Prince v. Appalachian Regional Healthcare, Inc.
MEMORANDUM OPINION & ORDER: (1) Prince's motion to remand, R. 9 , is GRANTED. (2) The case is REMANDED to Pike Circuit Court. (3) All pending motions are DENIED AS MOOT, and all conferences and hearings are CANCELLED. (4) This case shall be STRICKEN from Court's active docket. Signed by Judge Amul R. Thapar on 12/9/2015. (TDA) cc: COR & Pike Circuit Court (certified copy w/ docket sheet)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
Civil No. 15-52-ART-EBA
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A collective-bargaining agreement does not have the Midas touch, transforming every
state-law claim in the vicinity into a federal case. Here, Bryan Price sued his employer,
Appalachian Regional Healthcare, advancing two state-law claims: a civil-rights violation
and breach of contract. Appalachian then removed the case to this Court, arguing that
Prince’s breach-of-contract claim was really a federal-law claim arising under § 301 of the
Labor Management Relations Act. But although Prince was indeed subject to a collectivebargaining agreement—and thus could have sued for breach of contract under federal law—
he chose not to do so. Instead, he alleged only that Appalachian had breached the terms of
an implied contract that arose under the common law of Kentucky. Thus, Prince’s breach-ofcontract claim neither asserts a right under the bargaining agreement nor requires the Court
to interpret its terms. As shown below, that means his claim does not “arise under” federal
law. The Court must therefore grant Prince’s motion to remand.
From May 2013 until June 2014, Prince worked as a plant operational engineer at
Appalachian’s regional medical center in South Williamson, Kentucky. During that time,
Prince was a member of the United Steelworkers Union, which had a collective-bargaining
agreement with Appalachian. See R. 9-7 (Collective-bargaining agreement). Appalachian
eventually fired him from his job there. See R. 4 at 2.
In May 2015, Prince sued Appalachian in Kentucky state court. See R. 1-2. In his
complaint, Prince advanced two theories of liability: that Appalachian had violated the
Kentucky Civil Rights Act and that Appalachian had breached its contract with him. The
complaint made no reference to federal law. See id.
In June, Appalachian removed the case to this Court. See R. 1. In its notice of
removal, Appalachian argued that Prince’s breach-of-contract claim “requires the
interpretation of a collective bargaining agreement between [Appalachian] and [Prince’s]
R. 1 at 1.
As Appalachian points out, “[c]laims requiring the
interpretation of a collective bargaining agreement” are “completely preempted by Section
301 of the Labor Management Relations Act.” Id. at 3 (citing Caterpillar, Inc. v. Williams,
482 U.S. 386, 393 (1987)). Thus, Appalachian argues, Prince’s suit is “subject to removal
under 29 U.S.C. § 185(c) and 28 U.S.C. § 1331.” Id. (citing Smolarek v. Chrysler Corp., 879
F.2d 1326, 1326 (6th Cir. 1989) (en banc); In re General Motors Corp., 3 F.3d 980, 983 (6th
Cir. 1993)).1 Prince now moves to remand. R. 9.
Appalachian concedes that Prince’s civil-rights claim arises under state law, not federal, and thus asks the Court to
exercise its supplemental jurisdiction over that claim.
A defendant may remove a case filed in state court if the case arises “under the
Constitution, treaties, or laws of the United States.” 28 U.S.C. § 1441(b). In most cases,
federal courts determine whether a case “arises under” federal law by using the “wellpleaded complaint rule.” See generally Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 6 (1987).
Under that rule, a court has federal-question jurisdiction only if “a federal question is
presented on the face of [a] plaintiff’s properly pleaded complaint.” Caterpillar, 482 U.S. at
392. There is no question that, under the well-pleaded complaint rule, there would be no
federal-question jurisdiction here. For Prince’s complaint contains only two claims, both of
which appear to arise exclusively under state law, not federal.
Most rules have exceptions, however, and this one is no different. The well-pleaded
complaint rule does not apply in cases of “complete preemption.” If a state-law claim is
completely preempted by federal law, then even an “ordinary state common-law complaint”
is converted “into one stating a federal claim.” Id. at 393 (quoting Metro. Life, 481 U.S. at
65). Thus, if a defendant can show that federal law “completely preempts” any of the
plaintiff’s state-law claims, then a court will have federal-question jurisdiction over the
Here, Appalachian argues that § 301 of the Labor Management Relations Act has
“completely preempted” Prince’s breach-of-contract claim. Section 301 preempts a state-law
breach-of-contract claim in two situations: if the claim asserts a right created by a collectivebargaining agreement, or if the claim requires the court to interpret the terms of such an
agreement. See Mattis v. Massman, 355 F.3d 902, 906 (6th Cir. 2004). The “bare fact” that
“a court must consult the [collective-bargaining agreement] for information helpful to
resolving the claim is not enough to result in preemption.” Howard v. Cumberland River
Coal Co., 838 F. Supp. 2d 577, 583 (E.D. Ky. 2011).
