United States District Court, D. New Mexico
Stephen P. Curtis, Attorney at Law, P.C., Albuquerque, New
Mexico, for Plaintiff.
Franse and Krystle A. Thomas, Rodey Dickason Sloan Akin &
Robb P.A., Albuquerque, New Mexico, for Defendant Heartland
Payments Systems LLC.
MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF TONYA
SUTTON'S MOTION TO REMAND
KELLY, JR. UNITED STATES CIRCUIT JUDGE
MATTER is before the court on Plaintiff Tonya Sutton's
Motion to Remand (ECF No. 17). Upon consideration thereof,
the court finds the motion is not well taken and should be
Tonya Sutton sued her former employer, Defendant Heartland
Payment Systems LLC (HPS), and her ex-husband, Defendant
Joseph Wayne Rigsby, Sr., in New Mexico state court for (1)
breach of contract, (2) conversion, (3) unjust enrichment,
and (4) conspiracy. See generally Compl. (ECF No.
1-1). According to Ms. Sutton, she had a portfolio account at
HPS that was fully vested and worth over $300, 000.
Id. at 2-3. She claims that HPS, without her
knowledge or permission, merged her portfolio into Mr.
Rigsby's portfolio at some time after their marriage and
while Mr. Rigsby was also employed at HPS. Id. She
also claims that HPS failed to make distributions from Mr.
Rigsby's 401(k) account as required by a Qualified
Domestic Relations Order (QDRO) entered in state district
court as part of Ms. Sutton's divorce from Mr. Rigsby.
Id. at 4-5. She claims that Mr. Rigsby was aware of
the merger of the two portfolio accounts and that he has been
unjustly enriched by receiving funds from both the portfolio
and the 401(k) that rightly belong to her. Id. at
5-6. Together, she alleges HPS and Mr. Rigsby conspired to
deprive her of the value of her HPS portfolio and Mr.
Rigsby's 401(k) account. Id. at 6.
removed the suit on the ground that at least one of Ms.
Sutton's claims was completely preempted by ERISA, giving
this court federal question jurisdiction. Notice of Removal
at 2-3. Ms. Sutton opposes removal, claiming she is merely
seeking the value of her converted HPS portfolio and
enforcement of a QDRO. See Pl.'s Mot. to Remand;
Pl.'s Reply in Supp. of Mot. to Remand (ECF No. 22). She
argues neither of those claims creates federal jurisdiction.
HPS responds that Ms. Sutton is claiming entitlement to funds
in a 401(k) account governed by ERISA and alleging that HPS
has failed to properly administer the account to disburse the
funds to her; thus, the action is one “to recover
benefits due . . . under the terms of [the] plan, to enforce
[her] rights under the terms of the plan, or to clarify [her]
rights to future benefits under the terms of the plan,
” 29 U.S.C. § 1132(a)(1)(B), making ERISA the
exclusive mechanism for her claim. See Def.'s
Resp. in Opp'n at 1, 3 (ECF No. 19).
general, an action originally filed in state court is
properly removable to federal court when there is either (1)
diversity of citizenship among the parties or (2) a claim
that arises under the “Constitution, laws, or treaties
of the United States.” 28 U.S.C. § 1441. Here,
Defendants removed based on the latter ground. Notice of
Removal (ECF No. 1). Normally, the presence of federal
question jurisdiction is tested by the “well-pleaded
complaint” rule. See Caterpillar Inc. v.
Williams, 482 U.S. 386, 392-93 (1987). According to this
rule, a court looks to the face of a plaintiff's
complaint to determine whether the complaint pleads a federal
cause of action or instead relies exclusively on state-law
claims. Id. A complaint that does not raise a
federal claim - even if it necessarily will raise a federal
defense - does not create a basis for federal
jurisdiction. Id. at 393.
the well-pleaded complaint rule, an action that pleads only
state-law claims is still removable to federal court when the
claims fall within the “complete preemption” of a
federal statute. See Metro. Life Ins. Co. v. Taylor,
481 U.S. 58, 63-64 (1987). According to the complete
preemption doctrine, Congress occasionally demonstrates its
intent to sweep so broadly with an enactment that federal law
entirely displaces an area of state law. See Carland v.
