Laber et al v. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union et al

Filing 25

Opinion and Order: Plaintiffs' motion for reconsideration (Doc. No. 15 ) is denied, plaintiffs' motion for an extension of time in which to amend the complaint (Doc. No. 17 ) is granted, and plaintiffs' motion to certify (Doc. No. 16 ) is denied as moot. Plaintiffs shall have leave until October 2, 2014, to file an amended complaint that asserts a common law fraud claim that is fully compliant with the requirements set forth in this Opinion and Order. Should plaintiffs timely file such an amended pleading, the Court shall remand this matter to the state court. Should plaintiffs fail to file an amended pleading that relieves this Court of subject matter jurisdiction, the Court shall dismiss the complaint as preempted under Section 301 of the LRMA. (Related Doc # 18 ). Judge Sara Lioi on 9/25/2014. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

DONALD LABER, et al.,
PLAINTIFFS,
vs.

UNITED STEEL, PAPER AND
FORESTRY, RUBBER,
MANUFACTURING, ENERGY,
ALLIED INDUSTRIAL AND
SERVICE WORKERS
INTERNATIONAL UNION, et al.,
DEFENDANTS.

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CASE NO. 5:13CV640
JUDGE SARA LIOI

OPINION AND ORDER

Before the Court is a series of motions filed by plaintiffs, all of which, in
one way or another, seek relief from the Court’s January 31, 2014 Memorandum Opinion
and Order (hereinafter, “Opinion”) denying plaintiffs’ motion to remand this matter to
state court. (Doc. No. 14; see Mot. to Remand, Doc. No. 7.) Herein, the Court shall
address the following motions: plaintiffs’ motion for reconsideration (Doc. No. 15),
plaintiffs’ motion to certify a question for interlocutory appeal pursuant to 28 U.S.C. §
1292(b) (Doc. No. 16), and plaintiffs’ motion for an extension of time in which to amend

the complaint to assert a common law fraud claim (Doc. No. 17).1 Defendants have filed
an opposition to each motion (Doc. Nos. 19 [opposition to motion to reconsider], 20
[opposition to motion to certify], and 24 [opposition to motion for an extension of time to
amend]), and plaintiffs have filed a combined reply brief that further addresses all three
motions (Doc. No. 22).
I. BACKGROUND
The facts surrounding the present litigation have been set forth in
substantial detail in the Opinion. In order to properly frame the pending motions, an
abbreviated fact summary follows.
On February 25, 2013, plaintiffs, Donald Laber and Douglas Whack, filed
a lawsuit in the Summit County Court of Common Pleas against defendants, United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service
Workers International Union (“the international”) and Local 21 (“the local”), alleging
breach of contract and tortious interference with contractual and business relations.
(Compl., Doc. No. 1-2.)2 Defendants removed the action to this Court on March 25,
2013, claiming federal jurisdiction under § 301 of the Labor Management Relations Act
(“LMRA”), 29 U.S.C. § 185. (Notice of Removal, Doc. No. 1, at 3.)3
Plaintiffs were employees of HLI Commercial Highway, Inc. (“HLI”), a
subsidiary of Hayes Lemmerz International, Inc. (“Hayes Lemmerz”). (Compl. ¶ 5.) In
1

Plaintiffs have also moved for oral argument on their pending motions (Doc. No. 18). Because the Court
finds that it can resolve the pending motions without additional argument from counsel, the request for oral
argument is DENIED.
2

In the complaint, the international was identified as “United Steel Workers of America.” (Id.)

3

All page number references are to the page identification number generated by the Court’s electronic
docketing system.
2

