do well to apply them more directly to plaintiff's claims against Equitable.
To summarize, then, I find that all claims against the ERISA Insurance and Accident Plans and the claims against Westinghouse are preempted by Section 1144(a). Accordingly, I will deny plaintiff's motion to remand as to them. While I decline at this time to exercise pendent party jurisdiction over plaintiff's state law claims against Equitable, I reserve decision on this matter until further briefing by the parties.
An appropriate order follows.
For the reasons given in the attached memorandum, it is hereby ORDERED and DIRECTED that:
1) plaintiff's motion to remand as to the claims against the Westinghouse Insurance Plan, the Westinghouse Personal Accident Insurance Plan, and the Westinghouse Electric Corporation is DENIED.
2) defendants are directed to file further submissions on the issue of pendent party jurisdiction over Equitable Life Assurance Society of the United States by February 28, 1986. Plaintiff will respond to these submissions by March 14, 1986.
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