FILED
United States Court of Appeals
Tenth Circuit
April 13, 2011
PUBLISH
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
JEFFREY HANSEN, an individual,
Plaintiff-Appellant,
v. No. 08-4089
HARPER EXCAVATING, INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:07-CV-00679-BSJ)
April Hollingsworth of the Hollingsworth Law Office, LLC (Leslie G. Schaar of Hoole &
King LC, with her on the brief), Salt Lake City, Utah, for Plaintiff-Appellant.
Ryan B. Hancey (Scott O. Mercer with him on the brief) of Kesler & Rust, Salt Lake
City, Utah, for Defendant-Appellee.
Before TYMKOVICH, EBEL, and GORSUCH, Circuit Judges.
EBEL, Circuit Judge.
This case requires us to address the preemptive scope of the Employee Retirement
Income Security Act (“ERISA”), as well as to clarify the relationship between judicial
estoppel and subject-matter jurisdiction. Jeffrey Hansen worked for Harper Excavating
for six months beginning in 2003. During this time, he attempted to enroll in Harper’s
ERISA-regulated health insurance plan, but, unbeknownst to him, Harper never
effectively enrolled him in the plan, although it did deduct plan “payments” from his
paycheck. Shortly after he left the company, Hansen fell ill, and incurred thousands of
dollars in medical expenses when he discovered that he did not actually have insurance
through Harper.
Hansen sued in federal court under ERISA and won a substantial damages award.
During discovery related to that suit, Hansen learned of other alleged behavior on the part
of Harper that led him to file a lawsuit based entirely on state law against his former
employer in state court in Utah. Harper removed that case to federal court. The district
court denied remand, then dismissed the case. Exercising jurisdiction under 28 U.S.C.
§ 1291, we REVERSE and REMAND with instructions to remand the case to state court.
2
BACKGROUND1
Jeffrey Hansen was hired by Harper Excavating in November 2003. When he was
hired, he was told by Harper that employees were eligible to enroll in its health insurance
plan after 90 days on the job. He completed the enrollment forms, which he assumed
would be submitted once he had worked the requisite 90 days. In February 2004, Hansen
learned that premiums were not being deducted from his pay. Harper’s benefits
coordinator, Stacy Henderson, told Hansen that his original paperwork had been lost, and
had him fill out a new set of enrollment forms, which she sent to Regence BlueCross
BlueShield of Utah (“BCBS”), Harper’s insurance provider. Henderson also provided
Hansen with the policy and group numbers of Harper’s insurance policy in the event
Hansen needed to use the insurance before his own enrollment card arrived. Harper
began regularly deducting premium payments from Hansen’s check, for coverage
retroactive to February 1, 2004 (i.e. 90 days after he began working for the company).
On April 28, 2004, Hansen left his employment with Harper.
In May 2004, Hansen went to the hospital with breathing problems. When he
presented the group and policy numbers given to him by Henderson, he was informed
that he had no coverage under Harper’s plan. As was later revealed in discovery,
Harper’s contract with BCBS required employees to apply for coverage between 60 and
1
The facts recited in this opinion are taken from the pleadings. Because there has not yet
been a trial or other fact finding in this case, the recitation of facts herein are not, of
course, factual findings.
3
90 days after starting employment, rather than after 90 days, as Hansen had been told.
His initial paperwork had never been submitted, and when Henderson submitted his
second round of paperwork in March 2004, it was rejected by BCBS as untimely (which
is to say, after the 60-90 day window had closed). Harper was notified of this rejection,
and yet never informed Hansen that he was not covered and, moreover, continued to
deduct “premium payments” from his paycheck for the remainder of his tenure with the
company. In June 2004, Harper sent Hansen a check for $279.91 in refunded payments,
as well as a copy of the notification of rejection for Hansen it had received from BCBS in
March 2004.
Because he was unable to obtain medical care, Hansen’s condition worsened; he
currently suffers from spinal cord damage and is blind in one eye due to glaucoma. On
November 15, 2005, Hansen filed suit against Harper in the United States District Court
for the District of Utah, in case number 05-cv-00940. This federal lawsuit sought
damages based on three alleged violations of ERISA committed by Harper. On May 8,
2007, the district court granted summary judgment in Hansen’s favor on liability.
