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State ex rel. Huntington Ins. Agency, Inc.
In October 1987, then-Superintendent of Insurance, George Fabe, requested an opinion from the Ohio Attorney General concerning, inter alia, whether R.C. 3905.01 and 3905.04 prohibited affiliates of noninsurance financial institutions from being licensed as insurance agents. In 1988, the Attorney General issued Opinion No. 88-056, which stated in part that neither R.C. 3905.01 nor 3905.04 prohibits the licensing of a corporate appointee insurance agency merely because it was owned by, or affiliated with, a noninsurance financial institution.
In December 1988, amicus curiae, Independent Insurance Agents of Ohio, Inc. ("Independent"), an association of independent property and casualty insurance agents, filed a complaint against Fabe seeking a declaratory judgment that the principal-purpose test of R.C. 3905.01(B) and 3905.04 prohibits the licensing of applicants affiliated with noninsurance financial institutions. Upon subsequent appeal, this court held that R.C. 3905.01(B) and 3905.04 do not prohibit the licensing of applicants affiliated with noninsurance financial institutions, and an applicant for a license as an other-than-life insurance agent is not precluded from licensure by R.C. 3905.01(B) and 3905.04 merely because an affiliate of the applicant would be precluded thereunder, unless the applicant is the alter ego of the precluded affiliate. Indep. Ins. Agents of Ohio, Inc. v. Fabe (1992), 63 Ohio St.3d 310, 587 N.E.2d 814 ("Fabe"), paragraphs one and two of the syllabus. The court further stated that "[w]hether a particular applicant for a license is but the alter ego of an otherwise precluded entity requires a case-by-case analysis." Id. at 315, 587 N.E.2d at 818.
Relator, Huntington Insurance Agency, Inc. ("Huntington"), is an Ohio corporation organized for the purpose of acting as an insurance agent. Huntington is a subsidiary of Huntington Insurance Agency Services, Inc., a subsidiary corporation wholly owned by the Huntington State Bank, Alexandria, Ohio. The Huntington State Bank is a wholly owned subsidiary of Huntington Bancshares, Inc., a bank holding company.
On March 19, 1993, Minnesota Mutual Fire & Casualty Company, an insurance company authorized to transact business in Ohio, notified respondent, Superintendent of Insurance Harold T. Duryee, of its appointment of Huntington to act as its agent in Ohio. On April 2, 1993, Huntington submitted an application for licensure as an other-than-life insurance agent with the Ohio Department of Insurance. Huntington certified that it did not seek, and would not hold, an agency license with the principal purpose or intention of soliciting or placing insurance on or in connection with its property for which it acts as agent, custodian, vendor, bailee, trustee, or payee. Huntington's application is complete, and it has responded to all outstanding requests for supplementary information or clarification made by Duryee.
In June 1993, Independent filed an action for declaratory and injunctive relief in the Franklin County Court of Common Pleas, naming Duryee as defendant. In its complaint, Independent sought a declaratory judgment that any determination by the superintendent of whether an applicant for licensure as an other-than-life insurance agent was the alter ego of a precluded affiliate would constitute an unconstitutional exercise of legislative power by the superintendent. Independent also requested that the superintendent be enjoined from taking any action on Huntington's application, and any other application by affiliates of non-insurance financial institutions, until the General Assembly defines "alter ego" or delegates to the superintendent the power to define the term. However, Independent never filed a motion for a temporary restraining order or preliminary injunction.
Huntington is not a party in the common pleas court case, although it attempted to intervene as a defendant. On July 29, 1993, the common pleas court dismissed Independent's complaint based on this court's decision in Fabe , supra. The common pleas court also determined that Huntington's motion to intervene was moot because of the dismissal. On appeal, the Court of Appeals for Franklin County reversed the dismissal and remanded the case to the common pleas court based on its holding that the court's decision in Fabe did not bar Independent's action for declaratory and injunctive relief. Indep. Ins. Agents of Ohio, Inc. v. Duryee (1994), 95 Ohio App.3d 7, 641 N.E.2d 1117. A discretionary appeal to this court was not allowed. 70 Ohio St.3d 1448, 639 N.E.2d 115.
Duryee has not acted to either grant or deny Huntington's license application. The superintendent has determined to take no action on Huntington's pending application as long as Independent's claim that his alter ego determination would be an unconstitutional exercise of legislative power is pending.
Huntington instituted this action requesting a writ of mandamus ordering Duryee to act on its pending application for licensure. Although the common pleas court originally set Independent's complaint for declaratory and injunctive relief for trial following remand from the court of appeals, the common pleas court stayed the case pending the outcome of this action on joint motion of the superintendent and Independent.
We issued an alternative writ, and the parties filed stipulated facts and briefs. Independent filed an amicus brief urging denial of the requested writ.
Porter, wright, Morris & Arthur, Anthony J. Celebrezze, Jr., H. Grant Stephenson, Kathleen M. Trafford and Michael J. Barren, for relator.
Betty D. Montgomery, Attorney General, Ava W. Serrano and Julia M. Graver, Assistant Attorneys General, for respondent.
Emens, Kegler, Brown, Hill & Ritter, William J. Brown and Roger P. Sugarman, urging denial for amicus curiae, Independent insurance Agents of Ohio, Inc.
As a preliminary matter, amicus Independent contends that the writ must be denied because Huntington failed to comply with R.C. 2731.04. R.C. 2731.04 provides that an action for a writ of mandamus "must be * * * in the name of the state on the relation of the person applying * * *." This court has previously held that a writ of mandamus may be denied where the action is not brought in the name of the state on the relation of the person requesting the writ. Gannon v. Gallagher (1945), 145 Ohio St. 170, 171, 30 O.O. 351, 352, 60 N.E.2d 666; Maloney v. Court of Common Pleas of Allen Cty. (1962), 173 Ohio St. 226, 227, 19 O.O.2d 45, 181 N.E.2d 270; Maloney v. Sacks (1962), 173 Ohio St. 237, 238, 19 O.O.2d 51, 52, 181 N.E.2d 268, 269. Huntington's complaint for a writ of mandamus does not comport with R.C. 2731.04, since it was not brought in the name of the state on relation of Huntington.
"* * * When a statute of this state so provides, an action for use or benefit of another shall be brought in the name of this state. No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of the real party in interest. * * *"
In addition, Civ.R. 15(A) allows a party to seek leave of court to amend a pleading beyond the time period when amendments are allowed as a matter of course.
After Independent claimed in its amicus brief that Huntington had not complied with R.C. 2731.04, Huntington filed a motion for leave to amend the caption of the complaint to specify that this action is brought in the name of the state on relation of Huntington. "'The spirit of the Civil Rules is the resolution of cases upon their merits, not upon pleading deficiencies.'" Patterson v. V & M Auto Body (1992), 63 Ohio St.3d 573, 577, 589 N.E.2d 1306, 1309, quoting Peterson v. Teodosio (1973), 34 Ohio St.2d 161, 175, 63 O.O.2d 262, 269, 297 N.E.2d 113, 122. Liberal amendment of pleadings is also favored. Wilmington Steel Products, Inc. v. Cleve. Elec. Illum. Co. (1991), 60 Ohio St.3d 120, 121-122, 573 N.E.2d 622, 624. Finally, neither the superintendent nor Independent filed anything in opposition to Huntington's motion for leave to amend. Therefore, the motion is granted, and the case caption is amended to specify that it is brought in the name of the state on the relation of Huntington. See State ex rel. Cosmos Broadcasting Corp. V. Brown (1984), 14 Ohio App.3d 376, 378-379, 14 OBR 481, 483-484, 471 n.e.2D 874, 879.
As to the merits of this case, in order to be entitled to a writ of mandamus, Huntington must establish that it possesses a clear legal right to have the superintendent act on its license application, that the superintendent is under a clear legal duty to so act, and that Huntington has no plain and adequate remedy at law. State ex rel. Carter v. Wilkinson (1994), 70 Ohio St.3d 65, 637 N.E.2d 1.
"The superintendent of insurance shall refuse to grant any license applied for, and shall revoke any license of or to any appointee, agent, solicitor, or foreign broker, when the superintendent is satisfied that the principal use of such license has been or is to procure, receive, or forward applications for insurance of any kind, other than life, or to solicit, place, or effect such insurance directly or indirectly upon or in connection with the property of such appointee * * *.
As the superintendent concedes, he has a duty under R.C. 3905.01(B) and 3905.04 to determine applications for licensure. Further, under these statutes, Duryee had a duty to render a decision on Huntington's application promptly. Over two years have passed since Huntington's application for a license as an other-than-life insurance agent was submitted. The superintendent has refused to act on Huntington's application.
While a writ of mandamus cannot issue to control an officer's exercise of discretion, it can be issued to compel him to exercise it when he has a clear legal duty to do so. State ex rel. Hodges v. Taft (1992), 64 Ohio St.3d 1, 4, 591 N.E.2d 1186, 1189. Further, where officers responsible for granting or denying a license or permit have failed to respond to an application, mandamus is available to an applicant to compel the officer to pass upon the application. See, generally, 1 Antieau, The Practice of Extraordinary Remedies (1987) 322, section 2.24; State ex rel. Benton's Village Sanitation Serv. v. Usher (1973), 34 Ohio St.2d 59, 61, 63 O.O.2d 90, 92, 295 N.E.2d 657, 658 ("[F]or 'refusal to act' appellant would be entitled to a writ of mandamus compelling the appellees to consider appellant's application for a license and to either grant the license or enter upon their records an order denying the license.").
The superintendent asserts that his refusal to act on Huntington's application is justified by Independent's pending common pleas court action, since the common pleas court might declare that the superintendent's alter-ego determination mandated by this court's holding in Fabe would be unconstitutional. Independent contends that since the General Assembly has not specified standards regarding the alter-ego issue as it relates to licensure under R.C. 3901.01(B) and 3905.04, the holding by this court in Fabe unconstitutionally delegated legislative authority to the superintendent to make alter-ego determinations.
