McCarty v. Reynolds Metals Co.

• Decision Date: 04 April 1995
• Docket Number: No. NA 94-93-C.,NA 94-93-C.
• Citation: 883 F. Supp. 356
• Parties: Michael McCARTY, Plaintiff, v. REYNOLDS METALS CO., Defendant.
• Court: U.S. District Court — Southern District of Indiana

883 F. Supp. 356

Michael McCARTY, Plaintiff, v. REYNOLDS METALS CO., Defendant.

No. NA 94-93-C.

United States District Court, S.D. Indiana, New Albany Division.

April 4, 1995.

COPYRIGHT MATERIAL OMITTED

William C. Moyer, Lorch & Naville, New Albany, IN, for plaintiff.

William H. Hollander, Steven L. Snyder, Wyatt Tarrant & Combs, Louisville, KY, for defendant.

BARKER, Chief Judge.

This matter is currently before the court on Reynolds Metals Company's ("Reynolds") motion to dismiss Plaintiff's Amended Complaint and this court's Order of January 5, 1995, directing the briefing of specific issues raised by the court. For the reasons set forth below, we grant Defendant's motion to dismiss.

I. FACTUAL BACKGROUND

Plaintiff Michael McCarty is employed by Reynolds as a machinist in Reynolds' Louisville plant. Reynolds is engaged in the production and sale of aluminum foil. McCarty's duties included the maintenance and up-keep of Reynolds' equipment.

In March, 1988, McCarty devised a new process designed to eliminate maintenance down-time and, accordingly, increase Reynolds' production rates of aluminum foil. The development of this process was done on his own time and while working at his residence. Soon thereafter, McCarty and Reynolds entered into an oral agreement concerning Reynolds' use of that process. Specifically, Reynolds agreed to promote McCarty to a supervisory job in Research and Development if he installed his new process and that process actually reduced down-time and increased production.

Approximately four to six weeks later, McCarty completed the production of a prototype of his invention and demonstrated its use to Reynolds. Reynolds again orally agreed to promote McCarty to a supervisory position if the invention reduced down-time and increased production.

Subsequently, Reynolds installed McCarty's process on the production lines at its Louisville and Richmond, Virginia, plants. Plaintiff alleges that his process did in fact reduce down-time and increase production. However, Reynolds has neither promoted nor compensated him as negotiated in their agreement.

On June 6, 1994, McCarty filed a pro se complaint against Reynolds in Harrison Superior Court. The Complaint stated that McCarty wished "To be paid in full for work perform sic between 5-88—1-89." During this time, the terms and conditions of McCarty's employment were governed by two successive collective bargaining agreements ("CBA's"), which were in effect from June 1, 1986, to May 31, 1992.

On July 7, 1994, Reynolds removed the action to this court and moved to dismiss, claiming that McCarty failed to exhaust the CBA's grievance and arbitration process. McCarty, now represented by counsel, responded by seeking leave to file an amended complaint. The Amended Complaint alleged claims for breach of contract and unjust enrichment. We granted McCarty's motion to amend his Complaint and denied as moot Reynolds' motion to dismiss. However, we also asked the parties to brief the following three issues: (1) whether McCarty has framed a cause of action under § 301 of the National Labor Relations Act, 29 U.S.C. § 185(a); (2) if the Amended Complaint sufficiently asserts only state-law contract claims, whether the allegations relating to jurisdiction satisfy the requirements of diversity of citizenship and amount in controversy; and (3) if the Court's jurisdiction is properly invoked under diversity, whether the § 301 preemption issue will come into the case as a defense. If the first two questions are answered in the negative, then the Court lacks subject matter jurisdiction. If either is answered affirmatively, then we must consider the merits of Defendant's renewed motion to dismiss.

II. DID PLAINTIFF FRAME A § 301 CAUSE OF ACTION?

The presence or absence of federal question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). Under this rule, the plaintiff is "master of the claim" and "may avoid federal jurisdiction by exclusive reliance on state law." Id.; see also The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 411, 57 L.Ed. 716 (1913).

The doctrine of complete preemption, however, exists as an "independent corollary to the well-pleaded complaint rule." Caterpillar, 482 U.S. at 393, 107 S.Ct. at 2430. Under this doctrine, "if a federal cause of action completely pre-empts a state cause of action any complaint that comes within the scope of the federal cause of action necessarily `arises under' federal law." Franchise Tax Board v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 24, 103 S.Ct. 2841, 2854, 77 L.Ed.2d 420 (1983).