Metro. Life Ins. Co., 935 F.2d 1114, 1118- 19 (10th Cir.
1991). When it does so, “a claim which comes within the
scope of [a preempted] cause of action, even if pleaded in
terms of state law, is in reality based on federal
law.” Beneficial Nat. Bank v. Anderson, 539
U.S. 1, 8 (2003). The Supreme Court has said that ERISA's
§ 502 is one example of a federal provision that
completely preempts state-law actions, leaving federal law as
the exclusive cause of action and remedy for state-law claims
of the same nature. Felix v. Lucent Techs., Inc.,
387 F.3d 1146, 1154-56 (10th Cir. 2004). Accordingly,
“[a] state law claim will convert to a federal claim .
. . if the claim is preempted by ERISA and within the scope
of ERISA's civil enforcement provisions.”
Carland, 935 F.2d at 1119.
determine whether a plaintiff's state-law claim is
completely preempted, a court may need to recharacterize the
state-law claim in the complaint and ask whether the action
could have been brought as a federal claim under ERISA §
502. See Aetna Health Inc. v. Davila, 542 U.S. 200,
210 (2004). If the answer is “yes, ” then ERISA
is the exclusive avenue for that claim. Id. Here,
HPS argues Count II of Ms. Sutton's complaint
“squarely falls within ERISA § 502(a).”
Def.'s Resp. in Opp'n at 3. Count II claims that HPS
has failed to distribute to Ms. Sutton her portion of Mr.
Rigsby's 401(k) account in compliance with the QDRO.
Compl. at 5. HPS reminds the court that once federal subject
matter jurisdiction is established over one claim, a court
may assert supplemental jurisdiction over the remaining
related state-law claims. See 28 U.S.C. §
parties do not dispute that the HPS 401(k) account is a plan
organized pursuant to ERISA. The QDRO named Ms. Sutton as an
“alternate payee” of the HPS 401(k). QDRO at 2
(ECF No. 1-1, Ex. 4, at 17). And ERISA provides that, as an
alternate payee, she is to be considered a beneficiary under
the HPS plan. See 29 U.S.C. § 1056(d)(3)(J)
(“A person who is an alternate payee under a qualified
domestic relations order shall be considered for purposes of
any provision of this chapter a beneficiary under the
plan.”). Recharacterized for federal law purposes,
then, the nature of Ms. Sutton's claim is that, as a
beneficiary created by a QDRO, she is entitled to additional
benefits from an ERISA-governed plan from the plan's
administrator. This is a paradigmatic ERISA claim. In ERISA
terms, her suit is “a civil action . . . brought by a .
. . beneficiary . . . to recover benefits due to [her] under
the terms of [the] plan, to enforce [her] rights under the
terms of the plan, or to clarify [her] rights to future
benefits under the terms of the plan.” ERISA §
502(a) (codified at 29 U.S.C. § 1132(a)).
not all ERISA claims are completely preempted. State laws
that merely conflict with ERISA are not validly removable to
federal court because so-called conflict preemption is a
federal defense and defenses do not confer removal
jurisdiction. See Felix, 387 F.3d at 1156-58
(explaining the distinction between total preemption under
§ 502 and conflict preemption under § 514). But
because Ms. Sutton is an ERISA beneficiary claiming
additional benefits from her ERISA plan, her claim strikes at
the heart of the remedial scheme defined by § 502. This
contrasts with state-law claims that merely possess a
“tenuous, remote, or peripheral connection with [ERISA]
covered plans, ” which fall under § 514 and are
not removable. Id. at 1154. Given the
“extraordinary pre-emptive power” of §
502(a), Ms. Sutton's motion to remand must be denied.
Aetna Health, 542 U.S. at 209.
THEREFORE, IT IS ORDERED that Ms. Sutton's Motion to
Remand (ECF No. 17) ...