Harless v. Csx Hotels, Inc.

• Decision Date: 16 November 2004
• Docket Number: No. 03-2433.,03-2433.
• Citation: 389 F.3d 444
• Parties: Sarah HARLESS, Personal representative of Edward Lewis and administratrix of his estate, Plaintiff-Appellee, v. CSX HOTELS, INCORPORATED, a/k/a The Greenbrier Hotel, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

389 F.3d 444

Sarah HARLESS, Personal representative of Edward Lewis and administratrix of his estate, Plaintiff-Appellee, v. CSX HOTELS, INCORPORATED, a/k/a The Greenbrier Hotel, Defendant-Appellant.

No. 03-2433.

United States Court of Appeals, Fourth Circuit.

Argued: September 30, 2004.

Decided: November 16, 2004.

COPYRIGHT MATERIAL OMITTED

ARGUED: John Robert Hunt, Shea, Stokes & Carter, A.L.C., Atlanta, Georgia, for Appellant. Weldon Mark Burnette, Burnette & Burnette, Lewisburg, West Virginia, for Appellee. ON BRIEF: Arch Stokes, Shea, Stokes & Carter, A.L.C., Atlanta, Georgia, for Appellant.

Before WILKINS, Chief Judge, MOTZ, Circuit Judge, and Henry E. HUDSON, United States District Judge for the Eastern District of Virginia, sitting by designation.

Affirmed by published opinion. Judge Hudson wrote the opinion, in which Chief Judge Wilkins and Judge Motz joined.

HUDSON, District Judge:

CSX Hotels, Incorporated, d/b/a The Greenbrier Hotel ("The Greenbrier"), appeals an Order of the district court remanding this case back to state court, after granting a second amendment of the Complaint which intentionally eliminated all federal claims. The Greenbrier contends that the district court erred in remanding the case because the claims which remained in the Complaint after the second amendment were preempted by operation of Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). Finding no abuse of discretion, we affirm.

CSX Hotels, Incorporated operates The Greenbrier Hotel in White Sulphur Springs, West Virginia. Appellee, Sarah Harless, brought this action on behalf of her deceased father, Edward Lewis, who, until terminated, was employed as a general kitchen worker at The Greenbrier from May 2000 to January 2001. His position was part of the bargaining unit represented by the Hotel and Restaurant Employees International Union. Consequently, his employment was covered by a collective bargaining agreement ("CBA") between the Union and The Greenbrier at the time of his termination. Harless contends that her father was terminated because of his age, disability, and the fact that he had filed a workers' compensation claim. The Greenbrier, on the other hand, maintains that it terminated Mr. Lewis's employment because he had exceeded the maximum number of absences permitted under the no-fault absenteeism provisions of the CBA. Harless disputes this claim and counters that it is a mere pretext. Mr. Lewis died before this action was commenced.

Harless filed her initial Complaint on January 16, 2003 in the Circuit Court of Greenbrier County, West Virginia. As originally drafted, the Complaint alleged eight causes of action: wrongful discharge from employment; breach of contract; wrongful death; fraud; constructive fraud; outrageous and unconscionable conduct; intentional infliction of emotional distress; and breach of duty of good faith and fair dealing.

On February 18, 2003, The Greenbrier filed a Notice of Removal to federal court on the ground that Harless's claims were preempted by Section 301 of the LMRA. Harless subsequently filed a motion in the United States District Court for the Southern District of West Virginia for leave to amend her Complaint, by removing all references to the CBA and all causes of action that would require interpretation of the agreement. She also filed a Motion to Remand.

The district court granted Harless's motion to amend. The Amended Complaint contained six counts: wrongful discharge from employment; wrongful death; constructive fraud; outrageous and unconscionable conduct; intentional infliction of emotional distress; and breach of duty of good faith and fair dealing. The district court, however, denied Harless's Motion to Remand, finding that the breach of duty of good faith and fair dealing claim was federally preempted. The district court also ordered Harless to clarify her constructive fraud and wrongful discharge claims.

