386 F. Supp. 3d 505
E.D. Pa.2019Background
- Twelve plaintiffs, citizens of Kosovo employed under annual contracts by AECOM/GSS Ltd. to work in Afghanistan, alleged Reliance denied their short‑ and long‑term disability benefits.
- Reliance issued and administered the STD/LTD policies and removed the state suits to federal court asserting ERISA federal‑question jurisdiction; plaintiffs moved to remand for lack of subject matter jurisdiction.
- The policies stated they were governed by Rhode Island law and/or ERISA "where applicable." Plaintiffs worked exclusively outside the U.S. and are foreign nationals.
- The central legal question was whether ERISA applies extraterritorially to foreign nationals working abroad such that plaintiffs’ state law claims are preempted.
- The court applied the Supreme Court’s presumption against extraterritoriality and examined ERISA’s text and legislative history, including the foreign‑plan exemption, to determine congressional intent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ERISA preempts plaintiffs’ state claims by providing federal-question jurisdiction | Plaintiffs: ERISA does not apply extraterritorially to foreign nationals working abroad; state claims not preempted | Reliance: ERISA covers these claims (policy references ERISA); foreign‑plan exemption shows Congress contemplated extraterritorial reach | Held: ERISA does not clearly apply extraterritorially here; remand for lack of subject matter jurisdiction |
| Whether removal procedure defect (late notice to state court) requires remand | Plaintiffs: Reliance failed to promptly notify state court of removal | Reliance: 11‑day delay was prompt and harmless under district precedent | Held: Procedural defect argument rejected; delay was not fatal to removal |
| Whether ERISA’s foreign‑plan exemption implies general extraterritorial coverage | Plaintiffs: Exemption is narrow and does not evince affirmative extraterritorial intent | Reliance: Exemption implies ERISA otherwise applies, including to some foreign nationals | Held: Exemption insufficient to overcome presumption against extraterritoriality |
| Whether ERISA’s uniformity goal requires extending ERISA to these facts | Plaintiffs: Uniformity cannot override extraterritoriality presumption absent clear congressional intent | Reliance: Uniform national regime supports ERISA coverage | Held: Uniformity does not trump the absence of clear congressional intent for extraterritorial application |
Key Cases Cited
- Frederico v. Home Depot, 507 F.3d 188 (3d Cir.) (removal burden and federal jurisdiction principles)
- Samuel‑Bassett v. Kia Motors Am., Inc., 357 F.3d 392 (3d Cir.) (party asserting federal jurisdiction bears burden)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (preemption framework for ERISA)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (well‑pleaded complaint rule)
- Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (ERISA preemption principles)
- Morrison v. National Australia Bank Ltd., 561 U.S. 247 (presumption against extraterritoriality)
- EEOC v. Arabian American Oil Co. (ARAMCO), 499 U.S. 244 (extraterritoriality and statute construction)
- Bajrami v. Reliance Standard Life Ins. Co., 334 F. Supp. 3d 659 (E.D. Pa.) (district decision applying extraterritoriality to foreign nationals under ERISA)
- Raymond B. Yates v. Hendon, 541 U.S. 1 (Supreme Court interpretation of ERISA coverage in statutory context)