The opinion of the court was delivered by: Hon. R. Allan Edgar
Plaintiff Richard Geroux initially brought a complaint for unpaid benefits pursuant to long-term disability coverage provided by his employer, the Keweenaw Bay Indian Community ("KBIC"), in the Tribal Court of the Keweenaw Bay Indian Community, L'Anse Reservation, Michigan. [Court Doc. No. 1, Complaint]. Plaintiff sought compensation for alleged underpayment of benefits under the policy of "approximately $230.39 per month since December 21, 1982." Plaintiff's complaint does not mention any claims pursuant to the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA").
Defendants Assurant, Inc. ("Assurant") and Union Security Insurance Company ("Union Security") (collectively "Defendants") removed Plaintiff's case to this court on the basis of federal question jurisdiction, claiming that Plaintiff's claims were covered by ERISA. Defendant Union Security answered Plaintiff's complaint and brought a counterclaim for declaratory judgment pursuant to 28 U.S.C. § 2201 seeking a declaration from this court that it is the exclusive forum for Plaintiff's claims and that the tribal court lacks jurisdiction over Plaintiff's claims. The counterclaim further asserted that Union Security should not be required to exhaust its claims in tribal court because that court lacks jurisdiction over ERISA claims.
This court detailed the procedural history of this case in its November 23, 2009 memorandum. [Court Doc. No. 57]. As of that date the parties had failed to supply additional evidence and briefing despite this court's order denying further extensions of time [Court Doc. No. 54] and despite having had nearly a year in which to conduct jurisdictional discovery. The court thus granted the motion to remand the matter to tribal court and dismissed the defendants' counterclaim. [Court Doc. No. 56]. It was only after this court's grant of the motion for remand that the Defendants presented this court with further additional evidence supporting their position regarding this court's jurisdiction. [Court Doc. Nos. 57, 58].
The complaint asserts that Plaintiff is Native American and that he is a former employee and member of the KBIC. Complaint, II, ¶ 2. The Keweenaw Community is located in Baraga and Marquette County, Michigan. Plaintiff claims that he is a third-party beneficiary of an insurance policy between the KBIC and Mutual Benefit Life Insurance Company ("Mutual Benefit") and its successors in interest, Defendants Union Security and Assurant.
Plaintiff asserts that on June 1, 1980 Mutual Benefit issued Group Policy #G25012, Certificate #311 ("Policy") for the Keweenaw Community. The insurance provided long-term disability insurance for employees of the community. Plaintiff asserts that the coverage was "designed to provide benefits of 60% of an individual's monthly earnings up to a monthly payment limit of 70% of that individual's monthly earnings." Complaint, ¶ 8.
Plaintiff contends that he was injured while he was working for the KBIC on December 21, 1982. Complaint, ¶ 10. The injury allegedly led to his permanent disability. He asserts that at the time of his injury, his monthly earnings were $2,433.98 and that his monthly insurance benefits should have been $1,460.39. Plaintiff asserts that the Policy provided that increases in Social Security benefits pursuant to the Social Security Act would not affect the amount of benefits available pursuant to the Policy. Complaint, ¶¶ 9, 11. He contends that he has received under payments "of $81.00 per month from 1/1/86-12/31/88, of $229.00 from 1/1/89 - 12/31/91, of $335.00 from 1/1/92 - 1/31/2007 and of $367.00 from 2/1/2007 through the present." Complaint, ¶ 5.
Defendants removed Plaintiff's case to this Court, claiming that his claims are preempted by ERISA and that, as such, the tribal court lacks jurisdiction over Plaintiff's claims. Plaintiff moved to remand the case to tribal court on August 9, 2008. [Court Doc. No. 7]. This is the issue still pending before this court.
Local Rule 7.4 for the United States District Court for the Western District of Michigan states:
Generally, and without restricting the discretion of the Court, motions for reconsideration which merely present the same issues ruled upon by the Court shall not be granted. The movant shall not only demonstrate a palpable defect by which the Court and the parties have been misled, but also show that a different disposition of the case must result from a correction thereof.
W.D. Mich. L.Civ.R. 7.4(a). As this court previously noted, "a motion for reconsideration may not be used to raise issues that could have been raised in the previous motion, or to introduce evidence which could have been proffered during the pendency of a summary judgment motion." Aero-Motive Co. v. Great American Ins., 302 F.Supp.2d 738, 740 (W.D. Mich. 2003). A motion for reconsideration may be treated as a motion pursuant to Fed. R. Civ. P. 59(e) to alter or amend the judgment. See Huff v. Metropolitan Life Ins. Co., 675 F.2d 119, 122 (6th Cir. 1982). Such motions may be granted where "there is a clear error of law, newly discovered evidence, an intervening change in controlling law, or to prevent manifest injustice." GenCorp Inc.v. American Int'l Underwriters, 178 F.3d 804, 834 (6th Cir. 1999) (citations omitted).
However, documents filed late do not constitute "newly discovered evidence" for purposes of a motion for reconsideration. See e.g., School Dist. No. 1J, Multnomah Cty., Or. v. AC and S, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (noting that "[t]he overwhelming weight of authority is that the failure to file documents in an original motion or opposition does not turn the late filed documents into 'newly discovered evidence'"). In addition, as several courts have noted, "[a] scheduling order 'is not a frivolous piece of paper, idly entered, which can be cavalierly disregarded by counsel without peril.'" Dag Enterprises, Inc. v. Exxon Mobil Corp., 226 F.R.D. 95, 104 (D.D.C. 2005) (quoting Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 610 (9th Cir. 1992)); see also, Columbia Gas Transmission Corp. v. Zeigler, 83 F. App'x 26, 31 (6th Cir. 2003); Rosario-Diaz v. Gonzalez, 140 F.3d 312, 315 (1st Cir. 1998).