On June 24, 2003, Harless filed a request for leave to further amend her Complaint. It was accompanied by a proposed Second Amended Complaint and a Renewed Motion to Remand. In her Second Amended Complaint, Harless eliminated the claims for constructive fraud and for breach of duty of good faith and fair dealing. The Second Amended Complaint also contained language that the "wrongful discharge claim was based on the West Virginia Human Rights Act" and "any law that prohibits the termination of employment due to an employee's act of filing a workers' compensation claim." Harless continued to maintain that age and disability were the reasons for her father's termination.

The district court granted Harless's motion to amend and permitted her to file the Second Amended Complaint. The Second Amended Complaint contained only four causes of action based entirely on state law. Finding that her amendments to the Complaint were not undertaken in bad faith, the district court granted Harless's Motion to Remand.

The Greenbrier contends, on appeal, that the district court abused its discretion by permitting Harless to make repeated amendments to her pleadings for the sole purpose of avoiding federal preemption and federal jurisdiction. The Greenbrier further maintains that, even without Harless's claim for breach of duty of good faith and fair dealing, the other state law claims are federally preempted. The Greenbrier reasons that Harless's only evidence in support of her claims of age and disability discrimination will necessarily consist of an attempt to discredit The Greenbrier's application of the absenteeism provisions of the CBA.

According to The Greenbrier, in order to determine whether or not its conduct was lawful under state law, it would require the trier of fact to determine whether the company had the right under the CBA to terminate Mr. Lewis. Even though the remaining state law claims are not based on the LMRA, The Greenbrier maintains that resolution of the claims will inevitably require an interpretation of the CBA. Therefore, The Greenbrier argues that the claim is preempted by Section 301 of the LMRA. See McCormick v. AT & T Technologies, Inc., 934 F.2d 531, 534-35 (4th Cir.1991). This Court disagrees.

This Court reviews a district court's ruling on a motion to amend for abuse of discretion. Davis v. VCU, 180 F.3d 626, 628 (4th Cir.1999), citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). The language of Federal Rule of Civil Procedure 15(a) has been construed to counsel a liberal reading of its application. Motions to amend are typically granted in the absence of an improper motive, such as undue delay, bad faith, or repeated failure to cure a deficiency by amendments previously allowed. See Ward Elec. Serv., Inc. v. First Commercial Bank, 819 F.2d 496, 497 (4th Cir.1987). The Greenbrier argues that the district court abused its discretion in granting the successive motions to amend because their specific articulated objective was to defeat federal jurisdiction and avoid federal preemption. The Greenbrier also challenges the district court's finding that Harless's successive motions to amend were not made in bad faith. In The Greenbrier's view, allowing Harless to amend the Complaint to avoid federal jurisdiction and to enable remand violate the rule espoused by this Court in Brown v. Eastern States Corp., 181 F.2d 26, 28-29 (4th Cir.1950).

In Brown, this Court held that under the law then in existence, post-removal amendments to a complaint, which have the effect of eliminating federal questions, do not enable remand. If the original complaint was sufficient to vest jurisdiction in the federal courts, the case should not be remanded "if it was properly removable upon the record as it stood at the time the petition for removal was filed." Id. at 29. A careful reading of Brown does not appear to proscribe amendments to complaints which have the effect of eliminating federal claims. The vice addressed in Brown was the granting of a motion to remand based on such an amendment. The court in Brown merely stated that subject matter jurisdiction is not divested from the district court when the federal claims are dismissed from the complaint. Id. at 28-29.

In the immediate case, the district court stated that Harless had mixed motives in moving to amend the Complaint. While Harless clearly wanted to avoid federal court, she also had substantive reasons for amending the pleadings. Her counsel candidly represented to the Court that in drafting the Complaint, he never intended to allege a federal claim. It was his intention to allege a claim based solely on state law. Counsel confirmed that position in his argument before this Court.

This Court believes that Brown is distinguishable from the case at hand. Here, Harless had a substantive and meritorious reason to amend the Complaint other than simply defeating federal jurisdiction. Once the district court found the amendment to be made in good faith, the decision to remand to state court resided within the discretion of the trial court. When a district court relinquishes jurisdiction over a removed case involving pendent claims, the Court has the discretion to remand the case to the state court in which the action was initially filed. Carnegie-Mellon University, et al. v. Cohill, 484 U.S. 343, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988).

The reasoning underlying Brown is clearly in tension with the holding in United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966...