Tebbetts et al v. Blue Cross Blue Shield of Alabama et al
MEMORANDUM OPINION AND ORDER, denying 9 MOTION to Remand filed by David Allen Tebbetts, Cynthia Ingram Tebbetts, granting 5 motion to strike jury demand. Signed by Hon. Chief Judge Mark E. Fuller on 9/2/08. (Attachments: # 1 appeals checklist)(vma, )
IN THE UNITED STATES DISTRICT COURT FOR T H E MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION D A V ID ALLEN TEBBETTS, et al., P l a i n t if f s , v. B L U E CROSS BLUE SHIELD OF A L A B A M A , et al., D e f e n d a n ts . ) ) ) ) ) ) ) ) ) )
C A S E NO. 2:07-cv-925-MEF (W O )
M E M O R A N D U M OPINION AND ORDER T h is is a civil action in which Plaintiffs seek damages from Defendant insurance c o m p a n ie s for their alleged wrongful denial of benefits under Plaintiffs' health insurance p la n . The action was removed from the Circuit Court of Montgomery County, Alabama on O c to b e r 15, 2007 pursuant to 28 U.S.C. § 1441 on the basis that Defendants argue the P lain tiff s' health insurance plan is governed by the Employee Retirement Income Security A c t of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461, and, therefore, that this Court has ju ris d ic tio n under the doctrine of complete preemption. This cause is before the Court on P la in tif f s' Motion to Remand (Doc. # 9), filed October 24, 2007, and Defendants' Motion to Strike Jury Demand (Doc. # 5), filed October 22, 2007. For the reasons stated below, the P l a in t if f s' Motion to Remand is due to be DENIED and the Defendants' Motion to Strike J u ry Demand is due to be GRANTED. I . FACTS AND PROCEDURAL HISTORY P lain tiff Cynthia Ingram Tebbetts ("Mrs. Tebbetts") is an employee of Montgomery
Im a g in g , LLC. Mrs. Tebbetts purchased a Blue Cross Blue Shield family health insurance p l a n entitled "Medical Association of the State of Alabama Group Health Care Plan" (" M A S A " ). This plan provided coverage to Mrs. Tebbetts and her husband, Plaintiff David T e b b e tts ("Mr. Tebbetts"). The MASA policy was issued by Defendant Blue Cross Blue S h ie ld ("Blue Cross") and administered in part by Defendant CareCore National, LLC ("C are C o re" ). M o n tg o m e ry Imaging chose MASA as the sole health insurance plan offered to its e m p l o ye e s . Montgomery Imaging established eligibility requirements its employees must m e e t in order to qualify to purchase the plan, including working at least thirty-two hours per w e e k and having worked for Montgomery Imaging for at least sixty days. In addition, M o n tg o m e r y Imaging pays 100% of the employee's individual premium. If an employee e le c ts family coverage, the employee pays the incremental premium for that additional c o v e ra g e through payroll deduction. Montgomery Imaging also distributes enrollment forms a n d plan descriptions, which are provided by Blue Cross, to its employees. Blue Cross in v o ic e s Montgomery Imaging for all of its employees' premiums each month, and M o n tg o m e r y Imaging remits a check to Blue Cross each month to pay the premiums. O n September 13, 2006, Mr. Tebbetts consulted with a doctor because he was e x p e r ie n c i n g pain in his abdomen, and the doctor ordered a CT scan of Mr. Tebbetts' a b d o m e n . The doctor sought pre-approval from Defendants of the CT scan, but Defendants d e c lin e d coverage. Several days later, Mr. Tebbetts was taken to the hospital where a CT
sc a n and ultrasound revealed that Mr. Tebbetts had a cyst on his pancreas that had caused his s p le e n to rupture. Mr. Tebbetts' spleen was removed. P la in tif f s filed the Complaint in the Circuit Court for Montgomery County, Alabama o n September 10, 2007 for damages arising out of Defendants' failure to approve the original re q u e st for a CT scan. Blue Cross filed its Notice of Removal in this Court on October 15, 2 0 0 7 . Plaintiff has moved for remand on the grounds that the MASA group health insurance p o lic y is not an "employee benefit plan" within the meaning of ERISA, and that Defendants' re m o v a l was procedurally defective. I I . DISCUSSION A. M o tio n to Remand 1. S u b je c t Matter Jurisdiction
F e d e ra l courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian Life In s . Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1 1 th Cir. 1994). As such, they may only hear cases that they have been authorized to hear b y the Constitution or the Congress of the United States. Kokkonen, 511 U.S. at 377. The b u rd e n of establishing that subject matter jurisdiction exists rests upon the party asserting ju ris d ic tio n . Id. Defendants therefore bear the burden of proving federal jurisdiction in this c a s e . See, e.g., Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (11th Cir. 2002). D e f en d a n ts argue that federal jurisdiction exists in this case because the health insurance plan a t issue is governed by ERISA, which they argue completely preempts Plaintiffs' state law
c la im s . See, e.g., Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1211-12 (11th C ir. 1999). A civil action filed in a state court may be removed to federal court if the claim is one " a r i s i n g under" federal law. Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6 (2003). In o rd e r to determine whether a complaint "arises under" federal law, a court must examine the " w e ll pleaded" allegations of the complaint and ignore potential defenses. Id. A suit arises u n d e r the Constitution and laws of the United States only when the plaintiffs statement of his o w n cause of action shows that it is based upon federal law or the Constitution. Id. As a g e n e ra l rule, absent diversity jurisdiction, a case will not be removable if the complaint does n o t affirmatively allege a federal claim. Id. However, a state claim may be removed to f e d era l court under two narrow exceptions to the well pleaded complaint rule: (1) when C o n g re ss expressly provides for removal, or (2) when a federal statute wholly displaces the s ta te -la w cause of action through complete preemption. Id. at 8. T h e parties do not dispute that, if ERISA governs the health insurance policy in this c a s e , then the doctrine of complete preemption applies. See Butero, 174 F.3d at 1211 (" S u p e rp r e e m p t io n [or complete preemption] arises from Congress's creation of a c o m p r e h e n siv e remedial scheme in 29 U.S.C. § 1132 for loss or denial of employee b e n e fits ." ). The only dispute in this case related to the governance of ERISA is whether the M A S A plan is an "employee welfare benefit plan" within the definition of 29 U.S.C. § 1002(1).
