Kobold v. Good Samaritan Reg'l Med. Ctr.

• Decision Date: 09 August 2016
• Docket Number: No. 13-35265, No. 13-35590,No. 13-35528,13-35528
• Citation: 832 F.3d 1024
• Court: U.S. Court of Appeals — Ninth Circuit
• Parties: Susan Kobold, Plaintiff–Appellant, v. Good Samaritan Regional Medical Center, Defendant–Appellee. Larry Barr; Anthony Barton ; Stephen Busch; Brian Carlson; Peter Dennis; Dan Dorr; Clark Goble; Warren Martin; Billy Pierce; Jesse Robinson ; David Shatto; Douglas Toelkes, Plaintiffs–Appellants, v. Ross Island Sand & Gravel Co., Defendant–Third–Party–Plaintiff–Appellee, v. Oregon Teamsters Employers Trust; General Teamsters Local Union No. 162, Third–Party–Defendant. Ona C. Allen, Plaintiff–Appellant, v. Northwest Permanente, P.C., an Oregon corporation, Defendant–Appellee.

832 F.3d 1024

Susan Kobold, Plaintiff–Appellant,

v.Good Samaritan Regional Medical Center, Defendant–Appellee.

Larry Barr; Anthony Barton ; Stephen Busch; Brian Carlson; Peter Dennis; Dan Dorr; Clark Goble; Warren Martin; Billy Pierce; Jesse Robinson ; David Shatto; Douglas Toelkes, Plaintiffs–Appellants,

v.Ross Island Sand & Gravel Co., Defendant–Third–Party–Plaintiff–Appellee,

v.Oregon Teamsters Employers Trust; General Teamsters Local Union No. 162, Third–Party–Defendant.

Ona C. Allen, Plaintiff–Appellant,

v.Northwest Permanente, P.C., an Oregon corporation, Defendant–Appellee.

No. 13-35528

No. 13-35590

No. 13-35265

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 6, 2015 Portland, Oregon

Filed August 9, 2016

Thomas K. Doyle (argued), Bennett, Hartman, Morris & Kaplan, Portland, Oregon, for Plaintiff–Appellant Susan Kobold.

Kirk Peterson (argued), Bullard Law, Portland, Oregon, for Defendant–Appellee Good Samaritan Regional Medical Center.

Elizabeth Farrell (argued), Portland, Oregon; Benjamin Rosenthal, Portland, Oregon; for Plaintiffs–Appellants Larry Barr, et al.

Ankur H. Doshi (argued) and Kamyavathana Sivanesan, Portland, Oregon; Sheeba Suhaskumar, law student; Northwestern School of Law of Lewis & Clark College, Portland, Oregon; for Defendant–Third–Party–Plaintiff–Appellee Ross Island Sand & Gravel Co.

Matthew Caruso Ellis (argued), Portland, Oregon; George P. Fisher, Portland, Oregon; for Plaintiff–Appellant Ona C. Allen.

Chris Kitchel (argued), James N. Westwood, and Brenda K. Baumgart ; Stoel Rives LLP, Portland, Oregon; for Defendant–Appellee Northwest Permanente, P.C.

Before: Marsha S. Berzon and Paul J. Watford, Circuit Judges, and James Alan Soto,^** District Judge.

OPINION

BERZON, Circuit Judge:

The three cases in this consolidated appeal—Kobold v. Good Samaritan Regional Medical Center , Barr v. Ross Island Sand & Gravel Co. , and Allen v. Northwest Permanente —involve different parties and facts, but are similar in important ways. All three involve employees represented by labor unions who seek remedies under state law against their employers. In all three, there is a collective bargaining agreement (“CBA”) between the union and the employer setting out a grievance and arbitration procedure to govern disputes arising under the agreement. And in all three, a grievance was filed but did not provide full relief, prompting the employee to turn to the courts. All the employees initially filed their cases in state court, but the cases were removed to federal court on the basis of preemption under § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(a). In all the cases, the district court denied a motion to remand and held the state law claims preempted. We consider the § 301 preemption questions on appeal.

As this court has observed more than once, although § 301 preemption questions arise fairly frequently, “[f]amiliarity ... has not bred facility.” Cramer v. Consol. Freightways, Inc. , 255 F.3d 683, 689 (9th Cir. 2001) (en banc) (alteration in original) (quoting Galvez v. Kuhn , 933 F.2d 773, 774 (9th Cir. 1991) ). In the hope that doing so will illuminate the parameters of § 301 preemption analysis, and so help “[breed] facility,” id. we have consolidated the three cases for consideration and resolve them in this single opinion. We begin with a review of § 301 preemption doctrine and then proceed to discuss each case.

I. Section 301 Preemption

Section 301 of the LMRA states: “Suits 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.” 29 U.S.C. § 185(a).

