Villegas v. Princeton Farms, Inc.

• Decision Date: 22 January 1990
• Docket Number: 89-1850,Nos. 89-1632,s. 89-1632
• Parties: 134 L.R.R.M. (BNA) 2180, 114 Lab.Cas. P 11,812, 15 Fed.R.Serv.3d 850 Juan VILLEGAS, Plaintiff-Appellee, Cross-Appellant, v. PRINCETON FARMS, INCORPORATED, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 919

893 F.2d 919

134 L.R.R.M. (BNA) 2180, 114 Lab.Cas. P 11,812,

15 Fed.R.Serv.3d 850

Juan VILLEGAS, Plaintiff-Appellee, Cross-Appellant, v. PRINCETON FARMS, INCORPORATED, Defendant-Appellant, Cross-Appellee.

Nos. 89-1632, 89-1850.

United States Court of Appeals Seventh Circuit.

Argued Dec. 1, 1989.

Decided Jan. 22, 1990.

Susan Compernolle, Vincent H. Beckman, Chicago, Ill., Shelley Davis (argued), Washington, D.C., Kalman Resnick, Todd Thomas, Dowd & Resnick, Chicago, Ill., for plaintiff-appellee, cross-appellant.

Bradford L. Livingston, Carl H. Trieshmann (argued), James R. Beyer, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendant-appellant, cross-appellee.

Before CUMMINGS, FLAUM and KANNE, Circuit Judges.

CUMMINGS, Circuit Judge.

Juan Villegas sued his former employer, Princeton Farms, in the United States District Court for the Northern District of Illinois, alleging that he was fired in violation of Illinois law for his membership in, and advocacy for, a farmworker labor union. Jurisdiction rests solely on diversity of citizenship. The district judge granted Princeton Farms' motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), finding that Illinois law does not recognize a cause of action for retaliatory discharge against an employer who fires an employee for union activity. No. 88-C-8641, 1989 WL 13211, 1989 U.S.Dist. LEXIS 1495 (N.D.Ill. Feb. 9, 1989). Villegas then filed a motion to vacate the judgment and voluntarily dismiss the case without prejudice. The district judge granted the motion, inviting Villegas to refile his action in state court. For the reasons stated below, we reverse the district judge's final decision to vacate and dismiss and thus reinstate his original dismissal of the plaintiff's diversity suit for failure to state a claim under Illinois law.

I.

Princeton Farms does not contest the diversity basis for the suit that Villegas brought on October 11, 1988. Villegas is a citizen of Mexico lawfully residing in the United States. He was employed by Princeton Farms, an Illinois corporation located in Princeton, Illinois, as a mushroom picker for four years until March 24, 1988, when he was fired from that job.

Villegas claims that Princeton Farms fired him in retaliation for his involvement in labor union activities and that in doing so the corporation committed the tort of retaliatory discharge recognized in Illinois. To state a cause of action for retaliatory discharge in Illinois, Villegas is required to allege that his firing was "in contravention of a clearly mandated public policy." Barr v. Kelso-Burnett Co., 106 Ill.2d 520, 88 Ill.Dec. 628, 630, 478 N.E.2d 1354, 1356 (1985); Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 18, 421 N.E.2d 876, 881 (1981). Villegas contends that the requisite public policy is found in Illinois' so-called anti-yellow dog contract statute, Ill.Rev.Stat. ch. 48, p 2b, ¹ which he argues "clearly mandates" the right of workers to join unions and engage in concerted activity without losing their jobs because of those activities.

The National Labor Relations Act does not preempt this claim, both parties agree, because Congress precluded "agricultural laborers" from the definition of "employees" under the Act. See Section 2(3) of the Act, 29 U.S.C. Sec. 152(3); N.L.R.B. v. C & D Foods, Inc., 626 F.2d 578, 581 (7th Cir.1980). Villegas apparently did not perform any regular amount of non-agricultural work.

Villegas followed his suit with a motion for a preliminary injunction to require Princeton Farms to reinstate him and also to prohibit Princeton Farms "from engaging in any activities which coerce [Villegas] or any of his co-workers to refrain from exercising their right to belong to a labor union while employed." Attached was an affidavit by Villegas describing his termination and his activity with the Farm Labor Organizing Committee, a labor union with its headquarters in Toledo, Ohio.

