United Food & Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc.

• Decision Date: 12 July 1994
• Docket Number: No. 1332,P,D,AFL-CI,1332
• Court: U.S. Court of Appeals — Second Circuit
• Parties: 146 L.R.R.M. (BNA) 2933 UNITED FOOD & COMMERCIAL WORKERS UNION, LOCAL 919,laintiff-Appellant, v. CENTERMARK PROPERTIES MERIDEN SQUARE, INC., HO Meriden Square Development Co., doing business as H. Co. May Centers Meriden Square Partnership, and The May Department Stores Co., doing business as Filene's, Defendants-Appellees. ocket 93-9147.

Page 298

30 F.3d 298

146 L.R.R.M. (BNA) 2933

UNITED FOOD & COMMERCIAL WORKERS UNION, LOCAL 919, AFL-CIO Plaintiff-Appellant, v. CENTERMARK PROPERTIES MERIDEN SQUARE, INC., HO Meriden Square Development Co., doing business as H. Co. May Centers Meriden Square Partnership, and The May Department Stores Co., doing business as Filene's, Defendants-Appellees.

No. 1332, Docket 93-9147.

United States Court of Appeals Second Circuit.

Argued April 20, 1994.

Decided July 12, 1994.

Harry B. Elliott, Hartford, CT (J. William Gagne, Jr., Gregory C. Norsigian, Gagne & Associates, of counsel), for appellant.

Eric Hemmendinger, Baltimore, MD (Stephen D. Shawe, Shawe & Rosenthal, of counsel), for appellee May Dept. Stores Co.

Benjamin A. Lipman, St. Louis, MO (John J. Moellering, Lewis, Rice & Fingersh, of counsel), for appellees CenterMark Properties Meriden Square and HO Meriden Square Development Co.

Before: MESKILL, ALTIMARI and McLAUGHLIN, Circuit Judges.

MESKILL, Circuit Judge.

This dispute arises from a ban on union picketing and leafleting at a privately owned shopping mall during a campaign by plaintiff-appellant United Food and Commercial Workers Union, Local 919, AFL-CIO (Union) to organize workers at a Filene's department store located on mall property. In an effort to remove the restrictions on leafleting and picketing, the Union filed an action in Connecticut Superior Court for injunctive relief pursuant to Art. 1, Secs. 4 and 5 of the Connecticut Constitution against the owners of the mall property, defendants-appellees CenterMark Properties Meriden Square, Inc. and HO Meriden Square Development Co., collectively d/b/a Meriden Square Partnership (Meriden Square), and defendant-appellee May Department Stores Co., d/b/a Filene's (May), the owner and manager of the Filene's department store, whose employees the Union seeks to organize. May, with the consent of Meriden Square, removed the action to the United States District Court for the District of Connecticut, Covello, J., and then May and Meriden Square (collectively "defendants") moved to dismiss it for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). The district court granted dismissal.

On appeal, the Union, for the first time, raises the propriety of federal subject matter jurisdiction and urges us to return the action to state court for a ruling on the merits. Because we conclude that a resolution of the jurisdictional issue requires further findings and because we believe that the district court should be given an opportunity to resolve the jurisdictional issue, we vacate the judgment

and remand the matter to the district court for further proceedings.

BACKGROUND

The complaint alleges, inter alia, that the Union is a labor organization within the meaning of Conn.Gen.Stat. Sec. 31-77 with a principal place of business in Farmington, Connecticut. Defendant May is a corporate entity with its principal place of business in St. Louis, Missouri. Meriden Square is a partnership between defendant CenterMark Properties Meriden Square, Inc., a corporate entity with a principal place of business also in St. Louis and defendant HO Meriden Square Development Co., a corporate entity with a principal place of business in Chicago, Illinois.

The Union has been attempting to organize non-union employees who work at a Filene's department store (Filene's). Filene's is owned and operated by May and located at the Meriden Square Mall (Mall). The Mall, a large retail shopping complex located in Meriden, Connecticut, is owned by Meriden Square. As part of the Union's organizing efforts, its members and staff distribute literature, display placards or signs, and engage in verbal communication.

On June 11, 1993, Joseph Mahar (Mahar), Filene's general manager, informed the Union that Filene's prohibited non-employees from distributing literature or otherwise soliciting support on the Union's behalf on Filene's property, property that includes the sidewalks and access ways immediately adjacent to the Filene's building. In a letter dated June 21, 1993, moreover, Meriden Square notified the Union that its distribution and solicitation activities were prohibited on Mall property absent prior approval by Meriden Square. As a result of these prohibitions, the Union has been denied access to Mall property for the purposes of carrying out its distribution and solicitation activities.

