International Ass'n of Entrepreneurs of America v. Angoff

58 F.3d 1266, 1995 U.S. App. LEXIS 16074, 1995 WL 385442
CourtCourt of Appeals for the Eighth Circuit
DecidedJune 30, 1995
DocketNo. 94-3810
StatusPublished
Cited by54 cases

This text of 58 F.3d 1266 (International Ass'n of Entrepreneurs of America v. Angoff) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Ass'n of Entrepreneurs of America v. Angoff, 58 F.3d 1266, 1995 U.S. App. LEXIS 16074, 1995 WL 385442 (8th Cir. 1995).

Opinion

WOLLMAN, Circuit Judge.

International Association of Entrepreneurs of America and associated entities (collectively “IAEA”) appeals from the order dismissing its petition filed under the Declaratory Judgment Act, 28 U.S.C. § 2201. IAEA asserted exclusive federal jurisdiction to decide the merits of its ERISA claim. The district court1 held that the matter could be resolved in a parallel state proceeding and dismissed the petition. Although we essentially agree with the district court’s treatment of the case, we conclude that the case should not have been dismissed, and we therefore vacate the dismissal and remand for entry of a stay.

I

IAEA provides various insurance and benefits services to Missouri employers who are association members. Defendant, Jay An-goff, Director of the Missouri Department of Insurance (“Angoff’), sought an injunction in Missouri state court to stop IAEA from selling insurance without a state license. IAEA sought to remove the Missouri action to federal court, but the petition was denied as untimely.

IAEA then filed this declaratory action in federal court, alleging that IAEA’s insurance activities were covered by the Employee Retirement Income Security Act of 1974 (ERISA), codified as amended at 29 U.S.C. §§ 1001-14,61, and seeking a declaration that IAEA was exempt from state insurance regulation under ERISA provisions preempting such state rules.

The district court granted Angoffs motion to dismiss on the basis that IAEA’s federal preemption claim was in substance nothing more than an affirmative defense to Angoffs state law claim and that the Declaratory Judgment Act was not intended to be a vehicle for such affirmative defenses. Having dismissed on this ground, the district court declined to address Angoffs argument that IAEA does not operate an employee welfare benefit plan of the type covered by ERISA. Likewise, the district court purported not to address Angoffs third ground for dismissal, that being Younger abstention. See Middlesex County Ethics Committee v. Garden State Bar Ass’n, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982); Younger v. Hards, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971).

II

A

The keystone argument upon which IAEA’s appeal depends is that ERISA con[1269]*1269templates that only federal courts decide matters of ERISA status. Under IAEA’s exclusive federal jurisdiction theory, since ERISA guarantees IAEA a right to petition only federal courts for injunctive relief against state attempts to regulate ERISA plans, this declaratory action must be allowed to proceed, as the issues it raises cannot be addressed in any other forum.

ERISA § 502(a)(3), (29 U.S.C. § 1132(a)(3)), establishes the right of an ERISA fiduciary to an injunction against practices violative of ERISA. ERISA § 502(e)(1), (29 U.S.C. § 1132(e)(1)), provides that only a federal court can issue such an injunction. For purposes of discussion we presume that under these provisions an ERISA fiduciary can indeed seek an injunction based on assertions of improper state regulation like those IAEA makes here. E.g., MDPhysicians & Assoc. v. State Bd. of Ins., 957 F.2d 178 (5th Cir.) (rejecting declaratory action on merits ground), cert. denied, — U.S. -, 113 S.Ct. 179, 121 L.Ed.2d 125 (1992); Atlantic Health Care Benefits Trust v. Foster, 809 F.Supp. 365, 368 (M.D.Pa.1992), aff'd mem., 6 F.3d 778 (3rd Cir.1993), cert. denied, — U.S. -, 114 S.Ct. 689, 126 L.Ed.2d 656 (1994). But IAEA’s appeal fails because no court has yet decided whether IAEA is an ERISA plan as it alleges.

ERISA nowhere makes federal courts the exclusive forum for deciding the ERISA status vel non of a plan or fiduciary. Unless instructed otherwise by Congress, state and federal courts have equal power to decide federal questions. Federal Express Corp. v. Tenn. Pub. Serv. Comm’n, 925 F.2d 962, 968 (6th Cir.), cert. denied, 502 U.S. 812, 112 S.Ct. 59, 116 L.Ed.2d 35 (1991); CSXT, Inc. v. Pitz, 883 F.2d 468, 472 (6th Cir.1989), cert. denied, 494 U.S. 1030, 110 S.Ct. 1480, 108 L.Ed.2d 616 (1990). Because ERISA is silent on the matter of the power to declare ERISA status, we conclude that the question of IAEA’s ERISA status falls under the usual concurrent state and federal jurisdiction.

Until IAEA has proven its allegation that ERISA applies, questions of preemption and exclusive federal jurisdiction do not enter this case. Until the preliminary issue of ERISA status is decided, IAEA may not seek the exclusive federal protections available to an ERISA plan. See James F. JoR-DEN, ET AL., HANDBOOK .ON ERISA LITIGATION, ch. 1, § 1.01, .at 4 (1992) (hereafter ERISA Litigation) (“if no [ERISA] plan is involved, then ERISA’s broad preemption of state law claims is not triggered.”); see also MDPhysicians, 957 F.2d at 182 (preemption issues need not be considered until ERISA status established). (While we presume for discussion purposes that IAEA, if held to be covered by ERISA, could seek to enjoin the state court proceeding, this proposition is at least arguable. See 1975 Salaried Retirement Plan, etc. v. Nobers, 968 F.2d 401, 408 (3rd Cir.1992) (refusing to enjoin state action deciding matters within exclusive federal jurisdiction), cert. denied, — U.S. -, 113 S.Ct. 1066, 122 L.Ed.2d 370 (1993); Total Plan Servs. v. Texas Retailers Ass’n, 925 F.2d 142, 144-46 (5th Cir.1991) (same); ERISA Litigation, ch. 1, § 1.04[A], at 29 (“Despite this grant of exclusive jurisdiction, a federal court ordinarily may not enjoin a state court action seeking to adjudicate claims exclusively within federal court jurisdiction.”).)

Our conclusion that concurrent jurisdiction exists at this preliminary stage of the litigation is buttressed by the fact that the courts of Missouri and other states have in the past decided questions of ERISA status without correction by the United States Supreme Court or Congress. Marshall, et. al. v. Bankers Life and Cas. Co., 2 Cal. 4th 1045, 10 Cal.Rptr.2d 72, 832 P.2d 573, 575 (plan covered by ERISA), cert. denied, —— U.S. -, 113 S.Ct. 601, 121 L.Ed.2d 537 (1992); Rizzi v. Blue Cross of S. Calif., 206 Cal.App.3d 380, 253 Cal.Rptr. 541, 542 (1988) (covered), cert. denied, 493 U.S. 821, 110 S.Ct. 78, 107 L.Ed.2d 44 (1989); Cramer v. Ass’n Life Ins. Co., 569 So.2d 533, 534 (La. 1990) (covered; ERISA status litigated in lower courts but not appealed to state Supreme Court), cert. denied, 499 U.S. 938, 111 S.Ct. 1391, 113 L.Ed.2d 447 (1991); Blue Cross Hosp. Servs., Inc. of Missouri, et al. v. Frappier,

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