Jordan v. Equity Group Eufaula Division, LLC et al

Filing 22

MEMORANDUM OPINION AND ORDER that (1) Plaintiff's 14 Motion to Remand is GRANTED; (2) The case is REMANDED to the Circuit Court for Barbour County, Alabama; (3) Any other pending motions are left for resolution by the Circuit Court for Barbour County, Alabama; and (4) The Clerk is DIRECTED to take appropriate steps to promptly effect the remand. Signed by Hon. Chief Judge Mark E. Fuller on 10/21/2008. Copy mailed to Clerk, Circuit Court for Barbour County, Alabama. (Attachments: #(1) Civil Appeals Checklist) (dmn) [Modified on 1/22/2009 to replace the pdf of the attachment. The wrong pdf was attached in error when originally docketed.-DMN]

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION R O G E R JORDAN, P l a in tif f , v. E Q U IT Y GROUP EUFAULA DIVISION, L L C , JENNIFER BAKER and RANDY C L IN E , D e f e n d a n ts . ) ) ) ) ) C A S E NO. 2:08-cv-152-MEF ) ) (W O ) ) ) ) )

M E M O R A N D U M OPINION AND ORDER T h is cause is before the Court on Plaintiff's Motion to Remand. (Doc. # 14.) Plaintiff o rig in a lly filed his complaint in the Circuit Court for Barbour County, Alabama, alleging two s ta te law tort claims against Equity Group Eufaula Division, LLC and two managers, Jen n ifer Baker and Randy Cline, for claims arising out of the termination of Plaintiff's em p loym en t. Defendants argue that this Court has subject matter jurisdiction over Plaintiff's c la im s under the doctrine of complete preemption. The Court has thoroughly considered the s u b m is s io n s of the parties in support of and in opposition to the motion. For the reasons set f o rth in this Memorandum Opinion and Order, the Court finds that it lacks subject matter ju ris d ic tio n . Therefore, the Motion to Remand is due to be GRANTED. I . FACTS AND PROCEDURAL HISTORY D e f en d a n t Equity Group Eufaula Division, LLC ("Equity") employed Plaintiff Roger Jo rd a n as a line hanger at a poultry processing plant in Eufaula, Alabama. Defendants

Je n n if e r Baker and Randy Cline are management employees at Equity.

During his

e m p lo ym e n t, Plaintiff was represented by Retail, Wholesale and Department Store Union (" U n io n " ). Union acted as Plaintiff's collective bargaining representative. A collective b arg ainin g agreement ("CBA") between Equity and Union governed the terms of Plaintiff's e m p lo ym e n t, including employment termination and the provision of health insurance b e n e f its . On November 20, 2007, Plaintiff suffered a catastrophic non-work related injury w h ile jumping on a trampoline that rendered him a quadriplegic. The parties agree that D e f en d a n ts terminated Plaintiff's employment and cancelled his health insurance coverage in addition to other benefits. The parties disagree about the reason for the termination. A c c o rd in g to Plaintiff, Defendants terminated his employment and cancelled his health in s u ra n c e coverage after learning of his injury. Defendants claim Plaintiff was terminated f o r gross misconduct unrelated to his injury.1 P lain tiff claims Defendants terminated his employment under pretextual reasons in v io la tio n of Defendants' employee handbook and public policy. On January 31, 2008, P lain tiff filed his claims in the Circuit Court for Barbour County, Alabama, alleging two state la w tort claims against Defendants for outrageous conduct and wrongful termination. On M arc h 4, 2008, Defendants removed the case to this Court on the grounds that Plaintiff's
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Defendants allege Plaintiff notified Equity that he had misplaced or lost a paycheck and completed paperwork necessary for a replacement check. Both checks were cashed and Equity suspended Plaintiff pending an investigation. Defendants claim Plaintiff was subsequently terminated for his alleged gross conduct of theft. 2

