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Norwin v. Local 804 Welfare Trust Fund

United States District Court, E.D. New York

January 21, 2015


MITCHELL S. NORWIN, Plaintiff, Pro se, Suffern, NY.

For Defendants: David R. Hock, Noelia E. Hurtado, COHEN, WEISS and SIMON LLP, New York, NY.


John Gleeson, United States District Judge.

Mitchell S. Norwin commenced this action in New York Small Claims Civil Court, seeking to recover $350.70 for nonpayment of an insurance claim against Local 804 Welfare Trust Fund, an employee welfare benefit plan. On November 14, 2014, defendant Local 804 Welfare Trust Fund removed the case to this Court pursuant to 28 U.S.C. § 1441(a). Norwin now moves to remand the case to Small Claims Civil Court. For the reasons stated below, the motion to remand is denied.


Local 804 Welfare Trust Fund (" the Fund"), is a self-insured " employee welfare benefit plan" within the meaning of the Employment Retirement Income Security Act of 1974, as amended (" ERISA"), Section 3(1), 29 U.S.C. § 1002(1), and a multiemployer plan within the meaning of ERISA, Section 3(37), 29 U.S.C. § 1002(37), established in collective bargaining between Teamsters Local 804 and employers.[1] Declaration of Thomas Lamontanaro dated January 7, 2015 (" Lamontanaro Decl.") ¶ 7, ECF No. 10. The fund provides hospitalization, medical and certain other benefits to individuals covered by collective bargaining agreements requiring that contributions be made on their behalf to the Fund. Lamontanaro Decl. ¶ 9, ECF No. 10. The Fund's plans of benefits set forth the terms of these benefits. Id. Norwin is a retiree eligible for coverage in accordance with the Fund's applicable plan of benefits.

Norwin received medical treatment from an out-of-network service provider on September 18, 2014, November 20, 2013 and January 15, 2014. Ex. C, ECF No. 10-3 (New York Medical Management Letter dated Apr. 23, 2014). The total claimed for these charges was $1200. Lamontanaro Decl. ¶ 18, ECF No. 10. The Fund issued payment in the amount of $200.70 in accordance with the Fund's rules for services rendered by out-of-network providers. See id.

On March 15, 2014, Norwin filed an appeal of the Fund's determination to pay only $200.70, and the Fund responded by letter on March 21, 2014, detailing the criteria it used to make the determination. Lamontanaro Decl. ¶ ¶ 19-20, ECF No. 10. On April 18, 2014, Norwin sent the Fund a letter requesting that it consider his appeal in accordance with the Healthcare Bluebook, which he alleged should be used to determine the level of benefits awarded. Id. at ¶ 20. The Fund then sought review of Norwin's appeal by New York Medical Management, a review service organization, which concluded that the payments made were consistent with the current payment policy. Id. at ¶ ¶ 22-23. On April 25, 2014, the Fund informed Norwin that his appeal would be considered a second-level appeal and that it would be presented at the May 2014 Board of Trustees Meeting. Ex. D, ECF No. 10-3 (Fund Letter dated April 25, 2014). At the Trustees' meeting, the board denied the appeal, finding that Norwin was responsible for the deductible and the difference between the out-of-network service provider's charge and the plan's fixed fee schedule. Lamontanaro Decl. ¶ 25, ECF No. 10.

Norwin filed an action to recover $350.70 for nonpayment of his insurance claim in Small Claims Court in Queens County, New York, on October 16, 2014. Ex. A, ECF No. 1 (Notice of Claim). On November 14, 2014, the Fund removed the case to this Court pursuant to 28 U.S.C. § 1441(a). Norwin seeks remand to state court based on the state and district courts' " concurrent jurisdiction of actions under [29 U.S.C. § 1132(a)(1)(B)] and [ERISA Section 502(a)]." Plaintiff's Affirmation dated Dec. 17, 2014, ECF No. 6 (" Pl. Aff.").


A. Legal Standards

A defendant can remove an action filed in state court to a federal district court only if the federal court has original subject matter jurisdiction. 28 U.S.C. § 1441(a) (" Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . .., to the district court of the United States for the district . . . embracing the place where such action is pending."). In evaluating whether removal was proper, a district court must consider whether the case could have been originally filed in federal court based on a federal question, diversity of citizenship, or another statutory grant of jurisdiction. Estate of Gottesman v. Verizon New York, Inc., No. 09-CV-667 (JG)(RLM), 2009 WL 92831, at *3 (E.D.N.Y. Apr. 6, 2009) (citing Caterpillar, Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). Claims for benefits from an ERISA employee pension benefit plan may be brought in federal district court pursuant to Section 502(a)(1)(B) of ERISA, 29 U.S.C § 1132(a)(1)(B).

