Garcia v. Serv. Emps. Int'l Union

• Decision Date: 05 April 2021
• Docket Number: No. 19-16933,No. 19-16863, No. 19-16934,19-16863
• Citation: 993 F.3d 757
• Parties: Raymond GARCIA, as a member, and on behalf of Clark County Public Employees Association, Plaintiff-Appellee, and Cherie Mancini; Frederick Gustafson, Plaintiffs, v. SERVICE EMPLOYEES INTERNATIONAL UNION; Nevada Service Employees Union; Mary Kay Henry, in her official capacity as Union President; Luisa Blue, in her official capacity as trustee, Defendants-Appellants. Raymond Garcia, as a member, and on behalf of Clark County Public Employees Association, Plaintiff-Appellant, and Cherie Mancini; Frederick Gustafson, Plaintiffs, v. Service Employees International Union; Nevada Service Employees Union; Mary Kay Henry, in her official capacity as Union President; Luisa Blue, in her official capacity as trustee, Defendants-Appellees. Cherie Mancini, Plaintiff-Appellant, and Raymond Garcia, as a member, and on behalf of Clark County Public Employees Association; Frederick Gustafson, Plaintiffs, v. Service Employees International Union; Nevada Service Employees Union; Mary Kay Henry, in her official capacity as Union President; Luisa Blue, in her official capacity as trustee, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

993 F.3d 757

Raymond GARCIA, as a member, and on behalf of Clark County Public Employees Association, Plaintiff-Appellee,

and

Cherie Mancini; Frederick Gustafson, Plaintiffs,

v.SERVICE EMPLOYEES INTERNATIONAL UNION; Nevada Service Employees Union; Mary Kay Henry, in her official capacity as Union President; Luisa Blue, in her official capacity as trustee, Defendants-Appellants.

Raymond Garcia, as a member, and on behalf of Clark County Public Employees Association, Plaintiff-Appellant,

and

Cherie Mancini; Frederick Gustafson, Plaintiffs,

v.Service Employees International Union; Nevada Service Employees Union; Mary Kay Henry, in her official capacity as Union President; Luisa Blue, in her official capacity as trustee, Defendants-Appellees.

Cherie Mancini, Plaintiff-Appellant,

and

Raymond Garcia, as a member, and on behalf of Clark County Public Employees Association; Frederick Gustafson, Plaintiffs,

v.Service Employees International Union; Nevada Service Employees Union; Mary Kay Henry, in her official capacity as Union President; Luisa Blue, in her official capacity as trustee, Defendants-Appellees.

No. 19-16863

No. 19-16933

No. 19-16934

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 16, 2020 San Francisco, California

Filed April 5, 2021

Jonathan Cohen (argued), Glenn Rothner, Eli Naduris-Weissman, and Juhyung Harold Lee, Rothner Segall & Greenstone, Pasadena, California; Evan L. James and Kevin B. Archibald, Christensen James & Martin, Las Vegas, Nevada; for Defendants-Appellants/Cross-Appellees.

Michael J. McAvoyAmaya (argued), Las Vegas, Nevada, for Plaintiffs-Appellees/Cross-Appellants.

Before: M. Margaret McKeown and Jacqueline H. Nguyen, Circuit Judges, and Eric N. Vitaliano,^* District Judge.

NGUYEN, Circuit Judge:

This dispute between union members and their union arises out of a trusteeship imposed on Nevada Service Employees Union ("the Local") by the Service Employees International Union (the "International"). Following a period of internal strife and two hearings investigating member complaints, a majority of the Local's executive board voted to request the trusteeship. Local member Raymond Garcia filed suit in state court against the International, International officials, and the Local's board (collectively, "the Union") challenging the trusteeship as violating the Local's constitution, the International's constitution, and an affiliation agreement between the two organizations. The case was removed to federal court, and the district court granted the Union's motion dismiss in part, holding that five claims were preempted by § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and were therefore "converted" into § 301 claims. The consolidated plaintiffs (the "Union Members") appeal. We affirm the district court's preemption determination and its exercise of jurisdiction over the preempted claims.¹

I. BACKGROUND

The Local is an affiliate of the International and is governed by the Local Constitution, which is generally subordinate to the International Constitution. The Local and the International are also parties to an Affiliation Agreement. The Affiliation Agreement contains a waiver provision purporting to, in some circumstances, waive portions of the International Constitution concerning trusteeships.

After the International received numerous complaints from Local members regarding the breakdown of the Local's basic governance and democratic processes, the International ordered a hearing concerning the state of the Local. The hearing officer issued findings of fact and recommendations including a recommendation that the International place the Local into trusteeship. The Local Board met with two representatives of the International and the International's associate general counsel, and voted to request that the International place the Local into trusteeship. The International subsequently did so.

