Plaintiff sued for breach of contract regarding a health care reimbursement plan. The Plan called for the Plaintiff to forfeit his unused funds. Plaintiff claimed that Defendant never informed him he was making a contribution to an ERISA plan.
Plaintiff sued for breach of contract in state court. Defendant removed to federal court and moved for summary judgment. Plaintiff moved to remand and the district court granted the motion. Defendant appealed.
Fifth Circuit determined it had no appellate jurisdiction since the district court had concluded it had no subject matter jurisdiction. Fifth Circuit discussed the difference between complete preemption (under ERISA § 502) and conflict or ordinary preemption (under ERISA § 514(a).
Fifth Circuit held that Defendant removed under conflict preemption and the district court properly remanded the complaint. Court found that Defendant failed to preserve the complete preemption argument. Court noted that the first amended answer to the complaint raises the affirmative defense of ERISA preemption pursuant to 29 U.S.C. §§ 1446 et seq. But complete preemption arises from 29 U.S.C. § 1432, not § 1446; and it is not an affirmative defense. Majority opinion noted that it should make no comments on the merits of the preemption defense.
Judge Wiener, concurring commented that plaintiff's counsel so grossly mischaracterized the plaintiff's claims that it bordered on frivolousness. "Unless I miss my bet, however, conflict preemption will be presented lucidly to the state court on remand, where our learned state colleagues will, I am confident, address these matters and decide them correctly."
By the way, the amount at issue was $1200.
