Williams v. Caterpillar Tractor Co., No. 85-1972

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtBefore BROWNING, Chief Judge, and TANG and BEEZER; BEEZER
Citation786 F.2d 928
Decision Date12 June 1986
Docket NumberNo. 85-1972
Parties122 L.R.R.M. (BNA) 2590, 55 USLW 2039, 104 Lab.Cas. P 11,888, 105 Lab.Cas. P 12,043, 1 Indiv.Empl.Rts.Cas. 1223 Cecil WILLIAMS, Clyde Ward, Frederick Walker, Robert A. Van Buren, Clark A. Torres, John Tennant, James Payton, James A. Morretti, Andrew Horvath, Richard L. Gonzales, Willie Crum, Pete Carnute, and Joel Bryan, Plaintiffs/Appellants, v. CATERPILLAR TRACTOR COMPANY, Robert E. Gilmore, Don Fowler, Jeffrey A. Glickman, A.E. Mathisen, Keith Wheeler, and Does I through XX, inclusive, Defendants/Appellees.

Page 928

786 F.2d 928
122 L.R.R.M. (BNA) 2590, 55 USLW 2039,
104 Lab.Cas. P 11,888,
105 Lab.Cas. P 12,043,
1 Indiv.Empl.Rts.Cas. 1223
Cecil WILLIAMS, Clyde Ward, Frederick Walker, Robert A. Van
Buren, Clark A. Torres, John Tennant, James Payton, James A.
Morretti, Andrew Horvath, Richard L. Gonzales, Willie Crum,
Pete Carnute, and Joel Bryan, Plaintiffs/Appellants,
v.
CATERPILLAR TRACTOR COMPANY, Robert E. Gilmore, Don Fowler,
Jeffrey A. Glickman, A.E. Mathisen, Keith Wheeler,
and Does I through XX, inclusive,
Defendants/Appellees.
No. 85-1972.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted Feb. 14, 1986.
Decided April 7, 1986.
As Amended June 12, 1986.

Page 929

Fritz Wollett, McCartin & Wollett, Berkeley, Cal., for plaintiffs-appellants.

Gary P. Scholick, Littler, Mendelson, Fastiff & Tichy, San Francisco, Cal., for defendants-appellees.

On Appeal From the United States District Court for the Northern District of California.

Before BROWNING, Chief Judge, and TANG and BEEZER, Circuit Judges.

Page 930

BEEZER, Circuit Judge:

Plaintiffs, former employees of the Caterpillar Tractor Company, appeal the dismissal of their damage action for breach of employment contracts. We reverse on the ground that the action was improperly removed from state court and hold that the district court lacked jurisdiction to address the merits of the preemption defense or to dismiss the action.

I
BACKGROUND

The plaintiffs were all employed by defendant, Caterpillar Tractor Company, at its facility in San Leandro, California. They were initially employed in positions covered by a collective bargaining agreement, but were eventually elevated to positions as management or weekly salaried employees outside the scope of the collective bargaining unit.

During the period of time in which the plaintiffs were employed in positions outside of the bargaining unit, Caterpillar officials allegedly promised the plaintiffs permanent employment with Caterpillar as long as their performance was satisfactory. They were allegedly told that, even if the San Leandro plant were closed, they would be given the opportunity to transfer to positions at other Caterpillar facilities or with related companies or subsidiaries of Caterpillar. The plaintiffs claim they relied upon these promises in remaining in Caterpillar's employment.

Subsequently, all of the plaintiffs were downgraded in position and returned to bargaining unit jobs. They were then discharged shortly after the San Leandro facility closed in 1983.

The plaintiffs filed an action in California state court against Caterpillar and various Caterpillar officials alleging breach of an employment contract, breach of a covenant of good faith and fair dealing, intentional infliction of emotional distress, and fraudulent misrepresentation, all causes of action under state law. Caterpillar removed the action to federal district court on the ground that the state claims were preempted by section 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, and that the action must be recharacterized as an action arising under Sec. 301. Caterpillar contended that the alleged agreements which were made with the plaintiffs while they were not members of the bargaining unit were merged into and superseded by the collective bargaining agreement when the plaintiffs were subsequently downgraded to bargaining unit positions.