c laim s are completely preempted by federal law. On April 3, 2008, Plaintiff moved to re m a n d on the grounds that federal law does not preempt his claims and that Defendants' re m o v a l was procedurally defective. II. DISCUSSION A . Subject Matter Jurisdiction D e f en d a n t s argue that this Court has jurisdiction because the Plaintiff's state law c la im s are completely preempted by section 301 of the Labor Management Relations Act (" L M R A " ). Federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. G u a r d ia n Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1 0 9 2 , 1095 (11th Cir. 1994). As such, they may only hear cases that they have been a u th o riz e d to hear by the Constitution or the Congress of the United States. Kokkonen, 511 U .S . at 377. The burden of establishing that subject matter jurisdiction exists rests upon the p a rty asserting jurisdiction. Id. Defendants, as the removing party, bear the burden of p ro v in g federal jurisdiction in this case. See, e.g., Leonard v. Enterprise Rent a Car, 279 F .3 d 967, 972 (11th Cir. 2002). Defendants argue that this Court has jurisdiction because P la in t i f f ' s state law claims are completely preempted by the LMRA. See Palmer v. Local 8 2 8 5 U. S. Workers of Am., 234 Fed.Appx. 884 (11th Cir. 2007) (section 301 of the LMRA c o m p le te ly preempts certain state law claims and complete preemption is an exception to the w ell-plea d ed complaint rule).2 Defendants also argue that the Employee Retirement Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA") preempts Plaintiff's claims because Plaintiff alleges damages that 3
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A defendant may remove a civil action filed in a state court to federal court if the c la im is one "arising under" federal law. Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6 ( 2 0 0 3 ) . In order to determine whether a complaint "arises under" federal law, a court must e x a m in e the "well pleaded" allegations of the complaint and ignore potential defenses. Id. A suit arises under the Constitution and laws of the United States only when the plaintiffs s ta te m e n t of his own cause of action shows that it is based upon federal law or the C o n s titu tio n . Id. As a general rule, absent diversity jurisdiction, a case will not be re m o v a b le if the complaint does not affirmatively allege a federal claim. Id. However, a s ta te claim may be removed to federal court under two narrow exceptions to the well-pleaded c o m p la in t rule: (1) when Congress expressly provides for removal, or (2) when a federal s ta tu te wholly displaces the state law cause of action through complete preemption. Id. at 8. T h e parties do not dispute that the doctrine of complete preemption applies if P lain tiff 's state law claims are "inextricably intertwined" with the terms of the CBA. See A llis -C h a lm e rs v. Lueck, 471 U.S. 202, 211 (1985) (a state law claim is preempted by section 3 0 1 if "evaluation of the tort claim is inextricably intertwined with consideration of the terms o f the labor contract"). The parties disagree about whether the resolution of the state law c la im s depends upon an interpretation of the CBA. B . Complete Preemption Under the LMRA include a loss of health benefits. Defendants do not cite any authority that ERISA preempts a state law claim where a loss of health benefits constitute damages only and not a cause of action. 4

1 . Legal Framework D e f e n d a n ts argue section 301 of the LMRA completely preempts Plaintiff's claims b e c a u s e the claims are "inextricably intertwined" with interpretation of Plaintiff's CBA. P u r s u a n t to section 301, "[s]uits for violation of contracts between an employer and a labor o rg a n iz a tio n representing employees ... may be brought in any district court of the United S tate s having jurisdiction of the parties ..." 29 U.S.C. § 185(a). It is well established that a s ta te law claim is preempted by section 301 unless it exists independently of the collective b a rg a in in g agreement. See, e.g., Allis-Chalmers v. Lueck, 471 U.S. 202, 218 (1985); Int'l B h d .o f Elec. Workers v. Hechler, 481 U.S. 851, 859 (1987); Lingle v. Norge Div. of Magic C h e f, Inc., 486 U.S. 399, 408-09 (1988); United Steelworkers of Am. v. Rawson, 495 U.S. 3 6 2 , 370-71 (1990). A state law claim is not sufficiently independent when it requires an in te rp re ta tio n of the collective bargaining agreement. See 471 U.S. at 218; 481 U.S. at 859; s e e also 486 U.S. 408-09 ("... as long as the state-law claim can be resolved without in te rp re tin g the agreement itself, the claim is `independent' of the agreement for § 301 p r e e m p t io n purposes"). To determine whether a claim is independent, the Court must e x a m in e the elements of the state law claim to see if any of those require interpretation of the c o lle c tiv e bargaining agreement. See Palmer v. Local 8285, 234 Fed. Appx. 884 (11th Cir. 2 0 0 7 ) (citing Allis-Chalmers, 471 U.S. at 213 ("we must look to the elements of the state law c laim to determine `whether evaluation of the tort claim is inextricably intertwined' with c o n sid e ra tio n of the terms of the labor contract")); Bartholomew v. AGL Resources, Inc., 361

