This is an action filed by plaintiff Herbert L. Hutchison against defendant Crane Plastics Manufacturing Ltd., his former employer, and against defendants Crane Plastics Co., LLC, Crane Plastics, Inc., and Michael and Tanny Crane. In his complaint, plaintiff asserts claims of age discrimination under Ohio Rev. Code Chapter 4112 (Count One), retaliation under Ohio Rev. Code §4112.02(I) (Count Two); breach of contract (Count Three), and a claim alleging that the restrictions on punitive damages contained in Ohio Rev. Code §§2315.18 and 2315.19 are unconstitutional (Count Four).
This action was originally filed in the Court of Common Pleas of Franklin County, Ohio on March 13, 2006. On April 24, 2006, defendants filed a notice of removal of the action to this court on the basis that the breach of contract claim in Count Three, which challenges defendants' failure to pay plaintiff compensation allegedly due from his deferred compensation account, is completely preempted under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §1001, et seq. On May 24, 2006, plaintiff filed a motion to remand the action to state court. Plaintiff argues in the alternative that even if Count Three is deemed to be preempted by ERISA, the state law claims should be remanded to state court.
I. Requirements for Complete Preemption under ERISA
The provisions of 28 U.S.C. §1441 permit a defendant to remove an action from state to federal court when the federal district court has "original jurisdiction founded on a claim or right arising under" federal law. 28 U.S.C. §1441(b). Peters v. Lincoln Electric Co., 285 F.3d 456, 465 (6th Cir. 2002). The removing defendant bears the burden of proving that the plaintiff's claims are preempted by ERISA. Passcack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 401 (3d Cir. 2004).
In determining whether an action is removable under §1441(b), the "well-pleaded complaint rule" usually applies. Rivet v. Regions Bank of Louisiana, 522 U.S. 470 (1998). Under this rule, "a cause of action arises under federal law only when the plaintiffs' well-pleaded complaint raises issues of federal law."
Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). For removal to be appropriate, a federal question must appear on the face of the complaint. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10 (1983).
However, a "complete preemption exception" to the "well-pleaded complaint rule" has been recognized in cases where Congress' intent in enacting a federal statutory scheme was to completely preempt state law and create federal jurisdiction under 28 U.S.C. §1331. Peters, 285 F.3d at 467-68. Under this exception, a complaint may be removed to federal court and will be treated as alleging a federal cause of action for purposes of removal even though the complaint, on its fact, alleges only a state law cause of action. Id. at 468, n. 11.
In regard to the removal of claims allegedly preempted by ERISA, the Supreme Court held in Taylor that the "complete preemption exception" applies to a state law claim which meets two requirements: (1) the claim "relates to" an ERISA plan within the meaning of 29 U.S.C. §1144(a), ERISA's preemption provision; and (2) the claim falls within the scope of ERISA's enforcement provision, 29 U.S.C. §1132(a). Taylor, 481 U.S. at 66; Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 24 (1983). If the state law claim both "relates to" an ERISA plan within the meaning of §1144(a) and falls within the scope of ERISA's civil enforcement provisions found in §1132(a), then the state law claim is completely preempted by ERISA and converted to a federal question for purposes of removal jurisdiction. Taylor, 381 U.S. at 66.
The first requirement for complete preemption is that the claim fall within the scope of ERISA's preemption provision, which states that ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" as defined by ERISA. 29 U.S.C. §1144(a). ERISA preempts state laws relating to "employee benefit plans," not simply "employee benefits." Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 7 (1987). An "employee benefit plan" includes an "employee pension benefit plan." 29 U.S.C. §1002(3). An "employee pension benefit plan" includes any plan, fund, or program maintained by an employer which provides retirement income to employees or results in a deferral of income by employees for periods extending to the termination of covered employment or beyond. 29 U.S.C. §1002(2)(A)(i) and (ii).
A law "relates to" an employee welfare plan if it has a connection with or reference to such a plan. FMC Corp. v. Holliday, 498 U.S. 52, 68 (1990); Shaw v. Delta Air Lines, 463 U.S. 96-97 (1983). State law includes "all laws, decisions, rules, regulations, or other State action having the effect of law[.]" 29 U.S.C. §1144(c)(1). Thus, a state law may relate to a benefit plan for preemption purposes even if the law is not specifically designed to affect such plans, or the effect is only indirect. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990).
The second component of complete preemption requires that this court be able to characterize the state law claim as an ERISA enforcement action under §1132(a). Complete preemption occurs only if plaintiff's claims are the equivalent of an ERISA civil enforcement action. Ward v. Alternative Health Delivery Systems, Inc., 261 F.3d 624, 627 (6th Cir. 2001). The mere fact that ERISA preemption under §1144(a) may be raised as a defense, or is in actuality a defense, does not confer jurisdiction or authorize removal. Taylor, 481 U.S. at 64-67 (even if state law claim "relates to" an ERISA plan and is preempted by §1144(a), complaint is not removable unless it is also encompassed within ERISA's civil enforcement scheme).
In order to come within the well-pleaded complaint rule, the state law claim must be capable of being characterized as an ERISA enforcement action under §1132(a). Warner v. Ford Motor Co., 46 F.3d 531, 534-5 (6th Cir. 1995). Section 1132(a) authorizes a plan participant or beneficiary to bring an 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). The Supreme Court stated in Aetna Health Inc. v. Davila, 542 U.S. 200, 124 S.Ct. 2488, 2496 (2004), that "if an individual, at some point in time, could have brought his claim under ERISA [§1132(a)(1)(B)], and where there is no other independent legal duty that is implicated by a defendant's actions, then the individual's cause of action is completely pre-empted[.]"
II. Plaintiff's Breach of Contract Claim
In Count Three of the complaint, plaintiff asserts a breach of contract claim for failure to pay plaintiff the 2005 appreciation on his deferred compensation account and to pay him his prorated 2005 annual bonus. Complaint, ¶ 12. Defendants have produced documents indicating that the deferred compensation account referred to in the complaint is part of the Crane Plastics Company LLC Compensation Deferral Plan ("the Plan"), established by Crane Plastics Company LLC, the plan sponsor, by plan documents effective on January 1, 2002, and January 1, 2005. Defendants argue that the Plan is an ERISA plan, and that since plaintiff's breach of contract claim seeks to recover money allegedly due him from his plan account, his breach of contract claim is in essence an enforcement action under ERISA. The Plan documents reveal that the Plan is an employee pension benefit plan as defined in ERISA. The court concludes from the complaint that plaintiff ...