Olguin v. Inspiration Consol. Copper Co.

Decision Date21 August 1984
Docket NumberNo. 83-2366,83-2366
Citation740 F.2d 1468
Parties101 Lab.Cas. P 11,155, 1 Indiv.Empl.Rts.Cas. 399 Lansalot A. OLGUIN, Plaintiff-Appellant, v. INSPIRATION CONSOLIDATED COPPER COMPANY, et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

David F. Gomez, Van O'Steen & Partners, Phoenix, Ariz., for plaintiff-appellant.

Jon E. Pettibone, Lewis & Roca, Phoenix, Ariz., for defendants-appellees.

Appeal from the United States District Court for the District of Arizona.

Before WISDOM *, WALLACE, and ANDERSON, Circuit Judges.

WISDOM, Senior Circuit Judge:

In yet another "variant of a familiar theme" 1 we are called upon to decide if the plaintiff's state law tort and contract claims were properly removed to federal court and dismissed because they were preempted by federal labor law. The plaintiff's complaint was carefully worded to avoid any direct reference to the collective bargaining agreement that controlled his employment, but the district court found nevertheless that the plaintiff in reality alleged violations of that agreement. The district court dismissed the complaint. We affirm.


Lansalot Olguin was employed as a welder for seven and a half years by the Inspiration Consolidated Copper Company's mine in Inspiration, Arizona. He was a member of a collective bargaining unit represented by Local 187 of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO. A collective bargaining agreement established the terms and conditions of employment. The agreement gave the employer "the right to discharge or otherwise discipline employees for just cause"; the agreement also provided for a grievance and binding arbitration procedure to resolve disputes.

Inspiration disciplined Olguin four times during 1980 and 1981. 2 On the last occasion, on March 15, 1981, the company discharged him. He filed a grievance on each occasion but the Union took none to arbitration. Immediately after he was discharged Olguin filed a discrimination complaint with the Mine Safety and Health Administration (MSHA), alleging that he was discharged for filing a safety complaint with the MSHA. On August 27, 1981, Olguin also filed an unfair labor practice charge with the NLRB, alleging that he was discharged for union and protected concerted activities. After an investigation the Regional Director refused to issue a complaint because of "a lack of sufficient evidence" that Olguin's discharge had been retaliatory, and because the NLRB had a practice of deferring to the MSHA on retaliatory discharge complaints arising out of safety complaints. On November 18, 1981, the NLRB Office of General Counsel denied Olguin's appeal. In March 1982 the MSHA concluded that Olguin had not been subjected to discrimination in retaliation for his safety complaint. Olguin then pursued his administrative remedies by filing a complaint before the Federal Mine Safety and Health Review Commission (FMSHRC). In March 1983 Inspiration agreed to pay Olguin $1,000 in settlement of the FMSHRC complaint.

At this point the dispute moved to the courts. Olguin filed a complaint in Arizona Superior Court on March 9, 1983. The complaint alleged four causes of action under Arizona law: wrongful discharge; wrongful discharge in violation of public policy; intentional infliction of emotional distress (outrage); and breach of contract. The complaint omits any mention of the collective bargaining agreement, and relies instead on state tort law, an alleged agreement between Olguin and Inspiration, and (in the second count) on "public policy" as manifested in the National Labor Relations Act and the Federal Mine Safety and Health Act.

Inspiration removed the case to federal court on the ground that Olguin's causes of action arose not under state law but under federal labor law. Olguin moved to remand the proceedings to state court. In August 1983 the district court denied the motion of remand and granted summary judgment. The court found that no material facts were disputed, that the claims all arose under federal law, and that federal law provided exclusive remedies. Because Olguin had failed to follow the procedures provided by the collective bargaining agreement, the court dismissed his complaint.


