Charter Fairmount Institute, Inc. v. Alta Health Strategies

835 F. Supp. 233, 1993 U.S. Dist. LEXIS 13501, 1993 WL 439887
CourtDistrict Court, E.D. Pennsylvania
DecidedSeptember 24, 1993
DocketCiv. A. 93-3258
StatusPublished
Cited by12 cases

This text of 835 F. Supp. 233 (Charter Fairmount Institute, Inc. v. Alta Health Strategies) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charter Fairmount Institute, Inc. v. Alta Health Strategies, 835 F. Supp. 233, 1993 U.S. Dist. LEXIS 13501, 1993 WL 439887 (E.D. Pa. 1993).

Opinion

MEMORANDUM AND ORDER

HUTTON, District Judge.

Presently before the Court is the plaintiff Charter Fairmount Institute’s (“Charter Fairmount”) Motion for Remand; defendant Alta Health Strategies’ (“Alta”) response; Charter Fairmount’s reply; Alta’s Motion to Dismiss; Charter Health’s response; and Alta’s reply.

I. FACTUAL BACKGROUND

The plaintiff, Charter Fairmount Institute, Inc., is a hospital seeking reimbursement for medical services rendered to Miss Heather Craiter. Miss Craiter was insured under her mother’s health insurance plan. The defendant, Alta Health Strategies, administered the insurance plan that provided Miss Craiter’s health insurance coverage. During the period from May 20, 1992 until June 25,1992, Miss Craiter was hospitalized at the plaintiffs facility for major affective disorder. As a result of her hospitalization, charges were incurred in the amount of $43,536.75.

Alta allegedly confirmed that it would pay 100% of all expenses after the policy holder had met her $200 deductible. Miss Craiter’s right to receive benefits under the plan was assigned to Charter Fairmount. Alta refused to pay, claiming that Miss Craiter’s condition was “preexisting,” and therefore excluded from coverage under the plan.

Charter Fairmount commenced an action in the Court of Common Pleas of Philadelphia County against Alta, in which it sought reimbursement for the $43,536.75 charge. Charter Fairmount premised its action on the following three common law theories: estoppel, misrepresentation and negligent misrepresentation. Believing the causes of action to be preempted by The Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001-1461, Alta removed the case to this Court.

II. DISCUSSION

The defendant’s theory of the case is that it is entitled to dismissal under Fed.R.Civ.P 12(b)(6) because the plaintiffs state law claims are preempted by ERISA and its complaint fails to state a claim upon which relief may be granted under ERISA. The question of whether removal was appropriate in this case is inextricably intertwined with the question of whether the plaintiffs causes of action are preempted.

A. Removal Under § 1144(a)

The court’s consideration of whether removal was proper must begin with a consideration of 28 U.S.C. § 1441, which grants defendants the right, in appropriate circumstances, to remove a case to federal court. Under 28 U.S.C. § 1441(a),

any civil action brought in a State court of which the district courts of the United States have oi’iginal jurisdiction, may be removed by the defendant----

28 U.S.C.A. § 1441(a) (West 1985 & Supp. 1993). However, the district court must remand a case “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” Id. § 1447(c). Where there is no diversity of citizenship between the parties, the plaintiffs cause of action must raise a federal question. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). In its Petition for Removal, the defendant did not allege that diversity jurisdiction lies in the present case. 1 Thus, this Court’s original jurisdiction over this matter lies, if at all, under federal question jurisdiction. See 28 U.S.C. § 1331(a).

1. The Well Pleaded Complaint Rule

Alta’s argument with respect to removal is that because the plaintiffs claims are preempted by ERISA, the complaint presents a federal question. Thus, it asserts, the matter is removable under § 1441(a). The general rule, however, is that the plaintiff is entitled to remain in state court so long as its complaint does not present, on its face, an issue under federal law. See Metropoli *235 tan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 107 S.Ct. 1542, 1546-47, 95 L.Ed.2d 55 (1987); Railway Labor Execs. Ass’n v. Pittsburgh & Lake Erie R.R. Co., 858 F.2d 936, 939 (3d Cir.1988). For a case to present a federal question, “the statute, ... right or immunity created by the Constitution or laws of the United States must be an element, and an essential one of the plaintiffs cause of action.” Gully v. First Nat’l Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). Federal preemption is ordinarily a defense to a plaintiffs suit and, as such, does not appear on the face of a well-pleaded complaint. Albert Einstein Med. Ctr. v. National Benefit Fund for Hosp. & Health Care Employees, 740 F.Supp. 343, 348 (E.D.Pa.1989).

On its face, Charter Fairmount’s complaint does not present a federal question. Rather, the complaint speaks the language of common law tort. It asserts claims for estoppel, misrepresentation and negligent misrepresentation. It does not expressly refer to ERISA and the rights or immunities created under ERISA are not essential elements of the plaintiffs claims. Accordingly, unless the doctrine of “complete preemption” is applicable, removal was inappropriate.

2. The Doctrine of “Complete Preemption”

Although the “well pleaded complaint rule” would ordinarily bar the removal of an action to federal court where federal jurisdiction is not presented on the face of the plaintiffs complaint, the action may be removed if it falls within the narrow class of cases to which the doctrine of “complete preemption” applies. Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). This independent corollary to the “well pleaded complaint rule” permits removal where “Congress ... so completely preempt[s] a particular area that any civil complaint raising this select group of cases is necessarily federal in character.” Allstate Ins. Co. v. 65 Security Plan, 879 F.2d 90, 93 (3d Cir.1989) (quoting Taylor, 481 U.S. at 63-64, 107 S.Ct. at 1546). In Allstate, the Third Circuit Court of Appeals articulated a two-part test to be used in determining when a cause of action is completely preempted. The court stated that the doctrine applies only when:

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Bluebook (online)
835 F. Supp. 233, 1993 U.S. Dist. LEXIS 13501, 1993 WL 439887, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charter-fairmount-institute-inc-v-alta-health-strategies-paed-1993.