Diven v. Fairmont General Hospital, Inc. et al
Filing
51
MEMORANDUM OPINION AND ORDER; Court REMANDS the case to the Circuit Court of Marion County, West Virginia. Signed by District Judge Irene M. Keeley on 11/23/2011. (Copy counsel of record via CM/ECF)(jmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
JANICE DIVEN,
Plaintiff and
Counter Defendant,
v.
//
CIVIL ACTION NO. 1:11CV27
(Judge Keeley)
FAIRMONT GENERAL HOSPITAL,
INC.,
Defendant, Counter Claimant,
Third Party Plaintiff,
and Counter Defendant.
KIM CHEUVRONT, TARA
STEVENS, DONNA CASSELLA, and
FAIRMONT MANAGEMENT SERVICES
ORGANIZATION, INC.,
Defendants and
Counter Defendants.
DONALD G. MYERS,
Third-Party Defendant
and Counter Claimant.
MEMORANDUM OPINION AND ORDER
Pending before the Court is the question whether to remand
this case to state court based on the absence of a federal
question. For the reasons that follow, the Court concludes that
remand is appropriate and REMANDS this case to the Circuit Court of
Marion County, West Virginia.
I. FACTUAL BACKGROUND
The plaintiff, Janice Diven (“Diven”), filed a complaint in
the Circuit Court of Marion County, West Virginia, on February 4,
DIVEN v. FAIRMONT GENERAL HOSPITAL, et al
1:11CV27
MEMORANDUM OPINION AND ORDER
2011,
alleging
that
the
defendant,
Fairmont
General
Hospital
(“FGH”), had wrongfully terminated her employment. Diven, a fiftythree-year-old supervisor in FGH’s occupational health clinic,
worked for FGH for twenty-two years before being fired on June 30,
2010.
The factual background relevant to Diven’s termination began
with an incident involving her son, Donald Myers (“Myers”). Myers
had a romantic relationship with Diven’s coworker, Brenda Perkins
(“Perkins”), an employee of an FGH subsidiary, Fairmont Management
Services Organization (“FMSO”). According to Diven, after the
couple broke up in June 2010, rumors began to circulate at work
about the failed relationship and Diven’s alleged mistreatment of
Perkins. As a result, Diven’s work relationships soured and her
requests to management to intervene were ignored.
Around the same time, another FMSO employee, Donna Cassella
(“Cassella”), accused Diven of adulterating a drug test for Myers.
As a condition of his employment at a local energy company, Myers
was drug tested at FGH’s clinic in February, 2010. Cassella later
alleged that Diven had threatened to force Perkins out of her
relationship with Myers if Perkins did not help Diven adulterate
the test. FGH fired Diven shortly after these accusations surfaced
and replaced her with Cassella, who is in her forties. Diven denied
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MEMORANDUM OPINION AND ORDER
the accusations and alleged that Cassella conspired with Perkins to
manufacture the story.
Diven also claimed that FGH’s management failed to follow the
written disciplinary procedures in her employment contract prior to
firing her and, despite her years of experience and previously
spotless record, replaced her with a younger, less experienced
worker. Although she pled no specifics, Diven further alleged that
FGH did not take disciplinary action against younger employees who
had committed similarly serious infractions.
II. PROCEDURAL HISTORY
The complaint alleged a number of claims under West Virginia
common law, including breach of contract, breach of unilateral
contract, interference with a business relationship, hostile work
environment,
intentional
defamation,
damage
to
retaliatory
discharge.
infliction
credit
It
and
also
of
emotional
personal
asserted
distress,
relations,
claims
of
and
disparate
treatment, discriminatory treatment, and employment discrimination
under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C.
§ 621, Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e, et seq., and W. Va. Code § 5-11-9, as well as a claim for
wrongful discharge in violation of public policy under W. Va. Code
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MEMORANDUM OPINION AND ORDER
§ 5-11-2. Finally, the complaint sought class action certification
under W. Va. R. Civ. P. 23.
