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Johnson v. Lou Fusz Automotive Network Inc.

Court of Appeals of Missouri, Eastern District, Third Division

February 28, 2017

LISA JOHNSON, Appellant,

         Appeal from the Circuit Court of St. Louis County Hon. Tommy W. DePriest, Jr.

         Lisa Johnson appeals from the judgment dismissing her claim for employment discrimination and from the summary judgment denying her claim for unpaid overtime. We affirm the judgment, as modified herein.

         Johnson was employed by Lou Fusz Automotive Network, Inc. as a fleet leasing agent for sixteen years before she was terminated in January 2013. After filing discrimination charges with the relevant agencies, [1] Johnson filed this lawsuit. Therein, she asserted one count of employment discrimination based on her association with her son who has a disability in violation of the Missouri Human Rights Act ("MHRA") and one count for a violation of the Missouri Minimum Wage Law ("MMWL") based on unpaid overtime. The court dismissed the MHRA count with prejudice on the ground that it was preempted by the federal Employee Retirement Income Security Act ("ERISA") and, therefore, the state court lacked subject matter jurisdiction over that claim. The court entered summary judgment against Johnson on her claim for unpaid overtime. We will address each of the claims separately in this opinion.

         MHRA Discrimination Claim and ERISA Preemption

         The petition contains the following allegations with respect to Johnson's MHRA claim. Johnson received health insurance benefits through her employer, Lou Fusz. It is undisputed that this benefits plan qualifies as an ERISA plan. It included coverage for Johnson's son, who has had a disability caused by a brain malformation since his birth in 2006. Her son has had multiple surgeries, and his condition must be regularly monitored by angiograms and CT scans, all of which require multiple hospital admissions. Lou Fusz was aware that Johnson's son had this condition, that it would continue and was not curable and that it substantially limited his major life activities-thus, she alleged, it was a "disability" under the MHRA. See Section 213.010(4) RSMo.

         Johnson alleged that the medical costs of monitoring and treating her son's condition were covered by Lou Fusz's group health insurance policy, and Lou Fusz knew that the condition was covered. "The serious and continuing nature of [her son's] medical condition led to increased costs in the medical insurance provided to Johnson as a benefit of her employment, " and Lou Fusz "was aware of incurring continuing and increasing costs associated with insuring Johnson's family as a result of [her son's] disability." Lou Fusz was "aware of the extensive expenses it incurred as a result of insuring [her son's] medical care through Johnson" and "knew that [he] would require consistent medical monitoring, hospital stays, and treatment for his continuing disability."

         Johnson alleged that during the telephone conversation with her supervisor in which she was terminated, the supervisor informed Johnson that Lou Fusz eliminated her position "to 'cut company employment costs, '" "repeatedly mentioned [her son's] disability and how Johnson's termination placed her in a 'bad position' regarding [his] medical costs" and "directly stated" that Johnson "would no longer be able to rely on the insurance policy" to cover her son's "extensive medical expenses." Johnson alleged that after her termination, the employee who took over her position was paid more to perform the same duties and that other employees whose positions were also eliminated were offered other positions. Johnson was never offered an alternative position at Lou Fusz.

         Johnson alleged that her association with her son "served as a contributing or motivating factor in the decision of [Lou Fusz] to terminate Johnson" and alleged as evidence thereof: the direct statements her supervisor made "tying the termination to animus and [the son's] medical coverage and associated expenses;" the failure to offer her an alternative job like other employees whose positions were eliminated; and Lou Fusz's "knowledge of [her son's] disability and the fact that [it] would continue to face the cost of insuring [his] necessary and continuing medical treatment through Johnson." In this way, she alleged, Lou Fusz unlawfully discriminated and retaliated against Johnson because of her association with her son in violation of the MHRA. See Section 213.070(4) RSMo (prohibiting discrimination "in any manner against any other person because of such person's association with any person protected by this chapter"). Johnson sought compensatory and punitive damages, including lost wages and other benefits of employment, among other relief.

         Lou Fusz filed its answer and asserted affirmative defenses, none of which were based on an argument that Johnson's MHRA claim was preempted by ERISA. But later, after taking Johnson's deposition, Lou Fusz attempted to remove the case to federal court based on ERISA. The case was remanded to the state court, however, because the notice of removal had not been timely filed. See Johnson v. Lou Fusz Automotive Network, Inc., 2014 WL 7338820 (E.D. Mo December 22, 2004). Thereafter, Lou Fusz filed an amended answer in state court and moved to dismiss the MHRA claim for lack of subject matter jurisdiction because that claim was preempted by ERISA and therefore the federal courts had exclusive jurisdiction over it.

         Attached to Lou Fusz's motion to dismiss were excerpts of Johnson's deposition testimony. In those excerpts, Johnson testified that when she went to find insurance after she was fired, the insurance agents said her son was uninsurable except through an employer and that her termination sounded suspicious, which confirmed what she had been thinking already. One agent recommended an attorney and told Johnson he believed she had a claim for discrimination. She was asked at the deposition if she was alleging that Lou Fusz discriminated against her "based on the costs of [your son's] disability, " and she answered "yes." She was asked if she was claiming that the reason she was terminated was "to avoid paying for the medical insurance, the increasing costs of his treatment and insurance." Johnson said "yes." She also testified at the deposition that she believed that the individuals who were responsible for deciding to terminate her were aware of the cost of her son's treatment and "the cost of the insurance covering him" when they made the decision to eliminate her position. When asked if "the desire to avoid making those payments was the motivating factor behind your termination of employment, " Johnson answered "I think that they reasoned-in having to subsidize his continuing healthcare costs, yes." When asked what statements led her to believe that, she referred to the supervisor's comment that termination was leaving Johnson "in a bind with [her son] and insurance." She also said that comments were made during open enrollment meetings at Lou Fusz about rising healthcare costs and increases to insurance premiums. Johnson was unaware how the cost of her son's healthcare compared to the cost of covering other employees, but she believed other employees who had individual-not family-healthcare plans were treated better than her, "possibly" because they cost Lou Fusz less money.

