Oak v. Multicare Health System

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT TACOMA 9 10 FRANCIS FAYE OAK, CASE NO. 3:25-cv-05913-DGE 11 Plaintiff, ORDER GRANTING PLAINTIFF’S 12 v. MOTION TO REMAND (DKT. NO. 11) 13 MULTICARE HEALTH SYSTEM, 14 Defendant. 15 16 This matter comes before the Court on Plaintiff’s motion to remand this case to Pierce 17 County Superior Court. (Dkt. No. 11.) For the reasons discussed herein, Plaintiff’s motion to 18 remand (Dkt. No. 11) is GRANTED. 19 I BACKGROUND 20 A. Factual Background 21 The following summary is based on the factual allegations contained in the Complaint. 22 Since 2023, Defendant has employed Plaintiff as a bereavement counselor. (Dkt. No. 1-1 at 18.) 23 As an employee, Plaintiff is enrolled in Defendant’s health care coverage plan known as the 24 1 MultiCare Health System Flexible Benefits Program, MultiCare MyConnected Care Plan (the 2 “Plan”). (Id. at 3, 18.) Plaintiff alleges the Plan is part of Defendant’s “compensation for 3 employment.” (Id. at 3.) 4 Plaintiff is a woman and transgender. (Id. at 18.) Plaintiff was diagnosed with gender 5 dysphoria in 2021 and has been receiving gender-affirming health care since that time. (Id.) 6 Upon her employment with Defendant, Plaintiff sought pre-authorization for gender-affirming 7 facial feminization surgery. (Id.) Defendant denied the pre-authorization request because the 8 Plan excluded such medical treatment. (Id. at 19.) Defendant identified, “the requested 9 procedures . . . for facial feminization surgery is a Health Plan exclusion and Not a Covered 10 Benefit. This determination is based on the specific benefit exclusion and is not based on the 11 medical necessity of the service requested.” (Id. at 168.) Specifically, the Plan excludes from 12 coverage “[c]osmetic services, supplies or surgery to repair, modify or reshape a functioning 13 body structure for improvement of the patient’s appearance or self-esteem (except for gender 14 affirmation surgery).” (Id. at 115.) The Plan further excludes from coverage 15 “[t]ransgender/gender affirming services,” under which a lengthy list of procedures are identified 16 as “[s]ervices that are considered cosmetic[.]” (Id. at 117.) Theses provisions are hereinafter 17 referred to collectively as the “Exclusion.” 18 Plaintiff acknowledges that “[o]n the face of the Plan, [the procedures she sought are] 19 surgical procedures . . . excluded expressly when they are sought as treatment for gender 20 dysphoria, a condition with which only transgender people are diagnosed.” (Id. at 5.) Plaintiff 21 alleges Defendant designed the Exclusion in the Plan and “[b]y intentional design, the Exclusion 22 is uniquely targeted at transgender employees[.]” (Id. at 14.) Plaintiff states she “brings this 23 action to challenge MultiCare’s blanket exclusion of medically necessary gender-affirming care 24 1 as illegal sex discrimination and/or sexual orientation discrimination and to obtain a judgment 2 declaring it unlawful, thereby preventing its enforcement.” (Id. at 6.) Plaintiff asserts one cause 3 of action under the Washington Law Against Discrimination (“WLAD”). (Id. at 21–22.) 4 Plaintiff alleges Defendant is violating the WLAD because the Exclusion “is illegal facial or 5 proxy discrimination based on sex” and that Defendant “has drawn a classification that 6 discriminates based on sex and/or sexual orientation, including but not limited to gender identity, 7 transgender status, and gender transition. (Id.) Plaintiff seeks remedies under the WLAD 8 including “injunctive relief requiring MultiCare to stop its facially discriminatory policy, actual 9 damages resulting from the enforcement of the Transgender Exclusion, emotional distress 10 damages, attorney fees, and all other appropriate remedies permitted” under the WLAD. (Id. at 11 21.) 12 B. Procedural Background 13 Plaintiff filed her complaint in Pierce County Superior Court on September 22, 2025. 