Cobb v. MetLife

Filing 12

MEMORANDUM OPINION AND ORDER that: (1) Plaintiff's 9 Motion to Remand is DENIED; and (2) Plaintiff shall file a response to Defendant's 5 Motion to Dismiss or in the Alternative for Summary Judgment filed on 9/16/2008, by 7/31/2009. Plaintiff's response shall include a brief and any evidentiary materials. (3) Defendant may file a reply brief on or before 8/7/2009. Signed by Hon. Chief Judge Mark E. Fuller on 7/23/2009. (Attachments: #(1) Civil Appeals Checklist) (dmn)

IN THE UNITED STATES DISTRICT COURT FOR T H E MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION M A R IL Y N COBB, P l a in tif f , v. M E T L IF E D e f e n d a n t. ) ) ) ) ) ) ) ) )

C A S E NO. 2:08-cv-751-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 Plaintiff seeks damages from Defendant insurance c o m p a n y for their alleged wrongful denial of benefits under Defendant's life insurance p la n . Arguing that the Plaintiff's life insurance plan is governed by the Employee R e tire m e n t Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461, and, th e re f o re , this Court has jurisdiction under the doctrine of complete preemption, D e f e n d a n t removed this action from the Circuit Court of Montgomery County, Alabama o n September 11, 2008. This cause is now before the Court on Plaintiffs' Motion to R e m a n d (Doc. # 9), filed October 21, 2008. I . FACTS AND PROCEDURAL HISTORY P la in tif f Marilyn Cobb ("Cobb") was an employee of Halla Climate Systems, a s u b s id ia ry of Visteon Corporation. Plaintiff purchased a Visteon Life Insurance Plan (the " P la n " ) while employed at Halla Climate Systems. The Plan provided coverage to Cobb a n d her dependents. Defendant MetLife Corporation ("MetLife") issued Plaintiff a life

in su ra n c e policy under the Plan. The Summary Plan Description for the Plan states that it is governed by ERISA. Plaintiff does not dispute that ERISA governs the Plan. W h ile Cobb still worked for Halla Climate Systems, her son, Derek Cobb, died. Cobb submitted a claim to MetLife for dependent life insurance benefits under the Plan. In a letter dated July 11, 2007, MetLife denied Cobb's claim because it believed her son d id not meet the Plan's definition of a dependent child. MetLife avers that a nineteenye a r old child only qualifies as a dependent under the Plan if he is also a full-time student. MetLife further contends that Cobb's nineteen-year old son did not qualify as a dependent b e c a u se he was not a full-time student. C o b b filed the Complaint in the Circuit Court for Montgomery County, Alabama o n September 11, 2008 for damages arising out of MetLife's failure to approve her claim. At the time Cobb filed her lawsuit, she was no longer employed at Halla Climate Systems. MetLife filed its Notice of Removal in this Court on September 11, 2009. Cobb has m o v e d for remand on the grounds that this Court does not have subject matter jurisdiction b e c a u s e she is not a "participant" within the meaning of 29 U.S.C. § 1002(7). II. 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 L ife Ins. Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092,

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1 0 9 5 (11th Cir. 1994). As such, they may only hear cases that they have been authorized to hear by the Constitution or the Congress of the United States. Kokkonen, 511 U.S. at 3 7 7 . The burden of establishing that subject matter jurisdiction exists rests upon the party a s s e rtin g jurisdiction. Id. MetLife, therefore, bears the burden of proving federal ju ris d ic tio n in this case. See, e.g., Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (1 1 th Cir. 2002). MetLife argues that federal jurisdiction exists in this case because the life insurance plan at issue is governed by ERISA, which it argues completely preempts C o b b 's state law claims. See, e.g., Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1 2 0 7 , 1211-12 (11th Cir. 1999). A civil action filed in a state court may be removed to federal court if the claim is o n e "arising under" federal law. Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6 (2003). In order to determine whether a complaint "arises under" federal law, a court must e x a m in e the "well pleaded" allegations of the complaint and ignore potential defenses. Id. A suit arises under the Constitution and laws of the United States only when the p la in tif f s statement of his own cause of action shows that it is based upon federal law or th e Constitution. Id. As a general rule, absent diversity jurisdiction, a case will not be re m o v a b le if the complaint does not affirmatively allege a federal claim. Id. However, a sta te claim may be removed to federal court under two narrow exceptions to the well p le a d ed complaint rule: (1) when Congress expressly provides for removal, or (2) when a f e d e ra l statute wholly displaces the state-law cause of action through complete

