Local Union 598, Plumbers & Pipefitters Industry Journeymen & Apprentices Training Fund v. J.A. Jones Const. Co.

• Decision Date: 18 May 1988
• Docket Number: No. 85-3894,85-3894
• Parties: , 110 Lab.Cas. P 10,823, 10 Employee Benefits Ca 1204 LOCAL UNION 598, PLUMBERS & PIPEFITTERS INDUSTRY JOURNEYMEN & APPRENTICES TRAINING FUND, Plaintiff-Appellant, v. J.A. JONES CONSTRUCTION COMPANY; Bechtel Power Corporation; and Johnson Controls, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1213

846 F.2d 1213

56 USLW 2701, 110 Lab.Cas. P 10,823,

10 Employee Benefits Ca 1204

LOCAL UNION 598, PLUMBERS & PIPEFITTERS INDUSTRY JOURNEYMEN

& APPRENTICES TRAINING FUND, Plaintiff-Appellant, v. J.A. JONES CONSTRUCTION COMPANY; Bechtel Power Corporation; and Johnson Controls, Inc., Defendants-Appellees.

No. 85-3894.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 4, 1986.

Decided May 18, 1988.

Hugh Hafer and David Campbell, Hafer, Price, Rinehart & Schwerin, Seattle, Wash., for plaintiff-appellant.

Ronald F. Garrity, Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., Frederick T. Rasmussen and Paul R. Haerle, Riddell, Williams, Bullitt & Walkinshaw, Seattle, Wash., Patricia C. Williams and John C. Black, Winston & Cashatt, Spokane, Wash., for defendants-appellees.

Appeal from the United States District Court for the Western District of Washington.

Before POOLE, NORRIS and BEEZER, Circuit Judges.

BEEZER, Circuit Judge:

Plaintiff, an employee welfare benefit plan, brought this action against the defendant employers alleging a violation of Washington state's "prevailing wage" on public works statute. The Washington statute, Wash.Rev.Code ch. 39.12, requires employers on public works projects to make contributions to employee benefit plans at or above the mandated "prevailing wage" level, regardless of the level of contributions established by employment contract or collective bargaining agreement. The district court held that section 514(a) of the federal Employee Retirement Income Security Act ("ERISA") preempted the Washington statute insofar as it "relates to" an employee benefit plan. We affirm.

I

Defendants, J.A. Jones Construction Company, Bechtel Power Corporation, and Johnson Controls, Inc., ¹ are contracting companies which performed plumbing and pipefitting work on a Washington Public Power Supply System project near Richland, Washington. Plaintiff, Local Union 598, Plumbers & Pipefitters Industry Journeymen & Apprenticeship Training Fund ("Local Apprenticeship Fund"), is a labor-management apprenticeship and training trust fund.

On July 18, 1984, the Local Apprenticeship Fund brought an action in Washington state court alleging a violation of Washington's public works "prevailing wage" statute, Wash.Rev.Code ch. 39.12. The Local Apprenticeship Fund contends that the defendant contractors failed to make apprenticeship training contributions for labor performed by workers of the local union at the minimum level mandated by the state law. Instead, the defendants made contributions to a national apprenticeship training fund at the lesser level established by a collective bargaining agreement with the national union. The Local Apprenticeship Fund seeks the difference between the contributions paid and contributions allegedly due under the state prevailing wage statute.

The defendant contractors removed the action to federal district court. After the Local Apprenticeship Fund filed an amended complaint in the district court worded identically to the state court complaint, the defendants moved to dismiss, contending that the state prevailing wage law as it applies to employee benefit plans is preempted by ERISA. The district court granted the motion to dismiss, ruling that the state statute, to the extent it mandates employer contributions at a particular level to employee welfare benefit plans, is preempted by section 514(a) of ERISA, 29 U.S.C. Sec. 1144(a), because the state law "relates to" and "purports to regulate" an employee benefit plan. The Local Apprenticeship Fund appeals.

II

Removal is a question of federal subject matter jurisdiction reviewable de novo. Gould v. Mutual Life Ins. Co., 790 F.2d 769, 771 (9th Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 580, 93 L.Ed.2d 582 (1986). The defendant contractors properly removed this action to federal district court on diversity of citizenship grounds. ²

To be removable on diversity grounds, a case must exhibit complete diversity of citizenship between the plaintiffs and the defendants. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch.) 267, 2 L.Ed. 435 (1806). Furthermore, for diversity removal to be proper, none of the defendants may be a citizen of the state in which the action is brought. 28 U.S.C. Sec. 1441(b).

