Veneruso v. Mount Vernon Neighborhood Health Center
Plaintiff James J. Veneruso, on behalf of Community Choice Health Plan of Westchester Inc. (CCHP), sued Defendant Mount Vernon Neighborhood Health Center to recover 'Surplus Distributions' CCHP made to Mount Vernon. CCHP, a New York not-for-profit corporation, was directed by the New York State Department of Health to terminate operations and commence dissolution. Plaintiff, appointed temporary receiver, sought to recover payments made to Mount Vernon, arguing they were unlawful under New York's Not-for-Profit Corporation Law § 515(a). Defendant removed the case to federal court, asserting federal jurisdiction based on complete preemption, substantial federal question, its status as a federal corporation, and the involvement of federal funds. The court rejected all of Defendant's arguments for federal jurisdiction, finding that the claims were based purely on state law and that federal law was, at best, a potential defense. Consequently, the Plaintiff's motion to remand the case to state court was granted, while the request for attorneys' fees was denied.