Ethridge v. Harbor House Restaurant

Decision Date17 November 1988
Docket Number87-6379,Nos. 87-5776,s. 87-5776
Parties130 L.R.R.M. (BNA) 2001, 57 USLW 2337, 110 Lab.Cas. P 10,862 John W. ETHRIDGE, Jr., Plaintiff-Appellant, v. HARBOR HOUSE RESTAURANT, an unknown entity; Jim Murphy, individually and as agent of Harbor House Restaurant, and Does 1-25, Defendants-Appellees. John W. ETHRIDGE, Jr., Plaintiff/Counter-Defendant/Appellant, v. SAN DIEGO CULINARY CONCEPTS, d/b/a Harbor House; Jim Murphy, Individually and as agent of San Diego Culinary Concepts and Does 1-25, Defendants/Counter- Plaintiffs/Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Marie Backes, Backes & Friesen, San Diego, Cal., for plaintiff/counter-defendant/appellant.

Scott A. Wilson and Jody A. Landry, Littler, Mendelson, Fastiff & Tichy, P.C., San Diego, Cal., for defendants/counter-plaintiffs/appellees.

Appeal from the United States District Court for the Southern District of California.

Before HUG, POOLE and THOMPSON, Circuit Judges.

DAVID R. THOMPSON, Circuit Judge:

In these consolidated appeals, John W. Ethridge, Jr. ("Ethridge") appeals from the district court's orders dismissing two complaints filed by him in California state court, but which Harbor House Restaurant ("Harbor House") 1 removed to federal district court on the basis of federal question jurisdiction. See 28 U.S.C. Sec. 1441(b). Ethridge contends that Harbor House improperly removed his first complaint (the "1986 complaint") because the district court lacked jurisdiction over the case. Ethridge argues that the district court should have remanded the action to state court instead of dismissing it on the ground the action was preempted by the exclusive jurisdiction of the National Labor Relations Board ("NLRB"). After the court dismissed the 1986 complaint, Ethridge filed a second complaint (the "1987 complaint") in state court. Harbor House then removed this complaint to federal court. The district court dismissed the 1987 complaint. It concluded that Ethridge's claims were barred by the claim preclusive effect of the prior order dismissing the 1986 complaint, 2 and that any new claims asserted by Ethridge were preempted by sections 7 and 8 of the National Labor Relations Act, 29 U.S.C. Secs. 157, 158. Ethridge contends the district court erred in dismissing his 1986 and 1987 complaints.

We have jurisdiction over these consolidated appeals pursuant to 28 U.S.C. Sec. 1291, and we reverse. We conclude that the district court lacked subject matter jurisdiction over the removed 1986 complaint and therefore should not have dismissed it, but should have remanded the action to California state court. The order dismissing the 1986 complaint should not have been given claim preclusive effect with respect to the 1987 complaint. Because there was no basis for the exercise of removal jurisdiction over the 1987 complaint, the court was without power to dismiss it and should have remanded that action to state court as well.


From August 16, 1980, until September 23, 1985, John W. Ethridge, Jr., worked at Harbor House Restaurant pursuant to an oral employment agreement for an indefinite term. Ethridge began his employment at Harbor House as a busboy, but over the years he advanced to the position of bartender. On September 23, 1985, Jim Murphy, one of Harbor House's managers, fired Ethridge, ostensibly for poor job performance and failure to adhere to company policy. Murphy's decision rested on allegations contained in several so-called "shopper's reports," which he declined to show Ethridge at the time of his termination. Ethridge later learned that Murphy had fired him because of suspicions that Ethridge had conspired with one or more waitresses to steal, and had embezzled and stolen, from Harbor House.

On September 23, 1986, Ethridge filed but did not serve a complaint against Harbor House in California state court. On October 31, 1986, Ethridge filed and served a first amended complaint against Harbor House (the "1986 complaint"), in which he sought damages for his allegedly wrongful termination. In paragraphs 10-13 of this complaint, Ethridge alleged that he had engaged in union-organizing activities while at Harbor House. These factual allegations were incorporated by reference in each of Ethridge's nine causes of action. In a cause of action for breach of contract, Ethridge specifically charged that he was terminated in retaliation for his union-organizing efforts.

On November 26, 1986, Harbor House removed the 1986 complaint to federal district court, asserting federal question jurisdiction under 28 U.S.C. Sec. 1441(b) as the basis for removal jurisdiction. In its removal petition, Harbor House contended that Ethridge's retaliatory discharge claim fell within sections 7 and 8 of the National Labor Relations Act, 29 U.S.C. Secs. 157, 158 ("NLRA"), and therefore "arose under" the laws of the United States. The remaining claims were characterized as pendent state claims. On December 1, 1986, Harbor House moved to dismiss the 1986 complaint on the ground that Ethridge's claims were preempted by the exclusive jurisdiction of the National Labor Relations Board.