Hansen v. Harper Excavating, Inc., No. 2:05-cv-00940-DAK, Mem. Decision and Order
at 9, Doc. 99 (D. Utah. May 8, 2007) [Hansen I].2 In March 2008, after a hearing on
2
We hereby take judicial notice of the documents from this earlier case in the electronic
database of the U.S. District Court for the District of Utah, as facts “capable of accurate
and ready determination by resort to sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201(b)(2). We note that we may take this action “whether
Continued . . .
4
damages, the district court awarded Hansen a total of $57,182.33 to recompense his
medical expenses, and $102,056.88 in attorney’s fees and costs. Id., Doc. 127 at 6-7.
Harper did not appeal this award.
During discovery in the federal lawsuit, Hansen learned of the actions of
Henderson and Harper noted above. On June 6, 2007 (which is to say, after winning
summary judgment in Hansen I but before the award of damages), Hansen filed the
instant lawsuit, Hansen II, in the Third Judicial District Court of Salt Lake County, Utah.
This suit alleged five causes of action, all brought under Utah state law: (1) fraudulent
nondisclosure; (2) negligent misrepresentation; (3) conversion; (4) breach of contract –
good faith and fair dealing; and (5) special damages. On August 12, 2007, Harper filed a
Notice of Removal of the state-court case with the federal district court, arguing that
Hansen’s claims were completely preempted by ERISA, and thus federal jurisdiction
over the claims existed; shortly thereafter, Harper also filed a motion to dismiss Hansen’s
claims. Hansen filed an objection to removal (which the district court treated as a motion
to remand), a memorandum in opposition to dismissal, and sought leave to amend his
complaint to add Henderson as a defendant, as well as to add claims for negligent
supervision and vicarious liability against Harper. On April 28, 2008, the district court
______________________________________
Cont.
requested or not,” under Rule 201(c), and “at any stage of the proceeding,” under Rule
201(f).
5
issued an order denying Hansen’s motion to remand, dismissing the case on the basis of
res judicata, and denying Hansen’s motion to amend his complaint as moot.
We conclude that Hansen’s claims are not completely preempted by ERISA and
the district court erred in denying Hansen’s Request to Remand. Accordingly, we also
vacate the district court order dismissing Hansen’s complaint on the basis of res judicata.
DISCUSSION
The district court denied Hansen’s request to remand the case to state court,
holding that his claims are completely preempted by ERISA. We review this decision de
novo. Felix v. Lucent Techs., Inc., 387 F.3d 1146, 1153 (10th Cir. 2004) (“We review de
novo the question of whether Plaintiffs’ state law claims are completely preempted.”).
I. Hansen’s Claims Are Not Completely Preempted by ERISA
The jurisdiction of the federal courts is limited by Article III of the Constitution
and by statutes passed by Congress. A case that is filed in state court may be removed
from state to federal court at the election of the defendant, but only if it is one “of which
the district courts of the United States have original jurisdiction,” which is to say if
federal subject-matter jurisdiction would exist over the claim. 28 U.S.C. § 1441(a).
Under the well-pleaded complaint rule, in order to invoke federal question jurisdiction
under 28 U.S.C. § 1331 and thus to be removable on that basis, a federal question must
appear on the face of the plaintiff’s complaint; that the defendant possesses a federal
defense is not sufficient to invoke federal question jurisdiction. Felix, 387 F.3d at 1154.
6
Generally, the plaintiff is the master of his complaint, and if he files in a state court
pleading only state-law causes of action, the case is not removable to federal court based
on federal question jurisdiction. Id. (citing Caterpillar, Inc. v. Williams, 482 U.S. 386,
392 (1987)).
The Supreme Court, however, has recognized an exception (or “independent
corollary”) to the well-pleaded complaint rule for a narrow category of state-law claims
that can independently support federal jurisdiction and removal. Felix, 387 F.3d at 1154.
