                               UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                               No. 07-1715



MORGAN COUNTY WAR MEMORIAL HOSPITAL, by and through the
Board of Directors of War Memorial Hospital,

                Plaintiff − Appellant,

           v.

JENNIFER BAKER; JANET HORNER; SHARON HENDERSHOT; BARBARA
JOHNSON; TANYA MANLEY; HELEN MILLER; CHRISTINE MULLEN; RUTH
SMITH; BERNICE STOTLER; DEE ANN STOTLER; LINDA STOTLER;
BARBARA YOST; TERRY KESECKER; CAROL LAYTON; DIANE WARD;
NANCY WAUGH,

                Defendants − Appellees.



Appeal from the United States District Court for the Northern
District of West Virginia, at Martinsburg. John Preston Bailey,
District Judge. (3:06-cv-00066-JPB)


Argued:   September 22, 2008             Decided:   November 19, 2008


Before WILLIAMS, Chief Judge, and TRAXLER and GREGORY, Circuit
Judges.


Affirmed by unpublished per curiam opinion.


ARGUED: Mark Edward Kellogg, BECKER, KELLOGG & BERRY, P.C.,
Springfield, Virginia, for Appellant.   Mark Jenkinson, BURKE,
SCHULTZ, HARMAN & JENKINSON, Martinsburg, West Virginia, for
Appellees. ON BRIEF: Richard G. Gay, Nathan P. Cochran, THE LAW
OFFICE OF RICHARD GAY, Berkeley, West Virginia, for Appellant.
Lawrence M. Schultz, BURKE, SCHULTZ, HARMAN & JENKINSON,
Martinsburg, West Virginia; William R. McCune, Jr., Martinsburg,
West Virginia, for Appellees.


Unpublished opinions are not binding precedent in this circuit.




                                2
PER CURIAM:

       Morgan       County      War    Memorial      Hospital       (“War      Memorial”),

appeals the dismissal of its declaratory judgment action, which

requested a ruling on War Memorial’s ability to unilaterally

terminate      its     defined    benefit      pension       plan   (“the      Plan”)    and

retain the Plan’s residual assets,1 for lack of subject matter

jurisdiction.          Because War Memorial’s requested relief does not

depend upon a necessary and substantial question of federal law,

we affirm.



                                              I.

       War Memorial is a small community hospital created by the

West       Virginia       legislature    in    1947       and   located     in    Berkeley

Springs, West Virginia.                Since its inception, War Memorial has

been       owned    and    operated     by   the    County      Commission       of   Morgan

County.        In     1972,    prior    to    the   enactment       of   the     Employment

Retirement Income Security Act of 1974 (“ERISA”), War Memorial

created the Plan for its employees; that Plan remains in effect

today, although its membership was frozen in 1987.                             The Plan is

funded      wholly     by     contributions        from   War    Memorial      and    covers

seventy-three employees.                To date, fifty-seven employees have

       1
       Residual assets “are those assets remaining in a pension
plan at the time of termination after payment to the employees
of all accrued benefits under the plan.”     Wilson v. Bluefield
Supply Co., 819 F.2d 457, 458 (4th Cir. 1987).


                                              3
taken    their     retirement    benefits         under      the     Plan       and    sixteen

employees have yet to do so.

      In or around 2002, War Memorial decided to terminate the

Plan, disburse the remaining assets, and use the residual Plan

assets—estimated to be in excess of $500,000—to begin funding

the construction of a new hospital building.                         By June 30, 2002,

all participants were fully vested in the Plan, and War Memorial

forwarded its intention to terminate the Plan to the Internal

Revenue Service (“IRS”).              On November 3, 2003, the IRS issued

War   Memorial     a   favorable      determination           letter,       stating         that

“termination of this plan does not adversely affect [the Plan’s]

qualification for federal tax purposes.”                     (J.A. at 230.)

