Opposition Brief — G. A. B. Services, Inc. v. Cooper

WL 29 199)

In The OFFICE OF THE CLERK

Supreme Court of the United States

October Term, 1991

o

G.A.B. SERVICES, INC.,

Petitioner,

VS.

WILLIAM C. COOPER; and NATIONAL

UNION FIRE INSURANCE COMPANY OF

PITTSBURGH, PENNSYLVANIA,

Respondents.

¢

Petition For A Writ Of Certiorari

To The United States Court Of

Appeals For The Tenth Circuit

¢

RESPONDENT’S BRIEF IN OPPOSITION

¢

Jack G. ZuRAWIK

Counsel of Record

MICHAEL R. GREEN

Law Orrices oF DanieEL W. Lowe, P.C.

1401 South Cheyenne

Tulsa, Oklahoma 74119

(918) 582-2500

Attorneys for Respondent

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 “Respondent, William C. Cooper’s claims

arise under the Workers’ Compensation 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 ques-

tions presented are:

1. Whether the Tenth Circuit Court of Appeals or

the United States Supreme Court has jurisdiction to

review an order remanding a case to state court on the

grounds that remand was improvidently granted.

2. Whether the United States District Court for the

Northern District of Oklahoma exceed its statutory

authority in 28 U.S.C. § 1447(c), and 28 U.S.C. § 1445(c),

in remanding this case to the Oklahoma State District

Court within and for Tulsa County, State of Oklahoma.

- wo N

ii

PARTIES TO THE PROCEEDING

William C. Cooper

G.A.B. Services, Inc.

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! Transportation, Inc.

iii

TABLE OF CONTENTS

Page

8 ee ae | as i

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

LIST OF AFFILIATED CORPORATIONS............ ii

IEE 1

esa gee Se cadd-octuseeccceecs es 2

STATUTORY PROVISIONS INVOLVED............. 2

Dereeeeeeee GPP BPEE CASE... 0... cece ccccceces. 2

REASONS FOR NOT GRANTING THE PETITION 4

I. THE TENTH CIRCUIT DID NOT HAVE JURIS-

DICTION TO REVIEW THE ORDER FROM THE

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF OKLAHOMA

REMANDING THIS CASE TO STATE COURT

ON THE GROUNDS THAT REMAND WAS

IMPROVIDENTLY GRANTED.................. 4

II. DID THE FEDERAL DISTRICT COURT EXCEED

ITS STATUTORY AUTHORITY 28 U.S.C.

§§ 1445(c) AND 1447 (c) IN REMANDING THIS

ACTION TO THE STATE COURT?............. 9

EE 12

Court of Appeals Opinion..................... App. 1

SY I NOD ss ccc cece sere cere App. 3

ries sag h ev ccne ssc ceseeeys App. 7

edi ek gencccresvceescvtces on App. 9

eye av ess os esececsccessenceess App. 10

Watson v. Liberty Mutual Fire Ins. Co., 715 FSupp

Es cecescrvesesrssevesene App. 11

iv

TABLE OF AUTHORITIES

Page

Cases

Carnegie-Mellon University v. Cohill, 484 U.S. 343,

108 S.Ct. 614, 98 L.Ed.2d 729 (1988)........... 5, 6, 8

Gravitt v. Southwestern Bell Telephone Company, 430

U.S. 723, 97 S.Ct. 1439, 52 L.Ed.2d 1 (1977)........ 9

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

336, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976)....... passim

Volvo Corporation v. Schwarzer, 429 U.S. 1331, 97

SAA. 264, FO LEGS 273 UISTE). 002 ccsccccescces: 10

Watson v. Liberty Mutual Fire Insurance Co., 715

NN WOE ooo cc ewa CR eaVes kate k ie viccteee. 7, 8

STATUTES

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3 EE rere ny errr yer yr re 2, 5, 10

Se TI ae cs Dany b cod eeb aber enavenenedaeens 2

8 rT Pree rr rrr yor passim

I wa'5-d's v4 5's 66 VUE ep bas ce eMR ESE EES 5, 10

NU aa coaches eC ese eV Aaa unkvece sc caerahe 2

I Pe aa ca Ga ee hee bbe ewes passim

2 ae errs Sere rr err ry 4, 5, 6, 8

MiscELLANEOUS

H.R. Rep. No. 100-889 at 72, U.S. Code Cong. &

I EG oa vv becachusarerceavacwedess 11

No. 91-6

*

In The

Supreme Court of the United States

October Term, 1991

r

G.A.B. SERVICES, INC.,

Petitioner,

VS.

