United States District Court, N.D. Oklahoma
OPINION AND ORDER
E. DOWDELL DISTRICT JUDGE.
the Court is plaintiff Gary Anderson's Motion to Remand
and Brief in Support (the “Motion”) (Doc. 10),
which defendant the Fraternal Order of Police-Legal Plan,
Inc. has opposed (Doc. 11). For the reasons discussed below,
plaintiff's Motion is denied.
initiated this lawsuit in the Tulsa County District Court on
May 20, 2016. (Doc. 1, Exh. 1). Plaintiff's state court
petition alleges that he was employed as a law enforcement
officer by the City of Miami, Oklahoma until his termination
in 2010. During his employment, plaintiff was a member of the
Fraternal Order of Police (“FOP”), which offers
its members the opportunity to participate in a self-funded
legal plan (the “Plan”) that covers certain legal
defense costs. In 2010, plaintiff initiated legal proceedings
challenging his termination. In accordance with his Plan
membership, plaintiff routinely submitted legal billing
expenses to defendant. Plaintiff's lawsuit alleges that
defendant failed to pay for a portion of his legal expenses,
which caused him to suffer damages exceeding $10, 000.
(Id., ¶¶ 3-5). Plaintiff also seeks
punitive damages in an amount over $10, 000.
removed the case on May 24, 2016, asserting that this Court
has federal question jurisdiction over plaintiff's claim.
(Doc. 1 at 2). Specifically, defendant's Notice of
Removal states that plaintiff's lawsuit claims recovery
of benefits pursuant to an employee benefits plan that is
“exclusively governed” by the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C.
§ 1001 et seq. (Id.). Defendant
asserts that this Court has original jurisdiction under 28
U.S.C. § 1331 under the complete preemption doctrine.
Plaintiff's Motion does not address preemption, but
instead argues that ERISA does not govern the Plan and thus
the case should be remanded. (Doc. 10 at 2).
courts are ‘courts of limited jurisdiction, '
possessing ‘only that power authorized by Constitution
and statute.'” Sunshine Haven Nursing
Operations, LLC v. U.S. Dep't of Health & Human
Servs., 742 F.3d 1239, 1246 (10th Cir. 2014) (quoting
Devon Energy Prod. Co., L.P. v. Mosaic Potash Carlsbad,
Inc., 693 F.3d 1195, 1201 (10th Cir. 2012)). District
courts have original jurisdiction over federal question
cases, that is, those cases “arising under the
Constitution, laws, or treaties of the United States.”
28 U.S.C. § 1331. In a defendant's removal action
based on federal question jurisdiction, the defendant bears
the burden of establishing that removal was proper on this
basis. Karnes v. Boeing Co., 335 F.3d 1189, 1193
(10th Cir. 2003).
determining the existence of federal question jurisdiction,
courts are ‘guided generally by the ‘well-pleaded
complaint' rule, under which a suit arises under federal
law only when the plaintiff's statement of his own cause
of action shows that it is based on federal law.'”
Salzer v. SSM Health Care of Oklahoma Inc., 762 F.3d
1130, 1134 (10th Cir. 2014) (quoting Turgeau v. Admin.
Rev. Bd., 446 F.3d 1052, 1060 (10th Cir. 2006)). A
plaintiff may therefore “‘prevent removal to
federal court by choosing not to plead a federal claim even
if one is available.'” Id. (quoting
Turgeau, 446 F.3d at 1060). However, the doctrine of
complete preemption is “‘a corollary or an
exception to the well pleaded complaint rule, ' under
which ‘a state law cause of action may be removed to
federal court on the theory that federal preemption makes the
state law claim necessarily federal in character.'”
Id. (quotation omitted); Felix v. Lucent Techs.,
Inc., 387 F.3d 1146, 1154 (10th Cir. 2004). The Supreme
Court has recognized “only a few federal statutes that
so pervasively regulate their respective areas that they have
complete preemptive force; ERISA is one.” Hansen v.
Harper Excavating, Inc., 641 F.3d 1216, 1221 (10th Cir.
2011). Thus, the complete preemption doctrine allows a state
law claim to be converted into a federal claim for purposes
of federal question jurisdiction and the well-pleaded
complaint rule. Felix, 387 F.3d at 1156.
the Court must assess whether the Plan is governed by ERISA.
If the answer is yes, the dispositive question before the
Court becomes whether plaintiff's claim is completely
preempted by ERISA. See Salzer, 762 F.3d at 1134. It
is defendant's burden to demonstrate that removal is
proper under the ERISA doctrine of complete preemption.
See Karnes, 335 F.3d at 1193.
is subject to ERISA regulation if it is “established or
maintained by an employer or by an employee organization . .
. for the purpose of providing for its participants or their
beneficiaries . . . prepaid legal services.” 29 U.S.C.
§ 1002(1). ERISA does not apply to government plans,
defined as 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.” ERISA § 3(32), 29 U.S.C. §
1002(32); see McGraw v. Prudential Ins. Co. of Am.,
137 F.3d 1253, 1257 (10th Cir. 1998).
Motion attaches as exhibits the Legal Defense Plan Brochure
and Legal Defense Plan Description (“Plan
Description”). (Doc. 10, Exh. 1). The Plan Description
provides that participation in the Plan is limited to
“active FOP members in good standing” who are
employed with federal, state, or local government law
enforcement agencies. (Id. at 4). The Plan offers
its participants three options for coverage of legal defense
costs related to administrative, civil, and criminal
proceedings arising “directly out of the
Participant's activities in the scope of
employment.” (Id. at 8). In particular,
Coverage A applies to the “[l]egal defense or . . .
other appropriate legal challenge to administrative
discipline, sanction or proceeding” including the
participant's dismissal, “where such discipline or
sanction arises directly out of the Participant's
activities in the scope of employment.” (Id.).
plaintiff's Motion appears to allege that ERISA does not
govern because the governmental plan exception applies, his
Reply asserts that he “did not argue defendant was a
government plan and therefore not governed by
ERISA.” (Doc. 12 at 2, ¶ 3). It is unclear
precisely what plaintiff attempts to argue, nor do the two
cases cited by plaintiff support his argument for remand.
Both cases are distinguishable because the plans at issue
were not legal services plans, nor did they limit eligibility
to members in good standing with a particular organization.
See Wis. Educ. Asso. Ins. Tr. v. Iowa State Bd. of Pub.
Instruction, 804 F.2d 1059, 1061 (8th Cir. 1986) (tax
exempt trust was not an employee benefit plan for purposes of
ERISA because 30% of individuals receiving benefits were not
members of the labor union maintaining the trust);
National Business Conference Employee Benefit Association
v. Anderson, 451 F.Supp. 458 (S.D. Iowa 1977) (medical
insurance plan open to any individual in an ...