      The   following       year,     War   Memorial’s             Board    of    Directors

issued Written Consent Resolutions, which authorized termination

of the Plan and distribution of the assets, assuming another

ruling from the IRS “upon termination of the plan, to the effect

that the plan is qualified under Code Section 401(a).”                                (J.A. at

177.)     The IRS issued another favorable determination on October

6, 2005, and, buoyed by this news, on December 5, 2005, War

Memorial    informed     the    remaining        sixteen       participants            of   its

intention to terminate the Plan and offered them three options

for     claiming    their     benefits:         (1)     a    lump    sum        distribution

(subject to income tax withholding); (2) an annuity; or (3) a

tax-free    rollover     of     the    lump       sum       made    to     an    Individual

                                            4
Retirement        Account.         The       sixteen         participants         rejected      these

proposals        and    claimed         a    right      to    all     of    the    Plan    assets,

including the residual assets.

       In response, War Memorial’s Board of Directors reinstated

the Plan and filed a declaratory judgment action against the

sixteen Plan participants (the “Appellees”) in the United States

District Court for the Northern District of West Virginia.                                        War

Memorial’s six-count complaint requested a declaratory judgment

on   War       Memorial’s     right         to   unilaterally          terminate        the    Plan,

distribute the assets, and retain the residual assets for its

own use.        War Memorial stated that its action arose under ERISA,

the tax laws of the United States, and the district court’s

review of IRS determinations.

       The Appellees filed a timely answer, admitting jurisdiction

and venue and asserting counterclaims against War Memorial for

breach     of     fiduciary        duty       under      ERISA.         See       29   U.S.C.A.     §

1104(a)(1)        (West     1999).           Following         discovery,         the   Appellees

filed      a     motion       to     dismiss          for      lack    of       subject        matter

jurisdiction.           In particular, the Appellees alleged that, as a

governmental          plan,    the      Plan     was     exempt       from      ERISA     under    29

U.S.C.A. §            1003(b)(1) (West 1999).                  The district court agreed

with    the     Appellees       and,        on   June    25,     2007,      entered       an   order

granting        the    motion      to       dismiss     for     lack       of   subject        matter

jurisdiction.           War Memorial filed a timely notice of appeal, and

                                                  5
we    possess    appellate      jurisdiction        under    28    U.S.C.A.       §      1291

(West 2006).



                                            II.

       On    appeal,    War   Memorial       argues    that       the   district       court

erred in concluding that it lacked subject matter jurisdiction

over War Memorial’s complaint.                   We review questions of subject

matter jurisdiction de novo.                 Mayes v. Rapoport, 198 F.3d 457,

460 (4th Cir. 1999).            War Memorial filed its complaint pursuant

to the Declaratory Judgment Act, 28 U.S.C.A. § 2201(a) (West

2006), which provides: “In a case of actual controversy within

its jurisdiction, . . . any court of the United States, upon the

filing of an appropriate pleading, may declare the rights and

other    legal     relations     of    any       interested    party       seeking       such

declaration,       whether      or    not    further    relief       is    or    could     be

sought.”       We have explained that “a claim under the Declaratory

Judgment Act . . . does not confer jurisdiction.”                               Interstate

Petroleum Corp. v. Morgan, 249 F.3d 215, 221 n.7 (4th Cir. 2001)

(en banc); see also Skelly Oil Co. v. Phillips Petroleum Co.,

339     U.S.     667,   671     (1950)       (noting    that       in      enacting      the

Declaratory       Judgment      Act     “Congress      enlarged           the    range     of

remedies       available   in    the    federal     courts    but       did     not   extend

their       jurisdiction.”).           War       Memorial     thus        contends       that




                                             6
jurisdiction       over     its    declaratory          judgment    action        is    proper

under 28 U.S.C.A. §          1331 (West 2006).

     Section 1331 grants district courts “original jurisdiction

of all civil actions arising under the Constitution, laws, or

treaties     of    the    United        States.”        28    U.S.C.A.       §    1331.       In

determining whether War Memorial’s complaint satisfies §                                  1331,

we   apply        the    well-pleaded          complaint        rule;     that         is,   we

“ordinarily . . . look no farther than the plaintiff’s [properly

pleaded]        complaint    in        determining      whether     a    lawsuit        raises

issues     of     federal    law       capable     of    creating       federal-question

jurisdiction under 28 U.S.C.A. § 1331.”                        Custer v. Sweeney, 89

F.3d 1156, 1165 (4th Cir. 1996).

