The opinion
CUENNTITREADL S DTIASTTERSIC DTI SOTFR CICATL ICFOOURRNTIA
CIVIL MINUTES - GENERAL
Case No. CV 20-0010-GW-ASx Date April 10, 2020
Title Amir Pirouzian v. Children Specialists of San Diego, et al.
Present: The Honorable GEORGE H. WU, UNITED STATES DISTRICT JUDGE
Javier Gonzalez None Present
Deputy Clerk Court Reporter / Recorder Tape No.
Attorneys Present for Plaintiffs: Attorneys Present for Defendants:
None Present None Present
PROCEEDINGS: IN CHAMBERS - RULING ON PLAINTIFF'S MOTION TO REMAND
[16]; and DEFENDANT'S MOTION TO DISMISS ACTION FOR
FAILURE TO STATE A CLAIM [10]
The Court finds that the present motions can be decided without the need for oral argument,
especially given the lack of a filing of any opposition to the Motion to Remand. Therefore, pursuant to
C.D. Cal.L.R. 7-15, the April 13, 2020 hearing date is taken off-calendar. Based on the foregoing
discussion, the Court GRANTS Pirouzian’s Motion to Remand and DENIES CSSD’s Motion to Dismiss
as now moot. This case is ordered remanded back to state court forthwith.
:
Amir Pirouzian v. Children Specialists of San Diego et al; Case No. 2:20-cv-00010-GW-(ASx)
Ruling on: (1) Motion to Remand and (2) Motion to Dismiss
I. Background
Plaintiff Amir Pirouzian (“Pirouzian”) alleges that defendants Children Specialists of San
Diego (“CSSD”) and Northwestern Mutual Life Insurance Company (“NMLIC” and, together
with CSSD, “Defendants”) “wrongfully, mistakenly, or falsely instructed [Pirouzian] as to how
he could receive disability benefits.” See Complaint (“Compl.”) ¶ 3, Docket No. 1-1, Exh. A.
Before the Court are Pirouzian’s Motion to Remand and CSSD’s Motion to Dismiss.
A. Factual Background
Pirouzian brings a single claim for declaratory relief concerning benefits he received
through his disability insurance plan. He alleges that CSSD formerly employed him as a
licensed medical doctor. Id. ¶ 3. Due to an “extreme disability affecting his mental and
emotional well-being,” CSSD placed Pirouzian on disability status. Id. During this time,
Pirouzian received benefits from his disability insurance plan, which NMLIC acknowledges it
issued to CSSD. See Notice of Removal (“NoR”) ¶¶ 10-11, Docket No. 1. CSSD ultimately
terminated Pirouzian’s employment. Compl. ¶ 3.
For its part, CSSD alleges that Pirouzian engaged in insurance fraud. See Motion to
Dismiss (“MTD”), Docket No. 10. In its MTD, CSSD alleges that Pirouzian stopped working at
CSSD back in August 2006 because of depression and anxiety. Id. at 3. CSSD placed Pirouzian
on disability twice, with the second period beginning on July 1, 2007. Id. In December 2006,
while on leave, Pirouzian applied for and ultimately accepted a full-time position with Kaiser
Permanente Medical Center (“Kaiser”). Id. at 4. Pirouzian began working for Kaiser on July 16,
2007. Id. Even after starting work at Kaiser, Pirouzian repeatedly informed NMLIC that he was
unable to work due to his disability, and so continued to receive disability payments. After
NMLIC learned of Pirouzian’s employment with Kaiser, it asked Pirouzian to reimburse more
than $18,500 in disability payments and referred the matter to the California Department of
Insurance. Id. at 5. The department began an investigation into Pirouzian, and a criminal
complaint was filed, charging Pirouzian with presenting a false claim for insurance benefits.
After that complaint was filed, Pirouzian paid $10,700 back to NMLIC. Id. Pirouzian pled
guilty to a misdemeanor, agreed to pay restitution to the Department of Insurance and fines, and
had his conviction expunged. Id. at 5-6. In 2013, the local medical board initiated
administrative proceedings against Pirouzian, which led to his medical license being revoked.
Id. at 6. Afterwards, Pirouzian filed an ultimately unsuccessful state action to try reinstate his
medical license. Id. at 7-9.
B. Procedural History
Pirouzian filed the Complaint in this case on March 6, 2019, in Los Angeles County
Superior Court. He seeks declaratory relief to resolve the dispute over his disability benefits,
including a resolution of the following issues: (1) whether CSSD terminated Pirouzian’s
employment based on incomplete, mistaken, or false information; (2) whether NMLIC’s dispute
over Pirouzian’s disability claims was based on incomplete, mistaken, or false information; and
(3) whether Pirouzian’s receipt of disability benefits constituted misconduct of any kind. See id.