         Also attached to Lou Fusz's motion to dismiss were Johnson's interrogatories and requests for production of documents in which she sought, among other things: information and documents about the employer's group healthcare insurance, including the total annual cost of providing healthcare insurance to employees and the dollar amount expended to cover Johnson specifically; the percentage and dollar amount of employee premiums paid annually; information about how Lou Fusz chose insurance contracts and benefits levels; and whether any changes to benefits were made after Johnson's termination. A summary plan description of Lou Fusz's group healthcare plan was also attached to the motion.

         After considering the record and hearing oral arguments, the trial court granted the motion to dismiss, finding that it lacked subject matter jurisdiction over Johnson's discrimination claim because it was preempted by ERISA-though it did not specify which type of preemption or otherwise explain its reasoning. The claim was dismissed with prejudice, and this appeal follows.

         As a threshold matter, contrary to Johnson's contention on appeal, courts are not limited to the face of the pleadings in ruling on a motion to dismiss for lack of subject matter jurisdiction. See Rell v. Burlington Northern Railway Company, 976 S.W.2d 518, 520 (Mo. App. E.D. 1998). Rather, a motion to dismiss for lack of subject matter jurisdiction is to be granted "[w]henever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter." Rule 55.27(g)(3). The portion of Rule 55 requiring notice to the parties before the court considers matters outside the pleadings expressly applies only to motions to dismiss for failure to state a claim. Rule 55(a). Thus, contrary to Johnson's argument, the trial court was free to consider the materials attached to Lou Fusz's motion for lack of subject matter jurisdiction when deciding that ERISA preempted this claim and it lacked subject matter jurisdiction. We review this decision for an abuse of discretion. See Reese v. U.S. Fire Insurance Company, 173 S.W.3d 287, 293 (Mo. App. W.D. 2005).

         In the context of ERISA, there are two types of preemption of a state law cause of action: "express preemption" and "complete preemption." ERISA expressly preempts state causes of action that "relate to" employee benefit plans. See Section 514 of ERISA, codified at 29 U.S.C. 1144(a). ERISA completely preempts a state law cause of action if it falls within the comprehensive and exclusive enforcement scheme of ERISA. See Section 502(a) of ERISA, codified at 29 U.S.C. 1132(a). The two types of preemption are distinct doctrines to be analyzed separately. See, e.g., Fossen v. Blue Cross and Blue Shield of Montana, Inc., 660 F.3d 1102, 1111-12 (9th Cir. 2011) (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 214 n.4 (2004)). We find that Johnson's MHRA claim is completely preempted by ERISA and need not reach the issue of express preemption.

         Complete preemption depends on whether Johnson's cause of action based on the MHRA actually falls within the comprehensive and exclusive enforcement scheme set forth in Section 502(a) of ERISA. Metropolitan Life Insurance Company v. Taylor, 481 US. 59, 66 (1987). Section 502(a) enumerates the civil actions that may be brought under ERISA. 29 U.S.C. 1132(a)(1)-(11). One such authorized action is set forth in Section 502(a)(1)(B), which permits one to recover benefits due under an ERISA plan, enforce rights to plan benefits or clarify rights to future benefits under a plan; these are commonly referred to as "benefits-due" cases. Because of the frequency of benefits-due cases, there are numerous opinions in which the court determined complete preemption based on the fact that the claim fell within Section 502(a)(1)(B). Because that was the only subsection of Section 502(a) at issue, the "test" for complete preemption is often stated in those cases only in terms of whether the claim falls within that particular subsection, Section 502(a)(1)(B). Though there are cases that correctly recite the test as requiring broadly that the claim fall within any subsection of Section 502(a), repetition of the restrictive language in some benefits-due cases has nevertheless led to some confusion as to whether only Section 502(a)(1)(B) cases are completely preempted. This is the misguided argument Johnson makes here-that her claim is not for benefits-due and therefore does not fall within Section 502(a). But it is actually quite clear-and has been for some time-that a state cause of action that falls within any of the enumerated claims in the subsections of Section 502(a) is completely preempted. See, e.g., Kalo v. Moen Inc., 93 F.Supp.2d 869, 871-73 (N.D. Ohio 2000) and Wood v. Prudential Insurance Company of America, 207 F.3d 674, 678 (3rd Cir. 2000) (citing Metropolitan Life, 481 U.S. at 66, which was itself a benefits-due case but which held broadly that all of Section 502(a) has preemptive effect). Johnson's reliance on cases that would suggest complete preemption applies only to those claims that fall within Section 502(a)(1)(B) is misplaced. See Tovey v. Prudential Insurance Company of America, 42 F.Supp.2d 919, 925 (W.D. Mo. 1999).[2]

         A benefits-due claim is only one of the civil actions enumerated in Section 502(a). Another type is set forth in Section 502(a)(3), which authorizes civil actions to enforce the provisions of ERISA. See 29 U.S.C. 1132(a)(3). One such ERISA provision enforceable under Section 502(a) is Section 510, which prohibits employment decisions that discriminate against a participant for ...

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