Tammy Berera v. Mesa Medical Group, PLLC
779 F.3d 352
| 6th Cir. | 2015Background
- Plaintiff Tammy Berera worked for Mesa Medical Group and filed a state‑court class action alleging Mesa forced employees to pay Mesa’s share of payroll taxes, causing underpayment of wages.
- Complaint pleaded state‑law claims (unpaid wages, negligence, conversion) but referenced “payroll taxes and other taxes and withholdings.”
- At an August 30, 2013 hearing, plaintiff’s counsel conceded the disputed payroll deduction (the “First Adjustment”) corresponded to Mesa’s share of the FICA tax.
- Mesa removed to federal court asserting federal question jurisdiction (FICA) and CAFA; district court denied remand, treated the pleading as an artful FICA refund claim, and ordered dismissal for failure to exhaust IRS administrative remedies under 26 U.S.C. § 7422(a).
- The district court dismissed with prejudice; the Sixth Circuit affirmed but modified dismissal to be without prejudice to allow an IRS refund claim if timely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Berera’s state‑law wage claims are really a federal FICA refund claim under the artful‑pleading doctrine | Berera framed claims as state‑law unpaid wages/negligence; not a federal tax claim | Mesa: Complaint’s reference to forced payment of payroll taxes and counsel’s concession show a disguised FICA claim | Held: Artful‑pleading applies — the complaint (and counsel’s concession) show a FICA refund claim rather than a pure state wage claim |
| Whether 26 U.S.C. § 7422(a) bars suit for recovery of allegedly wrongfully collected FICA amounts absent an IRS refund claim | Berera: § 7422(a) doesn’t apply (argues First Adjustment not a tax, alleges possible payroll fraud) | Mesa: § 7422(a) requires administrative exhaustion for any claim to recover sums wrongfully collected as taxes | Held: § 7422(a) requires filing an administrative refund claim before suit; Berera failed to exhaust, so dismissal was required (dismissal modified to without prejudice) |
| Timeliness of removal under 28 U.S.C. § 1446(b) | Berera: Mesa had notice by Aug 8–9 (or even by complaint date) so removal was untimely | Mesa: complaint was ambiguous; removal was within 30 days after receiving “other paper” (hearing transcript) showing federal nature | Held: Mesa timely removed — the August 30 hearing transcript was an “other paper” giving solid and unambiguous notice, triggering § 1446(b)(3) 30‑day period |
| Whether dismissal should be with prejudice | Berera: sought to preserve rights; argued factual fraud theory | Mesa: dismissal appropriate | Held: Dismissal required for failure to exhaust, but modified to without prejudice (plaintiff may seek refund from IRS subject to statutory time limits) |
Key Cases Cited
- Mikulski v. Centerior Energy Corp., 501 F.3d 555 (6th Cir.) (explains artful‑pleading and well‑pleaded complaint rule)
- Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (federal‑question pleading principles)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (plaintiff may choose state law to avoid federal jurisdiction)
- Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59 (3d Cir.) (employee’s disguised FICA refund claim dismissed for failure to exhaust § 7422)
- United States v. Clintwood Elkhorn Mining Co., 553 U.S. 1 (statutory interpretation of § 7422’s scope)