2004, HLI entered into a collective bargaining agreement (“CBA”) with the local. (Id. ¶
8.) Plaintiffs were members of the bargaining unit covered by the CBA. On July 17,
2005, defendants and HLI entered into an agreement that extended to bargaining unit
employees with sufficient seniority a one-time opportunity to voluntarily terminate their
employment with HLI in exchange for certain benefits, including those relating to
healthcare (hereinafter, “memorandum agreement”). (Id. ¶¶ 6-8; memorandum
agreement, Doc. No. 1-2.) In 2006, plaintiffs exercised their rights under the
memorandum agreement and voluntarily separated their employment from HLI. (See id. ¶
11.)
In 2009, Hayes Lemmerz sought protection under Chapter 11 of the
United States Bankruptcy Code. (Compl. ¶ 17.) During the course of the bankruptcy
proceedings, Hayes Lemmerz and the international entered into an agreement “for the
purpose of negotiating a modification of ‘retiree benefits,’ as defined in Section 1114(a)
of the Bankruptcy Code[.]” (bankruptcy agreement, Doc. No. 1-2, beginning at 25;
Compl. ¶ 19.) The bankruptcy agreement made no reference to plaintiffs’ rights arising
under the memorandum agreement, and Hayes Lemmerz did not list plaintiffs as creditors
of the bankruptcy estate in sufficient time to permit plaintiffs to file a proof of claim.
(Compl. ¶ 18.) Nevertheless, the bankruptcy agreement had the effect of modifying the
medical benefits of all retirees of Hayes Lemmerz and its affiliates, including those—like
plaintiffs—who had exercised their rights under the memorandum agreement. (Compl. ¶¶
21-23.) None of the foregoing is in dispute.
On April 24, 2013, plaintiffs moved to remand this action to state court. It
was plaintiffs’ position that they had carefully crafted their complaint to avoid federal
3

jurisdiction by couching their claims in state law contract and tort principles. They further
insisted that their claims were wholly independent of the collective bargaining agreement,
with any right to damages flowing exclusively from the memorandum agreement. (See
Compl. ¶ 32; Mot. to Remand at 76.)
The Court agreed with plaintiffs to a point. It observed that plaintiffs’
contract rights were indeed tied to the memorandum agreement, but found that this
supplemental agreement, itself, was a contract between an employer and a labor
organization, such that it fell within the purview of § 301. (Opinion at 172-74.) Applying
the two-step inquiry appropriate for complete preemption, the Court found that plaintiffs’
claims were entirely dependent upon an interpretation of the memorandum agreement,
and that they arose out of that agreement. (Id. at 169, 172-73.) Because plaintiffs failed to
state a claim under § 301, the Court afforded plaintiffs leave to amend their complaint to
assert such a claim. Instead, plaintiffs elected to file the pending motions.
II. PLAINTIFFS’ MOTION FOR RECONSIDERATION
A.

Standard of Review
Although a motion for reconsideration is not mentioned in the Federal

Rules of Civil Procedure, it is often treated as a motion to alter or amend pursuant to Rule
59(e). McDowell v. Dynamics Corp. of Am., 931 F.2d 380, 382 (6th Cir. 1991) (citing
Smith v. Hudson, 600 F.2d 60, 62 (6th Cir. 1979)). The purpose of a motion to alter or
amend judgment is to request reconsideration of matters “properly encompassed in a
decision on the merits.” See Osterneck v. Ernst & Whinney, 489 U.S. 169, 174, 109 S. Ct.
987, 103 L. Ed. 2d 146 (1989). “It is not the function of a motion to reconsider either to
renew arguments already considered and rejected by a court or ‘to proffer a new legal
4

theory or new evidence to support a prior argument when the legal theory or argument
could, with due diligence, have been discovered and offered during the initial
consideration of the issue.’” McConocha v. Blue Cross and Blue Shield Mut. of Ohio, 930
F. Supp. 1182, 1184 (N.D. Ohio 1996) (quoting In re August, 1993 Regular Grand Jury,
854 F. Supp. 1403, 1408 (S.D. Ind. 1994)). In other words, Rule 59(e) is not designed to
give an unhappy litigant an opportunity to relitigate matters already decided. See Dana
Corp. v. United States, 764 F. Supp. 482, 488-89 (N.D. Ohio 1991) (citation omitted).
Generally, only three situations justify a district court in altering or
amending its judgment: (1) to accommodate an intervening change in controlling law; (2)
to account for new evidence not available at trial; or (3) to correct a clear error of law or
to prevent a manifest injustice. Rodriguez v. Tenn. Laborers Health & Welfare Fund, 89
F. App’x 949, 959 (6th Cir. 2004) (citing Reich v. Hall Holding Co., 990 F. Supp. 955,
965 (N.D. Ohio 1998)). Moreover, the motion for reconsideration must demonstrate to
the court why it should reconsider its decision and set forth strongly convincing facts or
law that would induce it to reverse its prior decision. Shields v. Shetler, 120 F.R.D. 123,
126 (D. Colo. 1988).
B.

