Barbara Kellum v. Gilster-Mary Lee Corporation Group Health Benefit Plan

United States Court of Appeals
For the Eighth Circuit
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No. 23-2765
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Barbara Kellum; Christopher Bradley; I.B., a minor, by and through legal
guardian, Cynthia Simpson; S.B., a minor, by and through Mother and Next
Friend, Brittney Britt, as Beneficiaries of Decedent, Mychal Byrd; Jada T. Byrd,
lllllllllllllllllllllPlaintiffs - Appellants,
v.
Gilster-Mary Lee Corporation Group Health Benefit Plan,
lllllllllllllllllllllDefendant - Appellee.
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Appeal from United States District Court
for the Eastern District of Missouri - Cape Girardeau
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Submitted: June 13, 2024
Filed: August 26, 2024
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Before COLLOTON, Chief Judge, MELLOY and GRUENDER, Circuit Judges.
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COLLOTON, Chief Judge.
Mychal Byrd was a covered person under the Gilster-Mary Lee Corporation
Group Health Benefit Plan, a self-funded benefit plan that is subject to the Employee
Retirement Income Security Act of 1974 (ERISA). In 2018, the Plan covered Byrd’s

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medical expenses after he was injured in an automobile accident with an unknown
motorist. When Byrd died from his injuries, his mother and children sued Byrd’s
automobile insurance provider in state court to collect the proceeds of his uninsured-
motorist coverage. The Plan intervened, removed the case to federal court, and
asserted an equitable right to the insurance proceeds. The district court granted
summary judgment for the Plan, and the plaintiffs appeal. Because we conclude that
the district court lacked subject-matter jurisdiction, we vacate the judgment.
I.
In 2018, Byrd was driving northbound on Interstate 55 in Cape Girardeau,
Missouri, when an unknown motorist ran him off of the road. Byrd swerved and
crashed into an embankment. He sustained serious injuries and was hospitalized until
his death approximately one month later. The Plan covered $474,218.24 of Byrd’s
medical expenses.
At the time of the accident, Byrd had an automobile insurance policy with
Nationwide Insurance Company. The policy provided $50,000 in uninsured-motorist
coverage. After Byrd’s death, the Plan’s administrator, HealthSCOPE Benefits,
demanded that Nationwide tender the insurance proceeds to the Plan pursuant to a
provision in Byrd’s plan document. The provision stated, in relevant part, that by
“accept[ing] . . . the Plan’s conditional payment of medical benefits,” a “Plan
Participant(s) agrees the Plan shall have an equitable lien on any funds received by
the Plan Participant(s) . . . from any source and said funds shall be held in trust until
such time as the obligations under this provision are fully satisfied.”
Byrd’s family also sought the insurance proceeds. His mother, Barbara
Kellum, along with Byrd’s children, commenced a “friendly” suit against Nationwide
in Missouri state court. The plaintiffs filed a Petition for Approval of Wrongful
Death Settlement, which stated:
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Plaintiffs have made a claim against Nationwide Insurance Company of
America for the wrongful death of Mychal Byrd, and in order to resolve
the issues between the parties, Plaintiffs and Defendant Nationwide
Insurance Company of America have agreed to settle the Plaintiffs’
claims against Nationwide Insurance Company of America for the total
sum of Fifty Thousand Dollars ($50,000.00) subject to the approval of
this Court, to be paid as follows:
a. The court to determine the amount that Healthscope Benefits is
entitled to pursuant to their lien. (See Exhibit B [Letters from
HealthSCOPE Benefits])
b. That the remaining balance be split five ways between Mychal Byrd’s
heirs, with Barbara Kellum to take Jada Byrd’s share.
The Plan moved to intervene, and the state court granted the motion.
The Plan removed the case to federal court. In its notice of removal, the Plan
acknowledged that “[t]he face of Plaintiffs’ petition makes no reference to federal law
or ERISA,” but invoked “the doctrine of complete preemption” to establish subject-
matter jurisdiction. The plaintiffs did not challenge the removal or contest the court’s
jurisdiction to hear the case.
The Plan counter-claimed against the plaintiffs and cross-claimed against
Nationwide, asserting an equitable right to the settlement fund under ERISA. See 29
U.S.C. § 1132(a)(3). The Plan moved for summary judgment. The plaintiffs, then
proceeding pro se, failed to respond to the motion. The district court granted
summary judgment for the Plan because it determined that the Plan was entitled to the
funds under the plan document. Kellum obtained counsel and moved for
reconsideration. The court denied the motion, and the plaintiffs appeal.
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Although no party raised the issue of subject-matter jurisdiction, this court has
an “independent obligation” to “raise and decide jurisdictional questions that the
parties either overlook or elect not to press.” Henderson ex rel. Henderson v.
Shinseki, 562 U.S. 428, 434 (2011). Accordingly, we requested supplemental briefing
on whether the federal courts have jurisdiction over this action.
II.
A defendant may remove a civil action from state court to federal court when
the action originally could have been brought in a federal district court. 28 U.S.C.
§ 1441(a). The party seeking removal has the burden to establish federal subject-
matter jurisdiction. See Cent. Iowa Power Coop. v. Midwest Indep. Transmission Sys.
