Petition for Writ of Certiorari — G. A. B. Services, Inc. v. Cooper

Supreme Court, U.S. )

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QEFIGE OF THE SLERK |

In The

Supreme Court of the United States

October Term, 1990

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G.A -. SERVICES, INC.,

Petitioner,

WILLIAM C. COOPER; and NATIONAL

UNION FIRE INSURANCE COMPANY

OF PITTSBURGH, PENNSYLVANIA,

Respondents.

_ +

Petition For Writ Of Certiorari To The United

States Court Of Appeals For The Tenth Circuit

¢

PETITION FOR WRIT OF CERTIORARI

S

MARTHANDA J. BECKWORTH

Counsel of Record

THomas, GLass, ATKINSON, HASKINs,

Neus & BOUDREAUX

525 South Main, Suite 1500

Tulsa, OK 74103

(918) 582-8877

Attorneys for Petitioner

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

The United States District Court for the Northern

District of Oklahoma remanded this removed action,

holding that it “arises under the workmen’s compensa-

tion laws of the State of Oklahoma,” and thus, is not

removable pursuant to 28 U.S.C. § 1445(c). The Tenth

Circuit held that it did not have jurisdiction to consider

the appeal of the district court ruling, pursuant to 28

U.S.C. § 1447(d). The questions presented are:

1. Whether the Tenth Circuit’s opinion incorrectly

fails to take into account the Thermtron Products, Inc. v.

Hermansdorfer, 423 U.S. 336 (1976), exception to 28 U.S.C.

§ 1447(d) whereby extraordinary remedies are available

to litigants whose actions are improperly remanded?

2. Whether § 1447(d) is unconstitutional insofar as it

deprives a certain class of litigants of their recourse to

appellate courts?

- 2 N

ii

PARTIES TO THE PROCEEDING

G.A.B. Services, Inc.

William C. Cooper

National Union Fire Insurance Company of Pitts-

burgh, Pennsylvania

LIST OF AFFILIATED CORPORATIONS

C.H.& A., Inc.

I.N.S. Investigations

Inter-Modal Technical Services, Inc.

Inter-Modal Trasportation Services, Inc.

iii

TABLE OF CONTENTS

Page

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PARTIES TO THE PROCEEDING .................. ii

AFFILIATED CORPORATIONS..................5.- ii

ced yee dsc ksi veseereséseceutes 1

a ed 6 6d uS or vv cece tceduevevesbes 2

CONSTITUTIONAL AND STATUTORY PROVI-

eens ynensetneceesesersecss 2

DEMnmeeeeen Ke Bbte CASE... 0... ieee cece ee eeee 2

REASONS FOR BRINGING THE PETITION........ 4

I. THE TENTH CIRCUIT’S FAILURE TO GRANT

AN EXTRAORDINARY REMEDY IN THIS CASE

CONFLICTS WITH THIS COURT’S DECISION

IN THERMTRON PRODUCTS, INC. V. HER-

da wi oy na dida eecssvedesesee. 4

II. 28 U.S.C. § 1447(d) UNCONSTITUTIONALLY

DEPRIVES A CERTAIN CLASS OF LITIGANTS

OF THEIR ACCESS TO APPELLATE COURTS,

THUS REQUIRING GRANTING OF THIS PETI-

TION SO THAT THIS COURT CAN CONSIDER

THIS IMPORTANT JURISDICTIONAL ISSUE... 6

see eel ees escesssecesces¥euees 10

Cours Ge Appesis Opinion ..................05. App. 1

OI TE ONO. ccc ccc ce cveceeese App. 3

en App. 7

rs ec ivcasersesbebveeneas App. 8

yon 5 5b ees vec sessecrvicness App. 8

ES WF oi viv sv van vevevcs caves el App. 10

iv

TABLE OF AUTHORITIES

Boddie v. Connecticut, 91 S.Ct. 780 (1971)..........

Bor-Son Building Corp. v. Heller, 572 F.2d 174 (8th

CO ake ¢

California Motor Transport Co. v. Trucking Unlimited,

See a ee IN wat > Kien peace Cabo hinlin c40> o>

Jones v. Newton, 775 F.2d 1316 (5th Cir. 1985).....

Maher v. City of New Orleans, 516 F.2d 1051 (5th

Ca SE ad ah OU Cb eatin 6 occ phd volta sb tase 6'v's

Mahone v. Addickes Utility District of Harris County,

GG Fe SA Gee, Bcc ccc cctccecéccces.

Mathews v. deCastro, 429 U.S. 181, 182 (1976).....

