Lontz v. Tharp

• Decision Date: 13 June 2007
• Docket Number: No. 33243.,33243.
• Court: West Virginia Supreme Court
• Parties: Grace LONTZ and Beverly Pettit, Plaintiffs Below, Appellants, v. Joyce THARP; Elizabeth Doak; James Baish; Sandeep Thakrar; and Monical, LLC, d/b/a Holiday Inn Express, Defendants Below, Appellees.

647 S.E.2d 718

Grace LONTZ and Beverly Pettit, Plaintiffs Below, Appellants, v. Joyce THARP; Elizabeth Doak; James Baish; Sandeep Thakrar; and Monical, LLC, d/b/a Holiday Inn Express, Defendants Below, Appellees.

No. 33243.

Supreme Court of Appeals of West Virginia.

Submitted: April 18, 2007.

Decided: June 13, 2007.

Dissenting Opinion of Justice Starcher June 27, 2007.

Syllabus by the Court

1. "Appellate review of a circuit court's order granting a motion to dismiss a complaint is de novo." Syl. pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac-Buick, 194 W.Va. 770, 461 S.E.2d 516 (1995).

2. "Preemption is a question of law reviewed de novo." Hartley Marine Corp. v. Mierke, 196 W.Va. 669, 673, 474 S.E.2d 599, 603 (1996), citing Kollar v. United Transportation Union, 83 F.3d 124, 125 (5th Cir.1996).

3. "Where a labor dispute is subject to National Labor Relations Board jurisdiction, a state is preempted from acting to enforce private or public rights." Syl. pt. 5, United Maintenance and Manufacturing v. United Steelworkers of America, 157 W.Va. 788, 204 S.E.2d 76 (1974).

Paul J. Harris, Esq., Wheeling, for the Appellants.

John R. Merinar, Jr., Esq., Steptoe & Johnson, Clarksburg, Mario R. Bordogna, Esq., Monte L. Williams, Esq., Steptoe & Johnson, Morgantown, for the Appellees.

PER CURIAM.

This action is before this Court upon the appeal of Grace Lontz and Beverly Pettit from the May 11, 2006, order of the Circuit Court of Ohio County, West Virginia, dismissing their action for wrongful discharge filed against their employer, Monical, LLC, d/b/a Holiday Inn Express.¹ The Circuit Court concluded that the action should be dismissed because it is preempted from State adjudication by the National Labor Relations Act. 29 U.S.C. § 151 (1947), et seq. The appellants contend that the action should remain in the Circuit Court because they assert that their discharge from employment violated the West Virginia Labor-Management Relations Act for the Private Sector. W. Va.Code, 21-1A-1 (1971).

This Court has before it the petition for appeal, all matters of record and the briefs and argument of counsel. Upon the applicable de novo standard of review and for the reasons expressed below, this Court is of the opinion that the Circuit Court was correct in concluding that the action is preempted by the National Labor Relations Act. Thus, appellants Lontz and Pettit may pursue their claims before the National Labor Relations Board. Accordingly, the May 11, 2006, order of the Circuit Court of Ohio County is affirmed.

I. Factual and Procedural Background

Appellants Lontz and Pettit worked at the Holiday Inn Express located in the Dallas Pike area of Ohio County, West Virginia. The controversy resulted when various employees at the Inn sought to unionize in 2003. Soon after, the employment of Lontz and Pettit ceased. Lontz and Pettit then filed an action in the Circuit Court of Ohio County alleging wrongful discharge. In addition to Monical, the named defendants included the following individuals who held management positions connected with the Holiday Inn Express: Joyce Tharp, Elizabeth Doak, James Baish and Sandeep Thakrar.

An amended complaint, filed in November 2003, alleged that the management at the Holiday Inn Express was "adamantly opposed to any union organizing activities and used legal and illegal means in an attempt to defeat the employees' efforts to unionize." Specifically, Lontz alleged that she was constructively discharged because she "refused to engage in unlawful conduct to have a union organizer arrested." Pettit alleged that she was wrongfully discharged because her employer blamed her for "commencing the union activity." According to Pettit, the defendants (the appellees in this appeal) engaged in a conspiracy to discharge her based on their belief that she assisted, cooperated and encouraged "certain employees to engage in union organizing activities." The amended complaint concluded by asserting that the conduct of the defendants violated the public policy of West Virginia.²

The appellees filed a motion to dismiss asserting that the action is preempted by the National Labor Relations Act. 29 U.S.C. § 151 (1947), et seq. However, prior to a ruling thereon, the appellees filed a notice that the action had been removed to the United States District Court for the Northern District of West Virginia. 28 U.S.C. § 1446 (1996). On July 1, 2004, the District Court dismissed the appellants' wrongful discharge action, concluding that it is subject to the National Labor Relations Act and, therefore, should be pursued before the National Labor Relations Board.³

