Fifth Circuit Court Cases - Case Law and Opinions from the 5th Circuit Federal Court - Court of Appeals

	ROMINGER LEGAL
		Fifth Circuit Court of Appeals Opinions - 5th Circuit
					Need Legal Help?
					Need Legal Help?
LEGAL RESEARCH CENTER
LEGAL RESEARCH CENTER			LEGAL HEADLINES - CASE LAW - LEGAL FORMS	NOT FINDING WHAT YOU NEED? -CLICK HERE

This opinion or court case is from the Fifth Circuit Court or Appeals. Search our site for more cases - CLICK HERE

LEGAL RESEARCH

COURT REPORTERS

PRIVATE INVESTIGATORS

PROCESS SERVERS

DOCUMENT RETRIEVERS

EXPERT WITNESSES

Find a Private Investigator

Find an Expert Witness

Find a Process Server

Case Law - save on Lexis / WestLaw.

Legal News - Legal Headlines

United States Court of Appeals,
Fifth Circuit.
No. 93-5538.
Summary Calendar.
Richard ROZZELL, Plaintiff-Appellant,
v.
SECURITY SERVICES, INC., et al., Defendants,
Security Couriers Inc. and Electronic Data Services Corporation,
d/b/a EDS, Defendants-Appellees.
Nov. 25, 1994.
Appeal from the United States District Court for the Eastern
District of Texas.
Before DAVIS, JONES and DUHÉ, Circuit Judges.
EDITH H. JONES, Circuit Judge:
Richard Rozzell (Rozzell) filed suit in state court alleging
that Electronic Data Systems (EDS) terminated him in retaliation
for pursuing rights under Article 8307c of the Texas Workers'
Compensation Act. EDS removed the case to federal court alleging
the action was a claim arising under section 510 of the Employment
Retirement Income Security Act (ERISA) and therefore satisfied
federal question jurisdiction. Plaintiff's motion to remand the
case to district court was denied and defendant won a bench trial
held on the merits. Because we conclude that removal was improper,
we must vacate the judgment and remand the case to state court.
BACKGROUND
In the bench trial, the district court judge made extensive
findings of fact, only a few of which are relevant to this appeal.
1

Rozzell was hired by EDS1 in November of 1985. Rozzell sustained
an injury unrelated to work on March 11, 1990. As a result of the
accident, Rozzell was unable to work until July 27, 1990. Rozzell
returned to work in a limited capacity on July 30, 1990. On that
date, Rozzell allegedly sustained an on the job injury preventing
him from continuing further work. Shortly after the alleged
injury, Rozzell filed a workers' compensation claim. Rozzell
alleges that he was terminated as a result of filing such claim.
Rozzell filed a lawsuit alleging a single cause of action
under section 8307c of the Texas Workers' Compensation Act.2 EDS
removed the action to federal court on the grounds that the
complaint contained a claim implicating ERISA. Specifically, EDS
1Rozzell was actually hired by Security Courier Corporation
which was purchased by EDS in July of 1988. Such a distinction,
however, is irrelevant to the instant case.
2Section 8307c provides:
Section 1: No person may discharge or in any other
manner discriminate against any employee because the
employee has in good faith filed a claim, hired a
lawyer to represent him in a claim, instituted, or
caused to be instituted, in good faith, any proceeding
under the Texas Workmen's Compensation Act, or has
testified or is about to testify in any such
proceeding.
Section 2: A person who violates any provision of
Section 1 of this act shall be liable for reasonable
damages suffered by an employee as a result of the
violation, and an employee discharged in violation of
the Act shall be entitled to be reinstated to his
former position. The burden of proof shall be upon the
employee.
Section 3: The district courts of the State of Texas
shall have jurisdiction, for cause shown, to restrain
violations of this Act.
2