Prescott v. United States, 523 F.Supp. 918 (D.C. Nev.

EE SF oP aS Se Rat, Ge eee

Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.

kee pres a re eee

No.

In The

Supreme Court of the United States

October Term, 1990

+

G.A.B. SERVICES, INC.,

Petitioner,

WILLIAM C. COOPER; and NATIONAL

UNION FIRE INSURANCE COMPANY

OF PITTSBURGH, PENNSYLVANIA,

Respondents.

¢

Petition For Writ Of Certiorari To The United

States Court Of Appeals For The Tenth Circuit

o

PETITION FOR WRIT OF CERTIORARI

¢

G.A.B. Services, Inc. respectfully petitions for a Writ

of Certiorari to review the Order of the United States

Court of Appeals for the Tenth Circuit in this case.

*

OPINIONS BELOW

The opinion of the Court of Appeals (App. 1) is

unreported. The opinion of the district court (App. 3) is

unreported.

JURISDICTION

The Order of the Court of Appeals was entered on

March 1, 1991. Petitions for rehearing were not filed in

this matter. On May 30, 1991, Justice White extended the

time for filing a Writ of Certiorari to, and including, July

1, 1991. The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1).

¢

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The statutory provisions involved are 28 U.S.C.

§ 1441; 28 U.S.C. § 1445; 28 U.S.C. § 1447; and U.S. Const.

Amend. V, which are fully set forth in the Appendix.

¢

STATEMENT OF THE CASE

This is an action sounding in bad faith refusal to pay

insurance benefits and intentional infliction of emotional

distress. The action was originally brought in the District

Court of the State of Oklahoma in Tulsa County. The

matter was timely removed by Petitioner, G.A.B. Services,

Inc. Removal was appropriate because of diversity juris-

diction based on 28 U.S.C. § 1441(a), and 28 U.S.C. § 1332.

This action arose when Respondent, Cooper, an

employee of Loffland Brothers, was injured in the course

of his employment, on January 10, 1985. Cooper filed a

worker’s compensation claim against his employer on

September 12, 1986, and was awarded disability pay-

ments on October 31, 1988. In this action, Cooper alleged

that Respondent, National Union Fire Insurance Com-

pany of Pittsburgh, Pennsylvania, and Petitioner, G.A.B.

Services, Inc., the administrator of the benefits, wrong-

fully refused to make the payments ordered by the Okla-

homa Worker’s Compensation Court on October 31, 1988.

As noted above, the action was originally brought in

state court, and was removed to the United States District

Court for the Northern District of Oklahoma. Simul-

taneously with the filing of removal papers, Petitioner

filed a motion to dismiss, arguing that the Oklahoma

Worker’s Compensation Court had exclusive jurisdiction

over this matter. Cooper filed an objection to the motion

to dismiss, as well as a motion to remand, arguing that

this action was one that “arises under” the Oklahoma

Workmen’s Compensation Act, and was, therefore, not

removable pursuant to 28 U.S.C. § 1445(c). On June 7,

1990, the trial court ordered that this matter be remanded

to state court. G.A.B. Services, Inc., filed a notice of

appeal on July 6, 1990.

During the course of the appeal, Respondent, Cooper,

filed a motion to dismiss the appeal and a request for

sanctions. This motion to dismiss was based on 28 U.S.C.

§ 1447(c) and (d). The Tenth Circuit, on September 17,

1990, required that memorandum briefs be filed by all

parties in support of their respective positions on the

jurisdictional issue. Petitioner filed a memorandum brief

arguing that, while a direct appeal may not be possible,

the circumstances warranted an extraordinary remedy,

and that the application of 28 U.S.C. § 1447(d) was uncon-

stitutional in that it violated Petitioner’s right to equal

protection under the law and deprived Petitioner of its

recourse to an appellate court. The Tenth Circuit dis-

missed the appeal, hoiding that an extraordinary remedy

was not warranted. In its Order, the Tenth Circuit did not

consider Petitioner’s argument that the application of

§ 1447(d) was unconstitutional.

®

REASONS FOR GRANTING THE PETITION

I.

THE TENTH CIRCUIT’S FAILURE TO GRANT AN

EXTRAORDINARY REMEDY IN THIS CASE CON-

FLICTS WITH THIS COURT’S DECISION IN

THERMTRON PRODUCTS, INC. V. HERMANSDORFER

The Tenth Circuit had jurisdiction to consider the

trial court’s erroneous remand of this action pursuant to

its power to grant extraordinary remedies. In its mem-

orandum brief on appellate jurisdiction, Petitioner

pointed out that, pursuant to Thermtron Products, Inc. v.

