Scott v. Machinists Automotive Trades Dist. Lodge No. 190 of Northern California, 1546

• Decision Date: 08 September 1987
• Docket Number: 86-1625,Nos. 86-1620,86-1626,86-1621,No. 1546,1546,s. 86-1620
• Parties: 126 L.R.R.M. (BNA) 2367, 107 Lab.Cas. P 10,161, 2 Indiv.Empl.Rts.Cas. 917 Brian P. SCOTT, Plaintiff-Appellant, Cross-Appellee, v. MACHINISTS AUTOMOTIVE TRADES DISTRICT LODGE NO. 190 OF NORTHERN CALIFORNIA; International Association of Machinists and Aerospace Workers; East Bay Automotive Machinists Lodge; Safeway Stores, Inc., a Maryland corporation; Raul Morales, Defendants-Appellees, Cross-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 589

827 F.2d 589

126 L.R.R.M. (BNA) 2367, 107 Lab.Cas. P 10,161,

2 Indiv.Empl.Rts.Cas. 917

Brian P. SCOTT, Plaintiff-Appellant, Cross-Appellee, v. MACHINISTS AUTOMOTIVE TRADES DISTRICT LODGE NO. 190 OF NORTHERN CALIFORNIA; International Association of Machinists and Aerospace Workers; East Bay Automotive Machinists Lodge No. 1546; Safeway Stores, Inc., a Maryland corporation; Raul Morales, Defendants-Appellees, Cross-Appellants.

Nos. 86-1620, 86-1621, 86-1625, 86-1626.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 11, 1986.

Decided Sept. 8, 1987.

B.V. Yturbide, San Francisco, Cal., for plaintiff-appellant, cross-appellee.

Stewart Weinberg, San Francisco, Cal., for defendant-appellee, cross-appellant, Machinists Automotive Trades.

Richard H. Harding, San Francisco, Cal., for defendant-appellee, cross-appellant, Safeway Stores, Inc.

Appeal from the United States District Court for the Northern District of California.

Before KENNEDY, TANG and THOMPSON, Circuit Judges.

ORDER

The opinion filed April 27, 1987, is withdrawn. The attached opinion is filed in its stead.

OPINION

PER CURIAM:

Scott filed suits in both state and federal court alleging five causes of action arising from termination of his employment by Safeway and related allegations of harassment by his supervisor, Morales. Three of the causes of action, although two were pleaded on theories sounding in state law for bad faith dealing and intentional interference with contractual relations, were ultimately determined to be based on section 301 of the National Labor Relations Act; the other two were state claims for defamation and emotional distress. The state case was removed to federal court, where the district court held that three section 301 causes of action had been properly removed, but remanded the defamation and emotional distress claims to state court. The district court then granted summary judgment on the section 301 claims in both the state and federal cases and dismissed the defamation and emotional distress claims in the federal case. Scott appeals the summary judgment which resulted in dismissal of his section 301 claims. Safeway and Morales appeal the remand of the claims for intentional infliction of emotional distress and defamation in the state suit. We affirm the dismissal of all five causes of action in the federal suit and the dismissal of the section 301 causes of action in the state suit; we vacate the order of remand of the emotional distress and defamation causes of action in the state suit, and dismiss these as well.

BACKGROUND

The facts of the discharge are not in dispute. Scott was employed by Safeway as a mechanic for fourteen years before the events leading to his discharge. In September 1984, his supervisor, Morales, accused Scott, in the presence of other employees, of poor work and a poor attitude. That incident is the basis for Scott's defamation claim. Scott was fired November 15, 1984, for using profane and abusive language toward his working foreman. His union, the Machinists Automotive Trades District Lodge 190, filed a grievance under the collective bargaining agreement.

During processing of the grievance, Scott alleged that Morales had lied about the profanity incident, and that this false testimony had caused him severe emotional distress. The matter was set for arbitration in February 1985, but the day before the hearing Safeway offered to reinstate Scott and to negotiate with the union to resolve the back pay award.

At a meeting with Safeway and his union representative, Scott stated that he did not want reinstatement and would waive that and release all claims against Safeway in exchange for expungement of his employment record and $125,000. Five days later Safeway counter offered $20,000 in full settlement of all claims. Scott apparently did not reject or accept the offer, and three weeks later, in March 1985, he contacted independent counsel.

Arbitration had been rescheduled, but later the union and Safeway proceeded to settle the grievance with a settlement that included reinstatement, full back pay less the eight days of Scott's suspension, and reimbursement of out-of-pocket health and welfare costs. Scott neither approved nor rejected the settlement. Settlement checks were sent to the union representative, but Scott refused to accept them. Instead, he filed his claims in federal and state court.

