Oklahoma Municipal Assurance Group et al v. Crossland Construction Company, Inc. et al
OPINION AND ORDER by Judge Claire V Eagan ; denying 12 Motion to Remand (Re: State Court Petition/Complaint ) (RGG, Chambers)
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
OKLAHOMA MUNICIPAL ASSURANCE
GROUP and COMPSOURCE MUTUAL
COMPANY, INC. and CROSSLAND
HEAVY CONTRACTORS, INC.,
Case No. 17-CV-0062-CVE-TLW
OPINION AND ORDER
Now before the Court is plaintiffs’ Motion to Remand (Dkt. # 12). Plaintiffs argue that 28
U.S.C. § 1445(c) bars removal of this case because it arises under Oklahoma’s workers’
compensation laws. Dkt. # 12, at 5. Defendants respond that this suit arises under Oklahoma tort law
and that § 1445(c) is not applicable. Dkt. # 15, at 7.
This case involves a workers’ compensation subrogation claim. Plaintiffs provided workers’
compensation coverage for the City of Grove, Delaware County, State of Oklahoma (the City)
during the relevant time period. Dkt # 12-1, at 1. Robert Bartley was employed by the City as a plant
operator. Id. On or about February 14, 2014, Bartley fell into an unmarked construction hole and
was injured. Id. at 1-2. Plaintiffs allege that the hole was left by defendants and that Bartley’s
injuries were solely caused by the negligence of defendants and their agents. Id. at 2. Bartley filed
a workers’ compensation claim to recover for his injuries, and plaintiffs have paid over $90,000 in
benefits to date. Id.; Dkt. # 12, at 2.
On February 8, 2016, plaintiffs filed this suit in the District Court of Delaware County, State
of Oklahoma. Dkt. # 12-1. Plaintiffs assert that Bartley’s injuries were caused by defendants’
negligence and, therefore, they have a right to subrogation under Okla. Stat. tit. 85A, § 43B. Dkt.
# 12, at 2. Defendants were served on January 20, 2017. Dkt. # 2-1, at 3. On February 8, 2017,
defendants removed the case to this Court. Dkt. # 2. Plaintiffs now move to remand, arguing that 28
U.S.C. § 1445(c) bars removal of this case because it arises under Oklahoma’s workers’
compensation laws. Dkt. # 12, at 5.
“Federal courts are courts of limited jurisdiction. They possess only that power authorized
by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
“If at any time before final judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “Because the jurisdiction of federal
courts is limited, there is a presumption against our jurisdiction, and the party invoking federal
jurisdiction bears the burden of proof.” Merida Delgado v. Gonzales, 428 F.3d 916, 919 (10th Cir.
2005). Section 1441(a) allows a defendant to remove most civil actions from state court to federal
court over which the federal court would have original jurisdiction. However, this provision is
subject to the restriction provided in 28 U.S.C. § 1445(c), which states that “[a] civil action in any
State court arising under the workmen’s compensation laws of such State may not be removed to
any district court of the United States.”
Whether a claim “arises under the state workers’ compensation law for purposes of the
removal statutes is a question of federal law.” Suder v. Blue Circle, Inc., 116 F.3d 1351, 1352 (10th
Cir. 1997). The only guidance from the Tenth Circuit on the scope of § 1445(c) comes from Suder,
which involved a claim of retaliation for filing a workers’ compensation claim. To determine
whether workers’ compensation retaliation claims fell under § 1445(c), the Tenth Circuit adopted
the test formulated by the Eighth Circuit in Humphrey v. Sequentia, Inc., 58 F.3d 1238 (8th Cir.
1995), which states:
Under the plain meaning of the [removal] statute, where a state legislature enacts
a provision within its workers compensation laws and creates a specific right of
action, a civil action brought to enforce that right of action is, by definition, a civil
action arising under the workers’ compensation laws of that state and therefore
§ 1445(c) applies; under such circumstances, the action would be non-removable,
subject only to the complete preemption doctrine.
Suder, 116 F.3d at 1352 (quoting Humphrey, 58 F.3d at 1246) (alteration in original). Oklahoma’s
workers’ compensation statute prohibited retaliation for filing a workers’ compensation claim. See
id. (quoting Okla. Stat. tit. 58, § 5 (repealed 2011)).1 Thus, the Tenth Circuit determined that
workers’ compensation retaliatory discharge claims arise under Oklahoma’s workers’ compensation
laws and are therefore nonremovable. Id. at 1353.
As applied by federal courts, the key question under the Humphrey test is whether the state’s
workers’ compensation statute creates the specific right of action. What types of claims are barred
from removal by § 1445(c) may be inconsistent across district courts, but cases generally turn on
whether the right to bring the claim was created in the state’s workers’ compensation statutes. For
Workers’ compensation retaliation is now prohibited at Okla. Stat. tit. 85A, § 7 in a form
very similar to the statute in force at the time Suder was decided.
example, in Zurich American Insurance Co. v. General Motors Corp., 242 F. Supp. 2d 736 (E.D.
Cal. 2003), a district court in California held that § 1445(c) barred removal of a subrogation claim
because the state’s workers’ compensation laws “create[d] a cause of action for subrogation with
respect to workers’ compensation benefits that would not otherwise be available at common law.”