On its face, § 301 reads as a jurisdictional statute. But not long after its passage, the Supreme Court held, in Textile Workers v. Lincoln Mills of Ala. , 353 U.S. 448, 451, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), that § 301 is not simply jurisdictional. Instead, it should be “understood ... as a congressional mandate to the federal courts to fashion a body of federal common law to be used to address disputes arising out of labor contracts.” Allis – Chalmers Corp. v. Lueck , 471 U.S. 202, 209, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). “The Court subsequently held that this federal common law preempts the use of state contract law in CBA interpretation and enforcement.” Cramer , 255 F.3d at 689 (citing Local 174, Teamsters of Am. v. Lucas Flour Co. , 369 U.S. 95, 103–04, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962) ). “Once preempted, ‘any claim purportedly based on [a] ... state law is considered, from its inception, a federal claim, and therefore arises under federal law.’ ” Burnside v. Kiewit Pac. Corp. , 491 F.3d 1053, 1059 (9th Cir. 2007) (alteration in original) (quoting Caterpillar, Inc. v. Williams , 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) ).

In addition to promoting the development of a uniform federal labor law, § 301 preemption doctrine is designed “in large part to assure that agreements to arbitrate grievances would be enforced, regardless of the vagaries of state law and lingering hostility toward extrajudicial dispute resolution.” Livadas v. Bradshaw , 512 U.S. 107, 122, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994). To give “the policies that animate § 301 ... their proper range,” the Supreme Court has expanded “the pre-emptive effect of § 301 ... beyond suits alleging contract violations” to state law claims grounded in the provisions of a CBA or requiring interpretation of a CBA. Lueck , 471 U.S. at 210–11, 105 S.Ct. 1904.

Critically, “not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is pre-empted by § 301.” Id. at 211, 105 S.Ct. 1904. Drawing on Supreme Court precedent, this court has articulated a two-step inquiry to analyze § 301 preemption of state law claims. First, a court must determine “whether the asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a CBA. If the right exists solely as a result of the CBA, then the claim is preempted, and [the] analysis ends there.” Burnside , 491 F.3d at 1059. If the court determines that the right underlying the plaintiff's state law claim(s) “exists independently of the CBA,” it moves to the second step, asking whether the right “is nevertheless ‘substantially dependent on analysis of a collective-bargaining agreement.’ ” Id. (quoting Caterpillar , 482 U.S. at 394, 107 S.Ct. 2425 ). Where there is such substantial dependence, the state law claim is preempted by § 301.¹ If there is not, then the claim can proceed under state law. Id. at 1059–60.

To determine whether a right is independent of a CBA—the first Burnside factor—a court must focus its inquiry on “the legal character of a claim, as ‘independent’ of rights under the collective-bargaining agreement [ ]and not whether a grievance arising from ‘precisely the same set of facts' could be pursued.” Livadas , 512 U.S. at 123, 114 S.Ct. 2068 (emphasis added) (internal citation omitted). Only if the claim is “founded directly on rights created by [a] collective-bargaining agreement[ ]” does § 301 preempt it. Caterpillar , 482 U.S. at 394, 107 S.Ct. 2425.

The second Burnside factor—whether a plaintiff's state law right is “substantially dependent on analysis of [the CBA],” Burnside , 491 F.3d at 1059 —turns on “whether the claim can be resolved by ‘look[ing] to’ versus interpreting the CBA. If the latter, the claim is preempted; if the former, it is not.” Id. at 1060 (quoting Livadas , 512 U.S. at 125, 114 S.Ct. 2068 ) (alteration in original). This court has previously “stressed that, in the context of § 301 complete preemption, the term ‘interpret’ is defined narrowly—it means something more than ‘consider,’ ‘refer to,’ or ‘apply.’ ” Balcorta v. Twentieth Century–Fox Film Corp. , 208 F.3d 1102, 1108 (9th Cir. 2000). And, notably, “a defendant cannot, merely by injecting a federal question into an action that asserts what is plainly a state-law claim, transform the action into one arising under federal law.” Caterpillar , 482 U.S. at 399, 107 S.Ct. 2425. In other words, “[i]f the claim is plainly based on state law, § 301 preemption is not mandated simply because the defendant refers to the CBA in mounting a defense.” Cramer , 255 F.3d at 691 (emphasis added).

The Burnside factors reflect two driving concerns of preemption doctrine: first, preventing “parties' efforts to renege on their arbitration promises by ‘relabeling’ as tort suits actions simply alleging breaches of duties assumed in collective-bargaining agreements,” Livadas , 512 U.S. at 123, 114 S.Ct. 2068 (citation omitted), and second, preserving “a central tenet of federal labor-contract law ... that it is the arbitrator, not the court, who has the responsibility to interpret the labor contract in the first instance,”Lueck , 471 U.S. at 220, 105 S.Ct. 1904.

Notably, there is no basis for scuttling the state law cause of action if any necessary CBA interpretation can in some fashion be conducted via the appropriate grievance/arbitration forum. To allow such scuttling disadvantages employees covered by CBAs, as they lose state law protections because of an embedded CBA issue possibly peripheral to their core cause of action. The interest in sending substantial CBA issues through grievance/arbitration does not justify creating this disadvantage unless the interest cannot be otherwise accommodated. There are, accordingly, circumstances in which preemption can be avoided by accepting an arbitrator's interpretation of the CBA.² In some instances, for example, an arbitrator's interpretation of the CBA may determine whether an employee's otherwise independent state law claim in fact asserts a right created by the CBA. See Section IV.C, infra.

Still, once a state law claim has been found substantially dependent upon analysis of a CBA under the second prong of Burnside , most...