Sturgill v. Henniges Automotive
Filing
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OPINION AND ORDER: GRANTING 5 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Henniges Automotive. This case is DISMISSED WITH PREJUDICE. *** Civil Case Terminated.. Signed by Judge Rudy Lozano on 12/4/12. (jld)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
LISA STURGILL,
Plaintiff,
vs.
HENNIGES AUTOMOTIVE,
Defendant.
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Case No. 3:12-CV-511
OPINION AND ORDER
This matter is before the Court on the Motion to Dismiss,
filed by Defendant, Henniges Automotive, on September 20, 2012 (DE
#5).
For the reasons set forth below, the motion is GRANTED and
the case is DISMISSED WITH PREJUDICE.
BACKGROUND
Plaintiff, Lisa Sturgill, acting as a pro se Plaintiff at the
time (who is currently represented by counsel), filed her complaint
on August 20, 2012, in the Wabash Superior Court (the “State
Court”).
The Complaint states Sturgill seeks: “the below amount
from when I was employed at GDX Automotive Wabash Indiana for the
unclaimed retention bonus from January 4, 2008," and Plaintiff
sought judgment against Defendant for $4,801.23 and Court costs of
$79.
(DE #1.)
Defendant filed a notice of removal on September 13, 2012 (DE
#2).
Defendant alleges Plaintiff’s claim arises from a Plant
Closure Agreement negotiated in 2007 between GDX Automotive North
America (“GDX”) and the Local No. 626 chapter of the United
Steelworkers, AFL-CIO, CLC, the labor organization that represented
Plaintiff.
Therefore, it removed the case on the basis of a
federal question under 28 U.S.C. § 1331.
(DE #2, ¶ 3.)
The Plant
Closure Agreement was attached as Exhibit B to the Defendant’s
notice of removal.
The Plant Closure Agreement provided that retention bonuses
would be paid to eligible employees on January 4, 2008 or through
the first regular payroll after their termination, whichever was
later.
(DE #6, Ex. A, ¶ 10.)
Defendant Henniges is the successor
to GDX’s obligations under the contract.
The Agreement required
any dispute regarding the application or interpretation of the
Agreement to be communicated to the other party within 30 days
after
the
party
should
reasonably
existence of any such dispute.
have
become
aware
(DE #6, Ex. A, ¶ 26.)
of
the
Any dispute
the parties were unable to resolve would be submitted to mandatory
arbitration pursuant to the rules of the Federal Mediation and
Conciliation Service (“FMCS”).
Id.
Defendant Henniges moves to dismiss the complaint under Rule
12(b)(6) of the Federal Rules of Civil Procedure.
It argues that
the 2-year statute of limitations relating to the employment
actions at issue has expired, and that Plaintiff is bound by the
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contract to settle disputes concerning her retention bonus through
arbitration.
In response, Plaintiff moves to remand this case back to the
State court.
She contends in her brief that GDX (now Henniges)
provided her with a 2008 W-2 and Earnings Summary showing it had
paid Sturgill $4,817.92, but she was never provided this payment.
(DE #9, pp. 1-2.)
She argues Henniges knew or should have known
the payment was not provided to Sturgill, and that they intended to
deceive her.
(Id., p. 2.)
Plaintiff characterizes her case as a
claim for fraud, not brought under a federal statute, which should
be remanded back to State court.
Having been fully briefed, this
matter is ripe for adjudication.
DISCUSSION
“To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (internal quotations omitted); see also Ray v. City
of Chicago, 629 F.3d 660, 662-63 (7th Cir. 2011) (“While the
federal pleading standard is quite forgiving . . .
the complaint
must contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.”).
A complaint should not be dismissed for failure to state a
claim “unless it appears beyond doubt that the plaintiff can prove
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no set of facts in support of his claim which would entitle him to
relief.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 561 (2007)
(quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Plus, Iqbal
requires that a plaintiff plead content which allows this Court to
draw a reasonable inference that the defendant is liable for the
alleged misconduct.
