Metropolitan Life Insurance Co. v. Price

The New Jersey Transit Corporation sponsored a life-insurance plan for its employees that was funded and issued by Metropolitan Life Insurance Company (MetLife) (plaintiff). Paul Price, a former bus driver with the New Jersey Transit and a former participant in the plan, had enrolled for $20,000 in life-insurance benefits. After Paul’s death, his widow and two children from a former marriage submitted competing claims for the life-insurance benefits. MetLife investigated the matter and discovered that Paul had changed his plan to name his widow as the primary beneficiary. Paul’s children requested a review of the claim, arguing that the final judgment of divorce from his prior marriage ordered the children be designated irrevocable beneficiaries of his life-insurance benefits. Unsure of whether to follow its duties under the Employee Retirement Income Security Act of 1974 (ERISA) and administer the claims in accordance with the terms of the plan or follow the divorce judgment, MetLife allowed the parties to resolve the matter amongst themselves. MetLife brought this interpleader action after the parties failed to reach an amicable agreement. The district court on its own motion dismissed the case for lack of subject-matter jurisdiction. MetLife appealed, arguing that it had established federal question subject-matter jurisdiction under 28 U.S.C. § 1332.