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F .3 d 133, 138 (11th Cir. 2004); Vines v. Sloss Indus. Corp., No. CV96-H-546-S, 1996 WL 8 0 6 6 8 2 , at *3 (N.D. Ala. Nov. 25, 1996). Using this legal framework, the Court must d e te rm in e whether section 301 of the LMRA preempts Plaintiff's state law claims or whether th e state law claims are sufficiently independent of the CBA and may be remanded back to sta te court. 2 . Count I: Outrage D e f e n d a n ts argue that Plaintiff's claim for the tort of outrage depends upon an interpre tatio n of the CBA because it relates to conduct in the employment context. The Court m u st determine whether the tort of outage, when related to employment termination, is s u f f ic ie n tly independent of the CBA by examining its elements. To demonstrate an outrage c la im under Alabama law, "the plaintiff must present sufficient evidence that the defendant's c o n d u c t (1) was intentional or reckless; (2) was extreme and outrageous; and (3) caused e m o tio n a l distress so severe that no reasonable person could be expected to endure it." T h o m a s v. BSE Indus. Contractors, Inc., 624 So.2d 1041, 1043 (Ala. 1993). In the

e m p lo ym e n t context, the discharge of an employee rises to the level of the tort of outrage if th e discharge violates public policy. Wyatt v. Bell South, Inc., 998 F. Supp. 1303, 1312 (M .D . Ala. 1998) (holding that the discharge of an employee who refused to engage in a c rim in a l act falls within the public policy exception). The Alabama Supreme Court has o b se rv e d that "an employer, by virtue of his position, possesses no roving license to treat his e m p lo ye e in an extreme and outrageous manner, whether before, during, or after this

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re la tio n s h ip ." American Rd. Serv. Co. v. Inmon, 394 So. 2d 361, 364 (Ala. 1981). Cf. WalM a r t Stores v. Smitherman, 872 So.2d 833, 840 (Ala. 2003) ("[I]t would be intolerable in a c iv iliz e d society to hold that an employer is guilty of outrageous conduct for merely d is c h a rg in g an employee.") (quoting Harrell v. Reynolds Metals Co., 495 So. 2d 1381, 1397 (A la . 1986)). Defendants contend that an analysis of the CBA is essential to the resolution of P la in tif f 's outrage claim, and as such, this claim is preempted. Defendants further argue that th e determination as to whether the employer's actions were sufficiently outrageous to satisfy t h e second element of this tort is dependent upon the employment context, and here the e m p l o ym e n t context is largely dependent on the CBA. The Court disagrees. A lth o u g h a court must examine some claims of outrage with reference to the CBA, n o t all claims require such analysis. In Peterson v. BMI Refractories, 132 F.3d 1405, 1413 (1 1 th Cir. 1998), the Eleventh Circuit found that the plaintiff's outrage claim was not p re e m p te d by the LMRA because the employer's conduct was so outrageous that it was e v id e n t without reference to the collective bargaining agreement. Therefore, the LMRA does n o t preempt an outrage claim if the outrageous conduct is apparent without consideration of th e CBA. Here, Plaintiff alleges that the "conduct of the Defendants was outrageous, went b e yo n d all bounds of human decency and should not be condoned, accepted or endured in a civilized society." 3 (Complaint ¶ 3.) As recognized in Peterson, whether an employer's This language comes from American Rd. Serv. Co., 394 So. 2d at 365, where the Alabama Supreme Court first recognized the tort of outrage in the employment context. 7
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c o n d u c t was outrageous does not always require an analysis of the CBA. Plaintiff's outrage c la im is not "inextricably intertwined" with the CBA because it alleges conduct "so o u tra g e o u s " that it is obvious without reference to the agreement. 3. Count II: Wrongful Discharge D e f en d a n ts also argue that Plaintiff's claim of wrongful discharge is dependent upon th e terms of the CBA. To determine whether wrongful discharge in violation of an employee h a n d b o o k and public policy is "inextricably intertwined" with the CBA, the Court must first c o n sid e r whether Plaintiff's mention of Defendants' employee handbook in his complaint tra n sla tes Count II into a breach of contract claim. If so, then Plaintiff's claim may implicate th e CBA. Second, the Court must determine whether wrongful discharge is sufficiently in d e p e n d e n t of the CBA to withstand preemption. Defendants argue that Plaintiff's mention of an employee handbook in his complaint c re a tes a breach of contract claim that is preempted by the LMRA. Plaintiff bases his claim o f wrongful discharge in part on "the provisions of [Equity's] employee handbook." (C o m p lain t ¶ 3.) Equity's handbook makes clear that employment is at-will unless terms are c o v e re d by a written employment agreement. In Plaintiff's case, the CBA is the written e m p lo ym e n t agreement because Plaintiff was represented by the Union.4 Indeed, preemption is appropriate when an employee alleges a violation of a labor contract. See Moss v. Bell S o u th Telecomm., Inc., No. 05-12781, 2005 WL 2901904, at *1 (11th Cir. Nov. 4, 2005)

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Article 3.3 of the CBA provides that employees may only be terminated for "just cause." 8