Instead, the “meaning of the
[agreement’s] terms must be at dispute.” Id. (quoting Livadas v. Bradshaw, 512 U.S. 107,
124 (1994)). Thus, § 301 “completely preempts” a state-law claim—for removal purposes,
anyway—only if “proof of the plaintiff’s prima facie case requires interpreting the
[collective-bargaining agreement].” Id. at 582. If not, then § 301 does not preempt the
claim. Id.; see also Alongi v. Ford Motor Co., 386 F.3d 716, 727 (6th Cir. 2004) (rejecting,
on appeal of a remand order, consideration of a defense that the defendants were “certain to
raise”); Mattis, 355 F.3d at 906–07 (analyzing, on appeal of a remand order, only the
elements of the plaintiff’s prima facie case).
Here, Prince’s breach-of-contract theory runs as follows. He alleges that, at the time
he was fired, Appalachian had in place “policies and procedures governing its expectations
of employees.” R. 1-2 at 6. Those policies and procedures, Prince says, created a contract
“between [Appalachian] and employees like [Prince].” Id. Under the terms of that contract,
Prince says, Appalachian could not fire an employee who abided by its policies and
And Prince says he did just that.
Thus, he concludes, Appalachian
“breached its contract with [him]” when it fired him. Id.
To summarize, Prince’s breach-of-contract claim is really a breach-of-impliedcontract claim. In Prince’s view, “personnel policies may become binding contracts” under
Kentucky common law “when the employee continues to work while the policy remains in
effect” because “the policy is deemed an implied contract for so long as it remains in effect.”
R. 9-1 at 3 (citing Parts Depot, Inc. v. Beiswenger, 170 S.W.2d 354, 363 (Ky. 2005)). Thus,
Prince says, when Appalachian issued its policies and procedures, the company thereby
created an implied contract under the common law of Kentucky. See id. That implied
contract—rather than, say, a collective-bargaining agreement—is the contract Prince says
that Appalachian breached.
It is not clear that Prince’s claim is a winner under Kentucky law. What is clear,
however, is that his claim does not assert any rights “created” by the collective-bargaining
agreement. After all, Prince says that his contract rights come from the common law, not
from any paper document. Equally clear is that his claim does not require the Court to
interpret the terms of the bargaining agreement. For Prince argues only that Appalachian
breached its implied contract, not that Appalachian breached its collective-bargaining
agreement. When evaluating that argument, a court will certainly need to interpret the
common law of Kentucky. But it will have no need—at least when evaluating Prince’s
prima facie case—to interpret the collective-bargaining agreement. See Howard, 838 F.
Supp. 2d at 582 (citing Smolarek v. Chrysler Corp., 879 F.2d 1326, 1333 (6th Cir. 1989))
(“If [Labor Management Relations Act] preemption arises as a basis for removal, the Court's
inquiry is limited to whether the proof of the plaintiff’s prima facie case requires interpreting
the [collective-bargaining agreement].”).
Thus, the state-law claim does not require
interpretation of the collective-bargaining agreement, nor is that claim based on rights
created by such an agreement. Thus, § 301 of the Labor Management Relations Act does not
“completely preempt” Prince’s state-law claim. See Mattis, 355 F.3d at 906.