The legislative power of the state is vested in the General Assembly by Section 1, Article II of the Ohio Constitution, and it may not transfer these vested legislative functions unless it has provided sufficient standards within which a board or administrative agency may make subordinate rules. Belden v. Union Cent. Life Ins. Co. (1944), 143 Ohio St. 329, 28 O.O. 295, 55 N.E.2d 629, paragraphs one and three of the syllabus; Princeton City School Dist. Bd. Of Edn. v. Ohio State Bd. of Edn. (1994), 96 Ohio App.3d 558, 645 N.E.2d 773.
Statutes are presumed to be constitutional unless shown beyond a reasonable doubt to violate a constitutional provision. Fabrey v. McDonald Village Police Dept. (1994), 70 Ohio St.3d 351, 352, 639 N.E.2d 31, 33. Neither Independent nor the superintendent cites pertinent authority for the proposition that this court's holding in Fabe , requiring the superintendent to conduct case-by-case determinations regarding whether an applicant for other-than-life insurance agency affiliated with a noninsurance financial institution is the alter ego of the precluded affiliate, compels the unconstitutional result of delegating legislative authority to the superintendent. Instead, the court merely construed the applicable law, and followed the general legal guidelines for an alter-ego determination. The court did not engage in judicial legislation.
The Superintendent of insurance has possessed authority to determine if an applicant is the mere alter ego of a precluded entity for many years, and Fabe did not modify the superintendent's authority in this regard. State ex rel. Johnson & Higgins Co. v. Safford (1927), 117 Ohio St. 576, 159 N.E. 829; State ex rel. Fed. Union Ins. Co. v. Warner (1934), 128 Ohio St. 261, 190 N.E. 575; Associated Adjusters of Ohio v. Dept. of Ins. (1977), 50 Ohio St.2d 144, 4 O.O.3d 341, 363 N.E.2d 730. As noted by Huntington, there is no constitutional prohibition on an administrative officer like the superintendent against following the controlling case law even if the General assembly has not yet incorporated that case law by statute. The criteria for the alter-ego determination have been expressed with sufficient specificity by precedent. See, e.g., Fabe , supra, 63 Ohio St.3d at 315, 587 N.E.2d at 817-818, citing Safford ; cf. Belvedere Condominium Unit Owners' Assn. v. R.E. Roark Cos., Inc. (1993), 67 Ohio St.3d 274, 289, 617 N.E.2d 1075, 1086. Further, the superintendent may not now enact administrative rules imposing additional requirements on license applicants that are contrary to the statutes as construed by this court in Fabe . See Hoover Universal. Inc. v. Limbach (1991), 61 Ohio St.3d 563, 569, 575 N.E.2d 811, 816.
In addition, even assuming, arguendo, the validity of Independent's claim that the superintendent could not constitutionally render an alter-ego determination, the superintendent would still have had a clear legal duty to act on Huntington's application. When any provision of the Revised Code or its application to any person is held unconstitutional, that portion is severed, and the remaining provisions or applications of the Revised Code which can be effective without reference to the unconstitutional portion remain operable. R.C. 1.50; State ex rel. Maurer v. Sheward (1994), 71 Ohio St.3d 513, 523-524, 644 N.E.2D 369, 377. The alter-ego determination is merely an exception to the general rule that R.C. 3905.01(B) and 3905.04 do not prohibit the licensing of applicants affiliated with noninsurance financial institutions. Fabe , supra, at paragraphs one and two of the syllabus. Therefore, if the superintendent could not constitutionally render an alter-ego determination, that portion of the application of R.C. 3905.01(B) and 3905.04 would be severed, and he would consider the license application based on the remaining provisions, which do not preclude the licensing of applicants affiliated with noninsurance financial institutions. Accordingly, even if Independent's action for declaratory relief were successful, the superintendent would still have the duty to rule on Huntington's application.
Consequently, Huntington has a clear legal right to a determination by the superintendent on its application, and the superintendent has a corresponding legal duty to render the determination.
The superintendent and Independent next claim that the writ should be denied because there is an adequate remedy at law. A writ of mandamus will not be issued when there is a plain and adequate remedy in the ordinary course of law. R.C. 2731.05. In order for an alternative remedy to constitute an adequate remedy at law, it must be complete, beneficial, and speedy. State ex rel. Howard v. Ferreri (1994), 70 Ohio St.3d 587, 592, 639 N.E.2d 1189, 1194.
Until there is a determination by the superintendent on Huntington's license application, there is no right of appeal. See, e.g., R.C. 3905.04. The superintendent and Independent contend that the pending declaratory judgment action provides an adequate alternative remedy at law. In general, where declaratory judgment would not be a complete remedy unless coupled with ancillary relief in the nature of a mandatory injunction, the availability of declaratory judgment is not an appropriate basis to deny a writ to which the relator is otherwise entitled. State ex rel. Fenske v. McGovern (1984), 11 Ohio St.3d 129, 11 OBR 426, 464 N.E.2d 525, paragraph two of the syllabus; State ex rel. K-mart v. Westlake Planning Comm. (1994), 68 Ohio St.3d 151, 158, 624 N.E.2d 714, 720; State ex rel. Ryan v. State Teachers Retirement Sys. (1994), 71 Ohio St.3d 362, 364, 643 N.E.2d 1122, 1125; see, generally, Antieau, The Practice of Extraordinary Remedies, supra, at 300, Section 2.06 ("A declaratory action, which merely announces the existence of a duty to be performed, has generally not been deemed as adequate as the writ of mandamus, which compels performance."). Since a mandatory injunction is an extraordinary remedy, it does not constitute an adequate remedy in the "ordinary" course of the law. State ex rel. Zupancic v. Limbach (1991), 58 Ohio St.3d 130, 133, 568 N.E.2d 1206, 1209; Fenske , supra, at paragraph one of the syllabus; State ex rel. Pressley v. Indus. Comm. (1967), 11 Ohio St.2d 141, 40 O.O.2d 141, 228 N.E.2d 631, paragraph six of the syllabus.
However, where a declaratory judgment action is not merely available but is actually pending, the court has sometimes held that the pending action constitutes an adequate remedy at law. See, e.g., State ex rel. First Natl. Bank v. Botkins (1943), 141 Ohio St. 437, 25 O.O. 576, 48 N.E.2d 865, paragraph two of the syllabus ("Where prior actions, to which relator could be made a party and which involve the same subject matter as the instant action, are pending in another court having jurisdiction to grant full and adequate relief to all parties, a writ of mandamus will not be granted during the pendency of such prior actions.").
In other words, "[w]here parties to a mandamus action are also parties, or may be joined as parties, in a previously filed declaratory judgment action involving the same subject matter, a court, in the exercise of its discretion, may refuse to issue a writ of mandamus." State ex rel. Bennett v. Lime (1978), 55 Ohio St.2d 62, 9 O.O.3d 69. 378 N.E.2d 152, syllabus; see, also, State ex rel. Zellner v. Bd. of Edn. of Cincinnati (1973), 34 Ohio St.2d 199, 63 O.O.2d 310, 297 N.E.2d 528; State ex rel. Ney v. Governor (1991), 58 Ohio St.3d 602, 567 N.E.2d 986.
In the case at bar, Huntington could intervene in the declaratory judgment action and seek a mandatory injunction compelling the superintendent to act on its application., This would arguably provide complete relief to Huntington.
Nevertheless, as noted previously, Independent's declaratory judgment action directly attacks the decision of this court in Fabe as requiring the superintendent to perform an unconstitutional determination whenever he has an applicant that is an affiliate of an otherwise precluded entity. This court, rather than the common pleas court, seems to be better equipped to rule on the constitutionality of the application of its own opinion. Unlike Ney , there is no need for further development of the record. In addition, unlike Zellner , the pending action will not provide a more complete disposition of the issues. Further, as detailed previously, even assuming the validity of Independent's constitutional claim, the superintendent would still possess a clear legal duty to act on Huntington's application. The pending action has been stayed during this extraordinary action. Finally, over two years have passed since Huntington submitted its application.
Based on the foregoing circumstances, the pending declaratory judgment action does not constitute an adequate remedy at law. Accordingly, a writ of mandamus is granted compelling the superintendent to act on Huntington's pending application for licensure as an other-than-life insurance agent.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY and COOK JJ., concur.

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Two rulings on the same day by District Judges Sterling Johnson and Sandra J. Feuerstein highlight the jurisdictional difficulties that can arise when removing personal injury cases to federal court on diversity grounds. Rita Alvarado v. New England Motor Freight, Inc. et al., 18 CV 2027 (E.D.N.Y. Aug. 24, 2018) (SJ) (RML). Mekhi v. Area Storage & Transfer, Inc. et al., 18-cv-4654 (E.D.N.Y. Aug. 24, 2018) (SJF) (AYS).
In the ruling by Judge Feuerstein, the Court sua sponte remanded the case back to state court because defendant jumped the gun by removing the case before the amount in controversy threshold was established. Mekhi v. Area Storage & Transfer, Inc. et al., 18-cv-4654 (E.D.N.Y. Aug. 24, 2018) (SJF) (AYS). In the ruling by Judge Johnson, the Court denied plaintiff’s motion to remand the case to state court where plaintiff argued that defendants waited too long before removing the case to federal court. Rita Alvarado v. New England Motor Freight, Inc. et al., 18 CV 2027 (E.D.N.Y. Aug. 24, 2018) (SJ) (RML).
Some background: Most attorneys are aware that removal based on diversity jurisdiction is only available if the amount at issue is more than $75,000. But New York CPLR 3017(c) prohibits personal injury plaintiffs from stating an amount of damages in the complaint – meaning the complaint will usually not establish the jurisdictional minimum of $75,000.