Upon appeal, the United States Court of Appeals for the Fourth Circuit vacated the ruling of the District Court and held that the question of preemption was for the Circuit Court of Ohio County, West Virginia, to decide, rather than the District Court. Lontz v. Tharp, 413 F.3d 435 (4th Cir.2005). In so ruling, the Court of Appeals observed that removal to District Court is appropriate: (1) where there is diversity of citizenship, (2) where the complaint reveals a federal question essential to the plaintiff's cause of action or (3) where the "complete preemption" doctrine displaces state-law claims in a federally regulated area, such as in matters of federal concern under the Employee Retirement Income Security Act and the National Bank Act. 413 F.3d at 441. Focusing on complete preemption, the Court of Appeals stated that the sine qua non of the doctrine "is a pre-existing federal cause of action that can be brought in the district courts." 413 F.3d at 442.

Applying those principles herein, the Court of Appeals in Lontz determined that, although the wrongful discharge action involves ostensible violations of sections 7 and 8 of the National Labor Relations Act, 29 U.S.C. § 157 (1947) and 29 U.S.C. § 158 (1974), those sections do not, in themselves, create jurisdiction in the federal courts.⁴ Thus, removal to the District Court under the complete preemption doctrine was error, and the proper forum to decide the question of preemption was the Circuit Court of Ohio County. See State ex rel. Orlofske v. City of Wheeling, 212 W.Va. 538, 543, 575 S.E.2d 148, 153 (2002) (indicating that when a state proceeding presents a preemption issue the proper course is to seek resolution of that issue by the state court). As the Court of Appeals made clear: "Even though their ordinary preemptive power is great, sections 7 and 8 do not on their own terms confer federal jurisdiction and therefore cannot be the basis of removal through complete preemption." 413 F.3d at 444. Consequently, the Court of Appeals, in Lontz, acknowledged that, even though a defendant might ultimately prove that the action is preempted under the National Labor Relations Act, that does not establish that the action is removable to a federal district court. 413 F.3d at 443.

Upon remand, the Circuit Court conducted a hearing and, pursuant to the order of May 11, 2006, dismissed the appellants' action.⁵ The Circuit Court concluded that the National Labor Relations Act "preempts the plaintiffs' allegations in this case of wrongful and/or constructive discharge because of union activity" as set forth in the amended complaint. The dismissal did not include the claim alleged by Lontz under the West Virginia Wage Payment and Collection Act. See, n. 1, supra. This appeal is from the May 11, 2006, order.

II. Standards of Review

The issue before this Court is whether the Circuit Court committed error in granting the appellees' motion to dismiss upon the ground that the wrongful discharge action is preempted by the National Labor Relations Act. As the motion states, the appellees rely on two provisions of Rule 12(b) of the West Virginia Rules of Civil Procedure: subsection (1), lack of jurisdiction over the subject matter, and subsection (6), failure to state a claim upon which relief can be granted. See Lugar & Silverstein, West Virginia Rules of Civil Procedure p. 100-03 (Michie 1960), discussing the history of Rule 12(b).

In syllabus point 2 of State ex rel. McGraw v. Scott Runyan Pontiac-Buick, 194 W.Va. 770, 461 S.E.2d 516 (1995), this Court observed: "Appellate review of a circuit court's order granting a motion to dismiss a complaint is de novo." Syl. pt. 1, Rhododendron Furniture & Design v. Marshall, 214 W.Va. 463, 590 S.E.2d 656 (2003); syl. pt. 1, Bowers v. Wurzburg, 205 W.Va. 450, 519 S.E.2d 148 (1999). Moreover, citing Kollar v. United Transportation Union, 83 F.3d 124, 125 (5th Cir.1996), this Court confirmed, in Hartley Marine Corp. v. Mierke, 196 W.Va. 669, 673, 474 S.E.2d 599, 603 (1996), that "preemption is a question of law reviewed de novo." State v. Quintero Morelos, 133 Wash.App. 591, 137 P.3d 114, 118 (2006); Galvez v. Kuhn, 933 F.2d 773, 776 (9th Cir.1991).

III. Discussion

In remanding the appellants' action to the Circuit Court, the Court of Appeals in Lontz emphasized that the question of preemption under sections 7 and 8 of the National Labor Relations Act should be viewed under the "Garmon preemption" as set forth in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). In Garmon, the Supreme Court of the United States held that a California action brought by an employer for damages caused by union picketing was preempted because the action fell within the purview of sections 7 and 8 of the Act. As the Supreme Court stated: "When an activity is arguably subject to § 7 or § 8 of the Act, the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board if the danger of state interference with national policy is to be averted." 359 U.S. at 245, 79 S.Ct. at 780, 3 L.Ed.2d at 783.

Although the Supreme Court indicated in Garmon that not all cases touching on sections 7 and 8 of the Act are preempted, the Court suggested that any doubt should be resolved in favor of the authority of...