The district court denied the plaintiffs' motion under 28 U.S.C. Sec. 1447(c) to remand the action to state court, with the exception of the claims of one plaintiff who had not been employed in a position covered by the collective bargaining agreement at the time of his discharge.

The district court ruled that the complaint stated a federal labor law claim cognizable under Sec. 301, on the ground that the complaint involved a dispute over employment agreements including both personal employment contracts and the collective bargaining agreement. The district court's oral opinion, although not unambiguous, indicates the ruling hinged on the fact the plaintiffs were in positions covered by the collective bargaining agreement at the time of the plant closure.

The district court then dismissed the action, with leave to amend the complaint, on the ground that the plaintiffs had failed to exhaust the mandatory grievance-arbitration procedures provided in the collective bargaining agreement. The plaintiffs elected not to amend their complaint, and timely filed this appeal.

II
STANDARD OF REVIEW

Removal of a case from state to federal court is a question of federal subject matter jurisdiction which is reviewable de novo. Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 768 (9th Cir.1986). The burden of establishing federal jurisdiction falls on the party invoking the removal statute. Hunter v. United Van Lines, 746 F.2d 635, 639 (9th Cir.1984), cert. denied, --- U.S. ----, 106 S.Ct. 180, 88 L.Ed.2d 150 (1985).

III

REMOVAL JURISDICTION BASED ON PREEMPTION

A suit may be removed to federal district court under 28 U.S.C. Sec. 1441(a) only if it could have been brought there originally. Harper v. San Diego Transit Corp., 764 F.2d 663, 666 (9th Cir.1985). Federal district courts are granted original jurisdiction

Page 931

under 28 U.S.C. Sec. 1331 over all civil actions "arising under the Constitution, laws, or treaties of the United States."

An action "arises under" federal law only if "resolution of the federal question must play a significant role in the proceedings." Hunter, 746 F.2d at 646. Under the "well-pleaded complaint" rule, the federal question must appear from the complaint and not from any defense the defendant might raise to defeat the cause of action. Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct. 2841, 2846, 77 L.Ed.2d 420 (1983); Bright, 780 F.2d at 769; see generally 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 3566 (1984).

On the face of the complaint, the employees have alleged state law causes of action. However, Caterpillar contends the action actually implicates section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185(a), which governs actions for violations of collective bargaining agreements.

It is axiomatic that the plaintiff is generally considered the "master" of his complaint. Franchise Tax Board, 463 U.S. at 22, 103 S.Ct. at 2853; The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 411, 57 L.Ed. 716 (1913) ("Of course the party who brings a suit is master to decide what law he will rely upon") (Holmes, J.). As such, the employees would be entitled to allege a state law cause of action, rather than a federal cause of action, and seek relief in a state forum. However, the "artful pleading" doctrine constitutes an exception to that general principle. This doctrine provides that the federal courts may take jurisdiction over a complaint removed from state court where the plaintiff, although framing his action under state law, in actuality raises an essential federal law question. 1 Bright, 780 F.2d at 769; see generally Hunter, 746 F.2d at 640-44.

The "artful pleading" doctrine may come into play in two related contexts. First, when the plaintiff alleges a state law claim that is preempted by federal law and a federal remedy exists for the plaintiff's grievance. Hunter, 746 F.2d 642-43. Second, when the plaintiff's state law claim necessarily implicates a federal law question, other than as a defense. Bright, 780 F.2d at 769; see also Franchise Tax Board, 463 U.S. at 9, 22, 103 S.Ct. at 2846, 2853.

