Crosby v. Cooper B-Line, Inc., 13–1054.

• Decision Date: 07 August 2013
• Docket Number: No. 13–1054.,13–1054.
• Citation: 725 F.3d 795
• Parties: Philip M. CROSBY, Plaintiff–Appellant, v. COOPER B–LINE, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

725 F.3d 795

Philip M. CROSBY, Plaintiff–Appellant,

v.COOPER B–LINE, INC., Defendant–Appellee.

No. 13–1054.

United States Court of Appeals, Seventh Circuit.

Argued June 6, 2013.

Decided Aug. 7, 2013.

Thomas F. Crosby, III (submitted), Winters, Brewster, Crosby & Schafer, Marion, IL, for Plaintiff–Appellant.

Bryan D. Lemoine, Thomas O. McCarthy, McMahon Berger, PC, St. Louis, Mo, for Defendant–Appellee.

Before POSNER, ROVNER, and WOOD, Circuit Judges.

WOOD, Circuit Judge.

The Supreme Court has held that Section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, preempts all state-law claims that require the interpretation of a collective bargaining agreement (CBA) or any other covered labor contract. This rule, which goes under the clumsy name of “complete preemption” (a better term might be “complete displacement”), covers not only obvious disputes over labor contracts, but also any claim masquerading as a state-law claim that nevertheless is deemed “really” to be a claim under a labor contract. These cases are understood to arise under federal law (Section 301 of the LMRA) from their inception. Subject-matter jurisdiction in the federal court thus rests on 28 U.S.C. § 1331, and it makes no difference if the parties are nondiverse or if the plaintiff's complaint is couched in state-law terms.

Cooper B–Line, Inc. contends that this is one such case. Although Philip Crosby, a former Cooper employee, filed a lawsuit in state court that asserted only a state-law claim against the company—the Illinois tort of retaliatory discharge—Cooper contends that the suit is a disguised Section 301 action that arises under federal law. Cooper removed the case to federal court on this basis and now asks us to dismiss it in its entirety because Crosby failed to exhaust his remedies under the CBA. Crosby counters that removal was improper and asks us to return his case to state court. We conclude that this case is not materially different from the one before the Supreme Court in Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988), where the Court rejected a finding of complete preemption. We do too, so we reverse the district court's judgment on the merits in Cooper's favor and order the case remanded to the state court.

I

Cooper describes itself as “a diversified global manufacturer of electrical components and tools,” see Cooper Indus., http:// www. cooper industries. com/ content/ public/ en/ company. html (last visited Aug. 5, 2013); it has seven operating divisions, one of which is Cooper B–Line, id. Crosby worked in the “flex tray” department of Cooper's facility in Pinckneyville, Illinois. On July 28, 2010, a portion of Crosby's middle finger was amputated as he was attempting to remove a piece of flex tray metal from a master bundle. Crosby had instructed a co-worker to kick the bundle in order to dislodge the pieces as he removed them. The company frowned on this procedure, precisely because it could lead to serious injury. Crosby sought medical attention and filed a claim for medical and temporary total disability benefits under the Illinois Workers' Compensation Act. 820 ILCS § 305.

Crosby returned to work on September 13, 2010. Following a conversation with management in which Crosby stubbornly maintained that he did not intend to stop using the “kicking method” to remove metal from the master bundles, Cooper suspended him for three days without pay as discipline for using an unsafe work practice. The “Disciplinary Corrective Action Discussion Worksheet” accompanying the suspension further stated that any violation of Cooper's safety policies for the duration of Crosby's employment would result in immediate termination of his job. Dennis Zimmerman, president of Crosby's union (Local 7252, United Steelworkers of America), filed a grievance on Crosby's behalf to protest the suspension.

After returning from his suspension, Crosby was given additional safety training during which, he alleges, Cooper told him about numerous new safety rules and procedures. Crosby then resumed work in the flex tray department, but, within hours, Cooper's plant safety specialist accused him of violating one of the new safety rules by tossing a wooden pallet. Crosby denied that he did so.

