Betim Ymeri v. Life Insurance Company of North America

• Court: District Court, C.D. California
• Decided: April 20, 2021
• Docket: 2:21-cv-01491
• Status: Unknown

Opinion

JS-6 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 CENTRAL DISTRICT OF CALIFORNIA

8 9 10 Betim Ymeri, et al., 11 2:21-cv-01491-VAP-JPRx Plaintiffs,

12 v. Order GRANTING Motion to 13 Remand Life Insurance Company of North (Dkt. 18). 14 America, et al. 15 Defendants. 16

17 On March 19, 2021, Plaintiffs Betim Ymeri, Naser Sahiti, and Burim Haliti 18 filed a Motion to Remand (“Motion”). (Mot., Dkt. 18.) Defendants Life Insurance 19 Company of North America, Eric Feldman, and Brianna Collins filed their 20 Opposition to the Motion on March 29, 2021 (Opp’n, Dkt. 22), and Plaintiffs filed 21 their Reply on April 5, 2021 (Reply, Dkt. 25). 22

23 The Court finds this matter appropriate for resolution without hearing 24 pursuant to Local Rule 7-15. After considering all papers filed in connection to the 25 Motion, the Court GRANTS the Motion. 26 1 1 I. BACKGROUND 2 Plaintiffs Betim Ymeri, Naser Sahiti, and Burim Haliti (“Plaintiffs”) are 3 residents of the Republic of Kosovo. (Compl., Dkt. 1-1 ¶¶ 5–7.) From 2012 4 through 2017, Plaintiffs performed work in Afghanistan in connection with 5 American military efforts for Global Sourcing Solutions (“GSS”) and Defendants 6 AECOM and AC First LLC (together, “AECOM Defendants”). (Id. ¶ 21.) GSS is 7 based in the Cayman Islands, and the AECOM Defendants are incorporated in the 8 United States. (Id. ¶¶ 11, 12, 30.) Plaintiffs allege that as part of their employment 9 contracts, the AECOM Defendants represented that Plaintiffs would receive long- 10 term disability (“LTD”) insurance coverage for on-the job injuries.1 (Id. ¶¶ 23–24.) 11 The LTD policy was to be issued and administered by Defendant Life Insurance 12 Company of North America (“LINA”), and monthly payments for LTD insurance 13 were thereafter deducted from Plaintiffs’ payroll. (Id. ¶¶ 24–25.) 14 15 Plaintiffs allegedly suffered various injuries during their employment in 16 Afghanistan and submitted claims to LINA for disability coverage. (Id. ¶¶ 2, 22, 17 26.) After review, LINA’s claim adjusters denied or closed the claims claiming 18 Plaintiffs were not eligible for coverage under the LTD policy. (Id. ¶¶ 3, 26.) 19 Plaintiffs contend that either the AECOM Defendants failed to obtain the promised 20 LTD policy or LINA and its insurance adjusters wrongfully denied coverage. (Id. ¶ 21 4.) 22 23 Plaintiffs accordingly brought suit in the Superior Court of California, 24 County of Los Angeles. Defendants removed the action on the basis of federal 25 1 Plaintiffs allege their contracts were through GSS on behalf of the AECOM Defend- 26 ants. (Compl. ¶ 23.) 2 1 question jurisdiction pursuant to ERISA. (See Dkt. 1.) Plaintiffs now seek to 2 remand the action to the Superior Court.2 3 4 II. LEGAL STANDARD 5 A defendant may remove any civil action from state court to federal court if 6 the federal court has original jurisdiction. 28 U.S.C. § 1441(a). “The removal 7 statute is strictly construed, and any doubt about the right of removal requires 8 resolution in favor of remand.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 9 1241, 1244 (9th Cir. 2009) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 10 1992)). The presumption against removal means that “the defendant always has the 11 burden of establishing that removal is proper.” Id. Moreover, the district court 12 must remand any case previously removed from a state court “if at any time before 13 final judgment it appears that the district court lacks subject matter jurisdiction.” 28 14 U.S.C. § 1447(c). 15 16 III. DISCUSSION 17 Generally, “[a] cause of action arises under federal law only when the 18 plaintiff's well-pleaded complaint raises issues of federal law.” Metropolitan Life 19 Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). Defendants rely on an exception to this 20 general rule, which applies when a complaint alleges state-law causes of action that 21 could have been brought under § 502(a)(1)(B) of ERISA, 29 U.S.C. § 22 1132(a)(1)(B), and are thus “completely preempted” by federal law. See Marin 23 Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 945 (9th Cir. 2009). 24