Considering the posture of this case at the time of removal, neither of these two requisites for diversity removal was met. The complaint named one defendant, Wright-Schuchart, Inc., a Washington state corporation, which was not diverse as to the Washington state plaintiff. If a state action includes non-diverse parties, it may not be removed until those parties have been dismissed. American Car & Foundry Co. v. Kettelhake, 236 U.S. 311, 35 S.Ct. 355, 59 L.Ed. 594 (1915); Othman v. Globe Indem. Co., 759 F.2d 1458, 1463 (9th Cir.1985), overruled on other grounds, Bryant v. Ford Motor Co., 832 F.2d 1080, 1082 (9th Cir.1987) (en banc). Moreover, this non-diverse defendant was also a citizen of the state in which the action was brought, thereby precluding removal jurisdiction by virtue of 28 U.S.C. Sec. 1441(b). Because removability is generally determined as of the time of the petition for removal, federal jurisdiction would ordinarily be defeated in this case.

However, in Grubbs v. General Elec. Credit Corp., 405 U.S. 699, 92 S.Ct. 1344, 31 L.Ed.2d 612 (1972), the Supreme Court held that a judgment of a district court may be upheld even if there was no right to removal, if the case has been tried on the merits and the federal court would have had original jurisdiction had the case been filed in federal court in the posture it had at the time of the entry of final judgment. See also American Fire & Casualty Co. v. Finn, 341 U.S. 6, 16-17, 71 S.Ct. 534, 541-42, 95 L.Ed. 702 (1951).

In this circuit, Grubbs has been made applicable not only to judgments after trials on the merits but also determinations of summary judgment motions which dispose of the merits. See, e.g., Gould, 790 F.2d at 773; Beers v. Southern Pac. Transp. Co., 703 F.2d 425, 427 (9th Cir.1983). Where the plaintiff has made no objection to jurisdiction before judgment and the jurisdictional defect has been cured before the district court by the plaintiff's voluntary action, we see no reason not to apply Grubbs to judgments of dismissal on the merits.

In this case, subsequent to removal, but before the judgment of dismissal, the plaintiff Local Apprenticeship Fund stipulated to the dismissal of the non-diverse defendant Wright-Schuchart, Inc. The plaintiff at no time has raised any objection to federal jurisdiction. Hence, although removal was initially improper, the jurisdictional defect was cured before judgment on the merits when the plaintiff voluntarily dropped the party whose presence prevented proper diversity jurisdiction. See 14A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure: Jurisdiction 2d Sec. 3723, at 319 (2d ed. 1985).

Accordingly, the district court had jurisdiction to enter judgment.

III

The plaintiff pleads sufficient facts to support its standing to claim damages under the Washington prevailing wage statute. The plaintiff's amended complaint concisely states:

1. Plaintiff is a labor-management apprenticeship and training trust.

2. Defendants are contractors or subcontractors who performed plumbing or pipefitting work in the Richland, Washington area for the Washington Public Power Supply System.

3. Defendants failed to pay costs of apprenticeship as required by RCW 39.12.010(3)(b) and RCW 39.12.020. Plaintiff is entitled to recover from Defendants the costs of apprenticeship, less any sums paid the UA-NCA Training Trust Fund. The exact amount due is not known, but will be proved at time of trial.

WHEREFORE, Plaintiff prays for judgment in the amount proved to be due for costs of apprenticeship and for other relief as may be appropriate.

Under Federal Rule of Civil Procedure 8(a)(2), a plaintiff need only make "a short and plain statement of the claim showing that the pleader is entitled to relief." The complaint before us in essence makes two allegations: first, Washington requires contractors to pay apprenticeship costs; second, plaintiff is entitled to recover such costs from the defendant contractors. There is no material difference between these allegations and those in a complaint stating that plaintiff delivered services to defendant and defendant failed to pay for the services rendered. The plaintiff has standing because it seeks relief for an actual injury which is fairly traceable to the defendants' allegedly unlawful conduct and is likely to be redressed by the requested relief. See Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984).

IV

Washington Revised Code chapter 39.12 is a "prevailing wage" statute applicable to all public works projects by the state, or any county, municipality, or political subdivision. Wash.Rev.Code Sec. 39.12.020. Persons contracting for the construction of any public work must agree to pay the prevailing wage in that locality to their employees. Id. Sec. 39.12.030-040.

The Washington statute is patterned after the federal Davis-Bacon Act, 40 U.S.C. Sec. 276a et seq., which applies to federal public works projects. Southeastern Washington Bldg. & Constr. Trades Council v. Department of Labor & Indus., 91 Wash.2d 41, 44, 586 P.2d 486, 488 (1978). Like the Davis-Bacon Act, the Washington prevailing wage statute is intended to "provide protection to local craftsmen who were losing work because contractors engaged in the practice of recruiting labor from distant cheap labor areas." 91 Wash.2d at 45, 586 P.2d at 488.

Under the Washington statute, wages paid to laborers, workmen, or mechanics by public works contractors "shall be not less than the prevailing rate of wage for an hour's work in the same trade or occupation in the locality within the state where such labor is performed." Wash.Rev.Code Sec. 39.12.020. This ...