Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Miller v. Starkey Laboratories, Inc.

United States District Court, D. Minnesota

March 2, 2018

LAWRENCE MILLER, Plaintiff,
v.
STARKEY LABORATORIES, INC., Defendant.

          David H. Redden and John A. Fabian, III, FABIAN MAY & ANDERSON, PLLP, for plaintiff.

          David Bradley Olsen and Scott A. Neilson, HENSON & EFRON, PA, for defendant.

          MEMORANDUM OPINION AND ORDER

          JOHN R. TUNHEIM CHIEF JUDGE

         Plaintiff Lawrence Miller brought breach of contract and promissory estoppel claims in state court against his former employer Starkey Laboratories, Inc. (“Starkey”), to enforce certain terms of his employment contract. Starkey removed the case to federal court, arguing that the provisions at issue - together with related provisions in the contracts of other top company managers - are an Employee Retirement Income Security Act (“ERISA”) pension benefit plan. Starkey now moves to dismiss the case on the ground that Miller's state-law claims are completely preempted by ERISA. Miller moves to remand and seeks sanctions against Starkey. Because Starkey has not shown by a preponderance of the evidence that the contracts establish an ERISA pension plan or program, the Court must grant Miller's Motion to Remand and deny Starkey's Motion to Dismiss as moot. However, because Starkey's legal position is not unreasonable, the Court will deny Miller's Motion for Sanctions.

         BACKGROUND

         Lawrence Miller worked for Starkey Laboratories from 1987 until he was terminated on September 8, 2015. (Notice of Removal ¶ 1, Ex. B (“Compl.”) ¶ 3, Aug. 28, 2017, Docket No. 1.) Miller was Starkey's Senior Vice President of Human Resources. (Id. ¶ 3.) On the same day Starkey that fired Miller, it also fired its President, Chief Financial Officer, Vice President of Operations, and Miller's wife Julie, an administrative assistant. (Id. ¶ 7.) Miller and three co-defendants are presently standing trial for allegedly fraudulent conduct involving Starkey. (See 3d Superseding Indictment, United States v. Ruzicka, Jan. 8, 2018, Criminal No. 16-246, Docket No. 298.)

         Miller, a Minnesota resident, brought this case against Starkey, a Minnesota corporation, in state court. (Compl. ¶¶ 1-2.) Miller stated two state-law causes of action, both founded on Starkey's refusal to pay certain post-separation benefits: Breach of Contract and Promissory Estoppel. (Id. ¶¶ 9-17.) These claims are based on Miller's employment contract (the “Agreement”), dated July 1, 2006. (Id. ¶ 4; Decl. of David Bradley Olsen Supp. Mot. to Dismiss (“1st Olsen Decl.”) ¶ 3, Ex. B (“Agreement”), Aug. 28, 2017, Docket No. 6.) The Agreement provided that Miller could only be terminated for an “important reason” (the “termination provision”), and promised a “long-term services and loyalty bonus” (the “loyalty benefit”) to be paid after Miller's separation, regardless of cause (the “loyalty provision”). (Compl. ¶¶ 5-6; Agreement §§ III(1)-(2), IX.) The loyalty benefit was to be a percentage of Miller's base salary for every year of service, to be paid in six annual installments. (Compl. ¶ 6; Agreement § IX.) Miller alleges that both the termination and loyalty provisions were breached. (Compl. ¶¶ 7-8.)

         Starkey removed the case to federal court claiming federal question jurisdiction, arguing that the loyalty provision established or is part of an ERISA pension plan, therefore giving rise to complete preemption of the state-law claims. (Notice of Removal ¶¶ 5-6.) Starkey has submitted contracts of other top executives that contain related provisions. (See 1st Olsen Decl. ¶¶ 4-5, Exs. C-D; Decl. of David Bradley Olsen Opp. Remand Mot. (“2d Olsen Decl.”) ¶¶ 4-9, Exs. F-K, Oct. 19, 2017, Docket No. 27.) Starkey filed a Motion to Dismiss for failure to state a claim, arguing that complete preemption, express preemption, and Miller's failure to exhaust his administrative remedies justify dismissal. (Mot. to Dismiss (“MTD”), Aug. 28, 2017, Docket No. 3.)

         Miller timely filed a Motion to Remand, arguing that the loyalty provision is not part of an ERISA plan, but is merely a freestanding single-employee contract term. (Mot. to Remand (“Remand Mot.”), Sept. 7, 2017, Docket No. 18; Mem. Supp. Remand Mot. at 1, Sept. 28, 2017, Docket No. 20.) Miller also alleges that he sought to arrange a meet-and-confer with Starkey, but its counsel did not respond. (Decl. of David H. Redden ¶ 2 & Ex. 1, Sept. 28, 2017, Docket No. 21.) Subsequently, Miller filed a Motion for Sanctions, arguing that Starkey's filings are legally frivolous and designed to delay this case until after Miller's trial. (Mot. for Sanctions (“Sanctions Mot.”), Oct. 26, 2017, Docket No. 29; Mem. Supp. Sanctions Mot., Oct. 26, 2017, Docket No. 31.)

         All three motions are now before the Court.

         DISCUSSION

         I. MOTION TO REMAND

         Miller moves to remand on the ground that the loyalty provision was not part of an ERISA plan. Because the Motion to Remand raises a jurisdictional question, the Court must deal with it first. If the loyalty provision was part of an ERISA plan, the Court has jurisdiction to consider Starkey's Motion to Dismiss; otherwise, remand is required.

         A. Standard of Review

         Under 28 U.S.C. § 1441, “[a] defendant's removal of a case to federal court is appropriate ‘only if the action originally could have been filed there.'” Junk v. Terminix Int'l Co., 628 F.3d 439, 444 (8th Cir. 2010) (quoting In re Prempro Prods. Liab. Litig., 591 F.3d 613, 619 (8th Cir. 2010)). Following removal, a “plaintiff may move to remand the case if the district court lacks subject matter jurisdiction.” Id. (citing 28 U.S.C. § 1447(c)). “[T]he defendant bears the burden of establishing federal jurisdiction by a preponderance of the evidence.” In re Prempro, 591 F.3d at 620. If the defendant fails to meet that burden, the district court must remand the case. § 1447(c); see Junk, 628 F.3d at 444-45. “All doubts about federal jurisdiction should be resolved in favor of remand to state court.” In re Prempro, 591 F.3d at 620.

         The only jurisdictional basis for removal here is federal question jurisdiction. Such jurisdiction applies to actions “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. In assessing whether federal question jurisdiction exists, the Court employs the “well-pleaded complaint rule” and looks only to the face of the complaint. Gore v. Trans World Airlines, 210 F.3d 944, 948 (8th Cir. 2000) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)). Generally, a court cannot have federal question jurisdiction based on a defense or counterclaim. Id. However, there is an exception in cases of complete preemption - where the statute “so completely pre-empt[s] a particular area that any civil complaint raising this select group of claims is necessarily federal.” Johnson v. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.