Cummings v. The Lincoln National Life Insurance Company
MEMORANDUM OPINION AND ORDER as follows: 1. The Motion to Dismiss (Doc. 2 ) is GRANTED as to Plaintiffs state law claims, without prejudice to the filing of an Amended Complaint asserting claims under ERISA. 2. The Motion to Dismiss (Doc. 2 ) is GR ANTED as to claims for extracontractual damages, including compensatory and punitive damages. 3. The Motion to Strike Jury Demand (Doc. 2 ) is GRANTED. 4. The Plaintiff is given until 7/8/2015 to file an Amended Complaint which asserts a claim under ERISA only. If no Amended Complaint is filed by that time, this case will be dismissed with prejudice. Signed by Honorable Judge W. Harold Albritton, III on 6/24/2015. (dmn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
THE LINCOLN NATIONAL LIFE
CASE NO. 2:15-cv-271-WHA-TFM
MEMORANDUM OPINION AND ORDER
This cause is before the court on the Defendant’s Motion to Dismiss Plaintiff’s State Law
Claims, Claims for Punitive and Extracontractual Damages, and to Strike Demand for Jury Trial
Pursuant to ERISA (Doc. # 2). Also before the court are the Plaintiff’s Response (Doc. # 5) and
the Defendant’s Reply thereto (Doc. # 6). The Defendant asks the court to dismiss the state law
claims in this case and require the Plaintiff to replead them as claims pursuant to the Employee
Retirement Income Security Act of 1974 (ERISA), on the ground that the state claims are
preempted by ERISA. For the reasons to be discussed, the Motion to Dismiss and related
motions are due to be GRANTED.
II. STANDARD OF REVIEW
The court accepts the plaintiff’s factual allegations as true, Hishon v. King & Spalding,
467 U.S. 69, 73 (1984), and construes the complaint in the plaintiff’s favor, Duke v. Cleland, 5
F.3d 1399, 1402 (11th Cir. 1993). In analyzing the sufficiency of pleading, the court is guided by
a two-prong approach: one, the court is not bound to accept conclusory statements of the
elements of a cause of action and, two, where there are well-pleaded factual allegations, a court
should assume their veracity and then determine whether they plausibly give rise to entitlement
to relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). “[A] plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a complaint need not
contain “detailed factual allegations,” but instead the complaint must contain “only enough facts
to state a claim to relief that is plausible on its face.” Id. at 570. The factual allegations “must be
enough to raise a right to relief above the speculative level.” Id. at 555.
The Plaintiff is employed by Kumi Manufacturing Alabama, LLC (“Kumi”). As a fulltime hourly employee, the Plaintiff participated in a short term disability policy issued by the
Defendant to Kumi. She also signed up for a separate long term disability policy issued to Kumi,
specifically Policy No. 000400095046. The Plaintiff suffers from “Chronic Obstructive
Pulmonary Disease (COPD), bilateral carpal tunnel syndrome, chronic fatigue, and right knee
pain.” (Doc. # 1-3 at 2 ¶ 4.) She filed claims with Defendant under both her short term and long
term disability policies. After a twenty-four month “Own Occupation Period,” the Defendant
denied further benefits to which Plaintiff believed she was entitled. She exhausted her appeals
with the Defendant by March 31, 2014.
On March 17, 2015, the Plaintiff filed a three-count complaint in the Circuit Court of
Chilton County, Alabama (Doc. # 1-3). The complaint alleges claims against the Defendant for
breach of contract, misrepresentation and fraud, and bad faith. All three counts relate to the
Defendant’s denial of benefits under the long term disability policy.
The Defendant removed the case to federal court on April 23, 2015, and on the same day
filed the instant motion, asking the court to dismiss the Plaintiff’s state law claims and claims for
extracontractual damages, and to strike the Plaintiff’s jury demand.
There are two types of ERISA-related preemption: 1) complete preemption, which is
jurisdictional; and 2) conflict or defensive preemption, which is an affirmative defense to
preempted state law claims. Conn. State Dental Ass’n v. Anthem Health Plans, Inc., 591 F.3d
1337, 1343–44 (11th Cir. 2009). Both types of preemption are at issue in this case, and the court
will discuss each in turn.
a. Subject Matter Jurisdiction
Although a motion to remand has not been filed in this case, the court is required to
satisfy itself that it may exercise proper jurisdiction over the claims in the case. See, e.g., Univ. of
S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999) (“[A] federal court is obligated to
inquire into subject matter jurisdiction sua sponte whenever it may be lacking.”). Because the
court finds it has proper federal question jurisdiction due to complete preemption under ERISA,
it will not discuss diversity jurisdiction as an alternative basis for jurisdiction.1
As stated above, complete preemption under ERISA is jurisdictional. “Complete
preemption is a narrow exception to the well-pleaded complaint rule and exists where the
preemptive force of a federal statute is so extraordinary that it converts an ordinary state law
claim into a statutory federal claim.” Anthem, 591 F.3d at 1343. Accordingly, if there is
Although the Plaintiff has not filed a Motion to Remand, her Response to the Motion to Dismiss includes a
paragraph on diversity jurisdiction, in which she states that she “would respectfully argue to the Court that her
position is that diversity does not exist.” (Doc. # 5 at 3.) The Plaintiff argues that because the events giving rise to
her claims took place in Alabama, there is no diversity jurisdiction. The court notes that the location in which the
events took place is more relevant to a choice of law analysis than to a determination of diversity jurisdiction. In
any event, this line of argument is moot, because the court has determined for reasons set forth in this Order that it
has proper federal question jurisdiction over this case.
complete preemption in this case, then the court has federal question jurisdiction under 28 U.S.C.
