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ALLOCCA v. WACHOVIA

November 4, 2005.

RICHARD E. ALLOCCA, Plaintiff/Counterclaim Defendant,
v.
WACHOVIA, WACHOVIA INSURANCE SERVICES, INC., WACHOVIA CORPORATION, WILLIAM BITTNER, JOHN KLUXEN, individually and in their capacities as employees of WACHOVIA, G. KENNEDY THOMPSON, individually and in his capacity as chairman, president and CEO of WACHOVIA, and ROBERT METZ, individually and in his capacity as an employee of WACHOVIA Defendants.



The opinion of the court was delivered by: WILLIAM WALLS, District Judge

OPINION

Presently before the court are two motions, plaintiff Richard E. Allocca's ("Plaintiff") motion to remand and defendant G. Kennedy Thompson's motion to dismiss. Pursuant to Fed.R.Civ.P. 78, the motions are decided without oral arguments. The Court denies Plaintiff's motion to remand and grants defendant Thompson's motion to dismiss.

I. FACTS AND PROCEDURAL BACKGROUND

  Plaintiff is an insurance broker, commonly referred to as an insurance producer, who entered into a Producer Employment Agreement (the "Agreement") with non-parties MJ Lieberman & Company and Spectrum Insurance Group dated January 1, 1997. At some point, defendant Wachovia Insurance Services, Inc., a subsidiary of Wachovia Corporation (collectively "Wachovia"), became the successor-in-interest to the Agreement with Plaintiff. Among other things, the Agreement outlines Plaintiff's compensation for employment and the parties' rights with respect to clients serviced under the Agreement. Of particular relevance, Paragraph 8 of the Agreement dcals with Plaintiff's benefits and expenses, providing that,
[d]uring the employment period, producer shall be entitled, at no expense to producer, to participate in and receive benefits under the company's group, life, health and dental plans, if any, in accordance with the terms and conditions of such plans as may from time to time be maintained by, or cover employees of, the company. In addition, during the employment period the producer may (I) participate in the company's group long term disability plan (at a cost to producer equal to 50% of the cost of such participation through the company) . . . in accordance with the terms and conditions of such plans as may from time to time be maintained by, or cover employees of, the company.
  On January 21, 2004, Plaintiff mailed a letter to Mr. Thompson, the chairman, president and CEO of Wachovia, that outlined allegations against Mr. Thompson and the other defendants for breach of contract, breach of fiduciary duty, defamation and age and ethnicity discrimination. On April 14, 2004, Wachovia, through counsel, responded to Plaintiff's letter denying the allegations made by Plaintiff, and shortly thereafter, on May 17, 2004, Wachovia terminated the Agreement, but not Plaintiff's employment.

  Plaintiff filed this suit in New Jersey Superior Court, Law Division, Morris County, on December 9, 2004 alleging multiple state law claims including breach of the Agreement and violations of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. Defendants removed the case to this Court on January 19, 2005 pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1337 claiming that the Fourth Count of Plaintiff's Verified Complaint alleges a federal claim arising under the Employee Retirement Income Security Act, 29 U.S.C. 1001 et seq. ("ERISA").*fn1 Shortly thereafter, Plaintiff filed the present motion to remand the case to state court and defendant G. Kennedy Thompson filed a motion to dismiss alleging a lack of personal jurisdiction. The Court addresses the question of its subject matter jurisdiction before deciding Mr. Thompson's motion to dismiss.

  II. DISCUSSION

  A. Motion to Remand

  In removing this case, defendants asserted that federal jurisdiction is appropriate based on complete preemption under the ERISA civil enforcement provision, Section 502(a), 29 U.S.C. § 1132(a) (hereinafter "Section 502(a)"). In his motion for remand, Plaintiff asserts that removal was improper based on the "well-pleaded complaint" rule, or alternatively that the dispute between the parties involves a contractual agreement that does not implicate the civil enforcement provisions of Section 502(a).

  1. Standard of Review

  The Supreme Court has established a widely recognized exception to the general requirement that federal court jurisdiction must be alleged on the face of the complaint. In cases where Congress so pervasively occupies a field, any claim that comes within the scope of federal law is deemed to "arise under" federal law notwithstanding the nature of the claim. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987); see also Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266 (3d Cir. 2001). Federal courts have long recognized that ERISA is one of the statutes that includes an expansive preemption provision such that state law causes of action are preempted and removable to federal court. See Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1981).

  Congress enacted the statutory requirements of ERISA to "protect . . . the interests of participants in employee benefit plans and their beneficiaries" and to "provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts." 29 U.S.C. § 1001(b). This necessitated a uniform regulatory regime over employee benefit plans, including "an integrated system of procedures for enforcement." Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985). The enforcement trigger of ERISA is codified in Section 502(a).*fn2 The ERISA civil enforcement mechanism is one of those provisions with such "extraordinary pre-emptive power" that it "converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Metropolitan Life, 481 U.S. at 65-66. As the Supreme Court noted in Pilot Life Ins. Co. v. Dedeaux:
[T]he detailed provisions of § 502(a) set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA. `The six carefully integrated civil enforcement provisions found in § 502(a) of the statute as finally enacted . . . provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.'
481 U.S. 41, 54 (1987) (quoting Russell, 473 U.S. at 146). Extending this holding to the scope of preemption under Section 502(a), the Supreme Court recently held that "any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted." Aetna Health Inc. v. Davila, 124 S.Ct. 2488, 2495 (2004).

  As such, a participant or beneficiary who can bring suit under Section 502(a)(1)(B) for benefits promised to him under the terms of the plan, to "enforce his rights" under the plan, or to clarify any of his rights to future benefits is subject to federal court jurisdiction. Likewise, Section 502(a)(1)(B) preempts a state law cause of action when "interpretation of the terms of [plaintiff's] benefit plan forms an essential part of [plaintiff's state law claims]." Id. at 2498.

  2. Analysis

  Here, Plaintiff has alleged a common law claim for breach of contract. In Count Four of his Verified Complaint, Plaintiff alleges that Paragraph 8 of the Agreement did not require him to pay for benefits that were provided through Wachovia's company benefit plans which are subject to ERISA.*fn3 Additionally, Plaintiff's more recent Amended Complaint contains new counts that seek judgment for "lost fringe benefits, medical, hospital, and dental coverage." As such, Plaintiff seeks compensatory damages and an accounting of the extra sums that Plaintiff was allegedly required to provide under the Agreement. In effect, Plaintiff seeks a determination of the difference between the benefits provided by the Agreement and those provided by Wachovia to all of its employees under its ERISA governed plans. In order to grant this relief, the Court must look to Wachovia's ERISA covered plans, as those plans are ...


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