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Reinstadtler v. BayOne Urethane Systems

March 7, 2007

ERIC REINSTADTLER, PLAINTIFF,
v.
BAYONE URETHANE SYSTEMS, LLC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

Electronically Filed

MEMORANDUM OPINION

Defendants BayOne Urethane Systems, LLC. and the other eleven defendants filed a notice of removal of this case from the Court of Common Pleas of Allegheny County, Pennsylvania, claiming that: (a) Eric Reinstadtler's state court complaint, raising claims under Pennsylvania's Wage Payment and Collection Law ("WPCL") and Pennsylvania common law breach of contract, is actually a claim for severance benefits under an ERISA welfare benefits plan, as defined by 29 U.S.C. § 1002(1); (b) ERISA completely preempts plaintiff's claims, 29 U.S.C. § 1144(a); and (c) plaintiff's state court action is removable to federal court pursuant to 28 U.S.C. §§ 1441 and 1446.

This Court was not convinced, and entered a Rule to Show Cause on February 20, 2007, directing the parties to "file a Response to Rule to Show Cause, stating the party's respective positions as to whether this case involves a federal question, and whether it should or should not be remanded to the Court of Common Pleas of Allegheny County." After careful consideration of the responses to the Rule to Show Cause and plaintiff's complaint, the Court holds that there is no ERISA welfare benefits plan implicated, and even if there were, plaintiff's breach of contract and WPCL claims are not sufficiently "related to" said plan to preempt the state law claims.

Plaintiff's complaint alleges, in most pertinent part: plaintiff worked 18 years for defendant Bayer Material Science LLC; in 2004, he was asked to join a subsidiary of Bayer, BayOne Urethane Systems, LLC (BayOne); plaintiff agreed to join BayOne when he requested and received "multiple assurances that he would not lose any of his accrued benefits"; that BayOne gives "Severance Benefits" upon termination of employment equal to two weeks of base pay for each year of "combined" service; and that, at the time of his termination from BayOne in 2005, he had "earned and accumulated 36 weeks of Severance Benefits according to the policy of BayOne"; and that he had earned a bonus of $15,000 from BayOne at the time of his termination. Complaint, ¶¶ 16-25. The complaint seeks wages and commissions allegedly owed him, including severance and an earned yearly bonus, liquidated damages under the WPCL, and severance benefits of $32,049.69 as calculated by his years of service pursuant to BayOne's "Severance Benefits" policy.

Defendants' Notice of Removal and Reply to Order to Show Cause insist that BayOne's severance pay plan is an ERISA welfare benefits plan because eligibility for such benefits "requires the exercise of judgment as to whether the reasons for termination of employment do or do not constitute a 'dismissal for cause.' Such severance pay plans are governed by ERISA." Defendants' Reply to Order to Show Cause (doc. no. 10) at 2.

At the outset, the Court notes that federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (1994). Because federal district courts have limited jurisdiction, the removal statutes are strictly construed against removal. Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992). All doubts as to substantive and procedural jurisdictional prerequisites must be resolved in favor of remand. Abels v. State Farm Fire & Casualty Co., 770 F.2d 26, 29 (3d Cir. 1985); Sterling Homes, Inc. v. Swope, 816 F. Supp. 319, 323 (M.D. Pa. 1993).

The removing defendant bears the heavy burden of persuading the court to which the state action was removed that it has jurisdiction under the removal statutes. Batoff, 977 F.2d at 851; Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085 (1991). "Whether the claim arises under 'federal law' for removal purposes is determined by applying the 'well-pleaded complaint rule' which determines original federal jurisdiction." Wuerl v. International Life Science Church, 758 F.Supp. 1084, 1086 (W.D.Pa. 1991).

Where defendants remove a state case on the grounds that the state court action is completely preempted by ERISA , this Court recently summarized the well-established rules of engagement, as follows:

In [UPMC Presby Shadyside v. Whirley Industries, Inc., 2005 WL 2335337 (W.D .Pa. 2005)], United States District Judge Sean McLaughlin held that UPMC's breach of contract claim, which it filed originally in state court, was predicated on a contractual legal duty between it and Whirley Industries . . . , and therefore the breach of contract action was not completely preempted by ERISA and should not have been removed. The Court explained:

A civil action filed in state court is removable to federal court if the claim is one "arising under" federal law. 28 U.S.C. §§ 1331, 1441(a). See Pascack Valley Hospital, Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 398 (2004). . . . Under the "well-pleaded complaint" rule, the plaintiff is generally entitled to remain in state court provided the complaint does not affirmatively allege a federal claim on its face. . . . To support removal, a right or immunity created by the Constitution or federal law must be an essential element of the plaintiff's cause of action. . . .

Because federal preemption is normally considered a defense to suit, it is not construed as appearing on the face of a well-pleaded complaint, and therefore does not generally authorize removal to federal court. Metropolitan Life Ins. co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); Pascask Valley Hosp., 388 F.3d at 398. However, an exception supporting removal exists if the civil action "falls within the narrow class of cases to which the doctrine of 'complete preemption' applies." Pascask Valley Hosp., at 399 . . . . This doctrine recognizes that "Congress may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." . . . That is because "[w]hen the federal statute completely pre-empts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law." . . .

Section 502(a) of ERISA-- the statute's civil enforcement provision-- is one such provision "with such 'extraordinary pre-emptive power' that it 'converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." " Pascask Valley Hosp., 388 F.3d at 399-400 . . . .Thus, state law actions that are within the scope of § 502(a) are removable to federal court. Pascack, 388 F.3d at 399-400 (citations omitted).

The question for this Court is whether Plaintiff has asserted claims falling within ERISA's civil enforcement provision such that the doctrine of complete preemption applies. In determining whether a plaintiff has artfully pled his suit so as to couch a federal claim in terms of state law, we are ...


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