This аppeal arises from a subrogation action brought by Appellant Asbestos Workers Local No. 42 Welfare Fund (the “Fund”) against Appellees Thomas L. Brewster, Sr., Candace L. Brewster, and Charles Snyderman, Esquire. The Fund was established under the Employment Retirement Income Security Act of 1974 (ERISA)
1
for the benefit of the members of Asbestos Workers Local No. 42 (“Local 42”) and their dependents. It operates pursuant to a Summary Plan Description (the “Plan”) and the provisions of ERISA. Mr. Brewster is a member of Local 42 and Mrs. Brewster qualifies as his dependent. Mrs. Brewster was injured in an automobile accident and sought to have her medical expenses paid by the Fund. Mr. Sny-derman, who was their counsel, also achieved third-party settlements from the
The Plan expressly required repayment of benefits from any money received from a third party for expenses paid by the Fund. The Fund paid Mrs. Brewster’s medical expenses, after she signed a sub-rogation agreement (as required by the Plan) promising to repay to the Fund an amount equal to the benefits she received from the Fund. The Brewsters through their counsel, Mi'. Snyderman, recovered the same medical expenses from a third party settlement, but did not repay the Fund after being requested to do so.
The Fund filed suit under ERISA in the United States District Court for the District of Delaware seeking a declaration of its subrogation rights and a constructive trust over the settlement proceeds. The Fund’s complaint was dismissed by the U.S. District Court for lack оf subject matter jurisdiction over the claim under ERISA. The Fund did not appeal that ruling. A second lawsuit brought by the Fund in the Court of Chancery was also dismissed for lack of jurisdiction. The Court of Chancery transferred the case to the Superior Court, which granted summary judgment in favor of the Brewsters and Mr. Snyderman after concluding that the Fund’s claim was preempted by federal law.
We hold that the Fund’s state law claim is preempted by § 514 of ERISA because that claim “relates to” the Plan. The Fund’s claim also duplicates or supplеments a civil enforcement remedy available to the Fund under § 502(a)(3) of ERISA. 2 Because there is federal jurisdictional preemption of the Fund’s subro-gation claim in this case, we affirm the judgment of the Superior Court.
I.
The Fund is a multiemployer employee benefit plan (the “Plan”) as defined by 29 U.S.C. § 1002(37)(A) of ERISA. The Fund was established for the benefit of the members of Local 42 and operates pursuant to both the Plan and the provisions of ERISA. Mr. Brewster is a member of Local 42 and a “participant” under the Plan. Mrs. Brewster is a dеpendent of a “plan participant” as defined by the Plan and 29 U.S.C. § 1002(8).
The Plan gave express subrogation rights to the Fund. Specifically, it provided:
When injury or injuries and/or death (for which any benefits would otherwise be payable under this) are caused under circumstances which create a legal liability with some other person or party, any payment made by the Plan to or on behalf of the participant shall be considered an advance only, and acceptance by the participant, dependent or provider shall constitute their agreement to repay the payments to the Plan in the event a recovery is made from the other person or party. In addition, the Fund shall be entitled to recover its lien directly from the third party.
Subrogation means that the Fund can regain, by legal action if necessary, benefits paid by it to the participant or that person’s insurance company or other plan or from the participant or the parties responsible fоr the injury....
Under the Plan’s subrogation provision, a participant has the following obligations in order to be entitled to receive the advance which is provided under this Section:
1. To sign the Standard Subrogation Agreement of the Plan and to take such action and cooperate with Plan representatives as may be necessary or appropriate to recover from any third party, as damages those payments made by the Plan. (Even if, however, a participant fails to sign the Standard Subrogation Agreement, she/he will still be responsible to repay the Plan in the event of a recovery.)
2. To immediately pay to the Plan any money recovered from third persons for expenses paid by the Plan.
3. To not do anything to impair, prejudice or discharge the Plan’s right of subrogation.
4. To assign to the Plan the right to bring an action against any third party responsible for the injuries sustained if the Participant fails to bring such action....
The Plan can withhold future benefits to a Participant for failure to cоmply with these rules.
