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ALLERGY DIAGNOSTICS LAB. v. EQUITABLE

December 17, 1991

ALLERGY DIAGNOSTICS LABORATORY, PLAINTIFF,
v.
THE EQUITABLE AND MR. ROBERT GARDNER, BENEFIT APPROVER, DEFENDANTS.



The opinion of the court was delivered by: Lewis, District Judge.

MEMORANDUM OPINION

Plaintiff, a medical service provider, filed a number of small complaints with its local district justice. Its default judgments were consolidated for appeal in the Court of Common Pleas of Allegheny County, Civil Division, Arbitration Division. This state court action alleged, inter alia, avoidance of payment for medical services by defendant. On December 14, 1990, defendant The Equitable, an "employee welfare benefit plan" within the meaning of 29 U.S.C. § 1002, petitioned this court for removal under 28 U.S.C. § 1441, claiming that plaintiff's suit presented removable federal questions arising under the Employee Retirement Income Security Act of 1974, 29 U.S.C.A. § 1001, et seq. (ERISA). Accordingly, defendants asserted that the district court had exclusive original jurisdiction.

Presently before the court is a question regarding the court's subject matter jurisdiction. Under these circumstances, a court is obligated to make its own determination as to whether it can assume jurisdiction over matters relating to an action. If the court concludes that it lacks subject matter jurisdiction, it may, on its own motion, remand the case to state court. McDonough v. Blue Cross of Northeastern Pennsylvania, 131 F.R.D. 467 (W.D.Pa. 1990); Mall v. Atlantic Financial Federal, 127 F.R.D. 107 (W.D.Pa. 1989); Recchion v. Kirby, 637 F. Supp. 290 (W.D.Pa. 1986).

Upon the court's raising the jurisdictional issue at a status conference, defendant argued that because it is an ERISA plan this claim must be brought in federal court as "relating to" such a plan. Defendant further urged that the court find that plaintiff lacked standing to bring an ERISA action. This opinion addresses jurisdictional issues and ERISA preemption of state law claims brought by a medical service provider against an employee welfare benefit plan. In the court's view, discussion of defendant's standing claim is necessary only to the extent that that claim relates to the jurisdiction and preemption issues. Because a medical service provider lacks standing under Third Circuit law to assert a claim under ERISA's exclusive civil enforcement provisions, the court finds that the circumstances of this case warrant remand.

DISCUSSION

Defendant grounded its petition for removal on ERISA § 514, which provides:

  Except as otherwise provided in subsection (b)
  (dealing with laws which regulate insurance), the
  provisions of this subchapter shall supersede any
  and all state laws insofar as they now or
  hereinafter relate to any employee benefit plan.

29 U.S.C.A. § 1144.

The Supreme Court, in Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987), interpreted this section in conjunction with the legislative history of the Act and held that the civil enforcement provisions of ERISA § 514 are the exclusive vehicle for actions by ERISA plan participants and beneficiaries. As such, all claims arising under this provision present removable federal questions.

Supreme Court doctrine does not, however, permit automatic removal of all ERISA cases to federal court. In Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987), the Court held that merely because a state law claim is subject to preemption does not convert the state claim into a federal question within the meaning of 28 U.S.C. § 1331. See also Allstate Insurance Co. v. 65 Security Plan, 879 F.2d 90, 93 (3d Cir. 1989). Under the removal statute, 28 U.S.C. § 1441(b), absent diversity of citizenship (as in the present case), a defendant's power to remove a state court action to federal court turns on whether the plaintiff's claim arises under federal law within the meaning of 28 U.S.C.A. § 1331. McDonough, 131 F.R.D. at 469. Moreover, for both removal and original jurisdiction, the federal question*fn1 must appear on the face of the complaint unaided by the answer, counterclaim or petition for removal. Id. at 469.

These firmly-established principles are recognized as the "well pleaded complaint rule." This rule remains in effect where plaintiff's state law claims are faced with an ERISA preemption defense. Metropolitan Life, 481 U.S. at 63, 107 S.Ct. at 1546; Allstate, 879 F.2d at 93. ("[T]he fact that the [defendant] may have a[n] [ERISA] preemption defense does not alone permit removal."). An exception to the well-pleaded complaint rule, known as complete preemption, exists only where it is found that Congress has so completely preempted a particular area, that "any civil complaint raising this select group of claims is necessarily federal in character." McDonough, 131 F.R.D. at 470.

Plaintiff's complaint appears to present a simple state law breach of contract claim.*fn2 As such, the court must determine whether the claim asserted is one of those "select group of claims" which Congress intended to fall within ERISA's exclusive civil enforcement provisions as set forth in § 502(a), 29 U.S.C. § 1132(a). McDonough, 131 F.R.D. 467. In Allstate, the Third Circuit outlined a two-prong test which will support removal jurisdiction in an ERISA case:

  1.  Congressional intent to permit removal
      despite plaintiff's exclusive reliance on
      state law (preemption); and
  2.  The enforcement provisions of the federal
      statute create a federal cause of action
      vindicating the same interests that the
      plaintiff's state law ...

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