Caseflicks

Supreme Court of the United States • 1987

Metropolitan Life Insurance v. Taylor

481 U.S. 58 | 107 S. Ct. 1542 | 95 L. Ed. 2d 55 | 1987 U.S. LEXIS 1514 | 55 U.S.L.W. 4468

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Takeaway

In short, Metropolitan Life established ERISA complete preemption: a beneficiary's state-law claim for plan benefits that falls within § 502(a)(1)(B) is treated as a federal claim and may be removed to federal court.

Background

General Motors maintained an ERISA-covered disability-benefit plan for salaried employees, insured by Metropolitan Life. Arthur Taylor, a General Motors employee, received disability benefits after taking leave for emotional problems. After medical examinations concluded that he could work and that his prior back injury did not disable him, Metropolitan stopped benefits and denied his supplemental disability claim. General Motors later terminated Taylor when he refused to return to work.

Taylor sued General Motors and Metropolitan in Michigan state court. He sought contractually owed disability benefits, damages for mental anguish resulting from the alleged breach, reinstatement of benefits and insurance coverage, and relief on separate employment-related claims. The defendants removed the action to federal court, contending that ERISA supplied federal-question jurisdiction over the benefits claim. The District Court held removal proper and granted summary judgment for the defendants. The Sixth Circuit reversed, reasoning that Taylor's complaint pleaded only state-law claims and that ERISA preemption was merely a federal defense that could not support removal. The Supreme Court granted certiorari and reversed.

Issues

Issue #1

Whether Taylor's state common-law contract and tort claims seeking disability benefits under an ERISA-covered employee-benefit plan were preempted and displaced by ERISA's civil-enforcement scheme.

Holding

Yes. The claims were preempted by ERISA and fell within ERISA § 502(a)(1)(B), which provides the exclusive federal cause of action for a beneficiary seeking plan benefits.

Reasoning

Taylor's suit related to an employee-benefit plan because it challenged Metropolitan's termination and denial of disability benefits under General Motors' ERISA-covered plan. Under the Court's contemporaneous decision in Pilot Life Insurance Co. v. Dedeaux, ERISA § 514(a) broadly preempts state common-law claims concerning the improper processing of benefit claims.

Taylor's contract and tort theories were rules of general application, not state laws that regulate insurance. They therefore were not preserved by ERISA's insurance saving clause.

The suit was also precisely the kind of action covered by § 502(a)(1)(B): a beneficiary's action to recover benefits allegedly due under plan terms, enforce plan rights, or clarify future benefits. For that category of dispute, ERISA supplies an exclusive federal remedy rather than merely a defense to state-law liability.

Issue #2

Whether a state-court complaint that pleads only state-law claims, but whose benefits claim falls within ERISA § 502(a)(1)(B), arises under federal law and is removable to federal court.

Holding

Yes. Congress completely preempted claims within § 502(a)(1)(B), so such claims are necessarily federal in character and may be removed despite being pleaded as state-law claims.

Reasoning

Ordinarily, the well-pleaded-complaint rule permits federal-question jurisdiction only when federal law appears on the face of the plaintiff's properly pleaded complaint. A federal preemption defense ordinarily does not satisfy that rule and therefore ordinarily cannot justify removal.

An established exception applies when Congress has so completely preempted a field that a complaint nominally asserting state-law claims necessarily states a federal claim. The Court had previously applied this principle to § 301 of the Labor Management Relations Act in Avco Corp. v. Machinists.

Franchise Tax Board held that ERISA preemption alone does not convert every state claim into a federal claim. But it left open the question whether a state claim both preempted by ERISA and within § 502(a)'s scope would receive the same treatment as an LMRA § 301 claim. Taylor's benefits claim presented that reserved question because it fell directly within § 502(a)(1)(B).

ERISA's jurisdictional provision, § 502(f), closely parallels LMRA § 301's jurisdictional language. More decisively, ERISA's legislative history expressly states that suits to enforce benefit rights or recover plan benefits should be regarded as arising under federal law in the same fashion as suits under LMRA § 301.

The relevant inquiry is Congress's intent, not whether ERISA preemption was obvious when Taylor filed suit. Because Congress clearly intended § 502(a) claims to be federal claims for jurisdictional purposes, Taylor's nominally state-law benefits claim arose under federal law and was removable under 28 U.S.C. §§ 1331 and 1441(b).

Concurrences

Justice Brennan

Reasoning

Justice Brennan, joined by Justice Marshall, emphasized that the Court's holding was narrow. The decision does not mean that every defense based on Congress's intent to preempt state law creates removal jurisdiction; ordinary preemption remains a defense that generally must be litigated in state court.

Removal was proper here because Congress clearly manifested a specific intent to make claims within ERISA § 502(a) removable. That congressional intent existed when ERISA became law, even though ERISA's application to claims like Taylor's was not obvious when removal occurred.

In future cases under other statutes, Justice Brennan advised federal courts to remand unless they find a clear congressional intent to create removal jurisdiction.