Operator, Inc., 561 F.3d 904, 912 (8th Cir. 2009). A defendant may not rely on its
own claims to establish jurisdiction under § 1441(a). Home Depot U.S.A., Inc. v.
Jackson, 587 U.S. 435, 442 (2019).
In its notice of removal, the Plan invoked the district court’s federal question
jurisdiction. See 28 U.S.C. § 1331. Under § 1331, the federal courts have original
jurisdiction over civil actions arising under the Constitution, laws, or treaties of the
United States. A case arises under federal law “[m]ost directly . . . when federal law
creates the cause of action asserted.” Gunn v. Minton, 568 U.S. 251, 257 (2013).
Typically, “federal-question jurisdiction is governed by the ‘well-pleaded complaint
rule,’ which provides that federal jurisdiction exists only when a federal question is
presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc.
v. Williams, 482 U.S. 386, 392 (1987).
Complete preemption is a narrow exception to the well-pleaded complaint rule.
“Once an area of state law has been completely pre-empted, any claim purportedly
based on that pre-empted state law is considered, from its inception, a federal claim,
and therefore arises under federal law.” Id. at 393. ERISA is one of few federal
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statutes with this “extraordinary pre-emptive power” that “converts an ordinary state
common law complaint into one stating a federal claim for purposes of the
well-pleaded complaint rule.” Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
But the mere mention of an ERISA plan—or even the “need to consider the
contents” of a plan document—is insufficient by itself to establish complete
preemption. Qassis ex rel. K.B. v. Methodist Healthcare - Memphis Hosps., 929 F.3d
795, 802 (6th Cir. 2019); see Ervast v. Flexible Prods. Co., 346 F.3d 1007, 1014
(11th Cir. 2003). For complete preemption to apply, the plaintiff’s claim must be
“within the scope of the civil enforcement provisions of § 502(a)” of ERISA. Metro.
Life Ins., 481 U.S. at 66; see Lyons v. Philip Morris Inc., 225 F.3d 909, 912 (8th Cir.
2000). A plaintiff’s claim is within the scope of § 502(a) when (1) the plaintiff
“could have brought his claim under ERISA”; and (2) “there is no other independent
legal duty that is implicated by a defendant’s actions.” Aetna Health Inc. v. Davila,
542 U.S. 200, 210 (2004); see Prudential Ins. Co. of Am. v. Nat’l Park Med. Ctr.,
Inc., 413 F.3d 897, 914 (8th Cir. 2005).
The Plan advances two arguments in support of subject-matter jurisdiction.
First, the Plan argues that the plaintiffs’ petition states a federal cause of action
because it asked the state court to “determine the amount that Healthscope Benefits
is entitled to pursuant to their lien.” Second, the Plan argues that even if the face of
the plaintiffs’ petition does not present a federal question, ERISA completely
preempts their claim. Both arguments rest on the Plan’s assertion that the plaintiffs’
claim is within the scope of ERISA’s civil-enforcement mechanisms.
To determine whether federal jurisdiction is proper, therefore, we consider
whether the plaintiffs could have brought their claim under ERISA. See Davila, 542
U.S. at 210; Prudential Ins. Co., 413 F.3d at 914. In this context, that condition has
two elements: first, that the plaintiff is the type of party who can bring a claim under
§ 502(a)(1)(B), and second, that the claim asserted can be construed as a colorable
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claim for benefits under § 502(a)(1)(B). Montefiore Med. Ctr. v. Teamsters Loc. 272,
642 F.3d 321, 328 (2d Cir. 2011).
Federal jurisdiction in this case founders on the first element. None of the
plaintiffs is the type of party who can bring a claim under § 502(a)(1)(B) of ERISA.
Section 502 creates a cause of action to recover benefits for plan participants and plan
beneficiaries only. 29 U.S.C. § 1132(a)(1)(B). The plaintiffs assert that they were
not plan beneficiaries, and the Plan does not argue to the contrary. ERISA defines
a beneficiary as “a person designated by a participant, or by the terms of an employee
benefit plan, who is or may become entitled to a benefit thereunder.” Id. § 1002(8).
The Plan has offered no evidence that the plaintiffs were designated by Byrd or
Byrd’s personal representative, or that they could become entitled to a benefit under
Byrd’s plan document. We find nothing in the record that would give the plaintiffs
the status of plan beneficiaries. They are also not plan participants. Claims to
recover benefits “by anyone other than a ‘participant or beneficiary’ . . . fall outside
the scope of ERISA’s civil enforcement section.” Alexander v. Elec. Data Sys. Corp.,
13 F.3d 940, 946 (6th Cir. 1994); see Marin Gen. Hosp. v. Modesto & Empire
Traction Co., 581 F.3d 941, 948 (9th Cir. 2009).
For these reasons, the plaintiffs could not have sued under ERISA, and their
claim does not fall within the scope of ERISA’s civil-enforcement provisions. The
Plan thus failed to establish that the claim in the state court petition was completely
preempted by ERISA. The district court lacked subject-matter jurisdiction over the
case at the time of removal. We therefore vacate the judgment and remand the case
to the district court with instructions to return the case to Missouri state court.
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