Thibodeaux v. Teamsters Local 853

Filing 31

ORDER by Judge Maria-Elena James granting 11 Motion to Dismiss with leave to amend. Amended Pleadings due by 5/18/2017. (mejlc3, COURT STAFF) (Filed on 4/26/2017)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7 8 GEORGE THIBODEAUX Case No. 17-cv-00188-MEJ Plaintiff, 9 ORDER RE: MOTION TO DISMISS v. Re: Dkt. No. 11 10 United States District Court Northern District of California 11 12 BAY AREA BUILDING MATERIAL TEAMSTERS, LOCAL 853, Defendant. 13 14 INTRODUCTION Plaintiff George Thibodeaux brings this action alleging (1) breach of contract, (2) breach 15 of implied covenant for good faith and fair dealing, (3) intentional misrepresentation, and (4) 16 negligent misrepresentation. Pending before the Court is Defendant Bay Area Building Material 17 Teamsters, Local 853’s (“Defendant,” “Local 853,” or “Teamsters”) Motion to Dismiss pursuant 18 to Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 11. Plaintiff filed an Opposition (Dkt. No. 19 20), and Defendant filed a Reply (Dkt. No. 28). The Court finds the matter suitable for disposition 20 without a hearing. See Civ. L.R. 7-1(b). Having considered the parties’ positions, the relevant 21 legal authority, and the record in this case, the Court GRANTS Defendant’s Motion for the 22 reasons set forth below. 23 BACKGROUND 24 For twenty years, Plaintiff was employed as a commercial driver by Central Concrete 25 Supply Co. and was a member of Local 853. Compl. ¶ 1, Dkt. No. 1, Ex. A. Central Concrete, 26 Local 853, and Plaintiff are governed by the terms of a “written agreement” that prevents 27 terminating an employee without just cause. Id. ¶¶ 10-11. Plaintiff alleges Central Concrete 28 terminated him without just cause in 2013. Id. ¶ 14. The agreement provides that all disputes 1 arising under the terms of the agreement “shall be resolved” through an escalating dispute 2 resolution procedure. Id. ¶ 20. In the first step, the dispute may be taken up with local 3 management at the discretion of the employee; however, any formal dispute shall be taken up by 4 the local union in the locality with the employer. Id. If the union and the employer are unable to 5 resolve the dispute, the second step requires the dispute to be referred to the Board of Adjustment. 6 Id. If the Board of Adjustment fails to resolve the dispute, at the third step, the dispute “shall be 7 submitted to an impartial arbitrator upon the request of either party.” Id. Plaintiff alleges he 8 requested Local 853 take up a formal dispute with his employer; Local 853 did so. Id. ¶¶ 14-15. 9 When the dispute was not resolved, the Board of Adjustment conducted a hearing. Id. ¶ 17. After the Board of Adjustment failed to resolve the dispute, Local 853 wrote Plaintiff and represented 11 United States District Court Northern District of California 10 that the “grievance was final and binding. . . . The union has exhausted its defense of your 12 termination under the collective bargaining agreement [‘CBA’].” Id. ¶¶ 17, 18. After Plaintiff 13 discovered Local 853’s statement was false, he requested Defendant submit his dispute to an 14 impartial arbitrator pursuant to the terms of the agreement. Id. ¶¶ 18-19. Plaintiff alleges 15 Defendant did not submit his dispute to an impartial arbitrator. Id. ¶ 20. 16 Plaintiff initiated this action in California Superior Court against Local 853 alleging four 17 state law claims: breach of contract, breach of the covenant of good faith and fair dealing, 18 intentional misrepresentation, and negligent misrepresentation. See Compl. Defendant removed 19 the action to this Court, asserting the Complaint alleges a breach of the duty of fair representation, 20 a claim that arises under the National Labor Relations Act (“NLRA”), 29 U.S.C. § 151 et seq., a 21 federal question that gives the Court subject matter jurisdiction. See Not. of Removal ¶ 3. The 22 Court found Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(a), 23 preempted Plaintiff’s claims, and denied Plaintiff’s motion to remand the action: 24 25 26 27 28 The Court finds Local 853 properly removed the action on the grounds that Plaintiff’s claims are founded on rights created by the CBA, or alternatively, substantially dependent on the CBA. Plaintiff alleges Local 853 failed to submit his dispute to an independent arbitrator as required by the CBA, thereby breaching the terms of the CBA and the implied covenant of good faith and fair dealing, and misrepresented the terms of the CBA in writing. As such, Local 853 “had a right to remove the action on the grounds