Timing is also an issue. The removal statute (U.S.C. § 1446) provides that defendant has 30 days from the date of service to remove the case. However, where the complaint does not evident the existence of diversity jurisdiction, defendant has 30 days “from which it may first be ascertained” that diversity jurisdiction exists to remove the case to federal court. In any event, the ability to remove to federal court normally ends one year after commencement of the action.
In Mekhi, one of defendants removed the case soon after it was served with the complaint, asserting that “there is a ‘reasonable probability’ that Plaintiff’s claim is in excess of the jurisdictional limit of $75,000, exclusive of interest and costs.” Judge Feuerstein sua sponte determined that defendant failed to establish that the amount in controversy exceeds $75,000.
The complaint here does not specify the damages sought since New York law prohibits statements regarding “the amount of damages to which the pleader deems himself entitled” in a personal injury action. N.Y. C.P.L.R. §3107(c). . . . [Defendant] notes that since Plaintiff has alleged “serious injury” within the meaning of New York Insurance Law §§5102(a) and 5104(a), she is seeking damages in excess of $50,000 for economic loss, plus pain and suffering. Notice ¶11. Coupling this threshold economic loss with Plaintiff’s generalized allegation of pain and suffering, Area Storage summarily concludes that “[c]onsequently, there is a reasonable probability” that the amount in controversy exceeds $75,000. Id. ¶13. The Court disagrees.
[Defendant’s] arguments are speculative and are extrapolated from boilerplate allegations of injury. In considering whether remand is appropriate, “boilerplate pleadings do not suffice to establish that this action involves an amount in controversy adequate to support federal diversity jurisdiction.” [citations omitted] . . . Defendant has provided no other basis upon which the Court can conclude that the jurisdictional limit has been met. Given its conclusory assertions and the lack of any detail regarding Plaintiff’s specific damages, there is simply insufficient information to “intelligently ascertain removability.” DeMarco v. MGM Transp., Inc., No. CV 06-0307, 2006 WL 463504, at *1 (E.D.N.Y. Feb. 24, 2006) (quotation marks and citations omitted). As this Court lacks subject matter jurisdiction, remand is required.
[Defendant] is not without recourse. Although New York law prohibits inclusion of an ad damnum clause in a personal injury complaint, it also allows a defendant to “at any time request a supplemental demand setting forth the total damages to which the pleader deems himself entitled.” N.Y. C.P.L.R. § 3017(c). A plaintiff is required to provide the supplemental demand within fifteen (15) days of the request, and may be compelled by the court to comply. Id. The Second Circuit, recognizing a defendant’s dilemma where the complaint fails to specify the amount of damages sought has held that “the removal clock does not start to run until the plaintiff serves the defendant with a paper that explicitly specifies the amount of money damages sought.” Moltner v. Starbucks Coffee Co., 624 F.3d 34, 38 (2d Cir. 2010) (per curiam). Defendant should have availed itself of the supplemental demand procedure rather than prematurely removing the action to this court.
Mekhi v. Area Storage & Transfer, Inc. et al., 18-cv-4654 (E.D.N.Y. Aug. 24, 2018) (SJF) (AYS).
In Alvarado, defendants almost waited too long to remove. The action was commenced on January 19, 2018. Plaintiff served a bill of particulars identifying $44,140 in special damages plus pain and suffering. On March 9, 2018, Plaintiff served a statement of damages alleging $1 million in damages. Defendants removed on April 5, 2018 – less than 30 days after the statement of damages but more than 30 days from the bill of particulars.
Plaintiff moved to remand the case back to state court, arguing that the removal was untimely because had Defendant used a “reasonable amount of intelligence” the bill of particulars would have evidenced the existence of diversity jurisdiction.
Plaintiff argues that Defendants’ removal was untimely and that the notice of removal failed to show complete diversity of the parties. Plaintiff contends that the first paper from which removability could be ascertained was Plaintiff’s bill of particulars, served on Defendants on February 16, 2018, which contains allegations referencing special damages in an amount not less than $44,140.00, and an unspecified amount of damages for pain and suffering. . . Defendants contend that the first paper from which removability could be ascertained was Plaintiff’s statement of damages, served on Defendants on or about March 9, 2018. If Plaintiff’s statement of damages is the “motion, order or other paper from which it [might] first be ascertained that the case is one which is or has become removable,” then removal was timely. See 28 U.S.C. § 1446(b)(3). The issue, therefore, is whether the case was removable on February 16, 2018.
In determining whether the thirty-day removal clock has begun to run, courts in this circuit have declined to impose on defendants an affirmative duty to investigate the possible federal features of a poorly drafted pleading. See Soto v. Apple Towing, 111 F. Supp. 2d 222, 224–26 (E.D.N.Y. 2000). But defendants may not willfully ignore grounds for removal that can be “intelligently ascertain[ed].” Id. at 226. “‘[A]scertained’ as used in section 1446(b) means a statement that should not be ambiguous or one which requires an extensive investigation to determine the truth.” Id. (quotation marks and internal citation omitted). Further, “the facts warranting removability” must be “explicit,” and “the elements of removability must be specifically indicated in official papers.” Id. at 225 (quoting Riggs v. Cont’l Baking Co., 678 F. Supp. 236, 238 (N.D. Cal. 1988). Put another way, a “defendant need not guess as to whether the Plaintiff’s claim reaches the $75,000 threshold for . . . diversity jurisdiction purposes, and may wait to file a notice of removal until the Plaintiff provides specific information about the amount in controversy.” Moltner v. Starbucks Coffee Co., 2009 WL 510879, at *1 (S.D.N.Y. June 18, 2007).
In the bill of particulars, Plaintiff specifies damages that are less than the jurisdictional threshold, but argues that its unspecified request for compensatory damages related to pain and suffering put Defendants on notice that the amount of Plaintiff’s claim exceeds $75,000. But Plaintiff’s position that Defendants could have utilized a “reasonable amount of intelligence” to ascertain that its claim for pain and suffering exceeds the jurisdictional threshold asks this Court to impose upon Defendants a duty to speculate as to the amount of those unspecified damages. This heightened standard would require Defendants to risk remand by removing an action where the amount in controversy has not been clearly established. As Defendants are not authorized to prematurely remove an action, such a result would effectively allow Plaintiff to have it both ways. . . . Accordingly, the Court finds that the action was not removable based on Plaintiff’s bill of particulars.
The Court finds that the statement of damages is the first paper from which removability could be ascertained, as it claimed an amount in controversy above the jurisdictional threshold. Defendant’s removal on April 5, 2018 was therefore timely.
Rita Alvarado v. New England Motor Freight, Inc. et al., 18 CV 2027 (E.D.N.Y. Aug. 24, 2018) (SJ) (RML).
District Judge Nicholas G. Garaufis denied an insurer’s motion to dismiss a lawsuit brought directly by a plaintiff against the insurer of a vehicle that belonged to the Principality of Monaco. The Court ruled that the lawsuit was proper under the Diplomatic Relations Act of 1978, despite the fact that plaintiffs typically may not bring a direct lawsuit against the insurer of an alleged tortfeasor. Green v. First Liberty Insurance Corporation, 17-cv-6975 (E.D.N.Y May 8, 2018) (NGG)(CLP).
Plaintiff in this case alleged injuries resulting from a traffic accident that involved a jeep owned by Monaco and alleged driven by a member of the Monegasque mission. Plaintiff sued the jeep’s insurer directly in order to bypass the diplomatic immunities available to the registrant and driver of the jeep. Defendant moved to dismiss, arguing that plaintiff improperly brought a direct action against the insurer. The Court denied the motion – explaining the history of the Diplomatic Relations Act and holding that it provided for a direct action against the insurer in this case.
Under the common law, a tort victim had no right of action against a tortfeasor’s liability insurer, because the two were not in privity of contract. Lang v. Hanover Ins. Co., 820 N.E.2d 855, 857 (N.Y. 2004); 7A Steven Plitt et al., Couch on Insurance § 104:2 (3d ed. updated 2017). Consistent with this common-law rule, most states prohibit a party injured in a traffic accident from bringing suit solely and directly against the alleged tortfeasor’s liability insurer. 13F Charles A. Wright et al., Federal Practice and Procedure § 3629, at 186 n.4 (3d ed. 2009). Some states—among them New York—have softened this prohibition on direct actions by permitting a tort victim to sue the alleged tortfeasor’s liability insurer, provided that, among other things, the victim first obtains a judgment against the tortfeasor. N.Y. Ins. Law § 3420; see also, e.g., Md. Code., Ins. § 19-102(b)(2); Va. Code § 38.2-2200(2).
These rules had unfortunate consequences for Americans injured in domestic traffic accidents with foreign diplomats. After such accidents, these victims were often left without legal recourse. As a diplomat, the actual tortfeasor could claim immunity from suit. See Windsor v. State Farm Ins. Co., 509 F. Supp. 342, 344 (D.D.C. 1981); Diplomatic Privileges and Immunities: Hearings Before the Subcomm. on Int’l Operations of the House Comm. on Int’l Relations, 95th Cong, 1st Sess., at 3, 5-6 (1977) (hereinafter Diplomatic Privileges Hearings) (statement of Rep. Fisher). Even if the plaintiff could bring a direct action against the diplomat’s liability insurer, the insurer could escape liability by asserting the insured’s diplomatic immunity as a defense to the suit. S. Rep. 95-1108, at 3 (1978) (statement of Sen. Mathias).
