Sheeran v. General Elec. Co.

• Decision Date: 24 January 1979
• Docket Number: No. 77-2869,77-2869
• Citation: 593 F.2d 93
• Parties: 100 L.R.R.M. (BNA) 2675, 85 Lab.Cas. P 11,160 Clement J. SHEERAN et al., Plaintiffs-Appellants, v. GENERAL ELECTRIC COMPANY, a New York Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 93

593 F.2d 93

100 L.R.R.M. (BNA) 2675, 85 Lab.Cas. P 11,160

Clement J. SHEERAN et al., Plaintiffs-Appellants, v. GENERAL ELECTRIC COMPANY, a New York Corporation, Defendant-Appellee.

No. 77-2869.

United States Court of Appeals, Ninth Circuit.

Jan. 24, 1979.

David E. Williams (argued), of Critchlow, Williams, Ryals & Schuster, Richland, Wash., for plaintiffs-appellants.

John Gavin (argued), of Gavin, Robinson, Kendrick, Redman & Mays, Yakima, Wash., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Washington.

Before GOODWIN and ANDERSON, Circuit Judges, and JAMESON, ^* District Judge.

JAMESON, District Judge:

This is an appeal from an order dismissing an action instituted by Clement J. Sheeran and 1529 other plaintiffs seeking increased pension benefits from General Electric Company. The plaintiffs asserted, Inter alia, a claim of equitable estoppel. The district court held that this cause of action is barred by the State of Washington's three year statute of limitations. We affirm.

Factual and Procedural Background

The appellants are former employees of General Electric at the Hanford Project near Richland, Washington. They left the employ of General Electric between 1965 and 1967 while the Atomic Energy Commission phased out its contract with General Electric. At the time his employment was terminated each appellant had sufficient service with General Electric to have acquired vested rights under the General Electric Pension Plan.

General Electric, by amendments to its Pension Plan in 1967 and 1971, granted pension increases to certain categories of beneficiaries. The amendments, however, specifically provided that the increases would not be granted to vestees, the category of beneficiaries which included appellants.

On April 26, 1972, the appellants brought suit in the Superior Court in Benton County, Washington, seeking a declaratory judgment that they were entitled to the 1967 and 1971 increases and all future increases in the pensions. General Electric removed the case to federal court. Appellants' motion to remand to state court was denied.

Appellants, through their complaint and the preliminary pretrial order, dated August 8, 1973, sought recovery under two theories: (1) direct recovery on the contract under the Pension Plan, and (2) indirect recovery on a theory of equitable estoppel. The court denied appellants' motion for summary judgment based on their contention that the "plain language of the pension plan" entitled them to the pension increases. Permission was granted appellants to take an interlocutory appeal.

This court in an unpublished order entered December 16, 1974, affirmed the district court and concluded that "inasmuch as this presumably disposes of the litigation, we assume that on remand judgment for the defendant will be entered". The Supreme Court denied a writ of certiorari on April 14, 1975, 421 U.S. 913, 95 S.Ct. 1570, 43 L.Ed.2d 779.

No further action was taken in the district court until October 1, 1976, when the court, on its own motion, called a status conference to determine if the remaining issue should be dismissed. Appellants then filed a motion to "deny entry of judgment" on the ground that their second theory of liability had not been determined, i. e., their claim that rights and benefits had been extended to them by reason of certain claimed oral or written representations. General Electric filed a motion to dismiss on four grounds, including its contention that the claims of estoppel were barred by the statute of limitations. Following a hearing the remaining claims were dismissed on this ground, the court concluding that they were barred by the State of Washington's three-year statute of limitations.

Issues on Appeal

Appellants contend that (1) the district court lacked jurisdiction and should have granted appellants' motion to remand to state court, and (2) the court erred in finding their claims of estoppel were barred by Washington's three year statute of limitations. Appellants did not seek in their interlocutory appeal to have the jurisdictional questions determined. Appellee contends that appellants therefore have waived their right to raise the issue of jurisdiction, and, in any event, the federal courts have jurisdiction.

Jurisdiction

(a) Diversity of Citizenship

While all of the 1530 plaintiffs were citizens of a state different from that of the defendant, only three satisfied the $10,000 amount in controversy requirements of 28 U.S.C. § 1352. The district court assumed ancillary jurisdiction of the remaining claims and orally denied plaintiffs' motion to remand. Before a formal order was entered, the plaintiffs filed a notice of voluntary dismissal of the three $10,000 claimants under Rule 41(a) of the Federal Rules of Civil Procedure. In an unpublished memorandum and order entered December 4, 1972, the district court held that assuming the dismissal was valid, jurisdiction, once assumed, was retained over the remaining claimants.

