United States District Court, W.D. Arkansas, Fayetteville Division
DEBORAH MANLEY, on Behalf of Herself and All Others Similarly Situated PLAINTIFF
UNITEDHEALTH GROUP INC., et al. DEFENDANTS
OPINION AND ORDER
HOLMES, III U.S. DISTRICT JUDGE.
the Court are Plaintiff Deborah Manley's motion to remand
(Doc. 16), brief in support of her motion (Doc. 17), and
Defendants' response in opposition (Doc. 21), and
Plaintiff's reply (Doc. 27). Defendants have separately
filed a motion (Doc. 14) to dismiss and a brief in support of
their motion (Doc. 15). Plaintiff filed a response opposing
the motion to dismiss (Doc. 20). Defendants filed a reply
(Doc. 26) and Plaintiff filed a surreply (Doc. 30). For the
reasons set forth below, the motion to remand will be GRANTED
and the motion to dismiss will be DENIED.
March 13, 2019, Plaintiff Deborah Manley filed a complaint in
Washington County Circuit Court against UnitedHealth Group
Inc., United Healthcare Services, Inc., UnitedHealthcare,
Inc., UnitedHealthcare Insurance Co., UMR, Inc.,
UnitedHealthcare of Arkansas, Inc. (collectively, the
“Defendants”), John Doe Corporations 1-10, and
John Doe Entities 1-10. Manley is the only named plaintiff,
but the complaint contains factual allegations in support of
a class action. No. class has been certified. Manley alleges
that the Defendants improperly collected subrogation or
reimbursement from her without first determining whether she
had been “made whole” by a settlement with a
third-party. She alleges that this practice by Defendants
violates Arkansas law which requires an insurance company to
make such a determination before collecting subrogation or
reimbursement. Manley seeks damages for proceeds improperly
collected by Defendants as well as a declaratory judgment
that Defendants' practices are contrary to Arkansas law.
removed this action on April 17, 2019 pursuant to 28 U.S.C.
§ 1331. (Doc. 1, p. 6, ¶ 15). Defendants argue that
Manley, on behalf of a prospective class, seeks a declaration
of rights that would impact the payment of benefits under
federal ERISA plans. Manley herself does not have an ERISA
plan. Instead, Defendants contend that nearly 44 members of
the putative class are ERISA plan participants. As such,
Defendants argue, the Court has federal question jurisdiction
over the action because ERISA completely preempts
Manley's state law claims. Manley's motion to remand
argues the Court is without subject matter jurisdiction
because Manley lacks standing to assert an ERISA claim or,
alternatively, that ERISA does not completely preempt her
state law claims.
action may be removed to federal court only if the complaint
could have originally been filed in federal court. 28 U.S.C.
§ 1441(a). After an action has been removed, a plaintiff
opposing removal may file a motion to remand an action back
to state court. 28 U.S.C. § 1447(c). The removing party
has the burden of demonstrating that the federal court has
subject matter jurisdiction. In re Business Men's
Assur. Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993).
When ruling on a motion to remand, the Court is to resolve
all doubts about federal jurisdiction in favor of remand.
removed this case pursuant to 28 U.S.C. § 1331, arguing
that claims within the complaint arise under federal law.
When deciding whether a claim “arises under”
federal law, courts follow the well-pleaded complaint rule,
which provides that an issue of federal law must necessarily
appear on the face of the plaintiff's well-pleaded
complaint. Hurt v. Dow Chem. Co., 963 F.2d 1142,
1144 (8th Cir. 1992). Under the well-pleaded complaint rule,
the plaintiff is the master of her complaint and she may
avoid federal jurisdiction by pleading exclusively state law
claims. Caterpillar, Inc. v. Williams, 482 U.S. 386,
391 (1987). A defendant's right to remove is “to be
determined according to the plaintiff['s] pleading at the
time of the petition for removal.” Pullman Co. v.
Jenkins, 305 U.S. 534, 537 (1939). Though Manley has
pled exclusively state law claims, Defendants argue that the
complaint could implicate one or more ERISA plans, and
ERISA's statutory framework would completely preempt
Manley's state law claims.
deciding whether Manley's claims are completely preempted
by ERISA, it is necessary to discuss the differences between
complete preemption and conflict (or express) preemption.
Conflict preemption generally applies when state and federal
laws conflict, but Congress has not clearly intended to
completely pre-empt that particular area of law. Doyle v.
