Caterpillar Inc v. Williams, No. 86-526

CourtUnited States Supreme Court
Writing for the CourtBRENNAN
PartiesCATERPILLAR INC., et al., Petitioners v. Cecil WILLIAMS et al
Docket NumberNo. 86-526
Decision Date09 June 1987

482 U.S. 386
107 S.Ct. 2425
96 L.Ed.2d 318
CATERPILLAR INC., et al., Petitioners

v.

Cecil WILLIAMS et al.

No. 86-526.
Argued April 21, 1987.
Decided June 9, 1987.
Syllabus

Caterpillar Tractor Co. (Caterpillar) hired respondents to work at its San Leandro, California, facility in positions covered by its collective-bargaining agreement with a union. Respondents eventually assumed management and other positions outside the bargaining unit, and allegedly were repeatedly assured by Caterpillar that, if the San Leandro facility ever closed, Caterpillar would employ them at other facilities. Subsequently, they were downgraded to unionized positions, but allegedly assured that the downgrades were temporary. However, Caterpillar later notified them that its San Leandro plant would close and that they would be laid off. Respondents then filed this action, based solely on state law, in a California state court, alleging that Caterpillar thereby breached their individual employment contracts. Caterpillar removed the action to Federal District Court, arguing that removal was proper because any individual employment contracts made with respondents were, as a matter of federal substantive labor law, merged into and superseded by the collective-bargaining agreement. Respondents denied that they alleged any federal claim and sought remand of the action to the state court. The Federal District Court held that removal was proper, and dismissed the case when respondents refused to amend the complaint to attempt to state a claim under § 301 of the Labor Management Relations Act, 1947, which confers federal jurisdiction as to suits for violations of collective-bargaining agreements. The Court of Appeals reversed, holding that the case was improperly removed.

Held: Respondents' state-law complaint for breach of the individual employment contracts is not removable to Federal District Court. Pp. 391-399.

(a) The presence or absence of federal-question jurisdiction that will support removal is governed by the "well-pleaded complaint rule," under which federal jurisdiction exists only when a federal question is presented on the face of the properly pleaded complaint. Ordinarily, a case may not be removed on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the complaint, and even if both parties concede that the federal defense is the only question truly at issue. However, under the "complete pre-emption doctrine," which is a corollary to the well-pleaded complaint rule, once an area of state law has been completely pre-empted, any claim purportedly

Page 387

based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law. Pp. 391-394.

(b) Respondents' state-law contract claims are not "completely pre-empted" § 301 claims. Section 301 governs claims founded directly on rights created by collective-bargaining agreements and claims substantially dependent on analysis of such agreements. However, respondents alleged that Caterpillar breached individual employment contracts with them, and § 301 says nothing about the content or validity of such contracts. Although respondents, as bargaining unit employees at the time of the plant closing, could have brought suit under the collective agreement, they, as masters of the complaint, chose not to do so. Moreover, their complaint is not substantially dependent upon interpretation of the collective-bargaining agreement. Pp. 394-395.

(c) J.I. Case Co. v. NLRB, 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762 does not support Caterpillar's contention that when respondents returned to the collective-bargaining unit, their individual employment contracts were subsumed into, or eliminated by, the collective-bargaining agreement so as to be pre-empted by § 301. That decision does not stand for the general proposition that all individual employment contracts are inevitably superseded by a subsequent collective agreement. The fact that an employer may raise such a question in state court and might ultimately prove that the employee's claims are pre-empted does not establish that they are removable. Pp. 395-398.

(d) There is no merit to Caterpillar's argument that § 301 pre-empts a state-law claim when the employer raises only a defense that requires a court to interpret or apply a collective-bargaining agreement, such as Caterpillar's defense claiming that, in its collective-bargaining agreement, its unionized employees waived any pre-existing individual employment contract rights. The presence of a federal question, even a § 301 question, in a defensive argument does not overcome the paramount policies embodied in the well-pleaded complaint rule. Pp. 398-399.

786 F.2d 928 (CA9 1986), affirmed.

BRENNAN, J., delivered the opinion for a unanimous Court.

Gerald D. Skoning, Chicago, Ill., for petitioners.

Fritz Wollett, Berkeley, Cal., for respondents.

Page 388

Justice BRENNAN delivered the opinion of the Court.

The question for decision is whether respondents' state-law complaint for breach of individual employment contracts is completely pre-empted by § 301 of the Labor Management Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U.S.C. § 185, and therefore removable to Federal District Court.

I

At various times between 1956 and 1968, Caterpillar Tractor Company (Caterpillar) hired respondents to work at its San Leandro, California, facility. Complaint &Par; 10-26, App. to Pet. for Cert. (App.) A-40—A-42. Initially, each respondent filled a position covered by the collective-bargaining agreement between Caterpillar and Local Lodge No. 284, International Association of Machinists (Union). Each eventually became either a managerial or a weekly salaried employee, positions outside the coverage of the collective-bargaining agreement. Respondents held the latter positions for periods ranging from 3 to 15 years; all but two respondents served 8 years or more. App. A-97—A-98.

Respondents allege that, "[d]uring the course of [their] employment, as management or weekly salaried employees," Caterpillar made oral and written representations that "they could look forward to indefinite and lasting employment with the corporation and that they could count on the corporation to take care of them." Complaint &Par; 27A, 27D, App. A-43.

