Kroske v. U.S. Bank Corp.

• Decision Date: 23 December 2005
• Docket Number: No. 04-35187.,04-35187.
• Parties: Kathy KROSKE, an individual, Plaintiff-Appellant, v. US BANK CORP., a foreign corporation; dba U.S. Bank, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

432 F.3d 976

Kathy KROSKE, an individual, Plaintiff-Appellant, v. US BANK CORP., a foreign corporation; dba U.S. Bank, Defendants-Appellees.

No. 04-35187.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 15, 2005.

Filed December 23, 2005.

COPYRIGHT MATERIAL OMITTED

Christine M. Weaver & Sean D. Jackson, Miller, Devlin, McLean & Weaver, P.S., Spokane, WA, for the plaintiff-appellant.

Thomas Bassett & Angel Rains, Lukins & Annis P.S., Spokane, WA, for the defendant-appellant.

Appeal from the United States District Court for the Eastern District of Washington; Robert H. Whaley, District Judge, Presiding. D.C. No. CV-02-00439-RHW.

Before TASHIMA, PAEZ, and CALLAHAN, Circuit Judges.

OPINION

PAEZ, Circuit Judge.

Kathy Kroske appeals the district court's order granting Defendant U.S. Bank Corp.'s motion for summary judgment, dismissing Kroske's age discrimination claim under the Washington Law Against Discrimination ("WLAD"), Wash. Rev.Code §§ 49.60.010-.400. Kroske first contends that the district court erroneously concluded that the amount in controversy exceeded $75,000 and therefore improperly determined that it had diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). Kroske further argues that the district court erroneously concluded that the National Bank Act, 12 U.S.C. §§ 21-216d, preempts her age discrimination claim under the WLAD. We have jurisdiction under 28 U.S.C. § 1291. We conclude that diversity jurisdiction is proper and that Kroske's age discrimination claim under the WLAD was not preempted. Accordingly, we reverse and remand.

I. Background

U.S. Bank Corp., a Delaware corporation, is a federally chartered National Banking Association that was formed in accordance with the National Bank Act, 12 U.S.C. § 21. The Bank is governed by a board of directors, which is empowered by the Bank's bylaws to elect and discharge officers.

Kathy Kroske began working for the Bank in 1977 as a teller. On April 20, 1993, the Bank's board of directors elected Kroske as an officer in the role of Assistant Vice President. During restructuring due to a merger, the Bank changed Kroske's position from retail market manager to manager of the Manito bank branch in Spokane, Washington. As manager, Kroske was notified that her branch was not meeting the Bank's goals and quotas for business activity. Although Kroske contends that her branch was the smallest in the area with the fewest employees, and that she was short-staffed, the Bank continued to insist that her branch meet fixed business activity levels and warned that she would be disciplined if it did not. Ultimately, in July 2002, the Bank terminated Kroske for allegedly failing to meet the daily performance goals. The board of directors subsequently ratified Kroske's termination in a meeting convened in Minneapolis, Minnesota.

Kroske filed suit in Washington State Superior Court against the Bank. She alleged that at the time of her termination, the other branch managers in the region were in their twenties and thirties, while Kroske was fifty-one years old. Further, the Bank allegedly gave these younger managers a reasonable opportunity to meet the business activity goals and denied Kroske such an opportunity. In addition, Kroske contended that she was replaced by an employee who was in his mid-twenties and possessed less experience than Kroske. Kroske therefore alleged that the Bank had terminated her on the basis of her age in violation of the WLAD, and sought damages, as well as attorney's fees and costs. In her complaint, Kroske did not allege any federal causes of action.

The Bank removed the case to federal court and, once in federal court, filed a motion for summary judgment arguing that Kroske's state discrimination claim was preempted by the National Bank Act, specifically 12 U.S.C. § 24(Fifth), which grants national banks the power to dismiss officers "at pleasure." Kroske opposed the motion, contending that she was not an officer under § 24(Fifth) and, in the alternative, that the National Bank Act did not preempt her age discrimination claim under the WLAD.

The district court granted the Bank's motion for summary judgment. The court held that Kroske qualified as an "officer" under the National Bank Act. Further, the district court concluded that § 24(Fifth) preempts the field of law regulating the Bank's employment practices and therefore preempted Kroske's age discrimination claim under the WLAD. Kroske timely appealed, challenging the district court's jurisdiction and the grant of summary judgment.