     Our     application          of    this   rule     is    slightly       different       in

declaratory        judgment       actions.         In     Franchise      Tax       Board     v.

Construction Laborers Vacation Trust, 463 U.S. 1, 19 (1983), the

Supreme Court noted that “[f]ederal courts have regularly taken

original jurisdiction over declaratory judgment suits in which,

if the declaratory judgment defendant brought a coercive action

to enforce its rights, that suit would necessarily present a

federal question.”          Accordingly, we have explained that, “if the

declaratory judgment plaintiff is not alleging an affirmative

claim arising under federal law against the declaratory judgment

defendant,        the    proper    jurisdictional            inquiry    is       whether     the

complaint alleges a claim arising under federal law that the

                                               7
declaratory judgment defendant could affirmatively bring against

the declaratory judgment plaintiff.”2                     Columbia Gas Trans. Corp.

v. Drain, 237 F.3d 366, 370 (4th Cir. 2001).                              See also New

Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 329 (5th

Cir. 2008) (noting that, “in applying the well-pleaded complaint

rule       we    ask    whether     if   the   declaratory       judgment       defendant

brought a coercive action to enforce its rights, that suit would

necessarily         present     a   federal        question”)   (internal      quotation

marks omitted); Samuel C. Johnson 1988 Trust v. Bayfield County,

520 F.3d 822, 828 (7th Cir. 2008) (same).

       And,       “[i]f   the   answer    to       this   question   is    yes,   federal

question jurisdiction exists.”                     Columbia Gas, 237 F.3d at 370.

In this regard, the Declaratory Judgment Act permits a party “to

bootstrap its way into federal court by bringing a federal suit

that corresponds to one the opposing party might have brought.”

Household Bank v. JFS Group, 320 F.3d 1249, 1257 (11th Cir.

2003) (internal quotation marks omitted) (emphasis in original).

This rule has its limitations, however, because “[a] plaintiff

cannot          evade   the   well-pleaded         complaint    rule      by   using   the

       2
       We note that both War Memorial and the Appellees failed to
identify our decision in Columbia Gas Trans. Corp. v. Drain, 237
F.3d 366 (4th Cir. 2001) as controlling our inquiry and instead
center   their  arguments   around  War   Memorial’s  declaratory
judgment action.     Our analysis follows Columbia Gas, which
provides a straightforward mechanism for applying the well-
pleaded complaint rule to declaratory judgment actions. Id. at
370.


                                               8
declaratory judgment remedy to recast what are in essence merely

anticipated or potential federal defenses as affirmative claims

for relief under federal law.”                        New Orleans & Gulf Coast Ry.

Co., 533 F.3d at 329.

     War Memorial’s complaint does not contain an “affirmative

claim arising under federal law,” Columbia Gas, 237 F.3d at 370,

so we are left to ask whether the Appellees could bring an

affirmative       claim       arising       under       federal   law      against     War

Memorial.        In making this inquiry, we are hardly flying blind

because, subsequent to the district court’s dismissal of War

Memorial’s declaratory judgment action, the Appellees filed just

such an action in the Circuit Court for Morgan County, West

Virginia.        In that complaint, the Appellees allege a state-law

claim for breach of fiduciary duty against War Memorial.

     This    fact         bodes    poorly       for    War   Memorial,    because     most

lawsuits “arise under the law that creates the cause of action.”

Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260

(1916) (Holmes, J.); Merrell Dow Pharm., Inc. v. Thompson, 478

U.S. 804, 808 (1986).               When, as here, the cause of action is

created by state law, we possess jurisdiction only in the “small

class of cases where, even though the cause of action is not

created     by    federal         law,    the       case’s   resolution     depends     on

resolution       of   a    federal       question      sufficiently      substantial   to

arise under federal law within the meaning of 28 U.S.C.A. §

                                                9
1331.”    Ormet Corp. v. Ohio Power Co., 98 F.3d 799, 806 (4th

Cir. 1996). Thus, “a case may arise under federal law ‘where the

vindication of a right under state law necessarily turn[s] on

some construction of federal law,’” Merrell Dow, 478 U.S. at 808

(quoting Franchise Tax Bd., 463 U.S. at 9), but “only [if] . . .

the   plaintiff's   right   to   relief     necessarily   depends   on     a

substantial question of federal law,” Franchise Tax Bd., 463

U.S. at 27-28.

