K.V. Mart Co. v. United Food and Commercial Workers Intern. Union, Local 324

Citation173 F.3d 1221
Decision Date14 April 1999
Docket NumberNo. 97-56055,97-56055
Parties161 L.R.R.M. (BNA) 2001, 138 Lab.Cas. P 10,431, 99 Cal. Daily Op. Serv. 2714, 1999 Daily Journal D.A.R. 3519 K.V. MART CO. dba Top Valu Markets and Valu Plus Food Warehouses, a corporation; and Market Venture, LLC, Plaintiffs-Appellees, v. UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, LOCAL 324, Does 1 through 50, inclusive, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Robert A. Cantore, Gilbert & Sackman, Los Angeles, California, for the defendants-appellants.

David A. Van Riper, Campion, Rodolff, Van Riper & Procopio, LLP, Santa Ana, California, for the plaintiffs-appellees.

Appeal from the United States District Court for the Central District of California; Richard A. Paez, District Judge, Presiding. D.C. No. CV-97-00790-RAP.

Before: HUG, Chief Judge, BROWNING and NOONAN, Circuit Judges.

PER CURIAM:

A labor union argues that a recent Supreme Court case requires us to reject forty years of case law interpreting § 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, 1 and reinterpret the section to confer federal subject matter jurisdiction over all suits by or against a union covered by the Act. We decline to do so.

From December 1996 to February 1997, United Food and Commercial Workers International Union, Local 324 (Union), picketed a store operated by Plaintiff K.V. Mart Co. and located in a shopping center owned by Plaintiff Market Venture, L.L.C. Plaintiffs filed three successive suits in state court to enjoin or restrict the picketing. The Union removed each action to federal district court, on the novel legal theory that the "sue and be sued" clause in LMRA § 301(b) confers federal subject matter jurisdiction over any suit by or against a union covered by the LMRA. The district court concluded that § 301 confers jurisdiction only over suits for breach of contract identified in § 301(a), and remanded the cases to state court. In this, the third remand order, the district court awarded Plaintiffs attorneys' fees and costs pursuant to 28 U.S.C. § 1447(c), on the ground that the Union did not have a reasonable basis for removal in light of the two prior remand orders. The Union appeals, contending the district court erred in concluding it lacked subject matter jurisdiction.

I

We have jurisdiction to review the district court's fee award under the collateral order exception to the final judgment rule. See Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (orders issued before final judgment are appealable under § 1291 as collateral orders if they "conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and [are] effectively unreviewable on appeal from a final judgment"). The order appealed in this case (1) conclusively determines that the Union must pay Plaintiffs' attorneys' fees incurred in challenging the removal; (2) resolves an important issue completely separate from the merits of the action--whether the removal was improper; and (3) is effectively unreviewable on appeal from the final judgment of the state court after remand because the state appellate court would have no jurisdiction to review the federal district court order. Cf. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 713-14, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) (holding remand order on abstention grounds, which is not rendered unreviewable by 28 U.S.C. § 1447(d), is a collateral order reviewable pursuant to § 1291). 2

II

Although the remand order itself is not reviewable, see 28 U.S.C. § 1447(d), an award of attorneys' fees and costs for improper removal is reviewed for abuse of discretion. Moore v. Permanente Med. Group, Inc., 981 F.2d 443, 447 (9th Cir.1992). A district court abuses its discretion if it relies " 'on an erroneous view of the law or on a clearly erroneous assessment of the evidence.' " Id. (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990)). The Union argues the district court committed legal error when it held the removal was improper, because the district court erred when it held the "sue and be sued" clause in § 301(b) did not confer subject matter jurisdiction.