Partly to address “the inequities associated with the immunity of members of diplomatic missions in civil court proceedings, “Congress enacted the Diplomatic Relations Act, which substantially revised the law of diplomatic immunity. Rodriguez v. Hanover Ins. Co., No. 14- CV-1478 (GJH), 2014 WL 3405258, at *3 (D. Md. July 9,2014) (internal quotation marks and citation omitted); see also Windsor, 509 F. Supp. at 343; S. Rep. No. 95-958, at 1 (1978). Three provisions of the Diplomatic Relations Act are relevant to this lawsuit. See Rodriguez, 2014 WL 3405258, at *3. The first, Section 5 (codified at 22 U.S.C. § 254d), “continues the long-standing concept of diplomatic immunity by providing for the dismissal of any action or proceedings brought against an individual entitled to such protection” under the Vienna Convention on Diplomatic Relations of April 18,1961, 23 U.S.T. 3227 (entered into force with respect to the U.S. Dec. 13,1972), the Diplomatic Relations Act itself, or any other laws extending diplomatic immunity or privileges. Windsor, 509 F. Supp. at 344. The second. Section 6 (codified at 22 U.S.C. § 254e), requires diplomatic missions in the United States, members of those missions, and members’ families to maintain adequate liability insurance against the risks of bodily injury, death, and property damage arising from their use of motor vehicles, vessels, or aircraft in the United States. See generally 22 C.F.R. §§ 151.11-151.11 (implementing this provision). The third. Section 7 (codified at 28 U.S.C. § 1364), provides that someone injured by certain diplomatic personnel—namely, a member of a diplomatic mission, a senior United Nations official, or a family member of either—can sue the alleged tortfeasor’s liability insurer directly in federal court, and that such a suit is tried without a jury and is not subject to the defense that the insured is protected by diplomatic immunity. By requiring individuals who are likely to be entitled to diplomatic immunity to maintain liability insurance and permitting tort victims to bring direct actions against those individuals’ insurers. Sections 6 and 7 of the Diplomatic Relations Act provide an effective remedy for Americans injured by foreign diplomatic personnel. Windsor, 509 F. Supp. at 345.
The district courts shall have original and exclusive jurisdiction, without regard to the amount in controversy, of any civil action commenced by any person against an insurer who by contract has insured an individual, who is, or was at the time of the tortious act or omission, a member of a mission (within the meaning of section 2(3) of the Diplomatic Relations Act (22 U.S.C. [§] 254a(3))) or a member of the family of such a member of a mission, or an individual described in section 19 of the Convention on Privileges and Immunities of the United Nations of February .13,1946, against liability for personal injury, death, or damage to property.
Green v. First Liberty Insurance Corporation, 17-cv-6975 (E.D.N.Y May 8, 2018) (NGG)(CLP).
District Judge Denis R. Hurley sua sponte dismissed two cases in as many days where plaintiffs failed to properly allege diversity jurisdiction in cases involving LLCs. Courtyard Apartments Property 1, LLC, v. Rosenblum, 17-cv-2909 (E.D.N.Y April 3, 2018) (DRH) (SIL); Sienna Ventures, LLC v. Halley Equipment Leasing, LLC, 18-cv-201 (E.D.N.Y April 2, 2018) (DRH) (GRB).
A bit of background: Establishing diversity jurisdiction for an LLC can be tricky because the citizenship of an LLC is determined by the citizenship of all of its members. (Indeed, LLCs with sizeable membership interests will often be ineligible for diversity jurisdiction.) Problem is, many attorneys instinctively think of citizenship in terms of principal place of business and state of organization of the LLC, which are not relevant – unlike traditional incorporated entities where place of business and incorporation determine citizenship. This has led to no shortage of “oops” cases where the parties or the courts realize deep into litigation that there is no subject matter jurisdiction.
Diligent federal judges and clerks have tackled the issue by proactively reviewing jurisdictional pleadings involving LLCs and sua sponte directing litigants to address jurisdictional defects at the outset of the case. Judge Hurley recently dismissed two such cases.
In accordance with its obligation to ensure that subject matter jurisdiction exists, on January 25, 2018, this Court ordered Plaintiffs to show cause in writing why the action should not be dismissed for lack of subject matter jurisdiction. On February 7, 2018, Plaintiffs filed an Amended Complaint, which again failed to address the citizenship of all of either Plaintiffs’ or Defendants’ members. In the Amended Complaint, Plaintiffs allege that Defendant Rosenblum “formed, and solely owned, or controlled as Managing Member” the corporate defendants. (Amended Complaint ¶ 12.) Plaintiffs make no other allegations concerning the citizenship of Defendants’ members, nor do Plaintiffs distinguish between which of the defendant corporations Rosenblum solely owned and which he just controlled.
The citizenship of a limited liability company (“LLC”) is determined by the citizenship of each of its members. See, e.g., Bayerische Landesbank, New York Branch v. Aladdin Capital Management LLC, 692 F.3d 42, 49 (2d Cir. 2012); Handelsman v. Bedford Vill. Assocs. Ltd P’ship, 213 F.3d 48, 51–52 (2d Cir. 2000). “A complaint premised upon diversity of citizenship must allege the citizenship of natural persons who are members of a limited liability company and the place of incorporation and principal place of business of any corporate entities who are members of the limited liability company.” New Millennium Capital Partners, III, LLC v. Juniper Grp. Inc., 2010 WL 1257325, at *1 (S.D.N.Y. Mar. 26, 2010), (citing Handelsman, 213 F.3d at 51–52)); Bishop v. Toys “R” Us-NY LLC, 414 F. Supp.2d 385, 389 n.1 (S.D.N.Y. 2006), aff’d, 385 Fed. App’x 38 (2d Cir. 2010).
When viewed against the foregoing principles, diversity jurisdiction has not been properly pled in this case as there are numerous fatal shortcomings in the Amended Complaint that are neither adequately addressed nor remedied by the Response to the Order to Show Cause. First, Plaintiffs make a blanket statement that each of the sixteen Plaintiffs are limited liability companies “with its same natural citizen sole owner and same principal place of business and residential address  listed as follows[.]” (Amended Compl. ¶ 9.) The Court is unpersuaded that this is sufficient to allege citizenship of each of the members of the sixteen limited liability companies. Moreover, Plaintiffs have failed to even allege the members, let alone the members’ citizenship, of certain of the Plaintiffs such as those of the David J. Keudell Revocable Trust. See Amerigold Logistics, LLC v. ConAgra Foods, Inc., 136 S. Cit. 1012, 1016–17 (2016) (explaining that for purposes of diversity jurisdiction, a trust as an unincorporated entity “possesses the citizenship of all of its members”). This shortcoming alone is fatal to diversity jurisdiction, however, there are also significant issues with Plaintiffs’ allegations regarding the citizenship of all Defendants.
As noted above, Plaintiffs make no allegations concerning the citizenship of each of the Defendants’ members, relying on confusing statements about Defendant Rosenblum’s involvement in the companies. Reference is also made to other non-defendants who apparently have or had some stake in the Defendant companies at some point in time.
While Plaintiffs ask that the Court provide guidance or further directive as to its Order to Show Cause, the Court declines to do so here. Plaintiffs have had three proverbial “bites at the apple” to properly allege subject matter jurisdiction; in the Complaint, the Amended Complaint, and the Response to the Order to Show Cause. Plaintiffs have failed to do so on all occasions. It is not the Court’s responsibility to do research for Plaintiffs’ counsel on how to properly allege subject matter jurisdiction.
Similarly, in Sienna Ventures, LLC v. Halley Equipment Leasing, LLC, the court issued a sua sponte directive for the plaintiff to fill in the jurisdictional blanks or have the case dismissed. However, plaintiff’s response failed to identify the members of defendant’s LLC and their citizenship. The court dismissed the action.
Plaintiff responded to the Court’s order to show cause by letter, which alleges simply that “subject matter jurisdiction exists in this case as Sienna Ventures, LLC  is a New York Limited Liability Company and its sole member is a citizen and resident of New York, and Halley Equipment Leasing, LLC  is a Texas Limited Liability Company.” Plaintiff makes no other allegations concerning the residency or citizenship of Defendant’s members. Thus, as explained below, the case is dismissed for lack of subject matter jurisdiction.
Sienna Ventures, LLC v. Halley Equipment Leasing, LLC, 18-cv-201 (E.D.N.Y April 2, 2018) (DRH) (GRB).


text:
Fisher, Leonard. The Railroads. Nineteenth Century America. New York. Holiday House. 1979. 62 pps. Octavo. Hardcover. First edition. Illustrated. Fine copy in dust jacket (large chip along bottom edge) in mylar).
Fitzsimons, Bernard. 150 Years of North American Railroads. Secaucus. Chartwell Books. 1982. 224 pps. 4to. Hardcover. First edition. Illustrated. Fine copy in near fine dust jacket (in mylar).
Fitzsimons, Bernard. 150 Years of North American Railroads. Secaucus. Chartwell Books. 1982. 224 pps. 4to. Hardcover. First edition. Illustrated. Fine copy in fine dust jacket (in mylar).
Fleming, Howard. Narrow Gauge Railways in America. A Sketch of Their Rise, Progress and Success: Valuable Statistics as a Grades, Curves, Weight of Rail, Locomotives, Cars, Etc (signed by the author). Oakland. Graham Hardy. 1949. Octavo. Hardcover. First edition (facsimile). Illustrated. Signed by the Author. Fine copy in near fine (light shelf wear) dust jacket (in mylar).
Fleming, Howard. Narrow Gauge Railways in America. A Sketch of Their Rise, Progress and Success: Valuable Statistics as a Grades, Curves, Weight of Rail, Locomotives, Cars, Etc. Oakland. Graham Hardy. 1949. Octavo. Hardcover. First edition (facsimile). Illustrated. Gift inscription from R. Demoro (railroad author). Fine copy in very good (edge wear, spine sunning) dust jacket (in mylar).
Fleming, Howard. Narrow Gauge Railways in America. A Sketch of Their Rise, Progress and Success: Valuable Statistics as a Grades, Curves, Weight of Rail, Locomotives, Cars, Etc. (signed by the author). Oakland. Graham Hardy. 1949. Octavo. Hardcover. First edition (facsimile). Illustrated. Signed by the Author. Fine copy (notes on page 58, owner inscription) in near fine dust jacket (in mylar).
Fletcher, Malcolm & John Taylor. Railways. The Pioneer Years. Photo available. Secaucus. Chartwell. 1990. 4to. Hardcover. First edition. Illustrated. Fine copy in fine dust jacket (in mylar).