In 1996, Mrs. Brewster sustained extensive injuries in an automobile accident. Mr. Brewster applied to the Fund for payment of her medical bills. As a precondition for payment, Mrs. Brewster signed the standard subrogation agreement, contemplated by the Plan, entitled “Asbestos Workers Union Local 42 Welfare Fund Subrogation Agreement” (the “Agreement”). Under the Agreement, Mrs. Brewster assigned to the Fund benefits paid or payable with respect to the same injury in an amount equal to the benefits received by her frоm the Fund. 3 After Mrs. Brewster completed the form, the Fund paid medical expenses of $42,852.44 relating to Mrs. Brewster’s accident.
In 1998, Mr. Snyderman, on behalf of the Brewsters, settled their claim against the driver of the other vehicle involved in the accident for $15,000 — the limit of the other driver’s insurance policy. Mr. Sny-derman also negotiated and settled an un-derinsured motorist claim against the Brewster’s own automobile insurance company for $100,000. Mr. Snyderman notified the Fund of the settlements and requested that the Fund provide him with the amount оf its subrogation claim.
The Fund requested that the Brewsters reimburse all monies it paid to or on behalf of Mrs. Brewster under the Agreement. In response, Mr. Snyderman questioned the Fund’s ability to enforce the Agreement. Sometime thereafter, he distributed $30,000 to the Brewsters and deducted one-third of the $115,000 for his attorneys’ fees and related expenses. According to the Fund, Mr. Snyderman put the remainder in escrow to reimburse the Fund, but then later distributed that amount to the Brewsters as well.
In 2001, the Fund filed a Complaint for Declaratory Judgment in the Unitеd
Thereafter, the Court of Chancery dismissed the parallel action for lack of equitable jurisdiction. 7 The case was then transferred to Superior Court pursuant to 10 Del. C. § 1902. 8 In the Superior Court, the parties filed cross motions for summary judgment. The Superior Court granted summary judgment in favor of the Brewsters and denied the Fund’s cross motion, concluding that, as a matter of law, the Fund’s сlaim “relates to” an ERISA employee benefit plan under § 514(a) of ERISA. 9 In reaching this conclusion, the Superior Court stated that the Fund “appears to be without a legal mechanism thru [sic] which to obtain reimbursement of the monies paid to or on behalf of Mrs. Brewster.” 10 This appeal followed.
II.
The Fund argues that there is no federal preemption of its state law subrogation claim. Specifically, it contends that the Superior Court erred as a matter of
A.
The Brewsters argue that the Fund’s claim is completely preempted by ERISA. Moore’s Manual on Federal Practice and Procedure aptly summarizes the variety of categories that have been used to describe preemption:
Complete preemption aрplies only in the extremely limited circumstance that Congress intends in a particular area to supersede both the substantive and remedial provisions of state law and create a federal remedy for violation of the law that is exclusive, even when a claimant attempts to rely entirely on state law in state court. To date, the Supreme Court has found only three federal statutes to have this broad preemptive scope: the Labor Management Relations Act, the Emplоyee Retirement Income and Security Act, and the National Bank Act for claims of usury against national banks.
Some courts have noted that the label of this exception is not entirely accurate, because the doctrine is not one of preemption, but rather one of federal jurisdiction. Furthermore, removal and preemption are two distinct concepts, and the fact that a claim may be preempted does not necessarily establish that it is covered by federаl question jurisdiction. A better term might be “jurisdictional preemption” because it is a doctrine that not only preempts the substantive state law but also supports federal jurisdiction to address the issue regardless of the procedural context in which the matter is brought before the federal court. It should also be noted that a claim of ordinary preemption, as opposed to complete preemption (jurisdictional preemption), is not a defense to the well-pleaded complaint rule. “Ordinary preemption” is an affirmative defense to the allegations in a plaintiffs complaint asserting a state law claim claiming that a state law conflicts with, and is overridden by, a federal law. On the other hand, complete preemption does not constitute a defense at all. Rather, it is a narrowly drawn jurisdictional rule for assessing federal removal jurisdiction when a complaint purports to raise only state law claims. It looks beyond the complaint to determinе if the suit is actually and entirely a matter of federal law, even if the state law would provide a cause of action in the absence of the federal law. Therefore, complete preemption creates the federal question jurisdiction requisite to removal of the claim to federal courts. 13
The case before us involves the issue of complete (or, more appropriately, jurisdictional) preemption.
