Smith-Emery Company v. International Union of Operating Engineers Local Union No 12

Filing 22

MINUTES OF Motion Hearing held before Judge Christina A. Snyder: The Court finds plaintiff's sole state law claim for intentional misrepresentation and fraud, as currently pled in the complaint, to be preempted by section 301 of the Labor Management Relations Act. The Court therefore GRANTS defendant's motion to dismiss 12 without prejudice. Plaintiff shall have until and including 12/14/2015 to file an amended complaint. Court Reporter: Laura Elias. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

Present: The Honorable

Date

November 16, 2015

CHRISTINA A. SNYDER, U.S. DISTRICT JUDGE

CONNIE LEE
Deputy Clerk

LAURA ELIAS
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

John Hunter

Hugo Tzec

Proceedings:

I.

DEFENDANT’S MOTION TO DISMISS CASE (Docket #12,
filed September 28, 2015)

INTRODUCTION

Plaintiff Smith-Emery Company (“plaintiff” or “Smith-Emery”) filed this action
against defendant International Union of Operating Engineers Local No. 12 (“defendant”
or “Local 12”) on July 10, 2015 in the Los Angeles Superior Court, asserting one claim
for intentional misrepresentation and fraud. See Compl. On August 20, 2015, defendant
removed the action to this Court on the basis of federal subject-matter jurisdiction
pursuant to section 301(a) of the Labor Management Relations Act (“LMRA”), 29 U.S.C.
§ 185, et seq. See Dkt. 1 (Notice of Removal). On September 14, 2015, plaintiff filed a
motion to remand the action to state court for lack of subject-matter jurisdiction. See
Dkt. 9. The Court denied plaintiff’s motion to remand on October 15, 2015. Dkt. 18.
On September 28, 2015, defendant Local 12 filed the instant motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6), as well as a request for judicial
notice.1 See Dkts. 12, 13. The hearing for the motion to dismiss was set for October 26,
1

Defendant requests judicial notice of three documents: a copy of the complaint
and the judgment entered in the action of Trustees of the Operating Engineers Pension
Trust v. Smith-Emery Company in the United States District Court for the Central
District of California, Case No. 2:09-cv-01476-CAS-VBK (respectively, Exs. A and B),
as well as a copy of the oral argument calendar of the United States Court of Appeals for
the Ninth Circuit for November 4, 2015 (Ex. C). Dkt. 13, Request for Judicial Notice
(“RJN”). Plaintiff has not objected to defendant’s request for judicial notice.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

2015. Dkt. 12. On October 2, 2015, the parties stipulated to continue the hearing to
November 16, 2015. Dkt. 14. Plaintiff filed an opposition to defendant’s motion to
dismiss on October 26, 2015. Dkt. 19. Defendant replied on November 2, 2015. Dkt.
21. Having carefully considered the parties’ arguments, the Court finds and concludes as
follows.
II.

BACKGROUND

This action arises out of an alleged fraudulent misrepresentation of the scope of
work coverage under a collective bargaining agreement between plaintiff Smith-Emery
and defendant Local 12 (the “CBA”). The complaint alleges that Smith-Emery is a
California Corporation that employs building and construction inspectors to perform
inspections of construction work. Compl. ¶ 5. Since 1969, Smith-Emery has employed a
group of field inspectors represented by Local 12. Id. ¶ 6. Smith-Emery and Local 12
have been and continue to be parties to the CBA, which requires Smith-Emery to make
contributions to various third-party trust funds (“the Trusts”). Id ¶¶ 14-15.
Smith-Emery’s payments to the Trusts ultimately benefit Local 12’s bargaining unit
employees. Id. ¶ 14. The complaint further states that the particular amount of
Smith-Emery’s contributions to the Trusts is determined by work that is both performed
by Local 12 employees within the scope of the CBA between Smith-Emery and Local 12.
Compl. ¶ 15.
Independent of its relationship with Smith-Emery, Local 12 is also a party to a
separate master labor agreement with other employers (the “Master Labor Agreement,” or
“MLA”), many of them Smith-Emery’s competitors. Compl. ¶¶ 9-10. The MLA governs
the contribution obligations of these other employers. Id. ¶ 9. Smith-Emery alleges that
(1) it has never been a signatory to the MLA, (2) it has no obligations under the MLA,
and (3) it has always maintained a separate collective bargaining agreement with Local

Accordingly, the Court takes judicial notice of exhibits A, B, and C, as they are matters
of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). The
Court does not, however, accept the documents for the truth of the matters asserted
therein. See Munguia v. Wells Fargo Bank, N.A., 2015 WL 1475996, at *1 n.1 (C.D.
Cal. Mar. 30, 2015).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