Fletcher, Malcolm & John Taylor. Railways. The Pioneer Years. Photo available. Secaucus. Chartwell. 1990. 4to. Hardcover. First edition. Illustrated. Fine (owner name on end paper) copy in fine dust jacket (in mylar).
Fletcher, R.S. Single Track. The Construction of the North Island Main Trunk Railway. Photo available. Auckland. Collins. 1978. Octavo. Hard cover. First edition. Illustrated. Fine copy in fine dust jacket (in mylar).
Folkins, Wentworth. The Great Days of Canadian Steam. Photo available. Willowdale. Hounslow Press. 1991. 4to. Soft cover. Reprint. Illustrated in black, white and color. Important reference work. Fine copy.
Ford, Robert. Red Trains Remembered. Photo available. Glendale. Interurbans. 1980. 104 pps. + time tables. Octavo. Hardcover. First edition. Illustrated. Fine copy in very good (light fading and wear) dust jacket (in mylar).
Fox, M.J. Industrial Steam Album. London. Ian Allan. 1970. 144 pps. Octavo. Hardcover. First edition. Illustrated. Fine copy (small owner name) in fine dust jacket (in mylar).
Fox, Peter. British Railways. Locomotives & Coaching Stock. 1993. Sheffield. Platform 5. 1993. 350 pps. Octavo. Hardcover. First edition. Illustrated in color and black & white. Fine copy.
Frailey, Fred W Twilight of The Great Trains. Photo available. Waukesha. Kalmbach. 1998. 4to. Hardcover. First edition. Illustrated. Fine copy in fine dust jacket (in mylar).
Fraser, Neil. Doncaster L.N.W.R. Premier News No. 62. Crewe. L. & N.W.R. Society. 1986. 21 pps. Octavo. Soft cover. First edition. Illustrated. Fine copy.
Fraser, Neil. Premier News No. 75. Photo available. Crewe. L. & N.W.R. Society. 1989. 21 pps. Octavo. Soft cover. First edition. Illustrated. Fine copy.
Frayn, Michael. Great Railway Journeys of the World. Photo available. New York. E.P. Dutton & Co. 1981. 182 pps. Octavo. Hardcover. First edition. Illustrated. Fine copy in fine dust jacket (in mylar).
Freezer, C.J. Great Western Kings. Photo available. Somerset. Foulis. 1984. Octavo. Hard cover. First edition. Illustrated in black, white and color. Fine copy.
Freezer, C.J. Green Arrows. V2 Class. Photo available. Somerset. Foulis. 1984. Octavo. Hard cover. First edition. Illustrated in black, white and color. Fine copy.
Freezer, Cyril J. Model Railroads. The Complete Guide to Designing, Building and Operating a Model Railroad. Philadelphia. Running Press. 1991. 96 pps. 4to. Hardcover. First edition. Illustrated in color and black & white. Fine copy in near fine dust jacket (in mylar).
French, Gerald. When Steam Was King. Railroads of the Central Mother Lode Region of California. Sierra Railway, Pickering Lumber Company, West Side Lumber Company. Photo available. Petluma. Eureka Publishing. nd. 241 pps. 4to. Hardcover. First edition. Illustrated. Important reference work. Fine copy.
Garratt, Colin. A Popular Guide to the Preserved Steam Railways of Britain. Poole. Blandford Press. 1979. 192 pps. Octavo. Hardcover. First edition. Illustrated. Fine copy in fine dust jacket (in mylar).

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Court of Appeal, Second District, Division 7, California.
Agneta DOBOS, Plaintiff and Appellant, v. VOLUNTARY PLAN ADMINISTRATORS, INC., et al., Defendants and Respondents.
Donna Bader, Laguna Beach, for Petitioner and Appellant. Laquer Urban Clifford & Hodge, Robert S. Clifford and J. Paul Moorhead, Pasadena, for Defendants and Respondents.
Appellant Agneta Dobos (“Dobos”) appeals from the trial court's judgment denying her petition for writ of administrative mandate brought against Respondents Voluntary Plan Administrators, Inc., Long Term Disability and Survivor Benefit Plan, and Chief Administrative Office, County of Los Angeles (collectively, “Respondents”). In her petition, Dobos challenged an administrative decision that upheld the denial of her application for benefits under the long-term disability benefit plan provided by her former employer, County of Los Angeles (the “County”). The trial court denied the petition on the grounds that Dobos did not meet the eligibility requirements of the plan because she was not employed by the County for the duration of a six-month qualifying period. We conclude that, based on the plain language of the Los Angeles County Code provisions setting forth the terms and conditions of the plan, Dobos had to be employed by the County until the end of the qualifying period to be eligible for long-term disability benefits. Because it is undisputed that Dobos' employment with the County terminated before the expiration of the qualifying period, she was not eligible for benefits under the County's plan. Accordingly, we affirm.
Dobos began working for the County on December 17, 1984, as a temporary student nurse. She was hired by the County as a temporary staff nurse on October 16, 1985, and was promoted to a full-time permanent staff nurse on January 1, 1987. Dobos worked at the University of Southern California Medical Center, Women's Hospital.
On March 25, 1992, Dobos allegedly incurred a disabling injury at work. On that same date, the County suspended Dobos pending an investigation into allegations of misconduct. Dobos did not return to work for the County at any time after March 25, 1992. Following its investigation, the County terminated Dobos' employment effective April 28, 1992.
On October 5, 1992, approximately five months after her employment with the County ended, Dobos filed an application for long-term disability benefits under the County's Long-Term Disability and Survivor Benefit Plan (the “Plan”). In her application, Dobos alleged that she first became disabled on March 25, 1992. Voluntary Plan Administrators, Inc. (“VPA”), the third party administrator for the County's Plan, denied Dobos' application for benefits on the grounds that there was insufficient medical information to support her alleged disability. Dobos filed an appeal with VPA on June 18, 1993, and VPA upheld its decision on November 4, 1993.
On November 9, 1993, Dobos applied for Supplemental Security Income (“SSI”) disability benefits through the Social Security Administration. On October 30, 2003, following several additional applications and appeals, an Administrative Law Judge found that Dobos was totally disabled and entitled to SSI disability benefits. In his decision, the Administrative Law Judge also found that Dobos had been disabled since at least November 1, 1993.
On February 15, 2005, approximately 13 years after her employment with the County ended, Dobos filed a second application for long-term disability benefits under the County's Plan. In her second application, Dobos alleged that her disability was the direct result of an injury that arose out of the performance of her duties for the County. She also alleged that her first day of absence from work as a result of her disability was March 26, 1992, and that she had not attempted to return to work since that date. Because Dobos had not returned to work following the denial of her first application for benefits, VPA agreed to review her original claim again, taking into account that Dobos subsequently had been approved for disability benefits by the Social Security Administration. On or about July 7, 2005, VPA denied Dobos' second application on the grounds that she failed to satisfy the Plan's eligibility requirements for long-term disability benefits. Specifically, VPA found that Dobos did not complete the six-month qualifying period during which an eligible employee must be totally and continuously disabled because her employment with the County terminated before the expiration of her qualifying period.
Dobos appealed the denial of her second application. The appeal was heard on April 10, 2006, before a Hearing Officer acting on behalf of the Los Angeles County Chief Administrative Office. On May 24, 2006, the Hearing Officer issued his Findings and Decision and upheld the denial. In his written decision, the Hearing Officer noted that the appeal was not about Dobos' medical eligibility or the reasons for her discharge, but was solely about “whether an individual is covered under the LTD program if they [sic ] are no longer employed by [the County] at the end of the six month qualifying period.” Based on his reading of the County's Plan as codified in the Los Angeles County Code, the Hearing Officer concluded that Dobos was not eligible for long-term disability benefits because she was not employed by the County at the expiration of the qualifying period.
On November 7, 2006, Dobos filed an amended petition for writ of administrative mandate in Los Angeles County Superior Court. In her petition, Dobos sought to challenge the administrative decision upholding VPA's denial of her application for benefits. She argued that the Hearing Officer erroneously interpreted the Los Angeles County Code provisions regarding benefit eligibility, asserting that the Code merely required that she be employed by the County when she first became disabled rather than for the full duration of the six-month qualifying period. She also contended that any contrary reading would violate public policy because it would allow an employer to unilaterally control the payment of benefits by terminating disabled employees before their qualifying period ended.
On April 4, 2007, the trial court denied Dobos' writ petition. In its Statement of Decision, the court concluded that the relevant provisions of the Los Angeles County Code required that, to be eligible for long-term disability benefits, Dobos “had to be an employee when she became totally disabled ․ [,] had to remain an employee absent from work due to a total disability for a period of six months ․ [,] and ․ had to be an employee on the first day following the expiration of the qualifying period.” The court further concluded that Dobos was “not eligible for such benefits because she did not remain an employee for six months after March 25, 1992, and she was not an employee on the first day following the expiration of that period.” The trial court entered judgment in favor of Respondents on May 9, 2007. On May 30, 2007, Dobos filed a timely notice of appeal.
Questions of law, on the other hand, are subject to a de novo standard of review. (Stermer v. Board of Dental Examiners (2002) 95 Cal.App.4th 128, 132-133, 115 Cal.Rptr.2d 294; Anserv Ins. Services, Inc. v. Kelso (2000) 83 Cal.App.4th 197, 204, 99 Cal.Rptr.2d 357.). The proper interpretation of a statute, and its application to undisputed facts, presents a question of law that the appellate court reviews independently. (Schutte & Koerting, Inc. v. Regional Water Quality Control Bd. (2007) 158 Cal.App.4th 1373, 1384, 71 Cal.Rptr.3d 54; MHC Operating Limited Partnership v. City of San Jose, supra, 106 Cal.App.4th at p. 219, 130 Cal.Rptr.2d 564.) In this case, the central issue on appeal is the proper interpretation of the Los Angeles County Code provisions regarding eligibility for long-term disability benefits under the County's Plan. We accordingly review that issue under a de novo standard of review.