Blue Cross Blue Shield of Illinois, 149 F.Supp.2d 427,
431 (N.D. Ill. 2001). In these cases, conflict preemption is
asserted as a defense to a state law claim, and therefore
does not appear on the face of a well-pleaded complaint.
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63
(1987). As a result, conflict preemption does not provide a
basis for removal to federal court. Id.; see also
Prudential Ins. Co. of Am. v. National Park Medical Center,
Inc., 413 F.3d 897, 907 (8th Cir. 2005). Complete
preemption on the other hand is a well-established exception
to the well-pleaded complaint rule. Metro. Life Ins.
Co., 481 U.S. at 63-64. Under complete preemption,
“Congress may so completely pre-empt a particular area
that any civil complaint raising this select group of claims
is necessarily federal in character.” Id.
Indeed, “[c]ertain federal laws, . . . including ERISA,
so sweepingly occupy a field of regulatory interest that any
claim brought within that field, however stated in the
complaint, is in essence a federal claim.” Levine
v. United Healthcare Corp., 402 F.3d 156, 162 (3d Cir.
2005). Where a complaint asserts a state cause of action
concerning an area of law that has been completely preempted,
removal to federal court is appropriate. Id.
distinction between conflict and complete preemption is
important in the ERISA context because ERISA's statutory
framework provides for both forms of preemption:
“‘complete preemption' under ERISA §
502, 29 U.S.C. § 1132, and ‘[conflict]
preemption' under ERISA § 514, 29 U.S.C. §
1144.” Prudential Ins. Co., 413 F.3d at 907.
ERISA's conflict preemption clause, § 514(a),
“preempts any state law that ‘relates to any
employee benefit plan.'” Id. (quoting 29
U.S.C. §1144(a)). It follows then that any claim that
merely “relates to” an ERISA plan does not
provide a basis for removal. Id. Rather, a defendant
seeking removal by invoking federal question jurisdiction
through ERISA must show that a state law cause of action
falls within the scope of § 502(a) of ERISA. Metro.
Life Ins. Co., 481 U.S. at 66; Aetna Health Inc. v.
Davila, 542 U.S. 200, 210 (2004). A state law cause of
action falls within the scope of § 502(a)-and is
therefore completely preempted by federal law-if: (1)
“an individual, at some point in time, could have
brought [the] claim under ERISA § 502(a)(1)(B), ”
and (2) “where there is no other independent duty that
is implicated by a defendant's action.”
Davila, 542 U.S. at 210. Thus, removal to federal
court is appropriate only if Manley's claims fall within
the scope of § 502(a) of ERISA.
502(a), ERISA's civil enforcement provision, provides
that only a plan participant, beneficiary, fiduciary, or
state actor may enforce ERISA's statutory provisions. 29
U.S.C. § 1132(a)(1)(B). Both parties agree that Deborah
Manley does not fall into any of these categories. Therefore,
Manley could not, at any point in time, have brought a claim
under § 502(a) of ERISA. This is not in dispute.
Defendants instead argue that federal jurisdiction exists
because members of the putative class described in the
complaint are plan participants. However, no class has been
certified at this time. The only plaintiff, Deborah Manley,
cannot bring an ERISA claim. As it stands, no federal issue
is currently in question.
position that a federal question exists based on the putative
class members is understandable. The face of the complaint
contains allegations that could potentially implicate federal
law. Fatal to Defendants' position, however, is their
speculation that these 44 putative class members will
eventually be class members in this action. For
Defendants' argument to succeed, the ERISA participants
must become part of the action and their ERISA plans must be
implicated by the adjudication of Manley's claims. It is
far from certain that these 44 members- or any other members
of the putative class-would fall within a class that meets
either Arkansas or Federal Rule of Civil Procedure 23's
requirements for class certification. Were a state court to
certify a class but limit the class definition to those
without an ERISA plan, no federal issue would be in question.
Apart from acknowledging that a favorable Rule 23
determination is necessary to Defendants' removal
argument, the Court makes no finding on how this case will
proceed in the Circuit Court of Washington County.
Deborah Manley cannot bring an ERISA claim, and it is far
from certain this action would extend to ERISA plan
participants, subject matter jurisdiction is in doubt. The
Court must resolve all doubts about federal jurisdiction in
favor of remand. See In re Business Men's Assur. Co.
of Am., 992 F.2d ...