IN RE BUSINESS MEN'S ASSUR. CO. OF AMERICA

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Docket Number

No. 93-1290.

Attorney(S)

Robert Wilson McKinley, Kansas City, MO, for petitioner. Kevin R. Thomas, Independence, MO, for respondent.

Judges

George Gardner Fagg
Gerald William Heaney
Clarence Arlen Beam

Acts

Judiciary And Judicial Procedure — District Courts; Removal Of Cases From State Courts — Jurisdiction And Venue — Procedure After Removal Generally

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Smart Summary

Factual and Procedural Background

William A. Rodgers obtained health insurance coverage through his wife's employer, Family Institute (FI), under a policy issued by Business Men's Assurance Company of America (BMA). After BMA denied Rodgers's claims for benefits, Rodgers initiated a lawsuit in state court alleging a vexatious refusal-to-pay claim. BMA removed the case to federal district court, asserting that the Employee Retirement Income Security Act (ERISA) preempted the state law action because the insurance policy was part of an employer-purchased plan. Rodgers moved to remand the case back to state court, arguing that the policy did not constitute an employee welfare benefit plan under ERISA. The district court was unable to determine whether FI had established and maintained an ERISA plan, as it was unclear if FI performed functions beyond collecting and forwarding insurance premiums. The district court resolved doubts regarding federal question jurisdiction in favor of remand under 28 U.S.C. § 1447(c) and declined to rule on ERISA's applicability. BMA appealed the remand order by petitioning for a writ of mandamus.

Legal Issues Presented

Whether the district court's remand order based on lack of federal question jurisdiction is subject to review by writ of mandamus.
Whether the district court abused its discretion by not holding an evidentiary hearing to resolve factual doubts about the existence of an ERISA plan.

Arguments of the Parties

Petitioner (Business Men's Assurance Company of America)

Contended that the district court erred in remanding the case to state court because ERISA preempted Rodgers's claim, thereby establishing federal question jurisdiction.
Argued that the district court should have held an evidentiary hearing to clarify whether FI had established an ERISA plan, which is a factual question.

Respondent (William A. Rodgers)

Maintained that the insurance policy was not an employee welfare benefit plan governed by ERISA, supporting remand to state court.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
28 U.S.C. § 1447(c) and (d)	Remand orders based on lack of federal jurisdiction are generally unreviewable by appeal or mandamus.	Supported the court's conclusion that the remand order was unreviewable despite possible error.
Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336 (1976)	Confirmed the unreviewability of remand orders, even if erroneous, except in limited circumstances.	Reinforced the immunity of the district court's remand order from mandamus review.
Farm Credit Bank v. Finstrom, 888 F.2d 559 (8th Cir. 1989)	Per curiam affirmation of remand order unreviewability.	Supported the general rule against review of remand orders.
In re Resolution Trust Corp., 888 F.2d 57 (8th Cir. 1989)	Exception to reviewability if authorized by another statute.	Determined that no exceptions applied in this case.
In re Life Ins. Co. of N. Am., 857 F.2d 1190 (8th Cir. 1988)	Exception for substantive ruling on federal law binding state court.	Found not applicable here.
National City Bank v. Coopers Lybrand, 802 F.2d 990 (8th Cir. 1986)	Remand order based on lack of federal question jurisdiction is unreviewable.	Applied to support the conclusion that the remand order was final and unreviewable.
Deibler v. United Food Commercial Workers' Local Union 23, 973 F.2d 206 (3d Cir. 1992)	Existence of an ERISA plan is a factual question.	Referenced by BMA to argue for evidentiary hearing; court disagreed.
Bor-Son Bldg. Corp. v. Heller, 572 F.2d 174 (8th Cir. 1978)	Party seeking removal bears burden of establishing federal jurisdiction.	Supported court's allocation of burden to BMA.
Steel Valley Auth. v. Union Switch Signal Div., 809 F.2d 1006 (3d Cir. 1987)	Doubts about federal jurisdiction must be resolved in favor of remand.	Applied to affirm the district court's decision to remand without evidentiary hearing.