E R IS A
P la in tif f s argue that the MASA plan is not an "employee welfare benefit plan" as re q u ire d to be governed by ERISA because it is not a plan "established or maintained by an e m p lo ye r or by an employee organization, or by both." 29 U.S.C. § 1002(1); Donovan v. D illin g h a m , 688 F.2d 1367, 1371 (11th Cir. 1982). Plaintiffs argue that the plan is
established or maintained by MASA and that Montgomery Imaging, Mrs. Tebbets' employer, d o e s not establish or maintain the plan. In this case, it is clear that Mongomery Imaging has "established or maintained" the M A S A plan. Montgomery Imaging selected MASA as the sole health insurance plan offered to its employees. Montgomery Imaging established eligibility requirements its employees m u s t meet in order to qualify to purchase the plan. Montgomery Imaging pays 100% of the e m p lo ye e 's individual premium; the employee is only responsible for the premiums of family m e m b e r s . Montgomery Imaging also distributes enrollment forms and plan descriptions. F in a lly, Montgomery Imaging collects employees' premiums via payroll deduction. Blue C ro s s invoices Montgomery Imaging directly for the premiums of its employees, and M o n tg o m e r y Imaging remits a check to Blue Cross each month to pay the premiums. T h e se actions taken by Montgomery Imaging are more than sufficient to establish or m a in ta in an ERISA plan. See Butero, 174 F.3d at 1214 (holding employer "established or m a in ta in e d " an ERISA plan where the employer had "consulted an insurance agent, selected th e terms of the group policy it wished to purchase for its employees, completed an
a p p lic a tio n form for the policy, solicited enrollments from its employees, collected money th ro u g h payroll deductions, and remitted premium checks"); McDonald v. Provident In d e m n ity Life Ins. Co., 60 F.3d 234, 236 (5th Cir. 1995) (finding employer had established o r maintained an ERISA plan by "purchasing the insurance, selecting the benefits, identifying th e employee-participants, and distributing enrollment and claim forms"). Accordingly, E R IS A completely preempts Plaintiffs' claims and this Court has subject matter jurisdiciton to hear the case. The only jurisdictional issue left for resolution by this Court is whether D e f en d a n ts ' removal was procedurally defective. 3. P r o c ed u r a l Issues Related to Removal
P la in tif f s claim that Defendants' removal was improper because they failed to include c o p ies of the return on service for either Defendant. The procedure for removal is set forth in 28 U.S.C. § 1446, which provides: A defendant or defendants desiring to remove any civil action or criminal p ro s e c u tio n from a State court shall file in the district court of the United S ta te s for the district and division within which such action is pending a notice o f removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure a n d containing a short and plain statement of the grounds for removal, together w ith a copy of all process, pleadings, and orders served upon such defendant o r defendants in such action. ( e m p h a s i s added). Plaintiff cites Kisor v. Collins, 338 F. Supp. 2d 1279 (N.D. Ala. 2004) in support of their argument that the failure to file returns on service with a notice of removal v io la te s § 1446. However, Kisor is not on point because in that case the defendants failed to file both the returns on service and the summons. Summons are served upon a defendant,
w h e re a s returns on service are not. M o r e on point is Usatorres v. Marina Mercante Nicaraguenses, S.A., 768 F.2d 1285 (1 1 th Cir. 1985), which held that § 1446 does not require the removing party to file d o c u m e n ts that were not served upon him. See id. at 1286-87 ("The removal statute requires o n ly that the removing party file copies of all process, pleadings and orders served upon him o r them in such action. Because the motion was not served upon him, there was no r e q u ir e m e n t that the defendant file it with the district court."). Accordingly, Defendants' f a ilu re to file returns on service, which were not served upon them, does not violate § 1446. C o n s e q u e n tly, Defendants' removal was not procedurally defective. B. M o tio n to Strike Jury Demand D e f e n d a n ts have moved to strike Plaintiffs' demand for a jury trial. Because relief u n d e r ERISA is equitable in nature, Plaintiffs have no right to a jury trial. See Chilton v. S a v a n n a h Foods & Indus., 814 F.2d 620, 623 (11th Cir. 1987). Therefore, Defendants' m o tio n to strike is due to be GRANTED. I I I . CONCLUSION F o r the reasons set for above, it is hereby ORDERED that (1 ) Plaintiffs' Motion to Remand (Doc. # 9) is DENIED. (2 ) Defendants' Motion to Strike Jury Demand (Doc. # 5) is GRANTED. D O N E this the 2 n d day of September, 2008. /s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE 7
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