      The Supreme Court has summarized the inquiry as follows:

“the question is, does a state-law claim necessarily raise a

stated federal issue, actually disputed and substantial, which a

federal    forum    may     entertain       without   disturbing         any

congressionally approved balance of federal and state judicial

responsibilities.” Grable & Sons Metal Prods., Inc. v. Darue

Eng'g & Mfg., 545 U.S. 308, 314 (2005).

      Within the context of this case, War Memorial points us to

what it believes are three necessary sources of federal law—

ERISA, the Internal Revenue Code, and federal common law.                 We

address each in turn.

                                 A. ERISA

      We first consider whether a breach of fiduciary duty claim

by the Appellees necessarily depends upon a substantial issue

involving ERISA.    Congress enacted ERISA to “protect . . . the

interests of participants in employee benefit plans and their

                                    10
beneficiaries,     .   .   .       by   establishing     standards     of       conduct,

responsibility,    and     obligation         for   fiduciaries   .    .    .       and   by

providing for appropriate remedies, sanctions, and ready access

to the Federal courts.”                 29 U.S.C.A. § 1001(b) (West 1999).

While   ERISA’s   scope    is       broad,    Congress   also   chose       to      exempt

certain benefit plans from compliance with ERISA’s mandates.                              In

particular, “Title I of ERISA specifically excludes from its

coverage any employee benefit plan that is a governmental plan.”

Gualandi v. Adams, 385 F.3d 236, 242 (2d Cir. 2004); see also

Cliburn v. Police Jury Ass’n of La., Inc., 165 F.3d 315, 316

(5th Cir. 1999) (noting ERISA is inapplicable to governmental

plans);   29    U.S.C.A.       §        1003(b).       This    governmental           plan

exemption is rooted “in part based on principles of federalism.”

Rose v. Long Island R.R. Pension Plan, 828 F.2d 910, 914 (2d

Cir. 1987).     In addition:

     [I]t was generally believed that public plans were
     more generous than private plans with respect to their
     vesting provisions, . . . that the ability of the
     governmental entities to fulfill their obligations to
     employees through their taxing powers was an adequate
     substitute for both minimum funding standards and plan
     termination insurance. . . . [and] [f]inally, there
     was concern that imposition of the minimum funding and
     other   standards   would  entail   unacceptable  cost
     implications to governmental entities.”

Id. (internal citations and quotation marks omitted).

     ERISA     currently    defines       a     governmental    plan   as       a    “plan

established or maintained for its employees by the government of



                                           11
the United States, by the government of any state or political

subdivision thereof, or by any agency or instrumentality of any

of the foregoing.”       29 U.S.C.A. §        1002(32) (West 1999).

     During this litigation, War Memorial has                      conceded, as it

must, that it is a governmental plan.                  This concession leads to

the inescapable conclusion that a breach of fiduciary duty claim

against War Memorial does not depend upon ERISA.                    Our conclusion

is   compelled   by     the     simple    fact    that      federal   courts     have

routinely found that they lack subject matter jurisdiction over

actions by ERISA benefit plan participants against governmental

plans for breach of fiduciary duty and other similar claims for

benefits.      See,     e.g.,    Gualandi,       385   F.3d   at    245;   Fromm    v.

Principal Health Care of Iowa, Inc., 244 F.3d 652, 653 (8th Cir.

2001); Cliburn, 165 F.3d at 316.                  In so ruling, these courts

recognized that Congress specifically declined to intervene in a

state’s decision to fund a pension plan.                 See Gualandi, 385 F.3d

at 243 (“One Senator commented that ‘State and local governments

must be allowed to make their own determination of the best

method   to   protect    the    pension    rights      of   municipal      and   state

employees.’”).        The Appellee’s breach of fiduciary duty claim

against War Memorial simply cannot depend upon the resolution of

any issues involving ERISA because ERISA does not even apply to

governmental plans.