Our analysis begins with ERISA, which has a broad preemptive purpose. In enacting ERISA, one of Congress’s principal goals was “to enable employers ‘to
In examining the congressional intent underlying § 502, the U.S. Supreme Court has held that “any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore preempted.” 17 The policy underlying these preemptiоn provisions is to maintain uniformity of the federal administrative scheme, 18 as the U.S. Supreme Court has recognized:
It is thus clear that ERISA’s pre-emption provision was prompted by recognition that employers establishing and maintaining employee benefit plans are faced with the task of coordinating complex administrative activities. A patchwork scheme of regulation would introduce considerable inefficiencies in benefit program operation, which might lead those employers with existing plans to reduce benefits, and thоse without such plans to refrain from adopting them. Pre-emption ensures that the administrative practices of a benefit plan will be governed by only a single set of regulations. 19
The integrated enforcement provisions of § 502 implement this policy.
20
For example, § 502(a)(1)(B) allows a participant or beneficiary “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under
In Great-West Life & Annuity Insurance Co. v. Knudson, 23 the U.S. Supreme Court explained that “equitable relief’ under § 502(a)(3) requires that the action for restitution “must seek not to impose personal liability on the defendant, but to restore to the plaintiff particular funds or property in the defendant’s possession.” 24 The Court explicitly left open the issue of “whether a direct action by petitioners against respondents asserting state-law claims such as breach of contract would [be] pre-empted by ERISA.” 25 Before Great-West, courts throughout the country generally found that ERISA had preempted certain state-law claims, including breach of contract actions brought to enforce reimbursement claims under a subrogation agreement. 26 After Great-West, courts were divided on the question of whether a fiduciary could enforce a subro-gation provision under § 502(a)(3). 27 In 2006, the U.S. Supreme Court answеred that question affirmatively in Sereboff v. Mid Atlantic Medical Services, Inc. 28 The Sereboff case has remarkable similarities to the case before us.
In
Sereboff,
the beneficiaries of an ERISA plan were involved in a car accident and suffered injuries.
29
Under its “Acts of Third Parties” provision, the plan required a “beneficiary who ‘receives benefits’ under the plan for such injuries to ‘reimburse [Mid Atlantic]’ for those benefits from ‘[a]ll recoveries from a third party (whether by lawsuit, settlement, or otherwise).’ ”
30
The plan paid the beneficiaries’ medical expenses, and the beneficiaries sought to recover compensatory
Here, the Fund, consistent with Sereboff, was entitled under § 502(a)(3) of ERISA to seek an equitable lien or constructive trust in federal court over the settlement proceeds the Brewsters had received. That the Fund’s Sereboff claim also could be duplicated or supplemented by a state law claim to enforce the same subrogation right does not deprive a federal court of its exclusive jurisdiction under ERISA. 35 As the U.S. Supreme Court explained in Metropolitan Life Insurance Company v. Taylor: “Congress has clearly manifested an intent to make causes of action within the scope of the civil enforcement provisions of § 502(a) removable to federal court.” 36 In both that case and in Aetna Health Inc. v. Davila, 37 the U.S. Supreme Court emphasized the “congressional intent to make the ERISA remedy exclusive” under § 502(a) 38
Both the Plan and the Agreement specifically contemplated relief that the Fund could seek under ERISA, namely, the assignment of the settlement proceeds equal to the amount of benefits paid. Even though state law also provides a cause of action to enforce subrogation rights, ERISA has preempted the jurisdiction of the Delaware courts over the Fund’s equitable claim to the settlement proceeds. We agree with the Superior Court that Mrs. Brewster’s agreement with the Fund also “relates to” the Plan under § 514(a) of ERISA.
39
The Plan expressly required
We also agree with the Fund that the Superior Court erred in suggesting that the Fund had no remedy to enforce subro-gation. Sereboff holds that there was an ERISA remedy for the Fund, namely, to enforce subrogation claims under § 502(a)(3) by way of a constructive trust or equitable hen. The availability of that remedy supports jurisdictional preemption in this case. Because Congress intended that remedy under ERISA to be exclusive, the Fund’s state subrogation claim is preempted. 40 The Supеrior Court did not have jurisdiction to decide the merits of the Fund’s subrogation claim. Accordingly, the Superior Court did not err in granting summary judgment.