25 2 Defendants filed a Request for Judicial Notice in connection with their Opposition. (Dkt. 23.) As the Court does not rely on the underlying documents in this Order, the 26 Request is denied as moot. 3 1 That section provides a participant or beneficiary a civil cause of action in 2 connection with an employee benefit plan, specifically an action “to recover 3 benefits due to him under the terms of his plan, to enforce his rights under the terms 4 of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 5 U.S.C. § 1132(a)(1)(B). In their Motion, Plaintiffs raise a threshold issue as to the 6 extraterritorial application of § 502(a)(1)(B) of ERISA. Specifically, Plaintiffs 7 contend that the provision does not extend to foreign nationals employed abroad 8 and thus cannot preempt their state law claims. (See Mot. at 6–15.) 9 10 Under Supreme Court precedent, courts apply a two-step framework for 11 assessing the extraterritorial application of a statute: 12 At the first step, we ask whether the presumption against extraterritoriality has been rebutted—that is, whether the statute 13 gives a clear, affirmative indication that it applies extraterritorially. We must ask this question regardless of whether the statute in 14 question regulates conduct, affords relief, or merely confers jurisdiction. If the statute is not extraterritorial, then at the second 15 step we determine whether the case involves a domestic application of the statute, and we do this by looking to the statute’s “focus.” If 16 the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application 17 even if other conduct occurred abroad; but if the conduct relevant to the focus occurred in a foreign country, then the case involves an 18 impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory. 19 RJR Nabisco, Inc. v. Eur. Cmty., --- U.S. ----, 136 S. Ct. 2090, 2101 (2016). 20

21 As the parties dispute the proper outcome at both steps of the analysis, the 22 Court addresses each in turn. 23

24 A. Step One: Presumption Against Extraterritoriality 25 26 4 1 As stated above, the Court will look for a “clear, affirmative indication” that 2 Congress intended to give ERISA, specifically § 502(a)(1)(B), extraterritorial 3 effect. “When a statute gives no clear indication of an extraterritorial application, it 4 has none.” Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247, 255 (2010). 5 6 Defendants rely on ERISA’s “foreign plan exemption” to support the 7 statute’s extraterritorial effect. (Opp’n at 10.) Although ERISA broadly 8 encompasses “any employee benefit plan if it is established or maintained . . . by 9 any employer engaged in commerce or in any industry or activity affecting 10 commerce,” it exempts from its governance plans “maintained outside of the 11 United States primarily for the benefit of persons substantially all of whom are 12 nonresident aliens.” 29 U.S.C. §§ 1003(a)(1)–(b)(4). Defendants contend ERISA 13 must therefore apply to “domestic plans covering foreign participants,” as in the 14 present case, or else the exemption would be superfluous. (Opp’n at 10.) 15 16 The argument that the foreign plan exemption supports extending ERISA’s 17 civil cause of action to non-residents employed abroad, however, has been rejected 18 twice before. In In re Reliance Standard Life Ins. Co., 386 F. Supp. 3d 505, 510–11 19 (E.D. Pa. 2019) (“Reliance”), the court rejected the defendants’ interpretation of the 20 foreign plan exemption as it was based on the “mistaken premise that 21 extraterritoriality can be implied” when in fact the Supreme Court requires “an 22 affirmative intention of Congress clearly expressed.” It construed the exemption as 23 a narrow indication of “what is not explicitly considered an ERISA-covered plan” 24 and determined it would be “mere speculation to conclude that this exemption 25 means that foreign nationals working in a foreign country are within the scope of 26 ERISA.” Id. In a related decision, Bajrami v. Reliance Standard Life Ins. Co., 334 5 1 F. Supp. 3d 659, 664 (E.D. Pa. 2018), the court rejected the same argument on the 2 ground that “the exemption concerns the plan itself, not who may bring suit.” The 3 court reasoned that the exemption nowhere states that foreign nationals employed 4 abroad can bring their claims under ERISA nor does it logically require that 5 conclusion. Id. The exemption could alternately be construed “as not limiting the 6 application of ERISA solely to [a plan covering] United States citizens or workers 7 within the United States, but it also could be directed, for example, toward a foreign 8 [maintained] plan that includes a few American citizens working abroad.” Id. 9 10 That it is the civil cause of action available under § 502(a)(1)(B) that 11 Defendants seek to extend extraterritorially is notable. Even where substantive 12 provisions of a statute apply extraterritorially, a provision providing a derivative 13 civil cause of action to individuals is not given de facto extraterritorial scope in light 14 of the high risk of international friction. RJR Nabisco, 136 S.Ct. at 2106–08.3 15 Defendants provide no evidence that § 502(a)(1)(B)’s civil action for participants of 16 benefit plans reaches foreign nationals employed abroad. The Court recognizes that 17 the statutory definition of “participants” repeatedly employs the term “any,” which 18 indicates its broad scope. See 29 U.S.C. § 1002(7) (a participant is “any employee 19 or former employee of an employer . . . who is or may become eligible to receive a 20 benefit of any type from an employee benefit plan”). The use of that term alone, 21 however, cannot support § 502(a)(1)(B)’s extraterritorial scope. Kiobel v. Royal 22 Dutch Petroleum Co., 569 U.S. 108, 118 (2013) (“[I]t is well established that 23 generic terms like ‘any’ or ‘every’ do not rebut the presumption against 24

