Young v. Anthony's Fish Grottos, Inc.

Decision Date15 October 1987
Docket NumberNo. 87-5505,87-5505
Citation830 F.2d 993
Parties126 L.R.R.M. (BNA) 2798, 56 USLW 2245, 107 Lab.Cas. P 10,196, 2 Indiv.Empl.Rts.Cas. 1086 Ruth L. YOUNG, Plaintiff-Appellant, v. ANTHONY'S FISH GROTTOS, INC.; Anthony's Fish Grotto of La Jolla; Anthony's Fish Grotto of La Mesa, Inc.; and Ida Tagliaferri, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

David A. Niddrie, San Diego, Cal., for plaintiff-appellant.

Gregg C. Sindici, San Diego, Cal., for defendants-appellees.

Appeal from the United States District Court for the Southern District of California.

Before WIGGINS and O'SCANNLAIN, Circuit Judges, and MARQUEZ, * District Judge.

WIGGINS, Circuit Judge:

Ruth Young appeals the district court's assumption of removal jurisdiction and its subsequent grant of summary judgment in favor of Anthony's Fish Grottos, Inc., related companies, and Ida Tagliaferri (collectively Anthony's) of Young's breach of contract and wrongful discharge claims. We affirm.

I. BACKGROUND

Young began working for Anthony's in 1974. In 1980 she organized employees in protest of an IRS audit of their tip income. In 1983 she quit. In April 1985 she agreed to return to work for Anthony's as a waitress. She alleges a manager promised to employ her on the same terms as before, subject to discharge only for just cause. She reported to work on May 15 and was fired the same day.

The collective bargaining agreement (CBA) between Young's union and Anthony's classifies the waitress position as within the collective bargaining unit. Under the CBA an employee is on probation during the first thirty days of work and can be discharged at Anthony's sole discretion. More senior employees can be discharged only for just cause.

Young sued Anthony's in California court for breach of contract, wrongful discharge, breach of the implied covenant of good faith and fair dealing, fraud, negligent misrepresentation, and intentional and negligent infliction of mental distress. She alleged that Anthony's fired her in violation of California public policy for organizing the IRS tip audit protest and that her discharge was in breach of an oral employment contract. Her complaint did not mention the CBA. Anthony's removed the case to federal court alleging that Young's state law claims were artfully pled claims for breach of the CBA under section 301 of the Labor Management Relations Act (section 301), 29 U.S.C. Sec. 185 (1982). Young moved to remand to state court for improper removal because as a probationary employee she had no effective remedy under the CBA. The court denied the motion. Anthony's then moved for summary judgment on the grounds that (1) Young's state claims were preempted by section 301 and (2) her failure to exhaust the CBA's grievance procedure or to timely file the section 301 claim barred the action. The court agreed and Young timely appealed. We have jurisdiction under 28 U.S.C. Sec. 1291.

II. STANDARD OF REVIEW

We review the denial of a motion to remand an action to state court for want of removal jurisdiction de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 930 (9th Cir.1986), aff'd, Caterpillar, Inc. v. Williams, --- U.S. ----, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). We also review the grant of a motion for summary judgment de novo and will affirm only if, viewing the evidence in the light most favorable to the party opposing the motion, there are no genuine questions of fact and the trial court correctly applied the substantive law. Ashton v. Cory, 780 F.2d 816, 818 (9th Cir.1986).

III. REMOVAL JURISDICTION

Under 28 U.S.C. Sec. 1441(a), a defendant may remove to federal court a civil action "brought in a State court of which the district courts of the United States have original jurisdiction." The Supreme Court has recently described the criteria for removal under section 1441:

Only state court actions that originally could have been filed in federal court may be removed to federal court by the defendant. Absent diversity of citizenship, federal question jurisdiction is required. The presence or absence of federal-question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal jurisdiction exists only when a federal question iis presented on the face of the plaintiff's properly pleaded complaint. The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.