asserted that because Paragraph Eight of the complaint alleged that
plaintiff was wrongfully terminated "to willfully deprive plaintiff
of the compensation and benefits of [his] job", plaintiff had
implicated the provisions of ERISA. The district judge denied
Rozzell's motion to remand based upon his findings that because
determination of plaintiff's damages necessitated reference to the
ERISA plan, plaintiff's claim was necessarily federal in character
and that plaintiff's allegation states a claim under section 510 of
ERISA. A claim that relates to an ERISA plan, as the court
recognized, is removable from state court.
DISCUSSION
The Employee Retirement Income Security Act of 1974 (ERISA),
codified at 29 U.S.C. § 1001 et seq. (1994 ed.), federally
regulates employee benefit plans. ERISA is "a comprehensive
statute designed to promote the interests of employees and their
beneficiaries in employee benefit plans." Shaw v. Delta Air Lines,
463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983),
(citing Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359,
361-62, 100 S.Ct. 1723, 1726, 64 L.Ed.2d 354 (1980); Alessi v.
Raybestos-Manhattan, Inc., 451 U.S. 504, 510, 101 S.Ct. 1895, 1899-
1900, 68 L.Ed.2d 402 (1981)). Section 514(a) of ERISA, 29 U.S.C.
§ 1144(a), expressly "supersedes any and all State laws insofar as
they may now or hereafter relate to any employee benefit plan"
covered by ERISA. This preemption clause has been interpreted to
be "deliberately expansive ... to "establish pension plan
regulation as exclusively a federal concern.' " Ingersoll-Rand Co.
3

v. McClendon, 498 U.S. 133, 138, 111 S.Ct. 478, 482, 112 L.Ed.2d
474 (1990) (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46,
107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987) (quoting Alessi, 451
U.S. at 523, 101 S.Ct. at 1906)).
The central preemption determination is whether the state
law3 relied upon in the well-pleaded complaint "relates to" an
employee benefit plan. Ingersoll-Rand, 498 U.S. at 138, 111 S.Ct.
at 482; Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1292 (5th
Cir.1989). A state law "relates to" an employee benefit plan "if
it has a connection with or reference to such a plan." Shaw, 463
U.S. at 96-97, 103 S.Ct. at 2899-2900. Therefore, a state law may
"relate to" an employee benefit plan even if the law is not
designed to affect the plan or does so even in an indirect manner.
Pilot Life, 481 U.S. at 47, 107 S.Ct. at 1552-53. Nevertheless,
the reach of ERISA preemption is not limitless. See, e.g., Mackey
v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 841, 108
S.Ct. 2182, 2191-92, 100 L.Ed.2d 836 (1988) (holding that ERISA did
not preempt a State's general garnishment statute, even when
applied to collect judgments against plan participants); Fort
Halifax Packing Co. v. Coyne, 482 U.S. 1, 6, 107 S.Ct. 2211, 2214-
15, 96 L.Ed.2d 1 (1987) (finding no ERISA preemption even though
state law required payment of severance benefits because law did
3Section 514(c)(1), 29 U.S.C. § 1144(c)(1), defines "state
law" as including "all laws, decisions, rules, regulations, or
other State action having the effect of law, of any State."
ERISA preempts state law causes of action as they relate to
employee benefit plans. Cefalu v. B.F. Goodrich Co., 871 F.2d
1290, 1292 n. 5 (5th Cir.1989).
4

not require the establishment or maintenance of an ongoing plan).
EDS's contention that Rozzell's claim is preempted by ERISA
focusses on the use (or misuse) of one word in Rozzell's complaint.
Although Rozzell's complaint alleges only one cause of action,
retaliatory discharge in violation of section 8307c, he also
includes a paragraph seeking punitive damages. In this paragraph,
Rozzell alleges that EDS fired him in an attempt "to willfully
deprive [Rozzell] of the compensation and benefits of [his]
job...." (emphasis added). EDS contends that this allegation
brings the otherwise state law cause of action within the purview
of federal law.
EDS argued, and the district court agreed, that because
computation of the plaintiff's damages necessitated reference to
the ERISA plan, the claim was pre-empted. This erroneous argument
finds its genesis in dicta in Cefalu v. B.F. Goodrich Co., 871 F.2d
1290, 1294 (5th Cir.1989). In Cefalu, another ERISA preemption
case, the plaintiff was employed by the defendant before purchasing
a franchise from the defendant. The plaintiff alleged that the
defendant breached an oral contract to continue his pension
benefits at the same level when he became an independent franchisor
as when he was an employee. Cefalu held that such a claim was
preempted by ERISA and properly removable. In explaining that the
lawsuit possessed the requisite relation to an employee benefit
plan to justify preemption, the court noted that "[t]o compute
[plaintiff's] damages, the court must refer to the pension plan
under which appellant was covered when he worked for [defendant]."
5