“F. ‘Eligible employee’ means an employee who becomes totally disabled: [¶] 1. As a direct consequence and result of injury or disease arising out of and in the course of the performance of his or her assigned duties; or [¶] 2. After five years of continuous service with the county.
“G. ‘Employee’ means an employee of the county of Los Angeles who is a general member of the Los Angeles County Employees Retirement Association. General member does not include a safety member.
Relying on the definitions of “employee” and “qualifying period” contained in section 5.38.010, Respondents contend that the Code requires that an applicant for long-term disability benefits be employed by the County at the expiration of the six-month qualifying period. They assert that, because Dobos' employment with the County ended on April 28, 1992, approximately one month after she was first absent from work due to a disability, she did not satisfy the qualifying period requirement and was thus ineligible for benefits. Focusing on the definition of “eligible employee,” Dobos argues that the Code merely requires that an applicant for long-term disability benefits be an employee of the County at the time he or she first becomes totally disabled, either as the result of an injury arising out of employment or after five years of continuous service. She claims that, because she was employed by the County on March 25, 1992, the date she first became totally disabled and unable to work, she was eligible for benefits irrespective of her employment status at the end of the qualifying period.
Based on the plain language of the enactment, we conclude that an applicant for long-term disability benefits under the County's Plan must be an employee of the County at the expiration of the six-month qualifying period to be eligible for benefits. We begin with the definition of “qualifying period.” The term “qualifying period,” as set forth in section 5.38.010, subdivision (K), requires that an “eligible employee” be totally disabled for a continuous period of six months, commencing with the first day on which the eligible employee is “absent from work due to a total disability.” (Title 5.38, § 5.38.010, subd. (G.).) An “eligible employee” is not entitled to any long-term disability benefits unless and until that employee has satisfied the qualifying period. (Title 5.38, § 5.38.020, subd. (A.).) The reference to an eligible employee being “absent from work” during the qualifying period supports the inference that, but for a total disability, the employee would otherwise be at work during that six-month period. (Title 5.38, § 5.38.010, subd. (G.).) This suggests that continuous employment with the County throughout the qualifying period is required to be eligible for benefits.
“Employee” in turn is defined in section 5.38.010, subdivision (G) as “an employee of the county of Los Angeles who is a general member of the Los Angeles County Employees Retirement Association.” (Title 5.38, § 5.38.010, subd. (G.).) Giving this definition its usual and ordinary meaning, an “employee” is a person who is employed by the County. It does not include persons who once were, but are no longer, County employees. Therefore, construing these definitions in context with each other, an applicant for long-term disability benefits must not only be an “employee” of the County at the time he or she becomes totally disabled and unable to work, but also must remain an “employee” of the County for the duration of the six-month “qualifying period” to be eligible for benefits.
Dobos argues that the definition of “disability beneficiary” set forth in section 5.38.010, subdivision (E) supports the reading that an “eligible employee” is not limited to current employees of the County. “Disability beneficiary” is defined by the Code as “a former employee who has not retired from service under Retirement Plan E, and who either is receiving disability benefits or is eligible to receive disability benefits.” (Title 5.38, § 5.38.010, subd. (E.).) Focusing on the phrase “eligible to receive disability benefits,” Dobos contends that a “former employee” would never be eligible to receive such benefits if the definition of “eligible employee” only applied to current County employees. We disagree with Dobos' reading. A former employee who was employed by the County for the duration of the six-month qualifying period and only thereafter discharged could be “eligible to receive disability benefits.” Such a former employee would still qualify as a “disability beneficiary” under the Code, but like any other applicant for benefits, he or she would have been subject to the same eligibility requirement of continuous employment with the County throughout the qualifying period. Furthermore, the fact that a “disability beneficiary” is defined specifically as a “former employee” reflects that the drafters distinguished between “employees” and “former employees” in defining the Plan's requirements, and further supports that the term “employee,” as used in the Code, does not encompass both current and former employees of the County.
Dobos also asserts that the written policy provided to employees supports the conclusion that an applicant for long-term disability benefits need not be employed by the County at the end of the qualifying period. The County's written policy consists of an eight-page document that summarizes the requirements set forth in Title 5.38. It states that, to be eligible for long-term disability benefits, “an employee must ․ [b]e a general member of Retirement Plan A, B, C, D, or E ․, [¶] and [¶] [b]e totally disabled, [¶] and either [¶] [h]ave completed five or more years of continuous County service, [¶] or [¶] [b]e totally disabled as a direct consequence and result of an injury or disease, which arose out of and in the course of the performance of the employee's assigned duties.” It further states that “[a] qualifying period of six months is required before disability benefits may be paid,” and that “[t]he qualifying period begins with the first day of absence from work by reason of the employee's total disability.” There is nothing in the language of the policy, however, that is inconsistent with the Code's requirement that an applicant for benefits be employed by the County at the end of the qualifying period. The policy does not provide that both current and former employees are eligible to apply for long-term disability benefits at any time, nor does it suggest that the qualifying period may be satisfied without regard to an applicant's employment status. Rather, it refers to persons who are eligible for benefits as “employees,” and under the plain language of the Code, an “employee” does not include an individual who is no longer employed by the County.
Dobos claims that construing the Code to require current employment with the County would create an illusory promise by granting the County the unilateral power to discharge employees without preserving their vested disability benefits. She also argues that such an interpretation would be contrary to public policy because it would allow an employer to discharge employees who are on disability-related leaves of absence in violation of both the Family Medical Leave Act, 29 U.S.C. § 2601 et seq., and the California Family Rights Act, Gov.Code § 12945.2. Notably, however, Dobos does not contend that the County terminated her employment because she took a disability leave or because she filed an application for long-term disability benefits. She simply asserts that such a scenario could exist for other disabled employees.
Dobos' argument is unavailing. To begin with, a County employee does not become entitled to long-term disability benefits until he or she completes the six-month qualifying period and satisfies the other requirements for eligibility. Thus, the County's decision to discharge an employee who has not yet met the eligibility criteria for reasons unrelated to his or her application for benefits does not deprive the employee of the right to any vested disability benefits. Moreover, contrary to Dobos' claim, the requirement that an applicant for benefits be employed by the County at the end of the qualifying period does not give the County free reign to discharge disabled employees in violation of state and federal law. To the extent that an employee is discharged because of a disability or in retaliation for taking a protected disability-related leave, he or she remains free to pursue a legal action against the employer for violation of any number of statutes, including the Family Medical Leave Act, the California Family Rights Act, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., and the California Fair Employment and Housing Act, Gov.Code § 12900 et seq. The County's Plan simply requires that a disabled employee be employed by the County at the end of the qualifying period to be eligible for long-term disability benefits. It does not in any manner exempt the County from compliance with applicable state and federal laws protecting the rights of disabled employees.
Judicial review in an administrative mandamus action brought pursuant to Code of Civil Procedure section 1094.5 is limited to issues raised in the proceedings before the administrative agency. (Pegues v. Civil Service Com. (1998) 67 Cal.App.4th 95, 104, 78 Cal.Rptr.2d 705.) Therefore, a trial court cannot properly grant relief based on a legal theory not presented at the administrative proceeding. (NBS Imaging Systems, Inc. v. State Bd. of Control (1997) 60 Cal.App.4th 328, 337, 70 Cal.Rptr.2d 237.) Dobos asserts that the trial court exceeded its scope of review in denying her writ petition because the court did not limit its review to construing the Code provisions on eligibility for long-term disability benefits. Rather, Dobos claims, the court also considered the basis of her medical disability and the reasons for her discharge, and thereby denied her due process of law.
With respect to the basis of her medical disability, Dobos refers to the portion of the trial court's Statement of Decision that discussed her claim for SSI disability benefits. In response to Dobos' argument that the County was bound by the Social Security Administration finding that she was totally disabled as of November 1, 1993, the court stated that even “[a]summing that it is, it does not help [Dobos], because, by the time she became disabled, she had ceased to be an employee of the county for over 18 months.” Contrary to Dobos' contention, the trial court was not drawing any conclusions about the nature of her disability in this statement, nor was it making any factual finding that Dobos first became disabled on November 1, 1993. The court was simply explaining how Dobos' assertion about the binding effect of the Social Security Administration ruling was not helpful to her argument regarding eligibility for County benefits because, at most, it established that she became disabled 18 months after her employment with the County ended. Nevertheless, for purposes of interpreting the requirements for eligibility under the County's Plan, the trial court accepted Dobos' allegation that she first became disabled on March 25, 1992, and concluded that, based on the language of the Code, she was not eligible for benefits because she was not employed by the County six months after that date.
With respect to the reasons for her discharge, Dobos contends that the trial court erroneously found that she was trying to evade her termination of employment by claiming that she was disabled only after she was discharged by the County for cause. Dobos refers to the portion of the Statement of Decision in which the trial court addressed her argument that the County's interpretation of the Code would give it power to unilaterally control the payment of long-term disability benefits by discharging employees during their qualifying period. In response to that argument, the trial court stated that Dobos' “contention does not fit the facts of this case, which are that it is [Dobos] who is trying to evade the termination of her employment for misconduct by belatedly claiming, AFTER SHE WAS TERMINATED, that she became disabled before her termination. [Dobos] was terminated on April 28, 1992, and did not claim that she had become disabled until October 5, 1992, five months later.” Dobos asserts that there was no evidence presented at the administrative hearing to support such a finding on this issue.