These claims are “completely preempted” because they fall within the scope of federal
statutes intended by Congress completely to displace all state law on the given issue and
comprehensively to regulate the area. Id. at 1154-55. Unlike ordinary preemption, which
is a federal defense to a state-law claim under the Supremacy Clause of the Constitution
that does not render a state-law claim removable to federal court, complete preemption
makes a state-law claim “purely a creature of federal law,” and thus removable from state
to federal court from the outset. See id. (quoting Franchise Tax Bd. v. Constr. Laborers
Vacation Trust, 463 U.S. 1, 23-24 (1983)).
The Supreme Court has recognized only a few federal statutes that so pervasively
regulate their respective areas that they have complete preemptive force; ERISA is one.
See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 67 (1987). Section 502(a) of ERISA3
authorizes civil actions “(1) by a participant or beneficiary . . . (B) to recover benefits due
3
Throughout this opinion, we will refer to sections of ERISA by their ERISA section
numbers, e.g. § 502, rather than their U.S. Code designations, e.g. 29 U.S.C. § 1132.
7
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 the terms of the plan.” ERISA § 502(a)(1)(B).
Under Taylor, a state-law suit that falls within the scope of this section may be removed
to federal court via complete preemption.
As to when a claim falls within the scope of ERISA § 502(a), the Supreme Court
in Aetna Health Inc. v. Davila held:
[W]here the individual is entitled to such [claimed] coverage only because
of the terms of an ERISA-regulated employee benefit plan, and where no
legal duty (state or federal) independent of ERISA or the plan terms is
violated, then the suit falls “within the scope of” ERISA § 502(a)(1)(B). In
other words, if an individual, at some point in time, could have brought his
claim under ERISA § 502(a)(1)(B), and where there is no other
independent legal duty that is implicated by a defendant’s actions, then the
individual’s cause of action is completely pre-empted by ERISA
§ 502(a)(1)(B).
542 U.S. 200, 210 (2004) (citation omitted). Therefore, if a state-law claim is for benefits
due or claimed under an ERISA-regulated plan, or to enforce or clarify rights under a
plan, and no legal duty independent of ERISA is implicated in the claim, then the state-
law suit falls within § 502(a) and may be removed to federal court.
In addition to the complete preemption created by 502(a), ERISA contains a
separate provision, § 514(a), that substantively preempts state laws: “the provisions of
this subchapter . . . shall supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan.” This provision, however, creates only
ordinary—rather than complete—preemption. That is to say, it creates a federal defense
of preemption to a substantive state-law claim that may be asserted in either state or
8
federal court, but it does not of its own force create federal jurisdiction. Only § 502(a) of
the statute has complete preemptive force. See generally Felix, 387 F.3d at 1156-58.
Complete preemption under ERISA, however, is limited to claims brought under
§ 502(a), and that provision, in turn, is limited by its terms to claims “by a participant or
beneficiary” of an ERISA-regulated plan “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 the terms of the plan.” ERISA § 502(a)(1)(B). Thus, in Franchise
Tax Board, the Supreme Court declined to hold a claim by a state government against an
ERISA-regulated plan completely preempted, because a state government was not a
“participant or beneficiary” under ERISA: “ERISA carefully enumerates the parties
entitled to seek relief under § 502; it does not provide anyone other than participants,
beneficiaries, or fiduciaries4 with an express cause of action . . . . A suit for similar relief
by some other party does not ‘arise under’ that provision.” 463 U.S. at 27. Thus, if the
party seeking state-court relief is not a “participant or beneficiary” under an ERISA plan,
he or she could not have brought suit under § 502(a)(1)(B) of the statute, and thus any
state law claim brought by such a person would not be completely preempted.
ERISA defines both “participant” and “beneficiary.” See ERISA § 3(7)-(8). A
participant is
4
“Fiduciaries” may file suit under § 502(a)(3), for equitable relief, but not under
§ 502(a)(1), for damages due to the denial of benefits. Fiduciary status, therefore, is not
relevant to this appeal.