Princeton Farms moved to dismiss the complaint with prejudice for failure to state a claim upon which relief could be granted, pursuant to Rule 12(b)(6), or in the alternative transfer the action to the United States District Court for the Central District of Illinois, pursuant to 28 U.S.C. Sec. 1404. Princeton Farms denied that Villegas was fired for his involvement with the union. Instead, the defendant asserted that Villegas lost his job because he failed to pick an average of eleven baskets of mushrooms per hour during work periods over the course of one month. Princeton Farms argued that--even assuming that Villegas was fired because of his participation in lawful union activities--Villegas failed to allege a cognizable claim because the Illinois courts have not recognized a retaliatory discharge cause of action for a plaintiff who loses his job for that reason. The Illinois statute, Princeton Farms argued, prohibits the use of union-stifling "yellow dog" contracts, but does not prevent employers from terminating workers because of their organizing activity.

Villegas argued that in passing the anti-yellow dog contract law, the Illinois Assembly carved out an exception to the general rule in Illinois that employers have broad discretion to fire at-will employees such as Villegas. Villegas conceded that no Illinois court had interpreted the provision to prohibit an employer from terminating a worker because of his membership in a labor union, but argued that that fact should not prevent the district judge from anticipating such a holding from the Illinois Supreme Court. In a 33-page memorandum and a six-page sur-reply memorandum, both of which were scholarly and able, plaintiff's counsel attempted to support that argument with legislative history and state and federal court precedent.

The district judge was not persuaded. In a Memorandum and Order dated February 9, 1989, the judge aptly summarized the facts and carefully weighed the legal arguments regarding the state of the law in Illinois regarding retaliatory discharge in the context of a firing for union activity. He then observed that a federal court considering a diversity case may not enlarge state law. In support of this proposition he cited with approval a statement made by this Court in the course of an attempt to divine Wisconsin law that "[f]ederal judges are disinclined to make bold departures in areas of law that we have no responsibility for developing." Afram Export Corp. v. Metallurgiki Halyps, S.A., 772 F.2d 1358, 1370 (7th Cir.1985).

Turning to the substance of the law at issue, the district judge found that while Illinois courts might "glean" from the anti-yellow dog contract statute a public policy to support Villegas' claim for various reasons there is as yet no clear expression of the required public policy in state statutory or case law. Thus, "our limited role in the evolution of state law requires us to decline to recognize a novel application of an ever developing state law tort."

Accordingly the judge denied Villegas' motion for a preliminary injunction and granted Princeton Farms' motion for dismissal. The dismissal included the following condition: "but with leave granted to plaintiff to move within ten days to vacate this dismissal and to dismiss this cause voluntarily and without prejudice." This order was recorded as a civil judgment on February 9, 1989.

Eight days later, Villegas accepted the invitation to move to vacate the order and to request entry of a voluntary dismissal without prejudice. The district judge held a hearing on February 24, 1989, during which he announced that he would grant Villegas' motion, telling counsel for both sides:

[T]here is a procedure in the Court of Appeals to certify a question to the state courts and to get an answer. There isn't a procedure here. In the circumstances, what I had contemplated accomplishes the same result. You people have done all the briefing you are going to do in this case, so that if, in fact, the plaintiff starts over again in state court, the work is already done. You get a shot, at this point, at the somewhat moving target of a retaliatory discharge law in the State of Illinois at the place where it ought to be decided.

Counsel for Princeton Farms immediately objected on the record that the district judge was effectively "abstaining from exercising jurisdiction in a case where you clearly have jurisdiction." The district judge did not respond on the record. In an order entered on the court's docket that same day, February 24, the district judge granted the motion to vacate the dismissal order of February 9 and granted the motion for voluntary dismissal without prejudice. It is from this final order that Princeton Farms appeals.

At oral argument in this appeal, Villegas' counsel represented that Villegas had not yet refiled his complaint in state court because he was prevented from doing so by Illinois rules pending the result of this appeal. But counsel stated that Villegas would follow the district judge's invitation to refile in state court if he prevailed in this appeal.

II.

The merits of Villegas' claim that he was fired for his union activities are not at issue in this appeal. They were not addressed by the district judge and have not even been tested through discovery by the parties. The only question properly presented for review is whether the district judge abused his discretion in issuing his February 24th order vacating his order of February 9 and in allowing Villegas to dismiss his action voluntarily. ² Before taking the possible justifications for the second order in turn, it is necessary to determine whether the district judge decided the case on the merits in his first order.

Villegas argues that the district court's February 9th memorandum was in essence a statement that Illinois law is undetermined and that, therefore, the Illinois courts should decide his case. Several sentences within the memorandum are admittedly...