Caterpillar, Inc. v. Williams, 107 S.Ct. at 2429 (citations and footnotes omitted). A state action cannot be removed to federal court based on a federal defense, even that of preemption, id. at 2430, but it can be removed if "completely preempted": the "preemptive force of a statute [may be] so 'extraordinary' that it 'converts an ordinary state common-law complaint into one stating Even when federal law preempts state law, a state law claim may not be removed unless federal law also supplants it with a federal claim. Hunter v. United Van Lines, 746 F.2d 635, 640-43 (9th Cir.1984), cert. denied, 474 U.S. 863, 106 S.Ct. 180, 88 L.Ed.2d 150 (1985); see Franchise Tax, 463 U.S. at 22-27, 103 S.Ct. at 2853-57 (rejecting removal jurisdiction over a state law claim raising on its face an issue of preemption under the Employee Retirement Income Security Act of 1974 (ERISA) because "ERISA does not provide an alternative cause of action in favor of the [plaintiff] to enforce its rights"). The federal claim requirement arises from the limitations on removal jurisdiction contained in 28 U.S.C. Sec. 1441. If the plaintiff could not have asserted a federal claim based on the allegations of her state law complaint, she could not have brought the case originally in federal court as required for removal jurisdiction under section 1441. Hunter, 746 F.2d at 640-43. In that case, preemption would be merely asserted as a defense. Id. Thus, to remove a state law claim to federal court under the complete preemption doctrine, federal law must both completely preempt the state law claim and supplant it with a federal claim.

                a federal claim for purposes of the well-pleaded complaint rule.' "    Id. (quoting Metropolitan Life Ins. Co. v. Taylor, --- U.S. ----, 107 S.Ct. 1542, 1547, 95 L.Ed.2d 55 (1987)).  If a federal claim completely preempts a state claim, a complaint coming within the scope of the federal claim necessarily arises under federal law and is removable.   Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 23-24, 103 S.Ct. 2841, 2853-54, 77 L.Ed.2d 420 (1983)
                
A. Complete Preemption Jurisdiction over Contract Claim

Young's complaint alleges breach of an oral employment contract made in connection with her reinstatement. Her complaint does not reveal that her employment is governed by a collective bargaining agreement. The district court, however, properly looked beyond the face of the complaint to determine whether the contract claim was in fact a section 301 claim for breach of a collective bargaining agreement "artfully pleaded" to avoid federal jurisdiction. Paige v. Henry J. Kaiser Co., 826 F.2d 857, 860-61 (9th Cir.1987); Olguin v. Inspiration Consol. Copper Co., 740 F.2d 1468, 1473 (9th Cir.1984).

Section 301(a) provides federal jurisdiction over "[s]uits for violation of contracts between an employer and a labor organization." 29 U.S.C. Sec. 185(a) (1982). A suit for breach of a collective bargaining agreement is governed exclusively by federal law under section 301. Franchise Tax, 463 U.S. at 23, 103 S.Ct. at 2853-54. The preemptive force of section 301 is so powerful as to displace entirely any state claim based on a collective bargaining agreement, id., and any state claim whose outcome depends on analysis of the terms of the agreement, IBEW v. Hechler, --- U.S. ----, 107 S.Ct. 2161, 2166, 95 L.Ed.2d 791 (1987); Stallcop v. Kaiser Foundation Hosps., 820 F.2d 1044, 1048 (9th Cir.1987).

Young contends that her individual labor contract is independent of the CBA and that her contract claim is thus not a claim for breach of the CBA. The subject matter of her contract, however, is a job position covered by the CBA. Because any "independent agreement of employment [concerning that job position] could be effective only as part of the collective bargaining agreement," the CBA controls and the contract claim is preempted. Olguin, 740 F.2d at 1474; accord Stallcop, 820 F.2d at 1048; Bale v. General Tel. Co., 795 F.2d 775, 779-80 (9th Cir.1986). 1 By way Young argues that it would be contrary to Congress' intent in enacting section 301 to hold preempted her state law contract claim when under the CBA she could be discharged at will. See Paige, 826 F.2d at 860-61 (essential inquiry in determining preemption is intent of Congress in enacting federal statute). Federal law, however, recognizes that a union may, in the give and take of collective bargaining, waive the employee's contractual rights. NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180, 87 S.Ct. 2001, 2006, 18 L.Ed.2d 1123 (1967); Hollins v. Kaiser Found. Hosps., 727 F.2d 823, 825 (9th Cir.1984) (per curiam). Preemption of Young's contract claim accordingly conforms to federal law.

                of contrast, a breach of contract claim concerning a job not governed by a collective agreement could be effective independent of the agreement and is therefore not completely preempted.   Caterpillar, Inc. v. Williams, 107 S.Ct. at 2430-32 & 2431 n. 9 ("[plaintiffs] rely on contractual agreements made while they were in managerial or weekly salaried positions--agreements in which the collective-bargaining agreement played no part").  Young's individual contract claim is thus effectively a claim for breach of the CBA
                

Federal law not only preempts Young's contract claim, but also supplants it with a federal claim. Young's individual labor contract is only enforceable under the CBA. J.I. Case Co. v. NLRB, 321 U.S. 332, 339, 64 S.Ct. 576, 581, 88...

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