14 (Dkt. No. 1-1.) On October 9, 2025, Defendant removed the matter to this Court by asserting 15 federal question jurisdiction based on the Employee Retirement Income Security Act of 1974 16 (“ERISA”). (Dkt. No. 1 at 2.) On November 13, 2025, Plaintiff moved to remand this case to 17 Pierce County Superior Court arguing that “ERISA does not apply to the claim in this case” and 18 there is no federal question jurisdiction because she is bringing only a claim under WLAD. (Dkt. 19 No. 11 at 1–2.) Defendant opposes remand. (Dkt. No. 12.) The motion is fully briefed. (See 20 Dkt. Nos. 12, 13.) 21 II LEGAL STANDARD 22 A. Motions to remand 23 24 1 District courts have federal question jurisdiction over “all civil actions that arise under 2 the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. The presence or 3 absence of federal question jurisdiction is governed by the “well-pleaded complaint rule,” which 4 provides that federal jurisdiction exists “only when a federal question is presented on the face of 5 the plaintiff's properly pleaded complaint.” Provincial Gov't of Marinduque v. Placer Dome, 6 Inc., 582 F.3d 1083, 1091 (9th Cir. 2009) (citation omitted). “‘In determining the existence of 7 removal jurisdiction, based upon a federal question, the court must look to the complaint as of 8 the time the removal petition was filed.’” Abada v. Charles Schwab & Co., 300 F.3d 1112, 1117 9 (9th Cir. 2002) (quoting O’Halloran v. Univ. of Wash., 856 F.2d 1375, 1379 (9th Cir. 1988)) 10 (italics omitted). 11 B. ERISA preemption 12 “ERISA is a comprehensive statute designed to promote the interests of employees and 13 their beneficiaries in employee benefit plans.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 14 (1983). ERISA is a “closely integrated regulatory system” that imposes certain requirements and 15 sets certain standards for pension and welfare plans. Ingersoll-Rand Co. v. McClendon, 498 U.S. 16 133, 137 (1990). “Congress included various safeguards to preclude abuse and ‘to completely 17 secure the rights and expectations brought into being by this landmark reform legislation.’” Id. 18 (quoting S.Rep. No. 93-127, p. 36 (1973)). Among these safeguards, “[t]here are two strands of 19 ERISA preemption: (1) ‘express’ preemption under ERISA § 514(a), 29 U.S.C. § 1144(a); and 20 (2) preemption due to a ‘conflict’ with ERISA’s exclusive remedial scheme set forth in ERISA 21 § 502(a), 29 U.S.C. § 1132(a).” Fossen v. Blue Cross & Blue Shield of Montana, Inc., 660 F.3d 22 1102, 1107 (9th Cir. 2011) (brackets omitted). 23 24 1 III ANALYSIS 2 Plaintiff asserts she “pleads a single WLAD claim” and that ERISA does not preempt 3 such claim. (Dkt. No. 11 at 6, 8–9). She further asserts her WLAD claim is not “an ERISA claim 4 in disguise” because she “challenges the design of the employer-sponsored health plan.” (Id. at 5 9–10.) Defendant acknowledges the “Plan denied her claim because it excludes the requested 6 procedures,” but asserts that because Plaintiff’s “claim is predicated on the alleged wrongful 7 denial of benefits under an ERISA-governed plan[,] it arises exclusively under ERISA.” (Dkt. 8 No. 12 at 1–2.) Defendant argues ERISA § 502(a) and § 514(a) preempt Plaintiff’s claim and, 9 therefore, removal was proper. (Id. at 5–16.) 10 A. ERISA§ 514(a) does not provide federal question jurisdiction and was not a proper 11 basis to remove Plaintiff’s complaint. 12 Section 514(a) “broadly preempts ‘any and all State laws insofar as they may now or 13 hereafter relate to any [covered] employee benefit plan.’” Fossen, 660 F.3d at 1108 (quoting 29 14 U.S.C. § 1144(a). However, “a defense of federal preemption of a state-law claim, even conflict 15 preemption under § 514(a) of ERISA, is an insufficient basis for original federal question 16 jurisdiction under § 1331(a) and removal jurisdiction under § 1441(a).” Marin General Hospital 17 v. Modesto & Empire Traction Co., 581 F.3d 941, 945 (9th Cir. 2009). Put another way, even if 18 § 514 does preempt Plaintiff’s claim, “a defense of conflict preemption under § 514(a) does not 19 confer federal question jurisdiction on a federal district court.” Id. 20 The Court finds Defendant asserts ERISA § 514 as a defense to Plaintiff’s WLAD claim. 21 (See Dkt. No. 12 at 13) (“Ms. Oak’s WLAD claim is squarely preempted by ERISA § 514.”). 22 But any reliance Defendant placed on § 514 to support removal of Plaintiff’s claims is 23 24 1 misplaced. § 514 does not confer federal question jurisdiction and removal based on § 514 was, 2 and continues to be, improper. 