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Gann v. J&B Services, Inc.

United States District Court, N.D. Mississippi, Aberdeen Division

September 17, 2018



         Presently before this Court is Plaintiff Shirley Gann's motion to remand [Doc. 5], and Defendant J&B Services motion to strike [Doc. 11]. Having considered the matter, the Court finds that both motions should be denied.


         Shirley Gann's husband, Jerry, was employed by J&B Services. While employed there, he maintained a life insurance policy issued by Humana that was made available to J&B employees. Premiums for this policy were paid through payroll deductions from Jerry's paycheck.

         In January 2015, Jerry suffered a severe work-related injury. After the injury, J&B began paying the premiums for Jerry's insurance since Jerry was no longer able to work.

         Jerry eventually succumbed to his injuries in June 2016. Gann made a claim on the life insurance benefits, only to discover that the policy had been cancelled by J&B in April 2015.

         Gann filed this action in state court alleging claims of negligence, negligent misrepresentation, breach of fiduciary duty, and equitable estoppel against J&B for stopping its payment of the premiums and failing to inform the Ganns it was doing so. J&B removed to this court, asserting that Gann's state law claims were completely preempted by the remedies of the federal Employee Retirement Income Security Act, and thus federal question jurisdiction existed.

         Gann moved to remand [Doc. 5] arguing that the life insurance policy was not a part of a benefits plan that was established and maintained by J&B and, thus not covered by ERISA. J&B responded the policy is part of such a plan. In her reply, Gann argues that J&B should be estopped from arguing that the policy was part of an employee benefit plan. Shirley further argues that ERISA did not completely preempt a Mississippi law regulating insurance policy cancellation provision.

         J&B then moved to strike [Doc. 11] Gann's estoppel and preemption arguments, asserting that she could not make those arguments for the first time in her reply brief. Gann responded, and both motions are now ripe for review. The Court will first address the motion to strike and then the motion to remand.

         Defendant's Motion to Strike Plaintiffs Reply Arguments

         J&B moves to strike Gann's estoppel and preemption arguments, claiming that they were improperly made for the first time in Gann's reply brief.

         "[A]rguments raised for the first time in rebuttal cannot be addressed by the other side and are therefore not properly before the Court. McWilliams v. Advanced Recovery Sys., Inc., 108 F.Supp.3d 456, 462 fn. 2 (S.D.Miss. 2015) (citing Wallace v. Cnty. Of Comal, 400 F.3d 284, 292 (5th Cir. 2005)). The reply brief is" limited to addressing matters presented in a motion and response." Lynch v. Union Pac. R.R. Co., No. 3:13-CV-2701-L, 2015 WL 6807716, at * 1 (N.D. Tex. Nov. 6, 2015).

         Gann's reply arguments are responsive to J&B's brief. Gann, in her initial remand motion, argues J&B did not "establish" and "maintain" the plan as contemplated by ERISA. J&B in response, argues that it was a plan as defined by ERISA, and that ERISA completely preempts Gann's claims. Gann's reply goes directly to those two arguments: that J&B is estopped from arguing the insurance policy is a plan under ERISA, and that her claims are not entirely preempted. Thus, J&B's motion to strike is DENIED.

         Plaintiffs Motion to Remand

         Removal jurisdiction exists in any case where the federal court would have original jurisdiction. Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008); 28 U.S.C. § 1441(a). The removing party "bears the burden of showing that federal jurisdiction exists." Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013) (citing Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)). "Any 'doubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction.'" Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014) (quoting Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000)).

         "A federal court only has original or removal jurisdiction if the federal question appears on the face of the plaintiffs well-pleaded complaint and there is generally no federal jurisdiction if the plaintiff properly pleads only a state law cause of action." MSOF Corp. v. Exxon Corp., 295 F.3d 485, 490 (5th Cir. 2002). Thus, a federal law defense to a state law claim is not a basis for removal. Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 123 S.Ct. 2058, 2062, 156 L.Ed.2d 1 (2003) ("Potential defenses, including a federal statute's pre-emptive effect, do not provide a basis for removal.")

         However, in some contexts, a "federal statute 'so forcibly and completely displace[s] state law that the plaintiffs cause of action is either wholly federal or nothing at all." Hoskins v. Bekins Van Lines, 343 F.3d 769, 773 (5th Cir. 2003) (quoting Carpenter v. Wichita Falls Ind. School Dist, 44 F.3d 362, 366 (5th Cir. 1995)). ERISA is such a statute. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (finding complete pre-emption in § 502 of ERISA, 29 U.S.C. § 1132). Thus, a defendant may defeat remand to state court by establishing that ERISA completely preempts the state law cause of action. This is not to say that, the defendant must establish complete preemption of every cause of action in the plaintiffs complaint, but rather that the defendant must show at least one claim is preempted. Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 337 (5th Cir.1999) ("When a complaint raises both completely-preempted claims and arguably conflict-preempted claims, the court may exercise removal jurisdiction over the completely-preempted claims and supplemental jurisdiction... over the remaining claims.")

         ERISA provides a beneficiary with a federal cause of action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). A state law claim is completely preempted by § 1132 when "(1) [t]he state law claim addresses ... the right to receive benefits under the terms of an ERISA plan; and (2) the claim directly affects the relationship among traditional ERISA entities." Mayeaux v. La. Health Serv. and Indent. Co.,376 F.3d 420, 432 (5th ...

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