Cook v. Georgetown Steel Corp.
| Citation | 770 F.2d 1272 |
| Decision Date | 29 August 1985 |
| Docket Number | 84-1898 and 84-1932,84-1897,84-1888,Nos. 84-1873,s. 84-1873 |
| Parties | 120 L.R.R.M. (BNA) 2339, 27 Wage & Hour Cas. (BN 530, 103 Lab.Cas. P 11,678 James Donald COOK; Arthur J. Keith; Gerald Dale Lambert; Ben Coakley; Julian Gamble; Robert Davis; Marshall Ray Justice; Leroy Davis; Qulex Dickerson, Plaintiffs, and James Cooper, Appellant, v. GEORGETOWN STEEL CORPORATION, Appellee. James Donald COOK; James Cooper, Plaintiffs, and Arthur J. Keith; Gerald Dale Lambert; Ben Coakley; Julian Gamble; Robert Davis; Marshall Ray Justice; Leroy Davis; Qulex Dickerson, Appellants, v. GEORGETOWN STEEL CORPORATION, Appellee. James Donald COOK, Plaintiff, and James Cooper; Arthur J. Keith; Gerald Dale Lambert; Ben Coakley; Julian Gamble; Robert Davis; Marshall Ray Justice; Leroy Davis; Qulex Dickerson, Appellees, v. GEORGETOWN STEEL CORPORATION, Appellant. James COOPER; Arthur J. Keith; Gerald Dale Lambert; Ben Coakley; Julian Gamble; Robert Davis; Marshall Ray Justice; Leroy Davis; Qulex Dickerson, Plaintiffs, and James Donald Cook, Appellee, v. GEORGETOWN STEEL CORPORATION, Appellant. James COOPER; Arthur J. Keith; Gerald Dale Lambert; Ben Coakley; Julian Gamble; Robert Davis; Marshall Ray Justice; Leroy Davis; Qulex Dickerson, Plaintiffs, and James Donald Cook, Appellant, v. GEORGETOWN STEEL CORPORATION, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (4th Circuit) |
Thomas J. Rubillo, Georgetown, S.C. (Lawrimore, Rubillo & Darr, Jack M. Scoville, Jr.; Rosen, Rosen & Scoville, Georgetown, S.C., on brief), for appellant.
Thomas A. Bright, Greenville, S.C. (Bruce A. Petesch, Haynsworth, Baldwin, Miles, Johnson, Greaves & Edwards, Greenville, S.C., on brief), for appellee.
Before WINTER, Chief Judge, WILKINSON, Circuit Judge and TURK, Chief District Judge for the Western District of Virginia, sitting by designation.
These suits were instituted in a state court and removed to the district court where they were there consolidated. While the parties to these cross-appeals press on us issues involving their collective bargaining agreement and South Carolina's wage claim statute, we do not reach them because we conclude that the cases were improperly removed. We vacate the judgment of the district court and direct it to remand the cases to state court.
Defendant Georgetown Steel is a Delaware corporation whose principal business is operating a steel mill in Georgetown, South Carolina. The ten individual plaintiffs in these consolidated cases worked at that mill under a collective bargaining agreement between defendant and the United Steelworkers of America that covered the period of February 7, 1981 to December 6, 1983. In January of 1982, plaintiffs requested and received pay in lieu of their vacation for 1982. On February 6, 1982, all of the plaintiffs were laid off, some of them permanently. Defendant withheld amounts equaling the 1982 vacation payments from plaintiffs' final paychecks, claiming that these amounts would not be earned until each plaintiff's individual employment anniversary date later in 1982.
The union filed a grievance on behalf of the employees whose wages had been withheld, and each of the plaintiffs made written and oral demands upon defendant for payment. On April 2, 1982, plaintiffs filed individual actions in state court, seeking payment of the withheld vacation amounts and civil penalties under S.C.Code Sec. 41-11-170. On April 7, 1982, the parties settled the grievances by agreeing that plaintiffs would be paid the amounts withheld by defendant and that employees laid off in the future would not have to reimburse defendant for unearned vacation, although employees otherwise leaving the defendant's employ would be so liable. Defendant did not immediately pay the disputed amounts. Instead, it wrote to the employees seeking releases. It paid the disputed amounts to the four who gave releases.