(b) § 301(a) of the Taft-Hartley Act

The Pension Plan was available to 521 plaintiffs under the terms of collective bargaining agreements. ¹ In its December 4 1972 order the district court found that the "pension plan became an integral part of the collective bargaining agreements ² and the individual union members (had) a right to sue under § 301(a) (of the Taft-Hartley Act, 29 U.S.C. § 185(a)) for enforcement of the plan". The court held further that, "The remaining claimants are properly before the court under the doctrine of ancillary jurisdiction." ³

It is well settled that an individual employee may bring suit for breach of a collective bargaining contract in Federal court under § 301(a) of the Taft-Hartley Act. Smith v. Evening News Ass'n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962). In Evening News the Court noted that, "The rights of individual employees concerning rates of pay and conditions of employment are a major focus of the negotiation and administration of collective bargaining contracts". 371 U.S. at 200, 83 S.Ct. at 270. ⁴ We agree with the district court that pension rights are within the scope of the terms " wages" and "conditions of employment" and therefore are mandatory subjects for collective bargaining. See Inland Steel Co. v. National Labor Relations Board, 170 F.2d 247 (7 Cir. 1948), Cert. denied on pension issue, 336 U.S. 960, 69 S.Ct. 887, 93 L.Ed. 1112 (1949), Aff'd on other issues Sub nom., United States Steelworkers of America v. NLRB, 339 U.S. 382, 70 S.Ct. 674, 94 L.Ed. 925 (1950). The individual union members had a right to sue General Electric under § 301(a) for enforcement of the pension plan.

Appellants argue, however, that in their complaint they asserted no basis for § 301(a) jurisdiction that they are not claiming a violation of any collective bargaining agreement as a basis for their claims. It is true that as a general rule a plaintiff has the prerogative of determining the theory of his action and, in the absence of fraud, may defeat removal to federal court by avoiding allegations which provide a basis for the assertion of federal jurisdiction. Jones v. General Tire and Rubber Co., 541 F.2d 660, 664 (7 Cir. 1976).

While appellants did not refer to the collective bargaining agreements in their complaint, they did allege a violation of the pension contract which was an integral part of the collective bargaining agreements. Moreover, as noted Supra (note 1), they agreed in the pretrial order that 521 of the plaintiffs were members of collective bargaining units and that the provisions of the Taft-Hartley Act were applicable with respect to the collective bargaining units.

A suit for violation of a labor contract is removable and federal law is applicable under § 301(a). Johnson v. England, 356 F.2d 44 (9 Cir.) Cert. denied 384 U.S. 961, 86 S.Ct. 1587, 16 L.Ed.2d 673 (1966). ⁵ It is true that Johnson v. England and related cases are not precisely in point since appellants rely upon an alleged violation of the provisions of the pension plan rather than the labor contract itself. It is undisputed, however, that the rights and benefits sought by 521 union employees were the subject of collective bargaining and that the pension plan was incorporated by reference in the labor contract. We conclude that the action was properly removed. In any event, appellants could have brought the action in federal court under § 301(a). For the reasons hereinafter set forth, we conclude that appellants accordingly are precluded from raising the remand issue on this appeal.

(c) Failure to Seek Review of Denial of Motion to Remand.

Where a motion to remand is denied, the propriety of removal is reviewable on appeal from the final judgment or by interlocutory appeal if the refusal to remand is certified under 28 U.S.C. § 1292(b). ⁶ Here, appellants did not seek an interlocutory appeal when their motion to remand was denied; nor did they seek to raise the jurisdiction issue upon the interlocutory appeal from the order denying their motion for summary judgment, which was determinative of their claims seeking recovery on the contract under the Pension Plan.

There is a conflict among the circuits as to whether the removal question a jurisdictional issue should be reviewed "at the first available opportunity". Wright, Miller & Cooper, Federal Practice and Procedure : Jurisdiction, § 3740 at page 769. Most of the cases have involved interlocutory appeals of orders granting or denying a preliminary injunction. They did not involve, as here, a final determination of the primary claim for relief.

Appellants argue that until now they have not had the opportunity to request appellate review of the district court's denial of their motion to remand. We cannot agree. Appellants' reliance upon La Chemise Lacoste v. Alligator Co. Inc., 506 F.2d 339 (7 Cir. 1974), Cert. denied, 421 U.S. 937, 95 S.Ct. 1666, 44 L.Ed.2d 94 (1975), in support of...