Moore v. Apple Central, LLC

Filing 15

OPINION AND ORDER, as set forth. IT IS ORDERED that Defendant Apple Central, LLCs motion to dismiss Doc. 9 is HELD IN ABEYANCE to allow Plaintiff to amend her complaint. Any amended complaint must be filed by March 10, 2017. Signed by Honorable P. K. Holmes, III on February 8, 2017. (rg) Modified text on 2/8/2017 (jas).

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
MEGAN MOORE
v.

PLAINTIFF
No. 5:16-CV-05069

APPLE CENTRAL, LLC, doing business
as Applebee’s Neighborhood Grill & Bar

DEFENDANT

OPINION AND ORDER
Before the Court is Defendant Apple Central, LLC’s motion (Doc. 9) to dismiss for failure
to state a claim and brief in support (Doc. 10). Plaintiff Megan Moore has filed a response
(Doc. 11) and brief in support (Doc. 12). Defendant requested leave to file a reply, and the Court
has considered the reply (Doc. 14-1) attached as an exhibit to that motion.
Defendant removed this case from the Circuit Court of Benton County, Arkansas.
Defendant states that this Court has original jurisdiction over the case pursuant to 28 U.S.C. § 1331
because it presents a federal question. Defendant argues that Plaintiff’s state law claims for breach
of contract, negligence, breach of fiduciary duty, bad faith, 1 and promissory estoppel are
completely preempted by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §
1001 et seq. See McLain v. Andersen Corp., 567 F.3d 956, 964 (8th Cir. 2009) (recognizing that
where ERISA completely preempts state law causes of action, federal courts have original
jurisdiction under § 1331) (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 207–08 (2004)). This
same preemption argument is the basis for Defendant’s motion to dismiss.
Defendant also states that this Court has original jurisdiction over the case pursuant to 28
U.S.C. § 1332 because the amount in controversy is in excess of $75,000, and because there is

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Plaintiff’s amended complaint (Doc. 8) does not assert a bad faith claim.
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complete diversity between the parties. Although Plaintiff’s complaint alleges that she is a citizen
of Arkansas, Defendant’s notice of removal alleges only that no member of the LLC is a citizen of
Arkansas. Defendant fails to properly allege that this court has original jurisdiction under § 1332
because Defendant does not allege the citizenship of its members with specificity. 2 See GMAC
Commercial Credit LLC v. Dillard Dep’t Stores, Inc., 357 F.3d 827, 829 (8th Cir. 2004) (holding
that for diversity jurisdiction purposes, an LLC’s citizenship is the citizenship of each of its
members); Barclay Square Properties v. Midwest Fed. Sav. and Loan Ass’n of Minneapolis, 893
F.2d 968, 969 (8th Cir. 1990) (holding that a limited partnership’s jurisdictional allegation was
insufficient because it did not allege the citizenship of each limited partner); see also Lincoln
Benefit Life Co. v. AEI Life, LLC, 800 F.3d 99, 108 n.36 (3d Cir. 2015) (“Of course, where the
unincorporated association is the proponent of diversity jurisdiction, there is no reason to excuse
it of its obligation to plead the citizenship of each of its members.”).
Because the merits of Defendant’s federal question jurisdictional allegation and of its
motion to dismiss are intertwined, the Court must analyze whether ERISA completely preempts
Plaintiff’s state law causes of action. “ERISA supercedes any and all state laws insofar as they
relate to any employee benefit plan.” Parkman v. Prudential Ins. Co. of Am., 439 F.3d 767, 771
(8th Cir. 2006) (quotation and ellipses omitted). To determine whether a state law claim relates to
a benefit plan, the Court must determine whether the claim “has (1) ‘a connection with’ or (2)
‘reference to such a plan.’” Id. (quoting California Div. of Labor Standards Enforcement v.

