Sunday, November 24, 2013

Franchise Tax Board v. Construction Laborers Vacation Trust case brief

Franchise Tax Board v. Construction Laborers Vacation Trust case brief summary
463 U.S. 1 (1983)


CASE SYNOPSIS
Appellant state tax board sought review of an order from the United States Court of Appeals for the Ninth Circuit, which denied appellant's petition for rehearing, in appellant's state-law action against appellee trust for a declaratory judgment as to its rights to levy on assets in an employee welfare benefit plan subject to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.S. §§ 1001 et seq.

CASE FACTS
Appellant state tax board filed a state-court declaratory judgment action against appellee trust that sought a ruling as to appellant's rights in assets held by respondent in an employee welfare benefit plan, which was subject to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.S. §§ 1001 et seq., and which appellee removed to federal court.

DISCUSSION

  • Holding that no federal-question jurisdiction existed, the court vacated the judgment and instructed that it be remanded to the state court. 
  • The court held that as to federal question jurisdiction, Congress gave federal courts jurisdiction to hear only those cases in which a well-pleaded complaint established either that federal law created the cause of action or that the plaintiff's right to relief necessarily depended on resolution of a substantial question of federal law. 
  • The court held that ERISA created no counterpart to appellant's state-law claims and thus had not pre-empted the causes of action -- even if ERISA precluded enforcement of the claims. 
  • The court also held that appellant's claims did not turn on a question of federal law such that federal courts would take jurisdiction.
CONCLUSION
The court vacated the judgment for appellee trust and remanded for disposition by the state court, because under the "well-pleaded complaint" rule, appellant's action to levy against the plan assets or for a declaration of rights was neither created by ERISA nor turned on a substantial question of federal law, and thus could not be removed to federal court.

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