On March 11, 2011, the defendants removed the case to this
Court pursuant to 28 U.S.C. § 1331, citing Diven’s federal claims
under the ADEA and Title VII. On March 18, 2011, the defendants
filed motions to dismiss these claims, which the Court granted on
May 4, 2011. Given the dismissal of the plaintiff’s Title VII and
ADEA claims for failure to exhaust administrative remedies, on its
own motion the Court ordered the parties to brief whether any
federal cause of action remained, focusing specifically on whether
the defendants’ contention that § 502(a) of the Employee Retirement
Income Security Act of 1974 (“ERISA”) preempted certain of the
plaintiff’s state-law claims.
III. LEGAL ANALYSIS
Section 510 of ERISA prohibits discharge of, or discrimination
against, an employee benefit plan participant “for exercising any
right to which he is entitled under the provisions of an employee
benefit plan.” 29 U.S.C. § 1140. Section 502(a)(3) provides a cause
of action to such a plan participant, and § 502(e)(1) gives federal
courts exclusive jurisdiction over such claims. 29 U.S.C. § 1132.
Here, it is undisputed that Diven was a beneficiary of an ERISA
pension plan while employed by FGH, and the defendants allege that,
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although
she
did
not
plead
them
as
such,
Diven’s
wrongful
termination claims actually assert a cause of action under § 510 of
ERISA. Specifically, they contend that Diven’s complaint alleges
that FGH’s decision to fire her was motivated, at least in part, by
a desire to interfere with her pension rights under the ERISA plan.
If true, Diven’s wrongful termination claims are preempted by
§ 510, and this Court has original jurisdiction under the “complete
preemption” exception to the well-pleaded complaint rule.
A.
ERISA Complete Preemption
Typically, a determination of whether a defendant may remove
a case pursuant to § 1331 “arising under” jurisdiction turns on the
“well-pleaded complaint” rule. The existence of a federal defense
normally does not create § 1331 jurisdiction. There is an exception
to this rule, however: “When a federal statute wholly displaces the
state law cause of action through complete preemption, the state
claim can be removed.” Aetna Health, Inc. v. Davilla, 542 U.S. 200,
207 (2004) (internal quotation marks and citations omitted).
ERISA is one of those statutes with such preemptive effect.
Congress enacted ERISA “to provide a uniform regulatory regime over
employee
benefit
integrated
plans.”
enforcement
Id.
at
mechanism
208.
ERISA
designed
to
§
502(a)
accomplish
is
an
that
purpose by superceding state law remedies for employees seeking to
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MEMORANDUM OPINION AND ORDER
enforce their benefits plans. “Therefore any state-law cause of
action that duplicates, supplements, or supplants the ERISA civil
enforcement remedy conflicts with the clear congressional intent to
make the ERISA remedy exclusive and is therefore preempted.” Id.
Consequently, “causes of actions within the scope of the civil
enforcement provision of § 502(a) [are] removable to federal
court.” Id. at 209.
Aetna established a two-pronged test to determine whether a
cause of action is completely preempted by ERISA:
[(1) the plaintiff] could have brought his claim under
ERISA § 502(a)(1)(B), and . . .
[(2)] there is no other independent legal duty that is
implicated by the defendant’s actions . . . .
542 U.S. at 210.
1.
ERISA Claim
For ERISA complete preemption to apply, the first prong of the
Aetna test requires that the plaintiff could have brought her claim
under ERISA’s civil enforcement provision, § 502(a). Id. at 201.
The defendants argue that Diven could have brought her claim under
ERISA’s anti-discrimination provision, § 510, which is enforced
through § 502(a). Section 510, in pertinent part, renders it
unlawful for
any
person
to discharge,
fine,
suspend,
expel,
discipline, or discriminate against a participant or
beneficiary . . . . for the purpose of interfering with
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MEMORANDUM OPINION AND ORDER
the attainment of any right to which such participant may
become entitled under the plan . . . .
The seminal case addressing this issue, and the case on which
the defendants primarily rely, is Ingersoll-Rand Co. v. McClendon,
498 U.S. 133 (1990). In McClendon, the plaintiff’s employer fired
him, citing a companywide reduction in force. McClendon sued the
company in state court, “alleging that his pension would have
vested in another four months and that a principal reason for his
termination was the company’s desire to avoid making contributions
to his pension fund.” Id. at 135-36.