Hermansdorfer, 423 U.S. 336 (1976), an extraordinary rem-

edy is available when the trial court removes on improper

grounds. The Tenth Circuit’s failure to consider this mat-

ter through its power to grani an extraordinary remedy

was in direct contravention of this Court’s holding in

Thermtron Products.

In Thermtron Products, this Court held that an appel-

late court would have jurisdiction to consider the remand

of a case to state court when the remand was issued on

impreper grounds. Under the facts of Thermtron Products,

the Defendant had properly removed the case from state

court, and the plaintiffs moved to remand. The federal

district court remanded the case because of its crowded

docket. The defendant filed a petition for writ of man-

damus or prohibition with the appropriate appellate

court. The Court of Appeals for the Sixth Circuit denied

the Petition, concluding that it had no jurisdiction to

review the order of remand because of the prohibition

against appellate review contained in 28 U.S. § 1447(d),

which expressly holds that an order remanding a case is

not reviewable on appeal or otherwise. However, this

Court granted the Petition for Certiorari and reversed the

order of the Court of Appeals, holding that the district

court exceeded its authority in remanding on grounds not

permitted by the controlling statute and that Petitioner

was entitled to an extraordinary remedy in this instance.

Id. at 345.

In the present case, the trial court similarly exceeded

its authority in remanding this action rather than in dis-

missing it. The trial court had previously held that

actions for bad faith refusal to pay insurance benefits lie

within the exclusive jurisdiction of the Workmen’s Com-

pensation Court of the State of Oklahoma. (See, App. 11.)

Consistent with this holding, the trial court correctly

should have dismissed the action rather than remanding

it to state court.

It is elementary that a court should only remand an

action to state court if the state court has jurisdiction. In

Bor-Son Building Corp. v. Heller, 572 F.2d 174 (8th Cir.

1978), the court affirmatively stated the corollary of this

rule. In that case, the court stated that it was not proper

for a federal court to dismiss a removed claim if the

federal court found that a state court would have jurisdic-

tion over those same claims. Similarly, in Jones v. Newton,

775 F.2d 1316 (Sth Cir. 1985), the court held that a remand

should not be ordered unless the state court could pro-

ceed to act on the claims once it was remanded.

The trial court remanded this action to state court, a

court which did not have jurisdiction over the matter.

Thus, the trial court exceeded its authority in remanding

rather than dismissing, and an extraordinary remedy was

warranted by the Tenth Circuit. Failure to grant such an

extraordinary remedy is in direct contravention to the

hoiding in Thermtron Products, and warrants the granting

of a Petition for Certiorari to the Court of Appeals for the

Tenth Circuit by this Court.

II. 28 U.S.C. § 1447(d) UNCONSTITUTIONALLY

DEPRIVES A CERTAIN CLASS OF LITIGANTS OF

THEIR ACCESS TO APPELLATE COURTS, THUS

REQUIRING GRANTING OF THIS PETITION SO

THAT THIS COURT CAN CONSIDER THIS

IMPORTANT JURISDICTIONAL ISSUE

The granting of the Petition for Certiorari in

Thermtron Products, demonstrates that this Court wi!!

grant certiorari under its supervisory powers to consider

important jurisdictional issues. The Tenth Circuit’s failure

to consider the improper remand of this matter presents a

similar need for review of an important jurisdictional

issue. The application of § 1447(d), such as was made by

the Tenth Circuit, results in an unconstitutional depriva-

tion of access to an appellate court. The application of 28

U.S.C. § 1447(d) is unconstitutional under these circum-

stances both because it deprived Petitioner of equal pro-

tection under the law as well as due process.!

1 It is well settled that the Fifth Amendment's due process

clause encompasses equal protection principles. Mathews v.

(Continued on following page)

The result of the application of § 1447(d) in this

instance is that Petitioner is denied any type of appellate

review by nature of having removed the case to federal

court. If Petitioner had been a defendant in a similar case

originally brought in federal court, Petitioner would have

a clearly established appellate right on jurisdictional

issues. Here Petitioner is deprived of that right and of

equal protection under the law. Interestingly, this equal

protection problem was recognized by the Tenth Circuit

in its order dismissing the action. In its order, the court

stated as follows:

Notwithstanding this, had the case originally

been lodged in federal court, citizenship diver-

sity would have been sufficient to vest the court

with jurisdiction to hear the matter. Prescott v.

United States, 523 FSupp. 918 (D.C. Nev. 1981)

(App. 4, n. 2).