of LMRA preemption.” Medina v. SEIU-United Healthcare 2 1 2 3 4 5 6 Workers W., 2013 WL 3157923, at *3 (N.D. Cal. June 20, 2013); see also Adkins [v. Mireles], 526 F.3d [531,] 539 [(9th Cir. 2008)]. Order Denying Mot. to Remand at 8-9 (“Remand Order”), Dkt. No. 19. Defendant now asks the Court to dismiss the entire action on the ground Plaintiff’s claims are barred by the applicable six-month statute of limitations. See Mot. LEGAL STANDARD Under Rule 12(b)(6), a party may file a motion to dismiss based on the failure to state a 7 claim upon which relief may be granted. A Rule 12(b)(6) motion challenges the sufficiency of a 8 complaint as failing to allege “enough facts to state a claim to relief that is plausible on its face.” 9 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A facial plausibility standard is not a “probability requirement” but mandates “more than a sheer possibility that a defendant has acted 11 United States District Court Northern District of California 10 unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations 12 omitted). For purposes of ruling on a Rule 12(b)(6) motion, the court “accept[s] factual 13 allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the 14 non-moving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 15 2008). “[D]ismissal may be based on either a lack of a cognizable legal theory or the absence of 16 sufficient facts alleged under a cognizable legal theory.” Johnson v. Riverside Healthcare Sys., 17 534 F.3d 1116, 1121 (9th Cir. 2008) (internal quotation marks and citations omitted); see also 18 Neitzke v. Williams, 490 U.S. 319, 326 (1989) (“Rule 12(b)(6) authorizes a court to dismiss a 19 claim on the basis of a dispositive issue of law”). 20 Even under the liberal pleading standard of Rule 8(a)(2), under which a party is only 21 required to make “a short and plain statement of the claim showing that the pleader is entitled to 22 relief,” a “pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of 23 a cause of action will not do.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555.) 24 “[C]onclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to 25 dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); see also Starr v. Baca, 652 26 F.3d 1202, 1216 (9th Cir. 2011) (“[A]llegations in a complaint or counterclaim may not simply 27 recite the elements of a cause of action, but must contain sufficient allegations of underlying facts 28 to give fair notice and to enable the opposing party to defend itself effectively”). The court must 3 1 be able to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” 2 Iqbal, 556 U.S. at 663. “[D]etermining whether a complaint states a plausible claim [for relief] is 3 [a] context-specific task that requires the reviewing court to draw on its judicial experience and 4 common sense.” Id. at 663-64. If a Rule 12(b)(6) motion is granted, the “court should grant leave to amend even if no 5 6 request to amend the pleading was made, unless it determines that the pleading could not possibly 7 be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en 8 banc) (internal quotation marks and citations omitted). DISCUSSION 9 10 A. Defendant argues, and this Court has already found, that Section 301 of the LMRA 11 United States District Court Northern District of California Arguments of the Parties 12 preempts Plaintiff’s state-law claims because each claim is substantially dependent on analyzing 13 the CBA. See Mot. at 3-4; Remand Order at 8-9.1 As such, Defendant argues Plaintiff’s claims 14 are time-barred under the applicable six-month statute of limitations the Court should borrow from 15 the NLRA. Id. at 5; see 29 U.S.C. § 160(b). Plaintiff argues his claims are timely because Section 301 borrows the most analogous 16 17 statute of limitations from the forum state, which Plaintiff contends is California’s four-year 18 period for breach of contract claims. Opp’n at 2-3 (citing cases). Plaintiff contends his claims 19 nevertheless are timely under the six-month NLRA statute of limitations because Defendant 20 21 22 23 24 25 26 27 28 1 The Court found: Plaintiff alleges the “tripartite” relationship between him, Local 853, and his employer is governed by the “Agreement.” Compl. ¶ 10. He quotes Sections 19 and 20.1 of the Agreement in his Complaint and relies upon these two sections to assert each of his claims. See Compl. at ¶¶ 10-12, 22-26, 28-32, 34-35, 42-43. Each of his claims exists solely as a result of the Agreement, even if state law is used to enforce a particular theory of liability. The rights Plaintiff seeks to assert are “substantially dependent” on analyzing the Agreement. Remand Order at 7. The fact Plaintiff did not refer to the “Agreement” as a CBA did not change the Court’s analysis. Id. at 8 (“Plaintiff’s failure to directly describe the Agreement as a CBA appears to be a conscious attempt to artfully plead around the existence of the CBA. The Court may look beyond such artful pleading.” (citing cases)). 