Smart v. Local 702 Intern. Broth. of Elec. Workers

Decision Date07 April 2009
Docket NumberNo. 07-4088.,07-4088.
Citation562 F.3d 798
CourtU.S. Court of Appeals — Seventh Circuit
PartiesRonald D. SMART, doing business as Paschall Electric, Plaintiff-Appellant, v. LOCAL 702 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Christopher N. Grant and Schuchat, Cook & Werner, Defendants-Appellees.

Ronald D. Smart, Pittsburg, IL, pro se.

Marilyn Teitelbaum, Attorney, Schuchat, Cook & Werner, St. Louis, MO, for Defendants-Appellees.

Gerald E. Berendt, John Marshall Law School, Chicago, IL, for Amicus Curiae.

Before RIPPLE, KANNE and TINDER, Circuit Judges.

RIPPLE, Circuit Judge.

Ronald Smart brought this action asserting state-law claims against the International Brotherhood of Electrical Workers, Local 702 ("IBEW"), its counsel, Christopher Grant, and Mr. Grant's law firm, Schuchat, Cook & Werner. The district court granted the defendants' motion to dismiss. We now affirm in part and reverse and remand in part the judgment of the district court.

A. Facts

Mr. Smart is the sole proprietor of Paschall Electric, a non-union company. In 2003, Mr. Smart contracted to perform electrical work for the construction of a sports complex. He alleges that, after he entered into the contract, the IBEW coerced the owner of the sports complex to terminate his relationship with Mr. Smart; specifically, Mr. Smart alleges that the IBEW threatened to withhold services and otherwise to shut down the building project if the owner did not employ union workers instead of Mr. Smart. According to the complaint, the owner fired Mr. Smart and hired a company affiliated with the IBEW to complete the work on the project.

B. District Court Proceedings

In response to the termination of Paschall Electric's services, Mr. Smart filed the present action in the United States District Court for the Southern District of Illinois. Mr. Smart alleged that the IBEW's coercive tactics violated the Illinois Antitrust Act, 740 ILCS 10/3. Mr. Smart also brought two additional claims. The first, a claim for unwarranted prosecution, was brought against the IBEW, Mr. Grant and Schuchat, Cook & Werner. The second, a claim for legal malpractice, was brought against Mr. Grant and his firm. At the heart of these claims were earlier legal actions by the IBEW to recover employee contributions to a fringe benefit fund associated with a collective bargaining agreement ("CBA").1

The defendants moved to dismiss Mr. Smart's complaint on the grounds that: Mr. Smart's claims were preempted by the National Labor Relations Act ("NLRA"); they were barred by judicial estoppel; and they failed to state a claim upon which relief could be granted. The district court granted the motion. It determined that Mr. Smart's state antitrust claim was preempted by the NLRA. With respect to the common law claims, the court held that Mr. Smart had pleaded himself out of court. Turning first to the malpractice claim, the court noted that "a legal malpractice claim can only be brought by a plaintiff against his former attorney, not against an attorney or law firm that has never represented the plaintiff...." Smart v. Int'l Bhd. of Elec. Workers, Local 702, No. 07-cv-94-DRH, 2007 WL 4259972, at *4 (S.D.Ill.Dec.3, 2007). Concerning the "unwarranted" prosecution claim,2 the court observed that, in order to prevail on this claim, Mr. Smart had to establish that he had prevailed in the underlying litigation. However, the court observed that none of the previous legal actions mentioned in Mr. Smart's complaint or in the IBEW's motion to dismiss were terminated in his favor.3 Consequently, the district court dismissed both the malpractice claim and the unwarranted prosecution claim with prejudice. Mr. Smart timely appealed.

A. Jurisdiction

Before turning to the merits of Mr. Smart's claims, we must address a threshold issue: whether the district court had subject matter jurisdiction over Mr. Smart's claims. Federal district courts are courts of limited jurisdiction; "[t]hey possess only that power authorized by Constitution and statute." Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (7th Cir.2005) (quoting Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)). Congress has conferred subject matter jurisdiction on the district courts only in cases that raise a federal question and cases in which there is diversity of citizenship among the parties. See 28 U.S.C. §§ 1331-32. Unless Mr. Smart's complaint falls into one of these two categories, we must dismiss the action for want of jurisdiction.