Cooper personnel then convened a meeting with Crosby and Zimmerman to discuss the alleged safety violation. At some point, Crosby was asked to leave the meeting, and the Cooper representative told Zimmerman that Crosby would be fired. Zimmerman left the meeting to give Crosby the bad news; he suggested that Crosby ask Cooper to call its action a “permanent layoff with no recall rights,” rather than an outright termination. If it did so, Crosby would be able to obtain unemployment benefits and a neutral job reference. Crosby followed Zimmerman's advice and asked Cooper for the more favorable label. Cooper accepted on the condition that Crosby agree to dismiss the grievance filed in response to his three-day suspension. The parties' agreement was memorialized in a “grievance settlement” (drafted by Cooper), which states, in its entirety:

The United Steelworkers, the grievant and Cooper B–Line agree that [the suspensiongrievance] shall be settled on the following terms:

1. Grievant Phil Crosby's voluntary separation from the company shall be considered a permanent layoff without recall rights effective September 22, 2010.

2. Cooper B–Line will pay Phil Crosby all accrued 2010 vacation[.]

3. Cooper B–Line shall provide neutral employment references upon request in the future.

This settlement is without prejudice to the contractual rights of either party and shall not constitute a precedent with respect to any like or related matter in the future.

Crosby now says that the entire process leading up to his signing the grievance settlement was a sham. He believes that Cooper's real reason for discharging him had nothing to do with safety violations. Instead, he asserts, it was because he filed a workers' compensation claim after the amputation of his finger. In support of this theory, he points to the timing of his firing, the sudden appearance of new safety rules to which he was subject, several emails from Cooper personnel expressing a desire to fire him or otherwise send a “hard message” immediately following the July 28 accident, and emails from Cooper's Human Resources manager expressing concern that transferring Crosby to a different part of the plant would result in a more costly workers' compensation award.

This view led Crosby to file a suit in the Circuit Court for the Twentieth Judicial Circuit, Perry County, Illinois, in 2011, alleging that he was fired in retaliation for asserting his right to medical and disability payments in violation of the Illinois Workers' Compensation Act. 820 ILCS § 305. Cooper removed the case to the Southern District of Illinois. Because the parties are non-diverse, the only possible basis for subject-matter jurisdiction was the presence of a federal question under 28 U.S.C. § 1331. Cooper argued that Crosby's retaliatory discharge claim was really a claim under his CBA and thus was necessarily covered by Section 301. See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 393–94, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Crosby did not move to remand.

After conducting discovery, Cooper moved for summary judgment. The district court granted the motion, finding that Crosby's retaliatory discharge claim failed on the merits. On appeal, Crosby now contends for the first time that the district court had no subject-matter jurisdiction over the case and asks that it be remanded to state court. For its part, Cooper defends the district court's judgment, but it also argues that the court should not have reached the merits of the case for a different reason. In its view, because the retaliatory discharge claim should have been characterized as a Section 301 claim, it could not be filed unless or until Crosby exhausted all contractual remedies under his CBA before resorting to federal court. Because Crosby did not do so, Cooper argues that this is an independent reason why his suit should have been dismissed. As we explain below, we have no need to reach the latter argument.

II

A

This case turns on a single question: does Section 301 of the LMRA govern the issues that Crosby was attempting to raise in his state-law claim for retaliatory discharge (or, put conventionally, does the LMRA completely preempt Crosby's state-law claim). If the answer is yes, then the case was properly dismissed. If the answer is no, then there is no federal question in the case and the district court lacked jurisdiction to decide it. Although Crosby did not raise subject—matter jurisdiction before the district court, this objection is not subject to waiver. See 28 U.S.C. § 1447(c); Henderson ex rel. Henderson v. Shinseki, ––– U.S. ––––, 131 S.Ct. 1197, 1202, 179 L.Ed.2d 159 (2011); see also Fed. Sav. & Loan Ins. Corp. v. Quinn, 419 F.2d 1014, 1016 (7th Cir.1969). The federal courts have an independent “obligation at each stage of the proceedings to ensure that [they] have subject matter jurisdiction over the dispute.” Ne. Rural Elec. Membership Corp. v. Wabash Valley Power Ass'n, Inc., 707 F.3d 883, 890 (7th Cir.2013). We review questions of subject-matter jurisdiction and the propriety of removal to federal court de novo. Farnik v. Fed. Deposit Ins. Corp., 707 F.3d 717, 721 (7th Cir.2013).

Ordinarily, the basis for federal-question jurisdiction must be apparent from the face of the plaintiff's well-pleaded complaint. See Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908); see also Ne. Rural Elec. Membership, 707 F.3d at 890. The Supreme Court, however, has long recognized an “independent corollary” to the well-pleaded complaint rule that it has dubbed the “complete preemption doctrine.” Caterpillar, 482 U.S. at 393, 107 S.Ct. 2425. At its base,...