§ 1331 because the state law claims become statutory federal claims. “Complete preemption
derives from ERISA’s civil enforcement provision, § 502(a).” Id. at 1344. As a result, “causes
of action within the scope of the civil enforcement provisions of § 502(a) [are] removable to
federal court.” Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987).
The Eleventh Circuit has expressly adopted the two-part test set forth in Aetna Health
Inc. v. Davila, 542 U.S. 200 (2004), for determining which claims fall within the scope of
§ 502(a). Anthem, 591 F.3d at 1345. As summarized by the Eleventh Circuit, the Davila test
“requires two inquiries: (1) whether the plaintiff could have brought its claim under § 502(a);
and (2) whether no other legal duty supports the plaintiff’s claim.” Id.
1. Whether the Plaintiff could have brought her claims under § 502(a)
Under ERISA § 502(a)(1)(B), a civil action may be brought “by a participant or
beneficiary . . . 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 his rights to future benefits under the terms of the plan.”
29 U.S.C. § 1132(a)(1). In Davila, the Supreme Court observed that “[t]his provision is
relatively straightforward,” and that “if an individual brings suit complaining of a denial of
coverage for medical care, where the individual is entitled to such coverage only because of the
terms of an ERISA-regulated employee benefit plan,” then the first prong of the two-part test is
satisfied. 542 U.S. at 210.
Here, the Plaintiff’s allegations amount to “complaining of a denial of coverage” and the
plan is regulated by ERISA. Her state court complaint alleges that she was “denied further
benefits” under the long term disability policy after twenty-four months, and that she is “entitled
to further benefits under the long term disability policy.” (Doc. # 1-3 at 2 ¶¶ 6, 8.) All three of
the claims in the complaint arise out of the denial of benefits Plaintiff believes she is due under
The long term disability policy at issue in this case qualifies as an ERISA-regulated plan.
Under the terms of the statute, an “employee welfare benefit plan” is “any plan, fund, or
program” that is “established or maintained by an employer . . . for the purpose of providing for
its participants or their beneficiaries, through the purchase of insurance or otherwise . . . benefits
for [disability, among other items in an enumerated list].” 29 U.S.C. § 1002(1). In this case, the
long term disability policy at issue, Policy No. 000400095046, was issued by the Defendant to
Kumi Manufacturing Alabama, L.L.C., Plaintiff’s employer. (Doc. # 2-1 at 2.) Plaintiff is part
of the eligible class consisting of all full-time hourly employees, and thus is eligible as a
participant in the plan because of her employment with Kumi. (Id. at 5.) Kumi was the
“Policyholder” under the terms of the plan, administered the policy, and had the right to
terminate it at any time. (Id. at 2, 13, 20.) The policy itself makes clear that it was both
established and maintained by Kumi in order to provide disability benefits to its employees,
including the Plaintiff.
In response to the motion to dismiss, the Plaintiff states that she “has limited information
as to whether the long term disability policy was an ERISA plan in name only.” (Doc. # 5 at 2.)
Plaintiff appears to make allegations to the effect that “the Defendant used ‘accounting’
procedures to afford it the protections under ERISA and to avoid claims for punitive damages in
state court.” (Id.) Ultimately, all that Plaintiff states in conclusion to this argument is that “the
policy may not have been an employee benefit plan.” (Id.)
In determining whether a plan was “established or maintained” within the meaning of the
statute, a court’s attention and analysis “necessarily focuses on the employer and its involvement
with the administration of the plan.” Anderson v. UNUM Provident Corp., 369 F.3d 1257, 1263
(11th Cir. 2004) (internal quotations and citations omitted). Courts must examine “whether [the
employer] intended to establish or maintain a plan to provide benefits to its employees as part of
the employment relationship.” Id. at 1263–64. Here, the policy itself reveals that Kumi acquired
the long term disability policy in its own name, and that all of its full-time hourly employees
were eligible for benefits. Kumi played a role in administering the policy and could terminate it
unilaterally. These factors lead the court to conclude that this policy was part of a plan meant to
provide benefits as part of the employment relationship, and that this case therefore involves an
Because the plan falls within the statute and because the crux of the Plaintiff’s claims is
that she was denied benefits, the court is satisfied that the Plaintiff could have brought her claims
under § 502(a).
2. Whether no other legal duty supports the Plaintiff’s claims
The Eleventh Circuit, as informed by Davila, has consistently held that claims that
“challenge coverage determinations under ERISA plans clearly implicate ERISA.” Borrero
v. United Healthcare of N.Y., Inc., 610 F.3d 1296, 1304 (11th Cir. 2010) (summarizing Anthem,
591 F.3d at 1353). Stated another way, the second prong of the Davila test is satisfied when “the
content of the claims necessarily requires the court to inquire into aspects of the ERISA plan
because of the invocation of terms defined under the plan.” Id.
