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David Veillette & Barry Hamp v. Health

United States District Court, D. Nevada

October 15, 2014

DAVID VEILLETTE & BARRY HAMP, Plaintiffs,
v.
RENOWN HEALTH, et al., Defendants.

ORDER

ROBERT C. JONES, District Judge.

This proceeding arises out of the alleged wrongful termination of two hospital executives. Pending before the Court is Plaintiffs' Motion to Remand (ECF No. 10) and Defendants' Motion to Dismiss (ECF No. 15). For the reasons given herein, the Court grants Plaintiffs' Motion to Remand and denies Defendants' Motion to Dismiss as moot.

I. FACTS AND PROCEDURAL HISTORY

Plaintiffs David Veillette and Barry Hamp sued Renown Health, Renown Regional Medical Center, and other individuals (collectively, "Renown") in state court for wrongful termination. (Compl., ECF No. 1-2). Renown removed the case on the grounds that Plaintiffs' claims are preempted by the Employee Retirement Income Securities Act ("ERISA"). Plaintiffs now move to remand, contending that Renown's removal was untimely and the Court has no subject matter jurisdiction over Plaintiffs' claims.

A. Plaintiffs' Termination

In 2010, Renown, a non-profit hospital group in Washoe County, Nevada, conducted a nation-wide search for executives to improve and create "Specialty Hospital" programs to "increase[] market share of the treatment of complex disease processes... [and] to more efficiently and timely provide quality patient care." ( Id. ¶¶ 13-14). Renown hired Veillette as Executive Vice President of Specialty Hospitals in 2011 and Hamp as Vice President of the Renown Institute for Cancer in 2012. ( Id. ¶¶ 17, 22, 25). Veillette and Hamp's compensation agreements included six-figure annual salaries and eligibility to receive a Management Incentive Bonus ("MIB") at the end of each fiscal year. ( Id. ¶¶ 17, 23). Additionally, after 90 days of employment, each were eligible to participate in Renown's medical and dental insurance plans, 401(k) tax-deferred retirement savings program, and sick pay plan. ( Id. ¶¶ 19, 24). Veillette also received a signing bonus, reimbursable to Renown in full or part if Veillette's employment was terminated within three years for any reason other than Renown's breach of the employment agreement. ( Id. ¶ 18).

Veillette and Hamp received their MIB for the fiscal year ending June 30, 2012 and both received salary increases effective July 1, 2013. ( Id. ¶ 30). Despite Plaintiffs' positive performance evaluations and accomplishments in expanding market share and profitability in their respective programs, Plaintiffs were "summarily terminated on June 5, 2013." ( Id. ¶¶ 32-33, 42). While Plaintiffs allege they were terminated for political reasons and "in a wrongful effort to prevent Plaintiffs from receiving their [MIBs], " Renown maintained the terminations were part of a "Reduction in Force." ( Id. ¶¶ 40-41, 44, 59).

Plaintiffs lost the following benefits as a result of their terminations: Plaintiffs failed to receive their MIBs due to vest at the end of June 2013 even though they had already met the objectives for receiving them, ( id. ¶ 48); Renown terminated Plaintiffs' dental, health, 401(k) retirement, and sick pay plans, ( id. ¶ 50); and Renown deducted an amount equivalent to onethird of Veillete's signing bonus from his final paycheck because he was five weeks shy of the three-year employment requirement, ( id. ¶ 49). Additionally, contrary to sizable severance packages Plaintiffs believed other executives received in the past, Renown only offered Plaintiffs one month's severance pay. ( Id. ¶¶ 52-53). Plaintiffs allege that Renown's termination of Plaintiffs' employment was "in an attempt to preclude them from receiving their employment benefits, including their MIB and [Veillette's] signing bonus." ( Id. ¶ 60).

B. The Present Case

Plaintiffs sued Renown on March 20, 2014 in Nevada state court for: (1) wrongful termination; (2) breach of the implied covenant of good faith and fair dealing; (3) intentional infliction of emotional distress; (4) negligent infliction of emotional distress; (5) detrimental reliance; (6) fraud; and (7) breach of contract. Renown moved to dismiss Plaintiffs' Complaint for failure to state a claim (ECF No. 15), and Plaintiffs opposed the motion (ECF No. 16). After receiving Plaintiffs' Opposition to Renown's Motion to Dismiss ("Plaintiffs' Opposition"), Renown removed the case to federal court on the basis that ERISA preempts Plaintiffs' state law claims. Renown asserts that it first learned the claims were removable upon receipt of Plaintiffs' Opposition, which, according to Renown, revealed new allegations that Plaintiffs were terminated for the purpose of interfering with rights under ERISA benefit plans. Plaintiffs' instant Motion to Remand argues that Renown's removal was untimely and that this Court has no subject matter jurisdiction over Plaintiffs' claims.

II. LEGAL STANDARDS

A. Motion to Remand

A defendant may remove an action to federal court if the plaintiff could have initially filed the complaint in federal court, 28 U.S.C. § 1441(a), i.e., if the Court has original jurisdiction. The party seeking removal bears the burden of establishing jurisdiction. California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2004). If a case is removed and the federal court lacks jurisdiction over the matter, the federal court must remand the case to state court. 28 U.S.C. § 1447(c). "The removal statute is strictly construed against removal jurisdiction." Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). "The defendant bears the burden of establishing that removal is proper." Id.

Federal courts have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States" (known as federal question jurisdiction). 28 U.S.C. § 1331. "A case arises under' federal law either where federal law creates the cause of action or where the vindication of a right under state law necessarily turns on some construction of federal law.'" Republican Party of Guam v. Gutierrez, 277 F.3d 1086, 1088-89 (9th Cir. 2002) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 8-9 (1983)). Under the well-pleaded complaint rule, "federal jurisdiction exists ...


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