A. Removal and Federal Court Jurisdiction
28 U.S.C. § 1441 governs the removal of actions generally. That statute states in relevant part:
(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 or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. . . .
(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
28 U.S.C. § 1441(a)-(b). Further, 28 U.S.C. § 1331 provides that "district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The defendant seeking removal has the burden of proving jurisdiction in the district court. See Williamson v. Aetna Life Ins. Co., 481 F.3d 369 (6th Cir. 2007). Further, as this court noted in its memorandum granting the Plaintiff's motion to remand, " '[b]ecause lack of jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile, the removal statute should be strictly construed and all doubts resolved in favor of remand.'" Eastman v. Marine Mech. Corp., 438 F.3d 544, 549-550 (6th Cir. 2006) (quoting Brown v. Francis, 75 F.3d 860, 864-65 (3d Cir. 1996)). In addition, "[w]hen addressing the removability issues, a trial court is urged to resolve all disputed questions of fact in favor of the non-removing party." Lyons v. U.S. Steel Corp., No. 09-12097, 2010 WL 374016, *1 (E.D. Mich. Jan. 25, 2010) (citing Coyne v. American Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999)).
Defendants removed the case to this Court pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1441(b) alleging federal question jurisdiction because Plaintiff's complaint relates to rights arising under the terms of a group long-term disability insurance policy governed exclusively by ERISA, 29 U.S.C. § 1001 et seq. Defendants allege that because Plaintiff claims to be the beneficiary of an "employee benefit plan" as that term is defined under ERISA, his remedy lies solely with ERISA, 29 U.S.C. § 1132(a)(1)(B). 29 U.S.C. § 1132(a)(1)(B) provides that:
A civil action may be brought--
(1) by a participant or beneficiary-- . . .
(B) 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). ERISA defines an employee welfare benefit plan, in relevant part, as any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) . . . benefits in the event of sickness, accident, disability, death or unemployment . . . .
29 U.S.C. § 1002(1). ERISA applies to employee benefit plans "established or maintained by any employer engaged in commerce or in any industry or activity affecting commerce . . ." 29 U.S.C. § 1003(a)(1). Governmental plans, among others, are excluded from coverage under ERISA. 29 U.S.C. § 1003(b)(1).
Defendants further argue that Plaintiff's claims in tribal court are pre-empted by ERISA and that the tribal court has no jurisdiction over such claims. 29 U.S.C. § 1144(a) states in part, ". . . the provision of this subchapter . . . shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title."
Further, 28 U.S.C. § 1132(e) provides:
(1) Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, fiduciary, or any person referred to in section 1021(f)(1) of this title. State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions under paragraphs (1)(B) and (7) of subsection (a) of this section.
28 U.S.C. § 1132(e). Citizenship of the parties does not affect the jurisdiction of the district courts. "The district courts of the United States shall have jurisdiction, without respect to the amount in controversy or the citizenship of the parties, to grant the relief provided for in subsection (a) of this section in any action." 29 U.S.C. § 1132(f).
There are two essential considerations at issue here. The first, raised in plaintiff's initial motion for remand, is whether removal was improper because 28 U.S.C. § 1441 allegedly does not provide for removal from tribal court. This question further implicates whether Plaintiff's claims are ERISA claims. The second major issue to be resolved is whether, despite this court having jurisdiction over Plaintiff's claims, the court must remand the case to tribal court for the tribal court to determine its own jurisdiction. Plaintiff relies on the theory of tribal exhaustion and comity in support of his position regarding remand.
B. ERISA Coverage of Tribal Benefit Plans
1. Whether the 2006 Amendment to ERISA Applies Retroactively
In 2006 Congress amended ERISA to exclude tribal benefit plans from ERISA's coverage. ERISA excludes "governmental plans" from coverage. See 29 U.S.C. § 1003(b)(1). Congress amended the definition of "governmental plan" to include: a plan which is established and maintained by an Indian tribal government . . . a subdivision of an Indian tribal government . . . or an agency or instrumentality of either, and all of the participants of which are employees of such entity substantially all of whose services as such an employee are in the performance of essential governmental functions but not in the performance of commercial activities.
29 U.S.C. § 1002(32). However, this amendment was included as § 906 of the overall Pension Protection Act, Pub. L. No. 109-280, 120 Stat. 780 (2006), and at least one federal district court has found that this amendment does not apply retroactively. Dobbs v. Anthem Blue Cross and Blue Shield, No. 04-cv-02283-LTB, 2007 WL 2439310, *3 (D. Col. Aug. 23, 2007). The notes to 29 U.S.C. § 1002(32) indicate that "Amendments by Pub.L. 109-280, § 906, [are] applicable to any year beginning on or after Aug. 17, 2006, see Pub.L. 109-280, § 906(c), set out as a note under 26 U.S.C.A. § 414." In Dobbs the plaintiff's complaint had been dismissed prior to the 2006 amendment, so the district ...