Costa v. Verizon N.J., Inc.

• Decision Date: 27 March 2013
• Docket Number: Civil Action No. 12–cv–3424.
• Citation: 936 F.Supp.2d 455
• Parties: Michael COSTA, Plaintiff, v. VERIZON NEW JERSEY, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

936 F.Supp.2d 455

Michael COSTA, Plaintiff,

v.VERIZON NEW JERSEY, INC., Defendant.

Civil Action No. 12–cv–3424.

United States District Court,

D. New Jersey.

March 27, 2013.

Colleen M. Ready, Esquire, Lisa A. Green, Esquire, Margolis Edelstein, Mount Laurel, NJ, for Plaintiff.

Mary B. Rogers, Esquire, Jeffrey Adam Gruen, Day Pitney LLP, Parsippany, NJ, for Defendant.

OPINION

HILLMAN, District Judge.

Presently before the Court is Plaintiff Michael Costa's Motion to Remand this matter to New Jersey state court. For the reasons that follow, the Motion will be granted.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Michael Costa is a New Jersey resident and former employee of Defendant Verizon of New Jersey, Inc. (“Verizon”). Prior to his discharge in 2009, Costa had been a Verizon employee for over twenty years. (Compl. ¶ 5.) During his term of employment, Costa allegedly became aware that a co-worker was performing his job duties while under the influence of drugs and alcohol. ( Id. ¶ 6.) Costa allegedly further determined that the co-worker was improperly accessing personal information on customers' computers during his employment. ( Id.) Costa believed his co-worker was unsuitable for his job and was endangering the safety of Verizon customers, and therefore reported him to his supervisor. ( Id. ¶ 6, 7.) Costa was subsequently terminated from employment at Verizon. ( Id. ¶ 7.) Costa presently contends that he was wrongfully discharged in retaliation for reporting his co-worker's conduct. ( Id. ¶ 5.) Defendant Verizon, however, maintains that it terminated Costa because he made racial slurs at the workplace and had numerous prior instances of misconduct.

Plaintiff filed a complaint in New Jersey state court on June 28, 2010, alleging violations of the New Jersey Conscientious Employee Protection Act (“CEPA”), N.J.S.A. 34:19–1 et. seq. On February 7, 2012, Plaintiff filed a First Amended Complaint in state court, in which he added claims for breach of contract, wrongful discharge, and breach of the covenant of good faith and fair dealing, which he based on Verizon's Code of Conduct employee manual. On May 16, 2012, Plaintiff once again amended his complaint. In his Second Amended Complaint, Costa supplemented his claims by basing them on both the Code of Conduct and the collective bargaining agreement between Verizon and his union. Defendant removed the case to federal court on June 6, 2012 alleging that the Court has federal question subject matter jurisdiction over disputes related to collective bargaining agreements because they are preempted by Section 301 of the federal Labor Management Relations Act (“LMRA”). Plaintiff thereafter filed the instant Motion to Remand this matter back to New Jersey state court on July 3, 2012. Defendants responded in opposition on July 23, 2012. Plaintiff subsequently filed a Third Amended Complaint on November 21, 2012. In his Third Amended Complaint, Costa removed all references to the collective bargaining agreement, and once again solely bases his claims on the Verizon Code of Conduct, thereby attempting to eliminate the federal question from suit.¹

II. LEGAL STANDARD

The removability of a legal matter is determined from the plaintiff's pleadings at the time of removal. See Am. Fire & Cas. Co. v. Finn, 341 U.S. 6, 14, 71 S.Ct. 534, 95 L.Ed. 702 (1951). It is well established that a defendant may remove a civil action filed in state court to federal court if the latter would have had original jurisdiction to hear the matter in the first instance. 28 U.S.C. § 1441(b); Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir.1990). The removing defendant bears the burden of establishing jurisdiction and compliance with all pertinent procedural requirements. Id. Once the case has been removed, however, the court may nonetheless remand it to state court if the removal was procedurally defective or subject matter jurisdiction is lacking. 28 U.S.C. § 1447(c). Furthermore, any doubts should be resolved in favor of remand. Boyer, 913 F.2d at 111.

