Philip Crosby v. Cooper B-Line, Incorporated
Filing
Filed opinion of the court by Judge Wood. We REVERSE and REMAND to the district court with instructions to return this case to state court. Richard A. Posner, Circuit Judge; Ilana Diamond Rovner, Circuit Judge and Diane P. Wood, Circuit Judge. [6506214-1] [6506214] [13-1054]
Philip Crosby v. Cooper B-Line, Incorporated
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 13‐1054
PHILIP M. CROSBY,
Plaintiff‐Appellant,
v.
COOPER B‐LINE, INC.,
Defendant‐Appellee.
____________________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 3:11‐CV‐00305‐WDS‐DGW — William D. Stiehl, Judge.
____________________
ARGUED JUNE 6, 2013 — DECIDED AUGUST 7, 2013
____________________
Before POSNER, ROVNER, and WOOD, Circuit Judges.
WOOD, Circuit Judge. The Supreme Court has held that
Section 301 of the Labor Management Relations Act (LMRA),
29 U.S.C. § 185, preempts all state‐law claims that require the
interpretation of a collective bargaining agreement (CBA) or
any other covered labor contract. This rule, which goes
under the clumsy name of “complete preemption” (a better
term might be “complete displacement”), covers not only
obvious disputes over labor contracts, but also any claim
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masquerading as a state‐law claim that nevertheless is
deemed “really” to be a claim under a labor contract. These
cases are understood to arise under federal law (Section 301
of the LMRA) from their inception. Subject‐matter
jurisdiction in the federal court thus rests on 28 U.S.C. §
1331, and it makes no difference if the parties are non‐
diverse or if the plaintiff’s complaint is couched in state‐law
terms.
Cooper B‐Line, Inc. contends that this is one such case.
Although Philip Crosby, a former Cooper employee, filed a
lawsuit in state court that asserted only a state‐law claim
against the company—the Illinois tort of retaliatory
discharge—Cooper contends that the suit is a disguised
Section 301 action that arises under federal law. Cooper
removed the case to federal court on this basis and now asks
us to dismiss it in its entirety because Crosby failed to
exhaust his remedies under the CBA. Crosby counters that
removal was improper and asks us to return his case to state
court. We conclude that this case is not materially different
from the one before the Supreme Court in Lingle v. Norge
Div. of Magic Chef, Inc., 486 U.S. 399 (1988), where the Court
rejected a finding of complete preemption. We do too, so we
reverse the district court’s judgment on the merits in
Cooper’s favor and order the case remanded to the state
court.
I
Cooper describes itself as “a diversified global manu‐
facturer of electrical components and tools,” see COOPER
INDUS., http://www.cooperindustries.com/content/public/en/
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company.html (last visited Aug. 5, 2013); it has seven
operating divisions, one of which is Cooper B‐Line, id.
Crosby worked in the “flex tray” department of Cooper’s
facility in Pinckneyville, Illinois. On July 28, 2010, a portion
of Crosby’s middle finger was amputated as he was
attempting to remove a piece of flex tray metal from a
master bundle. Crosby had instructed a co‐worker to kick
the bundle in order to dislodge the pieces as he removed
them. The company frowned on this procedure, precisely
because it could lead to serious injury. Crosby sought
medical attention and filed a claim for medical and
temporary total disability benefits under the Illinois
Workers’ Compensation Act. 820 ILCS § 305.
Crosby returned to work on September 13, 2010.
Following a conversation with management in which
Crosby stubbornly maintained that he did not intend to stop
using the “kicking method” to remove metal from the
master bundles, Cooper suspended him for three days
without pay as discipline for using an unsafe work practice.
The “Disciplinary Corrective Action Discussion Worksheet”
accompanying the suspension further stated that any
violation of Cooper’s safety policies for the duration of
Crosby’s employment would result in immediate
termination of his job. Dennis Zimmerman, president of
Crosby’s union (Local 7252, United Steelworkers of
America), filed a grievance on Crosby’s behalf to protest the
suspension.
After returning from his suspension, Crosby was given
additional safety training during which, he alleges, Cooper
told him about numerous new safety rules and procedures.
Crosby then resumed work in the flex tray department, but,
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within hours, Cooper’s plant safety specialist accused him of
violating one of the new safety rules by tossing a wooden
pallet. Crosby denied that he did so.
Cooper personnel then convened a meeting with Crosby
and Zimmerman to discuss the alleged safety violation. At
some point, Crosby was asked to leave the meeting, and the
Cooper representative told Zimmerman that Crosby would
be fired. Zimmerman left the meeting to give Crosby the bad
news; he suggested that Crosby ask Cooper to call its action
a “permanent layoff with no recall rights,” rather than an
outright termination. If it did so, Crosby would be able to
obtain unemployment benefits and a neutral job reference.