9
[A]ny employee or former employee of an employer, or any member or
former member of an employee organization, who is or may become
eligible to receive a benefit of any type from an employee benefit plan
which covers employees of such employer or members of such
organization, or whose beneficiaries may be eligible to receive any such
benefit.
Id. § 3(7). A beneficiary is an individual designated by a participant to receive benefits
under a plan. Id. § 3(8). Neither party asserts that Hansen is a beneficiary, and so we
will analyze his claim purely on the basis of his status as a participant.
The Supreme Court has further construed the term “participant” to include “either
employees in, or reasonably expected to be in, currently covered employment, or former
employees who have a reasonable expectation of returning to covered employment or
who have a colorable claim to vested benefits.” Firestone Tire & Rubber Co. v. Bruch,
489 U.S. 101, 117 (1989) (internal citations, quotation marks, and alterations omitted).
The Firestone Court further elaborated that “to establish that he or she ‘may become
eligible’ [per § 3(7)’s definition of participant] for benefits, a claimant must have a
colorable claim that (1) he or she will prevail in a suit for benefits, or that (2) eligibility
requirements will be fulfilled in the future.” Id. at 117-18. Finally, “[a] former employee
who has neither a reasonable expectation of returning to covered employment nor a
colorable claim to vested benefits . . . simply does not fit within the phrase ‘may become
eligible.’” Id. at 118 (alteration omitted).
The requirement that a litigant have standing under § 502(a) in order for his or her
complaint to be removable under complete preemption has a jurisdictional dimension.
10
“The express grant of federal jurisdiction in ERISA is limited to suits brought by certain
parties” outlined in § 502. Franchise Tax Bd., 463 U.S. at 21. “Therefore, the
requirement of § 502 is both a standing and a subject matter jurisdictional requirement.”
Felix, 387 F.3d at 1160 n.14 (internal quotation marks omitted). Thus, the subject-matter
jurisdiction of the district court depends on whether Hansen would have had standing to
bring his suit under § 502(a) of ERISA. And in order to have standing, the ERISA
claimant must fall within one of the following categories: (1) an employee currently in
covered employment, Firestone, 489 U.S. at 117; (2) an employee reasonably expected to
be in covered employment, id.; (3) a former employee with a reasonable expectation of
returning to covered employment, id.; or (4) a former employee with a colorable claim to
vested benefits, which is to say a colorable claim that (a) he or she will prevail in a suit
for benefits, or (b) his or her eligibility requirements will be fulfilled in the future, id. at
117-18.
A. ERISA Standing in a § 502(a)(1)(B) Action Is Determined as of the
Time of Filing the Complaint
In order to determine whether Hansen would have standing to bring this suit under
ERISA—and thus whether his claims might be completely preempted—we must first
determine at what point in time we assess ERISA standing. Two possibilities suggest
themselves: either when the wrongful behavior occurred, or when the complaint was
filed. This distinction matters; Hansen appears to have been a current employee
reasonably expected to be in covered employment at the time of Harper’s wrongful
11
behavior (which is to say Harper’s failure to tell Hansen of the proper enrollment
window), but by the time he filed the complaint, he was a former employee with no
reasonable expectation of returning to covered employment or with a colorable claim to
vested benefits under the plan, and thus he would not have had ERISA standing to sue.
Our cases do not expressly answer the question, but they suggest that standing is assessed
at the time the complaint is filed. We agree, and hold that ERISA standing is assessed as
of the filing of a complaint.