II. Amount In Controversy

Kroske first contends that removal of her case to federal court was improper because the district court lacked diversity jurisdiction under 28 U.S.C. § 1332.¹ She argues that the Bank did not meet its burden of establishing that the amount in controversy exceeded $75,000. "We review de novo a district court's determination that diversity jurisdiction exists." Breitman v. May Co. Cal., 37 F.3d 562, 563 (9th Cir.1994). The factual determinations necessary to establish diversity jurisdiction are reviewed for clear error. Co-Efficient Energy Sys. v. CSL Indus., Inc., 812 F.2d 556, 557 (9th Cir.1987).

Where, as here, "the complaint does not demand a dollar amount, the removing defendant bears the burden of proving by a preponderance of evidence that the amount in controversy exceeds $[75],000." Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir.1997); Cohn v. Petsmart, Inc., 281 F.3d 837, 839 (9th Cir.2002). The amount in controversy includes the amount of damages in dispute, as well as attorney's fees, if authorized by statute or contract. See Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1155-56 (9th Cir.1998). When the amount is not "facially apparent" from the complaint, "the court may consider facts in the removal petition, and may `require parties to submit summary-judgment-type evidence relevant to the amount in controversy at the time of removal.'" Singer, 116 F.3d at 377 (quoting Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335-36 (5th Cir.1995)).

Here, Kroske's complaint alleged that "she suffered and continues to suffer economic and emotion [sic] injuries and other damages, with specific amounts to be proven at the time of trial." In response to the Bank's interrogatories, Kroske further identified the following categories of damages: lost wages, benefits including but not limited to health and mental insurance, 401(k) contributions, value of life insurance policies, stock options, and emotional distress damages, as well as attorney's fees and costs. Kroske did not, however, allege the amount of damages or fees she sought.

In determining the amount in controversy, the district court properly considered Kroske's interrogatory answers and emotional distress damage awards in similar age discrimination cases in Washington. See De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir.1993). Based upon a preponderance of the evidence, the court concluded that Kroske's lost wages amounted to at least $55,000, that her 401(k) contribution amounted to at least $1000, and that her emotional distress damages would add at least an additional $25,000 to her claim. Therefore, even without including a potential award of attorney's fees, the district court found that the amount in controversy exceeded $75,000. This finding was not clearly erroneous; diversity jurisdiction properly exists in this case.

III. Preemption

Kroske contends that the district court erred in concluding that her age discrimination claim under the WLAD, Wash. Rev.Code § 49.60.180, was preempted by the National Bank Act. The National Bank Act provides that a national bank shall have the power "[t]o elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places." 12 U.S.C. § 24(Fifth) (emphasis added). Kroske concedes that she was appointed and terminated by the board of directors and does not challenge the district court's determination that she was an "officer" under 12 U.S.C. § 24(Fifth). Kroske contends, however, that the district court erred in determining that her state law age discrimination claim is preempted by the dismiss-at-pleasure provision of § 24(Fifth). We agree.

"We review a district court's grant of summary judgment de novo." Winterrowd v. Am. Gen. Annuity Ins. Co., 321 F.3d 933, 937 (9th Cir.2003). Further, federal preemption is an issue of law, which we review de novo. Id.

A.

Under Article VI of the Constitution, the laws of the United States "shall be the supreme Law of the Land; . . . any Thing in the Constitution or Laws of any state to the Contrary notwithstanding." U.S. Const. art. VI, cl. 2. Accordingly, it is axiomatic "that state law that conflicts with federal law is `without effect.'" Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (quoting Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 68 L.Ed.2d 576 (1981)).

Federal law may preempt state law under the Supremacy Clause in three ways. English v. Gen. Elec. Co., 496 U.S. 72, 78, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990). First, Congress may state its intent through an express preemption statutory provision. Id. at 78-79, 110 S.Ct. 2270. Second, "in the absence of explicit statutory language, state law is preempted where it regulates conduct in a field that Congress intended the Federal Government to occupy exclusively." Id. at 79, 110 S.Ct. 2270.

Such an intent may be inferred from a "scheme of federal regulation. . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it," or where an Act of Congress "touch[es] a field in which the federal interest is so dominant that the federal system will be assumed to...