Crosby followed Zimmerman’s advice and asked Cooper for
the more favorable label. Cooper accepted on the condition
that Crosby agree to dismiss the grievance filed in response
to his three‐day suspension. The parties’ agreement was
memorialized in a “grievance settlement” (drafted by
Cooper), which states, in its entirety:
The United Steelworkers, the grievant and Cooper B‐
Line agree that [the suspension grievance] shall be
settled on the following terms:
1. Grievant Phil Crosby’s voluntary separation
from the company shall be considered a perma‐
nent layoff without recall rights effective Septem‐
ber 22, 2010.
2. Cooper B‐Line will pay Phil Crosby all accrued
2010 vacation[.]
3. Cooper B‐Line shall provide neutral employ‐
ment references upon request in the future.
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This settlement is without prejudice to the contractual
rights of either party and shall not constitute a prece‐
dent with respect to any like or related matter in the
future.
Crosby now says that the entire process leading up to his
signing the grievance settlement was a sham. He believes
that Cooper’s real reason for discharging him had nothing to
do with safety violations. Instead, he asserts, it was because
he filed a workers’ compensation claim after the amputation
of his finger. In support of this theory, he points to the tim‐
ing of his firing, the sudden appearance of new safety rules
to which he was subject, several emails from Cooper per‐
sonnel expressing a desire to fire him or otherwise send a
“hard message” immediately following the July 28 accident,
and emails from Cooper’s Human Resources manager ex‐
pressing concern that transferring Crosby to a different part
of the plant would result in a more costly workers’ compen‐
sation award.
This view led Crosby to file a suit in the Circuit Court for
the Twentieth Judicial Circuit, Perry County, Illinois, in 2011,
alleging that he was fired in retaliation for asserting his right
to medical and disability payments in violation of the Illinois
Workers’ Compensation Act. 820 ILCS § 305. Cooper
removed the case to the Southern District of Illinois. Because
the parties are non‐diverse, the only possible basis for
subject‐matter jurisdiction was the presence of a federal
question under 28 U.S.C. § 1331. Cooper argued that
Crosby’s retaliatory discharge claim was really a claim
under his CBA and thus was necessarily covered by Section
301. See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 393‐94
(1987). Crosby did not move to remand.
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After conducting discovery, Cooper moved for summary
judgment. The district court granted the motion, finding that
Crosby’s retaliatory discharge claim failed on the merits. On
appeal, Crosby now contends for the first time that the
district court had no subject‐matter jurisdiction over the case
and asks that it be remanded to state court. For its part,
Cooper defends the district court’s judgment, but it also
argues that the court should not have reached the merits of
the case for a different reason. In its view, because the
retaliatory discharge claim should have been characterized
as a Section 301 claim, it could not be filed unless or until
Crosby exhausted all contractual remedies under his CBA
before resorting to federal court. Because Crosby did not do
so, Cooper argues that this is an independent reason why his
suit should have been dismissed. As we explain below, we
have no need to reach the latter argument.
II
A
This case turns on a single question: does Section 301 of
the LMRA govern the issues that Crosby was attempting to
raise in his state‐law claim for retaliatory discharge (or, put
conventionally, does the LMRA completely preempt
Crosby’s state‐law claim). If the answer is yes, then the case
was properly dismissed. If the answer is no, then there is no
federal question in the case and the district court lacked
jurisdiction to decide it. Although Crosby did not raise
subject‐ matter jurisdiction before the district court, this
objection is not subject to waiver. See 28 U.S.C. § 1447(c);
Henderson ex rel. Henderson v. Shinseki, 131 S. Ct. 1197, 1202
(2011); see also Fed. Sav. & Loan Ins. Corp. v. Quinn, 419 F.2d
1014, 1016 (7th Cir. 1969). The federal courts have an
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independent “obligation at each stage of the proceedings to
ensure that [they] have subject matter jurisdiction over the
dispute.” Ne. Rural Elec. Membership Corp. v. Wabash Valley
Power Ass’n, Inc., 707 F.3d 883, 890 (7th Cir. 2013). We review
questions of subject‐matter jurisdiction and the propriety of
removal to federal court de novo. Farnik v. Fed. Deposit Ins.
Corp., 707 F.3d 717, 721 (7th Cir. 2013).
Ordinarily, the basis for federal‐question jurisdiction
must be apparent from the face of the plaintiff’s well‐
pleaded complaint. See Louisville & Nashville R.R. v. Mottley,
211 U.S. 149, 152 (1908); see also Ne. Rural Elec. Membership,
707 F.3d at 890. The Supreme Court, however, has long
recognized an “independent corollary” to the well‐pleaded
complaint rule that it has dubbed the “complete preemption
doctrine.” Caterpillar, 482 U.S. at 393. At its base, this
doctrine reflects an understanding of the coverage of the
federal law in question. In a small number of areas, “the
Court has concluded that the pre‐emptive force of a statute
is so extraordinary that it converts an ordinary state
common‐law complaint into one stating a federal claim for
purposes of the well‐pleaded complaint rule.” Id. (internal
quotation marks omitted). “Once an area of state law has
been completely pre‐empted, any claim purportedly based
on that pre‐empted state law is considered, from its
inception, a federal claim, and therefore arises under federal
law.” Id.