556 U.S. at 678.
Although a Court generally may only consider the plaintiff’s
complaint when ruling on a 12(b)(6) motion to dismiss, an exception
is made for cases concerning contract interpretation.
v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998).
Levenstein
In those cases,
the contract is “considered part of the pleadings” as it is
“central to [Plaintiff’s] claim.” Wright v. Assoc. Ins. Cos. Inc.,
29 F.3d 1244, 1248 (7th Cir. 1994).
Here, Plaintiff referred to
the “unclaimed retention bonus” in her complaint, and because the
Plant Closure Agreement specifically provides for that bonus, the
Court will consider that Agreement.
Plaintiff tries to characterize her claim as one for fraud arguing there is no federal labor law question, her claim is not
time barred, and she was under no obligation to exhaust the
grievance
agreement.
and
arbitration
procedure
contained
in
the
plant
Her arguments fail.
This Court concurs with Henniges that federal labor law
applies to Sturgill’s claim.
Section 301 of the LMRA states:
Suits for violation of contracts between an
employer and a labor organization representing
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employees in an industry affecting commerce .
. . may be brought in any district court of
the United States having jurisdiction of the
parties, without respect to the amount in
controversy
or
without
regard
to
the
citizenship of the parties.
29 U.S.C. § 185(a).
It is well settled that section 301 preempts
any state cause of action for violation of a contract between an
employer and a labor organization (i.e., a collective bargaining
agreement).
Franchise Tax Bd. of State of California v. Constr.
Laborers Vacation Trust for Southern California, 463 U.S. 1, 23
(1983).
“Any such suit is purely a creature of federal law,
notwithstanding the fact that state law would provide a cause of
action in the absence of § 301.” Id.
Because “[t]he dimensions of
§ 301 require the conclusion that substantive principles of federal
labor law must be paramount in the area covered by the statute,”
Local 714, Teamsters, Chauffeurs, Warehousemen and Helpers of Am.
v. Lucas Flour Co., 369 U.S. 95, 102 (1962), “[s]tate law is []
‘pre-empted’ by § 301 in that only the federal law fashioned by the
courts under § 301 governs the interpretation and application of
collective-bargaining agreements.”
United Steelworkers of Am. v.
Rawson, 495 U.S. 362, 368 (1990).
Moreover, Sturgill’s attempt to characterize her claim as one
for fraud also fails. First, the complaint does not mention fraud,
much less allege the necessary elements of fraud to defeat a motion
to dismiss, nor does Plaintiff’s brief provide sufficient facts.
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“Furthermore, to prevent clever litigants from evading § 301's
broad preemptive force by recasting contract claims as claims
brought under state tort law, § 301 preempts tort claims as
well[.]” Smith v. Colgate-Palmolive Co., 943 F.2d 764, 768 (7th
Cir. 1991) (citing Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211
(1985)).
Collective bargaining agreements generally provide for
grievance
and
arbitration
procedures,
and,
barring
certain
exceptions, grievance and arbitration is the employee’s only remedy
for a breach of the agreement.
“To escape the exclusivity of the
contractual remedies, employees frequently attempt to avoid federal
law by basing their complaint on state law, disclaiming any
reliance on the provisions of the collective bargaining agreement.”
Smith v. Colgate-Palmolive Co., 752 F. Supp. 273, 276 (S.D. Ind.
1990).
In Lueck, the Court reasoned that:
[Q]uestions relating to what the parties to a
labor agreement agreed, and what legal
consequences were intended to flow from
breaches of that agreement, must be resolved
by reference to uniform federal law, whether
such questions arise in the context of a suit
for breach of contract or in a suit alleging
liability in tort.
Any other result would
elevate form over substance and allow parties
to evade the requirements of § 301 by
relabeling their contract claims as claims for
tortious breach of contract.
Lueck,
471
U.S.
at
211.
Tort
claims
are
preempted
where
“evaluation of the tort claim is inextricably intertwined with
consideration of the terms of the labor contract.”
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Id. at 213; see
also Lingle v. Norge Div. Of Magic Chef, Inc., 486 U.S. 399, 413
(1988) (holding that preemption occurs when a plaintiff’s state law
claim “requires the interpretation of a collective-bargaining
agreement.”).
