Lawless v. Steward Health Care Sys., LLC

• Decision Date: 25 June 2018
• Docket Number: No. 17-2128,17-2128
• Parties: Margaret LAWLESS, Plaintiff, Appellee, v. STEWARD HEALTH CARE SYSTEM, LLC, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

894 F.3d 9

Margaret LAWLESS, Plaintiff, Appellee,
v.
STEWARD HEALTH CARE SYSTEM, LLC, Defendant, Appellant.

No. 17-2128

United States Court of Appeals, First Circuit.

June 25, 2018

Robert G. Young, with whom Timothy P. Van Dyck and Bowditch & Dewey, LLP, Framingham, MA, were on brief, for appellant.

Daniel W. Rice, with whom Glynn, Landry & Rice, LLP, Braintree, MA, was on brief, for appellee.

Before Torruella, Selya and Kayatta, Circuit Judges.

SELYA, Circuit Judge.

At its inception, this appeal seemed to present a single question—albeit a novel one—about how to interpret the Massachusetts Wage Act (the Wage Act). See Mass. Gen. Laws ch. 149, §§ 148, 150. But appearances can be deceiving, cf. Aesop, The Wolf in Sheep's Clothing (circa 550 B.C.), and at oral argument, a threshold question emerged as to the existence vel non of federal subject-matter jurisdiction. After careful consideration, we hold that federal subject-matter jurisdiction existed at the time of removal because there was then a colorable claim of complete preemption under the Labor Management Relations Act (LMRA), 29 U.S.C. § 185(a). Even after it became evident that LMRA preemption was not in the cards, the district court retained authority to exercise supplemental jurisdiction over the case. See 28 U.S.C. § 1367(c). With our jurisdictional concerns assuaged, we reach the merits, grapple with the disputed Wage Act question, and affirm the judgment below.

I. BACKGROUND

The facts are, for all practical purposes, undisputed. Defendant-appellant Steward Health Care System, LLC owns and operates several medical facilities in Massachusetts, including Carney Hospital (Carney). Plaintiff-appellee Margaret Lawless worked as a nurse at Carney for many years. At the times relevant hereto, she was a member of the Massachusetts Nurses Association, a union that had a collective bargaining agreement (CBA) with the defendant. The CBA contained various provisions addressing members' compensation.

On March 5, 2016, the defendant terminated the plaintiff's employment. On March 7, the plaintiff sued the defendant in a Massachusetts state court, alleging failure to pay accrued wages by the date of her termination. Specifically, the plaintiff alleged that the defendant had failed to pay $20,154.30 in paid time off (PTO) and $21,191.11 in extended sick leave (ESL). These payment shortfalls, she alleged, were in breach of her employment contract

894 F.3d 16

and in violation of the Wage Act, Mass. Gen. Laws ch. 149, §§ 148, 150. That same day, the plaintiff filed an administrative complaint with the Attorney General of Massachusetts, requesting leave to proceed with her suit. See id. § 150.

On March 10, the defendant made a direct deposit into the plaintiff's bank account in the amount of $12,754.33—a sum that was intended to compensate her for all of the PTO owed. Six days later, the plaintiff received a check from the defendant in the amount of $2,440.80—a sum that was intended to compensate her for all of the accrued ESL. On March 22, the Attorney General assented to the plaintiff's maintenance of her suit.

On May 23, the plaintiff amended her complaint and withdrew her claim for breach of contract. The amended complaint also revised the amounts that the plaintiff claimed were overdue: it alleged that, at the time of her discharge, she was owed $20,354.44 in PTO and $2,440.80 in ESL. The defendant removed the case to the federal district court the next day, pegging federal subject-matter jurisdiction on the basis of LMRA preemption. See 28 U.S.C. §§ 1331, 1441(a), 1446 ; see also 29 U.S.C. § 185(a). The plaintiff did not move to remand. The case proceeded in the district court and, in due course, the parties cross-moved for summary judgment. See Fed. R. Civ. P. 56(a). The district court granted summary judgment in favor of the plaintiff, awarding her treble damages in an amount equal to three times the cumulative total of her accrued PTO and ESL as of the date of her discharge, together with reasonable attorneys' fees and costs. See Mass. Gen. Laws ch. 149, § 150. This timely appeal ensued.