WILLIAM C. COOPER; and NATIONAL

UNION FIRE INSURANCE COMPANY OF

PITTSBURGH, PENNSYLVANIA,

Respondents.

2

Petition For A Writ Of Certiorari

To The United States Court Of

Appeals For The Tenth Circuit

r

RESPONDENT’S BRIEF IN OPPOSITION

*

William C. Cooper respectfully responds to G.A.B.

Services, Inc.’s Petition for 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).

STATUTORY PROVISIONS INVOLVED

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

§1441; 28 U.S.C. §1445; 28 U.S.C. §1447; 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., who filed its Notice of Removal to the United States

District Court along with a Motion to Dismiss and Brief

in Support on January 2, 1990. Respondent, William C.

Cooper filed his Motion for Remand and Brief in Support

on January 16, 1990. Petitioner, G.A.B. Services, Inc., filed

its Response to Respondent, William C. Cooper’s Motion

for Remand on January 31, 1990. Judge Brett issued an

Order on June 7, 1990, finding that removal was

inappropriate as facts giving rise to Respondent’s claims

for bad faith insurance practices and intentional infliction

of emotional distress are directly connected to and arise

under the payment of a Workers’ Compensation Order

and pursuant to 28 U.S.C. §1445(c) are not to be removed

to any District Court of the United States.

This action arose when Respondent, William C.

Cooper, an employee of Loffland Brothers, was injured in

the course of his employment, on January 10, 1985. Will-

iam C. Cooper filed a Workers’ Compensation claim

against his employer on September 12, 1986, and was

awarded Permanent Partial Disability payments on Octo-

ber 31, 1988. In this action, William C. Cooper the

Respondent, National Union Fire Insurance Company of

Pittsburgh, Pennsylvania, and Petitioner, G.A.B. Services,

Inc., the administrator of the benefits, wrongfully refused

to make the payments ordered by the Oklahoma Workers’

Compensation Court on October 31, 1988.

This action was originally brought in the District

Court of the State of Oklahoma in Tulsa County, and was

removed to the United States District Court for the

Northern District of Oklahoma. Simultaneously with the

filing of removal papers, Petitioner, filed a Motion to

Dismiss arguing that the Oklahoma Workers’ Compensa-

tion Act provided an exclusive remedy. William C.

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 Workers’ Compensa-

tion 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 appeal, Respondent, William C.

Cooper, filed a Motion to Dismiss the appeal and a request

for attorney’s fees. William C. Cooper’s Motion to Dismiss

was based on 28 U.S.C. §§1447(c)(d) and §1445(c). The Tenth

Circuit Court of Appeals, on September 7, 1990, required that

memorandum briefs be filed by all parties in support of their

respective positions on the jurisdictional issue. Petitioner in

this matter filed a memorandum brief with the Tenth Circuit,

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

circumstances warranted an extraordinary remedy and that

the application of 28 U.S.C. §1447(d) was unconstitutional in

that it violated Petitioner’s rights to equal protection under

the law and deprived Petitioner of its recourse to an appel-

late court. In response, Respondent, William C. Cooper, filed

his memorandum brief arguing that the United States Dis-

trict Court for the Northern District of Oklahoma did not

exceed his statutory authority pursuant to 28 U.S.C. §1447(c),

and 28 U.S.C. §1445(c) by remanding this matter to the state

court.

&

vv

REASONS FOR NOT GRANTING THE

PETITION FOR WRIT OF CERTIORARI

I.

THE TENTH CIRCUIT DID NOT HAVE JURISDICTION

TO REVIEW THE ORDER FROM THE UNITED STATES

DISTRICT COURT FOR THE NORTHERN DISTRICT OF

OKLAHOMA REMANDING THIS CASE TO STATE

COURT ON THE GROUNDS THAT REMAND WAS

IMPROVIDENTLY GRANTED.

The United States Supreme Court’s decisions as to

the reviewability and propriety of a remand order is

governed by this court’s decisions in Thermtron Products,

Inc. v. Hermansdorfer, 423 U.S. 336, 96 S. Ct. 584, 46 L.Ed.

