United Ass'n of Journeymen and Apprentices of Plumbing and Pipe Fitting Industry of U.S. and Canada, Local No. 57 v. Bechtel Power Corp.

• Decision Date: 07 December 1987
• Docket Number: No. 85-1933,85-1933
• Citation: 834 F.2d 884
• Parties: 127 L.R.R.M. (BNA) 2342, 56 USLW 2357, 108 Lab.Cas. P 10,313, 2 Indiv.Empl.Rts.Cas. 1555 UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF the PLUMBING AND PIPE FITTING INDUSTRY OF the UNITED STATES AND CANADA, LOCAL NUMBER 57, James K. Housekeeper and Jay E. Trinnaman, Plaintiffs-Appellants, v. BECHTEL POWER CORPORATION and Ronald Weatherred, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 884

834 F.2d 884

127 L.R.R.M. (BNA) 2342, 56 USLW 2357,

108 Lab.Cas. P 10,313,

2 Indiv.Empl.Rts.Cas. 1555

UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF the

PLUMBING AND PIPE FITTING INDUSTRY OF the UNITED STATES AND

CANADA, LOCAL NUMBER 57, James K. Housekeeper and Jay E.

Trinnaman, Plaintiffs-Appellants, v. BECHTEL POWER CORPORATION and Ronald Weatherred, Defendants-Appellees.

No. 85-1933.

United States Court of Appeals, Tenth Circuit.

Dec. 7, 1987.

Rehearing Denied Jan. 7, 1988.

Joseph E. Tesch of Tesch and Hufnagel, Heber City, Utah, for plaintiffs-appellants.

Christopher J. Rillo (James P. Hargarten, also of Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., Steven E. Clyde of Clyde & Pratt, Salt Lake City, Utah, and Douglas P. Kight of Davis, Arneil, Dorsey, Kight & Parlette, Wenatchee, Wash., of counsel, with him on the brief), for defendants-appellees.

Before LOGAN, SEYMOUR, and BALDOCK, Circuit Judges.

LOGAN, Circuit Judge.

Plaintiffs filed this action in a state district court in Utah, alleging that defendants had blacklisted workers at the Intermountain Power Project (the project) in Millard County, Utah, in violation of various provisions of the Utah Constitution and Utah statutes. Defendants removed the case to the United States District Court for the District of Utah, asserting jurisdiction under 28 U.S.C. Sec. 1331 because plaintiffs' claim arose under Sec. 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185. Defendants then moved for dismissal on the grounds that (1) plaintiffs had failed to exhaust grievance procedures specified by a collective bargaining agreement in force at the project, and (2) the challenged conduct related to a mandatory subject of collective bargaining and was therefore protected by Sec. 8 of the National Labor Relations Act (NLRA), 29 U.S.C. Sec. 158.

The district court denied plaintiffs' motion to remand for lack of subject matter jurisdiction and, after plaintiffs declined an opportunity to amend their complaint, dismissed the action with prejudice. On appeal, we must consider first whether the district court had jurisdiction under 28 U.S.C. Secs. 1331 and 1441. Because we conclude that the district court lacked jurisdiction, we need not consider the other issues raised in the appeal.

Plaintiffs James K. Housekeeper and Jay E. Trinnaman were discharged from employment by B & W Construction Company, a subcontractor at the project. Their complaint alleges that defendant Bechtel Power Corporation (Bechtel), the construction manager at the project, and defendant Ronald Weatherred, a Bechtel employee, prevented plaintiffs from obtaining reemployment at the project by imposing a "work rule" upon all other contractors there. This rule prohibits the contractors from hiring any employee discharged by another employer at the project for thirty days after the discharge. ¹ Plaintiffs assert that enforcement of the "30 day discharge rule," including the promulgation and exchange among employers at the project of lists of employees subject to the rule, constitutes blacklisting in violation of article XII, Sec. 19 and article XVI, Sec. 4 of the Constitution of Utah, and Utah Code Ann. Sec. 34-24-1. ²

When an action "arising under the Constitution, laws, or treaties of the United States" is commenced in state court, the defendant or defendants may remove it to the federal district court for the district in which the action is pending. 28 U.S.C. Secs. 1331, 1441(a), (b). The "arising under" language of Sec. 1331 "has resisted all attempts to frame a single, precise definition for determining which cases fall within, and which cases fall outside, the original jurisdiction of the district courts." Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 8, 103 S.Ct. 2841, 2845, 77 L.Ed.2d 420 (1983).

Two clear principles have emerged, however, which form a sufficient basis for our determination of this appeal. First, when federal law creates the cause of action, the case arises under federal law. See id. at 8-9, 103 S.Ct. at 2845-46; American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 586, 60 L.Ed. 987 (1916). Second, an action does not arise under federal law unless a substantial, disputed question of federal law is an essential element of the plaintiffs' well-pleaded complaint. Franchise Tax Board, 463 U.S. at 10-13, 103 S.Ct. at 2846-48; Gully v. First National Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936).

