Salmons v. Prudential Ins. Co. of America

• Decision Date: 04 May 1999
• Docket Number: No. Civ.A. 2:99-0215.,Civ.A. 2:99-0215.
• Citation: 48 F.Supp.2d 620
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Ronald G. SALMONS, Plaintiff, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, et al., Defendants.

48 F.Supp.2d 620

Ronald G. SALMONS, Plaintiff, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, et al., Defendants.

No. Civ.A. 2:99-0215.

United States District Court, S.D. West Virginia, Charleston Division.

May 4, 1999.

COPYRIGHT MATERIAL OMITTED

Richard D. Owen, Tammy G. Owen and Alexander Macia, Goodwin & Goodwin, Charleston, WV, for plaintiff.

Elizabeth D. Harter and Lisa M. Drabik, Bowles, Rice, McDavid, Graff & Love, Charleston, WV, for defendant.

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending are Plaintiff's motion to remand and Defendants' motion to dismiss. Both motions are ripe for the Court's disposition. For reasons discussed more fully below, the Court GRANTS Plaintiff's motion to remand and DENIES as moot Defendants' motion to dismiss.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Salmons was an insurance agent for Defendant Prudential Insurance Company of America ("Prudential"). In October 1989 the United Food & Commercial Workers International Union ("the Union"), representing all Prudential agents in West Virginia, including Plaintiff, negotiated an Agent's Agreement with Prudential.¹ The collective bargaining agreement ("CBA") provided in pertinent part, "That the appointment as Prudential Representative and this Agreement may be terminated either by the Prudential Representative or the Company at any time."² Defs.' Mot. to Dismiss, Ex. A, p. 81.

From about July 1992 to October 1998, Salmons maintained an insurance office in West Hamlin, West Virginia. Sometime in 1997 Prudential imposed a minimum annual quota known as the Net First Year Commission Credits; agents who failed to meet the quota would be terminated. Salmons did not meet the quota in 1998 and on January 6, 1999 Prudential terminated his Agent's Agreement, effective January 22, 1999.

On February 16, 1999 Salmons filed this civil action in the Circuit Court of Lincoln County, West Virginia, alleging violations of W.Va.Code §§ 33-12A-3, Contractual Relationship Between Insurance Companies and Agents (the "Agent statute"), which provides that an insurance agent who has been employed for more than five years pursuant to a written contract can be terminated only for certain specified reasons.³

Defendants removed to this Court alleging Plaintiff's claim is preempted by Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, which provides federal question jurisdiction pursuant to 28 U.S.C. § 1331. Alternatively, Defendants propose the Agent statute conflicts with federal law so that conflict preemption applies. In lieu of an Answer, Defendants moved to dismiss for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Defendants rely on the CBA, which allows Prudential to discharge Salmons at any time with no requirement that a reason be given.

Plaintiff has moved to remand, arguing Section 301 preemption is not complete; state claims which do not require interpretation of the CBA are not preempted. Because Plaintiff's state law claims may be resolved without such CBA analysis, Plaintiff argues this Court is without jurisdiction and must remand this action.

II. ARGUMENT

A. Removal and Remand Standard

Removal statutes must be construed strictly against removal. Adkins v. Gibson, 906 F.Supp. 345 (S.D.W.Va.1995) (Haden, C.J.) (citing Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148, 151 (4th Cir.1994)); accord Murray v. State Farm Fire & Cas. Co., 870 F.Supp. 123, 124 (S.D.W.Va.1994) (Haden, C.J.). The burden of establishing the propriety of removal falls upon the removing party. Mulcahey, 29 F.3d at 151. If federal jurisdiction is doubtful, remand is necessary. Id.; see also 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."). Accordingly, the Court must determine first whether there is a proper basis for removal which provides subject matter jurisdiction. Without jurisdiction, the Court may not address the motion to dismiss.

