891 F.2d 540 (5th Cir. 1990), 88-1920, Kidd v. Southwest Airlines, Co.

Docket Nº:88-1920.
Citation:891 F.2d 540
Party Name:Debra KIDD, Plaintiff-Appellant, v. SOUTHWEST AIRLINES, CO., Defendant-Appellee.
Case Date:January 04, 1990
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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891 F.2d 540 (5th Cir. 1990)

Debra KIDD, Plaintiff-Appellant,

v.

SOUTHWEST AIRLINES, CO., Defendant-Appellee.

No. 88-1920.

United States Court of Appeals, Fifth Circuit

January 4, 1990

Page 541

Marvin Menaker, Menaker & Huffman, Dallas, Tex., for plaintiff-appellant.

J. Joe Harris, Matthews & Branscomb, San Antonio, Tex., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before GEE, and JONES, Circuit Judges, and HUNTER 1, District Judge.

EDITH H. JONES, Circuit Judge:

Debra Kidd appeals from the district court's summary judgment order which dismissed her wrongful discharge claim against Southwest Airlines. Kidd originally filed suit in Texas state court, alleging breach of her employment contract and wrongful discharge. Southwest Airlines removed the cause to federal district court, where the judge granted Southwest Airlines' summary judgment motion. Although the issue of federal jurisdiction was not plumbed by the parties as thoroughly as we might have hoped, we conclude that the district court did have subject matter jurisdiction to adjudicate this action. On the merits, we affirm the summary judgment.

I.

BACKGROUND

For over eight years, plaintiff Debra Kidd worked as a customer service agent, and subsequently as a customer service supervisor for defendant Southwest Airlines Company ("Southwest"). As a customer service supervisor, Kidd fell outside of the employee bargaining unit and was not covered by the Collective Bargaining Agreement ("CBA") between Southwest and the International Association of Machinists and Aerospace Workers, AFL-CIO. Instead, Southwest entered into an independent employment relationship with each of its supervisory employees, including Kidd.

Although Kidd was not a direct party to the CBA, she asserts that "it was common knowledge among employees and supervisors" that supervisors were governed by and were third party beneficiaries to certain of the agreement's provisions. Southwest concedes that it uniformly applied CBA terms covering shift trades, group insurance, profit sharing, free day bids, sick pay, and overtime to union and non-union employees. Further, Southwest maintained a salary differential between supervisory and union employees of $150 per month, so that when union employees received a raise, supervisory employees benefitted. Kidd also contends, over the company's vigorous denial, that it extended the CBA's termination and arbitration provisions to cover supervisory employees. The parties did not execute a written contract mentioning any of these incorporated provisions.

On September 26, 1986, Southwest discharged Debra Kidd without prior warning or an opportunity for arbitration.

Kidd filed suit in Texas state court, alleging that Southwest violated the terms of her employment agreement by arbitrarily firing her, refusing to reinstate her, and denying her request to arbitrate her claims.

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Pursuant to 28 U.S.C. § 1441(a), Southwest Airlines removed the cause to federal district court, asserting federal question jurisdiction, 28 U.S.C. § 1331.

Kidd moved for remand on the ground that, as a supervisor, she was not covered by the CBA or the Railway Labor Act, 45 U.S.C. § 151 et seq. (1986) ("RLA"), which governs collective bargaining in the transportation industry. The district court denied this motion.

Kidd then amended her complaint to assert breaches of Southwest's employee stock ownership plan and employee profit-sharing plan, which are ERISA-qualified. Her amendment thus explicitly raised federal issues for the district court's resolution. 29 U.S.C. §§ 1001-1461. After some discovery, the district court granted summary judgment for Southwest on the ground that Kidd failed to raise a genuine issue of material fact concerning whether Southwest had modified Texas' "at-will" employment doctrine by applying the CBA's termination provisions to Kidd's individual employment relationship. Later, the court tried and ruled against Kidd on the ERISA claims. Kidd has appealed the summary judgment, but she does not seek review of the ERISA judgment.

II.

REMOVAL JURISDICTION

The parties' jurisdictional arguments are framed solely around the question whether Kidd's complaint arose under federal law for purposes of removal jurisdiction. The propriety of removal from state to federal court is indeed one aspect of the question, but another critical aspect is what happened in this case after removal, when plaintiff amended her complaint to include causes of action founded on ERISA. We address each aspect of the jurisdictional question in turn.

The propriety of removal by Southwest depended upon whether Kidd's case fell within the United States district court's original "federal question" jurisdiction. Franchise Tax Board v. Const. Laborers Vacation Trust, 463 U.S. 1, 8, 103 S.Ct. 2841, 2845, 77 L.Ed.2d 420 (1983). Section 1331 provides that "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. A case "arises under" federal law when the vindication of a right under state law necessarily turns upon some construction of federal law, Franchise Tax Board, 103 S.Ct. at 2846; Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 41 S.Ct. 243, 65 L.Ed. 577 (1921), or when the plaintiff must establish both the correctness and applicability to his case of a federal law proposition, in order to secure the relief sought, Franchise Tax Board, 103 S.Ct. at 2846. Despite these concise statements, the Supreme Court has stressed that no one formulation of the "arising under" definition captures all of the nuances involved in determining which cases fall within the federal court's original jurisdiction. Merrill Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 106 S.Ct. 3229, 3232, 92 L.Ed.2d 650; Franchise Tax Board, 103 S.Ct. at 2846. See Willy, 855 F.2d 1160, 1165 (5th Cir.1988).

The "well-pleaded complaint" rule has become indispensable to implementing the federal question statute. As the Supreme Court explained in Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 725, 58 L.Ed. 1218 (1914):

Whether a case is one arising under [federal law] ... must be determined from what necessarily appears in the plaintiff's statement of his own claim ..., unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may interpose.

See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 1547, 95 L.Ed.2d 55 (1987); Merrill Dow, 106 S.Ct. at 3232; Louisville & Nashville Railway Company v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908); 13b Wright & Miller § 3566 (2d ed. 1984). In cases that have been removed to federal court, the plaintiff's complaint rather than the removal petition must establish federal jurisdiction. Merrill Dow, 106 S.Ct. at 3232; Franchise Tax Board, 103 S.Ct. at 2846-

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47. When the plaintiff moves to remand for lack of jurisdiction, the burden of establishing original federal jurisdiction rests upon the defendant. Pullman Co. v. Jenkins, 305 U.S. 534, 540, 59 S.Ct. 347, 350, 83 L.Ed. 334 (1939); Willy v. Coastal Corp., 855 F.2d at 1164.

Debra Kidd's original complaint alleged causes of action for breach of contract and the tort of wrongful discharge under Texas law. The material portions of her complaint state:

V.

Defendant has in effect now and at all material times during Plaintiffs' employment, an employment agreement between itself and the International Association of Machinists and Aerospace Workers. Plaintiffs are not direct parties to said agreement, but were governed by same and are third party beneficiaries of many of its provisions. Plaintiffs and Defendant both had express and implied understanding that Plaintiffs' jobs were governed by the terms of that agreement.

VI.

Plaintiffs' discharge was not for "just cause" and was capricious, arbitrary, wrongful, malicious and in violation of said agreement, thereby directly and proximately causing damages to Plaintiffs through their respective loss of wages and other employment benefits from date of...

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