Galveston Linehandlers v. Longshore. Local # 20

• Decision Date: 15 May 2001
• Docket Number: No. CIV. A. G-01-015.,CIV. A. G-01-015.
• Parties: GALVESTON LINEHANDLERS, INC. and Gulf Coast Linehandlers, Inc. v. INTERNATIONAL LONGSHORE MEN'S ASSOCIATION, Local Number # 20 et al.
• Court: U.S. District Court — Southern District of Texas

140 F.Supp.2d 741

GALVESTON LINEHANDLERS, INC. and Gulf Coast Linehandlers, Inc. v. INTERNATIONAL LONGSHORE MEN'S ASSOCIATION, Local Number # 20 et al.

No. CIV. A. G-01-015.

United States District Court, S.D. Texas, Galveston Division.

May 15, 2001.

COPYRIGHT MATERIAL OMITTED

Christopher B Ramey, Kilburn Jones et al, Houston, TX, for Galveston Linehandlers, Inc., Gulf Coast Linehandlers, Inc., plaintiffs.

James R. Watson, Jr., ILA, S. Atlantic & Gulf Coast District, Andrew J. Mytelka, Greer Herz & Adams, Galveston, TX, for International Longshoremen's Association, Local Number # 20, Michael D. Moore, Adolph D. Suderman, III, defendants.

ORDER GRANTING PLAINTIFFS' MOTION TO REMAND

KENT, District Judge.

Plaintiffs brought suit in state court against Defendants alleging various state law causes of action. Defendants removed the case, arguing that Plaintiffs' claims are completely preempted by federal law. Now before the Court is Plaintiffs' Motion to Remand. For the reasons stated below, Plaintiffs' Motion is GRANTED. In doing so, the Court notes that the facts of this case are so unique that it is not only a case of first impression, it is likely a case of last impression.

I. BACKGROUND

Plaintiffs Gulf Coast Linehandlers, Inc. ("Gulf Coast") and Galveston Linehandlers, Inc. ("Galveston Linehandlers") are corporations which provide mooring services for vessels in the Port of Galveston. Defendant International Longshoremen's Association, Local Number # 20 ("Local # 20") is a labor union which provided labor to Gulf Coast. Defendants Michael D. Moore ("Moore") and Adolph D. Suderman III ("Suderman") are individuals who allegedly created a rival mooring services company, Suderman Stevedores, with the help of Local # 20 officials. If Plaintiffs' allegations are believed, the Court is presented with the following factual scenario. In August of 1997, Gulf Coast entered into a written agreement with Local # 20 to utilize Local # 20 labor for the mooring of vessels. In November of 1998, this agreement was terminated through a no fault provision, but Gulf Coast continued to utilize Local # 20 labor. Almost two years later, in September of 2000, a conflict ensued between Gulf Coast and Local # 20 regarding the use by Gulf Coast of labor provided by International Longshoreman's Association 1504. Local # 20 officials allegedly began interfering in some unspecified way with parties with whom Gulf Coast had contracts. In October of 2000, Gulf Coast and Local # 20 held negotiations in which Local # 20 officials allegedly promised to stop this interference and to present Gulf Coast's proposed labor agreement to Local # 20 membership for their approval at their next meeting on November 1, 2000. Based on these promises, Gulf Coast continued to use Local # 20 labor. Gulf Coast complains that: 1) their proposal was never presented to Local # 20 membership; 2) Local # 20 officials began a conspiracy to interfere with Gulf Coast's existing contracts; and 3) Local # 20 officials conspired with Defendants Moore and Suderman to create their own mooring service to steal Gulf Coast's business. Gulf Coast claims that as a result, K-Line America ("K-Line") cancelled its contracts with Gulf Coast in favor of Suderman Stevedores, resulting in a loss of revenue for Gulf Coast of approximately $10,000 annually. Gulf Coast brings claims against Defendants for: 1) economic duress and coercion; 2) tortious interference with contract and with business opportunities; 3) fraud, fraudulent inducement, and conspiracy to commit fraud; 4) negligent misrepresentation and gross negligence; and 5) promissory and equitable estoppel.

Galveston Linehandlers, the other Plaintiff in the case, also claims to have lost business contracts as a result of Defendants' alleged machinations. Plaintiffs' Complaint, however, fails to reveal what relationship, if any, Galveston Linehandlers had with Local # 20. It simply states that unlike Gulf Coast, Galveston Linehandlers did not rely on any representations made by Local # 20, but had it been aware of the covert activities, it would have taken "defensive measures" to protect its existing contracts. Galveston Linehandlers allegedly lost its contracts with Carnival Cruise Line and Solar Yang-Ming Line to Suderman Stevedores, resulting in a loss of revenue of approximately $57,000 annually. Thus, Galveston Linehandlers brings claims for: 1) economic duress and coercion; 2) tortious interference with contract and with business opportunities; 3) fraud, fraudulent inducement, and conspiracy to commit fraud; and 4) gross negligence.

