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Steube v. Virco, Inc.

United States District Court, M.D. Alabama, Northern Division

February 8, 2017

VIRCO INC.; CNA CLAIMSPLUS, INC. et al Defendants.




         This cause is before the court on a Motion to Remand, filed by the Plaintiff, Ronald Steube on January 3, 2017 (Doc. #3).

         The Plaintiff originally filed a Complaint in this case in the Circuit Court of Montgomery County, Alabama. The Plaintiff brings two claims, alleging that the Defendants failed to pay the Plaintiff's mileage costs for travel to and from his medical and rehabilitation providers and that the Defendants concealed that they were required by Alabama regulatory law to notify the Plaintiff of his entitlement to reimbursement for these expenses. In Count I, the Plaintiff relies on Ala. Code §25-5-577[1], and in Count II on Section 480-5-5-.36(2) of the Alabama Administrative Code.[2]

         Plaintiff, Ronald Steube, is a citizen of Alabama. Defendant Virco is incorporated in Delaware and has its principle place of business in California. Defendant CNA ClaimsPlus, Inc. is incorporated in Nevada and has its principle place of business in Illinois.

         On December 29, 2016, the Defendants filed a Notice of Removal, stating that this court has diversity jurisdiction in this case.

         For reasons to be discussed, the Motion to Remand is due to be GRANTED.


         Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994); Burns v. Windsor Insurance Co., 31 F.3d 1092, 1095 (1994); Wymbs v. Republican State Executive Committee, 719 F.2d 1072, 1076 (11th Cir. 1983), cert. denied, 465 U.S. 1103 (1984). As such, federal courts only have the power to hear cases that they have been authorized to hear by the Constitution or the Congress of the United States. See Kokkonen, 511 U.S. at 377. Because federal court jurisdiction is limited, the Eleventh Circuit favors remand of removed cases where federal jurisdiction is not absolutely clear. See Burns, 31 F.3d at 1095.


         A federal district court may exercise subject matter jurisdiction over a civil action in which only state law claims are alleged if the civil action arises under the federal court's diversity jurisdiction. See 28 U.S.C. § 1332(a)(1). The diversity statute confers jurisdiction on the federal courts in civil actions "between citizens of different states, " in which the jurisdictional amount is met. Id. There is, however, a prohibition against the removal of cases which would otherwise meet the diversity jurisdiction requirements when the cases arise under the workmen's compensation laws of a state. 28 U.S.C. §1445(c) (stating “A civil action in any State court arising under the workmen's compensation laws of such State may not be removed to any district court of the United States.”). The purposes behind the enactment of §1445(c) are to stem the flood of workers' compensation cases removed to federal court and to restrict the cases to state court because they involve purely local disputes implicating no federal concerns. See Reed v. Heil Co., 206 F.3d 1055, 1060 n.3 (11th Cir. 2000); Pettaway v. Wayne Poultry Co., a Division of Continental Grain Co., 791 F.Supp. 290, 291 (M.D. Ala. 1992).

         The Plaintiff, Steube, has moved to remand this case to state court on the ground that his claims arise under the workmen's compensation laws of Alabama and, therefore, cannot be removed to federal court under 28 U.S.C. §1445. Although the Defendants did not acknowledge it in removing the case to this court, the Defendants now concede that Count I is a workers' compensation claim and due to be remanded. They continue to maintain, however, that Count II is a fraud claim and should be severed and remanded.

         As to Count II, Steube argues that his claim is for violation of Chapter 480-5-5-.36(2) of the Alabama Administrative Code, which requires Defendants to notify the injured employee in writing that he is entitled to reimbursement for expenses as stated in the workers' compensation laws of Alabama. Steube also points to a different portion of the same regulation which provides that disputes regarding reimbursement for incurred expenses should be first directed to the employer and then employees may contact the workers' compensation division if there are problems with payment and contact with the employer is fruitless. §480-5-5-.36 (5). Steube argues that because the Workers Compensation Act provides a mechanism for an employee to seek assistance, the present dispute arises under the workers' compensation laws. Steube contends that state workers' compensation law is an element of the claim in Count II and the source of the duty imposed on the Defendants.

         On its face, Steube's claim in Count II has a relationship with workers' compensation laws because the count specifically invokes a section of the Alabama Administrative Code regarding workers' compensation to establish a duty to Steube. The question before this court, therefore, is whether that is sufficient for the claim to arise under workers' compensation law. That inquiry is decided using federal, ...

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