Gulf States Paper Corp. v. Ingram, 86-7239

• Decision Date: 09 March 1987
• Docket Number: No. 86-7239,86-7239
• Citation: 811 F.2d 1464
• Parties: 124 L.R.R.M. (BNA) 2873, 55 USLW 2523, 106 Lab.Cas. P 12,239 GULF STATES PAPER CORPORATION, Plaintiff-Appellee, v. Eloise H. INGRAM, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1464

811 F.2d 1464

124 L.R.R.M. (BNA) 2873, 55 USLW 2523,

106 Lab.Cas. P 12,239

GULF STATES PAPER CORPORATION, Plaintiff-Appellee, v. Eloise H. INGRAM, Defendant-Appellant.

No. 86-7239.

United States Court of Appeals, Eleventh Circuit.

March 9, 1987.

Frank W. Donaldson, U.S. Atty., George C. Batcheler, Birmingham, Ala., William H. Berger, Atlanta, Ga., Scott D. Ernshaw, Michael Jay Singer, Dept. of Justice, Civil Div., Washington, D.C., for defendant-appellant.

Chris Mitchell, Carol Sue Nelson, Birmingham, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before GODBOLD and VANCE, Circuit Judges, and SWYGERT, ^* Senior Circuit Judge.

SWYGERT, Senior Circuit Judge:

This appeal arises from a declaratory judgment action brought by Gulf States Paper Corporation ("Gulf States") to determine its obligations under the Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 U.S.C. Secs. 2021 et seq. (1979), commonly known as the Veterans' Reemployment Rights Act. Gulf States had denied a one-year leave of absence requested by its employee Eloise H. Ingram, defendant-appellant. Ingram, a medic with the Army Reserve, had sought the leave to participate in a licensed practical nurse ("LPN") training program. The district court held that Ingram's leave request was unreasonable and therefore Gulf States did not violate the Act in denying the request. 633 F.Supp. 908 (1986). Ingram appeals from that decision.

On appeal, Ingram raises two issues: (1) whether the district court erred in assuming jurisdiction under 28 U.S.C. Sec. 1331 over a declaratory judgment action brought by an employer under the Veterans' Reemployment Rights Act; and (2) whether the district court erred in finding that Ingram's leave request was unreasonable and that Gulf States did not violate 38 U.S.C Sec. 2024(d) in denying her request. For the reasons stated below, we find that the district court had jurisdiction, but we reverse the finding that the leave request was unreasonable.

I

Ingram has served for eleven years in the Army Reserve. At the time of this suit, she was highly rated and had achieved the rank of sergeant, E-5, the top rank in her "military occupational specialty" (MOS) as a basic medic. To qualify for further promotions, Ingram needed training for a higher MOS--that of licensed practical nurse (LPN).

The Army Reserve identified a shortage of LPN's and established a one-year training program with a local technical college. The Reserve then recruited reservists from other specialties to participate in the training program and fill the LPN requirement. Ingram volunteered for the program and requested a one-year leave of absence from Gulf States.

She notified Gulf States on October 28, 1985 that her active duty training would begin March 1986. According to Joseph F. Vengrouskie, Gulf States' Director of Corporate Personnel, the company denied her request as unreasonable for four reasons: (1) twelve months was an unreasonable length of time; (2) she had volunteered for the training; (3) the training was not job-related; and (4) the absence would create an undue financial burden on the company.

At the time of the leave request, Ingram had been employed at Gulf States for more than thirteen years. She had held the position of secretary in the corporate planning department for eleven years. In addition to her general clerical duties, four times a year Ingram entered financial data in the company's computer. Ingram estimated she spent twenty percent of her time on this task and she was the only non-management employee who could perform that job. She also stated that training a new person to perform the task would take about six months.

Vengrouskie asked Ingram if there were any alternatives to the one-year training. She said that other alternatives, such as night-time programs or correspondence classes, were not possible. When the company realized that Ingram would take the leave with or without its permission, it filed this suit to determine whether the Veterans' Reemployment Rights Act would require her eventual reinstatement.

II Jurisdiction

The district court found subject matter jurisdiction under 28 U.S.C. Sec. 1331, the general federal question statute, because this case involves the "conflict between the rights of the reservists and the obligations of the private employer" under 38 U.S.C. Secs. 2021 et seq. ¹ We agree with this conclusion. 28 U.S.C. Sec. 1331 provides: "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States."

