Whedbee v. United of Omaha Life Insurance Company
Filing
19
ORDER adopting 16 REPORT AND RECOMMENDATIONS re 13 MOTION to remand to State Court filed by Oveda M. Whedbee. Plaintiff's Motion to Remand and Supporting Memorandum of Law (Doc. 13 ) is GRANTED. The Clerk is DIRECTED to close the file. Signed by Judge Roy B. Dalton, Jr. on 3/7/2018. (ctp)(JLC)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
OVEDA M. WHEDBEE,
Plaintiff,
v.
Case No. 6:17-cv-1695-Orl-37DCI
UNITED OF OMAHA LIFE
INSURANCE COMPANY,
Defendant.
_____________________________________
ORDER
Before the Court is U.S. Magistrate Judge Daniel C. Irick’s Report, recommending
remand of this action to state court. (Doc. 16 (“R&R”).) Defendant objected to the R&R
(Doc. 17 (“Objection”)), to which Plaintiff did not respond. For the following reasons, the
Objection is overruled and the R&R is adopted.
I.
BACKGROUND
Plaintiff initiated this action in state court, alleging that Defendant breached its
Group Long Term Disability Policy (“Policy”) by denying his claim for benefits. (See
Doc. 2.) Although not specifically alleged, Defendant apparently issued the Policy to
Plaintiff as part of an employee benefit plan in relation to Plaintiff’s employment with
Halifax Staffing, Inc. (“Staffing”), through which Plaintiff worked at Halifax Hospital
Medical Center (“Halifax”). (See Doc. 13, pp. 1–2; Doc. 15, pp. 1–3.) Arguing that the
Employment Retirement Income Security Act (“ERISA”) rendered Plaintiff’s claim
federal in nature, Defendant removed the action on the basis of federal question
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jurisdiction. (Doc. 1.)
On October 20, 2017, Plaintiff filed a motion to remand, arguing that the Policy is
exempt from ERISA, so the Court lacks subject matter jurisdiction over this action.
(Doc. 13 (“Remand Motion”).) Defendant submitted a timely response urging that ERISA
preempts Plaintiff’s claims. (Doc. 15). On referral, Magistrate Judge Irick recommends
that the Court grant the Remand Motion. (Doc. 16 (“R&R”).) He concludes that the Policy
is exempt from ERISA and, therefore, that remand is required. (Id. at 14.) As the matter
has been fully briefed (see Doc. 17), it is now ripe.
II.
LEGAL STANDARDS
When a party objects to a magistrate judge’s findings, the district court must
“make a de novo determination of those portions of the report . . . to which objection is
made.” 28 U.S.C. § 636(b)(1). The district court “may accept, reject, or modify, in whole
or in part, the findings or recommendations made by the magistrate judge.” Id. The
district court must consider the record and factual issues based on the record
independent of the magistrate judge’s report. Ernest S. ex rel. Jeffrey S. v. State Bd. of Educ.,
896 F.2d 507, 513 (11th Cir. 1990).
III.
ANALYSIS
ERISA generally preempts state laws relating to employee benefit plans, but
exempts governmental plans—that is, those plans “established or maintained for its
employees by the Government of the United States, by the government of any State or
political subdivision thereof, or by any agency or instrumentality of any of the foregoing”
(“Government Plan Exemption”). 29 U.S.C. §§ 1003(b)(1), 1002(32). ERISA does not
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define the terms “political subdivision,” “agency,” or “instrumentality.” At issue here is
whether the employee benefit plan, administered by Staffing, is exempt. This turns on
whether Staffing is an “agency or instrumentality” of “the government of any State or
political subdivision thereto” for purposes of the Government Plan Exemption. (Doc. 16,
p. 3.) In answering this question, Magistrate Judge Irick identified the two competing
tests that courts apply, neither of which has been adopted by the U.S. Court of Appeals
for the Eleventh Circuit. (Id. at 3–4.) Those tests are articulated in Rose v. Long Island R.R.
