Baker v. Kingsley

• Decision Date: 27 October 2004
• Docket Number: No. 04-1096.,No. 01-1071.,01-1071.,04-1096.
• Citation: 387 F.3d 649
• Parties: James A. BAKER, Raymond Wolfe and William Pate, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, Cross-Appellees, v. Alfred D. KINGSLEY, David D. Jones, Jr., Robert L. Fix, et al., Defendants-Appellees, Cross-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 649

387 F.3d 649

James A. BAKER, Raymond Wolfe and William Pate, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, Cross-Appellees, v. Alfred D. KINGSLEY, David D. Jones, Jr., Robert L. Fix, et al., Defendants-Appellees, Cross-Appellants.

No. 01-1071.

No. 04-1096.

United States Court of Appeals, Seventh Circuit.

Argued September 15, 2004.

Decided October 27, 2004.

Appeal from the District Court for the Northern District of Illinois, 294 F.Supp.2d 970, Gettleman, J.

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Thomas H. Geoghegan (argued), Despres, Schwartz & Geoghegan, Chicago, IL, Peter M. Trobe, Trobe, Babowice & Associates, Waukegan, IL, for Plaintiffs-Appellees.

John F. Verhey, Seidler & McErlean, Irving M. Geslewitz, Much, Shelist, Freed, Denenberg, Ament & Rubenstein, Caesar A. Tabet, Tabet, Divito & Rothstein, Peter C. John, Williams Montgomery & John, Chicago, IL, Mark H. Alcott (argued), Paul, Weiss, Rifkind, Wharton & Garrison, New York, NY, for Defendants-Appellants.

Before FLAUM, Chief Judge, and COFFEY and KANNE, Circuit Judges.

FLAUM, Chief Judge.

Plaintiffs-appellants, individually and on behalf of all others similarly situated, initiated this suit in Illinois state court alleging that defendants-appellees violated the Illinois Wage Payment and Collection Act ("Illinois Wage Act"), 820 ILCS § 115/5. Defendants removed the case to the United States District Court for the Northern District of Illinois, citing as the basis for the court's jurisdiction the complete preemption of plaintiffs' claim by § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. Thereafter, plaintiffs amended their complaint, adding a claim for breach of fiduciary duty in violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1022 and 1104. The district court then granted defendants' motion to dismiss plaintiffs' ERISA claim, held that the Illinois Wage Act claim was not preempted by the LMRA, and remanded the case to state court. Plaintiffs now appeal the dismissal of the ERISA claim and defendants cross-appeal the remand order. For the reasons stated herein, we reverse and remand for further proceedings consistent with this opinion.

I. Background

Plaintiffs-appellants were employees of Outboard Marine Corporation ("OMC") in its Waukegan, Illinois, manufacturing and production facility. According to their second amended complaint, on or about September 11, 1997, defendant Greenmarine Holdings, LLC completed a takeover of OMC and installed the individually named defendants as directors.

In September 1999, defendants anticipated having to close OMC's Waukegan plant over a two-year period as part of the takeover. Because the then-existing collective bargaining agreement with the International Marine and Machinists Association ("IMMA") was set to expire in October 1999, defendants negotiated an extension of the agreement ("Shutdown Agreement") by promising to pay IMMA members, including the named plaintiffs, certain severance and retention wage supplements if they worked to the end of the Shutdown Agreement, or until the actual shutdown of the Waukegan plant.

The Waukegan plant closed on December 21, 2000, and OMC filed for bankruptcy the following day. In the aftermath, OMC terminated its employee health plan and failed to pay the wage supplements provided for in the Shutdown Agreement.

Plaintiffs' first claim alleges that defendants' failure to pay the Shutdown Agreement's wage supplements violated the Illinois Wage Act. In their second claim, plaintiffs allege that defendants violated their fiduciary duty under ERISA by failing to notify plaintiffs of the likely termination of the OMC Health Plan and by failing to fund the plan. This appeal follows the district court's order dismissing the ERISA claim and remanding the Illinois Wage Act claim.

II. Discussion

A. Appellate Jurisdiction

We first must decide whether we have appellate jurisdiction over the parties' cross-appeals. The only challenge to our jurisdiction comes from plaintiffs-appellants who assert that 28 U.S.C. § 1447(d) precludes the exercise of appellate jurisdiction over defendants' cross-appeal of the remand of the Illinois Wage Act claim. Nevertheless, we have an independent duty to determine that jurisdiction exists before we can proceed to the merits of either appeal. See ITOFCA, Inc. v. MegaTrans Logistics, Inc., 235 F.3d 360, 363 (7th Cir.2000).

