A California federal judge has ruled that ERISA’s complete preemption doctrine reaches a wage-and-hour class action over a $37.50 tobacco surcharge, denying the plaintiff’s effort to return the case to state court. In Sample v. AT&T Mobility Services LLC, No. CV 25-10000 FMO (ASx) (C.D. Cal. Aug. 17, 2026), the court held that state labor code claims challenging a health plan surcharge cannot survive as state law claims, because deciding them requires the court to interpret an ERISA-governed benefit plan. The case is another example of the importance of engaging experienced ERISA attorneys when you have a dispute that touches on your employee benefits.
The decision matters to employees, to employers, and to any lawyer who evaluates benefit-related claims. It also builds directly on ground the firm covered last month in our post on Ajeti v. Life Insurance Company of North America, No. 2:26-cv-03249 (E.D. Pa. Jul. 27, 2026), where a Pennsylvania federal court applied the same doctrine to a putative group of seventeen Kosovar employees who sought disability benefits under a U.S.-maintained plan. Read together, the two cases teach a single lesson: the label a plaintiff puts on a claim rarely controls where — or under what law — that claim gets decided when that claim involves employee benefits.
What Happened in Sample v. AT&T Mobility
Walter Sample worked for AT&T Mobility Services LLC. He alleged that AT&T Mobility unlawfully imposed a tobacco surcharge of $37.50 per paycheck and, as a result, failed to pay him for all hours worked.
Sample filed a class action complaint in California state court. He pleaded California state law claims. He did not allege a violation of ERISA. He proposed a class of all current and former California employees charged a tobacco surcharge on their wage statements during the four years before he filed suit.
AT&T Mobility removed the case under 28 U.S.C. § 1331, asserting complete preemption under ERISA § 502(a), 29 U.S.C. § 1132(a). The company explained that Sample participated in the AT&T Umbrella Benefit Plan No. 3, which encompassed the AT&T Mobility Orange Medical Program. The program required eligible employees to make monthly contributions and applied a Tobacco User Surcharge that raised those contributions in certain circumstances. The surcharges on Sample’s wage statements, AT&T Mobility argued, were deductions tied to his plan participation.
Sample moved to remand to state court. U.S. District Judge Fernando M. Olguin denied the motion.
How Courts Apply Complete Preemption
Removal ordinarily depends on the well-pleaded complaint rule: a federal court looks to the face of the complaint to decide whether federal question jurisdiction exists. A federal defense to a state law claim does not, by itself, open the federal courthouse door. The removing defendant carries the burden of establishing jurisdiction, and courts resolve doubts in favor of remand.
Complete preemption is the narrow exception. As the Ninth Circuit has explained, complete preemption under § 502(a) functions as a jurisdictional doctrine rather than a defense, because it confers exclusive federal jurisdiction where Congress meant a federal statute to displace state law entirely. The Supreme Court’s decision in Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987), established that Congress may preempt an area so completely that any complaint raising claims within it becomes federal in character.
Aetna Health Inc. v. Davila, 542 U.S. 200 (2004), supplies the two-part test. A state law cause of action falls within complete preemption when (1) the plaintiff could have brought the claim under ERISA § 502(a) at some point, and (2) no other independent legal duty supports the claim. The defendant must satisfy both prongs.
Prong One: A Claim the Plaintiff Could Have Filed Under ERISA
The court found the first prong undisputed. Sample never contested his status as a plan participant, and § 502(a)(1)(B) authorizes a participant or beneficiary to sue to recover benefits due, to enforce plan rights, or to clarify rights to future benefits.
The court also observed that tobacco surcharge challenges routinely proceed under ERISA, citing Platt v. Sodexo, S.A., 148 F.4th 709 (9th Cir. 2025), Williams v. Bally’s Management Group, LLC, 813 F. Supp. 3d 263 (D.R.I. 2025), and Leslie v. Rentokil North America, Inc., 2026 WL 950490 (E.D. Pa. 2026). Plaintiffs across the country have alleged that surcharge programs violate ERISA § 702(b) by failing to offer a reasonable alternative standard, such as a cessation program, or by failing to disclose that alternative in plan materials.
Prong Two: No Independent Legal Duty
Sample argued that AT&T Mobility owed him an independent duty not to take wages from his paychecks illegally. The court disagreed. Claims rest on independent duties only when they would exist whether or not an ERISA plan existed. Here, deciding whether the $37.50 deduction was illegal under California law required the court to decide whether the surcharge was permissible under ERISA. Interpretation of plan terms formed an essential part of the claim, and liability could arise only from the administration of an ERISA-regulated plan. On that reasoning, the court held the claims completely preempted and kept the case.
What Our Prior Ajeti Post Teaches
Ajeti involved a very different set of plaintiffs and a very different theory, yet the complete preemption issue resolved the same way. Seventeen citizens of Kosovo who worked for AECOM participated in a long-term disability plan that AECOM maintained in the United States. When Life Insurance Company of North America, a New York Life subsidiary, denied their claims, they sued in state court under state law. The court denied remand, holding that their claims were, at bottom, claims for benefits under an ERISA plan, and it then dismissed a complaint that pleaded no ERISA cause of action. Our earlier analysis in this ERISA disability attorney breakdown of Ajeti explains the decision in further detail.
Three parallels stand out for prospective clients and referring counsel:
- Pleading around ERISA rarely works. Ajeti plaintiffs pleaded state law; Sample pleaded the California Labor Code. Both drew the same result once a court traced the claim back to plan terms.
- A class or group posture does not change the analysis. Neither the seventeen-plaintiff group in Ajeti nor the four-year statewide class in Sample escaped complete preemption.
- Engaging experienced ERISA attorneys matters. Employee benefits law is a specific niche. Engaging experienced employee benefits counsel can make a meaningful difference in how a case is presented to the court and its likelihood of a favorable resolution.
The practical consequence bites hardest on remedies. ERISA limits most claimants to the benefits wrongfully withheld, plus possible attorneys’ fees, and it strips away state law remedies such as punitive damages.
What Employees and Referring Attorneys Should Ask an ERISA Lawyer
If your paycheck reflects a surcharge, a deduction, or a premium adjustment tied to your employer’s health plan, treat the dispute as an ERISA matter from day one. Talking to an ERISA lawyer early helps you frame the claim correctly and preserve every deadline.
Employers and plan sponsors face the mirror image. Courts have recently dismissed several surcharge class actions on the merits, rejecting the argument that ERISA compels retroactive reimbursement of surcharges paid before a participant completed a cessation program, and treating the adoption of a wellness program as a settlor function outside ERISA’s fiduciary duties. Compliance still turns on offering a genuine reasonable alternative standard, making the full reward available to similarly situated participants, and disclosing the alternative in plan materials.
Talk With an Experienced ERISA Lawyer
The attorneys at The Garner Firm, Ltd. concentrate their practice on ERISA benefit litigation, representing individuals and, in appropriate cases, classes of participants against large group insurers and multinational employers. We litigate these disputes at every stage — administrative appeal, district court, and appellate review — and we know how complete preemption and ERISA’s remedial limits shape strategy from the first letter forward.
If an insurer or plan administrator has denied your benefits, or if a plan-related deduction has appeared on your wage statements, call The Garner Firm, Ltd. at (215) 645-5955 or contact our Philadelphia office online to schedule a consultation with an experienced ERISA lawyer. Referring attorneys are welcome to reach out to discuss co-counsel arrangements. ERISA deadlines run short and courts enforce them strictly, so early advice makes a measurable difference.
This post provides general information only and does not constitute legal advice. Reading it creates no attorney-client relationship. Consult a qualified ERISA lawyer about your specific situation.