Pension Plan, 828 F.2d 910 (2d Cir. 1987) (”Rose Test”) and Alley v. Resolution Trust Corp.,
984 F.2d 1201 (D.C. Cir. 1993) (“Alley Test”). Of these two, Magistrate Judge Irick adopted
and applied the Rose Test. (See id. at 9.) Defendant contends this was error. (See Doc. 17.)
As grounds, Defendant argues that Magistrate Judge Irick: (1) should have
adopted the Alley Test, as it is more appropriate in the ERISA context; and (2) ignored the
fact that Staffing’s employees are not state employees. (Id. at 2–16.) These arguments have
neither weight nor wings. Indeed, Defendant made the same objections, unsuccessfully,
in a previous case addressing the exact same issue before the Court now. See Gunn v.
United of Omaha Life Ins. Co., No. 6:13-cv-1731-Orl-36TBS, 2014 WL 25036135, at *2, 3
(M.D. Fla. May 22, 2014) (“In its Objections, Omaha argues that the Magistrate Judge
adopted the wrong test” and “also argues that [the Rose Test] is inapplicable because
Staffing’s employees are not state employees”).
Like the instant action, Gunn involved the alleged breach of a long term disability
policy issued by the same defendant—United of Omaha Life Insurance Company—as
part of an employee benefit plan to an employee of Staffing working at Halifax, which
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Defendant attempted to remove under ERISA. See id. at *1. On referral, U.S. Magistrate
Judge Thomas B. Smith adopted the Rose Test, concluded that Staffing came within the
purview of the Government Plan Exemption, and recommended remand. See Gunn v.
United of Omaha Life Ins. Co., No. 6:13-cv-1731-Orl-36TBS, 2014 WL 2505793, at *4–8
(M.D. Fla. Apr. 16, 2014). In adopting Magistrate Judge Smith’s Report, U.S. District Judge
Charlene E. Honeywell considered and rejected Defendant’s arguments. See Gunn,
2014 WL 25036135, at *2–5.
With the benefit of Gunn, Magistrate Judge Irick found highly persuasive Judge
Honeywell’s reasoning and Magistrate Judge Smith’s application of the Rose Test.
(Doc. 16, pp. 4–9 (quoting extensively from Judge Honeywell’s Order and Magistrate
Judge Smith’s Report and Recommendation).) Hence Magistrate Judge Irick found no
reason to depart from Gunn, and concluded that, under the Rose Test, Staffing is an
agency or instrumentality of Halifax, which is a political subdivision of the State of
Florida. (Id. at 9.)
Given the similarities between the instant case and Gunn, the Court finds no error
with Magistrate Judge Irick’s adoption and application of the Rose Test. Defendant’s
contrary arguments are no more compelling now than they were in Gunn. (Compare Gunn,
2014 WL 2506135, at *2, 3, 4–5 with Doc. 17, pp. 2, 11). This is especially true here because
Defendant points to no intervening authority since Gunn that casts doubt on its
reasoning. (See Doc. 17, pp. 2–16; see also Doc. 1, ¶ 5 (making no attempt to distinguish
Gunn but instead “respectfully [disagreeing]” with it).) Absent such authority,
Defendant’s re-litigation of the exact same issue, hoping for a different result based on a
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new audience alone, is not persuasive. Hence the Objection is due to be overruled, the
R&R is due to adopted, and the Remand Motion is due to be granted.
IV.
CONCLUSION
Accordingly, it is ORDERED AND ADJUDGED as follows:
1.
Defendant’s Objections to Magistrate’s Report and Recommendation
(Doc. 17) is OVERRULED.
2.
U.S. Magistrate Judge Daniel C. Irick’s Report and Recommendation
(Doc. 16) is ADOPTED, CONFIRMED, and made a part of this Order.
3.
Plaintiff’s Motion to Remand and Supporting Memorandum of Law
(Doc. 13) is GRANTED.
4.
This case is REMANDED to the Circuit Court of the Seventh Judicial
Circuit in and for Volusia County, Florida.
5.
The Clerk is DIRECTED to close the file.
DONE AND ORDERED in Chambers in Orlando, Florida, on March 7, 2018.
Copies to:
Counsel of Record
The Circuit Court of the Seventh Judicial Circuit
in and for Volusia County, Florida.
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