FOLLO et al v. LABORERS INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO, LOCAL UNION NO. 137 et al
Filing
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OPINION. Signed by Judge Dennis M. Cavanaugh on 9/15/11. (dc, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
_________________________________
CATHY FOLLO and GREG
:
TARANTINO,
:
Hon. Dennis M. Cavanaugh
:
Plaintiffs,
:
OPINION
:
v.
:
Civil Action No. 2:11-CV-04486
:
(DMC)(JAD)
LABORERS INTERNATIONAL UNION :
OF NORTH AMERICA, AFL-CIO,
:
LOCAL UNION 137, LABORERS’
:
INTERNATIONAL UNION OF NORTH :
AMERICA, AFL-CIO, EXECUTIVE
:
BOARD, LOCAL UNION 137,
:
LABORERS’ INTERNATIONAL
:
UNION OF NORTH AMERICA, AFL:
CIO, and ROBERT LIGUORI, Business
:
Manager, Local Union 137,
:
:
Defendants.
:
_________________________________
:
DENNIS M. CAVANAUGH, U.S. District Judge
This matter comes before the Court on Plaintiffs' motion to remand this action to the
Superior Court of New Jersey, Law Division, Hudson County pursuant to 28 U.S.C. § 1447(c)
and for fees pursuant to 28 U.S.C. § 1447(c). No oral argument was heard pursuant to Federal
Rule of Civil Procedure 78. For the following reasons, Plaintiffs' motion to remand to the
Superior Court of New Jersey, Law Division, Hudson County is granted and Plaintiffs’ motion
for fees is denied.
FACTUAL & PROCEDURAL BACKGROUND
Plaintiffs Cathy Follo and Greg Tarantino ("Plaintiffs") are employed as Pari-Mutuels for
New Jersey Sports and Exposition Authority ("NJSEA") at the Meadowlands Racetrack in East
Rutherford, New Jersey. (Pl. Mem. Supp. Mot. Remand 2, Aug. 24, 2011, ECF No. 8). Plaintiffs
are members of Local Union 137, Laborers' International Union of North America, AFL-CIO,
("Defendant Union 137"), a local chapter of Laborers' International Union of North America
("LiUNA Defendant"), an international labor organization. Id. Defendant Union 137 has been
the exclusive bargaining representative of employees at the Meadowlands Racetrack since its
opening in 1976. Id.
On or about July 15, 2011, Plaintiffs filed a Complaint and proposed Order to Show
Cause in the Superior Court of New Jersey, Law Division, Hudson County. This complaint
arises out of Defendant Union 137's alleged failure to present a proposed collective bargaining
agreement to union membership for an informed vote, thereby denying the members their
ratification rights.1 (Pl.’s Complaint 22, Jul. 20, 2011, ECF No. 8-4). Plaintiffs further alleged
that such failure breached the local and international constitutions, the Union's duty of fair
representation, and the Union's fiduciary duty to its membership as its collective bargaining
agent. (Pl. Compl. 24).
In addition, Plaintiffs allege that Defendant Union charged excessive or discriminatory
fees, constituting a violation of the Union Constitution as well as an Unfair Labor Practice under
29 U.S.C. Sec. 158 and 159. (Pl. Complaint 26).
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The challenged contract was ratified by the Executive Board of the Union. Plaintiffs
allege that the Executive Board lacked the authority to ratify such contracts without first
submitting the contract to an informed Union Membership vote. (Id. 22)
2
On July 28, 2011, Plaintiffs and Defendants appeared before the Honorable Maurice
Gallipoli in New Jersey Superior Court regarding Plaintiffs' request for temporary restraints
associated with their complaint. (Pl.’s Mem. Supp. Mot. Remand 7, Aug. 24, 2011, ECF No. 8).
Following the hearing, Judge Gallipoli granted an Order to Show Cause with Interim Restraints,
temporarily restraining and enjoining Defendant Union 137 from acting on any proposed contract
pending the return date of the Order, set for August 31, 2011. Id.
On August 2, 2011, Defendant LiUNA filed a timely Notice of Removal of the instant
case from the Superior Court to the United States District Court for the District of New Jersey.
(Def.'s Notice Removal, Aug. 2, 2011, ECF No. 1). As the specified grounds for removal,
Defendant provided "29 U.S.C. § 185 - Violation of Collective Bargaining Agreement." Id. On
August 8, 2011, Honorable Faith Hochberg of the United States District Court of New Jersey
issued a Standing Order Requiring Submission of Information Regarding Removal. (Order,
Aug. 8, 2011, ECF No. 3). Defendant thereafter filed a Motion for Dissolution of Injunctive
Relief. (Defs.' Mot. Dissolution, Aug. 24, 2011, ECF No. 7) On the same day, Plaintiffs filed a
Motion to Remand the case to State Court. (Pls.' Mot. Remand, Aug. 24, 2011, ECF No. 8).