This case requires us to consider the propriety of "preemption removal" as applied to the Caterpillar employees' complaint. The federal courts have long struggled with the question of whether, and under what circumstances, removal can be based upon a defendant's allegation of federal preemption. See generally Comment, Federal Preemption, Removal Jurisdiction, and the Well-Pleaded Complaint Rule, 51 U.Chi.L.Rev. 634 (1984). Recently, the Supreme Court directly addressed this problem in Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983).

In Franchise Tax Board, the Supreme Court held that the federal courts had no jurisdiction to decide whether state tax authorities were preempted from executing a levy for unpaid taxes on a benefit plan fund covered by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Secs. 1001-1461. Id. 3-4, 103 S.Ct. at 2843. The levy action had been removed from state to federal district court on the ground the state cause of action was preempted because it interfered with an

Page 932

ERISA protected plan. Id. at 7, 103 S.Ct. at 2845. Since the Supreme Court held that there was no independent basis for removal jurisdiction, it expressly declined to reach the merits of the preemption defense. Id. at 7, 103 S.Ct. at 2845.

The Court's decision affirmed the long-standing rule in this circuit that the question of federal preemption is ordinarily relevant only as a potential defense to an obligation created by state law. See id. at 13-14, 103 S.Ct. at 2848; see also Guinasso v. Pacific First Federal Saving & Loan Ass'n, 656 F.2d 1364, 1366 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982); Hunter, 746 F.2d at 641. In such a case, federal jurisdiction does not lie, and the action must be remanded to state court for consideration of the federal preemption defense. See Franchise Tax Board, 463 U.S. at 3-4, 12, 103 S.Ct. at 2843, 2848.

However, "if 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. The Court expressly stated that the "preemptive force of Sec. 301 [of the LMRA] is so powerful as to displace entirely any state cause of action" for...

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    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
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    ...The action must then be remanded to state court for consideration of the federal preemption defense. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 932 (9th Cir.1986), aff'd 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing Franchise Tax Board, 463 U.S. at 3-4, 12, 103 S.Ct. a......
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    ...to federal court is a question of federal subject matter jurisdiction which is reviewed de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 930 (9th Cir.1986) (citing Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 768 (9th Cir.1986)). The issue presented is whether the case was pr......
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    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • November 17, 1988
    ...in the first instance is a question of federal subject matter jurisdiction, which we review de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir.1986), aff'd, 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). The party invoking the removal statute bears the burden of ......
  • Lou v. Belzberg, Nos. 86-6144
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • November 12, 1987
    ...to federal court is a question of federal subject matter jurisdiction, which is reviewed de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 930 (9th Cir.1986) (citing Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 768 (9th Cir.1986)), aff'd, --- U.S. ----, 107 S.Ct. 2425, 96 L.Ed......
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105 cases
  • Pena v. Downey Sav. and Loan, Ass'n, No. CV 96-2051 WJR (AJWx).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • June 25, 1996
    ...The action must then be remanded to state court for consideration of the federal preemption defense. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 932 (9th Cir.1986), aff'd 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing Franchise Tax Board, 463 U.S. at 3-4, 12, 103 S.Ct. a......
  • Emrich v. Touche Ross & Co., No. 86-6347
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • May 16, 1988
    ...to federal court is a question of federal subject matter jurisdiction which is reviewed de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 930 (9th Cir.1986) (citing Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 768 (9th Cir.1986)). The issue presented is whether the case was pr......
  • Ethridge v. Harbor House Restaurant, Nos. 87-5776
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • November 17, 1988
    ...in the first instance is a question of federal subject matter jurisdiction, which we review de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir.1986), aff'd, 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). The party invoking the removal statute bears the burden of ......
  • Lou v. Belzberg, Nos. 86-6144
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • November 12, 1987
    ...to federal court is a question of federal subject matter jurisdiction, which is reviewed de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 930 (9th Cir.1986) (citing Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 768 (9th Cir.1986)), aff'd, --- U.S. ----, 107 S.Ct. 2425, 96 L.Ed......
  • Request a trial to view additional results

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