A case from the Supreme Court of the United States—Caterpillar v. Williams—
confirms this result. See Caterpillar, 482 U.S. at 386. There, the plaintiffs were union
members who were subject to a collective-bargaining agreement with Caterpillar, their
employer. They alleged that Caterpillar made “oral and written representations that they
could look forward to indefinite and lasting employment with the corporation.” Id. at 388
(internal quotations omitted). Specifically, the plaintiffs alleged that Caterpillar told them
that, if their plant was ever closed, “Caterpillar would provide employment opportunities for
[them] at other [Caterpillar] facilities.” Id. at 389. After Caterpillar closed the plant and
failed to transfer them, the plaintiffs “filed an action based solely on state law in California
state court, contending that Caterpillar [had] breached [its oral] agreement.” Id. at 390
(internal quotations omitted). Caterpillar then removed the action to federal court, arguing
that “removal was proper because the individual employment contracts made with
respondents were, as a matter of federal substantive labor law, merged into and superseded
by [the] collective bargaining agreements.” Id. (internal quotations omitted)
The Supreme Court rejected that argument and held that Caterpillar’s removal was
improper. As the Court noted, the plaintiffs “possessed substantial rights under the collective
agreement and could have brought suit under § 301 [but] as masters of the complaint . . . they
chose not to do so.” Id. at 395. Instead, the Court pointed out, the plaintiffs alleged that
Caterpillar had “entered into and breached individual employment contracts with them.” Id.
at 394 (emphasis in original). “Section 301,” the Court went on to say, “says nothing about
the content or validity of individual employment contracts,” and “it would be inconsistent
with congressional intent under [§ 301] to preempt state rules that proscribe conduct, or
establish rights and obligations, independent of a labor contract.” Id. at 394–95 (internal
quotations omitted). Caterpillar’s “basic error,” the Court held, was its “failure to recognize
that a plaintiff covered by a collective-bargaining agreement is permitted to assert legal
rights independent of that agreement, including state-law contract rights, so long as the
contract relied upon is not a collective-bargaining agreement.” Id. at 396 (emphasis in
Appalachian makes the same “basic error” here. Although Prince was covered by a
collective-bargaining agreement—and thus could have “brought suit under § 301”—he
“chose not to.” Id. at 395. And although Prince was indeed a member of the union, he
nevertheless “is permitted to assert legal rights independent of [the collective-bargaining]
agreement, including state-law contract rights, so long as the contract relied upon is not a
collective-bargaining agreement.” Id at 396. The contract Prince relies on here is an implied
contract under the common law of Kentucky, rather than a collective-bargaining agreement.
And thus this Court reaches the same result here that the Supreme Court reached in
Caterpillar: Prince’s claims “do not arise under federal law and therefore may not be
removed to federal court.” Id. at 399.
Appalachian responds in a few ways. First, it notes that, “[a]s a member of the
bargaining unit of [the union], [Prince’s] employment could only be terminated in
accordance with the terms and conditions of the [collective-bargaining agreement] between
the parties.” R. 11 at 2. As Appalachian points out, the [collective-bargaining agreement]
provides that union employees may be terminated only with “just cause,” “grants
[Appalachian] exclusive rights of hiring, discharging, and directing the work force, and
establishing reasonable policies in connection therewith,” and forbids Appalachian from
making any policy that “abridge[s] any terms, provisions, or conditions of the [agreement].”
R. 11 at 3 (citing the collective-bargaining agreement). Thus, Appalachian argues, “the
[collective-bargaining agreement] constitutes the only contract in existence between the
parties with respect to the termination of [Prince’s] employment.” R. 11 at 3.
That argument misunderstands Prince’s claim.
Prince argues that Appalachian’s
conduct created an implied contract notwithstanding the collective-bargaining agreement.
Thus, according to Prince, the collective-bargaining agreement was not the “only contract in
existence between the parties with respect to the termination of [Prince’s] employment.”
R. 11 at 3.
And it was that implied contract—rather than the collective-bargaining
agreement—that Prince says Appalachian breached when it fired him.
Second, Appalachian contends that “the [collective-bargaining agreement] is the sole
basis for determining the grounds and conditions of the termination of Prince’s employment
with [Appalachian].” R. 11 at 3. Since Appalachian may not “abridge” the agreement’s
terms, the argument seems to go, a union member may sue for breach of contract only if he
does so pursuant to the bargaining agreement. The problem with that argument is that the
agreement nowhere claims to be the only agreement between Appalachian and members of
union. The agreement does indeed provide that union members may not be fired without just
cause. And that provision creates for union members a base-level of employment protection:
if no “just cause,” then no termination. What the agreement nowhere provides, however, is
that the parties may not enter into other agreements that provide more than base-level
protections for employees.2
Here, Prince argues that Appalachian created one such additional agreement with
The terms of that agreement, Prince says, were that he would not be fired—
notwithstanding whether there was “just cause” pursuant to the collective-bargaining
agreement—so long as he complied with Appalachian’s policies and procedures.
collective-bargaining agreement nowhere purports to forbid such supplemental agreements.