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p re e m p tio n . Id. at 8. T h e parties do not dispute that ERISA governs the life insurance policy in this c a s e . Therefore, the doctrine of complete preemption applies. See Butero, 174 F.3d at 1 2 1 1 ("Superpreemption [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 C o b b is a "participant" within the definition of 29 U.S.C. § 1002(7). 2. E R IS A

C o b b claims that she does not qualify as a "participant" under ERISA because she w a s not a Halla Climate Systems employee at the time she filed this lawsuit. Therefore, C o b b argues, as a former employee she did not have "a colorable claim to vested b e n e f its." (Doc. #9, pg. 3). In particular, Cobb asserts that she is not a "participant" b e c a u s e she is seeking life insurance benefits and not pension or termination benefits. MetLife contends that Cobb qualifies as a "participant" under ERISA because she alleges a n entitlement to plan benefits. a. "Participant" under ERISA

T h e only parties that have standing to sue under ERISA are those listed in the civil e n f o rc e m e n t provision of ERISA. 29 U.S.C. § 1132(a). The civil enforcement provision provides:

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(a ) Persons empowered to bring a civil action A civil action may be brought (1 ) by a participant or beneficiary (A) for the relief provided in subsection (c) of this section, or (B ) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify h is rights to future benefits under the terms of the plan... 2 9 U.S.C. § 1132(a). Under ERISA, a "participant" is "any employee or former e m p lo y e e...w h o is or may become eligible to receive a benefit of any type from an e m p lo ye e benefit plan." 29 U.S.C. § 1002(7) (emphasis added); see also Hobbs v. Blue C r o s s Blue Shield of Ala., 276 F.3d 1236, 1241(11th Cir. 2001). The United States S u p r e m e Court held that "the term `participant' is naturally read to mean either `em p loyee s in, or reasonably expected to be in, currently covered employment' or former e m p l o y e e s who `have ... a colorable claim' to vested benefits." Firestone Tire & Rubber C o . v. Bruch, 489 U.S. 101, 117 (1989) (citations omitted) (emphasis added). The E lev e n th Circuit has further explained that a former employee who argues that she is e n title d to benefits under an ERISA plan is a "participant" within the meaning of 29 U .S .C . § 1002(7). Lanfear v. Home Depot, Inc., 536 F.3d 1217, 1222 (11th Cir. 2008). Here, Cobb alleges that she was eligible to receive life insurance benefits based on h er enrollment in an ERISA plan but that she was denied those benefits by MetLife. If C o b b 's allegations are true, she may receive benefits from the life insurance plan to

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w h ic h she was otherwise entitled. Thus, based on her allegations, the Court concludes th a t Cobb was a "participant" in the relevant ERISA plan, even though she is no longer e m p lo ye d at Halla Climate Systems. Cobb cannot avoid ERISA preemption simply by sta tin g that she brought this lawsuit after her employment ended.1 Cobb's Motion to R e m a n d is due to be denied because this Court has subject matter jurisdiction over this c a s e under ERISA.

I I I . CONCLUSION F o r the reasons set for above, it is hereby ORDERED that (1 ) Plaintiff's Motion to Remand (Doc. # 9) is DENIED; and (2) Plaintiff shall file a response to Defendant's Motion to Dismiss or in the A lte rn a tiv e for Summary Judgment (Doc. #5) filed on September 16, 2008, by July 31, 2 0 0 9 . Plaintiff's response shall include a brief and any evidentiary materials.

Cobb also argues that ERISA's definition of "participant" excludes former employees seeking life insurance benefits and only includes those seeking retirement or termination benefits. This argument is without merit. The Eleventh Circuit has repeatedly recognized that life insurance policies purchased by employers for an employee's benefit may be covered by ERISA. See Liberty Life Assur. Co. of Boston v. Kennedy, 358 F.3d 1295, 1302 (11th Cir. 2004) (finding that employers may offer life insurance plans which qualify as ERISA employee benefit plans); Druhan v. Am. Mut. Life, 166 F.3d 1324, 1325 (11th Cir. 1999) (approving district court's denial of plaintiff's motion to remand because plaintiff claimed benefits under a life insurance policy preempted by ERISA); Reeve v. Unum Life Ins. Co. of Am., 170 Fed. Appx. 108, 109 (11th Cir. 2006) (affirming district court decision where plaintiff alleged denial of benefits under two life insurance policies governed by ERISA); Adair v. Johnston, 221 F.R.D. 573, 578 (M.D. Ala. 2007) (finding that a former employee was a "participant" in a life insurance policy funded in part by a former employer). Here, the parties do not dispute that the plan at issue is governed by ERISA. 6

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(3 ) Defendant may file a reply brief on or before August 7, 2009. D O N E this the 23 r d day of July, 2009. /s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE

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