                                         12
                          B. Internal Revenue Code

      We   also   believe     that     a    breach      of    fiduciary      duty    claim

against War Memorial does not necessarily depend upon resolution

of   substantial     questions       of    federal      tax    law.     War    Memorial

correctly notes that it must comply with Title II of ERISA—

actually an amendment to the Internal Revenue Code, 26 U.S.C.A.

§§ 401 et seq.—which contains requirements pertaining to the

qualification of pension plans for favorable tax treatment.                              War

Memorial    is    also   correct      that      the    IRS    issued   two    favorable

determination      letters     regarding         War    Memorial’s     intention          to

terminate the Plan.           These facts do not, however, permit the

inferential leap that War Memorial would have us make—that the

Appellee’s   rejection        of    War    Memorial’s        interpretation         of   the

Plan creates a federal question.

      Indeed, War Memorial’s argument here paints too broadly.

Although cliché, it remains true that “nothing can be said to be

certain, except death and taxes.” Letter from Benjamin Franklin

to Jean Baptiste Le Roy (Nov. 13, 1789), in 10 The Writings of

Benjamin    Franklin     69    (Albert       Henry     Smyth    ed.,   1907).        Every

pension plan, family trust, and economic decision must comply

with federal tax laws.             As the district court aptly noted during

its oral hearing:

      I used to draft trust agreements, you paid attention
      to what the IRS rules were.    You made sure that it
      conformed to IRS rules. But it was your document, and

                                           13
      the fact that IRS rules governed how you wrote it, I
      don’t think makes the interpretation of that document
      a federal issue.

(J.A. at 264.)

      A   breach       of    fiduciary       duty      claim   against     War     Memorial

involves     interpreting         a   trust      document,     the    Plan,      that    is   a

creature     of    state     law,     and    Appellees      can   prove     a    breach       of

fiduciary duty claim without resolution of any issues of federal

tax   law.        We   have       made    clear      that   “[i]f     a   plaintiff       can

establish, without the resolution of an issue of federal law,

all of the essential elements of his state law claim, then the

claim does not necessarily depend on a question of federal law.”

Pinney v. Nokia Inc., 402 F.3d 430, 442 (4th Cir. 2005).

      War Memorial places its strongest reliance on the Supreme

Court’s recent decision in Grable, but a comparison to Grable

illustrates        that      this        case     is     “poles      apart.”            Empire

Healthchoice        Assurance,        Inc.      v.     McVeigh,   547     U.S.    677,     700

(2006).        In Grable, the IRS had seized property belonging to

Grable    to      satisfy     a    federal      tax     deficiency.        Following          an

auction, the IRS sold the property to a third party.                             Five years

after the fact, Grable sued the third party in state court to

quiet title, contending that the IRS failed to comply with the

federal statute governing notification of parties subject to a

tax deficiency.             The Supreme Court found federal jurisdiction

appropriate, noting “[t]he meaning of the federal tax provision

                                                14
. . . is an important issue of federal law that sensibly belongs

in a federal court.”         Grable, 545 U.S. at 315.            The Supreme

Court further noted that the case involved a “pure issue of law”

and the existence of federal jurisdiction would not affect the

federal/state balance because “it is the rare state quiet title

action that involves contested issues of federal law.”                Id. at

319.

       Perhaps seizing on the fact that the Plan is a “qualified”

plan under the Internal Revenue Code, and Grable was about taxes

as well, War Memorial presses that Grable provides a clear basis

for jurisdiction.      We disagree.        As the Seventh Circuit recently

explained, “[t]he only contested issue in [Grable] was one of

federal law, and the main effect of the suit if Grable should

prevail would be to require the federal government to reimburse

the parcel’s buyer.”         Bennett v. Southwest Airlines Co., 484

F.3d 907, 910 (7th Cir. 2007).             Moreover, any view that Grable

expanded upon the small class of cases recognized in Franchise

Tax Board was “squelched” in Empire Healthchoice.                  Id.      The

Empire Healthchoice Court in fact rejected the specific type of

argument   made   by   War   Memorial   in    this   case,   explaining   that

“Grable emphasized that it takes more than a federal element to

open the arising under door . . . [and] [t]his case cannot be

squeezed into the slim category Grable exemplifies.”                     Empire

Healthchoice, 547 U.S. at 701.