12. Id. ¶ 10. In its complaint, Smith-Emery alleges that at various times, Local 12 has
tried to expand the scope of the CBA “to mirror the scope of covered work” as defined in
the Master Labor Agreement, of which Smith-Emery is not a party. Id. ¶ 13.
Smith-Emery avers that it has repeatedly denied Local 12’s proposals to expand the
definition of work covered in the CBA. Id.
The instant dispute between Local 12 and Smith-Emery has its roots in a 2009
lawsuit (the “2009 Action”). In the 2009 Action, the Trusts sued Smith-Emery for breach
of contract resulting from Smith-Emery’s alleged failure to make benefit contributions to
the Trusts as agreed upon in the CBA. See RJN, Ex. A. Smith-Emery alleges that during
the course of the 2009 Action, it learned that a Local 12 officer had instructed the Trusts
to “read [the CBA] to ‘mirror’ the master labor agreement.” Compl. ¶ 18. Specifically,
Smith-Emery alleges in the instant suit that Local 12 “misrepresented the definition of
coverage under the CBA with [Smith-Emery]” to cover work classifications that were not
defined in the CBA, but were covered under the MLA.” Id. ¶¶ 19-21.
Furthermore, Smith-Emery contends in its complaint that Local 12’s
misrepresentations regarding the scope of the CBA “caused the Trusts to pursue legal
action against [Smith-Emery] for alleged delinquent [benefit contributions] on work
which is not and was never covered by the [CBA].” Compl. ¶ 22. Accordingly, in
pursuing its claim for misrepresentation and fraud in the instant lawsuit, Smith-Emery
seeks to recover from Local 12 damages, attorney’s fees, and costs resulting from
Smith-Emery’s defense of the 2009 Action. Id. at p. 5 (Prayer for Relief).
III.

LEGAL STANDARD
A.

Motion to Dismiss Pursuant to Rule 12(b)(6)

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the claims asserted in a complaint. Under this Rule, a district court
properly dismisses a claim if “there is a ‘lack of a cognizable legal theory or the absence
of sufficient facts alleged under a cognizable legal theory.’ ” Conservation Force v.
Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balisteri v. Pacifica Polic Dep’t,
901 F.2d 696, 699 (9th Cir. 1988)). “While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[F]actual allegations must
be enough to raise a right to relief above the speculative level.” Id.
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
from them. Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, “[i]n keeping with these
principles a court considering a motion to dismiss can choose to begin by identifying
pleadings that, because they are no more than conclusions, are not entitled to the
assumption of truth. While legal conclusions can provide the framework of a complaint,
they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009); Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a
complaint to survive a motion to dismiss, the non-conclusory ‘factual content,’ and
reasonable inferences from that content, must be plausibly suggestive of a claim entitling
the plaintiff to relief.”). Ultimately, “[d]etermining whether a complaint states a plausible
claim for relief will . . . be a context-specific task that requires the reviewing court to
draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.
Unless a court converts a Rule 12(b)(6) motion into a motion for summary
judgment, a court cannot consider material outside of the complaint (e.g., facts presented
in briefs, affidavits, or discovery materials). In re American Cont’l Corp./Lincoln Sav. &
Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other grounds sub nom
Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court
may, however, consider exhibits submitted with or alleged in the complaint and matters
that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon
Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

IV.

Date

November 16, 2015

ANALYSIS
A.

Preemption under § 301 of the LMRA

In an action arising under section 301 of the Labor Management Relations Act,
federal substantive law preempts state law in order to further the interest in uniform
federal interpretation of collective bargaining agreements. Allis-Chalmers Corp. v.
Lueck, 471 U.S. 202, 209 (1985) (“[D]imensions of § 301 require the conclusion that
substantive principles of federal labor law must be paramount in the area covered by the
statute [so that] issues raised in suits of a kind covered by § 301 [are] to be decided
according to the precepts of federal labor law policy.”) (citing Teamsters v. Lucas Flour
Co., 369 U.S. 95, 103 (1962)). Accordingly, section 301’s preemptive force “has been
broadly construed to cover most state law actions that require interpretation of labor
agreements.” Aguilera v. Pirelli Armstrong Tire Corp., 223 F.3d 1010, 1016 (9th Cir.
2000). “Such an analysis furthers the purpose of section 301 preemption doctrine ‘that
federal law will be the basis for interpreting collective-bargaining agreements,’ while
leaving undisturbed ‘the substantive rights a State may provide to workers when
adjudication of those rights does not depend upon the interpretation of such
agreements.’” Milne Employees Ass’n v. Sun Carriers, 960 F.2d 1401, 1408 (9th Cir.
1991) (quoting Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 409 (1988)).
The Supreme Court has articulated a two-step inquiry for determining whether a
state law claim is preempted under section 301. Lueck, 471 U.S. at 212-13 (1985); see
also Burnside v. Kiewit Pacific Corp., 491 F.3d 1053, 1059 (9th Cir. 2007). The first
inquiry involves determining “whether the asserted cause of action involves a right
conferred upon an employee by virtue of state law, [and] not by a [collective bargaining
agreement].” Burnside, 491 F.3d at 1059. “If the right exists solely as a result of the
[collective bargaining agreement], then the claim is preempted, and our analysis ends
there.” Id. (citing Lueck, 471 U.S. at 212). However, if the right exists independently of
the collective bargaining agreement, “we must still consider whether it is nevertheless
‘substantially dependent on analysis of a collective-bargaining agreement.’” Id. (citing
Caterpillar Inc. v. Williams, 482 U.S. 386, 394 (1987)). Where the resolution of a state
law claim is “substantially dependent upon analysis of the terms of [a collective
bargaining agreement] made between the parties in a labor contract, that claim must
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