(L M R A preempts an employee's outrage claim because she alleged her employer had v io late d a settlement agreement); Vines v. Sloss Indus. Corp., 1996 U.S. Dist. LEXIS 22504 (N .D . Ala. 1996) (finding plaintiff's claim for retaliatory discharge preempted by section 301 b ec au se parties were arguing over specific terms of the collective bargaining agreement). H o w e v e r, Plaintiff does not allege breach of a labor contract or the CBA. Therefore, the C o u rt is unwilling to covert Plaintiff's state law tort claim into a federal contract question. N e x t, the Court must determine whether wrongful discharge in violation of an e m p lo ye e handbook and public policy is "inextricably intertwined" with the terms of the C B A . Defendants argue that Plaintiff's claim raises a fundamental question under the CBA: d id Defendants have "just cause" to terminate Plaintiff's employment? Instead, Plaintiff's c la im asks whether, under Alabama law, Defendants' conduct constitutes wrongful d is c h a rg e .5 Plaintiff does not allege a violation of the CBA but specifically pleads that D e f en d a n ts ' conduct violated the public policy of Alabama. As such, Plaintiff's wrongful d is c h a rg e claim is sufficiently independent of the CBA and is not preempted by the LMRA. T h e re f o re , this Court lacks jurisdiction over Plaintiff's claims and they must be remanded

This Court will not address whether Plaintiff has stated a cause of action under state law for wrongful discharge. The Court notes, however, that it is doubtful that a public policy exception exists for at-will employment. See Hoffman-La Roche, Inc. v. Campbell, 512 So. 2d 725, 728 (Ala. 1987) (observing that Alabama courts' refusal to engraft public policy exception onto at-will doctrine applied even where employee had been fired for refusing to commit a criminal act); See also Scott Bridge Co. v. Wright, 883 So. 2d 1221, 1223 (Ala. 2003) (finding an employee at will may be discharged for any reason, even a "wrong" reason); Wright v. Dothan Chrysler Plymouth Dodge, Inc., 658 So. 2d 428, 431 (Ala. 1995) (Alabama Supreme Court declining to create a public policy exception to the employment at will doctrine, reasoning that any such exception should be created by the legislature). 9

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b a c k to state court. III. Procedural Issues Related to Removal P la in tif f claims that Defendants did not produce facts sufficient to support federal s u b je c t matter jurisdiction because Defendants failed to either attach a copy of the CBA or p ro v id e evidence that Plaintiff was subject to the CBA in their Notice of Removal. Instead, D e f en d a n ts attached this evidence to their Opposition to Plaintiff's Motion to Remand. (Doc. # 17.) The procedure for removal is set forth in 28 U.S.C. § 1446(a):

A defendant or defendants desiring to remove any civil action or criminal p ro s e c u tio n from a State court shall file in the district court of the United States f o r the district and division within which such action is pending a notice of re m o v a l signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and c o n ta in in g a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or d e f en d a n ts in such action. (e m p h a s is added). Plaintiff does not cite any authority in support of their argument. The party seeking removal has the burden of producing facts that support the existence o f federal subject matter jurisdiction. Hobbs v. Blue Cross Blue Shield of Ala., 276 F.3d 1 2 3 6 , 1242 (11th Cir. 2001). It is the Defendants' burden, therefore, to provide facts ju s tif yin g removal. In Sierminski v. Transourth Fin. Corp., 216 F.3d 945, 948 (11th Cir. 2 0 0 0 ), the Eleventh Circuit held that a district court is not limited to evidence provided at the tim e a petition for removal is filed. A district court may consider post-removal evidence in asse ssing removal jurisdiction. Id. at 949 ("[W]hile it is undoubtedly best to include all re le v a n t evidence in the petition for removal and motion to remand, there is no good reason 10

to keep a district court from eliciting or reviewing evidence outside the removal petition."); s e e also 14C Wright, Miller, & Cooper, Federal Practice and Procedure § 3735 (3d ed. 1 9 9 8 ). Defendants' attachment of the CBA and evidence that Plaintiff was subject to the C B A to their Opposition to Plaintiff's Motion to Remand does not violate § 1446(a). T h e re f o re , Defendants' removal was not procedurally defective. I I I . CONCLUSION F o r the reasons set forth above, it is hereby ORDERED that (1 ) Plaintiff's Motion to Remand (Doc. # 14) is GRANTED; (2) The case is REMANDED to the Circuit Court for Barbour County, Alabama; (3) Any other pending motions are left for resolution by the Circuit Court for Barbour C o u n ty, Alabama; and (4) The Clerk is DIRECTED to take appropriate steps to promptly effect the remand. D O N E this 21st day of October 2008.

/s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE

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