Turning first to the possibility that the complaint falls within the court's diversity jurisdiction, we note that Mr. Smart, as the party seeking to invoke federal jurisdiction bears the burden of demonstrating that the requirements for diversity are met. See Pollution Control Indus. of America, Inc. v. Van Gundy, 21 F.3d 152, 155 (7th Cir.1994). Specifically, Mr. Smart must establish "complete diversity," "meaning that no plaintiff may be from the same state as any defendant." Hart v. FedEx Ground Package Sys., Inc., 457 F.3d 675, 676 (7th Cir.2006); McCready v. eBay, Inc., 453 F.3d 882, 891 (7th Cir. 2006). However, neither Mr. Smart's complaint in the district court nor his brief to this court suggests that this requirement has been met. Quite the contrary, Mr. Smart, an Illinois citizen, asserts that one of the defendants is an Illinois law firm, which likely has partners who are Illinois citizens. See Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir.1998) ("The citizenship of a partnership is the citizenship of the partners, even if they are limited partners, so that if even one of the partners (general or limited) is a citizen of the same state as the plaintiff, the suit cannot be maintained as a diversity suit." (citing Carden v. Arkoma Assocs., 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990))).


If we are to maintain jurisdiction over this appeal, Mr. Smart's complaint must raise a federal question. "Ordinarily, a court must determine the presence or absence of a federal question by examining only the plaintiff's well-pleaded complaint," Nelson v. Stewart, 422 F.3d 463, 466 (7th Cir.2005) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)); a federal defense to a state cause of action typically will not suffice, see Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908). This rule is followed even if the defense relies on "the pre-emptive effect of a federal statute." Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003) (citing Franchise Tax Bd. of California v. Constr. Laborers Trust for S. Cal., 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)).

At first blush, it does not appear that Mr. Smart has met this requirement; he included only state causes of action in his complaint. Although the IBEW raised a federal defense to Mr. Smart's claims—the preemptive force of the NLRA—federal preemption ordinarily does not provide a basis for asserting federal jurisdiction over a claim.

There is, however, an exception to this general rule:

"On occasion, the Court has concluded that 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 Inc., 482 U.S. at 393, 107 S.Ct. 2425 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). This "independent corollary" to the well-pleaded complaint rule is known as the "complete preemption" doctrine. Id. "Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Id. ...

Nelson, 422 F.3d at 466-67 (parallel citations omitted). Complete preemption is a term that describes "the specific situation in which a federal law not only preempts a state law to some degree but also substitutes a federal cause of action for the state cause of action, thereby manifesting Congress's intent" to extend the jurisdiction of the federal courts to such cases. Schmeling v. NORDAM, 97 F.3d 1336, 1342 (10th Cir.1996).

To determine whether a claim is subject to complete preemption, we ask whether "Congress clearly intended completely to replace state law with federal law and create a federal forum...." Vorhees v. Naper Aero Club, Inc., 272 F.3d 398, 403 (7th Cir.2001). We never have articulated a precise method for discerning congressional intent in this area. A logical first step in this analysis is determining "whether the state claim is displaced by federal law under an ordinary preemption analysis." BLAB T.V. of Mobile, Inc. v. Comcast Cable Comms., Inc., 182 F.3d 851, 857 (11th Cir.1999). If a federal statute preempts the state action, we then look to whether Congress created a federal cause of action to take the place of the state action. See Rogers v. Tyson Foods, Inc., 308 F.3d 785, 788 (7th Cir.2002) (stating that the "`ability to bring suit under [federal law] is an element of "complete preemption."'" (quoting Vorhees, 272 F.3d at 404)).


Here Mr. Smart's state antitrust claim is preempted by federal law. In his complaint, Mr. Smart alleges that the IBEW threatened to "shut the project down if [the owner] continued to use Mr. Smart, a non union electrician, as opposed to a union electrician." R.1 at 2. Additionally, Mr. Smart claims that the IBEW threatened to have union electricians withhold work if the owner continued to use Mr. Smart's services. Id. at 2-3. As the IBEW recognizes, the activities described by Mr. Smart in his complaint arguably are prohibited by section 8(b)(4) of the NLRA, 29 U.S.C. § 158(b)(4), which prohibits an...

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