As was noted by the trial court, § 1447(d) works to

prevent appellate review of this action when, if the action

had not been removed, review would be available.

Such a distinction between removal jurisdiction and

original jurisdiction denies equal protection under the

law to Petitioner. The type of equal protection violation

which occurs here was discussed at length in Mahone v.

Addickes Utility District of Harris County, 836 F.2d 921 (5th

Cir. 1988). That court stated as follows:

(Continued from previous page)

de Castro, 429 U.S. 181, 182 (1976). Both the right to due process

and to equal protection of the law claimed by Petitioner are

based on U.S.Const.Amend.V (App. 10).

The equal protection clause essentially requires

that all persons similarly situated be treated

alike. . . . Because the clause’s protection reaches

only dissimilar treatment among similar people,

if the challenged government action does not

appear to classify or distinguish between two or

more relevant persons or groups, then the action

does not deny equal protection of the laws.

Id. at 932 (citations omitted)

In the present case, the statute on its face does not

appear to be discriminatory. However, the statute, as

applied, deprives the defendant in a removed case of the

right to appellate review of the subject matter jurisdiction

when the defendant in a case which was originally

brought in federal court would have that right to appel-

late review. Such a distinction violates the constitutional

rights of Petitioner.

A due process analysis also reveals the constitutional

problems with 28 U.S.C. § 1447(d). A due process analysis

requires this court to determine whether the stated pur-

pose to be served is legitimate and, if so, whether the

means chosen to accomplish the purpose are reasonable

and not arbitrary. See, Maher v. City of New Orleans, 516

F.2d 1051 (5th Cir. 1975). Here, the purpose of 28 U.S.C.

§ 1447(d) appears to be the management of the appellate

court’s docket, but the Court in Thermtron Products, recog-

nized that this is not always a legitimate purpose. Cer-

tainly, it cannot be argued that to choose removed cases

for such a deprivation of relief in the appellate courts,

rather than other types of cases, is nothing short of an

arbitrary determination without any foundation in law.

As has been demonstrated, 28 U.S.C. § 1447(d) pre-

sents a serious constitutional problem. This Court should,

in the present instance, grant the petition for writ of

certiorari to review this matter because of the important

interest at stake. Petitioner, as well as others similarly

affected is being deprived of its access to this Court. Such

a deprivation is clearly a due process violation. The right

to access to courts is a constitutional right. See, e.g.,

California Motor Transport Co. v. Trucking Unlimited, 404

U.S. 508 (1972). Not only must Petitioner have access to

courts, but Petitioner must also have access at a meaning-

ful time in a meaningful manner. See, Boddie v. Conneticut,

401 U.S. 220 (1971). Failure to allow access to the appel-

late courts deprived Petitioner of access to courts “in a

meaningful manner.”

Petitioner is being deprived of its access to federal

courts because Petitioner is deprived of appellate review

of an erroneous ruling by the district court. This is a

matter of significant interest not only in this particular

case, but to all persons who exercise their right of remov-

ing a case to federal court pursuant to 28 U.S.C. § 1441.

Moreover, it is an important question as to the parameters

of federal appellate court jurisdiction. Thus, Petitioner

urges that certiorari be granted in order that this Court

may review the constitutionality of 28 U.S.C. § 1447(d).

-

10

CONCLUSION

The Petition for Writ of Certiorari should be granted.

Respectfully submitted,

THomas, GLass, ATKINSON, HASKINS,

Ne.us & BoupREAUX

MARTHANDA J. BECKWORTH

525 South Main, Suite 1500

Tulsa, OK 74103

(918) 582-8877

App. 1

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

WILLIAM C. COOPER,

Plaintiff-Appellee,

No. 90-5141

v.

NATIONAL UNION FIRE

INSURANCE COMPANY OF

PITTSBURGH, PENNSYLVANIA,

Defendant,

and

G.A.B. SERVICES, INC.,

Defendant-Appellant.

i

ORDER

Filed: March 1, 1991

Before McKAY, BALDOCK and EBEL, Circuit Judges.

This matter comes on for consideration of the appel-

lee’s motion to dismiss and request for sanctions and the

response filed thereto.

Upon consideration thereof, the motion to dismiss is

granted. A remand order is not reviewable by appeal or

otherwise where the remand is based on the district

court’s determination that it is without jurisdiction. See 28

U.S.C. § 1447(d); Gravitt v. Southwestern Bell Telephone Co.,

App. 2

430 U.S. 723 (1977) (per curiam); Thermtron Products, Inc.

v. Hermansdorfer, 423 U.S. 336 (1976). The appellee’s

request for sanctions is denied.

