Dakota, Minnesota & Eastern Railroad Corporation v. Schieffer
Filing
73
OPINION AND ORDER granting re 20 Motion to Dismiss. Signed by U. S. District Judge Roberto A. Lange on 3/8/12. (CMS)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
DAKOTA, MINNESOTA & EASTERN
RAILROAD CORPORATION, a
Delaware Corporation,
Plaintiff,
vs.
KEVIN V. SCHIEFFER,
Defendant.
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CIV
FILED
MAR 082012
10-4037-RA~~
OPINION AND ORDER
GRANTING MOTION
TO DISMISS
This matter is before the Court on remand from the United States Court ofAppeals for the
Eighth Circuit. See Dakota, Minn. E. RR. Corp. v. Schieffer, 648 F 3d 935 (8th Cir. 2011). The
question on remand is whether there exists subject matter jurisdiction over the present action. This
Court previously determined that there was no federal subject matter jurisdiction. The Eighth
Circuit agreed in part, but remanded for consideration ofa theory ofpossible federal subject matter
jurisdiction that neither party advanced before this Court or the Eighth Circuit. Plaintiff Dakota,
Minnesota & Eastern Railroad Corporation ("DM&E") and Defendant Kevin Schieffer
("Schieffer") have filed several briefs addressing this theory of jurisdiction and this Court has
conducted a hearing on the question. Doc. 56, 60, 61, 63, 71, 72. For the reasons explained
below, this Court dismisses the case because of a lack of federal subject matter jurisdiction.
I. FACTS
Schieffer was the chief executive officer of DM&E. Doc. 7-1 at 5-6. In late 2004,
Schieffer and DM&E entered into an "Employment Agreement." Doc. 7-1. Anticipating a
"Change ofControl," DM&E's stated purpose for the Employment Agreement was "to encourage
the retention and ongoing employment of [Schieffer] and to enter into an agreement embodying
the terms of such employment." Doc. 7-1 at 14. The Employment Agreement afforded Schieffer
lucrative severance benefits upon termination without "Cause" or upon resignation for "Good
Reason." Those portions ofthe Employment Agreement pertinent to this Opinion and Order read
as follows:
3. Compensation. Compensation shall include Bonus Shares and
the following three components:
*****
(c) Employee Benefits. Executive shall be eligible to participate
in all employee health, welfare, and retirement benefits and
programs made available generally to senior executives of the
Company, and to the extent provided in such plans and programs,
the Executive's spouse and other dependents shall be eligible to
participate therein. In the event the Executive is not permitted to
participate in such plans or programs, whether by law or the terms
thereof, the Company shall periodically pay to the Executive, in
lieu of such participation, a cash payment equal to the amount the
Company would have contributed toward the Executive's
participation in the plans or programs.
*****
5. Termination of Employment
In the event that either Party terminates the Executive's
employment hereunder . . . other than (a) termination by the
Company for Cause, or (b) Voluntary Termination by the
Executive, the Company shall pay to Executive the Severance
Payment on the day preceding the effective date of such
termination, provided however that in the event Company
determines to exercise its pre-Change of Control option described
below, it may make said Severance Payment in installments proved
for below. The Company shall continue to provide Executive the
Employee Benefits described in section 3(c) ofthis Agreement for
a period of not less than three years from the date on which the
Severance Payment is paid in full (except in the event Company
determines to exercise its pre-Change of Control option described
below, such Employee Benefits shall continue for three years from
the first payment after Company's notice of the same).
Doc. 7-1 at 17-20.
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In October of2008, DM&E terminated Schieffer and elected to pay him a lump-sum cash
severance payment under Section 5 ofthe Employment Agreement. Unhappy with the amount of
the lump-sum payment, Schieffer filed a demand for arbitration. Doc. 7-1.
DM&E then filed a complaint seeking injunctive reliefto prevent Schieffer from pursuing
his arbitration demand. Doc. 1. DM&E's complaint sought to invoke federal question jurisdiction
by alleging that the dispute over Schieffer's severance arose out of an ERlSA-governed plan and
thus that ERlSA preempted Schieffer's state law claims. DM&E argued that the Employment
Agreement constituted an ERlSA-governed plan. Schieffer responded by filing a motion to
dismiss. Doc. 20. On June 16,2010, this Court issued an Opinion and Order granting Schieffer's
motion to dismiss for lack of subject matter jurisdiction. Dakota. Minn. & E. R.R. Corp. v.
