Opinion
No. 04 Civ. 6991 (WHP).
February 7, 2005
Evan L. Gordon, Esq., New York, NY, Plaintiff Pro Se.
Peter P. McNamara, Esq., Rivkin Radler LLP, Uniondale, NY, Attorneys for Defendant.
MEMORANDUM AND ORDER
Plaintiff Evan L. Gordon ("Gordon") filed this action in New York state court, claiming that defendant Oxford Health Insurance, Inc. ("Oxford") failed to reimburse his medical expenses. Oxford removed this action on the basis that Gordon's claim "is dependent upon a claim of right" under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. (Notice of Removal ¶ 3.) For the reasons that follow, this Court holds that it lacks federal subject matter jurisdiction and remands this action to New York state court.
BACKGROUND
Gordon, an attorney in solo practice, receives health insurance from Oxford through a plan (the "Plan") offered by the Association of the Bar of the City of New York (the "Bar Association"). (Compl. ¶¶ 1, 3; Letter Brief to the Court from Peter P. McNamara, dated Nov. 5, 2004 ("Def. Letter") Exs. 3, 4.) The Plan is made available to Bar Association members for groups with less than fifty enrollees. (Def. Letter Ex. 1.) Approximately 780 individuals participate in the Plan. (Def. Letter at 3.) Gordon is a Bar Association member and is enrolled in the Plan as a solo practitioner. (Def. Letter Exs. 3, 4.)
DISCUSSION
A federal court must ensure that it has subject matter jurisdiction over every action before it. See Oscar Gruss Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003) ("Failure of subject matter jurisdiction, of course, is not waivable and may be raised at any time by a party or by the courtsua sponte."). Where an action is removed from state court, the district court must remand the action "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).
Oxford contends that "all of [Gordon's] claims either `relate to' or are otherwise pre-empted by ERISA." (Notice of Removal ¶ 3.) As the party who removed this action to federal court, Oxford must establish federal subject matter jurisdiction. See United Food Commercial Workers Union, Local 919 v. Centermark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994).
ERISA applies to "any employee benefit plan if it is established or maintained by any employer . . . or by any employee organization." 29 U.S.C. § 1003(a). The statute authorizes a plan "participant or beneficiary" to bring a civil action, inter alia, "to recover benefits due to him under the terms of his plan [or] to enforce his rights under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). In fact, "[c]ivil suits by beneficiaries to recover benefits under an ERISA plan can be brought only under the civil enforcement provision of ERISA, 29 U.S.C. § 1132(a)." Grimo v. Blue Cross/Blue Shield of Vt., 34 F.3d 148, 151 (2d Cir. 1994).
Therefore, ERISA governs Gordon's suit to compel Plan benefits if (1) the Plan is an "employee benefit plan," (2) Gordon is a "participant" in the Plan and (3) the Bar Association is either an "employer" or an "employee organization," as those terms are used in the ERISA statute. See Grimo, 34 F.3d at 151 ("Assertion of ERISA preemption permits removal of the beneficiary's case from state court, even if the complaint has pleaded only state law claims."); Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987) ("Congress may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character.").
Oxford does not contend that the Bar Association is Gordon's "employer" within the meaning of the ERISA statute. See Marcella v. Capital Dist. Physicians' Health Plan, 293 F.3d 42, 49 (2d Cir. 2002) (holding that "a group or association . . . that contains non-employers cannot be an `employer' within the meaning of ERISA" and "a sole proprietor is not an `employee' for purposes of ERISA"); Rafferty v. N.Y. Mercantile Exch. Long Term Disability Plan, 133 F. Supp. 2d 158, 161 (E.D.N.Y. 2000) (holding that a plan sponsor was not the plaintiff's employer because it did not control his work or compensate him on a regular basis). Rather, Oxford argues that ERISA governs because the Bar Association established and maintains the Plan as an "employee organization."
ERISA defines "employee organization" to mean
any labor union or any organization of any kind, or any agency or employee representation committee, association, group, or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning an employee benefit plan, or other matters incidental to employment relationships; or any employees' beneficiary association organized for the purpose in whole or in part, of establishing such a plan.29 U.S.C. § 1002(4). Gordon contends that the Bar Association is not an employee organization because, although many of its members are law firm employees, the Bar Association does not exist to interact with employers regarding "matters incidental to employment relationships" or to establish benefit plans.
In a similar case, the Eastern District of Louisiana held that the Louisiana State Bar Association ("LSBA") is not an employee organization even though it sponsors a benefits plan. See Fierro v. Commercial Life Ins. Co., No. Civ. A. 99-3333, 2000 WL 1808502, at *2-3 (E.D. La. Dec. 11, 2000). The Fierro court found no evidence "that LSBA exists for the purpose of dealing with employers about employee benefit plans or other matters incidental to employment relationships such as labor disputes, wages, hours of employment, or conditions of work." Fierro, 2000 WL 1808502, at *2; cf. Hanson v. United Life Ins. Co., No. 01 CV 1504 ABC (BQRX), 2001 WL 1388260, at *5 (C.D. Cal. Oct. 30, 2001) (finding the Los Angeles City Employees Association to be an employee organization because, in part, "[t]he sole purpose of the LACEA is to provide insurance benefits to members"). Here, Oxford offers no evidence that the Bar Association negotiates or resolves labor disputes with the law firms that employ its members, or that making a health benefits plan available to its members is part of the Bar Association's raison d'etre.
The only evidence Oxford offers that the Bar Association exists to deal with matters incidental to employment relationships is the fact that it sponsors the Plan. (Def. Letter at 4-5.) However, merely offering a benefits plan is insufficient to render the Bar Association an employee organization under ERISA. Empire Blue Cross Blue Shield v. Consol. Welfare Fund, 830 F. Supp. 170, 174 (E.D.N.Y. 1993) (holding that a union plan sponsor was not an employee organization because "the union [did] not act as its associate members' collective bargaining representative for any purpose other than with respect to the Fund" (internal quotation omitted)).
The Bar Association's varied composition further undermines Oxford's position. To qualify as an "employee organization" under ERISA, an organization must be homogeneous and its members' interests uniform. See Sarraf v. Standard Ins. Co., 102 F.3d 991, 992-93 (9th Cir. 1996) (holding that that the Orange County Employees Association is an employee organization because, in part, it "limits its membership to employees of Orange County. No employers, self-employed individuals or independent contractors may join."). However, the Bar Association consists of attorneys with widely diverse employment circumstances. Its membership includes employers as well as employees, and its employee members work for many disparate employers. See Empire Blue Cross Blue Shield, 830 F. Supp. at 172 (holding that a union's benefit plan fell outside ERISA because the union included members "drawn from a variety of trades, sharing no common employment interests," as well as sole proprietors). Some members, such as Gordon, are self-employed.See Empire Blue Cross Blue Shield, 830 F. Supp. at 174 ("Plaintiff alleges that certain `associate members' are self-employed. If this allegation is proven true, the union can in no way deal with those individuals' employers.").
Therefore, because the Bar Association does not interact with its members' employers on matters incidental to employment and because of the varied nature of its membership, the Bar Association is not an "employee organization" under ERISA, and the Plan is not an ERISA employee benefit plan. Thus, Gordon's claim does not depend on a claim of right under ERISA, and subject matter jurisdiction is lacking in this action.
CONCLUSION
For the foregoing reasons, this action is remanded to the Supreme Court of the State of New York, New York County. The Clerk of the Court is directed to mark this case closed.SO ORDERED.