Calhoon v. Bonnabel, 82 Civ. 2091.

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Citation560 F. Supp. 101
Docket NumberNo. 82 Civ. 2091.,82 Civ. 2091.
PartiesJ.M. CALHOON, et al., Respondents/Plaintiffs, v. Henry J. BONNABEL, et al., Petitioners/Defendants.
Decision Date08 July 1982

Dickstein, Shapiro & Morin by Christian E. Liipfert, Washington, D.C., for respondents/plaintiffs.

Christopher P. Keane, P.C., New York City, for petitioners/defendants.


LOWE, District Judge.


This case presents a mixed question of procedure and substantive law which, though often probed, has produced no consistent answer nor a uniform doctrinal approach among the federal courts. Broadly framed, the question is whether the general removal statute codified at 28 U.S.C. § 14411 permits a state court defendant to remove an action to federal district court on the sole ground that the state claims (causes of action) are wholly preempted by federal law? More specifically, this Court must determine whether it has removal jurisdiction over the present action, which states a claim under N.Y. Labor Law § 198-c 1 and 2 (McKinney Supp. 1980-81)2 for unpaid, overdue contributions to benefit plans, where it is claimed by petitioners that the entire complaint is preempted by the Employee Retirement Income and Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1144 (1975).3

The present action was commenced on March 10, 1982 in the Supreme Court for New York County. It was removed pursuant to § 1441 on April 2, 1982. Respondents then moved to remand the matter to state court pursuant to 28 U.S.C. § 1447(c).4 On May 28, 1982, oral argument was heard by the Court. Upon further review of the pleadings and judicial authority, the Court concludes that it does have removal jurisdiction over the complaint and therefore denies the motion to remand. The rationale supporting this conclusion is discussed below.

A. Background

Respondentsplaintiffs in the state proceeding—include sixteen Trustees of the following employee benefit plans: the Marine Engineers' Beneficial Association ("MEBA") Pension Trust, the MEBA Medical & Benefits Plan, the MEBA Training Plan, the MEBA Vacation Plan, the Joint Employment Committee, and the Joint Maritime Congress (hereinafter referred to as the "MEBA Plans").5 Petitioners (defendants) are the executive officers of the American Coastal & Foreign Shipping Co., Inc., ("American Coastal"), a New York corporation which employs members of the National MEBA and District No. 1—Pacific Coast District, MEBA, AFL-CIO (hereinafter referred to as the "Union"), and which has a collective bargaining agreement with the Union. That agreement includes a provision requiring American Coastal to make payments to the MEBA Plans on behalf of its employees.

Defendants admittedly are in default for contributions due January 1 and February 1, 1982, totalling $105,328.69.6 On March 2, 1982, the respondents herein commenced a federal action against American Coastal pursuant to ERISA, 29 U.S.C. §§ 1145, 1132(a)(3). Their complaint, currently pending before this Court, alleges that American Coastal failed to make payments to the MEBA Plans due January 1 and February 1, 1982, totalling $105,328.69. The complaint requests an award of damages, costs and attorney's fees, as well as an order directing American Coastal to comply with its obligations under the MEBA Plans.

Shortly after the initiation of the federal lawsuit, respondents commenced this action under the New York labor law against the company's officers.7 The relief sought includes the overdue payments to the MEBA Plans, unpaid interest, costs and attorney's fees. Petitioners promptly removed the state action, claiming:

The above described action is a civil action of which this court has original jurisdiction under the provisions of Title 28, United States code, Section 1331, and is one which may be removed to this court by the petitioner, defendant therein, pursuant to the provisions of Title 28, United States Code, Section 1441 in that the Plaintiffs are identical in both actions and the defendants in the Supreme Court actions ... are the officers and the directors of the defendant corporation ... in the District Court action.

Petition for Removal, filed April 2, 1982, at 2.