Schieffer, 744 F. Supp. 2d 987 (D.S.D. 2010).
DM&E appealed this Court's decision to the United States Court ofAppeals for the Eighth
Circuit. The Eighth Circuit agreed with this Court's conclusion that the Employment Agreement
was not an ERlSA-governed plan, but remanded the case for this Court to consider the possibility
ofan alternative theory for federal subject matter jurisdiction. Schieffer, 648 F.3d at 938-40. The
Eighth Circuit explained that
If [Schieffer's arbitration demands] are demands for the payment
of benefits under ERlSA plans, as amended by the Employment
Agreement, then to that extent all state law remedies are preempted
and the district court has subject matter jurisdiction over portions
ofDM&E's complaint. On the other hand, if these are demands
under a free-standing single-employee contract that simply pegged
DM&E's payment obligations to amounts that would have been
due under ERlSA plans, there is no preemption-and no subject
matter jurisdiction.
Schieffer, 648 F.3d at 939-940 (footnote omitted). DM&E had not previously argued this theory
for federal jurisdiction to this Court or the Eighth Circuit, and for good reason. Schieffer's
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arbitration demands are based on a "free-standing single-employee contract that simply pegged
DM&E's payment obligations ll in part to ERISA plans and do not provide this Court with subject
matter jurisdiction over the present case.
II. DISCUSSION
A. Complete Preemption and Express Preemption
At the outset ofaddressing the question on remand, it is necessary to distinguish between
IIcomplete preemption ll under ERISA § 502(a), 29 U.S.C. § 1132(a), and lIexpress preemption"
under ERISA § 514(a), 29 U.S.C. § 1144(a). Neither this Court previously nor the Eighth Circuit
in its opinion discussed the difference between "complete preemption ll and "express preemption."
It is necessary to keep separate these distinct concepts, so as to avoid confusion in analyzing the
issue as framed by the Eighth Circuit on remand.
"Complete preemption, really a jurisdictional rather than a preemption doctrine, confers
exclusive federal jurisdiction in certain instances where Congress intended the scope offederal law
to be so broad as to entirely replace any state-law claim." Franciscan Skemp Healthcare, Inc. v.
Cent. States Joint Bd. Health & Welfare Trust Fund, 538 F.3d 594, 596 (7th Cir. 2008). "Claims
arising under the civil enforcement provision of Section 502(a) of ERISA, 29 U.S.c. § 1132(a),
including a claim to recover benefits or enforce rights under the terms ofan ERISA plan, implicate
one such area of complete preemption." Prudential Ins. Co. of Am. v. Nafl Park Med. Ctr., 413
F.3d 897, 907 (8th Cir. 2005) (citation omitted). Accordingly, a state-law suit that falls within the
scope of § 502(a) "arises under federal law and is removable to federal court." Id.
In contrast to the complete preemption created by § 502(a), ERISA's express preemption
clause, § 514(a), preempts any state law that IIrelate[s] to any employee benefit plan." 29 U.S.c.
§ 1144(a). Although express preemption under § 514(a) operates as a defense to a state law cause
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of action, it does not confer federal jurisdiction or authorize removal. See Metropolitan Life Ins.
Co. v. Taylor, 481 U.S. 58,64 (1987) ("ERISA preemption [under § 514(a)] without more, does
not convert a state claim into an action arising under federal law."); Hansen v. Harper Excavating.
Inc., 641 F.3d 1216, 1221 (lOth Cir. 2011) (explaining that while express preemption under §
514(a) creates a ''federal defense of preemption to a substantive state-law claim ... it does not of
its own force create federal jurisdiction. "); Marin Gen. Hosp. v. Modesto & Empire Traction Co.,
581 F.3d 941, 945 (9th Cir. 2009) ("[I]fthe doctrine of complete preemption does not apply, even
ifthe defendant has a defense of [express] preemption within the meaning of § 514(a) because the
plaintiffs claims 'relate to' an ERISA plan, the district court is without subject matter jurisdiction. ")
(citation and internal marks omitted); Prudential Ins., 413 F.3d at 907 ("Although express
preemption does not allow for automatic removal to federal court, it does provide an affirmative
defense against claims not completely preempted under ERISA § 502); Primax Recoveries. Inc.
v. Sevilla, 324 F.3d 544, 549 (7th Cir. 2003) ("[T]he factthat a defendant may be able to interpose
ERISA preemption as a defense to a suit under state law does not confer federal jurisdiction over
the suit; federal jurisdiction depends on the claim, not upon defenses, even ERISA preemption
defenses."); Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (lIth Cir. 1999) ("As
an affirmative defense, [express] preemption does not furnish federal subject-matter jurisdiction
under 28 U.S.c. § 1331 ..."); James F. Jorden et aI., Handbook on Erisa Litigation, § 2.06[B] (3d
ed. 2012 Supplement) ("[E]ven if a state law claim is preempted by § 514, the complaint is not
removable to federal court unless it is also encompassed by ERISA's civil enforcement scheme. ").
