United States District Court, D. Kansas
July 20, 2015
CHRIS BROWN and JAMES D. BEAM, Plaintiffs,
DAY AND ZIMMERMAN, INC., f/o/a DAY AND ZIMMERMAN, NPS, INC.; DANIEL DAVIS, RYAN STATLER, WESTAR ENERGY, INC., GARY D. HARRIS, MARK SHOEMAKER, MATT PROBST, DANIEL BINDER, KARL A. SAUVAGE and BRIAN MAYER, Defendants.
MEMORANDUM AND ORDER
JULIE A. ROBINSON, District Judge.
This matter was removed from Shawnee County, Kansas District Court on March 13, 2015. Before the Court is Plaintiffs' Motion to Remand (Doc. 11), in which Plaintiffs argue that the Court must remand because it lacks subject matter jurisdiction. For the reasons explained below, Plaintiffs' motion is denied.
Beginning July 2010, Plaintiffs Christopher Lee Brown and James D. Beam, members of the International Boilermakers Union, Local 83, ("Union") worked for Defendant Day & Zimmerman, Inc., ("DZ") as boilermakers at a Westar Energy plant in St. Marys, Kansas. The Union and DZ are parties to a written collective bargaining agreement titled the General Presidents' Project Maintenance Agreement ("CBA") that governs the terms and conditions of employment of Union members. The CBA, in addition to including management rights and a procedure for employee grievances, allows DZ to implement reasonable project rules and regulations. According to the CBA, Article II: Management Rights, Section 1, I, management has the right to "[d]ischarge, suspend, or discipline employees for proper cause." In January 2014, DZ began an investigation into whether Plaintiffs were taking property from DZ and/or Westar Energy. Several Defendants gave statements about Plaintiffs as part of this investigation. On January 10, 2014, DZ fired Plaintiffs and banned them from the property.
Plaintiffs commenced this action nearly a year later, on January 8, 2015, alleging: 1) tortious interference with a business relationship against Davis, Statler, Harris, Probst, Binder, Sauvage, and Shoemaker; 2) tortious interference with a business relationship against DZ; 3) tortious interference with a business relationship against Westar Energy; 4) defamation against Davis, Statler, Harris, Probst, Binder, Sauvage, Mayer, and DZ; 5) defamation against Davis and Shoemaker; 6) false light against Statler, Harris, Probst, Binder, Sauvage, Mayer, Shoemaker, Davis, and DZ; 7) wrongful discharge against DZ; 8) breach of an oral contract/third party beneficiaries against DZ; and 9) conversion against DZ and Westar Energy. Defendants removed this case pursuant to 28 U.S.C. §§ 1441(a) and 1446, alleging original jurisdiction under 28 U.S.C. § 1331 (federal question).
There is no diversity of citizenship jurisdiction, so subject matter jurisdiction may be conferred only through a federal question. On its face, Plaintiffs' well-pleaded Petition contains only state law claims. Nevertheless, in pleading a cause of action alleging a violation of the CBA, Plaintiffs have pleaded a cause of action that is completely preempted by § 301 of the Labor Management Relations Act ("LMRA") and is thus federal in nature. The Court therefore must deny Plaintiffs' Motion to Remand.
A. The Standard
A defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." Congress has authorized the federal district courts to exercise original jurisdiction in "all civil actions arising under the Constitution, laws, or treaties of the United States." Federal question jurisdiction exists only over those cases in which either 1) federal law creates the cause of action asserted, or 2) plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law. Whether a suit "arises under" federal law is determined by the well-pleaded complaint rule, which provides that federal jurisdiction exists "only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." The plaintiff is the master of the complaint and may eschew claims based on federal law thereby choosing to have the case heard in state court.
A federal claim may nevertheless arise. The "vast bulk of suits that arise under federal law" are from the first category, where federal law creates the cause of action. In a much narrower category are state law claims that "implicate significant federal issues." These claims fall within a limited exception to the well-pleaded complaint rule, which is grounded in "the commonsense notion that a federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues."
The issue presented by the Motion to Remand is whether Plaintiffs' state law claims can raise an issue of federal law that is substantial enough to warrant the exercise of federal question jurisdiction. There is a presumption against finding federal jurisdiction. The burden of proving jurisdiction lies with the party asserting it exists.
