Dieffenbach v. Cigna, Inc.

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
1-6-2009
L. Dieffenbach v. Cigna
Precedential or Non-Precedential: Non-Precedential
Docket No. 08-1474
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 08-1474
___________
L. PAUL DIEFFENBACH,
Appellant
v.
CIGNA, INC.
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 07-cv-03685)
District Judge: Honorable J. Curtis Joyner
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
January 6, 2009
Before: SLOVITER, AMBRO and STAPLETON, Circuit Judges
(Opinion filed: January 6, 2009)
___________
OPINION
___________
PER CURIAM
L. Paul Dieffenbach filed a complaint in the Chester County Court of Common
Pleas against CIGNA, his former employer, asserting claims of age discrimination and
seeking invalidation of the general liability waiver CIGNA requires in exchange for
severance benefits.1
CIGNA removed the action to the United States District Court for the Eastern
District of Pennsylvania and moved to dismiss it as barred by the doctrine of
res judicata and by the waiver and release Dieffenbach signed at the conclusion of an
earlier lawsuit against his former employer. Dieffenbach sought to have his suit
remanded to the state court, claiming that he did not plead a federal cause of action
because his age discrimination claims were brought under state law and his ERISA-
related question demanded an answer under Pennsylvania law alone. In a separate
motion, noting that CIGNA had a statute-of-limitations defense to any Age
Discrimination in Employment Act (“ADEA”) or ERISA claim it might find, Dieffenbach
asked the District Court to sever any federal law claims “made by the Defendant” and to
remand the surviving state law claims to state court. In response to Dieffenbach’s
motions and in a separate filing, CIGNA requested sanctions.
On October 17, 2007, the District Court, holding that Dieffenbach’s suit was
1
As the parties are aware, this is not the first lawsuit Dieffenbach has filed against
CIGNA. In his first case against CIGNA, the District Court granted CIGNA’s motion to
compel arbitration. The parties later entered into a settlement agreement, through which
Dieffenbach was awarded more than $17,000. When Dieffenbach subsequently stated an
intention not to comply with it as it related to pursuing some claims, CIGNA went back to
the arbitrator. The arbitrator dismissed Dieffenbach’s claims based on the settlement
agreement. Considering the parties’ cross-motions, the District Court confirmed the
arbitration award. We affirmed the District Court’s decision, Dieffenbach v. Int’l Rehab.
Assoc., Inc., 150 F. App’x 178 (3d Cir. 2005), and denied rehearing. The United States
Supreme Court denied Dieffenbach’s petition for a writ of certiorari. Dieffenbach v. Int’l
Rehab. Assoc., Inc., 127 S. Ct. 174 (2006).
2
properly removed to federal court and identical to his earlier action against his former
employer, denied Dieffenbach’s motions and dismissed his case on res judicata grounds.
In light of the order dismissing the case, CIGNA’s motion for sanctions, and a hearing
held earlier in October 2007, the District Court also ordered Dieffenbach to show cause
why he should not be sanctioned for knowingly and intentionally refiling a case that had
previously been fully and finally litigated. In response, Dieffenbach submitted an
amended complaint and took the position (unusual for a plaintiff) that he was without
standing to bring his claims.2 Among other things, he also contended that he should not
be sanctioned because he did not file his complaint in federal court; he only responded to
CIGNA’s submissions after CIGNA removed his action to federal court. Two months
after dismissing Dieffenbach’s case, the District Court granted CIGNA’s request for
sanctions, but permitted the parties additional time to file supplemental submissions
relating to the appropriate penalty amount.
CIGNA provided evidence of its counsel fees and expenses and presented
argument why monetary sanctions were appropriate. Dieffenbach filed a motion to quash
the removal and remand to state court, relying on the amended complaint he submitted
2
Dieffenbach separately and unsuccessfully objected to a different District Court
judge, Judge Bartle, that his case should not have been assigned to Judge Joyner under the
Local Rules for related cases. Judge Bartle also rejected Dieffenbach’s subsequent
motion that his case be reassigned under 28 U.S.C. § 144 because of alleged “increasingly
palpable favoritism.”