More than forty years ago, the Supreme Court ruled that § 301(b) did not create subject matter jurisdiction, but merely established that unions subject to the LMRA could sue and be sued in federal court. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). 3 Several lower courts have expressly held that § 301(b) is not a source of subject matter jurisdiction. 4

The Union argues that these holdings are no longer good law in light of the more recent Supreme Court decision, American Nat'l Red Cross v. S.G., 505 U.S. 247, 112 S.Ct. 2465, 120 L.Ed.2d 201 (1992). The Court held in Red Cross that a "sue and be sued" provision in the federal charter for the American National Red Cross conferred federal subject matter jurisdiction over all suits by or against the organization. Id. at 257, 112 S.Ct. 2465. The Court ruled that Congress must have intended the provision to have that effect, in light of the then-judicially-settled meaning of such "sue and be sued" clauses in charters of federally-chartered corporations. Id. at 255, 112 S.Ct. 2465 (case law at the time "support[ed] the rule that a congressional charter's 'sue and be sued' provision may be read to confer federal court jurisdiction if, but only if, it specifically mentions the federal courts"). Because the LMRA was enacted at about the same time as the Red Cross charter and § 301(b) uses "sue and be sued" language that would be deemed jurisdictional under the Red Cross rule, the Union argues that Red Cross requires us to reinterpret § 301(b) as creating subject matter jurisdiction.

The Court's holding in Red Cross applies specifically to "sue and be sued" provisions in charters for federally-chartered corporations. 5 The LMRA is a comprehensive statutory scheme regulating national labor relations. Unions subject to the LMRA are not comparable to federally-chartered corporations. They are subject to some regulation by the federal government, but that is true of most American institutions. Federally-chartered corporations, in contrast, are entirely defined by federal law. Osborn v. Bank of United States, 22 U.S. (9 Wheat.) 738, 823, 6 L.Ed. 204 (1824).

Red Cross does not undermine Lincoln Mills sub silentio. Red Cross is premised on Congressional intent. Indications of Congress's intent in enacting § 301, other than the wording of the "sue and be sued" clause, support the Lincoln Mills holding that the section confers jurisdiction only over the contract disputes identified in § 301(a). The legislative history demonstrates that Congress enacted § 301 to make unions liable for breaches of collective bargaining agreements. 6 See Lincoln Mills, 353 U.S. at 453, 77 S.Ct. 912 ("Both the Senate Report and the House Report indicate a primary concern that unions as well as employees should be bound to collective bargaining contracts."). Other jurisdictional provisions of the LMRA would be superfluous if § 301(b) conferred subject matter jurisdiction over all suits by or against unions. See Rock Drilling, 217 F.2d at 692 (§ 301(a) would be superfluous); Amazon Cotton, 167 F.2d at 188 (§ 301(a) and § 303(b), 29 U.S.C. § 187, would be superfluous); id. at 186-87 (§ 10 and § 208, 29 U.S.C. § 160 and § 178, respectively, would be superfluous). "Under accepted canons of statutory interpretation, [the court] must interpret statutes as a whole, giving effect to each word and making every effort not to interpret a provision in a manner that renders other provisions of the same statute inconsistent, meaningless or superfluous." Boise Cascade Corp. v. EPA, 942 F.2d 1427, 1432 (9th Cir.1991).

Federal courts would act outside their Article III powers if they exercised jurisdiction over suits by or against a union pursuant to § 301 absent diversity of citizenship or violation of a federal substantive right. See Schatte v. International Alliance of Theatrical Stage Employees, 182 F.2d 158, 164 (9th Cir.1950) (stating federal jurisdiction over § 301(a) suits would be unconstitutional if the subsection did not establish a substantive federal right); see also Lincoln Mills, 353 U.S. at 456-57, 77 S.Ct. 912 (holding that § 301(a) establishes a federal substantive right); cf. Osborn, 22 U.S. (9 Wheat.) at 823, 827 (holding actions by or against federally-chartered corporations, which are entirely defined by federal law, "arise under" federal law).

Finally, reinterpreting § 301(b) would wreak havoc on labor litigation, greatly expand federal jurisdiction over union-related suits, and deprive state courts of exclusive jurisdiction over matters of local concern. There is no indication in the legislative history that Congress intended such an extensive revision of federal jurisdiction.

We conclude that § 301(b) does not confer subject matter jurisdiction over all suits by or against unions covered by the LMRA. The district court correctly concluded that it lacked subject matter jurisdiction and did not abuse its discretion in awarding fees and costs to Plaintiffs for improper removal.

AFFIRMED.

1 Section 301, which is entitled "Suits by and against labor organizations," includes the following relevant subsections:

(a) Venue, amount, and citizenship

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

(b) Responsibility for acts of agent; entity for...

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