2d 542 (1976), and Carnegie-Mellon University v. Cohill, 484

U.S. 343, 108 S. Ct. 614, 98 L.Ed.2d 720 (1988).

In Thermtron, the Defendants had removed a diver-

sity case to Federal Court in full compliance with the

jurisdictional and procedural requirements set out in 28

U.S.C. §§ 1441 and 1446. The District Court’s opinion

acknowledged that Petitioners had properly removed the

case. Nevertheless, the District Judge remanded the case

to State Court on the grounds that because his docket was

crowded and diversity cases were assigned the lowest

priority for available trial time, the Plaintiffs would get a

speedier trial in state court. While recognizing that

Defendants had a statutory right to remove the action,

the Judge believed that the rights must be “balanced

against the Plaintiffs’ rights to a forum of their choice and

their right to a speedy decision on the merits.” See

Thermtron, 423 U.S. at 340, 96 S. Ct. at 587. The Defen-

dants, of course, appealed.

The question before the Supreme Court in Thermtron

was whether, in light of the prohibition on review of

remand orders set out in 28 U.S.C. §1447(d)' the Court of

Appeals had jurisdiction to review the district court’s

order. Answering in the affirmative, the court reasoned

that the ban on review in 28 U.S.C. §1447(d) was to be

1 28 U.S.C. §1447(d) provides, in pertinent part: “An order

remanding a case to the State court from which it was removed

is not reviewable on appeal or otherwise... ”

|

construed in pari materia with the grounds for remand

stated in 28 U.S.C. §1447(c).?

This Court first held that a district court may not

remand a case to state court on discretionary grounds not

authorized by §1447(c). See Thermtron, 423 U.S. at 345,

351, 96 S. Ct. at 590, 593. Second, this court held that the

bar against review of remand orders contained in

§1447(d) applies only to remand orders authorized by

§1447(c). Id. at 346, 96 S. Ct. at 590. Third, this Court held

that where district court issues a remand order on

grounds not authorized by §1447(c), the order is review-

able by writ of mandamus. Id. at 352-353, 96 S. Ct. at

593-94. Applying these rules, the court found that the

district court had exceeded its authority under §1447(c)

and that a writ of mandamus should issue to require the

district court to entertain the remand action.

In the subsequent case of Carnegie-Mellon, this court

revised the first rule and affirmed a discretionary remand

based on the doctrine of pendent jurisdiction. The Car-

negie-Mellon Court held that where a case is properly

removed on the basis of federal question jurisdiction, and

the federal question claim drops out of the lawsuit early

in the litigation, the district court may, in its discretion,

dismiss or remand any remaining pendent state law

claims, even though such a remand is not authorized by

§1447(c).

2 28 U.S.C. §1447(c) provides, in pertinent part: “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 Section 1446(a). If at any time before

final judgment it appears that the district court lacks subject

matter jurisdiction, the case shall be remanded ... ”

1 pc nee

In light of these two cases, this Court must decide

whether the remand in the instant case was authorized by

§1447(c). This court, in Thermtron, emphasized that

review was available only because a district court remand

order did not purport to remand on a ground authorized

by §1447(c). However, in the case at bar, Judge Brett in his

remand order determined that Respondent's claims arose

under the Workers’ Compensation Laws of the State of

Oklahoma and that removal from State court was improv-

ident and remand should be granted. The United States

District Court relied upon 28 U.S.C. §1445(c).3 A case

directly on point with the case before this Court is Watson

v. Liberty Mutual Fire Insurance Company, 715 F.Supp. 797

(W.D. Tex. 1989) (App. 9). In that case, the Plaintiff

brought a claim in State District Court for a balance of an

award from the Texas Industrial Accident Board and for

recovery due to the breach of an insurance carrier’s duty

of good faith and fair dealing. The Court remanded the

case to the State District Court stating that “the claim for

breach of duty of good faith and fair dealing presupposes

the existence of Workers’ Compensation benefits due and

owing to the Plaintiff, which the carrier has failed to

pay.” Id. at 798. The Court concluded that this was suffi-

cient to conclude that the claim arose “under the

Workers’ Compensation laws of the State of Texas for the

purposes of the removal statute, 28 U.S.C. §1445(c).” Id. at

798. The facts in the case at bar are identical to the Watson

case, supra.

