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Graham v. Hubbs MacHine and Manufacturing, Inc.

United States District Court, E.D. Missouri, Eastern Division

September 29, 2014

TONYA GRAHAM, Plaintiff,
v.
HUBBS MACHINE AND MANUFACTURING, INC. and RICK BENWARD, Defendants.

MEMORANDUM AND ORDER

CAROL E. JACKSON, District Judge.

This matter is before the Court on plaintiff's motion for reconsideration of the order denying remand or, in the alternative, motion for order certifying this case for interlocutory appeal. Defendants oppose the motion, and the issues are fully briefed.

I. Background

On August 26, 2013, plaintiff filed a one-count complaint against defendants Hubbs Machine and Manufacturing, Inc. and Rick Benward in the Circuit Court of Jefferson County, alleging wrongful termination in violation of Missouri public policy. Plaintiff filed an amended complaint on March 5, 2014, adding citations to state and federal laws and regulations to support her wrongful termination claim, including a citation to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. Plaintiff also asserted a second claim against Benward for tortious interference with a business expectancy.

On March 6, 2014, defendants removed the action, contending that ERISA completely preempts plaintiff's wrongful termination claim under §§ 1132(a)(3), 1140, and 1144. Plaintiff filed a motion to remand the action to circuit court on April 1, 2014, asserting that this Court lacks subject-matter jurisdiction because her claims arise solely under Missouri law. In support of her motion, plaintiff argued that she is not bringing the action to exercise any rights under ERISA, her claims do not "relate to" an ERISA plan as set forth in § 1144, and § 1144 of ERISA does not provide a basis for removal as it only establishes an affirmative defense. On June 16, 2014, the Court denied plaintiff's motion to remand. The Court found that plaintiff's claims relate to an ERISA plan, because she alleges she was wrongfully terminated in retaliation for reporting violations of ERISA. Therefore, the Court concluded, ERISA preemption is implicated and the defendant had the right to remove plaintiff's claims to federal court.

On June 23, 2014, plaintiff filed the instant motion for reconsideration of the order denying remand pursuant to Fed.R.Civ.P. 59(e) and 60(b), arguing that the Court misconstrued her complaint in finding that she was asserting her rights against wrongful termination under ERISA rather than only Missouri common law. Plaintiff also reasserts her argument that § 1144 of ERISA does not convey federal subject-matter jurisdiction. In the alternative, plaintiff requests an order certifying the case for interlocutory appeal on the issue of jurisdiction under ERISA preemption.

II. Discussion

A. Motion for Reconsideration of Order Denying Remand

Federal Rule of Civil Procedure 59(e) allows a district court to correct its own mistakes in the time period immediately following entry of judgment. Norman v. Ark. Dep't of Educ. , 79 F.3d 748, 750 (8th Cir. 1996) (citing White v. N.H. Dep't of Emp't Sec. , 455 U.S. 445, 450 (1982)). Rule 59(e) motions serve a limited function of correcting "manifest errors of law or fact or to present newly discovered evidence." Innovative Home Health Care, Inc. v. P.T.-O.T. Assocs. of the Black Hills , 141 F.3d 1284, 1286 (8th Cir. 1998) (internal quotation and citations omitted). "Such motions cannot be used to introduce new evidence, tender new legal theories, or raise arguments which could have been offered or raised prior to entry of judgment." Id.

Federal Rule of Civil Procedure 60(b) sets forth grounds for relief from a final judgment, order, or proceeding. Rule 60(b) "provides for extraordinary relief which may be granted only upon an adequate showing of exceptional circumstances." Robinson v. Armontrout , 8 F.3d 6, 7 (8th Cir. 1993). Under 60(b)(6), the catch-all provision, the "exceptional circumstances" must have "denied the movant a full and fair opportunity to litigate his/her claims and have prevented the movant from receiving adequate redress." Hodge v. Burlington N. & Santa Fe Ry. Co. , 461 F.Supp.2d 1044, 1054 (E.D. Mo. 2006) (citing Harley v. Agostini, 413 F.3d 866, 871 (8th Cir. 2005)).

Plaintiff asserts that the Court's order misconstrues the complaint, in which plaintiff alleges that by reporting Benward to authorities she had "exercised her rights to report violations of... the Employee Retirement Income Security Act of 1974, " among other laws and regulations. Plaintiff insists she was only referring to her Missouri common law right to be free from workplace retaliation. She restates her prior argument that she was not asserting any rights under ERISA. Because the Court has already considered and rejected this argument in its order denying remand, there is no basis for the Court to reconsider its prior decision. See Broadway v. Norris , 193 F.3d 987, 989-90 (8th Cir. 1999) (stating that Rule 60(b) is "not a vehicle for simple reargument on the merits").

Plaintiff also argues that in finding plaintiff's claims to be preempted by ERISA, the Court was relying exclusively upon § 1144 to establish subject-matter jurisdiction, contrary to Eighth Circuit precedent. The Court finds that plaintiff's assertion here relies on a fundamental misunderstanding of judicial decisions interpreting the preemption standards underlying ERISA's statutory scheme and a further misinterpretation of the Court's order. The Court will thus clarify its order as follows.

ERISA contains two types of preemption: "complete preemption" under § 1132 and "express preemption" under § 1144. Prudential Ins. Co. of Am. v. Nat'l Park Med. Ctr., Inc. , 413 F.3d 897, 907 (8th Cir. 2005). Under § 1144(a), a state law "relates to" an ERISA plan, and is thereby expressly preempted, "if it has a connection with or reference to such a plan, " Shaw v. Delta Air Lines, Inc. , 463 U.S. 85, 97 (1983), or "where resolution of the claim is substantially dependent on an analysis of the terms of the benefit plan." Neumann v. AT&T Comm'n, Inc. , 376 F.3d 773, 780 (8th Cir. 2004). For the reasons provided in the Court's prior order, plaintiff's claims are expressly preempted by ERISA.

Plaintiff is correct in noting that falling under the express preemption of § 1144 does not result in "automatic removal to federal court." Prudential Ins. Co. of Am. , 413 F.3d at 907 (stating that § 1144(a) provides an affirmative defense against claims not completely preempted by ERISA). However, it would be grossly inaccurate to suggest that removal is foreclosed. Rather, if the claim falls under § 1132, it is completely preempted by federal law and thus removable. Neumann , 376 F.3d at 779-80. Plaintiff interprets the Court's order to implement a two-part test, by which establishing preemption under § 1144 is an absolute prerequisite for complete preemption under § 1132. This, however, is incorrect. Finding a claim completely preempted under § 1132 is not dependent upon first finding express preemption under § 1144. See Harris v. Deaconess Health Servs. Corp. , 61 F.Supp.2d 889, 893 (E.D. Mo. 1999) (holding that judicial analysis of the preemption under § 1144 cannot help a federal court determine whether it has subject-matter ...


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