In finding that ERISA completely preempted the plaintiff’s
claim,
the
Supreme
Court
held
that
“McClendon’s
claim
falls
squarely within the ambit of ERISA § 510.” Id. at 143. The Court
explained that “[b]y its terms, § 510 protects plan participants
from termination motivated by an employer’s desire to prevent a
pension from vesting” and that it should be enforced through §
502(a). Id.
Although the defendants argue that Diven’s complaint alleges
FGH’s decision to fire her was motivated by a desire to interfere
with her rights under an ERISA pension plan, the Fourth Circuit has
held
that
“a
§
510
plaintiff
must
prove
specific
intent
by
defendants to interfere with [her] pension rights.” Conkwright v.
Westinghouse Elec. Corp., 933 F.2d 231, 238 (4th Cir. 1991). In
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Conkwright, our court of appeals emphasized that, when an employer
terminates an employee, incidental effects on that employee’s
pension benefits are not sufficient to establish that an employer’s
“principal reason” for the termination was to avoid contributing to
a pension fund:
ERISA guarantees that no employee will be terminated
where the purpose of the discharge is the interference
with one’s pension rights. Consequently, it is necessary
to separate the firings which have an incidental, albeit
important, effect on an employee’s pension rights from
the actionable firings, in which the effect of the firing
on the employer’s pension obligation was a motivating
factor in the firing decision. . . . An effective way of
making the necessary separation is to require plaintiffs
to demonstrate specific intent on the part of the
employer to interfere with the employee’s pension rights.
Id. at 238-39.
Here, the parties properly have focused their arguments on
whether Diven’s complaint has alleged that the “principal reason”
for her termination was FGH’s “specific intent” to interfere with
her pension rights. A careful review of the complaint establishes
that
it
does
not
do
so,
but
rather
alleges
that
Diven
was
terminated with a retaliatory purpose and because of her age, not
with the “specific intent” to avoid paying her pension.
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The defendants nevertheless contend that FGH’s desire to
interfere with Diven’s pension benefits was a motivating factor1
and rely on four paragraphs in the complaint to support their
argument:
42. Ms Diven believes she was forcibly terminated due to
her age, especially given that she was approaching
pension qualification . . . .
. . .
59. Ms Diven, as a fifty-three year old employee of
Defendant FGH, nearing retirement age and her pension,
was therefore treated in a disparate manner and was
subjected to Defendant FGH’s unfair policies and
practices insofar as she was treated in an unequal manner
and unlike younger employees similarly situated with
Defendant FGH.
. . .
65. As a result of Managerial Defendants’ enforcement of
employment policies, procedures, and practices, Ms. Diven
was unjustly and discriminatorily deprived of equal
employment opportunities, advancement, wage gain pension,
and other opportunities and benefits.
. . .
67. . . . Ms. Diven has been, is being, and will be
deprived of income in the form of wages and prospective
retirement benefits, and other benefits, promotion
opportunities, and job assignments due to her as an
employee, but denied because of her age and in an amount
1
The defendants suggest that an employer’s intent to interfere with
pension benefits must only be a motivating factor, rather than the motivating
factor, citing Conkwright as support. As explained above, however, Conkwright
actually supports a much different conclusion: that the employer must have
specifically intended to interfere and that any incidental effects on employee’s
pension benefits do not establish grounds for preemption. See 933 F.2d at 238-39.
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to be determined.
When considered both individually and also within the totality
of Diven’s complaint, however, these paragraphs do not evince a
contention by Diven that FGH intended to interfere with her rights
under her ERISA plan. See Conkwright, 933 F.2d at 238. Rather, they
are merely descriptive of Diven’s age and her potential damages.
Paragraph 42, which includes the dependent clause “especially given
that she was approaching pension qualification,” might begin to
suggest such intent were it representative of the complaint as a
whole. In point of fact, however, when considered in its totality,
the complaint alleges that FGH fired Diven due to her age or for
some retaliatory purpose, but never avers that interfering with
Diven’s
pension
benefits
was
a
“principal
reason”
for
her
termination. See McClendon, 498 U.S. at 135-36. Therefore, the
Court finds that Diven has not stated a claim under ERISA § 510.
When a defendant’s actions fail to create an ERISA cause of
action, the Fourth Circuit has held that the plaintiff’s claims are
not
preempted.
In
King
v.