3 28 U.S.C. §1445(c) provides, in pertinent part: “A civil

action in any State court arising under the Workers’ Compen-

sation laws of such State may not be removed to any District

Court of the United States.”

In the case at bar, the Respondent received an Order

from the Oklahoma Workers’ Compensation Court and

the insurance carrier began to make payments and then

for no apparent reason ceased to pay on the Order as

issued by the Workers’ Compensation Court. It is this

breach of the Petitioner’s obligation that gives rise to this

case at hand. See Watson, 715 F. Supp. 797 (W.D. Tex.

1989) (App. 9). In essence the United States District Court

found that the case was improvidently removed and

ordered it remanded to the State District Court in accor-

dance with 28 U.S.C. §1445(c).

To determine what improvidently means one must

look to Thermtron and Carnegie-Mellon where this Court

determined that the term “improvidently” means no

more than the word “improperly.” See Thermtron, 423 U.S.

at 336 n.15, 96 S.Ct. at 592 n.15 (“[t]hat the word “improp-

erly” in the old law was changed to “improvidently” in

§1447(c) .. . is of no moment”) and 343-44 (emphasizing

that a “properly removed action” may not be remanded);

See also Carnegie-Mellon, 484 U.S. 343 108 S.Ct. at 621.

Therefore once the Federal District Court found stat-

utory authority, 28 U.S.C. §1445(c) which precluded it

from assuming jurisdiction it had no other avenue but to

find that removal was improvidently granted; remanding

this case to the proper State District Court. Since the

Federal District Court followed 28 U.S.C. §1445(c) in

determining that removal was improvidently granted, the

United States Court of Appeals for the Tenth Circuit was

precluded by statute from reviewing the Federal District

Court’s decision pursuant to 28 U.S.C. §1447(d).

The Federal District Court did not exceed its statu-

tory authority in remanding this case to the State court,

as was the case in both the Thermtron and Carnegie-Mellon

instances. The Federal District court found that Respon-

dent’s claims arose under the Workers’ Compensation

laws of the State of Oklahoma and that removal from the

State court was improvidently granted pursuant to 28

U.S.C. §§1445(c) and 1447(c).

II. DID THE FEDERAL DISTRICT COURT EXCEED

ITS STATUTORY AUTHORITY, 28 U.S.C. §1445(C)

AND 28 U.S.C. §1447(C) IN REMANDING THIS

ACTION TO THE STATE COURT?

In determining if the district court exceeded its

authority under 28 U.S.C. §1447(c) the Thermtron court

repeatedly emphasized that district courts may not

remand properly removed cases “for discretionary rea-

sons not authorized by the controlling statute.” See

Thermtron, 423 U.S. at 345 n.9, 96 S. Ct. at 590 n.9. In the

instant case the Court relied on 28 U.S.C. §1445(c) as its

statutory authority to remand this case finding that Wil-

liam C. Cooper’s claim arises under the Workers’ Com-

pensation Laws of the State of Oklahoma and that

removal from State court was improvident.

Congress immunized ali forms of Appellate review of

any remand order issued on the grounds specified in 28

U.S.C. §1447(c), whether or not that Order might be

deemed erroneous by an Appellant Court. Thermtron v.

Hermansdorfer, 423 U.S. at 351, 96 S.Ct. at 593 (emphasis

added). Thus if the district court were to remand, say, on

the ground that diversity jurisdiction were lacking, no

matter how erroneous the decision may be, the decision is

unreviewable. Gravitt v. Southwestern Bell Telephone Com-

pany, 430 U.S. 723, 97 S. Ct. 1439, 52 L.Ed.2d 1 (1977);

10

Volvo Corporation v. Schwarzer, 429 U.S. 1331, 97 S.Ct. 284,

50 L.Ed.2d 273 (1976).

The removal statutes grant a right to a federal forum.

The motivating concern for granting that statutory right

was to protect litigants against local prejudice, influence

and discrimination. If a district court judge, were permit-

ted to order a case remanded on the discretionary ground

that his docket is too crowded, he would be in a position

to subvert the fairness concerns underlying the statutes.

Although errors will inevitably occur when applying any

ground for remand, the same potential for abuse is not

present where the remand is based on a non-discretion-

ary ground such as the instant case pursuant to 28 U.S.C.

§1445(c).

