United States District Court, N.D. Texas, Dallas Division.
Jose ANDRADES, Plaintiff,
ORIGINAL WOOD DESIGN, INC., Defendant.
Civil Action No. 3:04-CV-1324-N
Attorneys & Firms
Tom A. Carse, Carse Law Firm, Dallas, TX, for Plaintiff.
Evan L. Van Shaw, Law Office of Van Shaw, Dallas, TX, for Defendant.
David C. Godbey, United States District Judge
*1 Before the Court are Defendant’s Second Amended Motion to Compel Arbitration, filed on February 7, 2005, and Plaintiff’s Motion for Remand, filed on February 18, 2005. Because this Court lacks subject matter jurisdiction over this case, the Court grants the motion to remand and does not reach the motion to compel arbitration.
Plaintiff Jose Andrades brought a negligence suit in Texas state court for injuries suffered in the course of his employment with Defendant Original Wood Design, Inc. (“OWD”). OWD is a carpentry company that has opted out of Texas workers compensation. OWD removed to this Court on June 16, 2004, asserting federal subject matter jurisdiction on ERISA preemption grounds. On August 26, 2004, OWD moved to compel arbitration on the basis of a provision in the ERISA plan it alleges governs Andrades’s claim. Andrades argued he had never seen a copy of the plan or in any way acceded to binding arbitration of disputes as a condition of employment. From September 2004 to November 2004, the parties submitted a substantial stream of responses, supplements, amendments, and surreplies related to the motion to compel. Additionally, Andrades moved to remand and there were discovery disputes.
By Order of December 1, 2004 the Court denied the motion to compel arbitration, ordered the parties to rebrief that motion, and declared all other outstanding motions moot. The Court also stayed discovery of all other pretrial matters pending resolution of the motion to compel. The parties rebriefed the motion to compel in compliance with the Order, and Andrades moved to remand and for litigation sanctions. The parties appeared before the Court for an evidentiary hearing on May 31, 2005. At the conclusion of the hearing, the Court informed the parties it was inclined to deny the motion to compel based on the evidence and oral arguments, and that an opinion reflecting the Court’s ultimate determination would issue shortly. Upon review, however, questions appeared with regard to the jurisdictional basis for removal. The Court requested, and the parties submitted, supplemental briefs addressing specific authority related to that issue.
II. THE COURT LACKS SUBJECT MATTER JURISDICTION OVER THIS CASE AND MUST REMAND
A case falls outside the Court’s subject matter jurisdiction when the Court lacks statutory or constitutional power to adjudicate the case. Krim v. PCOrder.com, 402 F.3d 489, 494 (5th Cir. 2005). Because the Court lacks the power to decide substantive issues in the absence of jurisdiction, it must raise the issue of subject matter jurisdiction sua sponte if necessary. See Bridgmon v. Array Sys. Corp., 325 F.3d 572, 575 (5th Cir. 2003). For cases previously removed from state court, 28 U.S.C. § 1447(c) requires that “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” Upon consideration, the Court concludes it lacks subject matter jurisdiction over this case and must therefore remand to state court.
*2 In their submissions to the Court over the course of this dispute, the parties have argued that this Court’s jurisdiction hinges on the validity of the disputed ERISA plan as a federally-governed contract between Andrades and OWD. OWD’s notice of removal asserted jurisdiction on the following ground:
This Court has original subject matter jurisdiction over this action under 28 U.S.C. § 1331 and 29 U.S.C. § 1132 because Plaintiff’s claims arise exclusively under the Employment Retirement Income Security Act of 1974 (“ERISA”) 29 U.S.C. §§ 1001-1461 (1988). Specifically, because Plaintiff’s causes of action fall within the scope of § 502(a) [29 U.S.C. § 1132], they are completely preempted and, thus, removal is proper.
Section 502(a) is the exclusive remedy for vindicating rights under ERISA. In this case, Plaintiff is a participant. Because Plaintiff is seeking to vindicate his rights under ERISA his claims are completely preempted by § 502(a) of ERISA.
Andrades argued in response that removal was not appropriate because Andrades never acceded to the terms of the 2004 Plan.1 If the Court’s subject matter jurisdiction did hinge upon whether an ERISA plan governed Andrades’s employment, the proper course would be to decide that issue in the course of addressing the motion to compel arbitration. See Dahiya v. Talmidge Intern., Ltd., 371 F.3d 207 (5th Cir. 2004) (discussing district court order that denied motion to compel arbitration and granted motion to remand, where invalidity of arbitration clause destroyed treaty-based subject matter jurisdiction); cf. Krim, 402 F.3d at 494 n.15 (“[W]here issues of fact are central both to subject matter jurisdiction and the claim on the merits, we have held that the trial court must assume jurisdiction and proceed to the merits.”) (citation omitted).
