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Rudel v. Hawaii Management Alliance Association

United States District Court, D. Hawaii

March 31, 2016

RANDY M. RUDEL, Plaintiff,
v.
HAWAII MANAGEMENT ALLIANCE ASSOCIATION, Defendant.

FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFF’S MOTION TO REMAND (DOC. 10)

Barry M. Kurren United States Magistrate Judge

Before the Court is Plaintiff Randy M. Rudel’s Motion to Remand (Doc. 10). After careful consideration of the Motion and the supporting and opposing memoranda, the Court finds and recommends that the Motion to Remand be GRANTED.[1]

BACKGROUND

On December 29, 2014, Rudel sustained catastrophic, life-altering injuries when a vehicle driven by Kathe Goldscharek turned into his motorcycle in Kailua-Kona. (Petition at 2.) Rudel underwent eight surgeries and twenty-eight procedures on his left leg, including partial amputation. (Id.) He also had six surgeries and twenty procedures done to his left forearm including partial amputation. (Id.) He remains at risk of further amputation of his left arm and leg. (Id. at 6.) Rudel incurred over $600, 000 in medical expenses, some of which was paid by his health insurance company, Defendant Hawaii Management Alliance Association (“HMAA”). (Id. at 6.)

The driver of the vehicle that hit Rudel, Kathe Goldscharek, was insured by Allstate Insurance Company. (Id. at 8.) Allstate offered to pay Rudel the policy limits of Goldscharek’s insurance coverage in the amount of $1, 500, 000 pursuant to a general damages only release. (Id. at 8-9.) Rudel accepted the policy limits offer on August 17, 2015. (Id. at 9.)

On November 16, 2015, HMAA sent a letter to Rudel’s counsel, stating that it was entitled to reimbursement in the amount of $400, 779.70. (Exhibit 1 attached to Petition.) HMAA placed on lien on Rudel’s settlement in that amount. (Id.)

On December 9, 2015, Rudel filed the instant Petition for Determination of Validity of Claim of Lien of HMAA in state court. The Petition is brought pursuant to Haw. Rev. Stat. § 431:13-103(a)(10) and § 663-10 and seeks a determination of the validity of HMAA’s claim of lien against Rudel’s settlement.

On December 29, 2015, HMAA removed the action to federal court. Rudel now seeks to remand this action to state court, arguing that his state law claim for determination of the validity of HMAA’s claim of lien is not completely preempted by ERISA and, therefore, that this Court lacks federal jurisdiction over this action.

DISCUSSION

1. Removal and Complete Preemption Under ERISA 502(a) Under 28 U.S.C. § 1441, a defendant may remove an action filed in state court to federal court if the federal court would have original subject matter jurisdiction over the action. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1243 (9th Cir. 2009). Federal courts have original jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. “Generally speaking, ‘a cause of action arises under federal law only when the plaintiff’s well-pleaded complaint raises issues of federal law.’” Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944 (9th Cir. 2009) (brackets omitted). However, “there is an exception to the well-pleaded complaint rule for state-law causes of action that are completely preempted by [ERISA] § 502(a).” Id.

“Complete preemption under § 502(a) is ‘really a jurisdictional rather than a preemption doctrine, as it confers exclusive federal jurisdiction in certain instances where Congress intended the scope of a federal law to be so broad as to entirely replace any state-law claim.’” Id. at 945 (brackets omitted). In articulating this doctrine, the Supreme Court “held that § 502(a) reflected Congress’s intent to ‘so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character.’” Id. (citing Metro. Life Ins. v. Taylor, 481 U.S. 58, 63-64 (1987)). The Court explained that while “‘federal pre-emption is ordinarily a federal defense to the plaintiff’s suit, ’ Congress had ‘clearly manifested an intent to make causes of action within the scope of the civil enforcement provisions of § 502(a) removable to federal court.’” Id. (citing Metro., 481 U.S. at 63, 66).

“A party seeking removal based on federal question jurisdiction must show either that the state-law causes of action are completely preempted by § 502(a) of ERISA, or that some other basis exists for federal question jurisdiction.” Id. “If a complaint alleges only state-law claims, and if these claims are entirely encompassed by § 502(a), that complaint is converted from ‘an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’” Id. “But ‘if the doctrine of complete preemption does not apply, . . . the district court is without subject matter jurisdiction.” Id. (brackets omitted).

2. Rudel’s State Law Claim

Rudel’s claim seeks a determination of the validity of HMAA’s claim of lien against his settlement with Allstate. Rudel’s claim is brought pursuant to Haw. Rev. ...


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