Here, the Plaintiff’s state court complaint challenges a coverage determination under an
ERISA plan. Furthermore, the state court complaint invokes terms defined under the plan, such
as the “Own Occupation Period” as defined in the policy. (Doc. # 1-3 at ¶¶ 6–7.) Pursuant to
Eleventh Circuit precedent, no other legal duty supports the Plaintiff’s claims, and the second
prong of the Davila test is satisfied.
To the extent that the Plaintiff’s Response cites case law inconsistent with the foregoing
conclusions, the court rejects it as both not binding and not persuasive because it is at odds with
the state of the law as set out in Davila and Anthem. Because both prongs of the two-part Davila
test have been met, complete preemption is applicable in this case. The Plaintiff’s state law
claims are completely preempted by ERISA, meaning that the court has proper federal question
jurisdiction over the claims. Accordingly, the court will next consider whether the claims are
due to be dismissed due to conflict or defensive preemption.
b. Motion to Dismiss
“[D]efensive preemption is a substantive defense, justifying dismissal of preempted state
law claims.” Jones v. LMR Int’l, Inc., 457 F.3d 1174, 1179 (11th Cir. 2006). Defensive
preemption arises out of ERISA § 514(a), which has an “expansive sweep.” Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41, 47 (1987). A state law claim is defensively preempted “if it relates to an
ERISA plan.” Jones, 457 F.3d at 1179 (emphasis in original). Defensive preemption is broad in
scope, in that a claim relates to a benefit plan “if it has a connection with or reference to such a
plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96–97 (1983). Because complete preemption
is narrower in scope than defensive preemption, “[i]f the plaintiff’s claims are [completely]
preempted, then they are also defensively preempted.” Butero v. Royal Maccabees Life Ins. Co.,
174 F.3d 1207, 1215 (11th Cir. 1999).
Here, the court has already determined that the state claims in this case are completely
preempted. For the reasons described above, they also “relate to” the ERISA plan at issue. In
addition to falling within the narrower definition of complete preemption, these state law claims
fall within the broader scope of defensive preemption. Plaintiff’s breach of contract,
misrepresentation and fraud, and bad faith claims are all rooted in her allegation that the
Defendant denied benefits due to her under the ERISA-regulated long term disability policy.
Therefore, defensive preemption is applicable. The Motion to Dismiss the state law claims is
due to be GRANTED, but the court will afford the Plaintiff an opportunity to amend her
Complaint in order to allege claims under ERISA.
c. Remaining Motions
The Defendant has also asked the court to dismiss the Plaintiff’s claims for punitive and
extracontractual damages, and to strike the Plaintiff’s demand for a jury trial, arguing that neither
the right to a jury trial nor extracontractual damages are available in an ERISA case.
As to extracontractual damages, the Defendant is correct. “[A] plan beneficiary can sue to
enforce her rights under the plan and under ERISA, and for equitable relief, but not for punitive
or compensatory damages.” Godfrey v. BellSouth Telecomms., Inc., 89 F.3d 755, 761 (11th Cir.
1996); see also Anderson v. Unum Life Ins. Co. of Am., 414 F. Supp. 2d 1079, 1093 n.13 (M.D.
Ala. 2006) (citing Godfrey for the proposition that extracontractual damages, including
compensatory and punitive damages, “are not authorized under ERISA”). The Defendant’s
Motion to Dismiss the claims for extracontractual damages, punitive and otherwise, is due to be
The Defendant is also correct that no right to a jury trial exists for claims brought under
ERISA. Stewart v. KHD Deutz of Am. Corp., 75 F.3d 1522, 1527 (11th Cir. 1996); see also
Karns v. Disability Reinsurance Mgmt. Servs., Inc., 879 F. Supp. 2d 1294, 1298 (N.D. Ala.
2012) (“The Eleventh Circuit has routinely held that plaintiffs are not entitled to a jury trial
pursuant to the provisions of ERISA.”) (internal quotations and citations omitted). The Motion
to Strike the jury demand is due to be GRANTED.
For the reasons discussed, it is hereby ORDERED as follows:
1. The Motion to Dismiss (Doc. # 2) is GRANTED as to Plaintiff’s state law claims,
without prejudice to the filing of an Amended Complaint asserting claims under ERISA.
2. The Motion to Dismiss (Doc. # 2) is GRANTED as to claims for extracontractual
damages, including compensatory and punitive damages.
3. The Motion to Strike Jury Demand (Doc. # 2) is GRANTED.
4. The Plaintiff is given until July 8, 2015 to file an Amended Complaint which asserts a
claim under ERISA only. If no Amended Complaint is filed by that time, this case will
be dismissed with prejudice.
DONE this 24th day of June, 2015.
/s/ W. Harold Albritton
W. HAROLD ALBRITTON
SENIOR UNITED STATES DISTRICT JUDGE
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