United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR
REMAND [#8] AND GRANTING DEFENDANTS' MOTION TO DISMISS
GERSHWIN A. DRAIN, UNITED STATES DISTRICT COURT JUDGE
the Court is Plaintiff Progressive Insurance Company's
(“Progressive”) Motion to Remand. Dkt. No. 8.
Also before this Court is Defendants' Motion to Dismiss.
Dkt. No. 5. Plaintiffs filed this action in Oakland County
Circuit Court and Defendants removed the action to this
Court, asserting that this Court has jurisdiction over the
matter pursuant to the Employee Retirement Income Security
Act of 1974 (“ERISA”). Plaintiff asserts that
this Court does not have federal question jurisdiction over
this matter because this is not a case arising under ERISA.
Defendants move this Court to dismiss this action alleging
that Plaintiff does not have standing to pursue their claims
and that Plaintiff failed to exhaust administrative remedies.
For the reasons discussed below, this Court will deny
Plaintiff's Motion to Remand and grant Defendants'
Motion to Dismiss.
about July 22, 2016, Diane Mills-Gutierrez sustained bodily
injuries in a motor vehicle accident. Dkt. No. 1, pg. 12 (Pg.
ID 12). At the time of the accident, Mills-Gutierrez had a
health insurance policy through Defendants, the Blue Care
Network (“BCN”) and Blue Cross Blue Shield of
Michigan (“Blue Cross”). Id. at pg. 13
(Pg. ID 13). It is not disputed that Mills-Gutierrez's
employee benefits plan is an ERISA plan. See Dkt.
No. 12, pg. 2 (Pg. ID 167) (Plaintiff stating that
“Defendant is an ERISA plan.”). Mills-Gutierrez
received medically necessary treatment for injuries arising
out of the automobile crash at the Mary Free Bed
Rehabilitation Hospital (“Mary Free Bed”) from
August 1, 2016 through October 26, 2016. Id. Her
medical expenses amounted to $250, 215.75. Id. BCN
paid for most of Mills-Gutierrez's treatment, but left a
balance of $49, 781.50 outstanding because it determined that
some of her claims were not medically necessary.
Id.; Dkt. No. 9, pg. 15 (Pg. ID 142).
assigned Mary Free Bed the right to pursue payment of the
outstanding medical bill. Id. Mary Free Bed filed a
lawsuit against Progressive for payment of the outstanding
medical bill. Id. Progressive settled the claim in
the amount of $45, 301.17. Id. However, Progressive
asserts that Defendant Blue Cross is the primary insurer in
this matter and therefore Progressive is entitled to a full
reimbursement of the payments it made to Mary Free Bed.
Id. Defendants do not dispute that they are the
primary insurer. Dkt. No. 9, pg. 15 (Pg. ID 142).
filed the present action against Defendants on December 13,
2018 in Oakland County Circuit Court. Dkt. No. 1, pg. 11 (Pg.
ID 11). Defendants removed the action to this Court on
January 17, 2019. Dkt. No. 1. Defendants' Notice of
Removal asserts that removal to this Court is proper because
this is a suit seeking payment of medical benefits filed by a
participant in an employee welfare benefit plan (the Blue
Care Network Plan) as defined by ERISA. Id. at pg. 5
(Pg. ID 5). Therefore, Defendants assert that ERISA preempts
this suit and is removable to this Court. Id.
Plaintiff filed the present Motion to Remand on February 6,
2019. Defendants opposed the Motion on February 20, 2019.
Dkt. No. 9. Plaintiff replied on February 27, 2019. Dkt. No.
removal statute states that “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” to federal court. 28 U.S.C. § 1441(a).
Determination of whether a particular case arises under
federal law turns on the well-pleaded complaint rule. The
well-pleaded complaint rule holds that a cause of action
arises under federal law when the plaintiff's
well-pleaded complaint raises issue of federal law.
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63
(1987). A defense of federal preemption is not grounds for
federal question jurisdiction because the defense does not
appear on the face of a well-pleaded complaint. Id.
An exception to the well-pleaded complaint rule exists where
a federal statute has completely preempted a particular area
of a complaint, making the claims “necessarily federal
in character.” See Id. at 63-64. In other
words, “[o]nce an area of state law has been completely
pre-empted, any claim purportedly based on that pre-empted
state law is considered, from its inception, a federal claim,
and therefore arises under federal law.”
Caterpillar Inc. v. Williams, 482 U.S. 386, 393
Motion to Remand
Motion to Remand argues that it seeks relief pursuant to
M.C.L. 500.3109a and not ERISA. Dkt. No. 8, pg. 3 (Pg. ID
98). Plaintiff contends that it never mentioned ERISA in its
complaint. Id. at pg. 4 (Pg. ID 99). Plaintiff also
states that Defendants failed to state how the employee
benefit plan is funded in their Notice of Removal, which is
critical information to have in order for this Court to
exercise subject matter jurisdiction over this case.
Id. Plaintiff asserts that if a plan is not
self-funded, then ERISA is not applicable and state law
governs. Id. at pg. 10 (Pg. ID 100).
asserts that ERISA completely preempts the claims asserted in
Plaintiff's complaint pursuant to the two-prong test
asserted in Aetna Health Inc. v. Davila. 542 U.S.
200 (2004). Dkt. No. 9, pg. 16 (Pg. ID 143).
§ 502(a)(1)(B) states 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 completely
preempts a claim brought under state law “if an
individual, at some point in time, could have brought his
claim under ERISA § 502(a)(1)(B), and where there is no
other independent legal duty that is implicated by a