III. DISCUSSION

Plaintiff avers that this Court lacks subject matter jurisdiction over the instant dispute, and that this matter should therefore be remanded back to state court. In the alternative, Plaintiff also argues that Defendant's removal was untimely. Defendant, on the other hand, asserts that, despite his stated intentions to withdraw his specific references to the collective bargaining agreement (as later manifested in the Third Amended Complaint), Costa's claims are nonetheless “substantially dependent on” and “inextricably intertwined with” the terms of the agreement, and this Court therefore retains jurisdiction.² (Def.'s Resp. Opp'n at 9.) Defendant also asserts that its removal of this case to federal court was timely because it did not have a good faith basis to remove prior to the filing of Plaintiff's Second Amended Complaint on May 16, 2012.

A. Complete Preemption

Under the doctrine of complete preemption, the preemptive force of a federal law may “displace entirely any state cause of action.” Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S. Ca., 463 U.S. 1, 23, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). As explained by the Supreme Court of the United States, the doctrine operates to “convert[ ] an ordinary state common-law complaint into one stating a federal claim[.]” Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987).

One such instance of complete preemption occurs in the context of § 301(a) of the LMRA, which states in relevant part as follows:

Suits for violations of contracts between an employer and a labor organization representing employees in an industry affecting commerce ... may be brought in any District Court of the United States having jurisdiction over the parties.

29 U.S.C. § 185(a). In enacting § 301 of the LMRA, Congress vested jurisdiction in the federal courts over suits for contract disputes between employers and labor unions representing certain industries. See Textile Workers v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). In Teamsters v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962), the Supreme Court concluded that § 301 of the LMRA completely preempts any state-law cause of action for a violation of a collective bargaining agreement. Id. at 103, 82 S.Ct. 571. Subsequently, in Allis–Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985), the Court further extended the reach of federal preemption in this area, finding that the preemptive force of § 301 applied to tort, as well as contract, suits implicating “questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement.” Id. at 211, 105 S.Ct. 1904. Indeed, the Supreme Court has recognized that:

[T]he pre-emptive force of § 301 is so powerful as to displace entirely any state cause of action “for violation of contracts between an employer and a labor organization.” Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301.

Franchise Tax Bd., 463 U.S. at 23, 103 S.Ct. 2841. In Lueck, however, the Supreme Court also made clear that “not every dispute concerning employment, or tangentially involving a provision of a collective bargaining agreement, is pre-empted ... [because] it would be inconsistent with congressional intent ... to preempt state rules that ... establish rights and obligations independent of a labor contract.” Id. As such, a state law claim will be found to be preempted by § 301 if the claim is: (1) founded directly on rights created by a collective-bargaining agreement, or (2) substantially dependent upon an analysis of a collective bargaining agreement. Shanefelter v. U.S. Steel Corp., 784 F.Supp.2d 550, 558 (W.D.Pa.2011) (quoting Caterpillar, Inc. v. Williams, 482 U.S. 386, 394, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)).

In the instant case, Plaintiff argues that, since he has removed references to the collective bargaining agreement in his pleadings, the federal question has likewise been removed from suit. Defendant, on the other hand, asserts that, despite the fact that Plaintiff no longer expressly refers to the collective bargaining agreement, this matter is nonetheless federally preempted because the resolution of Costa's claims is substantially dependent upon and inextricably intertwined with an analysis of the larger collective bargaining agreement.

We are not the first to confront this issue, as both our Court of Appeals and district courts within its appellate jurisdiction have previously addressed the intersection of federal and state law in employment contract disputes. See Johnson v. NBC Universal, Inc., 409 Fed.Appx. 529 (3d Cir.2010); Fischer v. G4S Secure Solutions U.S.A., Inc., No.Civ.A.10–6792, 2011 WL 3859742 (D.N.J. Aug. 31, 2011) (Simandle, J.); Cole v. Pathmark of Fairlawn, 672 F.Supp. 796 (D.N.J.1987); Henderson v. Merck & Co., Inc., 998 F.Supp. 532, 536–540 (E.D.Pa.1998). In Fischer, the plaintiff brought suit against his former employer and his union in state court. Id. at *1. The employer removed the case to federal court on the basis that the union's presence in the suit mandated preemption. Id. at *2. The union was subsequently dropped as a party and all claims pertaining to it were dismissed. Id. Accordingly, the only claim remaining against the employer was for an alleged breach of contract for failure to abide by promises in the employee manual ³—a contract the plaintiff argued was separate and apart from his collective bargaining agreement with the union. Id. More specifically, in the employee manual, the defendant covenanted to treat employees fairly and confidentially. Id. at *3. The collective bargaining agreement, on the other hand, contained a provision stating the following:

This Agreement shall not be...