either be treated as a § 301 claim, or dismissed as pre-empted.” Lueck, 471 U.S. at 220
(internal citations omitted).
B.

Plaintiff’s Claim for Intentional Misrepresentation and Fraud

In the instant motion, defendant moves to dismiss plaintiff’s claim pursuant to
Federal Rule of Civil Procedure 12(b)(6). See Motion. Defendant argues that plaintiff
fails to state a claim upon which relief can be granted because plaintiff’s sole claim for
intentional misrepresentation and fraud is preempted by section 301 of the LMRA. Id. at
2. The Court addresses below whether plaintiff’s claim for intentional misrepresentation
and fraud is preempted by section 301 of the LMRA under the two-step inquiry
articulated in Lueck.
1.

Right Conferred by State Law

Under the first inquiry, to determine whether a right is conferred upon by state law
or by a collective bargaining agreement, the court must consider the “legal character of a
claim, as ‘independent’ of rights under the collective-bargaining agreement [and] not
whether a grievance arising from ‘precisely the same set of facts’ could be pursued.”
Burnside, 491 F.3d at 1060 (citation omitted) (emphasis in original). “A claim brought in
state court on the basis of a state-law right that is ‘independent of rights under the
collective-bargaining agreement,’ will not be preempted, even if ‘a grievance arising
from “precisely the same set of facts” could be pursued.’” Valles v. Ivy Hill Corp., 410
F.3d 1071, 1076 (9th Cir. 2005) (quoting Livadas v. Bradshaw, 512 U.S. 107, 123
(1994)). Additionally, “reliance on the CBA as an aspect of a defense is not enough to
‘inject[ ] a federal question into an action that asserts what is plainly a state-law claim.’”
Burnside, 491 F.3d at 1060 (quoting Caterpillar, 482 U.S. at 398-99).
Here, plaintiff Smith-Emery contends that its claim for intentional
misrepresentation and fraud is not preempted under this inquiry because the claim arises
under state law. Opp’n at 11. As to this question, the Court agrees with plaintiff.
Because plaintiff seeks its remedy under California law through its state law tort claim
for intentional misrepresentation and fraud, the right therefore does not “exist[] solely as
a result of the [collective bargaining agreement].” Burnside, 491 F.3d at 1060 (citing
Lueck, 471 U.S. at 212). However, the Court’s analysis does not end there, as the Court
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

must also consider, under the second inquiry, whether the claim is substantially
dependent upon analysis of the collective bargaining agreement. Id.
2.