3
and his claimed lack of standing.3 On January 15, 2008, approximately three months after
dismissing Dieffenbach’s complaint, the District Court denied Dieffenbach’s motion to
quash and remand and awarded CIGNA $21,645.80. Citing Federal Rule of Civil
Procedure 59 within 10 days of the sanctions award, see Fed. R. Civ. P. 6, Dieffenbach
then asked the District Court to vacate the sanctions award or, in the alternative, provide a
more definite ruling and a full accounting. Dieffenbach also filed a “fourth motion to
deny removal jurisdiction and remand to court of origin.” On February 6, 2008, the
District Court denied both motions. Dieffenbach appeals, designating in his notice of
appeal the orders entered January 15, 2008, and February 6, 2008.4 In his notice of
appeal, Dieffenbach also repeated a contention that he made in the District Court, namely
that his case should not have been assigned to Judge Joyner “at inception.” 5 In his brief,
Dieffenbach also seeks review of the District Court’s order dismissing his case on res
judicata grounds. In addition, CIGNA moves for sanctions, fees, and double costs, and
Dieffenbach moves for “summary vacatur” of the District Court’s sanctions award.
3
He also filed a notice of appeal to protest the orders dismissing his complaint,
refusing reconsideration, denying his recusal motion, and granting the sanctions motion.
On January 24, 2008, Dieffenbach’s appeal was dismissed on his request pursuant to
Federal Rule of Appellate Procedure 42(b).
4
Although Dieffenbach designated the orders entered January 15, 2008, and February
5, 2008, no orders were entered on February 5, 2008. We construe his notice of appeal to
designate the orders signed on February 4, 2008, which were entered on the docket on
February 6, 2008.
5
We consider only the aspect of the objection Dieffenbach raised in District Court that
he also raises in his brief – a claim of bias.
4
We first must consider our jurisdiction. We have jurisdiction over appeals from
final orders under 28 U.S.C. § 1291 and from collateral orders under the doctrine of
Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). See In re Briscoe, 484
F.3d 201, 211 (3d Cir. 2006). A final order is a decision that “ends the litigation on the
merits and leaves nothing for the court to do but execute the judgment.” See Coopers &
Lybrand v. Livesay, 437 U.S. 463, 467 (1978) (quoting Catlin v. United States, 324 U.S.
229, 233 (1945)). None of the orders designated in the notice of appeal is a final order by
this definition. However, an order denying remand is reviewable under the collateral
order doctrine. See Pennsylvania v. Newcomer, 618 F.2d 246, 249 (3d Cir. 1980).
Similarly, we have held that a Rule 11 motion for sanctions is ‘uniquely separable’ and
collateral from a decision of the merits. See Pensiero v. Lingle, 847 F.2d 90, 98 (3d Cir.
1988); see also Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 396 (1990) (noting that a
Rule 11 sanction requires the determination of a collateral issue and “does not signify a
District Court’s assessment of the legal merits of the complaint”) (superseded by statute
on other grounds).
Our consideration of the District Court’s collateral orders leads us to review the
jurisdictional issue that the District Court addressed in previous orders. See Steel Co. v.
Citizens for a Better Environment, 523 U.S. 83, 94-95 (1998) (“[T]he first and
fundamental question is that of jurisdiction, first, of this court, and then, of the court from
which the record comes.); cf. Kontrick v. Ryan, 540 U.S. 443, 455 (2004) (“A litigant
5
generally may raise a court’s lack of subject-matter jurisdiction at any time in the same
civil action . . . .”). However, as Dieffenbach did not designate a final order (as the term
is understood for purposes of 28 U.S.C. § 1291) in his notice of appeal, this is not a case
where a designated final order brings up earlier orders for our review.6 See, e.g., Pacitti
by Pacitt v. Macy’s, 193 F.3d 766, 777 (3d Cir. 1999).