The federal courts have original jurisdiction of any action "arising under" a federal law regulating commerce. 28 U.S.C. Sec. 1337 (1982). Federal question jurisdiction has been the subject of extensive judicial and academic discussion, as courts and commentators have attempted to evolve workable and justifiable principles out of doctrines "involving perhaps more history than logic". 3 See Powers v. South Central United Food & Commercial Workers Unions, 719 F.2d 760, 763 n. 1 (5th Cir.1983) (collecting cases and authorities). The firmest of these historical doctrines is the "well-pleaded complaint" rule. The Supreme Court has repeatedly held that for federal question jurisdiction to exist "a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action". Gully v. First National Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936); see Franchise Tax Board v. Construction Laborers Vacation Trust, 103 S.Ct. 2841, 2846-48, 77 L.Ed.2d 420, 430-32 (1983); Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914); Louisville & Nashville Railroad Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). Under the well-pleaded complaint rule, federal jurisdiction is not created when the plaintiff's cause of action is preempted by federal law, because preemption is a defense, not an element of the complaint. 4 This is so even if both parties agree that the only issue in the case is a question of federal law. In Franchise Tax Board the Court acknowledged that this rule "may produce awkward results", but reaffirmed the rule as supported by "unimpeachable authority". 103 S.Ct. at 2848, 77 L.Ed.2d at 432.

A plaintiff may not, however, avoid federal jurisdiction simply by omitting from the complaint federal law essential to his claim, or by casting in state law terms a claim that can be made only under federal law. Jurisdiction is determined on the basis of the well-pleaded complaint. A complaint that is "artfully pleaded" to avoid federal jurisdiction may be recharacterized as one arising under federal law. Franchise Tax Board, 103 S.Ct. at 2853, 77 L.Ed.2d at 439; Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 397 n. 2, 101 S.Ct. 2424, 2427 n. 2, 69 L.Ed.2d 103 (1981).

In suits arising under collective bargaining agreements, the "arising under" requirement of 28 U.S.C. Sec. 1337 is supplemented by section 301 of the Labor-Management Relations Act, which provides:

"Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties."

29 U.S.C. Sec. 185(a) (1982). Section 301 does not divest state courts of concurrent jurisdiction to hear collective bargaining suits. Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 103 n. 9, 82 S.Ct. 571, 576 n. 9, 7 L.Ed.2d 593 (1962); Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962). Whether brought in state or federal court, however, a suit arising under a collective bargaining agreement is governed exclusively by federal law; this law "displace[s] entirely any state cause of action 'for violation of contracts between an employer and a labor organization' ". Franchise Tax Board, 103 S.Ct. at 2853, 77 L.Ed.2d at 439; see Lucas Flour, 369 U.S. at 102-04, 82 S.Ct. at 576-77; Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957).

Collective bargaining agreements customarily provide for grievance and arbitration procedures, and unless an employee can show that he was not fairly represented by his union, grievance and arbitration is the employee's exclusive remedy for a breach of the agreement. See Republic Steel Co. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965). To escape this exclusivity employees frequently attempt to avoid federal law by basing their complaint on state law, disclaiming any reliance on the provisions of the collective bargaining agreement. Nevertheless, many of these cases are in fact section 301 suits and as such are governed by federal law. In such cases the "artful pleading" doctrine requires that the state law complaint be recharacterized as one arising under the collective bargaining agreement. The case may then be removed to federal court and adjudicated under the appropriate federal law. The Ninth Circuit has approved such recharacterization in, e.g., Schroeder v. Trans World Airlines, Inc., 702 F.2d 189, 191 (9th Cir.1983); Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir.1980); Magnuson v. Burlington Northern, Inc., 576 F.2d 1367, 1368-69 (9th Cir.), cert. denied, 439 U.S. 930, 99 S.Ct. 318, 58 L.Ed.2d 323 (1978). In Fristoe this Court permitted removal when it was "apparent from the allegations in [the plaintiff's] complaint and his responses to the [district] court's questions that Fristoe was alleging ... [wrongful discharge] in breach of the collective bargaining agreement ...." 615 F.2d at 1212. More recently, in Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367 (9th Cir.1984), the Court stated that removal is appropriate when "the substance of [the] claim ... states on its face a federal cause of action," id. at 1371 n. 5. The Fifth Circuit has recently held that "when a state cause of action is preempted by section 301, the federal courts...

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