Kane v. Matson Navigation Co.

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
• Parties: MARK KANE, Plaintiff, v. MATSON NAVIGATION COMPANY, INC., et al., Defendants.
• Docket Number: 22-cv-04583-WHO
• Decision Date: 12 December 2022

MARK KANE, Plaintiff,
v.
MATSON NAVIGATION COMPANY, INC., et al., Defendants.

No. 22-cv-04583-WHO

United States District Court, N.D. California

December 12, 2022

ORDER GRANTING MOTION TO DISMISS

Re: Dkt. No. 20

WILLIAM H. ORRICK, UNITED STATES DISTRICT JUDGE

Defendants Matson Navigation Company, Inc. (“Matson”) and Theodore Bernhard move to dismiss a First Amended Complaint (“FAC”) arising from plaintiff Mark Kane's termination from his job aboard a ship that Matson owned and Bernhard captained, because Kane's claims are preempted by section 301 of the Labor Management Relations Act (“LMRA”). Kane's breach of contract, breach of the implied covenant of good faith and fair dealing, and intentional interference with economic relations claims appear to be preempted as pleaded, but it is not entirely clear whether Kane bases these claims on the collective bargaining agreement (“CBA”) between Matson and his union, the shipping articles outlining the dates of his employment, or something else. As pleaded, the claims either arise directly from an alleged violation of the CBA or require interpretation of it. But I will give Kane the opportunity to amend in case additional allegations about the contract at issue can avoid preemption. His defamation and intentional infliction of emotional distress (“IIED”) claims do not require interpretation of the CBA and are not preempted, at least as pleaded. Kane's claim for retaliation asserted under California's Fair Employment Housing Act (“FEHA”) is DISMISSED with prejudice against Bernhard: nonemployer individuals cannot be held liable for such claims.

BACKGROUND

Kane, a seaman and member of the Sailors' Union of the Pacific (“SUP”), was hired to

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work aboard the vessel M/V Kaimana Hila in September 2021. FAC [Dkt. No. 18] ¶ 8. Matson owned and operated the vessel, of which Bernhard was the master. Id. ¶¶ 6-7. Kane's shipping articles provided work for 90 days, plus 15 days to return to Long Beach, California, for a total of 105 days from September 13, 2021, to December 26, 2021. Id. ¶ 10. He signed onto the ship in Los Angeles County on September 13. Id. ¶ 8.

According to Kane, he completed all of his work “as a prudent and competent merchant seaman.” Id. ¶ 11. But, he alleges, on December 6, 2021, Bernhard submitted a letter warning Kane that he had violated workplace policy. Id. Kane contends that this letter came in retaliation for his reporting that another sailor harassed and bullied him. See id. According to Kane, Bernhard read the letter to him in front of four shipmates, an experience that he described as “being dressed down” and “demoralizing and discriminatory.” Id. ¶ 13. Bernhard then confined Kane to his quarters, told him not to try to work, and said he would handcuff Kane if he left. Id. ¶ 15.

The next day, “[w]ithout the opportunity to correct any alleged deficiencies,” Bernhard issued another letter terminating Kane. Id. ¶ 16.^[1] Bernhard then “forcefully discharged” Kane from the ship in Guam. Id. ¶ 19. Matson also placed Kane on its “do not hire list” for two years. Id. ¶ 22.

The same day, December 7, Kane consulted with SUP and “they informed [him] that they

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would pursue and exhaust [his] remedies.” Id. ¶ 21. But on December 30, 2021, the president and secretary-treasurer of SUP sent Kane a letter declining to pursue his grievance and noting that the prohibition on future employment was not permanent. Id. ¶ 24.

Kane filed this suit on August 8, 2022. See Dkt. No. 1. After the defendants moved to dismiss, Kane filed the FAC, which alleges six causes of action: retaliation, breach of employment contract, breach of good faith and fair dealing, intentional interference with economic relations, defamation, and intentional infliction of emotional distress. FAC ¶¶ 31-80; see also Dkt. Nos. 9, 18. The defendants again moved to dismiss the complaint. Dkt. No. 20.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” See Twombly, 550 U.S. at 555, 570.

