Southeastern Mich. Roofing v. C. Davis Roofing, 00-CV-73844.

• Decision Date: 08 December 2000
• Docket Number: No. 00-CV-73844.,00-CV-73844.
• Citation: 123 F.Supp.2d 402
• Parties: SOUTHEASTERN MICHIGAN ROOFING CONTRACTORS ASSOCIATION, INC., a Michigan non-profit corporation, Plaintiff, v. C. DAVIS ROOFING, INC., a Michigan corporation, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

123 F.Supp.2d 402

SOUTHEASTERN MICHIGAN ROOFING CONTRACTORS ASSOCIATION, INC., a Michigan non-profit corporation, Plaintiff, v. C. DAVIS ROOFING, INC., a Michigan corporation, Defendant.

No. 00-CV-73844.

United States District Court, E.D. Michigan, Southern Division.

December 8, 2000.

James R. Case, Christopher L. Kerr, Kerr, Russell and Weber, PLC, Detroit, MI, for plaintiff.

Gayle L. Landrum, Wise & Marsac, PC, Detroit, MI, for defendant.

MEMORANDUM AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

COHN, District Judge.

I. Introduction

This is a breach of contract case. Plaintiff Southeastern Michigan Roofing Contractors Association, Inc. (the Association), a multi-employer trade association, is suing defendant C. Davis Roofing, Inc. (C. Davis), one of the members, over C. Davis' conduct during strike negotiations. The Association filed suit in Macomb County Circuit Court, claiming breach of contract and intentional interference with a business relationship under Michigan law. C. Davis removed the case to federal court on the grounds that (1) because resolution of the dispute is based upon the meaning and intent of a CBA, the Association's claims are preempted by § 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 158 of the National Labor Relations Act (NLRA), and (2) whether C. Davis acted wrongfully is dependent upon whether it committed an unfair labor practice under § 158 of the NLRA; thus, the complaint raises a federal question.

Before the Court is the Association's motion to remand on the grounds that the dispute is governed by state law. The Association argues: (1) its claims are not preempted by the LMRA, and (2) C. Davis' actions do not arguably constitute an unfair labor practice. For the reasons that follow, the Association's motion will be granted.

II. Background

A.

The Association is an multi-employer bargaining unit¹ of roofing contractors which collectively bargains on behalf of its members with the United Union of Roofers, Waterproofers & Allied Workers Local No. 149 (Local 149), who represents employees involved in performing roofing work in southeastern Michigan. C. Davis is a member of the Association. On March 14, 2000, C. Davis signed a Continuing Letter of Assent and Power of Attorney (Power of Attorney), under which the Association was given the authority to negotiate with Local 149 on behalf of C. Davis.² C. Davis also agreed in the Power of Attorney that "it will not enter into individual negotiations for contract with the Union by any means or at any time while this authorization remains in force. The undersigned specifically waives any right or means to so negotiate or contract while this authorization remains in force." The Power of Attorney also provided that it remained in effect until revoked; C. Davis could revoke the Power of Attorney by giving notice to the Association and Local 149 at least 90 days prior to the expiration of the collective bargaining agreement (CBA) then in effect.³ It is undisputed that C. Davis never gave notice of revocation.

The CBA in effect at the time the Power of Attorney was executed expired on May 31, 2000. The Association and Local 149 began negotiations for a new CBA around May 5, 2000. The wage rate increase to be paid to roofing employees was a hotly contested issue during negotiations. A tentative agreement, subject to the approval of the members of Local 149, was reached on May 25, 2000 which included an hourly wage increase of $1.40, $1.35, and $1.40 for the years 2000, 2001 and 2002, respectively. Members of Local 149 rejected the agreement. After the CBA expired, around June 1, 2000, members of Local 149 struck. The hourly wage increase continued to be a contested issue during negotiations to end the strike.

On June 7, 2000, C. Davis sent the Association a letter (Letter) reading:

Gentlemen,

Thank you for all the time and effort that you have volunteered to negotiations [sic] with the union. I wish your efforts had been successful, however, since no agreement has been reached, it is time to cut the bullshit and get back to work!

We are prepared to offer labor rate of $1.80 per hour for the next three years. The roofers will get what they deserve! We will work with or without you to resolve this issue as quickly and amicably as possible.