In response to Harbor House's motion, Ethridge sought Harbor House's agreement to a stipulated amendment of the 1986 complaint deleting paragraphs 10-13, which contained the union-organizing allegations as well as the claim for retaliatory discharge. Ethridge's counsel stated that upon further investigation, she had determined that Ethridge had not been fired because of his union-related activities. Harbor House refused to stipulate to this proposed amendment. As a result, on December 23, 1986, Ethridge unilaterally attempted to amend his complaint by filing a "Partial Dismissal and Order." This document purported to delete paragraphs 10-13 and the retaliatory discharge claim from the 1986 complaint. Contemporaneously with his attempted "Partial Dismissal," Ethridge moved to remand the action to state court, arguing that in view of the partial dismissal, no allegations supporting federal question jurisdiction remained in the complaint. In the alternative, Ethridge contended the district court lacked subject matter jurisdiction over the removed complaint and that it therefore was required to remand the action under 28 U.S.C. Sec. 1447(c).

The district court denied Ethridge's motion to remand. It refused to sign his proposed dismissal order, and ruled that the proposed "Partial Dismissal" was ineffective to amend Ethridge's complaint to eliminate the basis for federal question jurisdiction. On appeal, Ethridge contends that Federal Rule of Civil Procedure 41(a)(1)(i) permits him to use a voluntary dismissal to delete one claim among several from his complaint. We disagree. Although we have not previously addressed this issue, we agree with those courts that have held a plaintiff may not use Rule 41(a)(1)(i) to dismiss, unilaterally, a single claim from a multi-claim complaint. E.g., Management Investors v. United Mine Workers, 610 F.2d 384, 394 & n. 22 (6th Cir.1979); Exxon Corp. v. Maryland Cas. Co., 599 F.2d 659, 662 (5th Cir.1979); United States v. Outboard Marine Corp., 104 F.R.D. 405, 414 (N.D.Ill.1984); C. Van Der Lely N.V. v. F.lli Maschio S.n.c., 561 F.Supp. 16, 19-20 (S.D.Ohio 1982); Smith, Kline & French Labs. v. A.H. Robins Co., 61 F.R.D. 24, 27-29 (E.D.Pa.1973). Each of these cases relies on the Moore treatise on federal procedure, which convincingly argues that Federal Rule of Civil Procedure 15(a) is the appropriate mechanism "[w]here a plaintiff desires to eliminate an issue, or one or more but less than all of several claims, but without dismissing as to any of the defendants." 5 J. Moore, J. Lucas & J. Wicker, Moore's Federal Practice p 41.06-1, at 41-83 to -84 (1987). The cases relied on by Ethridge are not to the contrary because they either involve the use of Rule 41 to effect a complete dismissal as to all defendants, see, e.g., Miller v. Reddin, 422 F.2d 1264, 1266 (9th Cir.1970), or a partial dismissal of all claims against one codefendant, see, e.g., Brown v. Texas & Pac. R.R., 392 F.Supp. 1120 (W.D.La.1975).

In granting Harbor House's motion to dismiss the 1986 complaint, the district court concluded that dismissal was proper under either of two theories: First, because Ethridge's claims arose under sections 7 and 8 of the NLRA, 29 U.S.C. Secs. 157, 158, they were within the NLRB's exclusive jurisdiction and, therefore, the district court lacked subject matter jurisdiction of the dispute. In the alternative, the court concluded that under the doctrine of "derivative jurisdiction," it lacked jurisdiction over the removed complaint because the state court did not have subject matter jurisdiction in the first instance. 3

On March 6, 1987, Ethridge filed a new complaint in California state court (the "1987 complaint"). This complaint contained no allegations relating to union-organizing activities by Ethridge and did not state a claim for retaliatory discharge. Harbor House filed a counter-claim against Ethridge in this state court action. It then removed the case to federal district court. In its removal petition, Harbor House contended federal question jurisdiction existed because (1) provisions of the Employee Retirement Income Security Act, 29 U.S.C. Secs. 1001 et seq. ("ERISA") preempted Ethridge's claim for tortious discharge; (2) the 1987 complaint was "artfully pleaded" to avoid federal jurisdiction; or (3) the claims were preempted by the NLRA and the NLRB's exclusive jurisdiction.

After it had removed the case to federal court, Harbor House moved to dismiss the 1987 complaint. It based this motion on Ethridge appeals from the district court's order dismissing the 1986 complaint and from the district court's order dismissing the 1987 complaint. The two appeals have been consolidated.

                the alleged claim preclusive effect of the order dismissing the 1986

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