In considering whether Sturgill’s alleged state tort claim of
fraud requires interpretation of the Agreement, the Court must
first examine the state tort law claim.
To plead actual fraud
under Indiana law, a plaintiff must set forth the following
elements: “(1) a material misrepresentation of past or existing
fact by the party to be charged which (2) was false, (3) was made
with knowledge or in reckless ignorance of the falsity, (4) was
relied upon by the complaining party, and (5) proximately caused
the complaining party injury.”
Jarvis Drilling, Inc. v. Midwest
Oil Producing Co., 626 N.E.2d 821, 825 (Ind. Ct. App. 1993).
The proper test is whether “the resolution of a state-law
claim
depends
upon
the
meaning
of
a
collective-bargaining
agreement” or, in other words, “requires the interpretation of a
collective-bargaining agreement.” Lingle, 486 U.S. at 405-06, 413.
In this case, it is clear that the resolution of Sturgill’s fraud
claim
does
bargaining
indeed
require
agreement.
The
interpretation
Agreement
of
provided
the
collective
that
retention
bonuses would be paid to eligible employees on January 4, 2008 or
through
the
first
whichever was later.
regular
payroll
after
(DE #6, Ex. A, ¶ 10.)
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their
termination,
The Agreement required
any dispute regarding the application or interpretation of the
Agreement to be communicated to the other party within 30 days
after
the
party
should
reasonably
have
become
aware
of
the
existence of any such dispute, and any dispute the parties were
unable to resolve would be submitted to mandatory arbitration
pursuant to the rules of the Federal Mediation and Conciliation
Service (“FMCS”).
(DE #6, Ex. A, ¶ 26.)
Whether Sturgill was
entitled to the retention bonus, and whether the company wrongfully
withheld the bonus, is inextricably intertwined with the terms of
the Agreement, which establishes who is entitled to the bonus.
Therefore, Sturgill’s fraud claim is preempted by the LMRA.
See Smith, 943 F.2d at 769-70 (holding fraud claim preempted under
Section 301 of the LMRA).
Accordingly, the case does indeed
involve a federal question and it was properly removed to this
Court.
Section 301 of the LMRA does not contain a specific statute of
limitations period. However, Courts have borrowed the most closely
analogous statute of limitations period from state law.
See Int’l
United Auto. Workers of Am. v. Hoosier Cardinal Corp., 383 U.S.
696, 703-04 (1966).
Indiana has a two-year statute of limitations
for “[a]n action relating to the terms, conditions, and privileges
of employment . . . (including, but not limited to, hiring or the
failure to hire, suspension, discharge, discipline, promotion,
demotion, retirement, wages, or salary.)”.
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Ind. Code § 34-11-2-1.
The Seventh Circuit has held that “Indiana’s two-year statute of
limitations applies to § 301 cases brought to enforce contractual
obligations contained in a collective bargaining agreement.” Jones
v. General Elec. Co., 87 F.3d 209, 212 (7th Cir. 1996); Ind. Code
§ 34-11-2-1.
Plaintiff pleads in her complaint that the retention bonus she
is seeking was “from January 4, 2008.”
(DE #1.)
The Agreement
itself provides that the bonus was payable in January 2008.
#6, Ex. A, ¶ 10.)
(DE
The applicable 2-year statute of limitations
required Plaintiff to file her suit by January 2010; thus, her
complaint filed on August 20, 2012, is more than 2 years late.
Moreover, the Agreement provided for a mandatory grievance and
arbitration procedure to resolve disputes (Id. ¶ 26), and Plaintiff
failed to comply with that procedure.
As such, Sturgill’s claim
fails to state a claim for which this Court can provide relief.
CONCLUSION
For the aforementioned reasons, the Motion to Dismiss, filed
by Defendant, Henniges Automotive, on September 20, 2012 (DE #5),
is GRANTED and the case is DISMISSED WITH PREJUDICE.
DATED: December 4, 2012
/s/ RUDY LOZANO, Judge
United States District Court
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