Dependency upon Analysis of the CBA

Under the second inquiry, if resolution of a state law claim requires an
interpretation of the terms of a collective bargaining agreement, then the claim is
substantially dependent upon the collective bargaining agreement and is therefore
preempted under section 301. Burnside, 491 F.3d at 1060; Cramer v. Consolidated
Freightways, Inc., 255 F.3d 683, 693 (9th Cir. 2001), cert. denied 534 U.S. 1078 (2002).
On the other hand, if the “meaning of contract terms is not the subject of dispute, the bare
fact that a collective bargaining agreement will be consulted in the course of the state-law
litigation” does not result in preemption. Livadas, 512 U.S. at 124. Ultimately, “[t]he
plaintiff’s claim is the touchstone for this analysis; the need to interpret the CBA must
inhere in the nature of the plaintiff's claim.” Cramer, 255 F.3d at 691. Specifically, the
court must consider “whether the claim can be resolved by ‘look[ing] to’ versus
interpreting the CBA. If the latter, the claim is preempted; if the former, it is not.”
Burnside, 491 F.3d at 1060 (internal citations omitted) (alteration in original); see also
Cramer, 255 F.3d at 691-92 (“[A]lleging a hypothetical connection between the claim
and the terms of the CBA is not enough to preempt the claim: adjudication of the claim
must require interpretation of a provision of the CBA.”). Thus, “[a] state law claim is not
preempted under § 301 unless it necessarily requires the court to interpret an existing
provision of a CBA that can reasonably be said to be relevant to the resolution of the
dispute.” Cramer, 255 F.3d at 693.
The Ninth Circuit’s decision in Young v. Anthony’s Fish Grottos, Inc. is
instructive here. 830 F.2d 993, 1001 (9th Cir. 1987). The court in Young held that
plaintiff’s fraud claim was substantially dependent upon interpretation of the terms of a
collective bargaining agreement and thus preempted by section 301. Id. The plaintiff in
Young was employed by the defendant under an oral employment contract whereby
defendant promised that plaintiff could be discharged “only for just cause.” Id. at 996.
Independent of plaintiff’s oral employment contract, defendant and plaintiff’s union were
under a collective bargaining agreement under which “an employee . . . can be discharged
at [defendant employer’s] sole discretion[, and more] senior employees can be discharged
only for just cause.” Id. Following her employment termination, plaintiff brought a
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

fraud claim against defendant for falsely representing that plaintiff could only be
discharged for just cause. Id. at 996, 1001. Although plaintiff insisted that her state tort
claims for fraud and negligent misrepresentation resulted from oral representations and
therefore did not inhere from the collective bargaining agreement, the court concluded
that “[i]n order to prove misrepresentation, Young would be required to show that the
terms of the CBA differed significantly from the terms of the individual contract. As
resolution of her misrepresentation claims would substantially depend on interpretation of
the terms of the CBA, the claims [were] preempted.” Id. at 1001.
As with the plaintiff’s claim in Young, resolution of plaintiff Smith-Emery’s sole
claim for intentional misrepresentation appears to substantially depend upon
interpretation of the scope of coverage under the CBA. Under California law, the
“essential elements of a count for intentional misrepresentation are (1) a
misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and
justifiable reliance, and (5) resulting damage.” Chapman v. Skype Inc., 220 Cal. App.
4th 217, 230-31 (2013) (citation omitted). With respect to the first
element––misrepresentation––defendant argues that plaintiff Smith-Emery “cannot
simply allege that Local 12 misrepresented the work coverage [under the CBA] and then
avoid an interpretation of what that scope of coverage [actually] is under the CBA.”
Motion at 7 (emphasis added). Rather than “merely ‘looking’” to the CBA, defendant
contends that the alleged “misrepresentation of the definition of work coverage would
[thus] require [p]laintiff to analyze the CBA in proving its case.” Id.
Based on the allegations in the complaint, as currently pled, the Court agrees with
defendant Local 12. On its face, plaintiff’s complaint implicates the CBA by alleging
that Local 12 “misrepresented the definition of coverage under the CBA.” to cover work
classifications that were not defined in the CBA, but were covered under the MLA.
Compl. ¶ 19 (emphasis added). Specifically, Smith-Emery alleges that during the course
of the 2009 Action, it learned that a Local 12 officer had allegedly instructed the Trusts to
“read [the CBA] to ‘mirror’ the master labor agreement.” Id. ¶ 18 (emphasis added).
Therefore, as in Young, in order for plaintiff to demonstrate that Local 12 misrepresented
the definition of coverage as alleged in the complaint, plaintiff must establish that the
definition of coverage under the CBA differed from that under the MLA. Simply put, to
resolve plaintiff’s misrepresentation claim, the Court must interpret, rather than look to,
the CBA. Burnside, 491 F.3d at 1060.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