We need not determine, however, whether the trial court erred in making this factual finding. Even if it was erroneous, the court did not rely on that finding in deciding that Dobos was ineligible for long-term disability benefits. The court instead based its decision on its interpretation of the Code's requirements for eligibility. The court concluded that the plain language of Title 5.38 required that Dobos be employed by the County at the end of the qualifying period to be eligible for benefits and found that Dobos failed to satisfy such criteria because “she did not remain an employee for six months after March 25, 1992, and she was not an employee on the first day following the expiration of that period.” This interpretation had nothing to do with the reasons for Dobos' discharge or the nature of her disability. Accordingly, the trial court did not exceed the scope of its review in ruling on Dobos' petition.
Dobos also argues that the trial court erred in relying on the administrative record for its factual findings about the reasons for her discharge because the record on that issue was defective. According to Dobos, she testified at the administrative hearing about the circumstances surrounding her termination of employment, but her statements on the topic were inaudible and could not be accurately transcribed. She contends that because the administrative record regarding the reasons for her discharge was incomplete, the trial court committed reversible error in relying on the record to make factual findings on that issue. We disagree.
First, Dobos concedes that she is not now claiming, nor has she ever claimed, that the County terminated her employment in order to deny her long-term disability benefits. In fact, she admits that her notice of discharge and the onset of her disability occurred around the same time. Thus, Dobos' testimony about the reasons for her discharge are irrelevant and immaterial to the issues presented in this case. Second, as discussed above, the trial court's denial of Dobos' petition was not based on the reasons for her discharge, but on the legal conclusion that an applicant for long-term disability benefits must be employed by the County at the end of the qualifying period. The only facts that the trial court needed to decide whether Dobos met that eligibility criteria were the date on which she was first absent from work due to a total disability (March 26, 1992) and the date on which her employment with the County ended (April 28, 1992). Those facts were accurately represented in the administrative record and were not disputed by the parties at either the administrative or superior court proceedings. Therefore, the trial court properly relied on the administrative record in deciding that Dobos was ineligible for long-term disability benefits under the County's Plan because she did not satisfy the requirements for eligibility set forth in the Los Angeles County Code.
The judgment is affirmed. Respondents shall recover their costs on appeal.
1. Unless otherwise indicated, all further section references are to the County Code.
2. Title 5.38 was amended in 2008. The definitions contained in section 5.38.010 were re-numbered as a result, but the text of the above-cited definitions did not change.
We concur: PERLUSS, P.J., and WOODS, J.


How Does Vocational Rehabilitation Work in Louisiana Workers Compensation?
Typically, the vocational rehabilitation process begins after the injured employee's treating physician releases the employee to return to work with restrictions.
Once the employee's treating physician releases the employee to return to work with restrictions, the workers compensation insurance company will typically appoint a vocational counselor to handle the vocational rehabilitation process.
The process may include conducting a labor market survey to determine post-injury wage earning capacity.
Often, the vocational rehab counselor typically will use the treating physician's written work restrictions to locate actual jobs within 30 miles of the employee's geographical area that are actually available and fit within the doctor's work your restrictions.
And sometimes, the workers compensation insurance company will have the employee undergo a functional capacity evaluation (FCE), which is basically an examination by a physical therapist in order to determine the employee's physical ability to perform specific physical functions.
So, the workers compensation insurance company will tell the injured employee that the purpose of the vocational rehab process is to find a new job for the employee.
However, the employee does not need to actually be offered that job, or to receive the job. In fact, there are absolutely no guarantees that the employee will be able to get that new job.
What is guaranteed, however, is that if the doctor signs off on just the employee's ability to potentially do that job, then the workers compensation insurer will reduce or terminate the employee's indemnity (or lost wages) benefits, by whatever amount that new job pays.
Unfortunately, it does not matter if the employee receives the new recommended job, or if the job recommended is not very reliable, or if the job recommended requires more experience than the employee has, or if the job recommended requires physical demands that are too hard on the employee.
So vocation rehab is a trap, because its real purpose is not to find the injured employee a new job, or to provide retraining, but instead merely to give the insurance company the ability to terminate the employee's indemnity (or lost wages) benefits.
Louisiana workers compensation law states that "the goal of rehabilitation services is to return a worker with a disability to work, with a minimum of retraining, as soon as possible after an injury occurs."
So the priority is for the injured worker to return to his or her same job and position. And if that's not possible, injured worker should return to his or her same job and position, with some modifications and/or accommodations.
Return to a related occupation (in the same field) suited to the claimant's education and marketable skills.
So, once the employee's treating physician releases the employee to return to work with restrictions, the workers compensation insurance company will first determine if the employee can return to his or her position, either with or without modifications/accommodations.
What If the Employee Cannot Return to His or Her Old Job?
Often, an injured employee is able to receive workers compensation benefits for a short period of time, and then return to his or her position (either with or without modifications/accommodations). In such a scenario, the workers compensation benefits would end once the employee is able to earning 90% of what he or she was earning before the accident.
But not all employees are so fortunate. Some types of injuries make it difficult or impossible to return to the employee's position or job, even with modifications or accommodations.
If the employee cannot return to his or her position (either with or without modifications/accommodations), then the workers compensation insurance company has to determine if there is a job or jobs that the employee is capable of handling.
This job or jobs does not have to be a job that the employee likes or or prefers or accepts, though it must be in the employee's geographical location.
The workers compensation insurance company will initiate the vocational rehabilitation process, and will initiate determine if there is a job or jobs that the employee is capable of handling. Usually these processes begin with the workers compensation insurance company hiring a vocational rehabilitation counselor.
The insurer is actually using vocational rehabilitation as a means to reduce or terminate the employee's indemnity (or lost wages) benefits.
Unfortunately, an employee's refusal to accept vocational rehabilitation can result in the injured worker's weekly compensation being reduced by 50%!
Who Pays for Vocational Rehabilitation (Voc Rehab) Services?
As noted above, vocational rehabilitation is mandatory - meaning that the injured employee must participate in vocational rehabilitation - so long as the vocational rehabilitation services are deemed beneficial.
If the employee and the insurance company disagree as to whether the vocational rehabilitation services are deemed beneficial, then the OWC Judge will make that determination.
Nonetheless, all payments for all vocational rehabilitation services are covered by and paid for by the workers compensation insurance company.
How Does Job Retraining Work in Louisiana Workers Compensation?
The purpose of vocational rehabilitation is supposed to be to return an injured employee back to work as soon as possible.
However, in reality, of vocational rehabilitation is simply a trap used by the insurance company to minimize or terminate the employee's indemnity (or lost wages) benefits.
Thus, the real purpose of vocational rehabilitation is not to find the injured employee a new job, or to provide job retraining. And for this reason, very little job retraining ever actually occurs in workers compensation claim.
For example, an injured employee will not be offered any job retraining opportunities if the insurance company determines that there are suitable jobs already available to the employee. In such a situation, the insurance company with simply reduce or eliminate altogether the employee's lost wage benefits.
So job retraining is only even a possibility when the employee is injured so badly that it impossible to return to his or her prior job, and there are no other jobs available in the area that match the employee's education and skill level.
But even then, workers compensation insurance companies very rarely provide for retraining programs - either short-term or long-term - due to the cost of such programs and the time needed for such programs.
The costs of a retraining program would include the reasonable costs of board, lodging, and necessary travel, if there are no retraining programs close to the injured employee.
But again, the workers compensation insurance companies don't really care about retraining, they only care about minimizing about eliminating the workers compensation benefits that they are supposed to pay. To eliminate benefits, the insurance company only needs to show the existence of a job that fits the employee's physical capabilities and is located within a reasonable geographic distance. The insurance company does not need to actually find the worker a job to fulfill its obligations.
The workers compensation insurance company can eliminate benefits without the cooperation or participation of the employee - it just needs to notify the employee of the position opening and its wages, and then have the doctor sign off on the employee's ability to do such work.
In the very rare cases where job retraining actually occurs, a request for vocational retraining must be filed within two years from the end date of temporary total disability as determined by the treating physician.
Also, the few injured workers who actually are determined to be eligible for vocational rehab job retraining can typically receive lost wage benefits for up to 26 weeks, with an additional 26-week extension possible in special situations.
In Louisiana, the workers compensation insurance company will typically appoint a vocational rehabilitation counselor to handle the vocational rehabilitation process.
The goal of a vocational rehabilitation counselor should be to help injured workers return to gainful employment as soon as possible.
Testifying as an expert witness regarding availability of suitable employment.
Basically, the simple purpose of the vocational rehabilitation counselor is provide reasons to the workers compensation Judge as to why the employee's lost wage benefits should be reduced or eliminated.
After all, the vocational rehabilitation counselor is chosen by the insurance company, and paid by the insurance company, and therefore can be expected to tell the insurance company exactly what the insurance company wants to hear.
Nevertheless, an injured employee's interactions with the vocational rehabilitation counselor are extremely important the outcome of the employee's workers compensation claim.
If handled poorly, the injured employee's benefits can be reduced or terminated even if the employee is unable to return to work.
And really, the only way for the employee to properly handle a vocational rehabilitation counselor is to be honest and cooperative, but retain an experienced Louisiana workers compensation attorney to push back against and refute the vocational rehabilitation counselor's "conclusions."
Plus, an experienced Louisiana workers compensation attorney can prepare the employee for the employee's meeting with the vocational rehabilitation expert, in order to ensure that the employee continues to receive lost wage disability benefits.
Oftentimes, the workers compensation insurance company will have the employee undergo a functional capacity evaluation (FCE), which is basically an examination by a physical therapist in order to determine the employee's physical ability to perform specific physical functions.
The workers compensation insurance company may also instruct its chosen vocational rehabilitation counselor to conduct a Labor Market Survey, in order to determine post-injury wage earning capacity and thereby reduce or terminate the employee's indemnity (or lost wages) benefits.
A Labor Market Survey is based on the results of a functional capacity evaluation, and will contain a list of actual jobs that the vocational rehabilitation counselor claims are with the employee's physical limitations, education history, and present work skills.
The Labor Market Survey process begins with the insurance company's vocational rehabilitation counselor scheduling a meeting with the injured employee, in which the vocational rehabilitation counselor will assist with preparing a resumé and applying for jobs online.