4 1 fraudulently concealed his claims. Id. at 3-4. 2 B. Analysis Applicable Statute of Limitations2 3 1. 4 The statute of limitations applicable to LMRA claims is determined by whether the claims 5 are “straightforward” or “hybrid.” A “straightforward” claim involves suing an employer for 6 breaching a CBA. See DelCostello v. Int’l Broth. of Teamsters et al., 462 U.S. 151, 162 (1983) (a 7 union who sues an employer for breach of a CBA presents a “straightforward breach of contract 8 suit under § 301” of the LMRA (discussing Auto Workers v. Hoosier Corp., 383 U.S. 696 (1966)). 9 A “hybrid” claim is comprised of two causes of action: one against the employer for breach of a CBA under the LMRA, and the other against the union for breach of its duty of fair representation 11 United States District Court Northern District of California 10 under the NLRA. See id. at 164-65 (“The suit against the employer rests on [the LMRA], since 12 the employee is alleging a breach of the [CBA]. The suit against the union is one for breach of the 13 union’s duty of fair representation, which is implied under the scheme of the [NLRA].”). It is not 14 dispositive that Plaintiff chose to only name Local 853 as a Defendant and not his employer. Id. at 15 165 (an employee may “sue one defendant and not the other; but the case he must prove is the 16 same whether he sues one, the other, or both.”); see also Conley v. Int’l Broth. of Elec. Workers, 17 Local 639, 810 F.2d 913, 915 (9th Cir. 1987) (“It is the federal or state nature of the issues to be 18 decided, and not simply the identity of the parties, that controls the distinction between hybrid and 19 straightforward cases.”). “Straightforward” Section 301 claims borrow the “most closely analogous statute of 20 21 limitations under state law.” DelCostello, 462 U.S. at 159-162 (discussing application of state 22 contract statute of limitation to straightforward claim of breach of CBA by employer: “We relied 23 heavily on the obvious and close analogy between this variety of § 301 suit and an ordinary breach 24 25 26 27 28 2 “[A] defendant may . . . raise a motion to dismiss based on the [statute of limitations] defense if the running of the limitations period is apparent on the face of the complaint. Jay v. Serv. Empls. Int’l Union-United Health Care Workers W., 203 F. Supp. 3d 1024, 1037 (N.D. Cal. 2016) (citing Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980) (“If the running of a statute is apparent on the face of the complaint, the defense may be raised by a motion to dismiss”)). Here, Defendant’s statute of limitations argument is based on the face of the Complaint. See Mot. at 5 (referring to admission in Compl. ¶ 18). 5 of contract case. We expressly reserved the question whether we would apply state law to § 301 2 actions where the analogy was less direct or the relevant policy factors different[.]”). But “hybrid” 3 claims alleging not only the breach of a CBA but also of the union’s breach of its duty of fair 4 representation “amount[ ] to a direct challenge to the private settlement of disputes under [the 5 CBA] . . . [and have] no close analogy in ordinary state law.” Id. at 164-65 (internal quotation 6 marks and citations omitted). Instead of looking to state law, the Supreme Court held that the 7 statute most analogous to hybrid claims is Section 10(b) of the NLRA, “a federal statute of 8 limitations actually designed to accommodate a balance of interests very similar to that at stake 9 here.” Id. at 169; id. at 170 (“The NLRB has consistently held that all breaches of a union’s duty 10 of fair representation are in fact unfair labor practices. . . . Even if not all breaches of the duty are 11 United States District Court Northern District of California 1 unfair labor practices, however, the family resemblance is undeniable, and indeed, there is a 12 substantial overlap.” (emphasis in original)); see also Conley, 810 F.3d at 915 (looking at 13 “essence” of complaint: “[t]he case at hand poses the question of a union’s duty to its members, 14 and because of the close relation this bears to the federal policy of fair representation generally, it 15 