Marriott
International,
Inc.,
example, the court stated:
Because none of [the plaintiff’s] actions are protected
under § 510, the only potentially relevant provision,
ERISA does not provide a federal cause of action for [the
plaintiff’s]
allegations.
Consequently,
her
state
wrongful discharge claim is not completely preempted, and
removal of her claim was inappropriate.
10
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DIVEN v. FAIRMONT GENERAL HOSPITAL, et al
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MEMORANDUM OPINION AND ORDER
337 F.3d 421, 428 (4th Cir. 2003). Consequently, because Diven does
not have an ERISA claim, the first prong of Aetna is not met.
2.
Independent Legal Duty
In addition to the failure to plead an ERISA claim, Diven’s
complaint also fails to satisfy the second prong required under
Aetna for preemption, that “there is no other independent legal
duty that is implicated by a defendant’s actions . . . .” 542 U.S.
at
201.
In
Aetna,
the
Supreme
Court
explained
that,
when
“interpretation of the terms of the [plaintiffs’] benefit plans
forms an essential part of their [] claim” and when the defendant’s
liability exists only due to its administration of that plan, no
independent legal duty exists. Id. at 213. Only then is the second
requirement for ERISA preemption met. In Aetna, the plaintiffs sued
their health maintenance organization pursuant to state health care
liability law for its alleged failure to exercise ordinary care in
the handling of health care coverage decisions. The Court held that
ERISA completely preempted those state law claims because the state
law’s duty of ordinary care was not an “independent legal duty;” in
other words, the defendant’s liability under state law derived
“entirely from the particular rights and obligations established by
the benefits plans.” Id.
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Here, the duties implicated by Diven’s state law claims are
independent of any duties imposed by her ERISA pension plan. Unlike
the plaintiffs in Aetna, Diven has not alleged a breach of any duty
the defendants owed her under her pension plan, but rather a breach
of the duty they owed under her employment contract. See id.
Consequently, because Diven’s complaint relies on a legal duty
independent of any duty derived from her pension plan, the second
prong of Aetna is not met and her claim is not preempted.
In summary, because Diven’s complaint satisfies neither of the
requirements for complete preemption under Aetna Health, Inc. v.
Davilla, the Court finds that her claims are not preempted under
ERISA. See 542 U.S. at 210.
B.
Supplemental Jurisdiction
Although original jurisdiction under ERISA is lacking, the
Court
must
also
consider
whether,
under
the
doctrine
of
supplemental jurisdiction, it should exercise its discretion in
favor of keeping this case. Where, as here, a complaint no longer
includes a federal claim and diversity does not exist between the
parties, a court has broad discretion to determine whether to keep
a case with only state law claims. Carnegie-Mellon Univ. v. Cohill,
484 U.S. 343, 351 (1988).
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Under 28 U.S.C. § 1367(c), a district court may decline to
exercise supplemental jurisdiction over state law claims if:
(1) the claim raises a novel or complex issue of State
law,
(2) the claim substantially predominates over the claim
or claims over which the district court has original
jurisdiction,
(3) the district court has dismissed all claims over
which it has original jurisdiction, or
(4) in exceptional circumstances, there are other
compelling reasons for declining jurisdiction.
A court should also consider the principles of economy, fairness,
and comity in making this determination. Cohill, 484 U.S. at 357.
Here,
the
claims
over
which
the
Court
had
original
jurisdiction have been dismissed and it may properly decline to
exercise supplemental jurisdiction since the remaining claims arise
solely under West Virginia law. See 28 U.S.C. § 1367(c); Cohill,
484 U.S. at 351. Moreover, this action is still in its earliest
stages, no trial or pretrial dates having been set and no discovery
having been undertaken. The principles of economy, convenience,
fairness, and comity favor remand inasmuch as, at bottom, Diven’s
complaint alleges only state law claims with no federal defense.
See Cohill, 484 U.S. at 357. The Court, thus, within its reasonable
discretion declines to exercise supplemental jurisdiction over this
matter.
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IV. CONCLUSION
For the reasons stated, the Court REMANDS the case to the
Circuit Court of Marion County, West Virginia.
The Court directs the Clerk to transmit copies of this Order
to counsel of record.
DATED: November 23, 2011
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
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