In Felix, for example, we considered the state-law tort claims of a group of former
Lucent Technologies employees who claimed that they had been fraudulently induced to
take early retirement, and thus missed out on a more generous retirement plan offered by
the company shortly thereafter. 387 F.3d at 1151-52. We held that the plaintiffs were
former employees with no reasonable expectation of returning to covered employment;
moreover, we held that they did not have a colorable claim to vested benefits, because the
terms of the more generous later-offered plans expressly excluded the plaintiffs. Id. at
1161-62. We noted that “Plaintiffs are simply not claiming that, at the time of their suit,
they were eligible or likely to become eligible for the additional benefits under the terms
of any welfare or pension plan.” Id. at 1162 (emphasis added, additional emphasis
omitted). If the Felix court had considered the relevant timeframe to be when the
wrongful behavior occurred—which, in that case, was when the employees were
fraudulently induced to retire—the plaintiffs would have been considered current
employees, and the court’s analysis of whether the plaintiffs were “likely to become
12
eligible” for the later-offered plan would have been very different. But because the court
examined the plaintiffs’ position vis-à-vis the ERISA plan “at the time of their suit,” it
answered the ERISA standing question in the negative. See also Chastain v. AT&T, 558
F.3d 1177, 1181-84 (10th Cir. 2009) (rejecting “but for” ERISA standing for plaintiffs
predicated upon a claim that plaintiffs would have been participants in an ERISA plan but
for defendants’ wrongdoing).
Varity Corp. v. Howe, 516 U.S. 489 (1996), is not to the contrary. Varity was not
an ERISA standing case, but rather was a direct action for breach of fiduciary duty under
§ 502(a)(3); the parties had conceded that the plaintiffs in that case were participants, and
thus had standing under ERISA. Id. at 508.5 The Supreme Court did consider the text of
§ 502, but it did so only in order to answer the question whether § 502(a)(3) authorized
an action by participants seeking individual equitable relief, or whether it authorized only
actions seeking equitable relief on behalf of the plan itself. Id. at 507 (“The remaining
question before us is whether or not the remedial provision of ERISA that the
beneficiaries invoked, ERISA § 502(a)(3), authorizes this lawsuit for individual relief.”).
Varity did not address at what point ERISA standing is to be assessed.
In a separate portion of its opinion, the Varity Court did examine the state of
affairs as of the time of the alleged breach, but that inquiry was unrelated to the standing
5
We went on to observe in Felix that “ERISA provides no cause of action to non-
participants who claim they were defrauded out of pension benefits in violation of
common law fraud principles.” Id. at 1162.
13
analysis (which, again, was not at issue). In Varity, the plaintiffs’ employer, Varity,6 had
urged the plaintiffs to transfer their pensions to Massey Combines, a new spinoff of
Varity that, as was later revealed, had been designed by the parent company to fail and
default on its obligations. Id. at 492-94. This, according to the plaintiffs, constituted a
breach of Varity’s fiduciary duty under ERISA as the plan administrator. See ERISA
§ 404(a) (requiring fiduciaries to “discharge [their] duties with respect to a plan solely in
the interest of the participants and beneficiaries”). Varity, however, argued that when it
made the representations to the plaintiffs urging them to transfer their pensions to Massey
Combines, it had been acting as their employer, rather than as the plan administrator, and
thus had been under no ERISA-imposed fiduciary duty. Id. at 498. The Court examined
the statements made in context, and determined that, at the time it made the statements,
Varity was acting as a plan administrator, and was thus under a fiduciary duty imposed
by ERISA. Id. at 503.
But the fact that the Varity Court looked to the time of the alleged breach to
determine whether Varity owed a fiduciary duty to the plaintiffs does not mean that we
should look to the time of the alleged breach by Harper to determine whether Hansen has
standing to sue under ERISA. The question of Varity’s fiduciary status was an element
of the substantive claim in that case, and so of course the Court had to examine it as of
6
The Supreme Court referred to two of the petitioners, Varity and Massey-Ferguson,
interchangeably, as the district court had determined that they were alter egos of one
another. Varity, 516 U.S. at 493. For simplicity, we will refer to the petitioners in the
case simply as Varity.
