Garnes v. Encova Insurance Agency, Inc., 2:22-cv-00527

Background

Hayley Garnes worked for Encova from 2006 until her termination on October 15, 2021; she was diagnosed with multiple sclerosis in 2017 and requested accommodations in 2017, 2018, and 2020.
Garnes alleges supervisors increased her workload despite knowledge of her condition, gave negative evaluations, and denied her promotions in 2018 and 2020; she claims disability discrimination and other state-law wrongs under the WVHRA and West Virginia common law.
She also alleges that termination rendered her ineligible to apply for long-term disability benefits under a Prudential plan provided to Encova employees.
Defendants removed the case to federal court asserting federal-question jurisdiction based on ERISA complete preemption (29 U.S.C. § 1132), converting the state claims into federal ones.
The district court evaluated whether Garnes’s state-law claims—particularly the WVHRA disability claim—are completely preempted under the framework articulated in Sonoco and related precedents and concluded they are not.
Because complete preemption was not shown, the court lacked federal-question jurisdiction and remanded the entire case to the Circuit Court of Kanawha County; pending motions were not decided on the merits.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ERISA complete preemption supports removal of the state-law claims	Garnes: state claims are not completely preempted by ERISA; remand required	Defendants: Garnes’s allegation about loss of eligibility for Prudential LTD benefits "relates to" an ERISA plan and is completely preempted	Held: Removal inappropriate — complete preemption not established; case remanded
Whether the WVHRA disability claim (Count II) satisfies Sonoco’s standing requirement	Garnes: not asserting ERISA-based claim; no standing/ERISA cause shown	Defendants: Garnes’s damages theory ties to Prudential plan, implying plan-based federal claim (standing as participant/beneficiary)	Held: Standing unclear from pleadings; court assumed standing for analysis but found other Sonoco criteria unsatisfied
Whether Count II invokes an ERISA §1132(a) cause of action (Sonoco requirement 2)	Garnes: seeks state-law remedies, not ERISA §1132 relief	Defendants: damage allegation tied to LTD plan converts claim into ERISA enforcement	Held: Count II does not allege any §1132(a) cause of action (no claim to recover or enforce plan benefits, no fiduciary or equitable §1132 relief)
Whether resolution of Count II requires interpretation of an ERISA‑governed plan (Sonoco requirement 3)	Garnes: plan only referenced for damages calculation, not entitlement; no plan interpretation needed	Defendants: reliance on plan benefits for damages means plan interpretation is necessary	Held: Court concluded the claim can be resolved without interpreting the Prudential plan (damages reference alone insufficient to confer complete preemption)

Key Cases Cited

Aetna Health, Inc. v. Davila, 542 U.S. 200 (2004) (describing ERISA complete preemption and its effect on removal)
Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003) (complete preemption doctrine explanation)
Sonoco Prods. Co. v. Physicians Health Plan, Inc., 338 F.3d 366 (4th Cir. 2003) (three essential requirements for ERISA complete preemption)
Darcangelo v. Verizon Commc’ns, Inc., 292 F.3d 181 (4th Cir. 2002) (contrast between ordinary ERISA preemption as a defense and complete preemption)
Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) (ordinary preemption as defense does not authorize removal)
Pizlo v. Bethlehem Steel Corp., 884 F.2d 116 (4th Cir. 1989) (referencing a plan solely to calculate damages does not trigger ERISA preemption)
Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482 (7th Cir. 1996) (analysis on whether claim requires interpretation of ERISA plan)
Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743 (2019) (assessment of whether a district court would have had original jurisdiction for removal analysis)