In short, complete preemption under § 502(a) provides a basis for federal question jurisdiction;
express preemption under § 514(a) does not.
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In the portion of its opinion identifying the possibility of federal question jurisdiction
in this case, the Eighth Circuit stated:
Our determination that the Employment Agreement is not an
ERISA plan does not end the subject-matter-jurisdiction inquiry.
ERISA preempts all state laws that "relate to" an employee
benefit plan. 29 U.S.c. § 1144(a). Though "relate to" has
generated many difficult interpretive issues, in general the
Supreme Court gives it a "broad common-sense meaning, such
that a state law 'relates to' a benefit plan in the normal sense ofthe
phrase, if it has a connection with or reference to such a plan."
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41,47, 107 S. Ct. 1549,
95 L. Ed. 2d 39 (1987) (quotations omitted). Here, further
questions arise because the Employment Agreement included two
provisions that may "relate" the Agreement to other DM&E
programs that are ERISA plans.
Schieffer, 648 F.3d at 939. This Court does not believe the Eighth Circuit panel meant to
suggest that the "relate to" language of § 514(a) confers federal jurisdiction. The Eighth Circuit
in other cases has kept clear the distinction between complete preemption under § 502(a) and
express preemption under § 514(a). See Prudential Ins., 413 F.3d at 907-914.
Following remand, in its briefs to this Court and at oral argument, DM&E asserted that this
Court had federal question jurisdiction over the present matter because Schieffer'S arbitration
demands "related to" ERISA plans. This argument conflates the complete preemption of § 502(a)
with the express preemption of§ 514(a). The "relate to" language of§ 514(a) is not determinative
of whether a state-law suit falls within the scope of § 502(a). See Marin Gen. Hosp., 581 F.3d at
949 ("[T]he question whether a law or claim 'relates to' an ERISA plan is not the test for complete
preemption under § 502(a)(1)(8). Rather, it is the test for [express] preemption under § 514(a).").
Keeping in mind the distinction between complete preemption under § 502(a) and express
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preemption under § 514(a), this Court turns to analyzing whether there exists federal jurisdiction
based on Schieffer's claims in his arbitration demand.
B. Complete Preemption of Schieffer's Claim Under § 502(a)
Whether a case arises under federal law typically hinges on the "well-pleaded complaint"
rule, which focuses on whether the plaintiffs statement of his own claim presents a federal
question. Aetna Health, Inc. v. Davila, 542 U.S. 200,207 (2004). There exists an exception to
the well-pleaded complaint rule where a federal statute such as ERISA "wholly displaces the statelaw cause of action through complete pre-emption." Id. (quotation omitted). When a state-law
cause of action falls within the scope of a federal statute with complete preemptive power, the
cause of action, "even if pleaded in terms of state law, is in reality based on federal law" and
therefore federal question jurisdiction exists. Id. at 207-08.
In Davil~ the Supreme Court laid out a two-part test for determining whether a state-law
claim falls within the scope of § 502(a). Under Davil~ a state-law cause of action is completely
preempted if I) "an individual, at some point in time, could have brought his claim under ERISA
§ 502(a)(l)(B)," and 2) "where there is no other independent legal duty that is implicated by a
defendant's actions." 542 U.S. at 210; see also Prudential Ins. Co., 413 F.3d at 914 (same). The
Davila test is conjunctive: "a state-law cause ofaction is preempted only if both prongs ofthe test
are satisfied." Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 328 (2nd Cir. 2011);
see also Borrero v. United Healthcare ofN.Y., Inc., 610 F.3d 1296, 1304 (lIth Cir. 2010) (liThe
test in Davila is conjunctive-both conditions must be satisfied for a claim to be completely
preempted. "). This Court considers each prong of the test in tum.