Garcia filed suit in state court against the Union. He brought seven state law claims: (1) breach of contract by the Local Board, (2) breach of contract by the International, (3) breach of the implied covenant of good faith and fair dealing by the International, (4) fraudulent misrepresentation by the International, (5) negligent misrepresentation by the International, (6) legal malpractice by the International's associate general counsel, and (7) breach of fiduciary duty by the International. After removing the case to federal court, the Union moved to dismiss Garcia's claims. The district court granted the motion in part, holding that five of the claims (Claims 2, 3, 5, 6, and 7) were preempted by § 301 of the LMRA and thus "converted" into—that is, treated as—§ 301 claims. The Union Members appeal.

II. JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291, and we review the existence of subject matter jurisdiction de novo. Ignacio v. Judges of U.S. Court of Appeals for Ninth Circuit , 453 F.3d 1160, 1165 (9th Cir. 2006). We review a district court's ruling on a motion to dismiss de novo. Colony Cove Props., LLC v. City of Carson , 640 F.3d 948, 955 (9th Cir. 2011).

III. DISCUSSION

The Union Members argue that the district court erred in exercising federal question jurisdiction over Garcia's state law claims, because § 301 of the LMRA does not preempt claims based on a union constitution. They are mistaken. Section § 301 completely preempts state law claims based on contracts between labor unions, which may include union constitutions. The district court correctly held that Garcia's claims required analysis of at least one § 301 labor contract and were therefore preempted.

A. Section 301 Completely Preempts Claims That Require Interpretation of a Union Constitution, to the Extent the Constitution is a Contract Between Unions.

State law claims that are completely preempted are removable to federal court under the complete preemption corollary to the well-pleaded complaint rule. Caterpillar Inc. v. Williams , 482 U.S. 386, 392–93, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). This doctrine allows state law claims to be removed to federal court, even where a federal question does not appear on the face of the complaint, because "[o]nce an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Id. at 392, 107 S.Ct. 2425 ; see 28 U.S.C. § 1331. Section 301 is one of just three federal statutes that the Supreme Court has held to "so preempt their respective fields as to authorize removal of actions seeking relief exclusively under state law. ..."² In re Miles , 430 F.3d 1083, 1088 (9th Cir. 2005). State law claims that fall within the area of § 301 are considered federal law claims and are preempted and removable. Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists & Aerospace Workers , 390 U.S. 557, 560–61, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968) ; Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Tr. for S. California , 463 U.S. 1, 23–24, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983).

Section 301(a) of the LMRA provides:

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations , may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

29 U.S.C. § 185(a) (emphasis added). "[U]nion constitutions are an important form of contract between labor organizations," Wooddell v. Int'l Bhd. of Elec. Workers, Local 71 , 502 U.S. 93, 101, 112 S.Ct. 494, 116 L.Ed.2d 419 (1991), and therefore "a union constitution is a ‘contract’ within the plain meaning of § 301(a)," United Ass'n of Journeymen & Apprentices v. Local 334 , 452 U.S. 615, 622, 101 S.Ct. 2546, 69 L.Ed.2d 280 (1981).

We have previously held that a union member may bring suit directly under § 301 for violation of a union constitution. Kinney v. Int'l Bhd. of Elec. Workers , 669 F.2d 1222, 1229 (9th Cir. 1981) (citing Stelling v. Int'l Bhd. of Elec. Workers Local Union No. 1547 , 587 F.2d 1379, 1382–83 (9th Cir. 1978) ). Kinney and Stelling did not decide whether state law claims based on a union constitution are subject to § 301 preemption and removable. They are. As the text of the statute and Supreme Court authority make clear, § 301 preempts state law claims based on a union constitution to the extent the constitution is a contract between labor unions. Every court of appeals to have addressed the question agrees. See Kitzmann v. Local 619-M Graphic Commc'ns Conference of Int'l Bhd. of Teamsters , 415 F. App'x 714, 719 (6th Cir. 2011) (holding that state law claims based on an international constitution, district-level constitution, and affiliation agreement are preempted as those documents are labor contracts under § 301); Wall v. Constr. & Gen. Laborers' Union, Local 230 , 224 F.3d 168, 178 (2d Cir. 2000) (finding that "for preemption purposes, the term ‘labor contract’ includes union constitutions" and holding claims preempted by § 301); DeSantiago v. Laborers Int'l Union of N. Am., Local No. 1140 , 914 F.2d 125, 128 (8th Cir. 1990) (holding that because union members had "alleged claims against the Local based upon the local and international constitutions, .. those claims were preempted by section 301(a)"); Pruitt v. Carpenters' Local Union No. 225 of United Bhd. of Carpenters & Joiners , 893 F.2d 1216, 1219 (11th Cir. 1990) (finding that § 301 completely preempted state law claim alleging violation of union constitution).

The Union Members argue that even if § 301 once preempted state law claims alleging breach of a union constitution, Congress repealed § 301's preemptive force by including in the Labor Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 401 et...