While Thermtron did not specify the universe of

grounds for remand contained in §1447(c), Thermtron

court strongly indicated that it viewed the phrase

“improvidently and without jurisdiction” to mean non-

compliance with the procedural or jurisdictional require-

ments stated by Congress. Stressing the fact that the case

in Thermtron had been properly removed, the Court

repeatedly referred to the petitioner’s compliance with

the jurisdictional and procedural requirements of 28

U.S.C. §1441 and 28 U.S.C. §1446. See Thermtron v. Her-

mansdorfer, 423 U.S. at 338, 339, 340, 344 n.8, 96 S. Ct. at

586, 587, 588, 5849 n.8.

The recent removal statute effected by the Judicial

Improvement and Access to Justice Act are also instruc-

tive. Congress has revised 28 U.S.C. §1447(c) to replace

the two grounds of “improvidently” and “without juris-

diction” with the grounds of “defect in removal pro-

cedure” and “lack [of] subject matter jurisdiction.” Pub.L.

11

100-702, 102 Stat. 4642, 4670. Replacing the word

“improvidently” with “defect in removal procedure” is

consistent with the view that “improvidently” draws its

meaning from the procedural rules set out in the removal

statutes. Indeed, the House Report accompanying the

1988 revisions specifically equates the term “improvi-

dent” as used in 28 U.S.C. §1447(c) with the phrase

“defect in removal procedure” as used in the amended

provision. See H.R. Rep. No. 100-889 at 72, U.S. Code

Cong. & Admin. News 1988, pp. 5982, 6033.4

The trial court remanded this action to State Court, a

Court which does have jurisdiction over this matter pur-

suant to 28 U.S.C. §1445(c). Thus the trial court did not

exceed its authority in remanding this case to State court

4 The 1988 revisions place a 30-day limit within which

remand on non-jurisdictional grounds must be sought. In

explaining the purpose of the amendment, the House Report

states:

Subsection (c) amends 28 U.S.C. 1447(c) and adds a

new subsection (e). Section 1447(c) now appears to

require remand to state court if at any time before

final judgment it appears that the removal was

improvident. So long as the defect in removal pro-

cedure does not involve lack of federal subject mat-

ter jurisdiction, there is no reason why either State or

Federal courts, or the parties, should be subject to

the burdens of shutting a case between two courts

that each have subject matter jurisdiction.

H.R. Rep. No. 100-889 at 72 (emphasis added), U.S. Code Cong.

& Admin.News, 1988, p. 6033. This statement appears to

include within the terms “improvident” both defect in removal

procedure and lack of jurisdiction, which under our disjunctive

reading of the phrase “improvidently and without jurisdiction”

is unnecessary. The important point is that Congress specifi-

4s

cally links the term “improvident” to procedural defects.

12

and the Tenth Circuit did not exceed its authority by not

reviewing the appeal from the Federal District Court. The

petitioners are not entitled to an extraordinary remedy in

this particular instance as the Federal District Court did

not exceed its statutory authority in remanding this

action to the proper State court pursuant to 28 U.S.C.

§1445(c) and 28 U.S.C. §1447(c).

Respondent hereby requests that this Court award

attorney’s fee and costs pursuant to 28 U.S.C. §1447(c).

¢

CONCLUSION

The Petition for a Writ of Certiorari should be denied.

Respectfully submitted,

Law Orrices of Danie, W. Lowe, P.C.

Jack G. ZuRAWwIK

Counsel of Record

MICHAEL R. GREEN

1401 S. Cheyenne

Tulsa, Oklahoma 74119

(918) 582-2500

App. 1

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

WILLIAM C. COOPER,

Plaintiff-Appellee,

V. No. 90-5141

NATIONAL UNION FIRE

INSURANCE COMPANY OF

PITTSBURGH, PENNSYLVANIA

Defendant,

and

G.A.B. SERVICES, INC.,

Defendant-Appellant.

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

App. 2

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,

Plaintiff,

v. Case No. 90-C-2-B

NATIONAL UNION FIRE

INSURANCE COMPANY OF (Filed June 7, 1990)

PITTSBURGH, PENNSYLVANIA;

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

Defendants.

ORDER

This matter comes on for consideration upon the

Motion to Remand filed by William C. Cooper. Addi-

tionally 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 state’s

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

Co., (D.C. Miss 1983), 575 F.Supp 995, where an action in a

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 jurisdiction 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

claim 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

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 ciaim or right arising

under the Constitution, treaties or laws of the United

States shail 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.