14
the relevant time, i.e. when the representations were made. But questions that go to the
merits of a substantive claim do not precede the question of the plaintiff’s standing, and
standing is assessed as of the time of filing of the complaint. Thus, Varity is not
instructive on the issue of when standing is assessed, and we will continue to follow
Felix, as Tenth Circuit precedent, in holding that standing to sue under ERISA is assessed
as of the filing of the complaint.7
Finally, because ERISA standing is a matter of our subject-matter jurisdiction,
examining it as of the time of filing of the complaint is consonant with our treatment of
other subject-matter jurisdictional requirements. See Grupo Dataflux v. Atlas Global
Grp, L.P., 541 U.S. 567, 571 (2004) (reaffirming rule assessing diversity of citizenship as
of when complaint is filed); see also Mullan v. Torrance, 22 U.S. 537, 539 (9 Wheat)
(1824) (“[T]he jurisdiction of the court depends upon the state of things at the time of the
action brought . . . .”). In particular, when assessing standing under Article III, we do so
as of the time the lawsuit is filed. See Smith v. Rockett, 522 F.3d 1080, 1081 (10th Cir.
2008) (“Standing is assessed as of the time the action was commenced.” (citing Lujan v.
7
Dicta in Varity in fact supports our conclusion here, albeit indirectly. At the end of that
opinion, the Court observed that the plaintiffs could not have brought suit under ERISA
§ 502(a)(1)(B) because, as “they were no longer members of the [Varity] plan,” they had
no benefits due them under the plan, and could not thus maintain suit under
§ 502(a)(1)(B). 516 U.S. at 515. In order to reach this conclusion, the Court could not
logically have been looking at plaintiffs’ standing under § 502(a)(1)(B) as of the time of
Varity’s breach, because as of that time, none of the plaintiffs had yet transferred their
pensions to Massey Combines, and thus at the time of the breach they were still members
of Varity’s plan. The Court did not, however, examine this point closely because, as
noted above, Varity was not an ERISA standing case.
15
Defenders of Wildlife, 504 U.S. 555, 570 n.5 (1992))). And our conclusion that ERISA
standing is assessed as of the time of filing is consonant with the conclusions of other
courts to have addressed the issue. See, e.g., Crawford v. Lamantia, 34 F.3d 28, 32 (1st
Cir. 1994) (noting that not only must plaintiff have ERISA standing when the complaint
is filed, but that he must continue to have standing throughout the pendency of the
action); Harris v. Provident Life & Accident Ins. Co., 26 F.3d 930, 933 (9th Cir. 1994)
(“Whether a person is a plan participant must be decided as of the time of the filing of the
lawsuit.”).
Therefore, we hold that standing to sue under ERISA is assessed as of the time the
complaint is filed.
B. There Is No “But-For” ERISA Standing in the Tenth Circuit
Having established the relevant timeframe, we now pause briefly to refute an
exception that could be relevant to this case. At the heart of Harper’s argument for why
Hansen has standing under ERISA in this case is the notion that, but for the misdeeds of
Harper, Hansen would have been a participant in the ERISA-regulated plan. This may be
a compelling argument in the abstract, but this circuit has repeatedly and unequivocally
rejected the “but-for” exception to the ERISA standing requirement adopted by several
other circuits. “[T]he First, Second, Fifth, Sixth, and Eighth Circuits have held that
former employees may sue under ERISA if they make a ‘but for’ claim” that they would
have been participants had their employers not engaged in wrongful behavior. Felix, 387
F.3d at 1159. The Third Circuit also so holds. See Leuthner v. Blue Cross & Blue
16
Shield, 454 F.3d 120, 129 (3d Cir. 2006). “This court, however, has expressly rejected
the doctrine of ‘but for’ standing.” Chastain, 558 F.3d at 1183; see also Felix, 387 F.3d
at 1159-61; Raymond v. Mobil Oil Corp., 983 F.2d 1528, 1536 (10th Cir. 1993); Mitchell
v. Mobil Oil Corp., 896 F.2d 463, 474 (10th Cir. 1990). We are joined in that rejection
by the Fourth and Eleventh Circuits. See Sanson v. Gen. Motors Corp., 966 F.2d 618,
619, 621 (11th Cir. 1992); Stanton v. Gulf Oil Corp., 792 F.2d 432, 434 (4th Cir. 1986).
Therefore, if we are to find ERISA standing at all, it may not be based on the
notion that, but for the wrongful behavior of Harper and Henderson, Hansen would have
been a participant under the plan.