                                      15
       In   Empire    Healthchoice       the    Court      explained      the    factors

underlying its decision in Grable:

       The dispute there [1] centered on the action of a
       federal agency (IRS) and its compatibility with a
       federal   statute,   [2]   the   question   qualified   as
       ‘substantial,’   and   [3]   its   resolution   was   both
       dispositive of the case and [4] would be controlling
       in numerous other cases.

Id. at 700.

       Applying these factors in this case makes clear that any

breach      of   fiduciary   duty     claim     by    the    Appellees        cannot   be

squeezed       into   Grable’s    slim   category.           The     current     dispute

centers on the actions of private parties, resolution of any

question of federal tax law is not “dispositive” of a breach of

fiduciary duty claim, and it is hard to see how resolution of

any federal tax law issue in this case would be controlling in

“numerous” cases.

       At bottom, the fact that federal tax implications may arise

from     the     distribution    of   the      Plan’s      assets,      and    that    the

Appellees rejected a proposed distribution that was approved by

the IRS, cannot be a basis for federal jurisdiction.                             Such a

conclusion would shift virtually every business transaction and

trust distribution into federal court, violently upsetting the

federal/state balance.           To this end, War Memorial points to no

provision of the Internal Revenue Code which provides for such

causes      of    action.       See   Grable,        545    U.S.   at    319     (noting



                                         16
Congressional        failure       to    provide        private       right    of    action

relevant     when    deciding      if    finding       federal    jurisdiction        would

“materially affect, or threaten to affect, the normal currents

of litigation”).           The fact that the Plan is a “qualified” plan,

standing alone, is simply too thin a hook upon which to rest

federal jurisdiction.           Cf. Mikulski v. Centerior Energy Corp.,

501   F.3d     55   (6th    Cir.    2007)    (en       banc)    (finding       no   federal

jurisdiction over a state law claim implicating an accounting

rule in the federal tax code); New Orleans & Gulf Coast Ry. Co.,

533 F.3d at 338 (rejecting a railroad’s “broad argument . . . to

establish      federal      jurisdiction         on    the    basis    of     the   general

federal interest in interstate railroad transportation.”).

                              C. Federal Common Law

        Finally, we also believe the Appellees’ breach of fiduciary

duty claim against War Memorial does not depend upon a necessary

and substantial question of federal common law.                             We start from

the premise that federal common law is an even narrower basis

for federal jurisdiction.               Of course, “[i]t is well settled that

[§    1331] will support claims founded upon federal common law,”

Nat’l Farmers Union Ins. Co. v. Crow Tribe, 471 U.S. 845, 850

(1985),      and    the    Supreme       Court        has    suggested      that    federal

jurisdiction may exist over the extremely small class of cases

governed by federal common law, but only when the operation of

state    law   would      significantly      conflict         with    uniquely      federal

                                            17
interests.       Empire Healthchoice, 547 U.S. at 693 (noting that,

“[u]nless    and     until”     party       could      demonstrate        “a   significant

conflict     .   .    .     between    an    identifiable         federal        policy    or

interest and the operation of state law[,] . . . there is no

cause to displace state law, much less to lodge this case in

federal    court”     (internal       quotation        marks    omitted)).          In     the

specific context of ERISA, we have indicated federal question

jurisdiction     based       upon   the     federal      common     law    may    be    found

“where the issue in dispute is of ‘central concern’” to the

statute.     Provident Life & Acc. Ins. Co. v. Waller, 906 F.2d

985, 990 (4th Cir. 1990).