1. Davila Prong One
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The first prong under Davila evaluates whether a plaintiff seeking to assert a state-law
claim "at some point in time could have brought [the] claim under ERISA § 502(a)(l)(B)." 542
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U.S. at 210. Section 502(a)(I)(B) of ERISA provides that a participant in, or a beneficiary of, an
ERISA-regulated plan may bring an action to "recover benefits due to him under the terms of his
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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)(l)(B). A careful review of Schieffer's
arbitration demands and DM&E's employee benefit plans make clear that Schieffer could not have
brought his claims under § 502(a)(l )(B) once he was terminated and discontinued from the benefit
plans ofDM&E.
First, Schieffer, post-termination of employment, could not bring a claim for the reliefhe
sought in the arbitration demand pursuant to § 502(a)(l )(B) because the claims are not brought by
or as "a participant or beneficiary" ofan ERISA-regulated plan. Schieffer is not a "beneficiary."
His ability to bring suit under § 502(a)(l )(B) for the relief sought turns on whether he remained
a "participant" in any ofDM&E's ERISA-regulated plans after his termination. See Hansen, 641
F.3d at 1222 ("[I]fthe party seeking state-court reliefis not a 'participant or beneficiary' under an
ERISA plan, he or she could not have brought suit under § 502(a)(l)(B) of the statute, and thus
any state law claim brought by such a person would not be completely preempted."). ERISA
defines a "participant" as:
[A]ny employee or former employee of an employer, or any
member or former member ofan employee organization, who is or
may become eligible to receive a benefit of any type from an
employee benefit plan which covers employees of such employer
or members of such organization, or whose beneficiaries may be
eligible to receive any such benefit.
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29 U.S.C. § 1002(7). In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the Supreme
Court further construed the term "participant" to mean "either employees in, or reasonably
expected to be in, currently covered employment, or former employees who have a reasonable
expectation of returning to covered employment or who have a 'colorable claim' to vested
benefits." Id. at 117 (internal citations, quotation marks, and alterations omitted).
The Court explained that in order to establish "that he or she may become eligible for benefits, a
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claimant must have a colorable claim that (1) he or she will prevail in a suit for benefits, or that
(2) eligibility requirements will be fulfilled in the future." Id. at 117-18.
None of DM&E's ERISA-regulated plans provide for the delivery of benefits to a
terminated employee such as Schiefferofthe nature and extent he sought. Doc. 67-2 at p. 7,16-18;
Doc. 7-1 at 9, 32; Doc. 67-3 at 7; Doc. 67-4 at 7; Doc. 67-5 at 7-8; Doc. 67-7 at 6; Doc. 67-8 at
26-27; Doc. 67-9 at 42-43. DM&E had elected to pay Schieffer cash upon termination under the
Employment Agreement instead ofproviding employee benefits, and Schieffer was contesting the
amount of that payment. Doc. 7-1 at
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23. If Schieffer's claims result in a monetary judgment
against DM&E, the receipt of that money would not constitute the receipt of a plan benefit.
Instead, Schieffer will be receiving money by virtue of the Employment Agreement which,
assuming that DM&E did not terminate Schieffer for cause, allows Schieffer to receive certain
benefits in a manner that he would never be entitled to under the terms of DM&E's ERISA
regulated plans.
Second, the wrong alleged in Schieffer's state-law claims falls outside of the scope of §
502(a)(I)(B). Schieffer is not seeking to "recover benefits due to him under the terms ofhis plan,
to enforce his rights under the terms ofthe plan, or to clarifY his rights to future benefits under the
terms ofthe plan." ERISA § 502(a)(1)(B), 29 U.S.C. 1132(a)(1)(B). Prior to the remand, DM&E
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acknowledged as much by stating that "the arbitration that Schieffer seeks to pursue is not being
brought as a means of enforcing ERISA rights because Schieffer asserts no ERISA-covered
right." Doc. 23 at 13. Although Schieffer's arbitration demands make reference to DM&E's
ERISA-governed plans, these references do not convert Schieffer's claims into ones for plan
benefits. Schieffer's arbitration demands make reference to DM&E's ERISA-governed plans solely
as a means ofmeasuring the consideration contained in the Employment Agreement, a contract that
is entirely separate from the terms of any ERISA-governed plan. In other words, Schieffer's
arbitration demands are "demands under a free-standing single-employee contract that simply
pegged DM&E's payment obligations to amounts that would have been due under ERISA plans
..." Schieffer, 648 F.3d at 939. As such, Schieffer could not have brought his claim under §
502(a)(l )(B), and the first prong of the Davila test is not satisfied.