ANALYSIS

We review the district court's determination of subject matter jurisdiction de novo. Lumber Prod. Indus. Workers Local No. 1054 v. West Coast Indus. Relations Ass'n, 775 F.2d 1042, 1045 (9th Cir.1985). We review a grant of summary judgment de novo. Truex v. Garrett Freightlines, Inc., 784 F.2d 1347, 1348 (9th Cir.1985).

I. Removal Jurisdiction-Preemption of Bad Faith and Intentional Interference Claims

The district court properly held it has original jurisdiction over the claim for breach of the collective bargaining agreement and breach of the union's duty of fair representation, and that the claim was properly removed. 29 U.S.C. Sec. 185.

The district court also held the claims for breach of the implied covenant of good faith and fair dealing and intentional interference with contractual relations are preempted under the authority of Olguin v. Inspiration Consol. Copper Co., 740 F.2d 1468, 1472 (9th Cir.1984), and Fristoe v. Reynolds Metals Co., 615 F.2d 1209 (9th Cir.1980). We agree with the district court that these claims must be recharacterized as arising under federal law, and that they were properly removed to federal court. Carter v. Smith Food King, 765 F.2d 916, 921 (9th Cir.1985). The test for federal preemption of state law claims is:

[W]hen resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties to a labor contract, that claim must either be treated as a Sec. 301 claim ... or dismissed as preempted by federal labor-contract law.

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 1916, 85 L.Ed.2d 206 (1985) (citation omitted).

The two claims at issue here are related to the contract provisions and clearly depend upon interpretation of the contract. Interference with contract relations is obviously connected with interpretation of the contract. The tort of breach of the implied covenant of good faith and fair dealing is the tort involved in Allis-Chalmers in which the Supreme Court said that such a state cause of action is necessarily preempted by section 301. Id. at 218-19, 105 S.Ct. at 1914-15. Removal was therefore proper.

The district court remanded to state court the claims for defamation and intentional infliction of emotional distress. On its face, 28 U.S.C. Sec. 1447(d) appears to prevent us from reviewing this order of remand. That section provides that a remand order "is not reviewable on appeal or otherwise...." 28 U.S.C. Sec. 1447(d). In Thermtron Prod., Inc. v. Hermansdorfer, 423 U.S. 336, 350-52, 96 S.Ct. 584, 593, 46 L.Ed.2d 542 (1976), however, the Supreme Court held that the statute does not bar review under certain conditions. In Thermtron the district court had remanded a properly removed action solely because the district court's docket was crowded, and the action would proceed more quickly in state court. The Thermtron court held that review of the order was appropriate. The Court concluded that the restrictions of section 1447(d) apply in cases in which the remand order is based on section 1447(c), which specifies the appropriate grounds for remand. If a district court remands for reasons permitted under section 1447(c), the remand is not reviewable; but if the court remands for other reasons, the order is subject to review. Id. at 351, 96 S.Ct. at 593.

The threshold question, therefore, is whether the district court based its remand on section 1447(c). Section 1447(c) requires district courts to remand cases removed "improvidently and without jurisdiction." 28 U.S.C. Sec. 1447(c). Under this circuit's approach, therefore, we must decide whether the remand was jurisdictional. See Clorox Co. v. United States Dist. Court, 779 F.2d 517, 520 (9th Cir.1985).

The district court in the case before us decided that the claims for defamation and intentional infliction of emotional distress were not preempted and lacked an independent basis for federal jurisdiction. The district court further decided that it would not exercise its discretion to hear the actions as pendent claims. There can be no doubt that the claims were within the district court's supplemental jurisdictional power. The claims arose from the same "common nucleus of operative fact." See United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966); see also Matasar, A Pendent and Ancillary Jurisdiction Primer: The Scope and Limits of Supplemental Jurisdiction, 17 U.C. Davis L.Rev. 103 (1983). Even after dismissal of the section 301 claims, the district court retained the jurisdictional power to hear the claims. Anderson v. Allstate Ins. Co., 630 F.2d 677, 681 (9th Cir.1980). It is true, as the district court noted in its remand order, that Gibbs gave it the discretion to dismiss the emotional distress and defamation claims. See Gibbs, 383 U.S. at 726, 86 S.Ct. at 1139; Anderson, 630 F.2d at 681 n. 3. However, the dismissals were not jurisdictional dismissals. Rather, they were discretionary dismissals based on a determination that the claims would be better heard in state court. Therefore, the district court did not decide that the claims were removed "improvidently and without jurisdiction," and Thermtron commands us to review the remand. We thus are not precluded from reviewing the district court's disposition of any of the claims in either the state or federal complaints. We turn now to our review of the district court's disposition of the claims before it.

II. Summary Judgment on the Section 301 Claims

The district court held that Scott...