B. Section 301 preemption

A defendant may remove to federal court a civil action "brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). The Supreme Court has described the criteria for § 1441 removal:

Only state court actions that originally could have been filed in federal court may be removed to federal court by the defendant. Absent diversity of citizenship, federal question jurisdiction is required. 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, 96 L.Ed.2d 318 (1987). The well-pleaded complaint rule "makes plaintiff the master of the claim; he or she may avoid federal question jurisdiction by exclusive reliance on state law." Id. Further, a case may not be removed on the basis of a federal defense, "including the defense of preemption, even if the defense is anticipated in the plaintiff's complaint and even if both parties concede that the federal defense is the only question truly at issue." Id. at 393, 107 S.Ct. 2425.

There is an exception, however, to the well-pleaded complaint rule: the complete preemption doctrine, "[where] the preemptive force of a statute is so extraordinary that it converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Caterpillar, 482 U.S. at 392, 107 S.Ct. 2425. Complete preemption occurs whenever "Congress ... so completely pre-empts a particular area [of law] that any civil complaint raising this select group of claims is necessarily federal in character." Metro. Life Ins. v. Taylor, 481 U.S. 58, 63-64, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987).

Defendants assert Plaintiff's claim is completely preempted by § 301 of the LMRA, which provides in pertinent part:

Suits for violation of contracts between an employer and a labor organization representing employees ... 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. § 185(a).

The complete preemption doctrine originated with the Supreme Court's Avco decision that § 301 entirely preempted any state cause of action for violation of contracts between an employer and a labor organization. Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists & Aerospace Workers, 390 U.S. 557, 560, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968). "Within its proper sphere, § 301 has been accorded unusual preemptive power." Livadas v. Bradshaw, 512 U.S. 107, 122 n. 16, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994). That sphere is not unlimited, however, and every state civil action that somehow involves a CBA is not necessarily preempted. State laws are completely preempted by § 301 "only if such application [of state law] requires the interpretation of a collective-bargaining agreement." Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988). The rationale is that breaches of CBAs will be uniformly resolved by applying federal labor law principles, rather than potentially inconsistent state law principles. Id. at 406, 108 S.Ct. 1877.

To apply Lingle's § 301 complete preemption test, the Court examines the elements of the state law causes of action to determine whether resolution of the state law claim requires CBA interpretation. Id. at 406-07, 108 S.Ct. 1877; see also McCormick v. AT & T Technologies, Inc., 934 F.2d 531, 535 (4th Cir.1991).

Count I of Plaintiff's complaint alleges violation of the Agent statute, W.Va.Code § 33-12A-3.⁴ To prove a violation of the Agent statute, Plaintiff must demonstrate: 1) he was an insurance agent, employed pursuant to a written contract with an insurance company for a period of more than five years; 2) he was terminated by the insurance company; and 3) the insurance company terminated him for a reason other than those enumerated in the statute. No element of the claim requires any reference to the CBA, much less CBA interpretation.

Count II alleges Defendant Thomas J. LeRose ("LeRose"), the managing director of Prudential's Charleston, West Virginia office, aided and abetted Prudential's violation of the statute by impliedly threatening Salmons with adverse action if he did not resign, rather than being fired. Aiding and abetting may be proved by evidence that LeRose willfully joined with Prudential and willfully participated in the statutory violation. Again, the CBA will not be implicated.

Count III alleges LeRose harassed and intimidated Salmons, attempting to coerce his resignation. Proof of harassment, coercion, and intimidation implicates the motives and actions of LeRose, but requires no interpretation of the CBA.

Finally, Count IV alleges a civil conspiracy among LeRose and others unknown to violate the Agent statute. A civil conspiracy is a combination of two or more persons by concerted action to accomplish an unlawful purpose or to accomplish some purpose, not in itself unlawful, by unlawful means. Dixon v. American Indus. Leasing Co., 162 W.Va. 832, 834, 253 S.E.2d 150, 152 (1979). As with the other counts, neither proof of the conspiracy nor of the wrongful acts, which are its ostensible object (examined above), will require interpretation of the CBA. Accordingly, proof of Plaintiff's cause of action under the Agent statute does not require interpretation of the CBA and, therefore, it is not preempted by § 301.

Prudential's defense will be that the discharge provision of the CBA does not require any reason be given for terminating a Prudential representative. Defendants argue, therefore, the resolution of Plaintiff's state...