App. 9

§ 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 $10,000.00 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.

App. 10

§ 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.

(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 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

forum 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.

App. 11

Mary WATSON, Plaintiff,

v.

LIBERTY MUTUAL FIRE INSURANCE COMPANY,

Defendant.

No. EP-89-CA-123-H.

United States District Court,

W.D. Texas,

El Paso Division.

May 30, 1989.

Michael T. Aaronson, El Paso, Tex., for plaintiff.

Jeffrey S. Alley, Scott, Hulse, Marshall, Feuille, Finger

& Thurmond, El Paso, Tex., for defendant.

ORDER OF REMAND

HUDSPETH, District Judge.

Plaintiff Mary Watson filed suit in the 171st District

Court of El Paso County, Texas, against her employer’s

workers’ compensation insurance carrier. In her original

petition in state court, the Plaintiff alleged that she was

injured in the course and scope of her employment; that

she filed a claim for compensation under the Texas

Workers’ Compensation Act; that the Texas Industrial

Accident Board awarded her benefits in the amount of

$14,582.78, but that the Defendant has paid her only the

sum of $5,474.78, leaving a balance due and owing in the

amount of $9,108.00. The Defendant filed a petition for

removal to this Court, contending that the United States

District Court had original jurisdiction over the action

App. 12

under 28 U.S.C. § 1331 (federal question) and 28 U.S.C.

§ 1332 (diversity of citizenship and jurisdictional

amount). The Plaintiff filed a motion to remand the cause

to state court. The Court finds that the motion to remand

should be granted.

The Defendant’s claim that this Court has original

jurisdiction over the suit under 28 U.S.C. § 1332 is not

supported by the pleadings. The Plaintiff’s original peti-

tion makes no allegations concerning the citizenship of

the Plaintiff or the Defendant. The Defendant’s answer is

similarly silent as to this matter. The only allegations

concerning citizenship are found in the Defendant's

notice of removal. Furthermore, the pleadings fail to

establish that the amount in controversy exceeds

$10,000.00 exclusive of interest and costs. The only spe-

cific amount of damages claimed by the Plaintiff is

$9,108.00. Without diversity of citizenship and jurisdic-

tional amount, this Court lacks jurisdiction under 28

U.S.C. § 1332.

The Defendant's claim of federal question jurisdic-

tion under 28 U.S.C. § 1331 is based upon the theory that

the Texas Workers’ Compensation Act has been pre-

empted by the Employee Retirement Income Security Act

of 1974, 29 U.S.C. §§ 101 et seq. Significantly, no authority

is cited in support of this novel proposition. On the

contrary, this case comes within a category of cases spe-

cifically made nonremovable by Congress. Title 28,

United States Code, § 1445(c) provides as follows:

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.

App. 13

The instant case clearly arises under the Texas Workers’

Compensation Act, even though the Plaintiff pleads an

alternative theory of recovery under the common-law

doctrine of breach of duty of good faith and fair dealing.

The potential existence of such a duty on the part of a

workers’ compensation carrier was recognized by the

Texas Supreme Court in Aranda v. Insurance Company of

North America, 748 S.W.2d 210 (Tex.1988). As the Supreme

Court stated in that opinion:

A workers’ compensation claimant who asserts

that a carrier has breached the duty of good

faith and fair dealing by refusing to pay or

delaying payment of a claim must establish (1)

the absence of a reasonable basis for denying or

delaying payment of the benefits of the policy

and (2) that the carrier knew or should have

known that there was not a reasonable basis for

denying the claim or delaying payment of the

claim. Aranda v. Insurance Company of North

America, supra at 213.

In other words, the claim for breach of duty of good faith

and fair dealing presupposes the existence of workers’

compensation benefits due and owing to the Plaintiff,

which the carrier has failed to pay. Both classes of claims

arise under the workers’ compensation laws of the State

of Texas for purposes of the removal statute, 28 U.S.C.

§ 1445(c). In the instant case, Section 1445(c) bars its

removal to this Court.

It is therefore ORDERED that this cause be, and it is

hereby, REMANDED to the 171st District Court of El Paso

County, Texas. The District Clerk is directed to transmit

the file to the District Clerk of El Paso County, Texas.