APPEAL DISMISSED.

Entered for the Court

/s/ Robert L. Hoecker

ROBERT L. HOECKER, Clerk

App. 3

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA

WILLIAM C. COOPER, Case No.

Plaintiff, 90-C-2-B

vs. (Filed

NATIONAL UNION FIRE June 7, 1990)

)

)

)

)

)

INSURANCE COMPANY OF .

PITTSBURGH, PLNNSYLVANIA; }

and G.A.B. SERVICES, INC., )

)

Defendants.

ORDER

This matter comes on for consideration upon the

Motion to Remand filed by Plaintiff, William C. Cooper.

Additionally considered is the Motion to Dismiss, filed by

the Defendants, National Union Fire Insurance Company

of Pittsburgh, Pennsylvania and G.A.B. Services, Inc..

This action was initially filed in the District Court for

Tulsa County, State of Oklahoma, the Plaintiff alleging

bad faith insurance practices and intentional/negligent

infliction of emotional distress. The matter grew out of a

Workers’ Compensation claim made by Plaintiff due to an

injury suffered while an employee of Loffland Brothers, a

corporation located in Tulsa, Oklahoma. Loffland

Brothers was insured by Defendant National Union Fire

Insurance Company, with Defendant G.A.B. administer-

ing the workers’ compensation benefits under the policy.

Plaintiff alleges Defendants failed to continue payments

due him under the Workers’ Compensation Award.!

1 Plaintiff was awarded permanent disability benefits for

317.5 weeks at a rate of $163.00 per week, a total of $51,752.50,

plus medical benefits and vocational rehabilitation benefits.

App. 4

Defendants removed the matter to this court alleging

diversity of citizenship and an amount in dispute being

in excess of $50,000.00 Defendants simultaneously filed a

Motion to Dismiss based upon lack of subject matter

jurisdiction. The gravamen of Defendants’ dismissal

effort is that the Workers’ Compensation Court of the

State of Oklahoma has exclusive jurisdiction of cases

arising out of state workmen’s compensation laws.

Defendants have positioned themselves contradic-

torily. Either their removal from state court was improper

or their current motion to dismiss is meritless.

Defendants could only validly remove this matter to

federal court if it was not an action arising under the

workmen’s compensation laws of the State of Oklahoma.

Civil actions arising under the state workmen’s compen-

sation laws are nonremovable. 28 U.S.C. §1445 (c). Diver-

sity of citizenship does not abrogate §1445.2 However, it

has been held §1445 does not prevent removal from a

state court of an action which involves another states

workmen’s compensation laws. See Jackson v. Diamond M

Co., D.C. Miss 1983, 575 F. Supp. 995, where an action ina

Mississippi state court arising under the workmen’s com-

pensation laws of Louisiana was held removable to fed-

eral district court. The Jackson Court concluded that

§1445, prohibiting removal of workmen’s compensation

2 Notwithstanding this, had the case originally been

lodged in federal court, citizenship diversity would have been

sufficient to vest the Court with jurisdictior to hear the matter.

Prescott v. U.S. D.C. Nev. 1981, 523 F.Supp 918, affirmed 731

F.2d 1388.

App. 5

cases, applied only to actions arising under that forum

state’s compensation laws.

In the instant matter, the threshold issue is whether

Plaintiff's claim arises under the workmen’s compensa-

tion laws of the State of Oklahoma. Apparently there is

no dispute that Plaintiff has received all of the compensa-

tion award due him.? Plaintiff argues that facts giving rise

to Plaintiff’s claims for bad faith insurance practices and

intentional infliction of emotional distress are directly

connected to and arose under the payment of a Workers’

Compensation Order. The Court agrees. In a similar case,

this Court ruled that the Oklahoma Workers’ Compensa-

tion Act provides the exclusive remedy for all claims of

an injured worker until the Oklahoma legislature pro-

vides otherwise. Joseph Edwin Roberts, et al vs. Commercial

Union Insurance Company, Case No. 88-C-540-B, D.C. N.D.

of Oklahoma, Order entered October 20, 1988.

Having determined Plaintiff’s claims arise under the

Workers’ Compensation laws of the State of Oklahoma,‘

the Court is logically drawn to the conclusion that

removal from state court was improvident and remand

should be granted.

3 The Workers’ Compensation Court entered an Order

requiring the insurance carrier to pay the remainder of the

award in a lump sum which the Court presumes, has been

done in that the parties treat the matter as a fait accompli.