C. Davis also sent a copy of the Letter to Ed Farley, Business Manager and Chairman of Local 149. The Association also says that C. Davis gave a copy to each of its employees who were members of Local 149.

The Association and Local 149 eventually reached an agreement to end the strike. Under the new CBA, the hourly wage increased as follows: $1.50, $1.60, and $1.70 for the years 2000, 2001 and 2002, respectively.⁴

B.

1.

Thereafter, the Association filed suit against C. Davis in Macomb County Circuit Court, claiming (1) breach of contract, and (2) intentional interference with a business relationship and/or expectancy.⁵ In its complaint, the Association says it was

compelled to accept Local 149's counter-offer at these rates due to [C. Davis'] previously stated intention that it was willing to pay an increase of $1.80 for those respective years. Moreover, upon information and belief, the agreed-upon increases are substantially higher than those obtained by other labor trades in southeastern Michigan as a result of their collective bargaining efforts.

Complaint at ¶ 16. The Association claims that the Letter constituted a breach of C. Davis' obligations under the Power of Attorney inasmuch as it recommended a wage rate above what the Association had offered and engaged in separate negotiations with Local 149. The Association seeks damages in excess of $500,000 for (1) its increased expenses associated with prolonged negotiations, (2) payment of an hourly wage and associated fringe benefits substantially higher than the rate the Association would have agreed to, and (3) other incidental and consequential damages. The Association also seeks damages in excess of $25,000 on its claim of intentional interference with business relationship and/or expectancy.

2.

C. Davis removed the case to federal court. In its removal papers, C. Davis says that the Association's complaint raises a claim that is preempted by § 301 of the LMRA, 29 U.S.C. § 185, and raises a federal question (an unfair labor practice claim) under the NLRA. More particularly, it says:

resolution of this action is based upon the meaning and intent of a collective bargaining agreement, covered by § 301 of the Labor Management Relations Act, 29 U.S.C § 185, pursuant to which this District Court has original jurisdiction over this lawsuit; and

[the Association's] causes of acts and [C. Davis'] rights raise a Federal question and arise under Federal Law, to wit, the National Labor Relations Act, 29 U.S.C. § 158(a)(5). As it pertains to the NLRA, Plaintiff's cause of action arises under federal law because whether or not Defendant C. Davis did anything wrong is dependent upon whether its conduct is appropriate under 8(a)5 and 8(b)3 of the National Labor Relations Act.

Removal Petition at ¶ 5.

III. Motion to Remand

A. Federal Preemption — Section 301

1. General Principles

To determine whether a claim arises under federal law, a court, under the "well-pleaded complaint" rule, generally looks only to the plaintiff's complaint. Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936). It is undisputed that the complaint does not, on its face, raise a federal question. If, as here, the complaint relies only on state law, the district court generally lacks subject matter jurisdiction and the action is not removable. That a defendant raises a substantive federal defense to a state law claim — including a preemption defense — is immaterial for jurisdictional purposes. As the Supreme Court explained in Caterpillar, Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987):

[I]t is now well settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, 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.

(citation omitted).

There is a well-known exception to the well-pleaded complaint rule where Congress intends that a federal statute "completely preempt" an area of state law; any complaint alleging a claim under that area of state law is presumed to allege a claim arising under federal law. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 107 S.Ct. 1542, 95 L.Ed.2d 55, Therefore, a complaint may be removed to federal court and will be treated as alleging a federal cause of action, notwithstanding that on its face, it alleges only a statelaw cause of action. In Taylor, the Supreme Court specifically noted, however, that removal would be inappropriate absent a clearly manifested congressional intent to make certain state claims removable to federal court. Id. at 65, 107 S.Ct. 1542.

2. Section 301

The Supreme Court has stated that "the preemptive force of § 301 is so powerful as to displace entirely any state cause of action `for violation of contracts between an employer and a labor organization.' Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301." Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 23, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (footnote omitted); see also Caterpillar, 482 U.S. at 393-94, 107 S.Ct. 2425; Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968) (holding that if a federal cause of action completely preempts a state cause of action, the complaint comes within the scope of the federal cause of action and necessarily "arises under" federal law). The broad preemptive force of § 301 has been understood to extend to all contract claims...