      On this point, War Memorial argues that the Plan is not

subject to West Virginia’s analogue to ERISA, the West Virginia

Public Employees Retirement Act, W.Va. Code Ann. § §                             5-10-1 to

-55   (2006).        That    Act    covers    political        subdivisions        of     West

Virginia     which     “ha[ve]      elected       to    cover     its     employees,       as

defined     in   this       article,      under        the   West    Virginia          Public

Employees Retirement System.”                 W.Va. Code §           5-10-2(17).          War

Memorial notes that it did not elect to include its Plan under

the West Virginia Act, and it accordingly contends that this Act

does not apply to the Plan.                 Thus, argues War Memorial, federal

common law, specifically caselaw interpreting ERISA, must apply

in the absence of an affirmative state law.




                                             18
       We    find    significant         irony   in    War    Memorial’s            position.

Assuming War Memorial is correct that the West Virginia Public

Employees Retirement Act does not govern the Plan or define the

fiduciary duties War Memorial owed the Appellees, a state court

would most likely look to the common law of trusts in deciding

whether War Memorial’s decision to unilaterally terminate the

Plan   and    retain      the    residual    assets        constituted     a    breach    of

fiduciary     duty.         Of   course,     many     of    the    rules   of        decision

interpreting        ERISA       borrow    from   the       common    law       of     trusts.

Indeed, a fiduciary’s substantive duties under ERISA “draw much

of their content from the common law of trusts, the law that

governed most benefit plans before ERISA's enactment.”                                Varity

Corp. v. Howe, 516 U.S. 489, 496 (1996).                      Even today the common

law of trusts “will inform, but will not necessarily determine

the    outcome      of,     an    effort    to   interpret          ERISA’s         fiduciary

duties.”      Id. at 497.         The federal common law that War Memorial

contends must apply would, more likely than not, be derived from

the common law of trusts.

       Moreover,      War    Memorial       cannot     show       that   pursuing       this

action in state court would significantly impact unique federal

interests.          Instead, the opposite is true: Congress exempted

“governmental plans” from ERISA, indicating a lack of federal

interest in the operation of such plans.                      To the extent a state

court wishes to look to ERISA for determining how to define a

                                            19
fiduciary’s duty in the context of employee benefit plans, it is

free to do so, without any threat that its action will undermine

federal    policy.        After      all,      “state      courts       correctly      apply

federal law every day,”             Blue Cross Blue Shield Health Care Plan

v.    Gunter,   541    F.3d    1320,      1323     (11th       Cir.    2008),    and     West

Virginia has experience addressing just the type of claim raised

by the Appellees here.              See, e.g., Brown v. City of Fairmont,

655    S.E.2d   563,    569    (W.     Va.       2007)     (considering         breach    of

fiduciary duty claim against an ERISA-exempt governmental plan).

       At bottom, War Memorial’s argument that Appellees’ breach

of fiduciary duty claim necessarily depends upon federal common

law turns upside down the entire notion of federal jurisdiction.

“Federal    courts     are    courts      of      limited       jurisdiction.          They

possess only that power authorized by Constitution and statute,

which is not to be expanded by judicial decree.”                              Kokkonen v.

Guardian    Life      Ins.    Co.    of     Am.,    511     U.S.       375,   377    (1994)

(internal citation omitted).              “A court is to presume, therefore,

that a case lies outside its limited jurisdiction unless and

until jurisdiction has been shown to be proper.”                          United States

v. Poole, 531 F.3d 263, 274 (4th Cir. 2008).                          See also Turner v.

Bank of N. Am., 4 U.S. (4 Dall.) 8, 11, 1 L.Ed. 718 (1799)

(same).     The    absence     of     relevant      state       law    does   not    create

federal    jurisdiction.            Accordingly,          we     also     conclude     that




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Appellees’ breach of fiduciary duty claim does not necessarily

depend upon federal common law.



                                    III.

      This   case    centers    around     War   Memorial’s    attempt   to

unilaterally terminate an ERISA-exempt plan and keep the Plan’s

residual assets for its own uses.          It is “basically a state case

gone awry,” Waybright v. Frederick County, 528 F.3d 199, 209

(4th Cir. 2008), and we believe West Virginia state courts have

the right to resolve this dispute.           For the foregoing reasons,

the   district      court’s    decision,    dismissing   War    Memorial’s

declaratory judgment action for lack of jurisdiction, is

                                                                 AFFIRMED.




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