4 Defendant attempts to tenuous distinction between a

claim arising under the Workers Compensation laws and a

claims arising out of a Workers’ Compensation suit. The Court

finds this distinction, under these facts, disingenuous.

App. 6

It will be the Order of the Court that this matter be

and the same is hereby REMANDED to the District Court

for Tulsa County. Defendant’s Motion to Dismiss is there-

fore OVERRULED as moot.

IT IS SO ORDERED this 7th day of June, 1990.

/s/ Thomas R. Brett

THOMAS R. BRETT

UNITED STATES DISTRICT

JUDGE

ee ee, es ee ee Pe eee ey

App. 7

§ 1441. Actions removable generally

(a) Except as otherwise expressly provided by Act

of Congress, any civil action brought in a State court of

which the district courts of the United States have origi-

nal jurisdiction, may be removed by the defendant or the

defendants, to the district court of the United States for

the district and division embracing the place where such

action is pending. For purposes of removal under this

chapter, the citizenship of defendants sued under ficti-

tious names shall be disregarded.

(b) Any civil action of which the district courts have

original jurisdiction founded on a claim or right arising

under the Constitution, treaties or laws of the United

States shall be removable without regard to the citizen-

ship or residence of the parties. Any other such action

shall be removable only if none of the parties in interest

properly joined and served as defendants is a citizen of

the State in which such action is brought.

(c) Whenever a separate and independent claim or

cause of action within the jurisdiction conferred by sec-

tion 1331 of this title, is joined with one or more other-

wise non-removable claims or causes of action, the entire

case may be removed and the district court may deter-

mine all issues therein, or, in its discretion, may remand

all matters in which State law predominates.

(d) Any civil action brought in a State court against

a foreign state as defined in section 1603(a) of this title

may be removed by the foreign state to the district court

of the United States for the district and division embrac-

ing the place where such action is pending. Upon

removal the action shall be tried by the court without

App. 8

jury. Where removal is based upon this subsection, the

time limitations of section 1446(b) of this chapter may be

enlarged at any time for cause shown.

(e) The court to which such civil action is removed

is not precluded from hearing and determining any claim

in such civil action because the State court from which

such civil action is removed did not have jurisdiction

over that claim.

§ 1445. Nonremovable actions

(a) A civil action in any State court against a rail-

road or its receivers or trustees, arising under sections 51

to 60 of Title 45, may not be removed to any district court

of the United States.

(b) A civil action in any State court against a com-

mon carrier or its receivers or trustees to recover dam-

ages for delay, loss, or injury of shipments, arising under

section 11707 of Title 49, may not be removed to any

district court of the United States unless the matter in

controversy exceeds $10,000, exclusive of interest and

costs.

(c) A civil action in any State court arising under

the workmen’s compensation laws of such State may not

be removed to any district court of the United States.

§ 1447. Procedure after removal generally

(a) In any case removed from a State court, the

district court may issue all necessary orders and process

to bring before it all proper parties whether served by

process issued by the State court or otherwise.

App. 9

(b) It may require the petitioner to file with its clerk

copies of all records and proceedings in such State court

or may cause the same to be brought before it by writ of

certiorari issued to such State court.

(c) A motion to remand the case on the basis of any

defect in removal procedure must be made within 30

days after the filing of the notice of removal under sec-

tion 1446(a). If at any time before final judgment it

appears that the district court lacks subject matter juris-

diction, the case shall be remanded. An order remanding

the case may require payment of just costs and any actual

expenses, including attorney fees, incurred as a result of

the removal. A certified copy of the order of remand shall

be mailed by the clerk to the clerk of the State court. The

State court may thereupon proceed with such case.

(d) An order remanding a case to the State court

from which it was removed is not reviewable on appeal

or otherwise, except that an order remanding a case to

the State court from which it was removed pursuant to

section 1443 of this title shall be reviewable by appeal or

otherwise.

(e) If after removal the plaintiff seeks to join addi-

tional defendants whose joinder would destroy subject

matter jurisdiction, the court may deny joinder, or permit

joinder and remand the action to the State court.

AMENDMENT V

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in the

land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offence to be twice put in

jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor be

deprived of life, liberty, or property, without due process

of law; nor shall private property be taken for public use,

without just compensation.

App. 11

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA

JOSEPH EDWIN ROBERTS and

ANNA LAURA ROBERTS,

Plaintiffs,

)

) No. 88-C-540-B

)

)

vs. )

)

)

)

)

COMMERCIAL UNION

INSURANCE COMPANY,

Defendant.