B. Complete Preemption
One of the exceptions to the well-pleaded complaint rule is the "complete preemption doctrine." This doctrine allows courts to exercise jurisdiction over complaints that, "although not presenting federal questions on their face, nonetheless present state law claims that are preempted by federal law."The Supreme Court has said that although preemption is ordinarily a defense, complete preemption is different. The Court noted a "corollary of the well-pleaded complaint rule... is that Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Thus, once "an area of state law has been completely preempted, any claim purportedly based on that preempted state law is considered, from its inception, a federal claim, and therefore arises under federal law." The Supreme Court has recognized complete preemption as to three federal laws: 1) the Employee Retirement Income Security Act of 1974 ("ERISA); 2) the Labor Management Relations Act ("LMRA"); and 3) the National Bank Act.
This case relates to the preemptive scope of § 301 of the LMRA. The Court has recognized § 301 preemption two different ways: 1) the claim alleges violation of a CBA,  or 2) it requires interpretation of the terms of a CBA. The first always results in preemption. The second is more complicated and requires a case-by-case analysis that sometimes results in preemption and sometimes does not. The preemptive scope of § 301 extends to any claim interpreting a CBA because the "interests in interpretive uniformity and predictability... require that the meaning given a contract phrase or term be subject to uniform federal interpretation." When a state law claim requires interpretation of CBA terms, the Supreme Court's test for determining preemption is whether the claim is "inextricably intertwined" with the terms of the labor contract.
Plaintiffs argue that Defendants removed this action on the basis of a defense, that of preemption. The general rule is that a defense to a claim does not suffice to support federal subject matter jurisdiction. This general rule "retains its force" even when LMRA complete preemption is at issue.
Defendants argue that Plaintiffs have resorted to "artful pleading" to avoid federal law and that resolution of Plaintiffs' claim of wrongful discharge is "inextricably intertwined" with interpretation and/or application of the terms of the CBA. Defendants further allege that Plaintiffs' other claims are preempted as well because they are likewise "inextricably intertwined."
1. Plaintiffs Claim a Violation of the CBA
Having reviewed the arguments on both sides and the binding precedent of this district, the Court must conclude here that Plaintiffs have essentially pleaded a federal claim. The Court therefore need not resort to an "inextricably intertwined" analysis or determine whether Defendants attempt to use preemption defensively. Plaintiffs' Petition alleges: "DZ terminated the plaintiffs' employment with DZ without just cause as required by the contract between DZ and the International Boilermakers Union, Local 83." This alleged violation of the CBA falls squarely within § 301 preemption. The LMRA conveys exclusive federal jurisdiction over lawsuits concerning the violation of contracts between an employer and a labor organization.
The Court is mindful of the substantiality requirement as well as the presumption against finding federal jurisdiction and the burden on Defendants. But as the Supreme Court states: "[T]he preemtive force of § 301 is so powerful as to displace entirely any state cause of action for violation of contracts between an employer and a labor organization. Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301." As such, the Court views the wrongful discharge claim as a federal claim, from its inception, that Plaintiffs have chosen to plead. The Petition therefore on its face presents a federal question and subject matter jurisdiction is proper.
2. Supplemental Jurisdiction
Having established that federal question jurisdiction exists, the Court has discretion to exercise supplemental jurisdiction over claims so related that they form part of the same case or controversy. Such claims are "those state law claims that derive from a common nucleus of facts." Plaintiffs' claims appear to derive from such a common nucleus of facts. The three tortious interference claims, the two defamation claims, the false light, and the breach of oral contract all derive from the investigation relating to potential theft and subsequent firing of Plaintiffs. The conversion claim refers to personal property Plaintiffs kept at the power plant and have been unable to recover since being banned from the property. "Judicial economy and fairness result from retaining jurisdiction over mixed state and federal claims where "The state and federal claims... derive from a common nucleus of operative fact.'" The Court therefore exercises its discretion to retain supplemental jurisdiction over the remaining claims.
IT IS THEREFORE ORDERED BY THE COURT that Plaintiffs' Motion to Remand to State Court (Doc. 11) is denied.
IT IS SO ORDERED.