Dixon v. Coburg Dairy, Inc.

• Decision Date: 25 May 2004
• Docket Number: No. 02-1266.,02-1266.
• Citation: 369 F.3d 811
• Parties: Matthew DIXON, Plaintiff-Appellant, v. COBURG DAIRY, INCORPORATED, Defendant-Appellee. Equal Employment Advisory Council, Amicus Curiae.
• Court: U.S. Court of Appeals — Fourth Circuit

369 F.3d 811

Matthew DIXON, Plaintiff-Appellant, v. COBURG DAIRY, INCORPORATED, Defendant-Appellee Equal Employment Advisory Council, Amicus Curiae.

No. 02-1266.

United States Court of Appeals, Fourth Circuit.

Argued December 2, 2003.

Decided May 25, 2004.

COPYRIGHT MATERIAL OMITTED

ARGUED: Samuel Wilson Howell, IV, Howell & Linkous, L.L.C., Charleston, South Carolina, for Appellant. J. Thomas Kilpatrick, Alston & Bird, L.L.P., Atlanta, Georgia, for Appellee. ON BRIEF: Alan B. Linkous, Howell & Linkous, L.L.C., Charleston, South Carolina; Mikell R. Scarborough, Charleston, South Carolina, for Appellant. Christopher S. Enloe, Alston & Bird, L.L.P., Atlanta, Georgia, for Appellee. Ann Elizabeth Reesman, Rae T. Vann, McGuiness, Norris & Williams, L.L.P., Washington, DC, for Amicus Curiae.

Before WILKINS, Chief Judge, and WIDENER, WILKINSON, NIEMEYER, LUTTIG, WILLIAMS, MICHAEL, MOTZ, TRAXLER, KING, GREGORY, SHEDD, and DUNCAN, Circuit Judges.

Reversed and remanded with instructions by published opinion. Judge WILLIAMS wrote the opinion, in which Chief Judge WILKINS and Judges WIDENER, WILKINSON, NIEMEYER, LUTTIG, TRAXLER, SHEDD, and DUNCAN concur. Judge MICHAEL wrote a separate opinion concurring in the judgment. Judge MOTZ concurred in the judgment. Judge KING wrote a separate concurring opinion in which Judge MOTZ joined. Judge GREGORY wrote a separate opinion concurring in the judgment.

OPINION

WILLIAMS, Circuit Judge:

Matthew Dixon initiated this action in South Carolina state court, alleging that Coburg Dairy, Inc. unlawfully terminated his employment in violation of South Carolina law. Coburg removed the case to the United States District Court for the District of South Carolina, asserting that the court had subject matter jurisdiction over the case because it involved a substantial question of federal law. The district court denied Dixon's motion to remand the case to state court and granted summary judgment to Coburg on all of Dixon's claims. Sitting en banc, we hold that the district court lacked subject matter jurisdiction to hear this case. Accordingly, we reverse and remand with instructions that the case be remanded to the South Carolina Court of Common Pleas.

I.

Dixon began working for Coburg in 1997 as a mechanic. Dixon is a member of the Sons of Confederate Veterans, a Tennessee non-profit corporation, "who[se members] can prove genealogically that one of their ancestors served honorably in the armed forces of the Confederate States of America." See Sons of Confederate Veterans, Inc. v. Comm'n of Va. Dep't of Motor Vehicles, 288 F.3d 610, 613 n. 1 (4th Cir.2002). Dixon brought with him to work a personal tool box, to which he had affixed two decals depicting the Confederate battle flag. The decals offended one of Dixon's coworkers, who complained to Coburg management, citing the company's antiharassment policy.¹ Coburg asked Dixon to remove the decals from his toolbox and, when he refused, offered to buy him a new, unadorned toolbox. Dixon declined, explaining that "his heritage was `not for sale,'" and asserting that he had a First Amendment right to display the Confederate battle flag.² (J.A. at 10-11.) Unable to reach a compromise, Coburg terminated Dixon on September 5, 2000.

Dixon then filed suit in the South Carolina Court of Common Pleas. The complaint included nine causes of action. Critical to this appeal are the first, third and fourth causes of action, which allege that Dixon was terminated in violation of Section 16-17-560 of the South Carolina Code and that the discharge was in retaliation for his exercise of constitutional rights.³ Section 16-17-560 makes it "unlawful for a person to ... discharge a citizen from employment or occupation ... because of political opinions or the exercise of political rights and privileges guaranteed ... by the Constitution and laws of the United States or by the Constitution and laws of [South Carolina]." S.C. Code Ann. § 16-17-560.