¶ 6(A)-(C). In addition, Pirouzian seeks “an accounting of all disability benefits which
Defendants allege constitute any form of misconduct by [him],” and a “declaration that
[Pirouzian]’s termination from employment and/or receipt of disability benefits did not rise to
the level of willful, intentional, deceitful or fraudulent misconduct of any kind.” Id.
NMLIC, with CSSD’s consent, removed the case to federal court on January 2, 2020.
NMLIC argued that removal was proper because Pirouzian’s claim is completely preempted by
the civil enforcement provisions of Section 502(a) of the Employment Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a). NoR ¶ 23. CSSD, on January 8, 2020,
filed the MTD for failure to state a claim. See MTD. Pirouzian filed the instant Motion to
Remand on January 31, 2020, arguing that his claim does not fall within the scope of ERISA §
502(a). See Motion to Remand (“Mot.”), Docket No. 16. On March 17, 2020, the Court,
pursuant to a joint stipulation from Pirouzian and NMLIC, dismissed NMLIC with prejudice
from the case. See Docket No. 21. CSSD, the lone remaining defendant, did not oppose
Pirouzian’s motion to remand.
II. Legal Standard
Federal courts operate under the presumption that they do not have jurisdiction over
state-law causes of action. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994).
The party seeking removal has the burden of showing that the federal court has jurisdiction over
the matter and that removal is proper. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
Federal courts strictly construe the removal statute against removal jurisdiction, id., and must
reject jurisdiction “if there is any doubt as to the right of removal in the first instance.” Libhart
v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979).
III. Discussion
A. Complete Preemption
ERISA can preempt state law in two ways: “complete preemption” and “conflict
preemption.” The former transforms state-law claims into federal claims; the latter allows a
defendant to “defeat a plaintiff’s state-law claim on the merits by asserting the supremacy of
federal law as an affirmative defense.” Cmty. State Bank v. Strong, 651 F.3d 1241, 1261 n.16
(11th Cir. 2011). The difference between the two is critical here, because while the former can
form the basis for removal jurisdiction, the latter generally cannot.
Complete preemption under ERISA § 502(a) is “really a jurisdictional rather than a
preemption doctrine, [as it] confers . . . 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.”
Franciscan Skemp Healthcare, Inc. v. Cent. States Joint Bd. Health & Welfare Trust Fund, 538
F.3d 594, 596 (7th Cir.2008). The Supreme Court first articulated the doctrine of complete
preemption under ERISA § 502(a) as a basis for federal-question removal jurisdiction under 28
U.S.C. § 1441(a) in Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987). The
Supreme Court held that Section 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. at 63–64. The consequence of this complete preemption is that the claims within
Section 502(a)’s scope, regardless of how they are pled, are necessarily federal and therefore
removable. Complete preemption removal is an exception to the rule that a “plaintiff is
ordinarily entitled to remain in state court so long as its complaint does not, on its face,
affirmatively allege a federal claim.” Pascack Valley Hosp. v. Local 464A UFCW Welfare
Reimbursement Plan, 388 F.3d 393, 398 (3d Cir.2004).
Conflict preemption under ERISA § 514(a) is a true preemption doctrine that may be
raised as an affirmative defense against state-law claims. However, the general rule is that a
defense of federal preemption of a state-law claim, even conflict preemption under ERISA §
514(a), is an insufficient basis for original federal question jurisdiction under 28 U.S.C. §
1331(a) and removal jurisdiction under 28 U.S.C. § 1441(a). See Marin Gen. Hosp. v. Modesto
& Empire Traction Co., 581 F.3d 941, 945 (9th Cir. 2009).
Defendants, as the parties seeking removal1 based on federal-question jurisdiction, must
show that Pirouzian’s claim is completely preempted by Section 502(a), and that is what NMLIC
attempted to argue in its notice of removal. NoR ¶ 22 (“ERISA provides the exclusive federal
remedy for the enforcement of rights and obligations. See [Section 502(a)].”) However, NMLIC
conflated Section 514(a)’s conflict preemption with Section 502(a)’s complete preemption, when
it stated that the removability issue turned on whether Pirouzian’s claim “relates to” an ERISA
plan.2 To establish that a plaintiff’s claim is completely preempted by Section 502(a), a
defendant must show that: (1) plaintiff, “at some point in time, could have brought [the] claim
under ERISA [Section 502(a)(1)],” and (2) “there is no other independent legal duty that is
implicated by [the] defendant’s actions.” Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004).
B. The Davila Analysis
The first requirement for complete preemption is that the plaintiff’s claim could have
been brought under Section 502(a), which provides in relevant part:
A civil action may be brought −
(1) by a participant or beneficiary −
(A) for the relief provided for in subsection (c) of this section, or
(B) to recover benefits due to him under the terms of his plan, to enforce his rights
under the terms of the plan, or to clarify his rights to future benefits under the
terms of the plan;
29 U.S.C. § 1332(a). Section 502(a)(1)(A) is not applicable here.3 At issue is whether
Pirouzian’s claim could have been brought under Section 502(a)(1)(B). Pirouzian argues that it
could not, because he seeks only “a declaration of his rights, that he did not commit fraud in
receiving his past benefits.” Mot. at 5. The Court agrees that Pirouzian’s claim is not, in
essence, a claim for the recovery of an ERISA benefit plan.