follows that the federal limitations statute [in Section 10(b)] applies . . . In this case, the analogy to 16 an unfair labor practice is compelling.”). Section 10(b) establishes a six-month statute of 17 limitations. See 29 U.S.C. § 160(b) (“[N]o complaint shall issue based upon any unfair labor 18 practice occurring more than six months prior to the filing of the charge with the Board and the 19 service of a copy thereof upon the person against whom such charge is made[.]”); see also 20 Sullivan v. Aramark Unif. & Career Apparel, Inc., 2011 WL 5827220, at *2-3 & n.1 (N.D. Cal. 21 Nov. 18, 2011) (“As the Supreme Court made clear, a ‘hybrid’ claim under § 301 of the LMRA is 22 subject to a six-month statute of limitations.” (citing DelCostello, 462 U.S. at 169)). 23 The Court finds the federal nature of the issues presented in this matter is properly 24 characterized as a “hybrid” claim. A “hybrid” claim typically arises when a plaintiff alleges the 25 union was unfair in its representation of the employee’s interest. See Conley, 810 F.2d at 915 26 (where “the essence of [plaintiff’s] complaint [was] that the union failed to act fairly on his 27 behalf[,]” the claim was properly characterized as “hybrid”); Mediran v. The Int’l Ass’n of 28 Machinists & Aerospace Workers, 2011 WL 2746601, at *3 (N.D. Cal. July 14, 2011) (“Hybrid § 6 1 301/fair representation claims typically arise where a union’s handling of a grievance is alleged to 2 be deficient.” (citing Galindo v. Stoody Co., 793 F.2d 1502, 1509 (9th Cir. 1986)). The essence of 3 the Complaint is that Local 853 failed to act fairly on Plaintiff’s behalf by, inter alia, (1) failing to 4 present his dispute to an arbitrator as required by the CBA, and (2) misrepresenting to Plaintiff 5 that it had exhausted the dispute-resolution process and that the Board’s decision was final. See 6 Compl.3 This can be fairly characterized as a claim for breach of the duty of fair representation 4, 7 as well as a claim for breach of the CBA—i.e., a classic “hybrid” claim under the authorities cited 8 above. The six-month statute of limitation therefore applies to Plaintiff’s claims. 2. 9 Timeliness “Courts have generally found that the claim accrues and the six-month statute of 11 United States District Court Northern District of California 10 limitations starts to run when an employee ‘discovers, or in the exercise of reasonable diligence 12 should have discovered, the acts constituting the alleged [violation].’” Eason v. Waste Mgmt. of 13 Alameda Cty., 2007 WL 2255231, at *5 (N.D. Cal. Aug. 3, 2007) (quoting Galindo, 793 F.2d at 14 1509-10 (six-month statute of limitation for a “hybrid” claim accrued on or about the date plaintiff 15 received a letter stating the union would no longer pursue the employee’s grievance)). Where the 16 dispute arises in the grievance procedure context, the claim typically accrues at the conclusion of 17 the grievance proceedings; where the claim arises outside of that context, the claim accrues when 18 the employee reasonably should have learned of the violation. See id. Moreover, “[u]nion 19 members have a duty to become aware of the nature and availability of union remedies. . . . [and 20 t]he union’s failure to inform a union member of the existence of a union appeals process does not 21 excuse the member’s ignorance.” Evangelista v. Inlandboatmen’s Union of the Pac., 777 F.2d 22 1390, 1397 (9th Cir. 1985) (citing cases); Eason, 2007 WL 2255231, at *7-8 (employees who are 23 subject to CBAs are “charged with constructive knowledge of its terms”; that union never told 24 employee of the CBA’s terms, or that employee never read the CBA “is insufficient to 25 26 27 3 A “hybrid” claim can be brought against a defendant “notwithstanding the outcome or finality of the grievance or arbitration proceeding.” Sullivan, 2011 WL 5827220, at *2. 4 28 See also Remand Order at 4 (“Plaintiff’s misrepresentation claims appear to be subsumed by Local 853’s duty of fair representation. . . .”). 7 1 demonstrate that a reasonably diligent plaintiff would not have discovered [defendant’s] failure to 2 comply with the terms of the CBA.” (citing cases)). 3 Based on the allegations of the Complaint, the six-month statute of limitations accrued on 4 or about October 16, 2013, when Defendant notified Plaintiff “the grievance was final and 5 binding. . . . The union has exhausted its defense of your termination under the [CBA].” Compl. ¶ 6 18; see Galindo, 793 F.2d at 1510. Moreover, Plaintiff had constructive knowledge of the terms 7 of the, and as such, should have been aware a third step in the dispute resolution process remained 8 after the Board of Adjustment hearing. Plaintiff nonetheless did not file his Complaint until 9 December 27, 2016, well beyond the six-month statute of limitations. 