These motions now come before this court on an Order to Reassign. (Ord. Reassign., Aug. 26,
2011, ECF No. 12).
Defendants assert that removal is proper on the grounds of federal question jurisdiction
under 28 U.S.C. §1331. ("The district courts shall have original jurisdiction of all civil actions
arising under the Constitution, law or treaties of the United States."). Defendants provide two
separate grounds for removal. First, Defendants allege that Plaintiffs' claims of breach of the
Union Constitutions are cognizable under Section 301, and are thereby completely pre-empted by
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Section 301. (Heineman Letter Setting Forth Defs.' Position on Mot. Remand 8, Aug. 25, 2011,
ECF No. 13).
Second, Defendants assert that Plaintiffs' allegations of breach of fiduciary duty
and breach of duty of fair representation arise from Defendant's status as exclusive representative
of the employees under the National Labor Relations Act (“NLRA”), and therefore arise under
federal law. Id. at 4.
Plaintiffs argue that removal was improper because the claims have not been completely
pre-empted by Federal law, nor do they independently raise questions of federal law. (Pls.' Mem.
Supp. Mot. Remand 14, Aug. 24, 2011, ECF No. 8) Plaintiffs maintain that this case should be
remanded as Defendants have failed to fulfill their heavy burden in demonstrating that removal
was proper. Id.
Upon consideration, this court finds that removal was improper and hereby remands this
case to the Superior Court of New Jersey, Law Division, Hudson County
DISCUSSION
In reviewing a motion for remand, the Court must construe the removal statutes strictly
and resolve all doubts in favor of remand. See Shamrock & Gas Corp. v. Sheets, 313 U.S. 100,
108 (1941); Brown v. Francis, 75 F.3d 860, 865 (3d Cir. 1996); Batoff v. State Farm Ins. Co.,
977 F.2d 848, 851 (3d Cir. 1992) (removing party carries a "heavy burden of persuasion"); Boyer
v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990) (quoting Steel Valley Auth. v. Union
Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987)); Abels v. State Farm Fire & Cas. Co.,
770 F.2d 26, 29 (3d Cir. 1985); North Jersey Sav. & Loan Assoc. v. Fid. & Deposit Co. of Md.,
125 F.R.D. 96, 100 (D.N.J. 1988).
A defendant may remove a claim from a state court to a federal district court pursuant to
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28 U.S.C. §1441 and 28 U.S.C. §1446. 28 U.S.C. § 1441(a) provides that "any civil action
brought in a state court of which the district courts of the United States have original jurisdiction,
may be removed by the defendant or the defendants, to the district court of the United States for
the district and division embracing the place where such action is pending." City of Chicago v.
Int'l Coll. of Surgeons, 522 U.S. 156, 163-64 (1997).
28 U.S.C. §1446(a) states:
[a] defendant or defendants desiring to remove any civil action or criminal prosecution
from a State court shall file in the district court of the United States for the district and
division within which such action is pending a notice of removal signed pursuant to Rule
11 of the Federal Rules of Civil Procedure and containing 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 defendants in such action.
Defendant bears the burden of proving that removal was proper. Boyer v. Snap-on Tools Corp.
913 F.2d 108, 111 (3d. Cir. 1990).
In this case, Defendant LiUNA bases removal on federal question jurisdiction. The
presence of federal question jurisdiction as the basis for removal is governed by the well pleaded
complaint rule. Gully v. First Nat’l Bank, 299 U.S. 109, 116 (1936). Plaintiff is the master of
the claim and may avoid federal jurisdiction by exclusively relying on state law. Kline v. Sec.
Guards, Inc., 386 F.3d 246, 252. (3d Cir. 2004) A plaintiff may not, however, avoid federal
jurisdiction through artful pleading if, pursuant to the complete pre-emption doctrine, their claim
is one that belongs in federal court. Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987). The
doctrine of complete pre-emption is satisfied if
the pre-emptive force of a statute is so extraordinary that it converts an ordinary
state common-law complaint into one stating a federal claim for purposes of the
well-pleaded complaint doctrine. Once an area of state law has been completely
pre-empted, any claim purportedly based on that pre-empted state law is
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considered, from its inception, a federal claim and therefore arises under federal
law.
Id. Citing Metro. Life Ins. Co v. Taylor, 481 U.S. 58, 65 (1987), Franchise Tax Bd. of Cal. v.
Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 24 (1983) (internal citation and
quotations omitted).
Defendant LiUNA provides two separate bases of support in its assertion that this court
has original jurisdiction over this case. First, Defendants allege that the claims presented in
Plaintiffs' complaint are completely pre-empted by Section 301 of the Labor Management
Relations Act.2 Second, Defendants assert that Plaintiffs' claims present federal questions under
the National Labor Relations Act (“LMRA”). We address these assertions in turn.
1.
Section 301 of Labor Management Relations Act
Defendants allege that Plaintiffs' claims of breach of collective bargaining agreement and
Union Constitution have been completely pre-empted under Section 301 of the Labor
Management Relations Act. Section 301 provides:
Suits for violation of contracts between an employer and a labor organization
representing employees in an industry affecting commerce…or between any such
labor organizations, 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).
Although Section 301 has been found to hold pre-emptive force, such pre-emptive force has been
limited to claims which rely upon the interpretation of a collective bargaining agreement. See
2
Defendants initially argued that "Federal Courts have recognized that Union
constitutions and bylaws are collective bargaining agreements within the meaning of 29 U.S.C.
Section 301." (Heineman Aff. ¶5, Aug. 12, 2001, ECF No. 5). Defendants later asserted that a
claim for a violation Union Constitutions fall within the jurisdiction of Section 301, and is
therefore pre-empted. (Def. Br. Opp. Remand, Aug. 29, 2011, ECF No. 13)
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Franchise Tax Board, 463 U.S. at 23 (finding complete pre-emption under Section 301); Voilas
v. General Motors Corp., 170 F.3d 367, 373 (3d Cir. 1999)(acknowledging limitation of Section
301 complete pre-emption to claims relying on interpretation of collective bargaining
agreement). The mere fact that Plaintiff has rights that could be vindicated by a collective
bargaining agreement therefore does not necessarily require that their claims be pre-empted. Id.
Rather, employees "have the option of vindicating their interests by means of either a Section 301
action or an action brought under state law, as long as the state-law action as pleaded does not
require interpretation of the collective bargaining agreement." Id. 373-74l; see also Lingle v.
Norge Div. of Magic Chef, Inc., 486 U.S. 399, 409-10 (1988)("As long as the state claim can be
resolved without interpreting the agreement itself, the claim is 'independent' of the agreement for
§301 purposes.") Here, Plaintiffs' claims do not rely on the interpretation of a collective
bargaining agreement and are therefore not pre-empted under current Third Circuit precedent.
Defendants assert that because Plaintiffs' claims are premised upon a Union Constitution,
which has been found to constitute a Section 301 contract, that such claims are necessarily
pre-empted.
Defendants correctly point out that the Supreme Court had held in Wooddell v.
Elec. Workers, Local 71, that the subject matter jurisdiction of Section 301 extended to union
constitutions, which constitute contracts between labor organizations. 502 U.S. 93, 99 (1991).
The Wooddell court, however, specifically discussed the distinction between a collective
bargaining agreement and a union constitution. Id. Therefore, it does not follow that merely
because Plaintiffs' claims fall under Section 301 that they necessarily fall under the narrow
pre-emptive force of Section 301.
Defendants also assert that Plaintiffs claims of breach of duty of fair representation arise
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under and are completely pre-empted by Section 301. (Heineman Letter 10, Aug. 29, 2011, ECF
No. 13) Defendants allege that the reach of Section 301 is not limited to the interpretation of
collective bargaining agreements, but reaches their negotiations as well. Id. As previously
discussed, the complete pre-emptive force of Section 301 has been limited to claims that require
the interpretation of a collective bargaining agreement. This claim arises from the negotiations
of a collective bargaining agreement and an interpretation of the collective bargaining agreement
itself is not required. Therefore, this basis for removal must also fail.
2.
National Labor Relations Act
Defendants assert that Plaintiffs’ allegations of breach of duty of fair representation and
breach of fiduciary duty constitute federal causes of action. (Heineman Aff. ¶3, Aug. 12, 2011,
ECF No. 5). Defendants argue that the alleged fiduciary duties and duty of fair representation
arise from Local 137's status as exclusive collective bargaining representative of the bargaining
unit under federal law. Id. Specifically, Defendants assert that the relevant law for purposes of
assessing the Union's duty of fair representation includes Federal Labor law principles of
successorship under 29 U.S.C. §158(a)(3) and (5) and §159. Id.