The Court would initially note that Pirouzian’s Complaint does contain some ambiguous
1 As noted earlier, NMLIC filed, with CSSD’s consent, the notice of removal. NMLIC has since been
dropped from this action.
2 The notice of removal discusses Section 514(a)’s conflict preemption, stating that “[a]ll state law causes
of action that ‘relate to’ ERISA plans are completely preempted and are properly dismissed.” NoR ¶ 23. NMLIC
ported Section 514(a)’s “relate to” analysis over to Section 502(a), a mistake that the Ninth Circuit acknowledges it
may share some blame for. See Marin Gen. Hosp., 581 F.3d at 945-46 (“We may have been partially responsible for
the parties’ confusion between complete preemption under § 502(a), which provides a basis for federal question
removal jurisdiction, and conflict preemption under § 514(a), which does not.”)
3 That provision concerns an administrator’s refusal to supply certain information mandated by law.
language in regards to the scope of the declaration which he is seeking. While Plaintiff’s
declaratory relief request does seek determinations which are unrelated to ERISA (e.g., the
propriety of CSSD’s termination of his employment), the Complaint does claim that:
Defendants CSSD and NWM wrongfully, mistakenly, or falsely instructed Plaintiff as to
how he could receive disability benefits. Plaintiff relied on the information Defendants provided
to him. * * * *
[There is a current dispute as to] Whether NMI's pending dispute over the validity of
Plaintiff's disability insurance payments, was based on wrongful, mistaken or even fraudulent
information . . . .”
See Docket No. 1-1 at 10-11 of 73. Nevertheless, in his Motion to Remand, Plaintiff makes it
clear that he does not allege or seek “to recover benefits due to him under the terms of his plan,
to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under
the terms of the plan.” See Docket No. 16 at 5 of 6.
As recounted earlier, Pirouzian already reimbursed NMLIC and paid restitution to
California’s Department of Insurance. At this point, Pirouzian does not seek payment of
benefits, but is focused on challenging the findings in the criminal case and administrative
proceedings that he acted dishonestly when he lied about his employment status to CSSD and
NMLIC. See, e.g., Byars v. Greenway, 14-1181, 2014 WL 7335694 (W.D. Tenn. Dec. 19, 2014)
(finding that plaintiff’s state-law claim was not within the scope of Section 502(a)(1)(B), in large
part because she was not “seek[ing] to be reinstated as a beneficiary or for payment of previously
accrued benefits”).
NMLIC (while it was still a party in this action) and CSSD have not filed an opposition
to the Motion to Remand, nor have they otherwise challenged Plaintiff’s characterization of the
scope of his Complaint. Also, under C.D. Cal. L.R. 7-12, the “failure to file any required paper .
. . may be deemed consent to the granting . . . of the motion. Therefore, the Court finds that the
first prong is not met. As a result, there is no need to examine the second prong, and the Court
concludes that Pirouzian’s claim is not completely preempted. Remand is therefore proper, since
the Court lacks subject matter jurisdiction.
In addition to seeking remand, Pirouzian also asks for attorney fees and costs associated
with the removal pursuant to 28 U.S.C. § 1447(c). That section provides that “[a]n order
remanding the case may require payment of just costs and any actual expenses, including
attorney fees, incurred as a result of the removal.” The Supreme Court has stated that “the
standard for awarding fees should turn on the reasonableness of the removal. Absent unusual
circumstances, courts may award attorney’s fees under § 1447(c) only where the removing party
lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Capital Corp.,
546 U.S. 132, 141 (2005). The Court does not find that Defendants’ reasons for removing the
case were objectively unreasonable, especially given the somewhat loose language of the
Complaint as to what Plaintiff was seeking in regards to the declaration in this lawsuit. “[T]here
is no reason to suppose Congress meant to confer a right to remove, while at the same time
discouraging its exercise in all but obvious cases.” Id. at 140. Therefore, the Court declines
Pirouzian’s request for attorney fees and costs.
IV. Conclusion
The Court finds that the present motions can be decided without the need for oral
argument, especially given the lack of a filing of any opposition to the Motion to Remand.
Therefore, pursuant to C.D. Cal.L.R. 7-15, the April 13, 2020 hearing date is taken off-calendar.
Based on the foregoing discussion, the Court GRANTS Pirouzian’s Motion to Remand
and DENIES CSSD’s Motion to Dismiss as now moot. This case is ordered remanded back to
state court forthwith.