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Rojas v. Renfro Industries Inc.

United States District Court, N.D. Texas, Dallas Division

June 23, 2017

MARIA ROJAS, Plaintiff,
v.
RENFRO INDUSTRIES, INC, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          SIDNEY A. FITZWATER UNITED STATES DISTRICT JUDGE.

         Plaintiff's motion to remand presents the question whether this action was removable based on complete preemption under ERISA.[1] Concluding that defendants have failed to establish that any of plaintiff's state-law claims is completely preempted, the court grants plaintiff's motion and remands this case to state court.

         I

         Plaintiff Maria Rojas (“Rojas'”) is employed by defendant Renfro Industries, Inc. (“Renfro”). Renfro did not provide Rojas with worker's compensation insurance. Instead, Renfro offered an “Employee Injury Benefit Plan” (“the Plan”) created under ERISA. Am. Pet. ¶ 4.06. To participate in the Plan, Rojas was required to sign an “Election and Arbitration Agreement” (“Arbitration Agreement”) that provided that any dispute be resolved by binding arbitration before an arbitrator appointed by defendant DSI Dispute Solutions, Inc. (“DSI”). Am. Pet. ¶ ¶ 4.06-07. According to Rojas' state-court first amended original petition (“Amended Petition”), DSI and/or defendant Essential Corporate Solutions, Inc. (“ECS”) hired Gary Sarles, Esquire (“Sarles”) to draft the Arbitration Agreement. Sarles also represents Renfro as defense counsel when it is sued.

         Rojas injured herself on the job while operating a press machine. She alleges that the machine “was without a guard or any effective guarding pursuant to industry and safety regulations.” Am. Pet. ¶ 4.04. Rojas sued defendants in state court, asserting claims of negligence, gross negligence, fraud by nondisclosure, fraudulent inducement, and civil conspiracy. Rojas also requested an injunction prohibiting DSI from arbitrating any claim between Rojas and Renfro.

         Defendants removed the case to this court, asserting that Rojas' claims for fraud by nondisclosure, fraudulent inducement, and civil conspiracy, and her request for an injunction, are completely preempted by ERISA. Rojas moves to remand, contending that ERISA does not apply and that the court lacks subject matter jurisdiction. Defendants oppose the motion.

         II

         As the removing parties, defendants “[have] the burden of overcoming an initial presumption against jurisdiction and establishing that removal is proper.” Carnes v. Data Return, LLC, 2005 WL 265167, at *1 (N.D. Tex. Feb. 1, 2005) (Fitzwater, J.) (citing Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001)). “In general, defendants may remove a civil action if a federal court would have had original jurisdiction.” De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995) (citing 28 U.S.C. § 1441(a)). “Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which (a federal) statute has defined.” Victory Carriers, Inc. v. Law, 404 U.S. 202, 212 (1971) (quoting Healy v. Ratta, 292 U.S. 263, 270 (1934)). “The federal removal statute, 28 U.S.C. § 1441 (1997), is subject to strict construction because a defendant's use of that statute deprives a state court of a case properly before it and thereby implicates important federalism concerns.” Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997) (citing Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 365 (5th Cir. 1995)). “[D]oubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction.” Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000).

         Ordinarily, “[r]emoval is not possible unless the plaintiff's ‘well pleaded complaint' raises issues of federal law sufficient to support federal question jurisdiction.” Rodriguez v. Pacificare of Tex., Inc., 980 F.2d 1014, 1017 (5th Cir. 1993) (citing Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908)). “There is an exception, however, to the well-pleaded complaint rule.” Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004).

“[W]hen a federal statute wholly displaces the state-law cause of action through complete pre-emption, ” the state claim can be removed. This is so because “[w]hen the federal statute completely pre-empts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law.”

Id. at 207-08 (alterations in original) (quoting Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 8 (2003)). Thus because Rojas' Amended Petition does not assert claims under federal law, and because defendants do not contend that the court has diversity jurisdiction, defendants can establish removal jurisdiction only if ERISA completely preempts one or more of Rojas' state-law claims. See, e.g., Westfall v. Bevan, 2009 WL 111577, at *2 (N.D. Tex. Jan. 15, 2009) (Fitzwater, C.J.).

         Complete preemption is available under ERISA § 502, the statute's civil-enforcement provision, which “Congress intended to be the exclusive vehicle for suits by a beneficiary to recover benefits from a covered plan.” Mem'l Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 250 (5th Cir. 1990); see also, e.g., Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987) (“Congress has clearly manifested an intent to make causes of action within the scope of the civil enforcement provisions of § 502(a) removable to federal court.”). “Section 502, by providing a civil enforcement cause of action, completely preempts any state cause of action seeking the same relief, regardless of how artfully pleaded as a state action.” McGowin v. ManPower Int'l, Inc., 363 F.3d 556, 559 (5th Cir. 2004) (quoting Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 337 (5th Cir. 1999)). “A state-law claim that is completely preempted under § 502 is transformed into a new federal claim.” Cardona v. Life Ins. Co. of N. Am., 2009 WL 3199217, at *4 (N.D. Tex. Oct. 7, 2009) (Fitzwater, C.J.). In other words, complete preemption “eliminates the state-law claim” and “replaces [it] with a federal claim.” Id. “‘Because they are recast as federal claims, ' state-law claims that are completely preempted provide a basis for removal.” Westfall, 2009 WL 111577, at *3 (quoting McLaren v. RailAmerica, Inc., 2001 WL 366431, at *2 (N.D. Tex. Mar. 21, 2001) (Fitzwater, J.)).

         III

         Rojas maintains that this case should be remanded because none of her claims is completely preempted by ERISA. Defendants contend that Rojas' claims for fraud by nondisclosure and fraudulent inducement, and a derivative claim for civil conspiracy, are preempted by § ...


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