Ehlen Floor Covering, Inc. v. Lamb
660 F.3d 1283
| 11th Cir. | 2011Background
- Ehlen Floor created a 412(i) pension plan, later administered by IPS starting 2003.
- Arbitration Addendum attached to an Administrative Services Agreement required arbitration for claims arising from the Agreement's services.
- Section VI of the Agreement (Election of Services) is missing; no services were actually specified as performed.
- IPS drafted amendments to correct plan noncompliance; the IRS later deemed listed-transaction issues and imposed penalties.
- IRS audit in March 2006; penalties assessed against Ehlen Floor; 2007 state-court complaints preempted to federal court under ERISA.
- District court denied IPS’s motion to compel arbitration; plaintiffs argued federal ERISA preemption and jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there complete ERISA preemption giving federal jurisdiction? | Ehlens allege fiduciary breaches; ERISA preemption applies. | Preemption and federal jurisdiction should be limited; claims may not fit ERISA scope. | Complete preemption exists; federal jurisdiction proper. |
| Do the claims fall within ERISA §502(a) and have standing to sue? | Claims involve fiduciary duties and plan administration under ERISA. | Some claims may be non-ERISA; need to limit to ERISA duties. | Yes; claims fall within ERISA §502(a) with proper standing. |
| Is there an independent duty apart from ERISA that defeats preemption (Davila step two)? | Claims require interpretation of the ERISA plan terms; independent duty exists. | Plan interpretation embedded in ERISA; no independent duty. | Interpreting ERISA plan terms implicates ERISA, defeating independent-duty requirement. |
| Does the Arbitration Agreement govern this dispute? | No clear selection of services; dispute not necessarily arising out of services. | Arbitration should cover disputes arising from the Agreement's services. | Arbitration agreement does not govern; no services actually selected to trigger arbitral clause. |
| Is equitable estoppel applicable to bind non-signatories to arbitration? | Ehlens are not signatories; estoppel should not compel arbitration. | Non-signatories can be bound if disputes arise from the contract. | Equitable estoppel does not compel arbitration here; claims do not arise from the contract’s services. |
Key Cases Cited
- Connecticut State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337 (11th Cir. 2009) (test for complete preemption under ERISA using Davila framework)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) ( Davila test: preemption when claim could be brought under ERISA §502(a) and lacks independent duty)
- Kemp v. International Business Machines Corp., 109 F.3d 708 (11th Cir. 1997) (jurisdiction determined by removal-time face of well-pleaded complaint)
- Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (U.S. 1985) (ERISA fiduciary duties include proper management and disclosure)
- Davila v. Bar, No official reporter citation provided (Supreme Court 2004) (see Aetna Health Inc. v. Davila)
- Borrero v. United Healthcare of N.Y., Inc., 610 F.3d 1296 (11th Cir. 2010) (claims implicating ERISA-plan interpretation may be completely preempted)
- Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290 (11th Cir. 2008) (jurisdiction and removal timing considerations for federal questions)