Although Plaintiffs' Complaint alleges only state law causes of action, Defendants removed the case claiming that Plaintiffs' claims are preempted by the National Labor Relations Act, 29 U.S.C. § 151 et seq. ("NLRA" or "Act"), thus giving rise to jurisdiction under 28 U.S.C. § 1331.

II. ANALYSIS

A defendant may remove a state court action to federal court only if the action could have been originally filed in federal court. 28 U.S.C. § 1441(a); Caterpillar v. Williams, 482 U.S. 386, 391-92, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987); Wallace v. Ryan-Walsh Stevedoring Co., 708 F.Supp. 144, 150 (E.D.Tex. 1989). Where, like this case, there is no diversity jurisdiction, a federal question must exist for removal to be proper. Caterpillar, 482 U .S. at 392, 107 S.Ct. at 2429; Rheams v. Bankston, Wright & Greenhill, 756 F.Supp. 1004, 1008 (W.D.Tex.1991). Whether a federal question exists depends upon the well-pleaded complaint rule, which provides that the plaintiff's complaint governs the jurisdictional determination. Caterpillar, 482 U.S. at 392, 107 S.Ct. at 2429; Cedillo v. Valcar Enter., 773 F.Supp. 932, 934 (N.D.Tex.1991). If the complaint, on its face, contains no issue of federal law, then there is no federal question jurisdiction. Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct. 2841, 2846, 77 L.Ed.2d 420 (1983); Rheams, 756 F.Supp. at 1008. The fact that a federal defense may be raised to the plaintiff's action will not create federal question jurisdiction. Franchise Tax Board, 463 U.S. at 12, 103 S.Ct. at 2847; Powers v. South Cent. United Food & Commercial Workers Unions, 719 F.2d 760, 764 (5th Cir.1983). If there is neither diversity jurisdiction nor a federal question, the court must remand the suit to the state court whence it originated.

An important corollary to the well-pleaded complaint rule is the artful pleading doctrine. See 14A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3722 (1998). Although a plaintiff is the master of his complaint and may choose to assert only state law claims, a court will occasionally seek to determine whether the real nature of an action is federal, regardless of the plaintiff's characterization. For instance, under the complete preemption doctrine, federal law can so thoroughly preempt a field of state law that the plaintiff's complaint must be characterized as stating a federal cause of action, even if the complaint, on its face, contains only state law causes of action. See, e.g., Caterpillar, 482 U.S. at 393, 107 S.Ct. at 2430; Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 64, 107 S.Ct. 1542, 1547, 95 L.Ed.2d 55 (1987); Franchise Tax Board, 463 U.S. at 23-24, 103 S.Ct. at 2854; Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 675, 94 S.Ct. 772, 781, 39 L.Ed.2d 73 (1974). "In these situations the federal removal court will look beyond the letter of the complaint to the substance of the claim in order to assert jurisdiction." Wright et al., supra, § 3722. For complete preemption to adhere, the federal law must so completely preempt the field that any suit that sounds in that area necessarily is a federal action. Wallace, 708 F.Supp. at 151. This doctrine was first formulated by the Supreme Court in Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968). In Avco, the defendant, a labor union, removed to federal court a suit in which an employer sought an injunction against a labor strike, arguing that the strike violated a collective bargaining agreement between the employer and the union. The Supreme Court upheld the union's removal despite the fact that the employer's suit contained no federal question on its face. The Court concluded that Section 301 of the Labor Management Relations Act so thoroughly preempts state law as to force the Court to recharacterize the employee's complaint as arising under that section of the act. Id. at 561, 88 S.Ct. at 1237.

The NLRA preempts some but not all state law claims related to labor-management. The Supreme Court has articulated various doctrines for determining when state regulation is preempted by the NLRA. Under the primary doctrine, the Court asks whether the conduct a state seeks to make a basis of liability is actually or arguably protected or prohibited by the NLRA. Local 926, Int'l, Union of Operating Eng'rs, AFL-CIO v. Jones, 460 U.S. 669, 676, 103 S.Ct. 1453, 1458-59, 75 L.Ed.2d 368 (1983); San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959). If so, otherwise applicable state law is preempted. When, however, the conduct at issue is only a peripheral concern of the Act or touches on interests so deeply rooted in local feeling and responsibility that, in the absence of compelling Congressional direction, it could not be inferred that Congress intended to deprive the states of the power to act, the Court will refuse to invalidate state regulation or sanction of the conduct. Local 926, 460 U.S. at 676, 103 S.Ct. at 1458-59; Garmon, 359 U.S. at 243-44, 79 S.Ct. at 778-79.¹

A. Gulf Coast Linehandlers

Applying the preemption principles to Gulf Coast's claims, the Court first asks whether the conduct made the basis of liability in this case is actually or arguably protected or prohibited by the NLRA. Gulf Coast...