Section 301 of the LMRA provides a federal rule for
contract disputes between employers and labor
organizations or between different labor organizations. 29
U.S.C. § 185(a). The Court has understood this to be a rule
that overrides all possible applicable state law, or, in other
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words, as a rule of complete preemption. E.g., Franchise Tax
Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 23‐24 (1983).
Given the force of complete preemption, it is not enough for
a court to accept a plaintiff at her word when she represents
that her case raises no federal issue. Rather, to determine
whether a purported state‐law claim “really” arises under
Section 301, a federal court must “look beyond the face of
plaintiff’s allegations and the labels used to describe her
claims and … evaluate the substance of plaintiff’s claims.”
Paul v. Kaiser Found. Health Plan, 701 F.3d 514, 519 (6th Cir.
2012) (emphasis in original).
Although complete preemption sweeps away many
state‐law theories and re‐classifies them as federal, it has its
limits. The Supreme Court has made clear that preemption
does not extend to every state law that touches upon rights
governed by Section 301—that is, rights that may have some
connection to a CBA. See Lingle, 486 U.S. at 412‐13. Rather,
only those state‐law claims that require “interpretation” of a
CBA are inevitably federal. Douglas v. Am. Info. Techs. Corp.,
877 F.2d 565, 569‐70 (7th Cir. 1989); see also Atchley v. Cable
Vision Assocs., 101 F.3d 495, 499 (7th Cir. 1996). Put another
way, a state‐law claim is “completely preempted” only when
it is “inextricably intertwined with consideration of the
terms of the labor contract.” Allis‐Chalmers Corp. v. Lueck, 471
U.S. 202, 213 (1985). Factual overlap between a state‐law
claim and a claim one could assert under a CBA is not neces‐
sarily sufficient. Douglas, 877 F.2d at 570. And the general
rule that a federal defense does not suffice to support federal
subject‐matter jurisdiction, e.g., Rivet v. Regions Bank of La.,
522 U.S. 470, 475 (1998), retains its force, even when com‐
plete preemption is at issue, Caterpillar, 482 U.S. at 398‐99. As
the Court put it in Caterpillar:
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It is true that when a defense to a state claim is based
on the terms of a collective‐bargaining agreement, the
state court will have to interpret that agreement to
decide whether the state claim survives. But the
presence of a federal question, even a § 301 question,
in a defensive argument does not overcome the
paramount policies embodied in the well‐pleaded
complaint rule—that the plaintiff is the master of the
complaint, that a federal question must appear on the
face of the complaint, and that the plaintiff may, by
eschewing claims based on federal law, choose to
have the cause heard in state court. When a plaintiff
invokes a right created by a collective‐bargaining
agreement, the plaintiff has chosen to plead what we
have held must be regarded as a federal claim, and
removal is at the defendant’s option. But a defendant
cannot, merely by injecting a federal question into an
action that asserts what is plainly a state‐law claim,
transform the action into one arising under federal
law, thereby selecting the forum in which the claim
shall be litigated.
Id. (emphasis in original).
B
The state‐law claim at issue in this case is for retaliatory
discharge in violation of the Illinois Workers’ Compensation
Act. 820 ILCS § 305. Although the Act itself does not
recognize a cause of action for employees who are fired in
retaliation for exercising their rights under the statute,
Illinois courts have recognized an implied private action, to
“ensure that the sound public policy underlying the [Act]
c[an] not be frustrated by the actions of an employer.”
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Hinthorn v. Roland’s of Bloomington, Inc., 519 N.E.2d 909, 911
(Ill. 1988). A claim for retaliatory discharge requires a
plaintiff to show that “(1) he was discharged or threatened
with discharge and (2) the employer’s motive in discharging
or threatening to discharge him was to deter him from
exercising his rights under the Act or to interfere with his
exercise of those rights.” Lingle, 486 U.S. at 407 (quoting
Horton v. Miller Chem. Co., 776 F.2d 1351, 1356 (7th Cir.
1985)); see also Hinthorn, 519 N.E.2d. at 911. None of these
elements immediately calls to mind a labor contract. It is
thus not surprising that when the Supreme Court addressed
whether complete preemption applied to this very type of
claim in Lingle, it ruled against such a finding. 486 U.S. at
407‐08. As the Court pointed out, the elements of a
retaliatory discharge claim are “purely factual” and
“pertain[] to the conduct of the employee and the conduct
and motivation of the employer.” Id. at 407. It is not
ordinarily necessary to consult the terms of a labor contract
to know whether an employee was discharged, nor would
the contract be required to explain why the discharge
occurred. While Lingle does not hold that every claim for
retaliatory discharge will escape Section 301 preemption
(because the facts do matter), it suggests that preemption
will be rare.
