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In re Boisseau

United States District Court, N.D. New York

January 30, 2017

In the matter of BRENDA M. BOISSEAU, Individually and as executor of the estate of EDWARD BOISSEAU, Petitioner.

          DECISION AND ORDER

          Lawrence E. Kahn U.S. District Judge.

         I. INTRODUCTION

         On May 10, 2016, the Hanover HHR Employee Benefit Plan (“Plan”) removed this action to the Northern District of New York pursuant to 28 U.S.C. § 1441, asserting federal question jurisdiction under 28 U.S.C. § 1331. Dkt. No. 1 (“Notice of Removal”) ¶¶ 1, 10. Petitioner Brenda M. Boisseau, executrix of the estate of Edward Boisseau, moved to remand the case to the Surrogate's Court for the State of New York, Oswego County. Dkt. Nos. 9 (“Motion”), 9-1 (“Supporting Affidavit”), 9-2 (“Memorandum”). The Plan opposed Petitioner's Motion, Dkt. No. 13 (“Response”), and Petitioner filed a reply, Dkt. No. 14 (“Reply”). For the following reasons, Petitioner's Motion is granted.

         II. BACKGROUND

         Before Mr. Boisseau's death on October 15, 2014, he received medical treatment for prostate cancer. Supp. Aff. ¶ 4. During the course of Mr. Boisseau's treatment, the Plan, an employee benefit plan under the Employee Retirement Income Security Act (“ERISA”), paid out a total of $299, 975.73 to cover Mr. Boisseau's medical expenses. Id. ¶¶ 2, 5. The decedent and Mrs. Boisseau later brought a personal injury action against their medical providers in the Onondaga County Supreme Court for medical malpractice, wrongful death, and loss of consortium arising out of alleged medical negligence that occurred in August 2012. Id. ¶¶ 3-5.

         In October 2014, after a settlement agreement was reached in the personal injury action, the Plan--through its agent Xerox Recovery Services, [1] a collection agency-asserted a lien against the settlement proceeds seeking repayment of the funds expended to cover Mr. Boisseau's medical treatment. Id. ¶¶ 2, 5. Petitioner sent repeated requests to the Plan seeking information in order to ascertain the validity of the lien. Id. ¶ 8. After failing to receive a satisfactory response from the Plan, Petitioner filed a petition in the Oswego Surrogate's Court under section 1809 of the New York Surrogate's Court Procedure Act seeking to vacate the lien. Id. ¶¶ 2-4; Dkt. No. 2 (“State Record”) at 3. As a result, on April 1, 2016, the Surrogate's Court issued an order to show cause as to why the lien should not be dismissed. State R. at 1. The Plan responded by removing the action to this Court, asserting federal question jurisdiction under ERISA, and Petitioner moved to remand. Mem. at 2.

         III. LEGAL STANDARD

         28 U.S.C. § 1441(a) permits a defendant to remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction” to a district court of the United States. Under this statute, “[f]ederal courts have a duty to exercise jurisdiction over properly removed cases even if a related matter is currently proceeding before a state court.” Fox & Horan v. Beiny, No. 92-CV-2067, 1992 WL 168261, at *1 (S.D.N.Y. June 29, 1992). The Second Circuit has recognized that, “[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.” Somlyo v. J. Lu-Rob Enters., Inc., 932 F.2d 1043, 1045-46 (2d. Cir. 1991) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941)).

         Moreover, federal courts may not hear a case in the absence of subject matter jurisdiction. A lack of subject matter jurisdiction may not be waived and may be raised by motion or sua sponte at any time. Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 107 (2d Cir. 1997); see also Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). In the absence of subject matter jurisdiction, federal courts must remand a removed case to state court. 28 U.S.C. § 1447(c).

         IV. DISCUSSION

         Petitioner argues that the Plan could not remove because it was not a defendant in the underlying state court action, and because ERISA does not provide a basis for subject matter jurisdiction in this case. Mem. at 2, 10. But the Court does not reach those issues because there is a separate basis for remand in this case: the probate exception to federal jurisdiction. “The ‘probate exception' is an historical aspect of federal jurisdiction that holds ‘probate matters' are excepted from the scope of federal diversity jurisdiction.” Lefkowitz v. Bank of N.Y., 528 F.3d 102, 105 (2d Cir. 2007) (citing Marshall v. Marshall (Marshall II), 547 U.S. 293, 307 (2006)).

         While it is clear that the probate exception applies to diversity jurisdiction, there is some disagreement as to whether it also applies to federal question jurisdiction. The Second Circuit has not explicitly addressed the issue, and there is a split among the circuit courts that have. Compare Jones v. Brennan, 465 F.3d 304, 306-07 (7th Cir. 2006) (finding the probate exception applies to both federal question and diversity jurisdiction cases), and In re Marshall, (Marshall I) 392 F.3d 1118, 1131-32 (9th Cir. 2004) (same), rev'd on other grounds sub nom. Marshall II 547 U.S. 293, and Tonti v. Petropoulous, 656 F.2d 212, 215 (6th Cir. 1981) (same), with In re Goerg, 844 F.2d 1562, 1565 (11th Cir. 1988) (finding that the probate exception “relates only to 28 U.S.C. § 1332 . . . and has no bearing on federal question jurisdiction” (footnote omitted)). When the Supreme Court reversed the Ninth Circuit in Marshall II, it expressly avoided resolving the question of whether the probate exception applies to federal bankruptcy jurisdiction or other forms of federal question jurisdiction. Marshall II, 547 U.S. at 308-09.

         The probate exception “has been described as ‘one of the most mysterious and esoteric branches of the law of federal jurisdiction.'” United States v. Blake, 942 F.Supp.2d 285, 294 (E.D.N.Y. 2013) (quoting Ashton v. Paul, 918 F.2d 1065, 1071 (2d Cir. 1990)). It is a doctrine created by the judiciary and largely based on “misty understandings of English legal history.” Marshall II, 547 U.S. at 293. The original diversity jurisdiction statute, the Judiciary Act of 1789, was read to grant federal courts jurisdiction over those suits that would have been within the jurisdiction of England's common law courts or its High Court of Chancery. Peter Nicolas, Fighting the Probate Mafia: A Dissection of the Probate Exception to Federal Court Jurisdiction, 74 S. Cal. L. Rev. 1479, 1500 (2001).[2] Because issues of probate fell outside the jurisdiction of those courts (probate of wills and the administration of estates were left to England's ecclesiastical courts), they were also considered to be left out of the diversity jurisdiction granted by the Judiciary Act of 1789. Id.

         There is good historical reason to think that the probate exception applies equally to both diversity and federal question cases. Jones, 465 F.3d at 306-07. When Congress granted federal question jurisdiction to the federal courts in the Judiciary Act of 1875, it described the scope of that jurisdiction with the same language that was used to describe the scope of diversity cases: “all suits of a civil nature at common law or in equity.” Judiciary Act of March 3, 1875, § 1, 18 Stat. 470. Additionally, in their present form, 28 U.S.C. §§ 1331 and 1332(a)-the statutes that ...


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