2. Davila Prong Two
The question under Davila's second prong is whether "there is no other independent legal
duty that is implicated by defendant's actions." 542 U.S. at 210. If there is an independent legal
duty apart from those established by ERISA or an ERISA-governed plan, a claim based on that
duty is not completely preempted under § 502(a)(I)(B).
Schieffer's arbitration demand asserts that DM&E breached its obligations under the
Employment Agreement to pay Schieffer, among other matters, the employee benefits described
in Section 3(c) "for a period of not less than three years from the date on which the Severance
Payment is paid in full." Doc. 7-1 at 19. This claim does not rely on, and is independent of, any
duty under ERISA or DM&E's ERISA-governed plans. To be sure, this Court directed DM&E
to file all of its ERISA-governed plans. None of DM&E's ERISA-governed plans allow a
terminated employee like Schieffer to continue receiving employee benefits in the manner laid out
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in the Employment Agreement. I Doc. 67-2 at p. 7,16-18; Doc. 7-1 at 9,32; Doc. 67-3 at 7; Doc.
67-4 at 7; Doc. 67-5 at 7-8; Doc. 67-7 at 6; Doc. 67-8 at 26-27; Doc. 67-9 at 42-43.
Here, Schieffer's arbitration demand does not concern any failure to provide him notice
ofhis rights under COBRA. Instead, Section 24(a) of Schieffer's arbitration demand focuses on
DM&E's three-month delay in making Schieffer's severance payment. Schieffer argues that the
terms of the employment agreement required that Schieffer be kept "on the Company payroll"
until DM&E had given Schieffer his severance payment. Schieffer contends that DM&E's
failure to keep Schieffer on the company payroll resulted in the early triggering ofthe I8-month
COBRA period. This is not a claim based on ERISA § 502(a)(I)(B), § 502(a)(3), or § 502(a)(2),
but based on the terms of the Employment Agreement.
I Schieffer's arbitration demand contains far-reaching claims for special benefits under the
Employment Agreement, including for "vacation accruals and banked vacation cash compensation."
Schieffer asserts that DM&E's failure to allege that they use a separate trust fund to pay vacation
benefits means that Schieffer's demand for vacation benefits does not arise under ERISA. "ERISA
regulates 'employee welfare benefit plans' which include plans that provide employees medical,
sickness, and vacation benefits." Miller v. PPG Indus .. Inc., 278 F. Supp. 2d 826, 828 (W.D. Ky.
2003) (citing 29 U.S.C. § 1002(1». In Massachusetts v. Morash, 490 U.S. 107, 114 (1989), the
Supreme Court of the United States held that a company's policy to pay employees for unused
vacation time did not constitute an employee welfare benefit plan where those benefits were paid
from the company's general assets. In addition, the Secretary ofLabor has promulgated a regulation
that excludes vacation benefits from ERISA where the employer pays the benefits out of its general
assets. See Miller, 278 F. Supp. 2d at 828 (citing 29 C.F.R. § 251O.3-1(b)(3». The result may be
different, however, if the benefits are "paid directly from a fund established by the employer or a
group of employers." Id. at 829. Here, the DM&E ERISA-governed plans do not address such
vacation accruals or banked vacation cash compensation. DM&E's Employee Handbook (Doc. 66-2)
does discuss "Annual Leave Benefits," however, and explains how annual leave benefits are
calculated. Doc. 66-2 at 26-27. The Employee Handbook does not mention whether annual leave
benefits are paid from DM&E's general assets or from a separate fund. Before this Court, DM&E
did not claim that any payment for unused vacation would come from any source different than
general assets. See Doc. 71 at 2-4. Neither the arbitration demand nor any of the plans-and the
Court directed the filing by DM&E of all of its ERISA-governed plans-reveal unused vacation
reimbursement to be a plan benefit.
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In short, Schieffer's claims for payments for employee benefits arise out of a separate
agreement that references DM&E's ERISA plans as a method offixing the value ofthat agreement.
Accordingly, Schieffer's claim fails to invoke federal jurisdiction under the second prong of the
Davila test. See Stevenson v. Bank of N.Y. Co., Inc., 609 F.3d 56, 62 (2nd Cir. 2010) (no
preemption of breach of contract claim based on employer's alleged promise to maintain former
employee's pension and benefits where employee's claims made "reference to ERISA plans solely
as a means of describing the consideration underlying an alleged contract that itself is separate
from the terms of any plan. ").