ORDER

(Filed Oct. 20, 1988)

This matter comes before the Court on Defendant

Commercial Union Insurance Company’s motion to dis-

miss this case for lack of subject matter jurisdiction.

Plaintiff Joseph Edwin Roberts was injured while

working on the job July 8, 1985. His employer, Copeland

Steel Erectors, Inc. had workers’ compensation insurance

with Defendant Commercial Union Insurance Company.

Temporary total disability payments were made from July

8, 1985 to July 22, 1985. Benefits were reinstated on

November 18, 1985 and were terminated December 29,

1986. Plaintiff contends that his benefits were terminated

in December 1986 based on a medical report which he

received in the mail prior to his appointment to see the

doctor who made the report.

Plaintiff filed a worker’s compensation claim in the

Workers’ Compensation Court in September 1987 and

filed the present action in June 1988 for breach of good

faith and fair dealing. Defendant argues that this Court

lacks subject matter jurisdiction over the claim filed in

App. 12

this court and the exclusive remedy lies within the

Workers’ Compensation Court of the State of Oklahoma.

Defendant cites 85 Okl.St.Ann. §§ 11 and 12:

“Every employer subject to the provisions of the

Workers’ Compensation Act shall pay, or pro-

vide as required by the Workers’ Compensation

Act, compensation according to the schedules of

the Workers’ Compensation Act for the disabil-

ity or death of his employee resulting from an

accidental personal injury sustained by the

employee arising out of and in the course of his

employment, without regard to fault as a cause

of such injury. . . . The liability prescribed in

Section 11 of this Title shall be exclusive and in

place of all other liability of the employer and

any of his employees, . . . at common law or

otherwise, for such injury, loss of services, or

death to the employee, .. . ”

The Workers’ Compensation Act provides penalties

for failure to compensate. 85 OkI.St.Ann. §42 states:

“If payment of compensation or an installment

payment of compensation due under the terms

of an award, .. . is not made within ten (10)

days after the same is due... , the Court may

order a certified copy of the award to be filed in

the office of the court clerk and the county clerk

of any county, which award .. . shall be entered

on the judgment docket of the district court, and

shall have the same force and be subject to the

same law as judgments of the district court. Any

compensation awarded and all payments

thereof directed to be made by order of the

Court shall bear interest at the rate of eighteen

percent (18%) per year from the date ordered

paid by the Court until the date of satisfaction.

Upon the filing of the certified copy of the

Court’s award a writ of execution shall issue

and process shall be executed and the cost

App. 13

thereof taxed, as in the case of writs of execu-

tion, on judgments of courts of record, as

rovided by the Code of Civil Procedure of the

tate of Oklahoma. If any insurance carrier

intentionally, knowingly, or wilifully violates

any of the provisions of the Worker’s Compen-

sation Act, the Insurance Commissioner, on the

request of a Judge of the Court or the Adminis-

trator, shall suspend or revoke the license or

authority of such insurance carrier to do a com-

pensation business in this state.”

Rule 14 of the Workers’ Compensation Act provides:

“If the employer fails to continue payment of

temporary compensation benefits after a Form

12 has been properly filed, the trial judge shall,

at the time of trial, order the reinstatement of

such benefits retroactive to the date benefits

were terminated because of the employer’s fail-

ure to follow this court rule. A fifteen percent

(15%) penalty on all unpaid benefits shall be

assessed against the employer at the date of

trial. Further, the employer shall be required to

file another Form 11 and fully comply with this

rule before a trial on the motion to terminate

temporary compensation will be conducted.”

Plaintiff points out that 85 Okl.St.Ann. §101 provides

all penalties under the Workers’ Compensation Act are

paid into the state treasury, not to Plaintiff. Although the

penalty under Rule 14 of the Workers’ Compensation Act

may apply, the Court does not agree that the 18% interest

imposed under 85 Okl.St.Ann. §42 falls under 85

OK1.St.Ann. §101.

Plaintiff points out this is not a claim against his

employer for “such injury, loss of services or death of the

employee” as outlined in the statute, but a claim for

App. 14

recovery for the intentional bad faith breach by the insur-

ance company. The Oklahoma Supreme Court has not

addressed the issue. Other courts have held an indepen-

dent claim for bad faith breach is not under the exclusive

provisions of the Workers’ Compensation laws similar to

Oklahoma’s laws. Aranda v. Insurance Co. of North America,

748 S.W. 2d 210 (Tex. 1988); and Carpentino v. Transport

Insurance Co., 609 F.Supp. 556, 561 (Conn. 1985).