3. 11 United States District Court Northern District of California 10 Equitable Tolling Plaintiff argues his Complaint is timely even under the six-month statute of limitations, 12 because Defendant’s fraudulent concealment tolled the statute of limitations. Opp’n at 4. 13 Fraudulent concealment “halts the statute of limitations when there is active conduct by a 14 defendant, above and beyond the wrongdoing upon which the plaintiff’s claim is filed, to prevent 15 the plaintiff from suing in time.” Guerrero v. Gates, 442 F.3d 697, 706 (9th Cir. 2006) (citing 16 Johnson v. Henderson, 314 F.3d 409, 415 (9th Cir. 2002)). Tolling the statute of limitations on 17 the basis of fraudulent concealment requires Plaintiff to establish: “(1) fraudulent concealment by 18 the party raising the statute of limitations defense; [and] (2) the other party’s failure to discover the 19 facts that are the basis for a cause of action despite (3) the exercise of due diligence.” Eason, 2007 20 WL 2255231, at *6 (citing NLRB v. Don Burgess Const. Co., 596 F.2d 378, 383 (9th Cir. 1979)). 21 A plaintiff “must demonstrate that he relied on the defendant’s misconduct in failing to file in a 22 timely manner and must plead with particularity the facts which give rise to the claim of 23 fraudulent concealment.” Guerrero, 442 F.3d at 706-07 (internal quotation marks and citation 24 omitted). 25 The only allegations in the Complaint that relate to fraudulent concealment are that: 26 “Plaintiff did not discover that this statement [regarding exhaustion of the defense] was false until 27 within three (3) years of the filing of this lawsuit” (Compl. ¶ 18); “Defendants’ [sic] representation 28 was false. . . . Defendants [sic] knew that the representation was false when it was made” (id. ¶¶ 8 1 35-36, see also id. ¶¶ 43-44); and Plaintiff reasonably relied on the representation (id. ¶¶ 38, 46). 2 The conclusory allegations are insufficient to plead fraudulent concealment. See Guerrero, 442 3 F.3d at 706-7 (plaintiff must plead facts giving rise to fraudulent concealment with particularity); 4 see also Smith v. Norcal Waste Sys. of San Jose, Inc., 2006 WL 581041, at *4 (N.D. Cal. March 7, 5 2006) (“conclusory statements of fraudulent concealment and lack of actual or constructive 6 knowledge of the facts giving rise to their cause of action” come “woefully short” of standard for 7 pleading equitable tolling). Plaintiff fails to allege facts from which a reasonable inference could 8 be plausibly drawn that Defendant’s conduct was “above and beyond” the alleged wrongdoing, or 9 that Plaintiff exercised due diligence to discover the facts underlying this action. CONCLUSION 10 Based on the face of the Complaint, Plaintiff’s claims are preempted under Section 301 of United States District Court Northern District of California 11 12 the LMRA and are time-barred under the six-month statute of limitations applicable to hybrid 13 Section 301 claims. Because Plaintiff has not stated a claim upon which relief may be granted. 14 Defendant’s Motion is therefore GRANTED. 15 It is unclear whether Plaintiff can allege additional facts to show the statute of limitations 16 was tolled due to Defendant’s fraudulent concealment. The Court gives Plaintiff leave to amend 17 to allege such facts. If Plaintiff amends, he also must properly amend the complaint to state a 18 claim under federal law rather than reasserting the state law claims this Court has found are 19 preempted.5 Any amended complaint must be filed by May 18, 2017. IT IS SO ORDERED. 20 21 Dated: April 26, 2017 ______________________________________ MARIA-ELENA JAMES United States Magistrate Judge 22 23 24 25 26 27 28 5 See Carr v. Allied Waste Sys. of Alameda Cty., 2010 WL 4916433, at *18 (N.D. Cal. Nov. 23, 2010) (“[T]he fact that the state law claims are preempted does not mean that plaintiff has no claim—it simply means that he must amend the complaint to state a claim under federal law.”) The Court will dismiss Plaintiff’s state-law claims if he re-pleads them. See Sullivan, 2011 WL 5827220 at *3 (dismissing breach of contract and breach of duty of fair representation claims as preempted, after plaintiff had failed to follow court’s order to re-characterize these as “a ‘hybrid’ claim under § 301 of the LMRA.”) 9

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