The Puzzle of Panel Processing: ERISA, Complete Preemption, and the Federal Jurisdiction Gap

Abstract

Ordinarily, in federal practice, a plaintiff is master of the complaint. But the doctrine of preemption, which affects certain federal laws, allows a defendant to recharacterize a plaintiff's state claims as being federal claims in disguise. An ordinary contract dispute, for instance, can transform into a pension battle, or a copyright action; and, thus recast, the lawsuit can be removed to federal court.The Puzzle of Panel Processing: ERISA, Complete Preemption, and the Federal Jurisdiction Gap traces, from its inception, the curious case of Sexton v. Panel Processing, which began as a state whistleblower suit and ended as a marquee Sixth Circuit decision about the Employee Retirement Income Security Act of 1974, the statutory behemoth more commonly known as ERISA. By tracing the path of Panel Processing and its odd procedural outcome, the piece highlights a possible gap between federal-question jurisdiction and the complete preemption process, a gap which has the potential to lead to unclear and frustrating jurisdictional outcomes at late stages of litigation. A modest tweak to federal practice-the sua sponte scrutiny of all removal notices premised on preemption doctrines-is proposed as the simplest practical solution to this problem.