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CHARTER FAIRMOUNT INST. v. ALTA HEALTH STRATEGIES

September 22, 1993

CHARTER FAIRMOUNT INSTITUTE, INC.
v.
ALTA HEALTH STRATEGIES



The opinion of the court was delivered by: BY THE COURT; HERBERT J. HUTTON

 HUTTON, J. September 22, 1993

 Presently before the Court is the plaintiff Charter Fairmount Institute's ("Charter Fairmount") Motion for Remand; defendant Alta Health Strategies' ("Alta") response; Charter Fairmount's reply; Alta's Motion to Dismiss; Charter Health's response; and Alta's reply.

 I. FACTUAL BACKGROUND

 The plaintiff, Charter Fairmount Institute, Inc., is a hospital seeking reimbursement for medical services rendered to Miss Heather Craiter. Miss Craiter was insured under her mother's health insurance plan. The defendant, Alta Health Strategies, administered the insurance plan that provided Miss Craiter's health insurance coverage. During the period from May 20, 1992 until June 25, 1992, Miss Craiter was hospitalized at the plaintiff's facility for major affective disorder. As a result of her hospitalization, charges were incurred in the amount of $ 43,536.75.

 Alta allegedly confirmed that it would pay 100% of all expenses after the policy holder had met her $ 200 deductible. Miss Craiter's right to receive benefits under the plan was assigned to Charter Fairmount. Alta refused to pay, claiming that Miss Craiter's condition was "preexisting," and therefore excluded from coverage under the plan.

 Charter Fairmount commenced an action in the Court of Common Pleas of Philadelphia County against Alta, in which it sought reimbursement for the $ 43,536.75 charge. Charter Fairmount premised its action on the following three common law theories: estoppel, misrepresentation and negligent misrepresentation. Believing the causes of action to be preempted by The Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461, Alta removed the case to this Court.

 II. DISCUSSION

 The defendant's theory of the case is that it is entitled to dismissal under Fed. R. Civ. P 12(b)(6) because the plaintiff's state law claims are preempted by ERISA and its complaint fails to state a claim upon which relief may be granted under ERISA. The question of whether removal was appropriate in this case is inextricably intertwined with the question of whether the plaintiff's causes of action are preempted.

 A. Removal Under § 1144(a)

 The court's consideration of whether removal was proper must begin with a consideration of 28 U.S.C. § 1441, which grants defendants the right, in appropriate circumstances, to remove a case to federal court. Under 28 U.S.C. § 1441(a),

 
any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . .

 28 U.S.C.A. § 1441(a) (West 1985 & Supp. 1993). However, the district court must remand a case "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction." Id. § 1447(c). Where there is no diversity of citizenship between the parties, the plaintiff's cause of action must raise a federal question. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 96 L. Ed. 2d 318, 107 S. Ct. 2425 (1987). In its Petition for Removal, the defendant did not allege that diversity jurisdiction lies in the present case. *fn1" Thus, this Court's original jurisdiction over this matter lies, if at all, under federal question jurisdiction. See 28 U.S.C. § 1331(a).

 1. The Well Pleaded Complaint Rule

 Alta's argument with respect to removal is that because the plaintiff's claims are preempted by ERISA, the complaint presents a federal question. Thus, it asserts, the matter is removable under § 1441(a). The general rule, however, is that the plaintiff is entitled to remain in state court so long as its complaint does not present, on its face, an issue under federal law. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987); Railway Labor Execs. Ass'n v. Pittsburgh & Lake Erie R.R. Co., 858 F.2d 936, 939 (3d Cir. 1988). For a case to present a federal question, "the statute, . . . right or immunity created by the Constitution or laws of the United States must be an element, and an essential one of the plaintiff's cause of action." Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112, 81 L. Ed. 70, 57 S. Ct. 96 (1936). Federal preemption is ordinarily a defense to a plaintiff's suit and, as such, does not appear on the face of a well-pleaded complaint. Albert Einstein Med. Ctr. v. National Benefit Fund for Hosp. & Health Care Employees, 740 F. Supp. 343, 348 (E.D. Pa. 1989).

 On its face, Charter Fairmount's complaint does not present a federal question. Rather, the complaint speaks the language of common law tort. It asserts claims for estoppel, misrepresentation and negligent misrepresentation. It does not expressly refer to ERISA and the rights or immunities created under ERISA are not essential elements of the plaintiff's claims. ...


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