Indeed, DM&E in earlier briefing conceded that DM&E's ERISA-governed plans are not
the basis or source of Schieffer's claims. DM&E maintained that "DM&E assessed [its benefit]
plans and concluded that coverage could not be extended to a former employee in Schieffer's
situation." Doc. 23 at 9. 2 Despite DM&E's concession in this regard, this Court at oral argument
requested that the parties file all ERISA-governed plans in existence at DM&E at the time of
Schieffer's termination. This Court endeavored to read the numerous pages of plan documents
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filed. Having done so, this Court concludes that Schieffer's claims "are demands under a free
standing single-employee contract that simply pegged [part of] DM&E's payment obligations to
amounts that would have been due under ERISA plans." See Schieffer, 648 F.3d at 940.
Despite DM&E's arguments to the contrary, Johnson v. U.S. Bancorp, 387 F.3d 939 (8th
Cir. 2004) does not control the present case. In Johnson, the plaintiffs sued their employer in
federal court, alleging a wrongful denial of benefits under ERISA and state law claims for breach
2 DM&E made similar statements in Schamweber v. Dakota, Minn. & E. RR. Corp., No. 09
4025, regarding entitlement ofa former employee to benefits under its health plan. In Schamweber,
DM&E stated that !I[c]ontinuing benefits under DM&E's health plan was not, however, an option:
the plan only allows for participation by active employees." Schamweber, Doc. 37 at 6.
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of contract. Id. at 941. On appeal, the plaintiffs argued that their employer had created a "free
standing contract" by promising to pay the plaintiffs a severance payment "in accordance with"
the terms of the company's ERISA plan. Id. at 942. The Eighth Circuit disagreed and found that
ERISA preempted the plaintiffs breach ofcontract theory. Id. This case differs from Johnson in
a critical respect. Unlike the employer's promise in Johnson, DM&E's promise to pay Schieffer
employee benefits is not simply a promise to pay Schieffer employee benefits" in accordance with"
DM&E's ERISA-governed plans. In other words, DM&E was not promising to do something that
its ERISA plans obligated it to do. Instead, DM&E promised to pay Schieffer benefits in a manner
not provided for in any ofDM&E's ERISA plans.
Nor is this a situation where the Employment Agreement amended DM&E's ERISA plans.
See Schieffer, 648 F 3d at 939 ("If these are demands for the payment of benefits under ERISA
plans, as amended by the Employment Agreement, then to that extent all state law remedies are
preempted."). The parties did not enter the Employment Agreement for purposes of amending
DM&E's ERISA-governed plans. Indeed, Section 3(c) of the Employment Agreement states:
In the event the Executive is not permitted to participate in
[DM&E's health, welfare, and retirement benefit programs],
whether by law or the terms thereof, the Company shall
periodically pay to the Executive, in lieu of such participation, a
cash payment equal to the amount the Company would have
contributed toward the Executive's participation in the plans or
programs.
Doc. 7-1 at 18 (emphasis added). Thus, if the terms of one ofDM&E's ERISA plans precluded
Schieffer from participating in the plan, DM&E would simply pay Schieffer the equivalent ofthat
plan, as it sought to do in this case, rather than amend the terms ofthe plan itself. Schieffer makes
demands in arbitration that DM&E underpaid him under the Employment Agreement, not that the
Employment Agreement somehow amended DM&E's ERISA-governed plans. Such claims belong
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in arbitration, consistent with the terms of the Employment Agreement. 3 Doc. 7-1 at 20.
Schieffer's arbitration demands are "demands under a free-standing singe-employee contract that
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simply pegged DM&E's payment obligations [in part] to amounts that would have been due under
ERlSA plans." See Schieffer, 648 F.3d at 939-40.
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III. CONCLUSION
For the reasons explained, this Court lacks federal subject matter jurisdiction over this case.
Accordingly, it is hereby
ORDERED that Schieffer's Motion to Dismiss is granted and the case is dismissed.
Dated March 9~, 2012.
BY THE COURT:
UNITED STATES DISTRlCT JUDGE
In its previous Opinion and Order, this Court noted that even ERISA claims are arbitrable.
Schieffer, 744 F.Supp. 2d at 997 n.6 (citing Franke v. Poly-America Med. & Dental Benefits Plan,
555 F.3d 656 (8th Cir. 2009); Arnulfo P. Suli!, Inc. v. Dean Witter Reynolds, Inc., 847 F.2d 475,
477-79 (8th Cir. 1988)). The parties apparently did not contest this on appeal, as the Eighth Circuit
did not address it.
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