The Court concludes, however, that subject matter jurisdiction is lacking for more fundamental reasons, and regardless of whether the disputed plan binds Andrades. Andrades’s complaint contains only a state law negligence claim, and does not state an ERISA claim or even mention ERISA. Because ERISA preemption appears only as a federal defense in the present case, “it does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to a federal court.” Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) (citation omitted). The Supreme Court recognizes a rare exception to the well-pleaded complaint rule for claims within the scope of section 502(a) of ERISA, which provides exclusive federal remedies for certain categories of claims. Id. at 65-67; Arana v. Ochsner Health Plan, 338 F.3d 433, 437 (5th Cir. 2003) (en banc). Andrades’s claim, however, is not within the scope of section 502 because the relevant portion of that section only covers a beneficiary’s claims “to recover benefits due to him under the terms of his 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.” 28 U.S.C. § 1132(a)(1)(B); see Metro. Life, 481 U.S. at 62-64. Andrades’s suit is not completely preempted because it is for negligence, not for enforcement of the 2004 Plan.
*3 Indeed, the Fifth Circuit has held that even the broader conflict preemption provision of ERISA, section 514(a), does not apply to a Texas negligence action based on allegations of unsafe working conditions. 38 F.3d 776 (5th Cir. 1994) (upholding remand of formerly pendant claim asserted to be preempted by ERISA). The Hook court held that an employee’s negligence claim against an employer implicates only the employer/employee relationship, and not the administrator/beneficiary relationship central to ERISA. Id. at 783. The court rejected the employer’s argument that the negligence claim fell under ERISA because the plan included a waiver of state law rights to sue for job-related personal injuries. ERISA preemption, it held, does not apply to a claim outside the realm Congress sought to regulate with ERISA merely because the employer crafts an ERISA plan so that it interferes with the claim. Id. at 785. Hook directly controls the present case, which is also a Texas negligence action whose only relevant connection to an ERISA plan is the defendant’s assertion that a clause in the plan prohibits the state court suit.2 ERISA does not preempt Andrades’s claim. Accordingly, OWD’s asserted basis for jurisdiction fails and the case is subject to remand.
III. ANDRADES IS NOT ENTITLED TO COSTS OR FEES
28 U.S.C. § 1447(c) permits an award of “just costs and any actual expenses, including attorney fees, incurred as a result of [improper] removal,” but the Court declines to make such an award. A district court has great discretion to award costs under § 1447(c), and an attorney’s fee award is appropriate if the defendant did not have objectively reasonable grounds to believe removal was legally proper. Hornbuckle v. State Farm Lloyds, 385 F.3d 538, 541 n.5 (5th Cir. 2004). In the present case, OWD’s notice of removal asserted ERISA preemption without any citation to precedent, when Fifth Circuit authority disallowed this basis for jurisdiction. Cf. Garcia v. Amfels, Inc., 254 F.3d 585 (2001) (upholding fee award under section 1447(c) when defendant removed based on preemption argument previously rejected by the Fifth Circuit). However, the Court lacks discretion to award costs and fees when “the plaintiff himself bears a substantial share of responsibility for [a] case’s lengthy but futile sojourn in the federal courts.” W.H. Avitts v. Amoco Prod. Co., 111 F.3d 30, 33 (5th Cir. 1997) (citation omitted). That is the case here, because Andrades moved for remand only on grounds that required resolution of the factual dispute underlying OWD’s motion to compel arbitration, and failed to identify the more straightforward grounds for remand upon which the Court relies today.
Because this Court lacks subject matter jurisdiction over the present dispute, Andrades’s motion to remand is granted. This case is hereby remanded to the County Court of Law No. 5 of Dallas County, Texas.3
There has also been some suggestion in the briefs that this Court’s jurisdiction depends on upon the validity of the arbitration clause in particular. This is incorrect. The Federal Arbitration Act is not an independent source of federal jurisdiction over claims subject to arbitration. Rio Grande Underwriters, Inc. v. Pitts Farms, Inc., 276 F.3d 683, 685 (5th Cir. 2001). Conversely, the validity of particular clauses within an ERISA plan is not an element in an ERISA preemption or removal inquiry. See generally Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987); Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (1987).
OWD’s efforts to distinguish Hook ignore the holding of that case. In particular, it is irrelevant that Andrades has received benefits under the plan and deposed the plan administrator as a fact witness, because these facts have nothing to do with the relief Andrades seeks through his negligence claim. Hook held that ERISA does not preempt a state law claim unless the claim directly invokes the administrator/beneficiary relationship, and further that workplace negligence claims do not do so. See id. at 784 (“Hook’s unsafe workplace claim, however, is totally independent from the existence and administration of MMC’s ERISA plan. She neither seeks benefits under the plan nor claims that MMC improperly processed her claim for benefits. She seeks only damages for MMC’s alleged negligent maintenance of its workplace.”)
Notwithstanding the remand, the Court will exercise its inherent jurisdiction to consider the presently pending motion for sanctions.