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American Funeral Financial, LLC v. UPS Supply Chain Solutions, Inc.

United States District Court, N.D. Georgia, Atlanta Division

July 19, 2019

American Funeral Financial, LLC, Plaintiff,
UPS Supply Chain Solutions, Inc., Defendant.

          OPINION & ORDER


         Plaintiff American Funeral Financial (“AFF”) sued Defendant UPS Supply Chain Solutions, Inc. (“UPS”) in state court for negligent misrepresentations about coverage under its employee benefit plan. (Dkt. 1-3.) Defendant removed the action to this Court. (Dkt. 1-5.) Plaintiff seeks to remand under 28 U.S.C. § 1447(c), arguing this Court lacks federal subject matter jurisdiction. (Dkt. 7 at 1.) The Court agrees.

         I. Background

         In March 2017, Tanya Maness died. (Dkt. 1-3 ¶ 6.) At the time, her husband, Joey Maness, worked for Defendant UPS and participated in an employee welfare benefit plan that provided access to life insurance benefits. (Dkt. 9 at 2-3.) At the time of her death, Mrs. Maness had coverage under a group life insurance policy issued by Prudential Group Life Insurance Company. (Dkt. 1-3 ¶ 5.) Where applicable, this plan also provided participants with dependent life insurance coverage. (Dkt. 9 at 2.) The Employee Retirement Income Security Act (“ERISA”) governs this plan. (Id.)

         Mr. Maness offered to assign $22, 474.75 from his wife's life insurance benefits to Plaintiff AFF if AFF agreed to pay for his wife's funeral. (Dkt. 1-3 ¶ 7.) Before agreeing to this arrangement, Plaintiff called Defendant UPS to verify that the policy covered Mrs. Maness and that the policy had sufficient funds to pay the assignment. (Id. ¶ 8.) Plaintiff claims Defendant “affirmatively represented to [it] . . . that the policy's available benefits would cover the proposed assignment.” (Id. ¶ 9.) Plaintiff relied on this alleged representation by paying for Mrs. Maness's funeral and burial. (Id. ¶ 10.) When Plaintiff later made a claim under the assignment for plan benefits, the insurer told Plaintiff that there was no dependent coverage and that Defendant had provided a “misverification of dependent coverage.” (Id. ¶ 13.) The insurance company thus refused to pay Plaintiff any money. (Id. ¶ 13.) Plaintiff then asked Defendant to pay it the amount of the assignment, but Defendant refused. (Id. ¶ 15.)

         Plaintiff sued Defendant in state court for negligence and misrepresentation based on Defendant's alleged “misverification” of coverage - that is, Defendant telling Plaintiff that Mr. Maness's dependent coverage included his wife when it did not. (Id. ¶¶ 20-21, 24- 25.) Plaintiff does not allege that Mrs. Maness was - in fact - covered under the insurance policy. Plaintiff accepts the insurance company's representation that Mrs. Maness was not covered. (Dkt. 7-1 at 1 (stating that insurance funds “were never available” to Plaintiff because Mrs. Maness was ineligible for coverage).) Instead, Plaintiff sued Defendant for damages it sustained when it relied on Defendant's “misverification” of coverage - specifically, money it paid for Mrs. Maness's funeral in exchange for her husband's assignment of benefits totaling $22, 474.75.

         Defendant removed the case to this Court, asserting that ERISA completely preempted Plaintiff's state law claims. (Dkt. 1-1.) Plaintiff seeks remand under 28 U.S.C. § 1447(c), claiming there is no federal jurisdiction. (Dkt. 7 at 1.)

         II. Standard of Review

         Removal from state to federal court is proper if the federal court has original subject matter jurisdiction over the action. See 28 U.S.C. § 1441(a). If at any time before final judgment the federal court does not have subject matter jurisdiction, it must remand the case to state court. 28 U.S.C. § 1447(c). The defendant has the burden of proving federal jurisdiction, tested at the time of removal. Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1294-95 (11th Cir. 2008).

         Because the amount in controversy here is less than $75, 000, this Court does not have diversity jurisdiction over this matter. 28 U.S.C § 1332(a). The Court must rely - if at all - on federal question jurisdiction. See 28 U.S.C. § 1331.

         The test used for determining whether a claim arises under federal law is whether a federal question appears on the face of the plaintiff's well-pleaded complaint. Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152 (1908). Generally, “a case arises under federal law only if it is federal law that creates the cause of action.” Conn. State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343 (11th Cir. 2009) (quoting Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996)).

         A narrow exception to the well-pleaded complaint rule exists where a state law claim is filed in state court but a federal statute provides complete preemption. Id. at 1344. Complete preemption occurs when “the preemptive force of a federal statute is so extraordinary that it converts an ordinary state law claim into a statutory federal claim.” Id. at 1343 (citing Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987)). The complete preemption doctrine applies only to federal statutes that provide “the exclusive cause of action for the claim asserted and also set forth procedures and remedies governing that cause of action.” Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 8 (2003). A party may remove the state law claim because the federal statute “wholly displaces the state-law cause of action through complete pre-emption.” Id.

         Courts must also determine whether the asserted facts of the case support removal. Kemp v. Int'l Bus. Machs. Corp., 109 F.3d 708, 712-13 (11th Cir. 1997). For removal to be proper, the court must find that preemption applies to plaintiff's claims and the relief plaintiff seeks is available under the preemptive statute. Id. at 713. A court must resolve all uncertainties or “doubts about the propriety of federal jurisdiction” in favor of remand to state court. Adventure Outdoors, 552 F.3d at 1294.

         III. ...

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