Coburg then removed the case to federal court, asserting that the district court had original jurisdiction pursuant to 28 U.S.C.A. § 1331 (West 1993), because the case involved a substantial question of federal law. Dixon moved for the district court to remand the case to state court, and the district court denied the motion. The parties then filed cross-motions for summary judgment, and the district court granted summary judgment in favor of Coburg on all claims and dismissed the case. Dixon appealed, and a divided panel of this court affirmed the district court's judgment in part and reversed in part.⁴ Dixon v. Coburg Dairy, Inc., 330 F.3d 250 (4th Cir.) vacated & reh'g en banc granted, (4th Cir. Sept. 16, 2003). A majority of full-time, active circuit judges voted to rehear the case en banc.

II.

We review questions of subject matter jurisdiction de novo, "including those relating to the propriety of removal." Mayes v. Rapoport, 198 F.3d 457, 460 (4th Cir.1999). The burden of demonstrating jurisdiction resides with "the party seeking removal." Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994). We are obliged to construe removal jurisdiction strictly because of the "significant federalism concerns" implicated. Id. Therefore, "[i]f federal jurisdiction is doubtful, a remand [to state court] is necessary." Id.

III.

Section 1441 of Title 28 provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C.A. § 1441(a) (West 1994). In this case, Coburg alleges that removal was proper because the district court had original jurisdiction to hear Dixon's case under 28 U.S.C.A. § 1331. Section 1331 grants district courts "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C.A. § 1331. Thus, we must decide whether Dixon's claim "aris[es] under the Constitution, laws, or treaties of the United States." Id.

The vast majority of lawsuits "arise under the law that creates the cause of action." Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916) (Holmes, J.); Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986). Thus, we must "first discern whether federal or state law creates the cause of action.... In cases where federal law creates the cause of action, the courts of the United States unquestionably have federal subject matter jurisdiction." Mulcahey, 29 F.3d at 151. In this case, Dixon's cause of action was created by South Carolina law not federal law, but our inquiry does not end there. Instead, we must determine whether this case is within the "small class of cases where, even though the cause of action is not created by federal law, the case's resolution depends on resolution of a federal question sufficiently substantial to arise under federal law within the meaning of 28 U.S.C. § 1331." Ormet Corp. v. Ohio Power Co., 98 F.3d 799, 806 (4th Cir.1996). Thus, "a case may arise under federal law `where the vindication of a right under state law necessarily turn[s] on some construction of federal law,'" Merrell Dow, 478 U.S. at 808, 106 S.Ct. 3229 (quoting Franchise Tax Bd. v. Const. Laborers Vac. Trust, 463 U.S. 1, 9, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)), but "only [if] ... the plaintiff's right to relief necessarily depends on a substantial question of federal law," Franchise Tax Bd., 463 U.S. at 28, 103 S.Ct. 2841 (emphases added). Thus, in the absence of another jurisdictional ground, a defendant seeking to remove a case in which state law creates the plaintiff's cause of action must establish two things: (1) that the plaintiff's right to relief necessarily depends on a question of federal law, and (2) that the question of federal law is substantial. If either of these two elements is lacking, removal is improper and the case should be remanded to state court. As discussed below, we conclude that Dixon's complaint satisfies neither of these requirements.

A.

A plaintiff's right to relief for a given claim necessarily depends on a question of federal law only when every legal theory supporting the claim requires the resolution of a federal issue. Mulcahey, 29 F.3d at 153 ("[I]f a claim is supported not only by a theory establishing federal subject matter jurisdiction but also by an alternative theory which would not establish such jurisdiction, then federal subject matter jurisdiction does not exist."); see Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 810, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988)(holding that "a claim supported by alternative theories in the complaint may not form the basis for [patent] jurisdiction unless patent law is essential to each of those theories" and noting the similarities between the patent and federal question jurisdictional statutes). In other words, if the plaintiff can support his claim with even one theory that does not call for an interpretation of federal law, his claim does not "arise under" federal law for purposes of § 1331.

Our opinion in Mulcahey nicely illustrates the foregoing rule. In Mulcahey, the plaintiffs alleged that the Columbia Organic Chemicals Company had negligently released hazardous substances into the soil. Mulcahey, 29 F.3d at 149. The plaintiffs relied on at least the following two alternative theories of liability to establish their negligence claim: (1) Columbia Organic was negligent per se because it had violated several federal environmental statutes; and (2) Columbia Organic was negligent per se because it had violated various state and local environmental laws. Id. at 153-54. The plaintiffs' negligence claim thus relied on multiple theories of liability, only one of which required the resolution of a federal...