25 3 Defendants contend that no such risk is present here as Plaintiffs seek to apply Cali- fornia law. The potential for a risk of conflict between a domestic statute and foreign 26 laws, however, is not altered by the circumstances of an individual case. 6 1 extraterritoriality.”). And for the reasons explained by the Bajrami court, the 2 foreign plan exemption relied on by Defendants also does not support the 3 extraterritorial application sought here. See also Morrison, 561 U.S. at 264 4 (“[P]ossible interpretations of statutory language do not override the presumption 5 against extraterritoriality.”) In short, what is missing is an “affirmative intention of 6 the Congress clearly expressed.” Id. at 255. The Court will accordingly apply the 7 presumption against extraterritoriality.4 8 9 B. Step Two: Domestic Application Exception 10 Having determined the presumption applies, the Court next considers if this 11 litigation presents a “domestic application” of ERISA such that extraterritoriality 12 concerns are not implicated. As stated above, the crux of the analysis is whether 13 “the conduct relevant to the statute’s focus occurred in the United States” even if 14 other conduct occurred abroad. RJR Nabisco, 136 S. Ct. at 2101. As the provision 15 4 Defendants urge the Court to consider statutory context, specifically, ERISA’s broad 16 preemption provision, as additional support for its extraterritorial effect. (Opp’n at 12.) The Court is unconvinced that congressional intent to preempt state laws can serve as 17 a substitute for the requisite intent to extend § 502(a)(1)(B) extraterritorially. 18 Defendants also contend that uniformity concerns require the extension of ERISA cov- erage to Plaintiffs because their benefit plan is governed by ERISA. (Opp’n at 5–6.) 19 Defendants rely on the Supreme Court’s decision in Yates v. Hendon, 541 U.S. 1 (2004) 20 but have drawn an overbroad conclusion from it. At issue in Yates was not the extra- territorial application of ERISA, but whether a working owner of a business could qual- 21 ify as a “participant” in a benefit plan. Id. at 11. The Supreme Court answered in the affirmative. This holding was supported by a textual analysis of ERISA. Id. at 12 22 (“ERISA’s text contains multiple indications that Congress intended working owners to qualify as plan participants.”) Defendants overlook this textual analysis and focus 23 instead on the Supreme Court’s statement that its ruling “also avoids the anomaly that 24 the same plan will be controlled by discrete regimes: federal-law governance for the nonowner employees; state-law governance for the working owner.” Id. at 17. There 25 is nothing to suggest that the Supreme Court intended this statement to transform into the blanket rule Defendants advance, particularly where extraterritorial concerns are 26 implicated. 7 1 which Defendants seek to apply extraterritorially is § 502(a)(1)(B), it thus follows 2 that the appropriate question under this step is whether the allegations of the 3 Complaint present a domestic application of that section or a foreign one. 4 5 Defendants contend that the application of ERISA here is domestic because 6 the benefit plan at issue was created, maintained, funded, and administered in the 7 United States. (Opp’n at 4– 5, 8–9; Dkts. 22-1, 22-2.) Defendants rely on the 8 congressional declaration of policy, codified at 29 U.S.C. § 1001, which states, inter 9 alia, that ERISA was enacted because Congress found it in the interest of 10 employees that “disclosure be made and safeguards be provided with respect to the 11 establishment, operation, and administration of [employee benefit] plans.” 29 12 U.S.C. § 1001(a). Looking at this provision and relevant legislative history, the 13 Supreme Court has stated that “[t]he focus of [ERISA] . . . is on the administrative 14 integrity of benefit plans.” Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 15–16 15 (1987). 16 17 Plaintiffs argue that the portion of Fort Halifax cited by Defendants does not 18 control this Court’s analysis because that case concerned preemption of a state law 19 and the Supreme Court did not apply the focus inquiry under the extraterritoriality 20 framework. (Reply at 5–7.) Plaintiffs’ arguments are well taken. The focus 21 inquiry under step two of the extraterritoriality analysis is specific and directed 22 towards § 502(a)(1)(B). While the analysis considers provisions that work in 23 tandem with the statutory provision at issue, the ultimate question is as to the 24 “object of the statute’s solicitude.” WesternGeco LLC v. ION Geophysical Corp., -- 25 - U.S. ----, 138 S.Ct. 2129, 2137 (2018). This can include the conduct that statute 26 8 1 seeks to regulate as well as the parties and interests it seeks to protect or vindicate. 2 Id. 3 4 Plaintiffs contend § 502(a)(1)(B) focuses on the participant and his or her 5 claim for benefits, and hence the relevant conduct is that underlying their claims. 6 (Reply at 2–7.) The Court agrees with Plaintiffs. See 29 U.S.C. § 1132(a)(1)(B) (a 7 participant or beneficiary may bring a civil action “to recover benefits due to him 8 under the terms of his plan, to enforce his rights under the terms of the plan, or to 9 clarify his rights to future benefits under the terms of the plan”).5 This approach is 10 also consistent with the presumption against extraterritoriality. As explained by the 11 court in Chong v. InFocus Corp., adopting an approach that singularly focuses on 12 the location of the plan administration would render “territorial borders, as well as 13 the citizenship and location of the employees . . . irrelevant” and “eviscerate the 14 presumption against extraterritorial application.” No. CV–08–500–ST, 2008 WL 15 5205968, at *5 (D. Or. Oct. 24, 2008). The Supreme Court has cautioned that the 16 presumption against extraterritorial application is not such a “a craven watchdog” 17 that it “retreat[s] to its kennel whenever some domestic activity is involved in the 18 case.” Morrison, 561 U.S. at 266. 19 20 Here, Plaintiffs are residents of Kosovo, who were employed in Afghanistan, 21 contracted for disability benefits through a Cayman Islands intermediary, suffered 22 injuries in connection with their employment in Afghanistan, and filed their claims 23 from abroad. Hence, Plaintiffs’ claims accrued, and relevant conduct occurred, in 24