B. General Principles

Congress has provided in § 1441 that the federal district courts may assume jurisdiction over an action commenced in state court if, inter alia, that action could have been commenced by the plaintiff(s) in federal court under the court's original jurisdiction.8 Before approving a petition for removal, the court must be satisfied that 1) the court from which the action has been removed acquired both subject matter and personal jurisdiction,9 and 2) the subject matter of the removed action is within its original jurisdiction. The second requirement must be satisfied by review of the allegations in the state court complaint, uncolored by potential or asserted defenses or counterclaims of the defendant(s). As explained by the court in Committee of Interns and Residents v. N.Y. State Labor Relations Board, 420 F.Supp. 826, 831 (S.D. N.Y.1976):

There can be no removal on the basis of a federal question asserted for the first time in defendant's answer or petition for removal. citation These principles were succinctly summarized in Gully v. First National Bank in Meridian, 299 U.S. 109, 112-113, 57 S.Ct. 96, 97-98, 81 L.Ed. 70 (1936), which holds:
"To bring a case within the statute, 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.... The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction and defeated if they receive another.... A genuine and present controversy not merely possible or conjectural one, must exist with reference thereto ..., and the controversy must be disclosed on the face of the complaint, unaided by the answer or the petition for removal."

See also Westmoreland Hospital Association v. Blue Cross of Western Pennsylvania, 605 F.2d 119, 122 (3d Cir.1979), cert. denied, 444 U.S. 1077, 100 S.Ct. 1025, 62 L.Ed.2d 759 (1980); 14 Wright, Miller & Cooper, Federal Practice and Procedure § 3721 at 530 (1976).

The rule that the essence of the controversy must be determined from the perspective of the plaintiff, whose interests in control over his litigation and in his choice of forum must be respected, does not limit the reviewing court to the words on the face of the complaint or to plaintiff's characterization of his claims. Cf. Gully v. First National Bank in Meridian, 299 U.S. 109, 113, 57 S.Ct. 96, 98, 81 L.Ed. 70 (1936) ("the complaint itself will not avail as a basis of jurisdiction in so far as it goes beyond a statement of the plaintiff's cause of action and anticipates or replies to a probable defense."). Instead:

The court must ascertain from the complaint whether federal law is a pivotal issue in the case, one that is basic in the determination of the conflict between the parties. Gully v. First National Bank, 299 U.S. 109, 117-18, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Ivy Broadcasting Co. v. AT & T, 391 F.2d 486, 489 (2d Cir.1968). However, the lack of any reference to federal law in the complaint is not controlling. Sylgab Steel & Wire Corp. v. Strickland Transportation Co., 270 F.Supp. 264, 267 (E.D.N.Y.1967); 1A Moore's Federal Practice ¶ 0.160 at 185-87 (2d ed. 1974).

North American Phillips Corp. v. Emery Air Freight Corp., 579 F.2d 229, 233 (2d Cir. 1978). Accord State of New York v. Local 144, Hotel, Nursing Home and Allied Health Services Union, 410 F.Supp. 225, 226-27 (S.D.N.Y.1976) ("inquiry must be made as to whether, regardless of artful pleading, in fact the action is one governed by federal law.").

The deceptively obvious distinction between claims asserted by plaintiffs on the one hand, and defenses raised by defendants on the other, breaks down when a state defendant removes the proceeding to federal court on the ground that the state law under which a plaintiff is claiming relief is preempted by federal statute.10 Some courts have viewed preemption merely as a defense to claims under state law, and therefore have remanded actions removed under a theory of preemption.11 For example, in Long Island Railroad Co. v. United Transportation Union, 484 F.Supp. 1290 (S.D.N.Y.1980), former Chief Judge MacMahon remanded an action in which defendant argued that plaintiff's claims under New York's Taylor Law, N.Y. Civil Service Law §§ 201 et seq. (McKinney 1973), were preempted by the Federal Railway Labor Act, 45 U.S.C. §§ 151 et seq. After noting that the Railway Labor Act, if it applied, would prohibit plaintiff's suit for injunctive relief against the union's threatened strike, Judge MacMahon wrote:

We do not believe this is a case where the plaintiff has skillfully avoided mentioning the federal right upon which it relies. The complaint is clearly drawn only in terms of New York's Taylor Law; moreover, even if we assume arguendo that state law is preempted by the Railway Labor Act, this is by itself no reason to assume that LIRR's complaint can thereby somehow be said to "arise under" federal law, since in that event plaintiff would evidently be left with no remedy whatsoever. "It is illogical to say that the litigant's claim is really predicated on a body of law which grants him no rights." New York v. Local 1115, supra, 412 F.Supp. 720 at 723.

Id. at 1293. He therefore concluded that the controversy did not "arise under an act of Congress" so as to confer removal jurisdiction, despite defendant's preemption claims.

Other courts have reached a different conclusion.12 A recent, illustrative case is Billy Jack I. There, the court's explication of the preemption concept and its import in the removal context is particularly illuminating, and bears quoting at length:

Federal preemption is not, by its nature, an

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