United States: Subrogation Interest of Employer/Carrier Does Not Prevent Removal to Federal Court

Acknowledging that an action that arises under the workers’ compensation laws of a state is a “nonremovable action” under 28 U.S.C.S. § 1445(c), a U.S. District Court in California recently held that the fact that a California employer and its workers’ compensation insurance carrier had a subrogation interest in the proceeds of any recovery in a third-party negligence/product liability action filed against the designer and manufacturer of a garbage truck by an injured worker. The defendant removed the case to federal court and the plaintiff sought to have it remanded back to the state trial court on the basis that workers’ compensation issues were implicated. The federal court noted that there was no question that an insurer’s suit under Cal. Lab. Law § 3852 to recover workers’ compensation benefits paid out arose under California’s workers’ compensation law and was, therefore, nonremovable. Here, however, that at the point of removal, neither the employer nor the carrier had asserted any specific subrogation claim. The court observed that the result might have been different if the employer and/or carrier had intervened before the case was removed to federal court.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is co-author of Larson’s Workers’ Compensation Law (LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis

See Gutierrez v. McNeilus Truck & Mfg., 2019 U.S. Dist. LEXIS 181984 (N.D. Cal., Oct. 21, 2019)

See generally Larson’s Workers’ Compensation Law, § 117.01.

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law

For a more detailed discussion of the case, see