At the very least, Appalachian has not pointed to any such language in the collective-bargaining agreement.
And thus Appalachian is mistaken when it says that the collective-bargaining agreement
provides the only foundation on which to build a breach-of-contract claim.
Third, Appalachian argues that, “[w]hile a particular policy or policies of
[Appalachian] might certainly be referred to as part of the disciplinary process, such
reference would be in assessing whether ‘just cause’ exi[s]ts under the [collective-bargaining
agreement] to terminate the employment of an employee.” R. 11 at 3–4. The policies “do
not authorize termination of a bargaining unit employee,” Appalachian says, “only the
[collective-bargaining agreement] provides this authority.” R. 11 at 4. Thus, the argument
seems to go, when Prince sued for breach of contract, he must have done so pursuant to the
Again, this argument misunderstands Prince’s claim.
He does not argue that
Appalachian’s policies gave Appalachian some additional power to terminate employees. He
argues instead that the policies placed additional restrictions on Appalachian’s ability to do
so, namely that Appalachian could not terminate an employee if he complied with its
This argument therefore provides no basis on which to conclude that § 301
preempts Prince’s state-law claim.
Finally, Appalachian argues that Prince’s “requested relief requires the interpretation
of the collective-bargaining agreement.” R. 11 at 6. In the prayer-for-relief section of
Prince’s complaint, he asks the Court to reinstate him “to his former position with
[Appalachian] at the rate of pay he received at the time of his discharge.” R. 1-2 at 7.
Appalachian points out that the Sixth Circuit has held that, if a plaintiff requests
reinstatement as the remedy for a breach-of-contract claim, then that request alone is
“enough to support preemption.” R. 11 at 6 (quoting Klepsky v. United Parcel Serv., Inc.,
489 F.3d 264, 270 (6th Cir. 2007)). The reason for this rule is that employment is typically
at-will and courts will thus refrain in most cases from ordering specific performance—in the
form of reinstatement—to enforce employment agreements. See Klepsky, 489 F.3d at 270.
Thus, Appalachian says, the only way Prince would be entitled to reinstatement is if the
collective-bargaining agreement says so. In Appalachian’s view, therefore, the Court would
need to interpret the terms of the collective-bargaining agreement when fashioning a remedy.
For that reason, Appalachian concludes, § 301 preempts Prince’s breach-of-contract claim.
That would be a good argument if Prince had included only a breach-of-contract
claim in his complaint. But he also included a claim under the Kentucky Civil Rights Act.
And under that law, a plaintiff is entitled to reinstatement as an injunctive remedy in certain
situations. See Brooks v. Lexington-Fayette Urban Cty. Hous. Auth., 132 S.W.3d 790, 806
(Ky. 2004). In Prince’s complaint, he refers to reinstatement only twice: in his civil-rights
count, and in his catch-all prayer for relief at the very end. See R. 1-2 at 5, 7. He does not
ask for reinstatement at all in the breach-of-contract section of his complaint. See id. at 6.
Moreover, in Prince’s prayer for relief, he makes clear that he wants either damages
or, in the alternative, reinstatement. Id. at 7. The most natural reading of the complaint is
that Prince seeks reinstatement only if he prevails on the civil-rights claim; otherwise, he
seeks only damages. For that reason, Klepsky—the Sixth Circuit case on which Appalachian
There, the plaintiff’s reinstatement request could have been
granted only on the basis of the collective-bargaining agreement, thus requiring a court to
interpret that document when fashioning relief. See Klepsky, 489 F.3d at 270. Here, by
contrast, the Kentucky Civil Rights Act provides an alternative basis for granting
reinstatement, which means a court might not need to interpret the bargaining agreement at
all to determine whether to order Appalachian to reinstate Prince. Thus, Prince’s request for
reinstatement does not show that § 301 completely preempts his breach-of-contract claim.
In summary, the defendant bears the burden to show that a federal court has
jurisdiction over the case.
Here, Appalachian has failed to demonstrate that § 301
completely preempts Prince’s state-law claim for breach of contract. Since Appalachian
identifies no other basis for federal jurisdiction, the Court must remand the case back to
Kentucky state court.
Accordingly, it is ORDERED as follows:
(1) Prince’s motion to remand, R. 9, is GRANTED.
(2) The case is REMANDED to Pike Circuit Court.
(3) All pending motions are DENIED AS MOOT, and all conferences and hearings
(4) This case shall be STRICKEN from the Court’s active docket.
This the 9th day of December, 2015.
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