III.
The judgment of the Superior Court is AFFIRMED. 41
Notes
. As amended, 29 U.S.C. §§ 1001-1461 (2005).
. In 2006, the U.S. Supreme Court held in
Sereboff v. Mid Atlantic Medical Services, Inc.,
. The relevant provisions of the Agreement state:
If the Fund pays any hospital, surgical-medical, accident and sickness, or other benefits for which you recover damages from an insurance company or other party (for example, as the result of an accident and a suit for damages), then the Fund must be reimbursed the amount of the benefits it has paid.
In consideration of the payment to me at this time for medical expenses incurred or weekly accident and sickness benefits paid following the injuries above noted, should any benefits be paid or payable to me under any workman’s award, settlement, compromise or judgment with respect to thе same injury, then I do hereby assign to Local Union No. 42 Welfare Fund an amount equal to those benefits received by me from the Fund.
. Codified at 29 U.S.C. § 1132(a)(3). The Fund also brought suit under § 502(a)(2) of ERISA.
.
.
Asbestos Workers Local No. 42 Welfare Fund v. Brewster,
. Specifically, the Court of Chancery concluded that “[ajlthough the complaint states that this is an action for declaratory judgment, breach of contract and breach of fiduciary duty, it is clear that the Fund seeks to enforce its contractual subrogation claim.” It found that the Fund’s claim was "a garden-variety breach of contract claim for which money damages is the sole form of relief to be awarded.”
Asbestos Workers Local No. 42 Welfare Fund v. Brewster,
. 10 Del. C. § 1902 provides, in pertinent part:
No сivil action, suit or other proceeding brought in any court of this State shall be dismissed solely on the ground that such court is without jurisdiction of the subject matter, either in the original proceeding or on appeal. Such proceeding may be transferred to an appropriate court for hearing and determination....
. Codified at 29 U.S.C. § 1144(a): "Exceptas provided in subsection (b) of this section, the provisions of this title and title IV shall supersede any and all State laws insofar as they may now or hereafter relate to аny employee benefit plan described in section 4(a) [29 USCS § 1003(a)] and not exempt under section 4(b) [29 USCS § 1003(b)].” (emphasis added).
. Asbestos Workers Local No. 42 Welfare Fund v. Brewster, 2006 WL 3393587, at *5 (Del.Super.).
.
Wilmington Trust Co. v. Aetna Cas. & Sur. Co.,
.
Linn v. Del. Child Support Enforcement,
. 1 Moore’s Manual — Federal Practice and Procedure (2007) § 5.13[3][b] (citations omitted).
.
Egelhoff v. Egelhoff,
. 29 U.S.C. § 1144(a) (emphasis added). The Fund is a plan subject to this section. See 29 U.S.C. § 1003(a) ("[Tjhis tifie shall apply to any employee benefit plan if it is established or maintained ... by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce....”).
.
See Davila,
.
Davila,
. See
id.
at 208,
.
Coyne,
. See
Davila,
. 29 U.S.C. § 1132(a)(1)(B).
. 29 U.S.C. § 1132(a)(3) (emphasis added).
.
.
Id.
at 214,
.
Id.
at 220,
. See,
e.g., Bast v. Prudential Ins. Co. of Am.,
.
Compare Admin. Comm. of Wal-Mart
As
socs. Health & Welfare Plan v. Willard,
.
. Id. at 1872.
. Id.
. Id.
. Id. at 1873.
. Id.
.
Id.
at 1878.
See also id.
at 1877 ("As explained, Mid Atlantic's action to enforсe the “Acts of Third Parties” provision qualifies as an equitable remedy because it is indistinguishable from an action to enforce an equitable lien established by agreement, of the sort epitomized by our decision in
[Barnes v. Alexander,
.
See Aetna Health Inc. v. Davila,
.
Metro. Life Ins. Co. v. Taylor,
.
.
Id.
at 209,
. We distinguish the cases that the Fund has relied upon, specifically
Pascack Valley Hospital, Inc. v. Local 464A UFCW Welfare Reim
.
See Popowski v. Parrott,
. Whether or not the Fund is entitled to relief under Fed.R.Civ.P. 60(b) in the U.S. District Court is a matter addressed to the discretion of that court.