3 B. ERISA § 502(a) conflict preemption also does not apply. 4 Section 502(a) “confers federal subject matter jurisdiction for claims that nominally arise 5 under state law.” Fossen, 660 F.3d at 1107; see also Marin General Hospital, 581 F.3d at 945 6 (comparing “complete preemption under § 502(a), which provides a basis for federal question 7 removal jurisdiction, and conflict preemption under § 514(a), which does not”). ERISA § 502(a) 8 allows a “participant or beneficiary” to bring a civil action based on an administrator’s refusal to 9 supply requested information or “to recover benefits due to [her] under the terms of [her] plan, to 10 enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits under 11 the terms of the plan.” 29 U.S.C. § 1132(a)(1). 12 Whether a state law is preempted by section 502(a) is a two-part analysis. Fossen, 660 13 F.3d at 1107–1108. “[A] state-law cause of action is completely preempted if (1) ‘an individual, 14 at some point in time, could have brought [the] claim under ERISA § 502(a)(1)(B),’ and (2) 15 ‘where there is no other independent legal duty that is implicated by a defendant’s actions.’” 16 Marin General Hospital, 581 F.3d at 946 (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 17 210 (2004)). Both prongs must be met. Id. at 947. 18 1. Davila prong 1: whether Plaintiff could have brought her claim under ERISA 19 § 502(a)(1)(B). 20 ERISA § 502(a)(1)(B) covers only claims to “recover benefits,” “enforce [] rights,” or 21 “clarify [] rights” due under an ERISA-governed plan. 29 U.S.C. § 1132(a)(1). Defendant 22 asserts Plaintiff’s claim can be brought under ERISA § 502(a)(1)(B) because Plaintiff “ask[s] the 23 Court to find that under the Plan she is entitled to the benefits she seeks” and because Plaintiff 24 1 “seeks to change how MultiCare interprets the Plan and clarify her rights to future benefits under 2 the Plan.” (Dkt. No. 12 at 8–9.) 3 However, Defendant acknowledges the Plan excludes coverage for the procedures 4 Plaintiff sought. (Id. at 1; see also Dkt. 1-1 at 168 (“the requested procedures . . . for facial 5 feminization surgery is a Health Plan exclusion and Not a Covered Benefit”)). Plaintiff also 6 acknowledges the Plan excludes coverage for the medical procedures she sought. (Dkt. No. 1-1 7 at 21) (“On the face of the MultiCare Plan, certain clinically effective surgeries that are the 8 standard of care for treatment of gender dysphoria are expressly singled out and excluded from 9 coverage precisely because they treat transgender people.”). Plaintiff further notes “[s]he does 10 not allege that the ERISA plan administrator for MultiCare misconstrued the plan terms or 11 denied benefits to which under the plan language she is entitled.” (Dkt. No. 11 at 10.) 12 Thus, the Parties agree the Plan excludes the procedures Plaintiff sought. Based on this 13 agreement, the Court is unable to conclude Plaintiff’s complaint seeks to “recover benefits,” 14 “enforce [] rights,” or “clarify [] rights” due under an ERISA-governed plan. 15 Defendant also argues Plaintiff’s “claim arose only because of the denial of coverage.” 16 (Dkt. No. 12 at 8.) But while it may be true that this dispute arose because the Plan excludes 17 coverage for gender-affirming procedures, Plaintiff’s claim does not allege such denial violated 18 the terms of the Plan. The Court, therefore, has no reason to analyze whether Defendant 19 followed the terms of the Plan because neither Party disputes the Plan by its terms excludes 20 coverage for the procedures Plaintiff sought. 21 Defendant further argues Plaintiff can maintain her claim under § 502(a)(1)(B) if “‘(1) 22 there is a relevant ERISA plan; (2) plaintiff has standing to sue under the plan; (3) the defendant 23 is an ERISA entity; and (4) the [complaint] ‘seeks compensatory relief akin to that available 24 1 under § 502(a).’” (Dkt. No. 12 at 7) (quoting McGill v. Pac. Bell Tel. Co., 139 F. Supp. 3d 1109, 2 1117 (C.D. Cal. 2015)). But Plaintiff does not seek compensatory relief akin to that available 3 under § 502(a). Here, Plaintiff asks for declaratory judgment that Defendant’s “blanket 4 exclusion of gender-affirming care discriminates because of sex and/or sexual identity in 5 violation of the WLAD”; for damages that would fully compensate “the financial harm, 6 emotional distress and suffering, embarrassment, humiliation, pain and anguish, violation of her 7 dignity, and other damages” caused by a violation of the WLAD; and for declaratory relief 8 prohibiting Defendant from maintaining a health plan that “eliminate[s] coverage for gender- 9 affirming care as ‘cosmetic’ or because the treatment is for or related to an employee’s sex or 10 diagnosis with gender dysphoria.” (Dkt. No. 1-1 at 22.) 