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ALLEMAN v. BLUECROSS BLUESHIELD OF ILLINOIS

October 3, 2002

JOHN D. ALLEMAN, INDIVIDUALLY, AND AS "CLASS REPRESENTATIVE," PLAINTIFF,
V.
BLUECROSS BLUESHIELD OF ILLINOIS, AS ADMINISTRATOR OF THE ASSOCIATES' HEALTH AND WELFARE PLAN FOR WAL-MART AND SAM'S ASSOCIATES/PARTNERS, DEFENDANT



The opinion of the court was delivered by: J. Phil Gilbert, District Judge

ORDER

This matter comes before the Court on the plaintiff's motion to remand. (Doc. 11). The defendant has responded. (Doc. 13). For the reasons discussed below, the Court will grant the motion to remand.

BACKGROUND

The plaintiff, John Alleman, is an attorney. At all times relevant to this action, Donna Newcomb (who is not a party) was an employee at Wal-Mart and had health insurance through the "Associates Health and Welfare Plan," an ERISA plan (hereinafter "the Plan"). The plaintiff alleges that the defendant, Blue Cross/Blue Shield of Illinois, is the plan administrator.*fn1
Newcomb was involved in an automobile accident, sustained injuries and incurred medical bills, of which $5,513.60 were paid by the Plan. She hired Alleman to represent her interests in a personal injury suit against the other driver. Alleman worked for a 1/3 contingent fee and settled Newcomb's claim for $100,000.00. Alleman created a common fund, out of which he paid $5,513.60 to Blue Cross/Blue Shield as was required by the Plan's reimbursement provision.
The reimbursement provision of the Plan further provided that there would be no reduction of the Plan's lien for attorney's fees. Nevertheless, Alleman sought attorney's fees, under the Illinois Common Fund Doctrine, from Blue Cross/Blue Shield for 1/3 of the amount remitted. Blue Cross/Blue Shield refused, and Alleman filed suit against Blue Cross/Blue Shield in Jackson County, Illinois on behalf of himself and an alleged class of similarly situated attorneys. His Complaint asserts a claim under the Common Fund Doctrine.
The defendant removed the case to this Court under 28 U.S.C. § 1441 on the basis of diversity and federal question jurisdiction. The plaintiff's motion to remand followed.

DISCUSSION

A defendant may remove to federal court a case filed in state court if there is federal subject matter jurisdiction over the case. 28 U.S.C. § 1441(a). Federal courts are courts of limited subject matter jurisdiction. Flight Attendants Against UAL Offset v. C.I.R., 165 F.3d 572, 578 (7th Cir. 1999) (citing Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994)). In its § 1441 notice of removal the defendant asserts two bases for federal subject matter jurisdiction: diversity jurisdiction, 28 U.S.C. § 1332, and federal question jurisdiction, 28 U.S.C. § 1331. (Doc. 1).

Section 1332(a) confers upon federal courts subject matter jurisdiction over civil actions where the amount in controversy exceeds $75,000.00 and there is complete diversity of citizenship. The defendant now concedes that the jurisdictional amount is not satisfied in this case. The individual plaintiff's claim is well below $75,000.00. Under Zahn v. International Paper Co., 414 U.S. 291 (1973), multiple plaintiffs with separate claims must each meet the jurisdictional amount requirement. Therefore, even though the plaintiff purportedly brings this suit on behalf of a class, the jurisdictional amount is not satisfied by the class's aggregate claim — even assuming that such a claim is greater than $75,000.00.
Section 1331 confers upon federal courts subject matter jurisdiction over civil actions "arising under" the laws of the United States. As a general rule, whether a case arises under federal law is determined by what appears in the plaintiff's well pleaded complaint as "[i]t is long settled law that a cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987) (citing Gully v. First National Bank, 299 U.S. 109 (1936)). "Thus the defendant cannot cause a transfer to federal court simply by asserting a federal question in his responsive pleading." Rice v. Panchal, 65 F.3d 637, 639 (7th Cir. 1995). This is the so-called "well-pleaded complaint rule." In this case, the face of the plaintiff's complaint does not raise any federal issues.
There is, however, an exception to the to the well-pleaded complaint rule — the "complete preemption doctrine." This jurisdictional doctrine provides that "to the extent that Congress has displaced a plaintiff's state law claim, that intent informs the well-pleaded complaint rule, and a plaintiff's attempt to utilize the displaced state law is properly `recharacterized' as a complaint arising under federal law." Rice, 65 F.3d at 640 n. 2 (citing Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 64 (1987)).
The jurisdictional doctrine of complete preemption is often confused with "conflict preemption." Conflict preemption exists when a federal law provides a defense to a state law claim. Rice, 65 F.3d at 639. Federal defenses can be raised in state court, and they do not create federal jurisdiction. Id at 639-40. On the other hand, "federal subject matter jurisdiction exists if the complaint concerns an area of law `completely preempted' by federal law, even if the complaint does not mention a federal basis of jurisdiction." Jass v. Prudential Health Care Plan, 88 F.3d 1482, 1487 (7th Cir. 1996) (citing Rice, 65 F.3d at 642).
"In [Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987)], the Supreme Court extended the `complete preemption' exception to the well-pleaded complaint rule to ERISA cases." Jass, 88 F.3d at 1487. Subsequently, the Seventh Circuit has held that cases within the scope of ERISA § 502(a) are completely preempted while § 514(a) provides the basis for conflict preemption. Rice, 65 F.3d at 639-40. In this case, the ...

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