Cooper acknowledges Lingle, but it contends that this
case is different, both because the grievance settlement
Crosby signed on his departure from the company was
reached under the auspices of the CBA and because it sees
the interpretation of this settlement as critical to Crosby’s
state‐law claim. It argues that before Crosby may invoke the
protection of the Workers’ Compensation Act, he must show
that he was discharged. The grievance settlement, however,
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says that Crosby agreed to a “voluntary separation from the
company [that] shall be considered a permanent layoff
without recall rights.” Cooper argues that the reference to a
“voluntary separation” in the settlement prohibits Crosby
from claiming he was discharged unless he first attacks the
settlement itself. Since attacking the settlement would
require the court to interpret and evaluate the CBA’s dispute
resolution procedures, Cooper reasons that this case, at its
core, involves interpretation of a labor contract and therefore
falls under Section 301.
We have no quarrel with the proposition that Crosby
must prove discharge to succeed on the merits of his claim,
see Hinthorn, 519 N.E.2d at 911, but we are not persuaded
that he can do so only by attacking the grievance settlement.
The settlement is not nearly as clear in characterizing Cros‐
by’s departure from the company as “voluntary” as Cooper
portrays it. The settlement refers to a voluntary separation,
but it then explains that the separation is a “permanent
layoff without recall rights.” That does not sound voluntary
to us; it sounds as if Cooper has firmly shut the door behind
Crosby. The message we take from the settlement is that
Crosby is leaving Cooper and that he does not have the op‐
tion to come back.
The significance of the grievance settlement wanes
further when we consider that Illinois law does not attach
dispositive weight to the label an employer uses to describe
an employee’s departure in determining whether that
employee was discharged. In Hinthorn, the plaintiff was
ordered to sign a so‐called “voluntary resignation” form
after being told that she was going to be fired for having cost
her employer too much money for workers’ compensation
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claims. Id. at 910‐11. Her employer told her that she would
nevertheless be given an opportunity to “resign” and
thereby “save face” and keep a clean resume. Id. at 912. The
Illinois Supreme Court rejected the employer’s attempt to
rely on the “voluntary resignation” label in arguing that it
did not discharge the plaintiff, finding that the
circumstances under which the plaintiff signed the form
provided ample evidence of discharge, regardless of what
the employer chose to call it. Id. Under Hinthorn, Crosby too
is not bound by labels, but instead is entitled to rely on the
circumstances leading up to his signing the grievance
settlement to show that he was discharged. This evidence
has nothing to do with interpreting either the CBA or the
settlement agreement.
Instead, the grievance settlement takes Crosby’s
discharge as given. It governs the terms of that discharge,
but it does not undermine the basic fact of the action. The
grievance settlement says nothing at all about the central
question in a retaliatory discharge case, which is why the
employee was discharged. Crosby aims to show that
Cooper’s desire to punish him for seeking workers’
compensation led it to place him (improperly) in the position
of having to sign the settlement. In short, interpretation of
the settlement is unnecessary to the resolution of Crosby’s
claim.
Crosby has no wish to repudiate the grievance settle‐
ment, and even if he succeeds in this lawsuit, any such suc‐
cess would not deprive Cooper of any benefit it bargained
for in the settlement. Crosby is not seeking reinstatement to
his former position, nor does he wish to change any other
term of the settlement. Crosby wants money damages in
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compensation for Cooper’s alleged violation of Illinois law
and public policy, and nothing in the settlement precludes
such relief. To the contrary, the settlement says that it “is
without prejudice to the contractual rights of either party
and shall not constitute a precedent with respect to any like
or related matter in the future.” If this means anything, it
must indicate that both parties are reserving their rights un‐
der other applicable laws.
None of this is to say that Cooper is barred from raising
preemption as a defense on the merits in state court. See
Caterpillar, 482 U.S. at 398 (claim that is not subject to federal
jurisdiction under the complete preemption doctrine may
nevertheless be proven preempted when the state court
reaches the merits); Smith v. Colgate‐Palmolive Co., 943 F.2d
764, 770 (7th Cir. 1991) (same). We conclude only that
Crosby’s case is not within the territory that Congress carved
out to be governed exclusively by federal rules in Section
301. Without Section 301 “complete preemption,” there is no
basis for federal subject‐matter jurisdiction over this case.
Removal was therefore improper, and we REVERSE and
REMAND to the district court with instructions to return this
case to state court. Needless to say, we express no view on
the underlying merits.
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