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Shepherd v. Community First Bank

United States District Court, D. South Carolina

March 7, 2016

Frederick D. Shepherd, Jr. Plaintiff,
v.
Community First Bank, et al., Defendants.

ORDER

Mary G. Lewis United States District Judge

Plaintiff Frederick D. Shepherd, Jr., (“Plaintiff”), brought this action for breach of contract in South Carolina state court on September 25, 2015. (ECF No. 1-1). Defendants filed a notice of removal on October 23, 2015, asserting federal question jurisdiction pursuant to 28 U.S.C. § 1331. (ECF No. 1). The matter now comes before the Court on Plaintiff’s Motion to Remand, (ECF No. 7), filed on November 23, 2015. Defendants filed a Response in Opposition, (ECF No. 12), to which Plaintiff replied. (ECF No. 15). Also before the Court is Defendants’ Motion to Dismiss, (ECF No. 9), filed on November 25, 2015, and associated responses and replies, (ECF Nos. 16, 18 and 19), which include legal arguments that are substantially similar to those raised in the briefing on Plaintiff’s Motion to Remand.

The Court has carefully considered the pleadings, motions and memoranda of the parties and these matters are now ripe for disposition.

BACKGROUND

This case arises out of a “Salary Continuation Agreement, ” (“The Plan”), concluded between Plaintiff, the former President and CEO of Defendant Community First Bank, and Defendant Community First Bank and its Board of Directors. (ECF No. 1-1 at pp. 6-7). According to its terms, the Plan was “maintained primarily to provide supplemental retirement benefits” to Plaintiff. Id. at p. 16. The Plan provided for an annual payment of $210, 000.00 in monthly installments to commence after Plaintiff’s 71st birthday and to continue for 20 years. Id. at p. 18.

Beginning on or about December 20, 2011, (Plaintiff’s 71st birthday), and continuing through May 2015, Defendants made monthly payments to Plaintiff pursuant to the agreement. Id. at pp. 8-9. However, on or about May 26, 2015, Defendants notified Plaintiff that they would cease making payments under the Plan. Id. at p. 9.

On September 25, 2015, Plaintiff filed an action in Oconee County Court of Common Pleas, alleging causes of action for breach of contract, conversion, unjust enrichment, breach of fiduciary duty, and unfair trade practices. (ECF No. 1-1). On October 23, 2015, Defendants removed the action to this Court, asserting federal question jurisdiction pursuant to 28 U.S.C. § 1331. (ECF No. 1). More specifically, in both their Response in Opposition to Plaintiff’s Motion to Remand, (ECF No. 7), and in their own Motion to Dismiss, (ECF No. 9), Defendants maintain that Plaintiff’s Complaint is completely preempted by the Employee Retirement Income Security Act of 1974, (“ERISA”), 29 U.S.C. § 1001, et seq.

LEGAL STANDARDS GOVERNING REMAND

The provisions of 28 U.S.C. § 1441 permit a defendant to remove an action to federal court where the court has “original jurisdiction founded on a claim or right arising under” federal law. 28 U.S.C. § 1441(b). However, a removing defendant bears the burden of establishing that the plaintiff’s state law claims are preempted by a federal regime, such as ERISA. See Pascack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 401 (3d Cir. 2004).

In determining whether an action is removable under § 1441(b), the so-called “well-pleaded complaint rule usually applies. Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (1998). Under this rule, “a cause of action arises under federal law only when the plaintiffs’ well-pleaded complaint raises issues of federal law.” Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). For removal to be appropriate, a federal question must appear on the face of the complaint. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10 (1983).

However, a “complete preemption” exception to the well-pleaded complaint rule has been recognized by federal courts in situations where Congress’ intent in enacting a federal statutory scheme was to completely preempt state law. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987). Under this exception, federal jurisdiction over a claim exists where “the preemptive force of a statute is so extraordinary that it converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Id. (internal citation and quotation marks omitted).

Specifically with respect to state law claims allegedly preempted by ERISA, the Fourth Circuit Court of Appeals has instructed that three requirements must be met for complete preemption: (1) the plaintiff must have standing to pursue his claims under the civil enforcement provisions of ERISA § 502(a); (2) the plaintiff’s claims must fall within the scope of an ERISA provision that he can enforce via § 502(a); and (3) the plaintiff’s claims must not be capable of resolution without an interpretation of an ERISA-governed employee benefit plan. Kuthy v. Mansheim, 124 Fed.Appx. 756, 757 (4th Cir. 2004) (citing Sonoco Prods. Co. v. Physicians Health Plan, Inc., 338 F.3d 366, 372 (4th Cir. 2003)).

DISCUSSION

Upon review of the parties’ briefing and in view of the above standards, it appears that the critical determination before the Court is whether Plaintiff’s claims for breach of the salary continuation agreement, (or “The Plan”), are properly characterized as an ERISA enforcement ...


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