Tantaros v. Fox News Network, LLC
| Decision Date | 27 August 2021 |
| Docket Number | August Term 2020,No. 20-3413-cv,20-3413-cv |
| Citation | 12 F.4th 135 |
| Parties | Andrea K. TANTAROS, Plaintiff-Appellant, v. FOX NEWS NETWORK, LLC, The Estate of Roger Ailes, William Shine, Suzanne Scott, Dianne Brandi, and Irena Briganti, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Second Circuit |
Bruce Fein, Fein & DelValle, PLLC, Washington, D.C., for Plaintiff-Appellant.
C. Harker Rhodes IV, Kirkland & Ellis LLP, Washington, D.C. (Matthew W. Lampe, New York, NY; Anthony J. Dick, Alexandra Zabrierek, Washington, D.C., Jones Day, on the brief), for Defendants-Appellees.
Before: Walker, Cabranes, and Wesley, Circuit Judges.
Judge Wesley dissents in a separate opinion.
Plaintiff Andrea K. Tantaros commenced this action in the New York Supreme Court pursuant to New York Civil Practice Law and Rule § 7515 ( C.P.L.R. § 7515 ), challenging arbitration of her sexual harassment, hostile work environment, and retaliation claims against Fox News Network, LLC and certain senior executives. C.P.L.R. § 7515 prohibits mandatory arbitration clauses covering employment discrimination claims, "[e]xcept where inconsistent with federal law." Following removal to federal court, the district court (Andrew L. Carter, J. ) denied Tantaros's motion to remand on the basis that the action necessarily raises an issue of federal law: whether her claim is preempted by the Federal Arbitration Act (FAA). On appeal, Tantaros argues (1) that her claim does not necessarily raise an issue of federal law because the federal issue is an anticipated defense, (2) that the federal issue is not substantial, and (3) that it cannot be resolved in federal court without disrupting the federal-state balance. For the reasons that follow, we AFFIRM the district court's December 17, 2019 order.
Andrea K. Tantaros was employed at Fox News Channel, LLC (Fox News) as a political commentator. In May 2016, Fox News initiated an arbitration against Tantaros alleging that she breached her employment agreement by publishing a book without prior approval. The employment agreement contained an arbitration clause providing that "[a]ny controversy, claim or dispute arising out of or relating to ... [Tantaros's] employment shall be brought before a mutually selected three-member arbitration panel."1 In August 2016, Tantaros filed a complaint against Fox News and certain of its senior executives (Defendants) in the New York Supreme Court, alleging sexual harassment, hostile work environment, tortious interference with business expectancy, and retaliation for her complaints of sexual harassment. In February 2017, the New York Supreme Court granted Defendants’ motion to compel arbitration of the sexual harassment claims, and the claims of both parties proceeded in arbitration through discovery.
A little more than a year later, New York passed the law that is at the heart of this appeal. On April 10, 2018, the New York State Legislature enacted C.P.L.R. § 7515 which, as relevant here, declares void any mandatory arbitration clause covering sexual harassment claims:
On October 11, 2019, the law was amended to extend beyond sexual harassment claims to all employment discrimination claims.3
In July 2019, Tantaros brought a claim pursuant to C.P.L.R. § 7515 in the New York Supreme Court seeking a temporary restraining order, preliminary injunction, and permanent injunction against continuing arbitration of her employment claims, and a declaratory judgment that § 7515 prohibits enforcement of the arbitration agreement. Defendants removed the action to the District Court for the Southern District of New York contending that the case necessarily raises an issue of federal law: whether Tantaros's claim is consistent with the FAA. Tantaros moved to remand. Pending adjudication of this § 7515 claim, the parties and arbitrators agreed to stay the arbitration.
On December 17, 2019, the district court denied Tantaros's motion to remand, concluding that the case arises under federal law pursuant to Gunn v. Minton4 and Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing.5 The district court certified the order for interlocutory appeal and, on October 6, 2020, we granted immediate review pursuant to 28 U.S.C. § 1292(b).