No simple test exists to determine whether a case "arises under" the laws of the United States, although our foremost jurists and legal scholars have struggled to articulate one. Justice Holmes stated that "a suit arises under the law that creates the action." American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 586, 60 L.Ed. 987 (1916). Holmes' test, however, generally identifies only those cases that fall within arising under jurisdiction. C. Wright, The Law of Federal Courts 93-94 (4th ed. 1983). Justice Cardozo's test requires that "a right or immunity created by the Constitution or laws of the United States" supply an "essential element" of the plaintiff's cause of action. Gully v. First Nat'l Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936).

To further complicate the inquiry, the well-pleaded complaint rule applies. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10 & n. 9, 103 S.Ct. 2841, 2846-47 & n. 9, 77 L.Ed.2d 420 (1983). To invoke federal jurisdiction, a complaint's well-pleaded allegations must raise a substantial issue of federal law. Id. at 10, 103 S.Ct. at 2846-47. If the federal question only appears as an anticipated defense, the complaint is not well pleaded. Id.

The declaratory relief sought in this case adds yet another layer of complexity to the jurisdictional analysis. While the Declaratory Judgment Act, 28 U.S.C. Sec. 2201, does not broaden federal jurisdiction, see, e.g., Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 878-79, 94 L.Ed. 1194 (1950), it does allow parties to precipitate suits that otherwise might need to wait for the declaratory relief defendant to bring a coercive action. See, e.g., Franchise Tax Board, 463 U.S. at 19 & n. 19, 103 S.Ct. at 2851 & n. 19; Lowe v. Ingall's Shipbuilding, a Division of Litton Systems, Inc., 723 F.2d 1173, 1179 (5th Cir.1984) (Declaratory Judgment Act broadens class of litigants--"though the underlying cause of action which is thus actually litigated is the declaratory defendant's, not the declaratory plaintiff's, this does not violate the requirement that what must arise under federal law is the cause of action in issue itself (regardless of to whom it belongs).") " '[I]f the federal issue [presented in a declaratory judgment action] would inhere in the claim on the face of the complaint that would have been presented in a traditional damage or coercive action, then federal jurisdiction exists over the declaratory judgment action.' " McDougald v. Jenson, 786 F.2d 1465, 1476 (11th Cir.1986) (quoting 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 2767, at 745 (2d 1983)). Therefore, the declaratory judgment device allows a party "to bootstrap its way into federal court" by bringing a federal suit that corresponds to one the opposing party might have brought. Superior Oil Co. v. Pioneer Corp., 706 F.2d 603, 607 (5th Cir.1983), cert. denied, 464 U.S. 1041, 104 S.Ct. 706, 79 L.Ed.2d 171 (1984); see also Bell & Beckwith v. United States, IRS, 766 F.2d 910, 912-14 (6th Cir.1985) (discussing declaratory judgment suits that anticipate federal coercive actions).

To decide whether the well-pleaded complaint for declaratory relief in the present case properly asserts a substantial federal claim, we must determine whether, absent the availability of declaratory relief, the instant case could nonetheless have been brought in federal court. To do this, we must analyze the assumed coercive action by the declaratory judgment defendant. The coercive action in this case would be a suit by Ingram under the Veterans' Reemployment Rights Act seeking reinstatement in her job at Gulf States when she returned from her training program. Ingram's coercive action clearly would present a federal cause of action. Her suit would satisfy both Holmes' and Cardozo's arising under tests. Therefore, Gulf States' suit here that merely anticipates Ingram's federal claim against it falls within section 1331 jurisdiction via the bootstrapping mechanism of the declaratory judgment suit.

III Section 2024(d) and Reasonableness

The second issue is whether the district court erred in finding Ingram's request unreasonable and that Gulf States did not violate 38 U.S.C. Sec. 2024(d) in denying her leave of absence.

A. Standard of Review

As a preliminary matter, we must determine the applicable standard of review. Gulf States argues that our review is limited to the "clearly erroneous" inquiry applied to a district court's findings of fact. We believe, however, that the de novo review accorded legal questions is appropriate in this case. The district court applied a reasonableness requirement to the facts of this case, based upon Lee v. City of Pensacola, 634 F.2d 886 (5th Cir.1981), ² to find that Gulf States did not violate the Act. The question here is whether Gulf States' denial of Ingram's leave of absence violated the Act. The facts are not contested. Instead, we are reviewing the factors that the district court considered in applying the reasonableness test. In so doing, we are further articulating the legal reasonableness standard. Thus, the question presented is one of law and our review is plenary. See Daley v. United States, 792 F.2d 1081, 1085 (11th Cir.1986) (questions of...