C. Hansen Would Not Have Had Standing to Sue Under § 502(a)(1)(B)
With the preceding legal questions answered, it becomes a simple matter to
conclude that Hansen would not have had standing to bring his claim under ERISA, and
therefore to conclude that his claims are not completely preempted by that law. In order
to have standing under ERISA, Hansen must have been a participant of the plan at the
time he filed his complaint, which means he would have needed to fall into one of the
four categories outlined above, drawn from the Supreme Court’s Firestone opinion.
Those four categories, once again, are: (1) an employee currently in covered
employment; (2) an employee reasonably expected to be in covered employment; (3) a
former employee with a reasonable expectation of returning to covered employment; or
(4) a former employee with a colorable claim to vested benefits, which is to say a former
17
employee with a colorable claim that (a) he will prevail in a suit for benefits, or (b) his
eligibility requirements will be fulfilled in the future. Firestone, 489 U.S. at 117-18.
The first two categories—a current employee in covered employment and a
current employee reasonably expected to be in covered employment—cannot apply to
Hansen, because as of when he filed suit in this case, June 2007, he was no longer a
current employee of Harper Excavating.
To have standing, Hansen must therefore fall within one of the latter two
categories, for former employees. As of June 2007, we cannot say that Hansen had any
expectation, reasonable or otherwise, of returning to covered employment; nothing in the
record, nor in the submissions of the parties, gives any hint that either Hansen or Harper
ever expected to resume their employment relationship.
To have standing as a former employee, Hansen must have a colorable claim to
vested benefits under one of the two subdivisions of the fourth category. The record
shows that Hansen has had no involvement with Harper of any kind (other than his
lawsuits) since he left his employment in April 2004. Therefore, even if there are some
eligibility requirements that he has not yet fulfilled, there seems to be no tenable
argument that he will fulfill any such requirements in the future. We are, thus, left with
the final option that Hansen might be a former employee with a colorable claim that he
will prevail in a suit for benefits. But, of course, Hansen has already prevailed in a suit
for benefits in Hansen I; he thus no longer has a “colorable claim” that he will do so in
the future. Therefore, Hansen is not a former employee with a colorable claim that he
18
will in the future prevail in a suit for benefits. He is a “former employee who has neither
a reasonable expectation of returning to covered employment nor a colorable claim to
vested benefits [who] simply does not fit within the phrase ‘may become eligible,’”
Firestone, 489 U.S. at 118 (alteration omitted), and thus he has no standing under ERISA.
Thus, under the statute as interpreted in Firestone and Felix, Hansen does not have
standing to sue under ERISA, and his claim cannot be completely preempted.8
II. Judicial Estoppel Does Not Apply to Create Subject-Matter Jurisdiction
Finally, Harper argues that, even if, as a strictly analytical matter, Hansen does not
have ERISA standing now and did not have it at the time of Hansen I, we should apply
the principle of judicial estoppel to prohibit him from arguing that he has no standing
now, based on the position he took in Hansen I. In essence, it is Harper’s position that
Hansen’s assertions, accepted by the court in Hansen I, should preclude Hansen from
arguing—and us from concluding—that he does not have ERISA standing here, via
operation of judicial estoppel. We disagree.
8
Even if Hansen did have standing to assert a complete preemption claim in this suit as a
participant or beneficiary under an ERISA plan, it is doubtful this present suit would
satisfy the Davila requirements for complete preemption of claiming (1) benefits under
the plan where (2) “there is no other independent legal duty that is implicated by a
defendant’s actions.” However we do not need to address these Davila issues because of
our ruling on standing.
19
The principle of judicial estoppel “is based upon protecting the integrity of the
judicial system by ‘prohibiting parties from deliberately changing positions according to
the exigencies of the moment.’” Bradford v. Wiggins, 516 F.3d 1189, 1194 (10th Cir.