To determine whether the District Court properly exercised jurisdiction over
Dieffenbach’s removed case, we examine “‘the face of [his] complaint’ for a federal
question.” Westmoreland Hosp. Ass’n v. Blue Cross of W. Pa., 605 F.2d 119, 123 (3d
Cir. 1979). In the District Court and in his brief before us, Dieffenbach has offered
arguments relating to statute of limitations, standing, and other obstacles to his success on
the merits of any federal claims CIGNA perceived. However, the question of jurisdiction
is separate from the question whether relief is available after jurisdiction attaches. See id.
at 123-24 (quoting Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 561 (1968)).
Dieffenbach also sought a remand in reliance on the amended complaint he filed after the
District Court denied the first remand requests and dismissed the removed complaint.
However, “a subsequent amendment to the complaint after removal designed to eliminate
the federal claim will not defeat federal jurisdiction.” See Westmoreland Hosp. Ass’n.,
6
In any event his notice of appeal is untimely as to the final order dismissing his case
on res judicata grounds. See Fed. R. App. P. 4(a)(1). The time-limit of Rule 4(a)(1) for
commencing an appeal is mandatory and jurisdictional. See Bowles v. Russell, 127 S. Ct.
2360, 2363-66 (2007).
6
605 F.2d at 123.
Even if Dieffenbach purports to raise only state law claims, we must consider
whether the District Court has jurisdiction because the claims are completely preempted
because they raise an issue necessarily federal in character. See Metro. Life Ins. v.
Taylor, 481 U.S. 58, 64, 67 (1987); see also Franchise Tax Bd. v. Constr. Laborers
Vacation Trust, 463 U.S. 1, 24 (1983). In considering whether the complaint includes any
claims that are completely preempted, we “may ‘look beyond the face of the complaint to
determine whether [he] has artfully pleaded his suit so as to couch a federal claim in
terms of state law.’” Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266, 274 (3d Cir.
2001).
The first count in Dieffenbach’s removed complaint (found attached as the first
exhibit to CIGNA’s Notice of Removal (District Court Docket Entry # 1)) is entitled
“Age Discrimination in Employment.” To summarize, Dieffenbach alleged in that count
that after working (with a flawless record) for twelve years for a CIGNA subsidiary, he
learned that he was being laid-off. He contended that although CIGNA stated that the
facility where he worked was being eliminated, it was actually being moved to
Connecticut, where the work he performed would be given to two new hires, who were
significantly younger than Dieffenbach (who was then 56 years old).
Dieffenbach titled the second count in his complaint “Employment Policies and
Practices which Contravene Pennsylvania Public Policy.” In that count, he alleged that
7
CIGNA offered him a severance package in exchange for executing a general liability
release, including a waiver of his right to sue for age discrimination. In short, he stated
that the release requirement set off an “acrimonious dispute” between him and CIGNA,
which “came to a head” when an interim manager demanded that he sign the severance
contract. Dieffenbach alleged that he refused to sign the agreement and was “summarily
terminated” as a result the same day.
Dieffenbach sought “compensatory and punitive damages as a jury may deem
comensurate [sic] with the evidence.” He also sought the following injunctive relief:
[A] declaratory judgment invalidating that part of Defendant’s severance
pay policy which requires the execution of a “global” liability release as
condition of receiving basis benefits as being contrary to the way and
benefit law(s), as well as other elements of public policy, in the
Commonwealth of Pennsylvania, along with a corresponding performance
order that the offending provisions be written out of the Defendant’s
Severance Pay Plan.
