Douglas v. E.G. Baldwin & Associates, Inc.

• Decision Date: 04 August 1998
• Docket Number: No. 97-3588,97-3588
• Parties: 74 Empl. Prac. Dec. P 45,482, 135 Lab.Cas. P 33,705, 4 Wage & Hour Cas.2d (BNA) 1409 Sheila R. DOUGLAS, Plaintiff-Appellant, v. E.G. BALDWIN & ASSOCIATES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 604

150 F.3d 604

74 Empl. Prac. Dec. P 45,482, 135 Lab.Cas. P 33,705,

4 Wage & Hour Cas.2d (BNA) 1409

Sheila R. DOUGLAS, Plaintiff-Appellant, v. E.G. BALDWIN & ASSOCIATES, INC., Defendant-Appellee.

No. 97-3588.

United States Court of Appeals, Sixth Circuit.

Submitted June 12, 1998.

Decided Aug. 4, 1998.

Robert W. Bryce (briefed), Teresa Dewey Bacho (briefed), McCrory & Clark, Toledo, Ohio, Schlageter, Breier & Bryce, Oregon, Ohio, for Plaintiff-Appellant.

Robert J. Valerian (briefed), Steven M. Moss (briefed), Kahn, Kleinman, Yanowitz & Arnson, Cleveland, Ohio, for Defendant-Appellee.

Before: NELSON and RYAN Circuit Judges; ROSEN, District Judge. ^*

ROSEN, District Judge.

I. INTRODUCTION

Plaintiff Sheila R. Douglas ("Douglas") initiated this action against her employer, Defendant E.G. Baldwin and Associates ("Baldwin"), claiming she was not offered an equivalent position when she returned from her maternity leave, in violation of the Family and Medical Leave Act. Although Baldwin did not employ the requisite number of employees to fall with the ambit of the Act itself, the District Court ruled that Baldwin had, through its conduct and representations, modified its at-will employment relationship with Plaintiff by effectively adopting the terms of the Act and the corresponding obligations, thereby exposing Baldwin to potential liability for breach of contract. Although not raised by the parties, the threshold question raised by this appeal is whether federal question jurisdiction exists where an employer who does not employ a sufficient number of employees to come within the ambit of the Family and Medical Leave Act has nevertheless explicitly adopted its policies as its own. For the following reasons, we find that it does not, and that the District Court erred by failing to recognize that because Baldwin did not fall within the statutory definition of "employer" under the Family and Medical Leave Act, federal question jurisdiction over the case did not exist. Therefore, we dismiss the case for lack of subject matter jurisdiction. ¹

II. FACTS

Defendant E.G. Baldwin & Associates, Inc. is an Ohio corporation which sells and services medical diagnostic imaging equipment and supplies. Baldwin's corporate headquarters are located in Cleveland, Ohio, and it has several division offices, including one in Holland, Ohio. On August 3, 1992, Plaintiff Sheila R. Douglas began working at Baldwin's Holland office as a sales secretary. At the time the events giving rise to this action occurred, Baldwin employed 29 people in its Holland office.

When Baldwin hired Mrs. Douglas, she was given an Employee Handbook that set forth personnel policy statements and outlined performance requirements. After Congress enacted the Family and Medical Leave Act ("FMLA"), 29 U.S.C.A. §§ 2601 et. seq., Baldwin formally adopted the provisions of the FMLA by adding a new policy to its Employee Handbook, effective January 1.1994. The policy stated:

Employees who have worked for the Company for at least twelve (12) months and at least 1,250 hours during the prior twelve (12) months may take up to twelve (12) weeks of unpaid Family and Medical Leave (hereinafter "leave"). * * *

Baldwin also developed forms which had to be completed upon the exercise of the employee's leave rights, and specifically referenced the FMLA. Unlike the FMLA, which applies only to worksites with minimum of 50 employees, the policy expressed in the Handbook did not restrict the availability of family and medical leave based on the size of the division offices.

On December 19, 1994, Mrs. Douglas, having by this time been promoted to the position of image processing coordinator, requested a leave of absence from work due to her impending child birth. Upon Douglas' return from leave, Defendant Baldwin informed her that the image processing coordinator position had been eliminated pursuant to a corporate restructuring, and offered her three alternative positions: sales secretary, receptionist, and customer service representative. Plaintiff claimed that none of these positions were "equivalent" to the position she held at the commencement of her leave, as required by the Act. ²

III. DISTRICT COURT'S DECISION

The District Court determined that although Defendant did not technically come within the statutory ambit of the Act, Defendant had voluntarily agreed to abide by the terms of the Act in its employment contract with Plaintiff. Neither of the parties disputed or raised this ruling on appeal.