The sole issue on appeal is whether Tantaros's claim was properly removed on the basis that C.P.L.R. § 7515 arises under federal law pursuant to 28 U.S.C. § 1331. Tantaros argues: (1) the action does not necessarily raise an issue of federal law because preemption is an anticipated defense; (2) any federal issue is not substantial; and (3) the exercise of federal jurisdiction here would upset the federal-state balance.
We review the district court's denial of a motion to remand de novo .6
I. Tantaros's Suit Arises Under Federal Law
"Federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute."7 Under 28 U.S.C. § 1331, federal district courts have subject-matter jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." While federal question jurisdiction is typically invoked by a plaintiff pleading a federal cause of action,8 it also extends to a "special and small category" of cases brought under state law that implicate a federal issue.9 In determining whether a state law claim warrants the exercise of federal jurisdiction, we apply the four-factor test set forth in Gunn and Grable : "[F]ederal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress."10 The Grable - Gunn test reflects the "commonsense notion that a federal court ought to be able to hear" state law claims that "turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues."11
The removing defendant has the burden of establishing federal jurisdiction.12 Here, the parties agree that the federal issue is contested, but they dispute the first, third, and fourth steps of the Grable - Gunn analysis. We conclude that because § 7515 requires a threshold showing that the plaintiff's claim complies with the FAA, it necessarily raises a substantial federal issue that may be resolved in federal court without threatening the federal-state balance.
The first step of the Grable - Gunn test concerns whether the state law claim necessarily raises a question of federal law. This element is met where "the plaintiff's right to relief necessarily depends on resolution of a ... question of federal law."13 In other words, federal jurisdiction exists if a court must apply federal law to the plaintiff's claim in order to decide the case.14 "[A] mere speculative possibility that a federal question may arise at some point in the proceeding" is insufficient to establish jurisdiction in federal court.15
Based on these principles, courts derived the so-called well-pleaded complaint rule as "a quick rule of thumb" for discerning the presence of a federal question.16 Focusing on "what necessarily appears in the plaintiff's statement of his own claim,"17 a district court may exercise federal jurisdiction only if "a right or immunity created by the Constitution or laws of the United States ... [is] an element, and an essential one, of the plaintiff's cause of action."18 The inquiry must be "unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may interpose."19 This is true "even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case."20
The New York Court of Appeals has yet to construe the essential elements of a prima facie case under § 7515. When faced with an unsettled interpretation of state law, we proceed by "carefully predict[ing] how the state's highest court would resolve the uncertainty or ambiguity."21 Our predictive inquiry is guided by decisions of the state's lower courts, decisions on the same issue in other jurisdictions, and "other sources the state's highest court might rely upon in deciding the question."22 Imprecise as this undertaking may be, it is "our job" to complete this "necessary task."23
Applying this guidance, we consider how the New York Court of Appeals would decide the instant issue: whether the condition "except where inconsistent with federal law" is an essential element of § 7515.24
New York principles of statutory interpretation provide that the "primary consideration is to ascertain and give effect to the intention of the Legislature."25 Because "the clearest indicator of legislative intent is the statutory text, the starting point ... must always be the language itself, giving effect to the plain meaning thereof."26 All parts of the legislation should be "harmonized with each other as well as with the general intent of the whole statute."27 The court should avoid any construction that renders one part of the statute meaningless.28 While the plain text is generally determinative, New York law holds that the legislative history of the statute "may also be relevant and is not to be ignored, even if words [of the statute] be clear."29
C.P.L.R. § 7515 provides, "Except where inconsistent with federal law," no...
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Employment Law Reporter Spring 2022
...jurisdiction, the defendant relied on a decision by the U.S. Court of Appeals for the Second Circuit in Tantaros v. Fox News Network, LLC, 12 F.4th 135, 147 (2d Cir. 2021), affirming the district court’s denial of a motion to remand. The District Court’s Decision The district court remanded......