Id. at 1294. This statement does not, and can not, mean that any
lawsuit in which reference to a benefit plan is necessary to
compute plaintiff's damages is preempted by ERISA and is removable
to federal court. See Burks, 8 F.3d at 306 (holding that "[a]
claim that unlawful termination resulted in loss of benefits is not
preempted by ERISA"). Therefore, removal on these grounds was
improper.4
EDS also argued, and the district court agreed, that
plaintiff's allegation that he was terminated in an attempt to
deprive him of his benefits sufficiently implicated ERISA to
warrant preemption.
Rozzell's complaint, however, alleges only one cause of
action, that he was fired by EDS for filing a workers' compensation
claim. Under the well-pleaded complaint rule, the court will look
past the words in the complaint to the substance of the claim
alleged. See generally Franchise Tax Bd. of Cal. v. Constr.
Laborers Vacation Trust for S. Cal., 463 U.S. 1, 103 S.Ct. 2841, 77
L.Ed.2d 420 (1983). Viewing Rozzell's complaint in this manner, it
remains patently clear that the substance of his claim is limited
to the state law retaliatory discharge cause of action. He
included the word "benefits" in his accusation of the requisite
malice for punitive damages, not as a separate claim for relief.
Rather, the allegation of lost "benefits" related back to the
4A district court in this circuit addressed a virtually
identical case in Addison v. Sedco Forex, U.S.A., 798 F.Supp.
1273 (N.D.Tex.1992). While the analysis was thoughtful and
extensive, we now overrule Addison to the extent it is
inconsistent with this opinion.
6

retaliatory discharge in order to punctuate that wrongful conduct.
Therefore, the substance of Rozzell's complaint alleges only one
cause of action that is governed exclusively by state law.
EDS urges this court to look to the recent case of Burks v.
Amerada Hess Corp., 8 F.3d 301 (5th Cir.1993) for guidance. Burks
does not favor EDS. In Burks, the plaintiff was fired from his job
shortly after filing a workers' compensation claim. Burks alleged
various state law causes of action. Defendant removed the case to
federal court on the grounds of federal preemption. This court
reversed the district court's remand of the case to state court,
holding that plaintiff's complaint stated an ERISA claim.
In regard to benefits, Burks alleged that defendant's
wrongful denial of benefits constituted an intentional infliction
of emotional distress. We explained, "This is not a case in which
the loss of benefits is merely an element in damages related to a
claim for wrongful discharge. Burks's complaint expressly says
that--independently of the wrongful discharge--his denial of benefits
is illegal under state law."5 Id. at 305. In contrast, Rozzell
makes no independent claim that denial of his benefits was illegal
under state law. Rather, the loss of benefits is "merely an
element in damages related to a claim for wrongful discharge." Id.
See also Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 6, 107
5Burks, 8 F.3d at 306 (citing Ethridge v. Harbor House
Restaurant, 861 F.2d 1389, 1405 (9th Cir.1988)); Titsch v.
Reliance Group, Inc., 548 F.Supp. 983, 985 (S.D.N.Y.1982) aff'd
mem., 742 F.2d 1441 (2d Cir.1983); Samuel v. Langham, 780
F.Supp. 424, 427 (N.D.Tex.1992); Morningstar v. Meijer, Inc.,
662 F.Supp. 555, 557 (E.D.Mich.1987); Rody v. Midland Enter.,
685 F.Supp. 129 (M.D.La.1988).
7

S.Ct. 2211, 2214-15, 96 L.Ed.2d 1 (1987) (explaining that state law
must relate to the plan, not merely the benefits for preemption to
be appropriate). Burks, 8 F.3d at 306. In sum, Rozzell's
"well-pleaded complaint" does not state a cause of action which
"relates to" an employee benefit plan; removal on such basis was
improper.
Based on this discussion, we need not reach Rozzell's
alternate contention that because his claim under § 8307c "arises
under" state workers compensation law, it is not removable pursuant
to 28 U.S.C. § 1445(c) even if it were preempted by ERISA. See
Jones v. Roadway Express, Inc., 931 F.2d 1086, 1091-92 (5th
Cir.1991).
For these reasons, the judgment of the district court is
vacated and remanded with instructions to remand this case back to
state court and to undertake further proceedings not inconsistent
with this opinion.
VACATED and REMANDED with INSTRUCTION TO REMAND TO STATE
COURT.

8