Court's Reasoning and Analysis

The court began by acknowledging the general rule that remand orders under 28 U.S.C. § 1447(c), especially those based on lack of federal question jurisdiction, are not subject to appellate review or mandamus relief, even if the order might be erroneous. The court found no applicable exceptions to this rule in the present case. Since the district court remanded the case due to uncertainty about the existence of an ERISA plan and thus federal jurisdiction, the remand order was unreviewable.

Regarding the contention that the district court should have held an evidentiary hearing, the court emphasized that BMA, as the party seeking removal, bore the burden of establishing federal jurisdiction. The district court was required to resolve doubts in favor of remand. Because BMA did not request a hearing, the district court did not abuse its discretion by declining to hold one sua sponte.

Holding and Implications

The court DENIED the petition for a writ of mandamus.

This decision leaves the district court's remand order intact, returning the case to state court. No new precedent was established, and the ruling reinforces the principle that remand orders based on lack of federal jurisdiction are generally unreviewable on appeal or mandamus, even if arguably erroneous. The burden remains on the removing party to demonstrate federal jurisdiction, and courts must resolve jurisdictional doubts in favor of remand.

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IN RE BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA, PETITIONER.

PER CURIAM.

Business Men's Assurance Company of America (BMA) petitions for a writ of mandamus ordering the district court to retain jurisdiction of a vexatious refusal-to-pay claim brought against BMA by William A. Rodgers. We deny the petition.

Rodgers obtained BMA health insurance through his wife's employer, Family Institute (FI). After BMA denied Rodgers's claims for benefits, Rodgers filed this action in state court. BMA removed the case to federal district court, claiming ERISA preempted the state action because the health insurance policy was an employer-purchased plan. Rodgers petitioned for remand, claiming the policy was not an employee welfare benefit plan.

The district court could not determine whether FI had established and maintained an ERISA plan because it was unclear whether FI did more than collect and mail insurance premiums. The court resolved its doubt about federal question jurisdiction in favor of remand under 28 U.S.C. § 1447(c), and it declined to rule whether ERISA would control the remanded action. BMA challenges the correctness of the district court's remand order.

In general, remand orders issued under 28 U.S.C. § 1447(c) are not reviewable by appeal or writ of mandamus. See 28 U.S.C. § 1447(d) (1988); Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 342-43, 96 S.Ct. 584, 588-89, 46 L.Ed.2d 542 (1976); Farm Credit Bank v. Finstrom, 888 F.2d 559 (8th Cir. 1989) (per curiam). This is true "whether or not that order might be deemed erroneous by an appellate court." Thermtron, 423 U.S. at 351, 96 S.Ct. at 593. Although there are some exceptions to the general rule immunizing remand orders from review, see, e.g., id. at 345-46, 351, 96 S.Ct. at 590-91, 593 (remand based on grounds outside § 1447(c)); In re Resolution Trust Corp., 888 F.2d 57, 58-59 (8th Cir. 1989) (review authorized by another statute); In re Life Ins. Co. of N. Am., 857 F.2d 1190, 1193 (8th Cir. 1988) (substantive ruling on federal law that binds the state court), none of the exceptions apply in this case. Because the district court's order is based on a lack of federal question jurisdiction, the remand order is unreviewable. National City Bank v. Coopers Lybrand, 802 F.2d 990, 993 (8th Cir. 1986).

BMA also contends the district court should have held an evidentiary hearing to resolve its doubts about federal jurisdiction. See Deibler v. United Food Commercial Workers' Local Union 23, 973 F.2d 206, 209 (3d Cir. 1992) (existence of ERISA plan is factual question). We disagree. As the party seeking removal and opposing remand, BMA had the burden of establishing federal subject matter jurisdiction. Bor-Son Bldg. Corp. v. Heller, 572 F.2d 174, 181 n. 13 (8th Cir. 1978). The district court was required to resolve all doubts about federal jurisdiction in favor of remand. See Steel Valley Auth. v. Union Switch Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987), cert. dismissed, 484 U.S. 1021, 108 S.Ct. 739, 98 L.Ed.2d 756 (1988). BMA did not request an evidentiary hearing, and the district court did not abuse its discretion by not conducting a hearing on its own motion.

The petition for writ of mandamus is denied.