Plaintiff resists this conclusion, arguing that its intentional misrepresentation claim
is not preempted because resolution of its claim does not require an interpretation of the
terms of the CBA. In its opposition, plaintiff relies upon the Ninth Circuit’s decision in
Milne Employees Ass’n v. Sun Carriers, 960 F.2d 1401 (9th Cir. 1992). In Milne,
management for the defendant-employer, a trucking company, had “allegedly made
speeches and presented videotapes promising the employees job security, asking them to
have faith in the group controlling [one of the defendant-entities], and asking them to
refrain from seeking other employment.” Id. at 1405. Defendant-employer also sold two
“terminals but represented the sales to employees as a ‘revamping’ or as a ‘blend[ing]’ of
operations” with other terminals. Id. Later, after defendant-employer closed all of its
locations, liquidated its assets, and began terminating its employees, plaintiff, an
employee association, claimed that defendant-employer’s prior actions “were ‘efforts to
deceive, mislead and conceal’ from [their] employees [the] Employer’s true intentions to
liquidate the company.” Id. Accordingly, plaintiff brought an action that included, inter
alia, a claim for fraud and misrepresentation against defendant. Id. Following removal
of the action, the district court concluded that plaintiff’s misrepresentation claim was
preempted by section 301. Id. at 1407.
On appeal, plaintiff argued that its state law claims, including its misrepresentation
claim, were not completely preempted by section 301 and, thus, that the district court had
improperly exercised jurisdiction over the suit. Id. The Ninth Circuit agreed and
reversed the district court, finding plaintiff’s fraud and misrepresentation claims not to be
preempted under section 301 because resolution of plaintiff’s claim, which was largely
based upon defendant’s various oral misrepresentations, did not require an interpretation
of specific terms in the CBA. Id. at 1401. The Court looked to the first three elements of
the fraud claim—misrepresentation, knowledge of falsity, and intent to defraud—and
concluded that resolution of these elements “does not require interpretation of the
employees’ collective bargaining agreements.” Id. at 1408. Instead, the Court explained,
resolution “turns on [defendant’s] state of mind and involves ‘purely factual questions
pertain[ing] to . . . the conduct and motivation of the employer.” Id. (quoting Lingle, 486
U.S. at 407 (alteration in original)).
The same reasoning applies in the instant action, according to plaintiff SmithEmery, because the question of whether defendant Local 12 made a false representation
regarding the scope of the CBA involves “purely” factual questions, as in Milne, and
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

therefore does not require the court to reference or otherwise interpret the CBA.
See Opp’n at 9. Plaintiff’s argument misses the mark. First, the allegations in plaintiff’s
complaint, as currently pled, distinguish this case from Milne. It is true, as plaintiff
contends, that the Ninth Circuit in Milne handily rejected the defendant-employer’s
argument that establishing the misrepresentation claim “require[d] interpretation of the
collective bargaining agreements, thus triggering preemption under section 301.” Milne,
960 F.2d at 1409. However, the Court did so because to resolve the various claims, “it
would have no occasion to interpret the collective bargaining agreement itself, in part
because these fraud claims do not originate in or refer to rights and duties derived from
the collective bargaining agreement.” Id. (emphasis added) (noting that there was “no
provision or term [in the CBA] which arguably conflict[ed] with [defendant’s] promises
regarding its continued operations and employee job security[] that would call for
interpretation”). Here, in contrast, Smith-Emery alleges that a Local 12 officer
improperly instructed the Trusts to “read [the CBA] to ‘mirror’ the master labor
agreement” and “misrepresented the definition of coverage under the CBA.” See
Compl. Id. ¶¶ 18-21. Thus, the Court will likely be “require[d] to interpret an existing
provision of a CBA that can reasonably be said to be relevant to the resolution of the
dispute.” Cramer, 255 F.3d at 693.
Second, in advancing these arguments in opposition to the instant motion, plaintiff
cites to testimony from the 2012 trial in the 2009 Action during which a witness stated
that a Local 12 union officer once “told [the testifying witness] that the contract with
Smith-Emery Company mirrored the master labor agreement.” See Opp’n at 9-10 (citing
Dkt. 19-1 (Declaration of John Logan Hunter), Ex. A.). According to plaintiff, this
statement contrasted with a previous Local 12 representation from a December 2004
letter, which plaintiff attaches to a declaration submitted in opposition to the instant
motion, but does not reference in or attach to the complaint. Id. at 10 (citing Declaration
of John Logan Hunter, Ex. B). For purposes of the instant motion, the Court cannot
consider material outside of the complaint, such as facts presented in briefs, affidavits, or
discovery materials. In re American Cont’l Corp./Lincoln Sav. & Loan Sec. Litig., 102
F.3d at 1537. Any such factual allegations must be properly pled in the complaint itself,
and are accordingly not considered by the Court here.
V.

CONCLUSION

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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Case No.

2:15-cv-06367-CAS-AFM

Date

November 16, 2015

Title

SMITH-EMERY CO. V. INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL NO. 12

In accordance with the foregoing, the Court finds plaintiff’s sole state law claim for
intentional misrepresentation and fraud, as currently pled in the complaint, to be
preempted by section 301 of the Labor Management Relations Act. The Court therefore
GRANTS defendant’s motion to dismiss without prejudice.
Plaintiff shall have until and including Monday, December 14, 2015, to file an
amended complaint.
IT IS SO ORDERED
00
Initials of Preparer

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:

02

CL

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