The complete preemption doctrine "is applied primarily in cases raising claims pre-empted by § 301 of the LMRA." Caterpillar, 482 U.S. at 393, 107 S.Ct. at 2430. Section 301¹ governs disputes regarding collective bargaining agreements, and mandates the application of uniform federal law to resolve such disputes. Indeed,

the pre-emptive force of § 301 is so powerful as to displace entirely any state cause of action "for violation of contracts between an employer and a labor organization." Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301.

Franchise Tax Board, 463 U.S. at 23, 103 S.Ct. at 2853-54.² However, "not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement" arises under federal law. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211, 105 S.Ct. 1904, 1911, 85 L.Ed.2d 206 (1985). Rather, only "claims founded directly on rights created by collective-bargaining agreements" or "substantially dependent on analysis" of a CBA trump the well-pleaded complaint rule and establish federal jurisdiction. Caterpillar, 482 U.S. at 394, 107 S.Ct. at 2431 (citations omitted).

The Supreme Court applied this test in a situation similar to the case at bar in Caterpillar Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). In that case, the plaintiffs alleged that their employer breached individual employment agreements that pre-dated their joining the union. The alleged agreements derived from the employer's repeated representations that the plaintiffs would enjoy continuing employment, even if one of the defendant's facilities were to close. The defendant then removed the action to federal court, arguing that removal was proper because any claims based on individual contracts were preempted by § 301.

In holding that removal was improper, the Court noted that the mere existence of a collective bargaining agreement does not prevent an employee from bringing state law claims based on an independent agreement. Rather,

a plaintiff covered by a collective-bargaining agreement is permitted to assert legal rights independent of that agreement, including state-law contract rights, so long as the contract relied upon is not a collective-bargaining agreement.

Caterpillar, 482 U.S. at 396, 107 S.Ct. at 2431 (emphasis in original). Because the job security agreements pre-dated plaintiffs' participation as union members, the Court found that the individual contracts were not substantially dependent upon interpretation of the CBA. Accordingly, the Court affirmed the Ninth Circuit's remand of the case to state court.

In this circuit, the Court of Appeals has found federal question jurisdiction when "the resolution of a state-law claim depends upon the meaning of a collective-bargaining agreement." Matter of Amoco Petroleum Additives Co., 964 F.2d 706, 709 (7th Cir.1992) quoting Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 405-06, 108 S.Ct. 1877, 1881-82, 100 L.Ed.2d 410 (1988). For example, in Amoco Petroleum the court held that a female employee's state law claim for invasion of privacy caused by the employer's installation of a video camera in the women's locker room arose under § 301 for purposes of establishing federal jurisdiction. Although the CBA did not expressly cover surveillance, the employer argued that the subject was covered by implication under the contract's management rights clause. The court agreed, reasoning that in order to determine whether the surveillance was unjustified, the state court would have to construe the CBA and reject the management-rights argument. 964 F.2d at 709-710.

The common thread running throughout this caselaw is straightforward: a plaintiff may assert state contract rights independent of an operative CBA "so long as the contract relied upon is not a collective-bargaining agreement." Caterpillar, 482 U.S. at 396, 107 S.Ct. at 2431 (emphasis added). It is not enough that the plaintiff is a member of the bargaining unit: "Claims bearing no relationship to a collective-bargaining agreement beyond the fact that they are asserted by an individual covered by such an agreement are simply not pre-empted by § 301." Caterpillar, 482 U.S. at 396 n. 10, 107 S.Ct. at 2432 n. 10. Rather, resolution of the state-law contract claim must require a court to construe the meaning of the CBA.

A. Unjust Enrichment Claim

Under Indiana law, the essential elements of an unjust enrichment claim are well known. A plaintiff must establish that a measurable benefit has been conferred under such circumstances that the defendant's retention of the benefit without payment would be unjust. Bayh v. Sonnenburg, 573 N.E.2d 398, 408 (Ind.1991). To be unjust, one must labor with a reasonable expectation of payment. Wood v. Mid-Valley Inc., 942 F.2d 425, 429 (7th Cir.1991); Biggerstaff v. Vanderburgh Humane Society, Inc., 453 N.E.2d 363, 364 (Ind.App.1983).

Whether McCarty had a reasonable expectation of payment will require the interpretation and...