25 5 Other than the congressional declaration of policy, discussed above, Defendants do not cite any “tandem provisions” that lend additional context to § 502(a)(1)(B). See 26 WesternGeco, 138 S.Ct. at 2137. 9 1 the territory of other sovereigns. This conclusion aligns with that of other district 2 courts. “[W]ithin the last four decades of ERISA’s enactment, no district court has 3 held that a foreign national working abroad can bring a claim under ERISA.” 4 Reliance, 386 F. Supp. 3d at 511 (citing Bajrami, 334 F. Supp. 3d at 663–64; 5 Chong, 2008 WL 5205968, at *4, 6; Maurais v. Snyder, No. 00-2133, 2000 WL 6 1368024, at *2 (E.D. Pa. Sept. 14, 2000)). The Reliance and Bajrami decisions 7 considered facts strikingly similar to the present case and are thus particularly 8 persuasive. Those plaintiffs were citizens of Kosovo employed by AECOM and 9 GSS in Afghanistan. Bajrami, 334 F. Supp. 3d at 660–61; Reliance, 386 F. Supp. 10 3d at 507. They also suffered injuries abroad and submitted claims for LTD benefits 11 offered to them by their employers that were ultimately denied by the insurer. Id. 12 Both decisions concluded that although the administration of the relevant benefit 13 plan occurred domestically, foreign events underlay the employees’ benefit claims. 14 Bajrami, 334 F. Supp. 3d at 663–64; Reliance, 386 F. Supp. 3d at 507, 511. The 15 facts of the present litigation do not merit a contrary conclusion. 16 17 Accordingly, the Court finds that the Complaint does not present a 18 permissible domestic application of ERISA. As Plaintiffs could not bring their 19 benefit claims pursuant to § 502(a)(1)(B), ERISA does not “completely preempt” 20 their state law claims. Removal was therefore inappropriate. 21 / / / 22 / / / 23 / / / 24 25 26 10 1 IV. CONCLUSION 2 For the reasons stated herein, the Court GRANTS the Motion to Remand. 3 | The Court accordingly declines to rule on Defendants’ pending Motion to Dismiss. 4 | ITISSO ORDERED. 5 * 6 Dated: 4/20/21 ~. A, : 7 Virginia A. Phillips United States District Judge 9 10 11 12

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