The District Court also ruled that Defendant satisfied its contractual obligation to Plaintiff by complying with the terms of the Act. Specifically, the District Court ruled that the position of secretary, offered to Mrs. Douglas at the end of her leave, was equivalent to the position of image processing coordinator which Plaintiff held at the commencement of her leave. Thus, because Defendant offered Plaintiff a position equivalent to the position she held before her leave, it satisfied the requirements of the FMLA.

IV. ANALYSIS

"Nothing is to be more jealously guarded by a court than its jurisdiction." In re Mooney, 841 F.2d 1003, 1006 (9th Cir.1988) (overruled on other grounds by Partington v. Gedan, 923 F.2d 686 (9th Cir.1991)). The primacy of jurisdiction is evident, for without it courts have no power. Jurisdiction defines the contours of the authority of courts to hear and decide cases, and, in so doing, it dictates the scope of the judiciary's influence. To a great extent, the legitimacy of the judiciary as a co-equal branch of government in our tripartite system of governance relies upon the ability of courts to resist the temptation of exerting their authority beyond their constitutionally defined role and usurping the power of the other branches, for "there is no liberty if the power of judging be not separated from the legislative and executive powers." The Federalist Papers, No. 78 (Alexander Hamilton) (citing Montesquieu, Spirit of Laws, Vol. I., p. 181).

Federal courts are courts of limited jurisdiction which may exercise only those powers authorized by Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). See also, O'Melveny & Myers v. FDIC, 512 U.S. 79, 90, 114 S.Ct. 2048, 129 L.Ed.2d 67 (1994) (Stevens, concurring). Therefore, "[i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Kokkonen, 511 U.S. at 377, 114 S.Ct. 1673 (cites omitted). The first and fundamental question presented by every case brought to the federal courts is whether it has jurisdiction to hear a case, even where the parties concede or do not raise or address the issue. Bender v. Williamsport Area School Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986); Delaware v. VanArsdall, 475 U.S. 673, 692, 106 S.Ct. 1431, 89 L.Ed.2d 674(1986) (Stevens, dissenting) (citing Mansfield C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884)). Quite aside from whether the parties raise jurisdictional issues themselves--or even attempt to consent or agree to federal jurisdiction--federal courts have an independent obligation to investigate and police the boundaries of their own jurisdiction. Ebrahimi v. City of Huntsville Board of Education, 114 F.3d 162, 165 (11th Cir.1997) ("Federal courts have an independent obligation to police the constitutional and statutory limits on our jurisdiction.") (citing Minority Police Officers Ass'n v. City of South Bend, 721 F.2d 197, 199 (7th Cir.1983)).

In making this threshold determination, we begin by examining the underpinnings of federal court jurisdiction. The jurisdiction of federal courts originates in Article III, Section 1 of the United States Constitution, which states that, "the judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." Congress has defined the province of federal judicial authority in two basic jurisdictional statutes: (1) 28 U.S.C.A. § 1331, which confers jurisdiction upon federal courts over civil actions "arising under the Constitution, laws, or treatises of the United States;" and, (2) 28 U.S.C.A. § 1332, which confers jurisdiction upon federal courts in civil actions involving citizens of different states, also known as "diversity jurisdiction." ³ These statutes, taken together, comprise the federal courts' subject matter jurisdiction: that is, what cases federal courts are able to hear and decide.

In this case, removal was based on § 1331 because Plaintiff's discrimination claim purportedly arose under the Family and Medical Leave Act of 1993, 29 U.S.C.A. §§ 2601, et seq. ⁴ As noted, the District Court retained jurisdiction over the case even after determining that Defendant Baldwin did not employ 50 or more employees, such that it could be considered an "employer" within the purview of the Act. ⁵ The jurisdictional issue presented by these circumstances is whether a federal court has subject matter jurisdiction ab initio where a company does not meet the statutory definition of "employer" because it does not employ the requisite number of employees, even though the employer may have adopted the policies of the Act and the parties do not contest jurisdiction. We hold that it does not.

While the existence of this jurisdictional prerequisite may not be immediately apparent from the text of the statute itself, an examination of relevant case law reveals that courts have consistently held that where a company does not employ the requisite statutory number of employees to be considered an "employer" under the relevant act, federal subject matter jurisdiction does not exist. See, Armbruster v. Quinn, 711 F.2d 1332, 1335 (6th Cir.1981) (central issue in case was whether the plaintiff's case was...