As previously discussed, in order for a state law claim to provide the basis for removal,
such claim must be completely pre-empted by federal law. See Franchise Tax Board, 463 U.S. at
24 ("[I]f a federal cause of action completely pre-empts a state cause of action any complaint that
comes within the scope of the federal cause of action necessarily 'arises under' federal law"), see
also Caterpillar Inc. v. Williams, 482 U.S. at 397. ("The fact that a defendant might ultimately
prove that plaintiff's claims are pre-empted under the NLRA does not establish that they are
removable to federal court.") The Third Circuit has found that Section 8 of the NLRA does not
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completely pre-empt state law, and therefore may not provide the basis for removal jurisdiction.
Brione v. Bon Secourts Health Sys., 69 Fed. Appx. 530, 535-36 (3d Cir. 2003). As such,
Plaintiffs' claims regarding unfair labor practices asserted under Section 8 of the NLRA do not
provide adequate grounds for removal jurisdiction.
Decisions recognizing removal of claims brought under Section 301 of LMRA do not
necessarily also dictate removal of fair representation claims under the NLRA. See Smith v.
Local Union No. 110, Intern. Broth. Of Elec. Workers, 681 F.Supp.2d 995, 1001 (D.Minn.
2010). (applying the Caterpillar holding to distinguish claims arising under Section 301 that are
completely pre-empted and complaints arising under Section 9 of NLRA). In order for complete
pre-emption to apply, it must be shown that Congress clearly intended the federal law to provide
the exclusive cause of action for the claim. As noted by the Fourth Circuit, neither the statutory
language nor the legislative history of Section 9 of the NLRA “shows a clear intent by Congress
that all state law claims relating to all fiduciary duties owed to union members by virtue of their
union membership are exclusively federal claims." Barbour v. Int'l Union, 594 F.3d 315, 329-30
(4th Cir. 2010)(questioned on separate grounds). While Defendant notes that Federal courts
have exercised jurisdiction to hear disputes arising out of a collective bargaining agreement
between a union and a racetrack, such exercise of jurisdiction is not sufficient to establish
complete pre-emption . Therefore, the fact that federal courts have exercised jurisdiction is not
sufficient to establish that they must.
This court finds that Defendant has not satisfied its burden in demonstrating that removal
to federal court was proper. Accordingly, Plaintiffs' motion to remand this action to the Superior
Court of New Jersey, Law Division, Hudson County is granted.
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3.
Request for Fees and Costs
Plaintiffs seek costs and attorney fees in connection with the Motion to Remand pursuant
to 28 U.S.C. § 1447(c) which provides:
A motion to remand the case on the basis of any defect in removal procedure must
in removal procedure must be made within 30 days after the filing of the notice of
removal under section 1446(a)...An order remanding the case may require
payment of just costs and any actual expenses, including attorneys fees, incurred
as a result of the removal.
"[T]he district court may require the payment of fees and costs by a party which removed a case
which the court then remanded, even though the party removing the case did not act in bad faith."
See Morris v. Bridgestone/Firestone, Inc., 985 F.2d 238, 240 (6th Cir. 1993); Moore v.
PermanenteMed. Group, Inc., 981 F.2d443, 447 (9th Cir. 2003); Morgan Guar. Trust Co. v.
Republic of Palau, 971 F.2d 917, 923-24 (2d Cir. 1992). "[A] district court has broad discretion
and may be flexible in determining whether to require the payment of fees under section
1447(c)." Mints v. Educ. Testing Serv., 99 F.3d 1253, 1260 (3d Cir. 1996). However, "absent
unusual circumstances, attorney's fees should not be awarded when the removing party has an
objectively reasonable basis for removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 136
(2005).
Plaintiffs argue that an award of fees and costs are appropriate under the circumstances,
due to Defendant's initial lack of an objectively reasonable basis for removal. (Pl. Br. Supp.
Remand 23, Aug. 24, 2011, ECF No. 8). Plaintiffs point to Defendants’ initial characterization
of the basis for removal as a breach of a collective bargaining agreement, rather than violation of
a union constitution, as lacking an objectively reasonable basis. Id.
In light of the substantial federal presence and the existence of limited complete federal
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pre-emption in the area of union contracts affecting interstate commerce, this court does not find
that Defendant's basis for removal was objectively unreasonable.
Accordingly, Plaintiffs' motion for costs and fees is denied.
CONCLUSION
Based on the foregoing, Plaintiffs' motion to remand this action to the Superior Court of
New Jersey, Law Division, Hudson County is granted. Plaintiffs’ motion for fees is denied. An
appropriate Order accompanies this Opinion.
S/ Dennis M. Cavanaugh
DENNIS M. CAVANAUGH, U.S.D.J.
Dated: September 15, 2011
cc:
All counsel of record
Honorable Joseph A. Dickson, J.S.M.J.
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