In seeking removal of Dieffenbach’s action to federal court and in arguing that the
District Court had jurisdiction over the suit, CIGNA argues that the second count is a
claim under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132
et seq., because Dieffenbach seeks to invalidate the eligibility criteria of an ERISA-
governed employee benefit plan. Furthermore, CIGNA maintains that ERISA completely
preempts any related state law claims in count two pursuant to 8 U.S.C. § 1144(a).7
7
In seeking removal, CIGNA also noted that the first count of the complaint could be
construed to be a claim for age discrimination under state or federal law, and that the
District Court had original jurisdiction over a federal suit for age discrimination. The
8
Dieffenbach insists that he raised state law claims and states that he “carefully worded his
complaint to avoid any reference to federal laws or the inclusion of anything that might
even remotely be construed as federal subject matter.” Appellant’s Brief 7.
Dieffenbach couched his claims in state public policy language. As he contends,
he avoided mentioning ERISA or other federal laws. However, the question remains
whether his claims, through which he sought to invalidate CIGNA’s severance plan
(which no one disputes is an ERISA-regulated plan), fall within the scope of ERISA’s
civil enforcement provision. If they do, they are completely preempted, see Pryzbowski,
245 F.3d at 272, and properly removed. However, not all claims preempted by ERISA
are subject to removal. See Dukes v. U.S. Healthcare, 57 F.3d 350, 355 (3d Cir. 1995);
see also, e.g., Pryzbowski, 245 F.3d at 273 (noting that claims relating to “treatment
decisions,” that is, claims about the quality of a medical treatment, may be subject to a
state action). “[S]tate law claims that fall outside of the scope of [the civil enforcement
District Court ruled that the Dieffenbach’s age discrimination was cognizable under both
federal and state law, the second count of his complaint was an ERISA claim, and the
causes of action were properly removed. Stating that the ERISA issues are dispositive,
CIGNA does not brief the issue whether the case should have been removed based on the
first count. Appellee’s Brief 22 n.9. If Dieffenbach had filed his complaint in federal
court, his first count could have been liberally construed to raise a federal age
discrimination claim. However, unlike the plaintiffs in Westmoreland Hosp. Ass’n, 605
F.2d at 123, he filed the complaint in state court without citing or relying on federal law.
Because the age discrimination claim could have been decided “solely on state law
precepts,” it did not (at the time of filing) require “construction of a federal statute for its
disposition.” See id. at 123-24. Accordingly, the jurisdictional question turns on whether
Dieffenbach alleged a federal claim (or raised a claim completely preempted by federal
law) in the second count of his complaint.
9
provision], even if preempted by [ERISA], are still governed by the well-pleaded
complaint rule, and therefore, are not removable under . . . complete preemption
principles.” Dukes, 57 F.3d at 355.
CIGNA argues that Dieffenbach’s claims fall within the scope of ERISA’s civil
enforcement provision of § 502(a)(1)(B). That civil enforcement provision “allows a
beneficiary or participant of an ERISA-regulated plan to bring a civil action ‘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 Pryzbowski, 245 F.3d at 272 (quoting 29 U.S.C. § 1132(a)(1)(B)).8 “[A] beneficiary
may obtain accrued benefits due, a declaratory judgment about entitlement of benefits, or
an injunction to require the administrator to pay benefits.” Id.
However, Dieffenbach 9 did not seek accrued benefits due, as in many typical
complete preemption cases. See, e.g., Metro. Life Ins. Co., 481 U.S. at 63 (holding that a
state suit to recover benefits from a covered plan was completely preempted); Sofo v.
8
In a different context, we have described the distinction to be made as “whether the
claim challenges the administration or eligibility for benefits, which falls within the scope
of § 502(a) [29 U.S.C. § 1132(a)] and is completely preempted, or the quality of the
medical treatment performed, which may be the subject of a state action.” Pryzbowski,
245 F.3d at 273. Although we are informed by that distinction, we focus on the language
of the statute when a claim, such as Dieffenbach’s, does not fall cleanly into either
category. See id.
9
For our purposes, we assume that Dieffenbach is a participant in CIGNA’s plan, as
the term is set forth in statute, see 29 U.S.C. § 1002(7), and has been interpreted, see
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117-18 (1989), although we
understand that Dieffenbach would challenge this assumption.
