720 F.2d 459 (6th Cir. 1983), 82-1593, City of Saginaw v. Service Employees Intern. Union, Local 446-M

• Citation: 720 F.2d 459
• Date: 03 November 1983
• Docket Number: 82-1593.
• Parties: CITY OF SAGINAW, Plaintiff-Appellee, v. SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 446-M, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 459

720 F.2d 459 (6th Cir. 1983)

CITY OF SAGINAW, Plaintiff-Appellee,

v.

SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 446-M,

Defendant-Appellant.

No. 82-1593.

United States Court of Appeals, Sixth Circuit

November 3, 1983

Submitted Aug. 31, 1983.

Page 460

Floyd P. Kloc, Otto W. Brandt, Jr., Saginaw, Mich., for plaintiff-appellee.

Peter C. Jensen, Borrello, Thomas & Jensen, Saginaw, Mich., for defendant-appellant.

Before LIVELY, Chief Circuit Judge, PECK, Senior Circuit Judge, and NEESE ^[*], Senior (retired) District Judge.

NEESE, Senior District Judge.

The defendant-appellant Service Employees International Union, Local 466-M (the union), appeals the declaratory judgment of the District Court for the Eastern District of Michigan, Northern Division, that the arbitral-award rendered it against the plaintiff-appellee City of Saginaw, Michigan (the employer), is unenforceable because its implementation would violate the Comprehensive Employment Training Act (the CETA), as amended in 1978, 29 U.S.C. Secs. 801, et seq., regulations promulgated thereunder, and a public-policy of federal labor law expressed therein. Such award was made under the grievance/arbitration clauses of the collective-bargaining contract of the employer and the union and concerned the layoffs by the employer of some

Page 461

14 of its CETA-employees when the earnings of each from such employment attained the aggregate amount of $14,400.

The employer defended the grievance of the union in the arbitration on the basis that its layoff of its CETA-employees was mandated by federal law which took precedence over any conflicting provision of the contract of the parties. Cf. W.R. Grace and Co. v. Local 759, --- U.S. ----, 103 S.Ct. 2177, 2183, 76 L.Ed.2d 298 (1983). The arbitrator resolved such dispute by deciding that, in laying-off those workers, the employer violated seniority ("bumping-rights") provisions of such contract.

The union moved for a dismissal, contending inter alia that the employer was attempting to establish subject-matter jurisdiction under the Federal Declaratory Judgment Act, 28 U.S.C. Sec. 2201. The District Court sustained its jurisdiction on an examination of the entire complaint, finding therefrom a proper basis for its assuming jurisdiction in the fact that the action "arises under, and requires an interpretation of [the] CETA," so that it had "subject matter jurisdiction * * * as a case which 'arises under the ... laws ... of the United States' pursuant to 28 U.S.C. 1331." ¹

We resolve all questions regarding the subject-matter jurisdiction of the District Court before ruling on the merits of an appeal. Gross v. Hougland, 712 F.2d 1034, 1036 (6th Cir.1983). It appeared to us from our pre-submission investigation that the District Court might have lacked federal-question jurisdiction of the subject matter ² from the expressions of the Supreme Court in Franchise Tax Bd. v. Const. Laborers Vac. Trust, --- U.S. ----, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983), decided after the District Court rendered judgment, and we requested supplemental briefs on the effect hereon of that decision. The employer contended that Franchise Tax Bd. had no application here, but we disagree.

As to the power of the District Court to entertain this litigation within the restricted area to which the laws of the United States confine its district courts, " 'jurisdiction' means the kinds of issues which give right to entrance to federal courts." Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 878, 94 L.Ed. 1194 (1950). The Federal Declaratory Judgment Act, 28 U.S.C. Sec. 2201, supra, confers no "absolute right upon the litigant." Public Service Commission of Utah v. Wycoff Co., 344 U.S. 237, 241, 73 S.Ct. 236, 239, 97 L.Ed. 291 (1952). One kind of issue which precludes entrance to federal courts is where the complaint in an action for declaratory judgment seeks in essence to assert a defense to an impending state-court action by the declaratory judgment defendant and the lawsuit by the declaratory judgment defendant does not "arise under" federal law. Franchise Tax Bd. v. Constr. Laborers Vac. Trust, supra, --- U.S. at ---- n. 14, ---- n. 19, 103 S.Ct. at 2850 n. 14, 2851 n. 19 ("[A] declaratory judgment plaintiff could not get original federal jurisdiction if the...