Following the filing of briefs, the case came on for oral argument in this court on May 10, 2018. Although neither party had broached the existence of federal subject-matter jurisdiction, we raised doubts about jurisdiction at oral argument and ordered supplemental briefing. Those briefs having been submitted, the appeal is now ripe for resolution.

II. JURISDICTION

A court without jurisdiction is like a king without a kingdom: both are powerless to act. Since the existence of federal subject-matter jurisdiction implicates our power to hear and determine a case, we must address that issue before proceeding further. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ; Bonano v. E. Carib. Airline Corp., 365 F.3d 81, 83 (1st Cir. 2004). The fact that neither party has challenged the existence of federal subject-matter jurisdiction is of no moment: federal subject-matter jurisdiction can never be presumed, nor can it be conferred by acquiescence or consent. See Arbaugh v. Y&H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) ; Cusumano v. Microsoft Corp., 162 F.3d 708, 712 (1st Cir. 1998). When circumstances exist that call federal subject-matter jurisdiction into legitimate question, "an appellate court has an unflagging obligation to inquire sua sponte into its own jurisdiction." Watchtower Bible & Tract Soc. of N.Y. v. Colombani, 712 F.3d 6, 10 (1st Cir. 2013) (quoting Charlesbank Equity Fund II v. Blinds To Go, Inc., 370 F.3d 151, 155-56 (1st Cir. 2004) ).

This case, though originally filed in a Massachusetts state court, was removed to the federal district court. It is settled beyond peradventure that a state-court action is removable only if it "originally could have been filed in federal court." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). We review a district court's retention of subject-matter jurisdiction

894 F.3d 17

over a removed case de novo. See BIW Deceived v. Local S6, Indus. Union of Marine & Shipbldg. Workers of Am., 132 F.3d 824, 830 (1st Cir. 1997).

The parties see no jurisdictional problem. They jointly posit that this case was appropriately removed on the basis of federal-question jurisdiction, that is, they envision that this case arises "under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. But "[t]he gates of federal question jurisdiction are customarily patrolled by a steely-eyed sentry—the ‘well-pleaded complaint rule.’ " BIW, 132 F.3d at 831. Consequently, the propriety of federal-question jurisdiction must be assayed based on "what necessarily appears in the plaintiff's statement of [her] own claim" in her complaint, "unaided by anything alleged in anticipation of avoidance of defenses which it is thought that a defendant may interpose." Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (quoting Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914) ). In the context of removal, "we consider the claims in the state court [complaint] as they existed at the time of removal." Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) ; see Gentek Bldg. Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007).

At first blush, the parties' shared claim of jurisdiction appears to run headlong into the well-pleaded complaint rule. The operative pleading (the amended complaint) contains a single cause of action claiming violations of the Wage Act and does not refer at all to federal law. But there may be more here than meets the eye: the parties argue that the amended complaint raises a colorable claim under the complete preemption doctrine (sometimes referred to as the artful pleading doctrine). See López-Muñoz v. Triple-S Salud, Inc., 754 F.3d 1, 5 (1st Cir. 2014) (explaining complete preemption doctrine). On reflection, we agree.

We start with the doctrine of complete preemption: "Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). Section 301 of the LMRA operates in this fashion. See 29 U.S.C. § 185(a) ; Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209-13, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). It is by now black-letter law that "the preemptive force of [section] 301 is so powerful as to displace entirely any state cause of action for violation of contracts between an employer and a labor organization." BIW, 132 F.3d at 831 (quoting Franchise Tax Bd., 463 U.S. at 23, 103 S.Ct. 2841 ). Any claim falling under the carapace of section 301 is therefore treated as "purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of [section] 301." Id. (quoting Franchise Tax Bd., 463 U.S. at 23, 103 S.Ct. 2841 ). Although state courts may exercise concurrent jurisdiction over claims completely preempted under section 301, they must look to federal common law for the substantive rules of...