Javier v. Kaiser Foundation Health Plan Inc

Background

Lia C. Javier, proceeding without a lawyer, sued Kaiser Foundation Health Plan, Inc. for breach of contract concerning a retirement plan. According to the complaint and attached administrative record, Javier participated in a retirement plan managed by Kaiser. She was offered a choice between receiving her benefits as a single lump-sum payment or as a monthly annuity. Javier later asked Kaiser to reverse the transaction after being surprised by tax withholding, but Kaiser denied that request.

Javier originally filed the case in California Superior Court. Kaiser removed it to federal court, arguing that the state-law contract claim was completely preempted by the Employee Retirement Income Security Act of 1974, a federal law governing many employee-benefit plans. Javier did not ask the federal court to send the case back to state court.

Motion to dismiss

Kaiser moved to dismiss under Federal Rule of Civil Procedure 12(b)(5), arguing that service of process was insufficient. Kaiser also moved under Rule 12(b)(6), arguing that Javier’s contract claim was preempted by the federal employee-benefits law.

Service of process

The court denied the request to dismiss under Rule 12(b)(5). Kaiser argued that the complaint incorrectly named “Kaiser Permanente Retirement” as the defendant, lacked a summons, and was left at a Kaiser building after an employee in Kaiser’s legal department refused to accept it. The court concluded that Kaiser had actual notice of the lawsuit, had removed the case to federal court, and was not prejudiced by the service defects. The court therefore found dismissal for insufficient service unwarranted.

Federal preemption

The court granted the request to dismiss under Rule 12(b)(6). It concluded that Javier’s claim could have been brought under Section 502(a)(1)(B) of the federal employee-benefits law because she sought to be reinstated into the retirement plan and sought benefits or enforcement of rights under that plan. The court also found that Kaiser’s alleged conduct did not involve a legal duty independent of the plan.

The court further concluded that the contract claim concerned administration of an employee-benefit plan and did not fall within an exception to federal preemption. It therefore held that the claim was preempted and dismissed it.

Disposition

The motion to dismiss was granted and denied in part: the Rule 12(b)(5) request was denied, and the Rule 12(b)(6) request was granted. Javier was permitted to file an amended complaint consistent with the order by November 5, 2020. She could not add new claims or parties without the court’s prior approval. The order stated that failure to follow its terms might result in dismissal of the case with prejudice under Rule 41(b).