10
Pan-American Life Ins. Co., 13 F.3d 239, 241 (7th Cir. 1994) (holding that a rescission
claim had been properly removed as completely preempted because it was a claim by a
participant for a denial of benefits); Lister v. Stark, 890 F.2d 941, 944 (7th Cir. 1989)
(holding that a complaint alleging fraud and breach of contract had been properly
removed because the plaintiff claimed entitlement to additional pension benefits); cf.
Dukes, 57 F.3d at 356 (noting that a claim that an ERISA plan withheld benefits would be
completely preempted). The parties previously came to an agreement about the amount
of severance pay due Dieffenbach; the agreement and award were upheld in subsequent
litigation. Although he sought a declaratory judgment, he sought a judgment not to
enforce his rights under the plan or to clarify his entitlement to benefits under it; he
wanted a declaration that the liability release violated Pennsylvania public policy.
Similarly, the injunction Dieffenbach requested – an order that a provision be written out
of severance plan – was not an injunction to require CIGNA to pay him benefits. He also
sought unspecified compensatory and punitive damages, but they were not for violations
of the terms of the plan. He sought relief on the belief that the terms of the plan conflict
with state law and public policy.10 Accordingly, Dieffenbach did not raise a claim that
was completely preempted as a claim under ERISA’s civil enforcement provision.11 Cf.
10
For this reason, it cannot be said that his complaint was an effort to get the equitable
relief envisioned by 29 U.S.C. § 1132(a)(3).
11
However, a state court (if it did not find Dieffenbach’s claim barred on res
judicata or other grounds) could still find that the state law cause of action is preempted
by federal law and apply federal law in resolving the matter. See Lister, 890 F.2d at 944
11
Hook v. Morrison Milling Co., 38 F.3d 776, 784 (5th Cir. 1994) (stating that “ERISA’s
preemptive scope may be broad but it does not reach claims that do not involve the
administration of plans, even though the plan may be a party to the suit or the claim relies
on the details of the plan”). The Hook court held that a plaintiff in a common law
negligence suit, who did not seek benefits under a plan or claim that a company
improperly processed her claim for benefits, did not present a preempted claim despite the
question whether a waiver in an ERISA plan barred the suit. See id.
Because Dieffenbach did not include a claim that is completely preempted and no
federal claims are apparent on the face of his complaint, the District Court should not
have exercised jurisdiction. The District Court should have remanded the matter to state
court.12 We must vacate the District Court’s orders, not only those specified in the notice
of appeal, but also all those entered in this case.13 We remand this matter to the District
Court for further proceedings consistent with this opinion, including a remand to the
n. 1; see also Dukes, 57 F.3d at 355. Potentially relevant to this matter is the Supreme
Court’s discussion about the permissibility of waivers in exchange for benefits.
See Lockheed Corp. v. Spink, 517 U.S. 882, 890-95 (1996).
12
We categorically reject claims by Dieffenbach that the District Court did not remand
the matter because he was biased. There is no evidence in the record that Judge Joyner
was carrying out a “personal vendetta” against Dieffenbach, Appellant’s Brief 3, 13, or
“mollycoddling” CIGNA, id. at 6.
13
Because the jurisdictional issue controls, we do not address the parties’ competing
arguments relating to sanctions, or any issues surrounding the timing of the entry of the
sanctions award in the District Court, cf., e.g., Pensiero v. Lingle, 847 F.2d 90, 100 (3d
Cir. 1988); Simmerman v. Corino, 27 F.3d 58, 60 (3d Cir. 1994); but see Gary v.
Braddock Cemetery, 517 F.3d 195, 202-03 (3d Cir. 2008).
12
Court of Common Pleas for Chester County, Pennsylvania. We deny Dieffenbach’s
motion for “summary vacatur,” and CIGNA’s motion for sanctions, fees, and double
costs.
13