Recently the Supreme Court of Texas in Aranda v.

Insurance Co. of North America, supra, held that first, the

exclusivity provision of the Workers’ Compensation Act

did not include a carrier’s breach of duty of good faith.

The court stated:

“Injury from the carrier’s conduct arises out of

the contractual relationship between the carrier

and the employee and is sustained after the job-

related injury. This court has recognized that an

employee may have one claim against his

employer under the Act and another claim at

common law for an intentional tort.

Accordingly, we hold that the exclusivity provi-

sions of the Worker’s Compensation Act does

not bar a claim against a carrier for breach of the

duty of good faith and fair dealing or inten-

tional misconduct in the processing of a com-

pensation claim. A claimant is permitted to

recover when he shows that the carrier’s breach

of the duty of good faith and fair dealing or the

carrier’s intentional act is separate from the

compensable claim and produced an indepen-

dent injury.” (citations omitted).

Second, the court held the penalty provisions for nonpay-

ment contained within the Workers’ Compensation Act

which are similar to Oklahoma’s did not afford “relief to

App. 15

the claimant when a carrier breaches the duty of good

faith and fair dealing by refusing to pay benefits for a

compensable claim until ordered to do so by the Indus-

trial Accident Board.” The court explained:

“Even if these provisions addressed such mis-

conduct, the Act does not contemplate that the

failure of a carrier to act in good faith or the

carrier’s intentional tort can be meaningfully

redressed by the mere addition of 12% or 15% to

the past due compensation. Such nominal penal-

ties are of questionable value as an incentive for

the carrier to act reasonably in processing an

employee’s claim.”

The Court of Appeals of Oklahoma has specifically

held:

“The Workers’ Compensation statutes were

designed to provide the exclusive remedy for

accidental injuries sustained during the course

and scope of a worker’s employment. The stat-

utes were not designed to shield employers or

co-employees from willful, intentional or even

violent conduct.” Thompson v. Madison Machinery

Co., 684 P.2d 565 (Okla. App. 1984).

The Tenth Circuit Court of Appeals has also held that

the exclusivity of the Act is only for “accidental” injury.

“An ‘intentional’ injury is not ‘accidental’ for

purposes of the Act however and is therefore

not covered by the Act. That being the case an

employer can be held liable at common law for

injuries ‘intentionally’ inflicted on a covered

employee.” Tyner v. Fort Howard Paper Co., 708

F.2d 517 (10th Cir. 1983).

However, Judge Seay in Gilbert v. Home Indemnity Co.,

No. 86-048-C (E.D.Okla. 1986) held that concerning a

claim for bad faith breach of an insurance contract “the

App. 16

Oklahoma Workers’ Compensation Act provides the

exclusive remedy for an injured employee for compensa-

tion against an employer and the employer’s carrier. The

appropriate relief sought by plaintiff against defendant is

under the Oklahoma Workers’ Compensation Act.”

The Tenth Circuit Court of Appeals found that the

New Mexico Workers’ Compensation Act provided the

exclusive remedy for a bad faith denial of a workers’

compensation claim. The court stated “Plaintiff's conten-

tion that the tort claims asserted in this action are sepa-

rate and apart from the Plaintiff’s claims for

compensation under the Workman’s Compensation Act is

without merit.” The court reasoned:

“The Act clearly contemplates that an employer

may deny a workman’s claim for compensation

benefits, but if he does, the Act provides the

workman with a remedy. The remedy is the

same whether the denial is made in good faith

or bad faith.”

Courts in other jurisdictions have reached similar

results. Whitten v. American Mutual Liability, 468 F.Supp.

470 (Dist.S.C. 1977); Young v. United States Fidelity and

Guaranty Co., 588 S.W.2d 46 (Mo. 1979) (However the

Missouri Act doubles the entire award for failure to com-

pensate); Gonzales v. United States Fidelity, 659 P.2d 318

(N.M. 1983); Robertson v. Travelers Insurance Co., 448 N.E.

2d 866 (Ill. 1983).

This Court concludes the Oklahoma Workers’ Com-

pensation Act provides the exclusive remedy for Plaintiff

until the Oklahoma legislature provides alternatives.

Defendant’s motion to dismiss is hereby sustained.

tnt Fe ol a a

a Ne Net er

App. 17

Plaintiff’s appeal of the Magistrate’s protective order

staying discovery pending the outcome of this motion is

moot.

IT IS SO ORDERED this 20th day of October, 1988.

/s/ Thomas R. Brett

Thomas R. Brett

United States District Judge