May 19, 2017
from the United States District Court for the Northern
District of Illinois, Western Division. No. 15 C 50242 -
Frederick J. Kapala, Judge.
WOOD, Chief Judge, and POSNER and Kanne, Circuit Judges.
Shaw Bethea Hospital is a not-for-profit healthcare provider
in Dixon, Illinois. Heather Studer worked at the hospital as
an occupational therapist until she resigned. After she
resigned, she filed a small-claims complaint in Illinois
state court, alleging that the hospital violated certain
provisions of the Illinois Wage Payment and Collection Act
("IWPCA") by failing to pay her money that she had
accrued under the hospital's Paid Days Leave policy. The
hospital removed the suit to federal court, claiming that
Studer's claim was completely preempted by the Employee
Retirement Income Security Act of 1974 ("ERISA").
then filed a motion to remand her suit to state court,
challenging the hospital's preemption claim and asserting
that the district court did not have jurisdiction over her
state-law claim; the hospital filed a motion for summary
judgment. The district court denied Studer's motion to
remand, holding that it had federal-question jurisdiction
because ERISA completely preempted the state-law claim. The
court then granted the hospital's motion for summary
judgment, holding that Studer had failed to name the welfare
benefit plan as a defendant, which ERISA requires in most
instances. See Jass v. Prudential Health Care Plan,
Inc., 88 F.3d 1482, 1490 (7th Cir. 1996) (citing 29
U.S.C. § 1132(d)(2)). In granting the motion, the court
permitted Studer "to file an amended complaint naming
the appropriate defendant and to issue summons." (R. 27
instead of filing an amended complaint, Studer filed a Rule
59(e) motion to alter or amend the judgment, again arguing
that ERISA did not preempt her claim. The district court
denied that motion, and this appeal followed. On appeal,
Studer again contends that her IWPCA claim was not preempted
by ERISA. Because we agree with the district court, we
a defendant cannot remove a case to federal court unless the
plaintiff's complaint demonstrates that the
plaintiff's case arises under federal law. Aetna
Health Inc. v. Davila, 542 U.S. 200, 207 (2004). This is
known as the "well-pleaded complaint" rule.
Id. (quoting Franchise Tax Bd. of Cal. v.
Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1,
this rule, "the existence of a federal defense normally
does not create statutory 'arising under'
jurisdiction." Id. But there is an exception
"[w]hen a federal statute wholly displaces the state-law
cause of action through complete preemption."
Id. (quoting Beneficial Nat. Bank v.
Anderson, 539 U.S. 1, 8 (2003)). In those circumstances,
a defendant can remove a plaintiff's state-law claim if
the defendant can show complete preemption because the state
law claim, "even if pleaded in terms of state law, is in
reality based on federal law." Id. at 208
(quoting Anderson, 539 U.S. at 8).
is one of those federal statutes with expansive preemptive
power. See Hartland Lakeside Joint No. 3 Sch.
Dist. v. WEA Ins. Corp., 756 F.3d 1032, 1035 (7th Cir.
2014) ("ERISA ... may contain the broadest preemption
clause of any federal statute and completely occupies the
field of employees' health and welfare benefits ...
."). And with the exception of a few identified
circumstances, ERISA "supersede[s] any and all State
laws insofar as they may now or hereafter relate to any
employee benefit plan" created by any employer engaged
in interstate commerce. ERISA § 514(a), 29 U.S.C. §
Davila, the Supreme Court created a two-step test to
determine if a plaintiff's state-law claim is preempted
by ERISA: a state-law claim is completely preempted (1)
"if an individual, at some point in time, could have
brought his claim under" ERISA's expansive civil
enforcement mechanism- ERISA § 502(a)(1)(B), 29 U.S.C.
§ 1132(a)(1)(B)-and (2) "where there is no other
independent legal duty that is implicated by a
defendant's actions." Davila, 542 U.S. at
210. We consider each step of this test in turn.
to analyze Davila's first step, we must
initially determine whether the hospital had created an ERISA
employee welfare benefit plan and, if so, whether Studer was
a participant in that plan. See ERISA §
502(a)(1), 29 U.S.C. § 1132(a)(1) (empowering a
"participant or beneficiary" of an ERISA plan
"to bring a civil action"). To make these
determinations, we first look at the hospital's employee
begin with the Paid Days Leave ("PDL") policy,
which the hospital created"[t]o provide [its employees]
time away from the work environment in a way that conforms to
an individual's lifestyle by allowing paid time off to be
used for vacation, sick, personal, etc." (R. 17-2 at
40.) Under the PDL policy, certain hospital employees would
accrue "PDL hours"-which those employees could use
to take days off from work-based on a variable accrual rate
that increased with the employees' seniority.
(Id.) For example, "[f]ull-time regular
employees" hired prior to December 20, 2009 with
"0-9 years of service" accrued 7.38 PDL hours for
every 80 hours of paid work. (Id.) And that accrual