When opposing a motion to remand, it is the removing party's burden to show that it has met the requirements for removal. R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 655 (2d Cir. 1979), abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010); Farneti v. BethPage FCU, No. 13-CV-7218 (SJF), 2014 WL 1797478, at *2 (E.D.N.Y. May 1, 2014) (citations omitted). Additionally, " [i]n light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability." Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 274 (2d Cir. 1994) (citations omitted).

B. ERISA Preemption

" When a federal statute [such as ERISA] wholly displaces the state-law cause of action through complete pre-emption, the state claim can be removed to federal court." Arditi v. Lighthouse Int'l., 676 F.3d 294, 298 (2d Cir. 2012), as amended (Mar. 9, 2012) (internal quotation marks and citations omitted). " This is so because when the federal statute completely pre-empts the state-law cause of action, . . . even if pleaded in terms of state law, [it] is in reality based on federal law." Id. (alterations in original); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-67, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). In Aetna Health, Inc. v. Davila, 542 U.S. 200, 209, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004), the Supreme Court held that state law claims seeking to remedy the denial of benefits under ERISA-regulated benefits plans fall with the scope of and are completely preempted by ERISA. Claims for benefits from employee benefit plans are thus properly removed from state to federal court. See Metropolitan Life Ins., 481 U.S. at 66 (1987) (" Congress has clearly manifested an intent to make causes of action within the scope of the civil enforcement provisions of § 502(a) removable to federal court."); Arditi, 676 F.3d at 301(2d Cir. 2012) (" The suit was properly removed to federal court, the district court had federal jurisdiction over the case, and remand to state court was not warranted"); Barnable v. First Fortis Life Ins. Co., 44 F.Supp.2d 196, 201 (E.D.N.Y. 1999) (state breach of contract claims relating to employee benefit plan completely preempted by ERISA); Mercy Hosp. Ass'n v. Miccio, 604 F.Supp. 1177, 1180 (E.D.N.Y. 1985) (claims related to employee benefit plan properly removed from state court to the district court).

Here, the Fund asserts ERISA preemption, warranting removal of the case to this Court. The Fund's benefits plan falls within ERISA's statutory definition of an employee welfare benefits plan, and Norwin seeks benefits (payment for medical services) from this plan. Thus, the case was properly removed, as Norwin's rights arise from a defined benefit plan as provided for in ERISA. In fact, Norwin does not appear to dispute that this action is an ERISA claim, rather, he misunderstands the state and federal courts' concurrent jurisdiction. " The fact that the state courts have concurrent jurisdiction with the federal courts under ERISA § 502(e)(1) means that an action for benefits . . . may be commenced in the state courts, but is subject to removal to the federal courts under 28 U.S.C. § 1441(a) . . . ." 3 Ronald J. Cooke, ERISA Practice and Procedure § 8.64 (2d ed. 2014) (emphasis added). I am mindful that because Norwin proceeds pro se, his submissions are to be liberally construed and interpreted to raise the strongest arguments that they suggest. Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (per curiam) (internal quotation marks and emphasis omitted). Norwin's motion to remand, as liberally construed, plainly asserts that remand is appropriate because the state court has concurrent jurisdiction with this Court over his ERISA claim.

The concurrent jurisdiction of the federal and state courts over a plaintiff's claim for benefits is specifically established by Congress in Section 502(e)(1) of ERISA. 29 U.S.C. § 1132(e)(1). As the Fund correctly points out, the existence of concurrent jurisdiction does not compel remand if the action is otherwise removable. See e.g., Khoudary v. Supermarkets Gen. Corp., No. 95 CV 3302, 1996 WL 204496, at *1 (E.D.N.Y. Apr. 15, 1996) (" Section 1441(a) gives defendants the choice of removing the action or proceeding in state court, but it does not give the court discretion to remand a removable action."); Mercy Hospital Asso. v. Miccio, 604 F.Supp. 1177, 1180 (E.D.N.Y. 1985) (" To make removal discretionary with the district court and base exercise of that discretion on a principle of deference to initial filing destroys the purpose and effect of the removal provisions."). When state and federal courts have concurrent jurisdiction as they do over ERISA claims, and a defendant is sued in state court, the defendant has the option of removing the case to federal court:

The congressional delegation of power to state courts to exercise concurrent jurisdiction over individual benefit claims means only that the plaintiff has the option, in the first instance, to file an ERISA Section 502(a)(1)(B) action in state court. Notwithstanding the initial court selection of the plaintiff, the defendant has the absolute right to remove a benefit claim to federal court.

Iacona v. JP Morgan Chase Bank, N.A., No. 12 Civ. 2330(BMC), 2012 WL 288549, at *5 (E.D.N.Y. July 13, 2012) (citing Paul J. Schneider & Brian M. Pinheiro, ERISA: A Comprehensive Guide § 8.03[D] at 8--8 (4th ed.2011)). Accordingly, the Fund properly removed the case to this Court and Norwin's motion to remand is denied.

So ordered.

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