Page 389

More specifically, respondents claim that, "while serving Caterpillar as managers or weekly salaried employees, [they] were assured that if the San Leandro facility of Caterpillar ever closed, Caterpillar would provide employment opportunities for [them] at other facilities of Caterpillar, its subsidiaries, divisions, or related companies." Id. ¶ 27F, App. A-48.1 Respondents maintain that these "promises were continually and repeatedly made," and that they created "a total employment agreement wholly independent of the collective-bargaining agreement pertaining to hourly employees." Id. ¶ 29, App. A-49.2 In reliance on these promises, respondents assert, they "continued to remain in Caterpillar's employ rather than seeking other employment." Id. ¶ 31, App. A-49.

Between May 1980 and January 1984, Caterpillar downgraded respondents from managerial and weekly salaried positions to hourly positions covered by the collective-bargaining agreement. Respondents allege that, at the time they were downgraded to unionized positions, Caterpillar supervisors orally assured them that the downgrades were temporary. Id. ¶ 27F, App. A-48. On December 15, 1983, Caterpillar notified respondents that its San Leandro plant would close and that they would be laid off.

Page 390

On December 17, 1984, respondents filed an action based solely on state law in California state court, contending that Caterpillar "breached [its] employment agreement by notifying [respondents] that the San Leandro plant would be closed and subsequently advising [respondents] that they would be terminated" without regard to the individual employment contracts. Id. ¶ 32, App. A-49.3 Caterpillar then removed the action to federal court, arguing that removal was proper because any individual employment contracts made with respondents "were, as a matter of federal substantive labor law, merged into and superseded by the . . . collective bargaining agreements." Petition for Removal, App. A-36. Respondents denied that they alleged any federal claim and immediately sought remand of the action to the state court. In an oral opinion, the District Court held that removal to federal court was proper, and dismissed the case when respondents refused to amend their complaint to attempt to state a claim under § 301 of the LMRA. App. A-4.

The Court of Appeals for the Ninth Circuit reversed, holding that the case was improperly removed. 786 F.2d 928 (1986). The court determined that respondents' state-law claims were not grounded, either directly or indirectly, upon rights or liabilities created by the collective-bargaining agreement. Caterpillar's claim that its collective-bargaining agreement with the Union superseded and extinguished all previous individual employment contracts alleged by respondents was deemed irrelevant. The court labeled this argument a "defensive allegation," "raised to defeat the [respondents'] claims grounded in those independent contracts." Id., at 936. Since respondents' cause of action did not require interpretation or application of the collective-bargaining agree-

Page 391

ment, the court concluded that the complaint did not arise under § 301 and was not removable to federal court.4

We granted certiorari, 479 U.S. 960, 107 S.Ct. 455, 93 L.Ed.2d 401 (1986), and now affirm.

II
A.

The Court recently set forth in some detail "[t]he century-old jurisdictional framework governing removal of federal

Page 392

question cases from state into federal courts," Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55...

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8831 practice notes
  • Mattel, Inc. v. Bryant, No. CV 04-9059 NM (RNBX).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • March 4, 2005
    ...under § 1331 is proper only when a federal question appears on the face of a well-pled complaint. See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). As a result, a plaintiff—as master of the complaint— "may avoid federal jurisdiction by exclus......
  • Lynchburg Range & Training v. Northam, Case No. 6:20-cv-00020
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
    • April 22, 2020
    ...only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams , 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). This means that affirmative defenses, counter arguments, 455 F.Supp.3d 242 or federal questions that......
  • Retail Prop. Trust v. United Bhd. of Carpenters & Joiners of Am., No. 12–56427.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • September 23, 2014
    ...the parties were not diverse, the Mall could not have filed its suit in federal court in the first instance. Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Even if the Union anticipated raising preemption as a federal defense, [768 F.3d 947] that wou......
  • Jaramillo v. Frewing, No. CIV 17-0673 JB/SCY
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • August 28, 2018
    ...exists when "a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing Gully v. First Nat'l Bank, 299 U.S. 109, 112–13, 57 S.Ct. 96, 81 L.Ed. 70 (1936) ). As "th......
  • Request a trial to view additional results
8851 cases
  • Mattel, Inc. v. Bryant, No. CV 04-9059 NM (RNBX).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • March 4, 2005
    ...under § 1331 is proper only when a federal question appears on the face of a well-pled complaint. See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). As a result, a plaintiff—as master of the complaint— "may avoid federal jurisdiction by exclus......
  • Lynchburg Range & Training v. Northam, Case No. 6:20-cv-00020
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
    • April 22, 2020
    ...only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams , 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). This means that affirmative defenses, counter arguments, 455 F.Supp.3d 242 or federal questions that......
  • Retail Prop. Trust v. United Bhd. of Carpenters & Joiners of Am., No. 12–56427.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • September 23, 2014
    ...the parties were not diverse, the Mall could not have filed its suit in federal court in the first instance. Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Even if the Union anticipated raising preemption as a federal defense, [768 F.3d 947] that wou......
  • Jaramillo v. Frewing, No. CIV 17-0673 JB/SCY
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • August 28, 2018
    ...exists when "a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing Gully v. First Nat'l Bank, 299 U.S. 109, 112–13, 57 S.Ct. 96, 81 L.Ed. 70 (1936) ). As "th......
  • Request a trial to view additional results
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