The Union alleges that because the Mall is the largest retail shopping center in Meriden, it has assumed a uniquely public character and, thus, is subject to the free speech requirements of Art. 1, Secs. 4 and 5 of the Connecticut Constitution. In an effort to vindicate its purported right to freedom of speech thereunder, the Union filed suit in Connecticut Superior Court seeking a temporary and permanent injunction enjoining May and Meriden Square from prohibiting the Union from engaging in its solicitation and leafleting campaign on Mall property.

On July 28, 1993, May, with the consent of Meriden Square, removed the action to federal court. The notice of removal asserted that the requirements for both diversity jurisdiction and federal question jurisdiction were met. With respect to diversity jurisdiction, the notice of removal asserted that there was complete diversity of citizenship among the parties and that the amount in controversy exceeded $50,000. As to federal question jurisdiction, the notice of removal asserts that the Union's cause of action is preempted by federal labor law.

May and Meriden Square then moved to dismiss the complaint, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim under the Connecticut Constitution. The Union opposed the motion on the merits but did not file a motion to remand the case to state court for lack of federal jurisdiction pursuant to 28 U.S.C. Sec. 1447(c). The district court granted defendants' motions. Specifically, the court found the Union's claim to be identical to claims previously rejected by the Connecticut Supreme Court, see Cologne v. Westfarms Assocs., 192 Conn. 48, 469 A.2d 1201 (1984), as well as the federal courts, see United Food & Commercial Workers Union, Local 919, AFL-CIO v. Lechmere, Inc., 682 F.Supp. 15 (D.Conn.1988). The court reasoned that, although the Connecticut Supreme Court was divided on the issue of whether the Connecticut Constitution gives advocacy groups the right to demonstrate or handbill on private property, including shopping malls, the majority's decision that it did not was fatal to the Union's cause of action. The court noted, moreover, that only the Connecticut Supreme Court had the authority to revisit its decision in Cologne. Accordingly, the district court dismissed the complaint for failure to state a claim and final judgment entered on October 8, 1993.

This appeal followed.

DISCUSSION

On appeal, the Union argues for the first time that the district court lacked subject matter jurisdiction. Specifically, it contends that no basis exists for the assertion of federal jurisdiction over this action because the complaint raises neither a federal question nor provides a basis for diversity jurisdiction. Thus, the Union now asks us to determine whether this action, which it filed in state court, belongs in federal court despite its failure to challenge the removal to the district court via a motion to remand pursuant to 28 U.S.C. Sec. 1447(c).

The failure of the parties to contest the district court's authority to hear a case "does not act to confer [federal] jurisdiction ... since a challenge to subject matter jurisdiction cannot be waived and may be raised sua sponte by ... a federal appellate court." Alliance of Am. Insurers v. Cuomo, 854 F.2d 591, 605 (2d Cir.1988); see also 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure Sec. 1350, at 202-05 (1990) (Wright & Miller). Indeed, our cases make clear that "[i]t is common ground that in our federal system of limited jurisdiction any party or the court sua sponte, at any stage of the proceedings, may raise the question of whether the court has subject matter jurisdiction." Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501, 503 (2d Cir.1983). Where jurisdiction is lacking, moreover, dismissal is mandatory. Id. We must, therefore, entertain the Union's jurisdictional challenge regardless of its unexplained failure to raise the issue with the district court in a motion to remand pursuant to 28 U.S.C. Sec. 1447(c).

To that end, the party asserting jurisdiction bears the burden of proving that the case is properly in federal court and that party may not "be relieved of [its] burden by any formal procedure." McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); see also In re Joint E. & S. Dist. Asbestos Litig., 14 F.3d 726, 730 (2d Cir.1993). Thus, "[i]f [the averring party's] allegations of jurisdictional facts are challenged by [its] adversary in any appropriate manner, [the averring party] must support them by competent proof." McNutt, 298 U.S. at 189, 56 S.Ct. at 785 (emphasis added). Where, as here, jurisdiction is asserted by a defendant in a removal petition, it follows that the defendant has the burden of establishing that removal is proper. See R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 655 (2d Cir.1979); see also 14A Wright & Miller Sec. 3721, at 209-10 ("[d]efendant always has the burden of establishing that removal is proper").

Applying these principles, we must determine from the record before us whether the defendants can establish a basis for either diversity or federal question jurisdiction. See 14A Wright & Miller Sec. 3723, at 311-12 (usual rule is that removability is determined from the record as of the time the petition for removal is filed but where basis of removal is diversity then diversity of citizenship must exist at time action was filed in state court as well as at time of removal).

A. Diversity...