Zurich, 242 F. Supp. 2d at 737-38; see also Pemiscot-Dunklin Elec. Coop. v. Jacobson, No. 1:06CV-18-LMB, 2006 WL 2432026 (E.D. Mo. Aug. 18, 2006) (finding that under the Humphrey test
a subrogation claim fell under § 1445(c) because Missouri’s workers’ compensation created the
cause of action). On the other hand, in Spearman v. Exxon Coal USA, Inc., the Seventh Circuit
found that a workers’ compensation retaliation case did not arise under Illinois’s workers’
compensation laws where the claim was created as an “independent tort action” by the Illinois
courts. Spearman, 16 F.3d at 725; see also Bray v. Automatan, LLC, 167 F. Supp. 3d 770, 773-74
(D.S.C. 2016) (holding that a subrogation claim was removable because South Carolina’s workers’
compensation laws did not fundamentally alter what was essentially a common law tort claim).
Here, plaintiffs assert a right to subrogation pursuant to Okla. Stat. tit. 85A, § 43B, which
states that “[a]n employer or carrier liable for compensation under [the workers’ compensation act]
for the injury or death of an employee shall have the right to maintain an action in tort against any
third party responsible for the injury or death.” The Oklahoma Supreme Court has explained that
“the legislature did not intend the enactment of the Workers’ Compensation Act to abrogate or
modify rights of the insurance carrier who seeks indemnification for the amount paid by it because
of its contractual obligation.” Prettyman v. Halliburton Co., 841 P.2d 573, 577 (Okla. 1992);2 cf.
Spearman, 16 F.3d at 725 (discussing whether the Illinois Supreme Court considered the claim at
issue a part of Illinois’s workers’ compensation law). Moreover, the Oklahoma Supreme Court has
stated that “an insurance carrier’s right to subrogation is not dependent on [workers’ compensation
law]” because “[s]ubrogation is an equitable right and where one has been subjected to liability and
suffered a loss thereby on account of the negligence of another, one has a right of action against the
other for indemnity.” Id. at 577 n.1 (citing Aetna Cas. Co. v. Assocs. Transports Inc., 512 P.2d 137
(Okla. 1973); Travelers Ins. Co. v. Leedy, 450 F.2d 898 (Okla. 1969); Stinchcomb v. Dodson, 126
P.2d 257 (Okla. 1942); State Ins. Fund v. Smith, 88 P.2d 895 (Okla. 1939)). Thus, the purpose of
§ 43B is to protect a right to subrogation, not create one. See id. at 577 (“[O]nce the insurer is
subrogated, [workers’ compensation law] protects its right to maintain an action against the third
In 1992, when Prettyman was decided, workers’ compensation subrogation claims were
governed by Okla. Stat. tit. 85, § 44 (repealed 2011). Section 44 differs from the current law,
Okla. Stat. tit. 85A, § 43B, with regard to the procedure an insurance carrier must follow
before bringing a claim. Under § 44, an injured worker had to choose whether to take
compensation under the Workers’ Compensation Act, or bring suit against the third-party
tortfeasor. Okla. Stat. tit. 85, § 44(a) (repealed 2011). If the worker chose to take
compensation under the Workers’ Compensation Act, the insurance carrier had the right to
subrogation and could bring a tort claim against the third party. Id. Under § 43B, an
insurance carrier has “the right to maintain an action in tort against any third party
responsible for the [claimant’s] injury or death,” but “the carrier shall notify the claimant in
writing that the claimant has the right to hire a private attorney to pursue any benefits to
which the claimant is entitled in addition to the subrogation interest against any third party
responsible for the injury or death.” Okla. Stat. tit. 85A, § 43B. Although the Oklahoma
Supreme Court was considering a different version of the workers’ compensation laws in
Prettyman, an insurance carrier’s substantive rights with regard to a third-party tortfeasor
when a claimant has collected on a workers’ compensation claim have not changed. Under
either statute, plaintiffs would have the right to bring a negligence claim against defendants
and the claim would be determined by Oklahoma common law. Because the substance of the
claim is unchanged, Prettyman’s statements on the substance of subrogation claims are
unaffected by other changes in the workers’ compensation laws.
party tort-feasor it its own name.”). This interpretation is bolstered by the text of § 43B, which states
that an insurance carrier has “the right to maintain an action in tort against any third party
responsible for the injury or death.” Okla. Stat. tit. 85A, § 43B. Consequently, § 43B “does not
change the fundamental character of the claim, which is still preserved within [Oklahoma’s]
common law tort system.” Arthur v. E.I. DuPont de Nemours & Co., 58 F.3d 131, 127 (4th Cir.
1995). Unlike a workers’ compensation retaliation claim, which can only be brought because the
right is created by Oklahoma’s workers’ compensation laws, a workers’ compensation subrogation
claim is created by Oklahoma common law. Under the Humphrey test, a subrogation claim does not
arise under the workers’ compensation laws of Oklahoma.
In sum, plaintiffs’ claim is essentially a negligence claim, and the substance of the claim is
governed by Oklahoma common law. Oklahoma’s workers’ compensation laws protect plaintiffs’
right to bring the claim, but plaintiffs’ right is independent of Oklahoma’s workers’ compensation
laws. Thus, plaintiffs’ subrogation claim does not arise under the workers’ compensation laws of
Oklahoma and 28 U.S.C. § 1445(c) does not bar removal.
IT IS THEREFORE ORDERED that plaintiffs’ Motion to Remand (Dkt. # 12) is denied.
DATED this 27th day of March, 2017.
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