After meeting with the injured employee, the insurance company's vocational rehabilitation counselor will meet alone with the employee's doctor, in order to try to convince the doctor to sign off on the employee's ability to potentially do some of those jobs.
Afterwards, the vocational rehabilitation counselor will produce by certified mail a Labor Market Survey, which is simply the written list of jobs, including the names and addresses of prospective employers.
The workers compensation insurance company will then use this Labor Market Survey to claim that the employee can return to employment, and thereby reduce or terminate the employee's indemnity (or lost wages) benefits.
A. When an employee has suffered an injury covered by this Chapter which precludes the employee from earning wages equal to wages earned prior to the injury, the employee shall be entitled to prompt rehabilitation services. Vocational rehabilitation services shall be provided by a licensed professional vocational rehabilitation counselor, and all such services provided shall be compliant with the Code of Professional Ethics for Licensed Rehabilitation Counselors as established by R.S. 37:3441 et seq.
(a) Return to the same position.
(b) Return to a modified position.
(c) Return to a related occupation suited to the claimant's education and marketable skills.
(e) Short-term retraining program (less than twenty-six weeks).
(f) Long-term retraining program (more than twenty-six weeks but not more than one year).
(2) Whenever possible, employment in a worker's local job pool must be considered and selected prior to consideration of employment in a worker's statewide job pool.
(3) (a) The employer shall be responsible for the selection of a licensed professional vocational rehabilitation counselor to evaluate and assist the employee in his job placement or vocational training. Should the employer refuse to provide these services, or a dispute arises concerning the work of the vocational counselor, the employee may file a claim with the office to review the need for such services or the quality of services being provided. The employee shall have a right to an expedited summary proceeding pursuant to R.S. 23:1201.1(K)(8). The workers' compensation judge shall set a hearing date within three days of receiving the motion. The hearing shall be held not less than ten, nor more than thirty days, after the employer or payor receives notice, delivered by certified or registered mail, of the employee's motion. The workers' compensation judge shall provide notice of the hearing date to the employer and payor at the same time and in the same manner that notice of the hearing date is provided to the employee or his attorney. For the purposes of this Section, an employee shall not be required to submit the dispute on the issue of vocational services to mediation or go through a pretrial conference before obtaining a hearing. The hearing shall be conducted as a rule to show cause.
(b) An employee shall have no right of action against a vocational counselor for tort damages related to the performance of vocational services unless and until he has exhausted the administrative remedy provided for in Subparagraph (a) of this Paragraph. The running of prescription shall be suspended during the pendency of the administrative proceedings provided for in this Paragraph.
(c) Upon refusal by the employee, the employer or payor may reduce weekly compensation, including supplemental earnings benefits pursuant to R.S. 23:1221(3), by fifty percent for each week of the period of refusal. Reduction of benefits by the employer or payor shall be made in accordance with the provisions of R.S. 23:1201.1(A) through (E).
(a) An insurer or self-insured employer by designating a rehabilitation provider and notifying the office.
(b) The office by requiring the insurer or self-insured employer to designate a rehabilitation provider.
(c) The employee, through a request to the office. The office shall then require the insurer to designate a rehabilitation provider.
(2) Rehabilitation services provided under this Part must be delivered through a rehabilitation counselor approved by the office.
D. Prior to the workers' compensation judge adjudicating an injured employee to be permanently and totally disabled, the workers' compensation judge shall determine whether there is reasonable probability that, with appropriate training or education, the injured employee may be rehabilitated to the extent that such employee can achieve suitable gainful employment and whether it is in the best interest of such individual to undertake such training or education.
E. When it appears that a retraining program is necessary and desirable to restore the injured employee to suitable gainful employment, the employee shall be entitled to a reasonable and proper retraining program for a period not to exceed twenty-six weeks, which period may be extended for an additional period not to exceed twenty-six additional weeks if such extended period is determined to be necessary and proper by the workers' compensation judge. However, no employer or insurer shall be precluded from continuing such retraining beyond such period on a voluntary basis. An injured employee must request and begin retraining within two years from the date of the termination of temporary total disability as determined by the treating physician. If a retraining program requires residence at or near the facility or institution and away from the employee's customary residence, reasonable cost of board, lodging, or travel shall be borne by the employer or insurer. A retraining program shall be performed at facilities within the state when such facilities are available.
F. Temporary disability benefits paid pursuant to R.S. 23:1221(1) shall include such period as may be reasonably required for training in the use of artificial members and appliances and shall include such period as the employee may be receiving training or education under a retraining program pursuant to this Section.
G. The permanency of the employee's total disability under R.S. 23:1221(2) cannot be established, determined, or adjudicated while the employee is employed pursuant to an on-the-job training or a retraining program as provided in Subsections B and E of this Section.
Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1988, No. 938, §1, eff. July 1, 1989; Acts 1989, No. 23, §1, eff. June 15, 1989; Acts 1989, No. 260, §1, eff. Jan. 1, 1990; Acts 1989, No. 454, §6, eff. Jan. 1, 1990; Acts 1997, No. 88, §1, eff. June 11, 1997; Acts 2003, No. 980, §1; Acts 2004, No. 341, §1, eff. June 18, 2004; Acts 2005, No. 257, §1; Acts 2013, No. 337, §1; Acts 2014, No. 811, §12, eff. June 23, 2014.


§1103.100 Applicability of 2 CFR part 200 to requirements for recipients in DoD Components' terms and conditions.
§1103.200 Exception for small awards.
§1103.205 Timing of payments made using the reimbursement method.
§1103.210 Management of federally owned property for which a recipient is accountable.
§1103.215 Intangible property developed or produced under an award or subaward.
§1103.220 Debarment and suspension requirements related to recipients' procurements.
§1103.305 DoD Grant and Agreement Regulations.
Authority: 5 U.S.C. 301 and 10 U.S.C. 113.
Source: 79 FR 76047, Dec. 19, 2014, unless otherwise noted.
(1) Institutions of higher education, hospitals, and other nonprofit organizations included in the definition of “recipient” in part 32 of the DoD Grant and Agreement Regulations (32 CFR part 32).
(2) States, local governments, and Indian tribal governments.
(1) Awards to institutions of higher education, hospitals, and other nonprofit organizations included in the definition of “recipient” in part 32 of the DoD Grant and Agreement Regulations (32 CFR part 32) are not subject to the administrative requirements, cost principles, and audit requirements specified in 32 CFR part 32.
(2) Awards to States, local governments, and Indian tribal governments are not subject to the administrative requirements, cost principles, and audit requirements specified in part 33 of the DoD Grant and Agreement Regulations (32 CFR part 33).
(3) References in other parts of the DoD Grant and Agreement Regulations that cite part 32 or part 33 as the source of administrative requirements, cost principles, and audit requirements for awards to the types of recipient entities described in paragraphs (b)(1) and (2) of this section therefore do not apply to those new awards.
(c) Provisions of the DoD Grant and Agreement Regulations other than those listed in paragraph (b) of this section continue to be in effect, with applicability as stated in those provisions.
For small awards to institutions of higher education, hospitals, and other nonprofit organizations, DoD Components' terms and conditions may apply less restrictive requirements to recipients than the OMB guidance in 2 CFR part 200 specifies, except for requirements that are statutory. This exception maintains long-standing policy established in 32 CFR 32.4.
In DoD Components' awards to institutions of higher education, hospitals, and other nonprofit organizations, the terms and conditions implementing the provisions of 2 CFR 200.305(b)(3) concerning timing of payments when the reimbursement method is used must specify that the DoD payment office generally makes payment within 30 calendar days after receipt of the request for reimbursement by the office designated to receive the request, unless the request is reasonably believed to be improper. This substitution of “generally makes payment” for “must make payment” maintains long-standing policy established in 32 CFR 32.22(e)(1).
(a) For any award to an institution of higher education, hospital, or other nonprofit organization, broaden the requirements of 2 CFR 200.313(d) to also apply to any federally owned property for which the recipient is accountable under its award. Doing so maintains long-standing policy established in 32 CFR 32.34(f).
(b) For any award to a State, local government, or Indian tribal government (as defined in 32 CFR part 33), specify that the recipient must manage federally owned equipment in accordance with the DoD Components' rules and procedures. Doing so maintains long-standing policy established in 32 CFR 33.32(f).
In DoD Components' awards to institutions of higher education, hospitals, and other nonprofit organizations, the award terms and conditions implementing the guidance in 2 CFR 200.315(a) on intangible property must exclude intangible property developed or produced under an award or subaward. Doing so maintains long-standing policy established in 32 CFR 32.36(e).
In award terms and conditions implementing the guidance in 2 CFR 200.318(h) on awarding contracts only to responsible entities, DoD Components must require recipients to comply with DoD's implementation in 2 CFR part 1125 of OMB guidance on nonprocurement debarment and suspension (2 CFR part 180). Doing so maintains long-standing policy established in 2 CFR parts 180 and 1125 and in 32 CFR 32.44(d), as well as compliance with Executive Orders 12549 and 12689.
In award terms and conditions implementing the guidance in 2 CFR 200.345 on collection of amounts due, DoD Components must inform recipients that DoD post-award administration offices follow procedures set forth in 32 CFR 22.820 for issuing demands for payment and transferring debts for collection, and that a recipient will be informed about specific procedures and timeframes affecting it through the written notices of grants officers' decisions and demands for payment. Doing so maintains long-standing policy established in 32 CFR 32.73(c).
The Office of the Secretary of Defense, the Military Departments, and all Defense Agencies, DoD Field Activities, and other entities within the Department of Defense that are authorized to award or administer grants, cooperative agreements, and other non-procurement transactions subject to the DoD Grants and Agreement Regulations.
The regulations in Chapter I, Subchapter C of Title 32, Code of Federal Regulations, and Chapter XI of Title 2, Code of Federal Regulations.
An award not exceeding the simplified acquisition threshold.