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For purposes of determining its diversity jurisdiction, the Court does not address
Plaintiff’s citizenship allegations in the amended complaint. “For a party to remove a case to
federal court based on diversity jurisdiction, the parties must be diverse both when the plaintiff
initiates the action in state court and when the defendant files the notice of removal in federal
court.” Chavez-Lavagnino v. Motivation Educ. Training, Inc., 714 F.3d 1055, 1056 (8th Cir.
2013).
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Dillingham Constr., Inc., 519 U.S. 316, 324 (1997)). In this case, an ERISA benefit plan exists in
the form of a life insurance policy sponsored by Defendant. Plaintiff alleges that her now-deceased
husband filled out an enrollment form for this policy and gave it to Defendant; that Defendant
failed to forward the application to the insurer or enroll Plaintiff’s husband in the plan; that
Defendant nevertheless deducted payments for plan membership from Plaintiff’s husband’s
paycheck; and that Plaintiff’s application for plan benefits upon her husband’s death was denied.
The Eighth Circuit has explained that “a claim relates to an ERISA plan when it premises a cause
of action on the existence of an ERISA plan.” Estes v. Fed. Express Corp., 417 F.3d 870, 872 (8th
Cir. 2005) (quotation omitted). All of Plaintiff’s causes of action are premised on the existence of
an ERISA plan in which Defendant failed to enroll her husband. Under this precedent her state
law claims are preempted by ERISA.
Plaintiff attempts to distinguish her claims from the typical preempted claims by citing to
an Eighth Circuit opinion that held state law claims were not preempted by ERISA. See Wilson v.
Zoellner, 114 F.3d 713 (8th Cir. 1997). The Wilson panel, relying on an inclusive list of factors 3
often considered when analyzing whether state law claims are preempted, determined that state
law claims could proceed against an insurance broker who failed to purchase the coverage that a
plaintiff thought she had under an ERISA health insurance plan. Although the claims in Wilson
were also premised on the existence of an ERISA plan, the plan and relevant ERISA entities were

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“In addressing the effect of a state law on an ERISA plan, this Court has considered a
variety of factors, including: [1] whether the state law negates an ERISA plan provision, [2]
whether the state law affects relations between primary ERISA entities, [3] whether the state law
impacts the structure of ERISA plans, [4] whether the state law impacts the administration of
ERISA plans, [5] whether the state law has an economic impact on ERISA plans, [6] whether
preemption of the state law is consistent with other ERISA provisions, and [7] whether the state
law is an exercise of traditional state power.” Wilson v. Zoellner, 114 F.3d 713, 717 (8th Cir.
1997) (brackets in original) (quoting Arkansas Blue Cross and Blue Shield v. St. Mary’s Hosp.,
Inc., 947 F.2d 1341, 1344 – 45 (8th Cir. 1991)).
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ancillary to the merits of the claims. While this case is analogous to Wilson, and the issue of
preemption is a close one, because the benefit plan (Doc. 9-1) in this case does not specifically
designate a plan administrator, Defendant is the plan administrator. 29 U.S.C. § 1002(16)(A)(ii),
(B)(i); Johnston v. Paul Revere Life Ins. Co., 241 F.3d 623, 633 n.12 (8th Cir. 2001). Allowing
state law claims premised on the existence of an ERISA plan to proceed against the plan
administrator would affect relations between primary ERISA entities and impact the
administration of the plan. Even following Wilson, the Court must find preemption.
Because Plaintiff’s state law claims are fully preempted by ERISA, the Court has original
jurisdiction over this federal question under 28 U.S.C. § 1331. While preemption means that
Plaintiff cannot recover on her state law claims, this ruling presents good cause for Plaintiff to
amend her complaint to pursue any remedy she might be afforded under ERISA, and it is in the
interest of justice that she be allowed to do so. Accordingly, Plaintiff will be permitted to file an
amended complaint, and is cautioned that failure to pursue this action will result in granting of this
motion and dismissal of the complaint.
IT IS THEREFORE ORDERED that Defendant Apple Central, LLC’s motion to dismiss
(Doc. 9) is HELD IN ABEYANCE to allow Plaintiff to amend her complaint. Any amended
complaint must be filed by March 10, 2017.
IT IS SO ORDERED this 8th day of February, 2017.

/s/P. K. Holmes, III
P.K. HOLMES, III
CHIEF U.S. DISTRICT JUDGE

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