The well-pleaded complaint rule applies even when "both parties admit that the only question for decision is raised by a federal pre-emption defense." Franchise Tax Board, 463 U.S. at 12, 103 S.Ct. at 2848. Despite this, a complaint purporting to rely entirely on state-created rights and remedies sometimes may be deemed to have stated a cause of action arising under federal law. "[I]f a federal cause of action completely pre-empts a state cause of action any complaint that comes within the scope of the federal cause of action necessarily 'arises under' federal law." Id. at 24, 103 S.Ct. at 2854. Thus, in Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968), the Supreme Court held that because suits for violation of collective bargaining agreements are to be governed entirely by federal law pursuant to LMRA Sec. 301, see Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456-57, 77 S.Ct. 912, 917-18, 1 L.Ed.2d 972 (1957), a suit brought in state court to enjoin a union and its members from violating a "no-strike" clause in such an agreement was removable to federal court, notwithstanding the petitioner's reliance on state law. Avco, 390 U.S. at 560, 88 S.Ct. at 1237.

Defendants in the instant case argue that because plaintiffs' state law claims "concern a matter [the 30 day rule] addressed by the collective bargaining agreement," they are preempted by Sec. 301 of the LMRA, and the action is therefore one arising under federal law.

In analyzing this issue, we first delineate the two types of federal labor law preemption. The first type, which is not involved at this stage of the appeal, arises under Secs. 7 and 8 of the NLRA. Sections 7 and 8 do not confer original federal court jurisdiction over actions within its scope; they confer jurisdiction in the first instance upon the National Labor Relations Board (NLRB).

Under principles announced in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), both state and federal courts generally lack original jurisdiction to determine disputes involving conduct actually or arguably prohibited or protected by the NLRA. Id. at 244-45, 79 S.Ct. at 779-80; Belknap, Inc. v. Hale, 463 U.S. 491, 498, 103 S.Ct. 3172, 3177, 77 L.Ed.2d 798 (1983); see also Viestenz v. Fleming Cos., 681 F.2d 699, 702 (10th Cir.), cert. denied, 459 U.S. 972, 103 S.Ct. 303, 74 L.Ed.2d 284 (1982). The Supreme Court has considered it essential to the administration of the NLRA that determinations regarding the scope and effect of Secs. 7 and 8 "be left in the first instance to the National Labor Relations Board." Garmon, 359 U.S. at 244-45, 79 S.Ct. at 779-80.

The Garmon doctrine does not, however, preempt all local regulation that in any way touches or concerns the employment relationship. Farmer v. United Brotherhood of Carpenters, 430 U.S. 290, 295-96, 97 S.Ct. 1056, 1060-61, 51 L.Ed.2d 338 (1977). The Supreme Court has refused to prohibit state regulation otherwise within the scope of Garmon when the conduct at issue is of only peripheral concern to the NLRA or touches interests deeply rooted in local feeling and responsibility. Id. at 296-97, 97 S.Ct. at 1061-62; Belknap, 463 U.S. at 498, 103 S.Ct. at 3177.

"In such cases, the State's interest in controlling or remedying the effects of the conduct is balanced against both the interference with the National Labor Relations Board's ability to adjudicate controversies committed to it by the Act, and the risk that the State will sanction conduct that the Act protects."

Belknap, 463 U.S. at 498-99, 103 S.Ct. at 3177 (citations omitted); see also Sears, Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S. 180, 98 S.Ct. 1745, 56 L.Ed.2d 209 (1978) (discussing separate considerations underlying arguably prohibited and arguably protected branches of Garmon preemption doctrine). ³

In cases in which preemption under the NLRA does not automatically deprive both state and federal courts of jurisdiction in favor of the jurisdiction of the NLRB, such preemption is simply a defense to state law claims touching on areas covered by the federal enactment. See Sears, 436 U.S. at 205, 98 S.Ct. at 1761 (permitting state court to "evaluate the merits of an argument that certain trespassory activity is protected" by NLRA Sec. 7). As a defense, it cannot confer jurisdiction on the federal courts. " '[A] suit brought upon a state statute does not arise under an act of Congress ... because prohibited thereby.' " Franchise Tax Board, 463 U.S. at 12, 103 S.Ct. at 2848 (quoting Gully, 299 U.S. at 116, 57 S.Ct. at 99). Thus, preemption under NLRA Secs. 7 or 8 provides no basis for removal of the instant case to the federal court.

The second type of labor law preemption, which is involved here, concerns Sec. 301 of the LMRA. Section 301 vests concurrent jurisdiction in state and federal courts over "[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce." 29 U.S.C. Sec. 185(a); Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962). The federal district courts have jurisdiction over such suits even if the contractual violation is also an unfair labor practice within the NLRB's jurisdiction. Farmer, 430 U.S. at 297 n. 8, 97 S.Ct. at 1062 n. 8.

Therefore, to determine whether the federal district court had jurisdiction...