On April 23, 1982, defendant removed the state suits to federal court. The parties submitted stipulations of fact, and the district court conducted a bench trial in July, 1984. It held that defendant had no right to withhold the disputed vacation pay, and that defendant was liable for accrued vacation pay until it paid each plaintiff the withheld amounts. Plaintiffs appealed contending that they should have received their full wages for the penalty period, rather than just their vacation pay. Defendant cross-appealed, contending that it was not liable at all to these plaintiffs because the collective bargaining agreement permitted it to withhold the amounts in dispute and because South Carolina's wage claim statute does not apply if there is a bona fide dispute over the amount of wages due.
The defendant removed the state actions to federal district court. Although plaintiffs have not questioned the district court's jurisdiction, lack of subject matter jurisdiction is an issue that requires sua sponte consideration when it is seriously in doubt. Having such a doubt, we directed the parties to address the issue.
The relevant portion of the removal statute provides that 28 U.S.C. Sec. 1441. Since the defendant's principal place of business is in South Carolina and all the plaintiffs reside in that same state, removal was proper only if plaintiffs' complaints fall within the original federal question jurisdiction of the district courts.
The district court's citation of 29 U.S.C. Sec. 185 in support of its jurisdiction indicates that a federal question may be involved in this case. 1 But as we have recently noted, "To be removable to federal court under 28 U.S.C. Sec. 1441 a state action must be within the original jurisdiction of the district court, and its jurisdiction must be ascertainable from the face of the complaint." Hunter Douglas, Inc. v. Sheet Metal Workers International Association, Local 159, 714 F.2d 342, 345 (4 Cir.1983) (emphasis added). 2 See also Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 10 n. 9, 103 S.Ct. 2841, 2847 n. 9, 77 L.Ed.2d 420 (1983) ().
In their complaints, plaintiffs did not allege any issue relating to the collective bargaining agreement, nor would they be required to prevail on any such issue in order to establish their right to recovery. Their complaints merely stated that defendant owed them unpaid wages and penalties. The district court characterized their suit by saying that "plaintiffs' claim is brought pursuant to section 41-11-170 of the Code of Laws of South Carolina, 1976." In order to recover, plaintiffs would be required to prove only that they worked the periods involved, that defendant withheld wages for that time (neither of which is disputed), and what is the correct measure of damages under state law. A federal issue is interjected into the cases only by defendant's counterclaim or setoff, in which it pleads that it was entitled under the collective bargaining agreement to withhold these wages as reimbursement for vacation pay advanced to the employees. A federal defense to a state cause of action is not sufficient to invoke federal jurisdiction, and we do not think that every claim for unpaid wages under a collective bargaining contract governed by federal law necessarily states a federal cause of action. 3
The well-pleaded complaint rule has occasionally been subject to criticism, but its principles were recently reaffirmed by a unanimous Supreme Court in Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). The Court noted that the statutory phrase "arising under" has "resisted all attempts to frame a single, precise definition," but that Justice Holmes' statement that "[a] suit arises under the law that creates the cause of action" had often been used as an inclusive principle and that leading commentators have suggested that "an action 'arises under' federal law 'if in order for the plaintiff to secure the relief sought he will be obliged to establish both the correctness and the applicability to his case of a proposition of federal law.' " 463 U.S. at 8-9, 103 S.Ct. at 2846. The Court then reaffirmed the practical utility of the well-pleaded complaint rule:
One powerful doctrine has emerged, however--the "well-pleaded complaint" rule--which as a practical matter severely limits the number of cases in which state law "creates the cause of action" that may be initiated in or removed to federal district court, thereby avoiding more-or-less automatically a number of potentially serious federal-state conflicts.... Thus, a federal court does not have original jurisdiction over a case in which the complaint presents a state-law cause of action, but also asserts that federal law deprives the defendant of a defense he may raise, ... or that a federal defense the defendant may raise is not sufficient to defeat the claim.... [A] defendant may not remove a case to federal court unless the plaintiff's complaint establishes that the case "arises under" federal law. "[A] right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Gully v. First National Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936).
Id. 463 U.S. at 9-10, 103 S.Ct. at 2846-47 (original emphasis). Although this...
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