2008) (per curiam) (quoting New Hampshire v. Maine, 532 U.S. 742, 749 (2001)). The
doctrine applies when (1) a party takes a position clearly inconsistent with an earlier-
taken position; (2) adopting the later, inconsistent, position would create an impression
that either the earlier or the later court was misled; and (3) allowing the party to change
their position would give them an unfair advantage. See Johnson v. Lindon City Corp.,
405 F.3d 1065, 1069 (10th Cir. 2005). This circuit applies the doctrine “both narrowly
and cautiously.” Bradford, 516 F.3d at 1194 n.3. Further, we note, as have other circuits,
that judicial estoppel is an affirmative defense. See, e.g., Lozano v. Ocwen Fed. Bank,
FSB, 489 F.3d 636, 638 (5th Cir. 2007); Liberty Mut. Fire Ins. Co. v. Scott, 486 F.3d
418, 421-22 (8th Cir. 2007); Serra Chevrolet, Inc. v. Gen. Motors Corp., 446 F.3d 1137,
1152 (11th Cir. 2006); Altman v. Altman, 653 F.2d 755, 758 n.1 (3d Cir. 1981).
The Eighth Circuit recently faced an analogous situation in Gray v. City of Valley
Park, Missouri., 567 F.3d 976, 980-82 (8th Cir. 2009). In that case, the appellant had
argued in the district court that a municipal ordinance threatened to do her imminent
injury, and so she had Article III standing to bring her case. In what the Eighth Circuit
characterized as “an unlikely turn of events,” after losing a motion for summary judgment
she argued on appeal that the ordinance did not threaten her imminent harm, and thus that
she had never had standing, and so the district court had no subject-matter jurisdiction
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over the case. Id. at 980. The appellees argued that the appellant should be judicially
estopped from arguing that she did not have standing, based on her assertions to the
district court. The court disagreed. Even though “it would seem at first blush that this is
just the sort of case to which judicial estoppel must apply,” the court declined to do so.
Id. at 982. The court observed:
In the end, we must have Article III jurisdiction to entertain any claim even
though the change in tactics in this case does seem to result in the sort of
extreme perversion of the judicial process that normally justifies the use of
judicial estoppel. Most critically, we have failed to find any precedent, and
the [appellee] cites to no authority, supporting the application of this
doctrine in the face of an alleged jurisdictional default.
Id. Rather than apply judicial estoppel, the court conducted its own independent analysis
of Article III standing, concluded that the appellant did, in fact, have standing, and
affirmed the district court. Id. at 982-87.
Similarly, here, Harper’s argument asks us to refrain from inquiring into whether
Hansen actually had ERISA standing, and rather to apply the doctrine of judicial estoppel
and hold that he is precluded from arguing that he did not. Like the Eighth Circuit, we
are unwilling to “forge ahead on blind principle without jurisdiction to do so.” Id. at 982.
In our view, complete preemption is meant to be a narrow exception to the well-pleaded-
complaint rule, and we are not inclined to widen it by holding that a party may establish
subject-matter jurisdiction based on complete preemption via judicial estoppel. As
analyzed above, Hansen would not have standing under ERISA to bring his present suit,
notwithstanding the outcome in Hansen I. Given the subject-matter jurisdictional
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element of ERISA standing, we cannot simply ignore this fact, and allow judicial
estoppel to substitute for subject-matter jurisdiction. Therefore, we deny this argument.9
CONCLUSION
Hansen has already sued Harper for ERISA benefits wrongfully denied, and won.
Therefore, as he does not fulfill the requirements of Firestone or Felix, he has no present
standing under ERISA to bring the claims currently being asserted in his second suit, and
thus his state-court suit cannot be removed to federal court on the basis of the doctrine of
complete preemption. Further, his assertions in the prior lawsuit regarding his ERISA
status cannot now be used to manufacture subject-matter jurisdiction in this court based
on the doctrine of judicial estoppel. We thus REVERSE the district court’s conclusion to
the contrary, VACATE the order dismissing the complaint, and REMAND with
instructions to remand the case to state court.
9
Because judicial estoppel is an affirmative defense, as noted above, we take no position
on its applicability to the merits of Hansen’s claims, once it is returned to state court.
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