Our general appellate jurisdiction derives from 28 U.S.C. § 1291, which provides in relevant part: "The courts of appeals... shall have jurisdiction of appeals from all final decisions of the district courts of the United States." "Whether a decision is final for purposes of § 1291 generally depends on whether the decision by the district court `ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'" ITOFCA, 235 F.3d at 363 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978)).

The "final decision" requirement of § 1291 restricts piecemeal appeals. See id. Ordinarily, a party is precluded from appealing a district court's order resolving some but not all of the claims in a case. See United States v. Ettrick Wood Prods., Inc., 916 F.2d 1211, 1217 (7th Cir.1990). Where, however, a district court has resolved all federal claims and has remanded the remaining claims to state court, we have appellate jurisdiction to review the federal claims, the district court having nothing of the matter left on its docket. See, e.g., Hileman v. Maze, 367 F.3d 694, 696 (7th Cir.2004) (reviewing dismissal of federal claims where district court declined to retain jurisdiction over state-law claims); McCullah v. Gadert, 344 F.3d 655, 656 (7th Cir.2003) (same). The district court's order dismissed plaintiffs' ERISA claim and remanded the Illinois Wage Act claim, leaving it with nothing to do but enter judgment on the former. Accordingly, the dismissal of the ERISA claim is an appealable "final decision."

A remand order that marks the end of litigation in federal court, like the order issued in this case, is also a "final decision." See Kircher v. Putnam Funds Trust, 373 F.3d 847, 848 (7th Cir.2004) (citing Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711-15, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996)). There is, however, an additional obstacle to appellate jurisdiction over remand orders. The general grant of appellate jurisdiction in 28 U.S.C. § 1291 is limited by § 1447(d), which states in relevant part: "An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." Apart from a specific exception for civil rights cases, the language of § 1447(d) is unqualified and would seem to suggest that the courts of appeals lack jurisdiction over all remand orders. As we have explained before, however, the Supreme Court has read § 1447, the statute governing removals and remands, as a whole and has interpreted the limitation on appellate jurisdiction in subsection (d) in relation to the reasons for remand set forth in subsection (c). See Adkins v. Ill. Cent. R.R. Co., 326 F.3d 828, 831 (7th Cir.2003) (discussing Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976), abrogated on different ground by Quackenbush, 517 U.S. 706, 116 S.Ct. 1712, 135 L.Ed.2d 1); Kircher, 373 F.3d at 848-49 (same).

In its first case dealing with the issue, the Supreme Court held that "only remand orders issued under § 1447(c) and invoking the grounds specified therein that removal was improvident and without jurisdiction are immune from review under § 1447(d)." Thermtron, 423 U.S. at 346, 96 S.Ct. 584. The Court phrased its statement of the rule in this way to reflect the language of § 1447(c), which permitted remand "[i]f at any time before final judgment it appears that the case was removed improvidently and without jurisdiction." In 1988, Congress amended § 1447(c) to permit remand when "it appears that the district court lacks subject matter jurisdiction" or when a defect in removal procedure is raised in a motion to remand within 30 days of removal. See Judicial Improvements and Access to Justice Act, Pub.L. No. 100-702, Title X, § 1016(c), 102 Stat. 4642 (Nov. 19, 1988). Accordingly, the Supreme Court's next statement of the scope of § 1447(d) reflected the language of the amended statute: "As long as a district court's remand is based on a timely raised defect in removal procedure or on lack of subject-matter jurisdiction—the grounds for remand recognized by § 1447(c)—a court of appeals lacks jurisdiction to entertain an appeal of the remand order under § 1447(d)." Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 116 S.Ct. 494, 133 L.Ed.2d 461 (1995).

In an important case revealing the limits of the Thermtron rule, the Supreme Court addressed a split among the circuits as to "whether a district court has discretion to remand a removed case to state court when all federal-law claims have dropped out of the action and only pendent state-law claims remain." Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 348, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988).¹ Though the question came to the Court on appeal from a remand order, the Court reached the merits of the appeal without doubting the circuit court's, or its own, appellate jurisdiction. See id. at 345-57, 108 S.Ct. 614; see also Rothner v. City of Chicago, 879 F.2d 1402, 1409 (7th Cir.1989) (noting that the majority and dissent in Carnegie-Mellon agreed that the remand order was reviewable).

In accordance with this case law, our appellate review is barred by § 1447(d) only as to "remands based on grounds specified in § 1447(c)." Things Remembered, 516 U.S. at 124, 116 S.Ct. 494, quoted in Benson v. SI Handling Sys., Inc., 188 F.3d 780, 782 (7th Cir.1999). Stated obversely, if a district court's remand is based on a ground other than a timely...