In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court accepts his allegations as true and draws all reasonable inferences in his favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

If the court dismisses the complaint, it “should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” See Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).

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DISCUSSION

I. SECTION 301 PREEMPTION

Section 301 of the LMRA provides that

[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . 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). The Supreme Court has held that section 301 “not only provides federal court jurisdiction over controversies involving collective bargaining agreements, but also authorizes federal courts to fashion a body of federal law for the enforcement of these collective bargaining agreements.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 403 (1988) (citation and quotation marks omitted).

When a state law claim “arises entirely from or requires construction of a CBA,” section 301 preempts the claim. Alaska Airlines Inc. v. Schurke, 898 F.3d 904, 914 (9th Cir. 2018) (citing cases). The Ninth Circuit established a two-part inquiry to determine whether a claim is so preempted. Id. at 920. First, the court must “evaluate the ‘legal character' of the claim by asking whether it seeks purely to vindicate a right or duty created by the CBA itself.” Id. at 920-21 (citation omitted). “If a claim arises entirely from a right or duty of the CBA-for example, a claim for violation of the labor agreement, whether sounding in contract or tort-it is, in effect, a CBA dispute in state law garb, and is preempted.” Id. at 921 (citations omitted). However, “claims are not simply CBA disputes by another name” and are not preempted under the first step, “if they just refer to a CBA-defined right; rely in part on a CBA's terms of employment; run parallel to a CBA violation; or invite use of the CBA as a defense.” Id. (citing cases).

If a right is not grounded in a CBA at the first step, the court then asks “whether litigating the state law claim nonetheless requires interpretation of a CBA, such that resolving the entire claim in court threatens the proper role of grievance and arbitration.” Id. (citing cases). “Interpretation” of a CBA is narrowly construed and “means something more than ‘consider,' ‘refer to,' or ‘apply.'” Id. (citation omitted). Instead, “claims are only preempted to the extent

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there is an active dispute over the meaning of contract terms.” Id. (citation and quotation marks omitted). “Accordingly, a state law claim may avoid preemption if it does not raise questions about the scope, meaning, or application of the CBA.” Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1153 (9th Cir. 2019) (citation omitted).

The defendants' motion to dismiss relies on section 301 of the LMRA and its applicability to Kane's claims. See MTD at 7:6-8:23. They contend that section 301 preempts all but Kane's retaliation claim, as the remainder arise from or otherwise require analysis of the CBA between Matson and SUP. See id.

A. Breach of Contract

Turning first to Kane's allegations of breach of contract, the defendants argue that section 301 preempts the claim because it is “based on the underlying allegations that his treatment and termination were violations of the CBA,” pointing to the FAC's assertion that “the grievance procedure established in the above-mentioned collective bargaining agreement assured [Kane] that defendant Matson would not arbitrarily terminate him.” Id. at 17:1-6 (citing FAC ¶ 44).

Kane's response is twofold. First, he argues that this claim is not based on the CBA's terms and conditions, but on California Labor Code section 2924, which states:

An employment for a specified term may be terminated at any time by the employer in case of any willful breach of duty by the employee in the course of his employment, or in case of his habitual neglect of his duty or continued incapacity to perform it.

See Oppo. [Dkt. No. 22] 14:2-18; Cal. Lab. Code § 2924. This, he contends, does not require me to interpret the CBA, as the rights afforded under section 2924 “are not substantially dependent” on the CBA's terms. See Oppo. at 12:12-16, 14:2-18. Second, he argues that the “grievance procedure in the collective bargaining agreement is not at issue” because he does not challenge its legality. Id. at 12:17-18. According to Kane, all I need to do is “look to the CBA to...