11 Accordingly, Davila prong one is not satisfied. 12 2. Davila prong 2: whether Plaintiff’s claim implicates an independent legal duty. 13 “[A] state-law claim is not preempted if it reflects an ‘attempt to remedy [a] violation of a 14 legal duty independent of ERISA[.]’” Depot Inc. v. Caring for Montanans, Inc., 915 F.3d 643, 15 667 (9th Cir. 2019) (quoting Davila, 542 U.S. at 214). “State-law claims are based on other 16 independent legal duties when they are in no way based on an obligation under an ERISA plan 17 and would exist whether or not an ERISA plan existed.” Id. (cleaned up); see also Marin 18 General Hospital, 581 F.3d at 950. 19 Defendant argues Plaintiff’s “claims are based on her application for Plan benefits” and 20 that “[b]ut for the terms [of the Plan], Ms. Oak would not have a claim.” (Dkt. No. 12 at 11.) 21 According to Defendant, “nothing in the Complaint implicates an independent legal duty aside 22 from the obligations of the respective parties set forth in the Plan documents.” (Id.) Defendant’s 23 24 1 arguments focus on the Plan’s existence; in essence, if the Plan did not exist, Plaintiff would 2 have no basis to complain of any discrimination under the WLAD. 3 But Plaintiff points out that Defendant has an employer-employee relationship governed 4 by the WLAD and which exists independent of their ERISA Plan administrator-beneficiary 5 relationship. (Dkt. No. 13 at 6–7.) Plaintiff argues that the Plan is a form of employment 6 compensation and that Defendant, as an employer, may not discriminate when it designs such 7 employment compensation. (Dkt. No. 13 at 7.) The complaint itself does allege the Plan is part 8 of an employee compensation package: “[a]s part of its compensation for employment, Multicare 9 provides its employees with health care coverage through a self-funded plan” (Dkt. No. 1-1 at 3); 10 the Plan is “an employment benefit” (id. at 7); “[h]ealth insurance and other fringe benefits are a 11 form of compensation or privileges of employment” (id. at 17); “[a]s part of the terms, 12 conditions, privileges, and status of her employment . . . , Ms. Oak is and, at all relevant times, 13 was enrolled in MultiCare’s Plan” (id. at 18); “[a]n exclusion of care in employment benefits, 14 which treats transgender individuals differently than non-transgender individuals . . . is sex 15 discrimination” (id. at 19). Thus, according to Plaintiff, “[t]he discrimination began when 16 MultiCare designed a compensation package excluding transgender healthcare, not when its Plan 17 administrator administered that exclusion.” (Dkt. No. 13 at 7.) 18 When the Plan is viewed as part of Plaintiff’s employment compensation package, it 19 becomes clear that the obligation to provide a non-discriminatory compensation package, under 20 the WLAD as alleged by Plaintiff, is a legal duty independent of any obligation owed under the 21 Plan. The Defendant’s duty under the WLAD to provide a non-discriminatory employment 22 compensation package is a duty that exists whether or not the Plan existed. And determining 23 whether Defendant complied with its duties under the WLAD requires interpretation of state law, 24 1 not interpretation of the Plan. Therefore, Plaintiff’s WLAD claim implicates an independent 2 legal duty. 3 As with the first Davila prong, the second Davila prong has not been satisfied. 4 IV ORDER 5 For the reasons stated herein, the Court finds and ORDERS that Plaintiff’s motion to 6 remand (Dkt. No. 11) is GRANTED. The Court REMANDS the matter to Pierce County 7 Superior Court. 8 Dated this 31st day of March, 2026. 9 a 10 David G. Estudillo 11 United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24