Analysis
Rather than attempt to fit their request for reconsideration into one of the

three situations set out above, plaintiffs rely on two recent unreported cases from this
judicial district to suggest that § 301 cannot supply the necessary subject matter
jurisdiction to keep this case in federal court. Plaintiffs cite Wayt v. DHSC, LLC, No.
5:12-CV-3048, 2013 WL 3459229 (N.D. Ohio July 9, 2013), for the general proposition
that “complete preemption” is sparingly applied in the law. (Mot. at 177 [quoting Wayt,
5

2013 WL 3459229, at *3].) They also look to the language in Dobrski v. Kalinowski, No.
1:13-CV-2841, 2014 WL 185789 (N.D. Ohio Jan. 16, 214), that a properly pled
affirmative defense cannot “provide a basis for removal to federal court.” (Id. [quoting
Dobrski, 2014 WL 185789, at *2].) Neither of these cases espoused any new notions
regarding federal preemption. Nevertheless, the factual and procedural differences
between these cases and the present action actually serve to underscore why plaintiffs’
current claims are completely preempted.
In Wayt, this Court found that the defendants had waived their argument
that § 301 completely preempted plaintiffs’ state law claims, and further found that the
National Labor Relations Act (“NLRA”) could not supply the necessary jurisdiction to
support removal of plaintiffs’ state law claims. Wayt, 2013 WL 3459229, at *3-4. Thus,
in remanding the case to state court, the Court drew an important distinction between
conflict preemption, which cannot support the removal of state law claims, and complete
preemption, which can. See id. at *4 (Ҥ 301 of the LMR is an entirely different ground
[for preemption] than §§ 7 and 8 of the NLRA”) (citation omitted); see generally Warner
v. Ford Motor Co., 46 F.3d 531, 533-34 (6th Cir. 1995) (en banc) (discussing the
difference between conflict and complete preemption).
“Conflict preemption arises where compliance with both federal and state
law is physically impossible, or ‘where state law stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress.’”
Puterbaugh v. AirTran Airways, 494 F. Supp. 2d 597, 600 (S.D. Ohio 2003) (quoting
Hines v. Davidowitz, 312 U.S. 52, 67, 61 S. Ct. 399, 85 L. Ed. 581 (1941)) (further
citations omitted). This type of preemption usually does not give rise to federal-question
6

subject matter jurisdiction, and normally cannot make a state case removable to federal
court. See Tisdale v. United Ass’n of Journeymen, 25 F.3d 1308, 1311 (6th Cir. 1994).
“In contrast, ‘[i]f Congress evidences an intent to occupy a given field,
any state law falling within that field is [completely] preempted.’” Putterbaugh, 494 F.
Supp. 2d at 601 (quoting Pacific Gas & Elec. Co. v. State Energy Res. Conservation &
Dev. Comm’n, 461 U.S. 190, 103 S. Ct. 1713, 75 L. Ed. 2d 752 (1983)). Where the
federal law’s preemptive force is deemed “complete,” “then the state law claim is
displaced by the federal cause of action, and the action is subject to removal.” Loftis v.
United Parcel Serv., Inc., 342 F.3d 509, 515 (6th Cir. 2003) (citations omitted); see
Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8, 123 S. Ct. 2058, 156 L. Ed. 2d 1 (2003)
(“When the federal statute completely pre-empts the state-law cause of action, a claim
which comes within the scope of that cause of action, even if pleaded in terms of state
law, is in reality based on federal law.”); Caterpillar Inc. v. Williams, 482 U.S. 386, 399,
107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987) (“When a plaintiff invokes a right created by a
collective-bargaining agreement, the plaintiff has chosen to plead what we have held
must be regarded as a federal claim, and removal is at the defendant’s option.”)
(emphasis in original).
The Supreme Court and the Sixth Circuit have repeatedly identified § 301
of the LMRA as one of the few statutes to which the complete preemption rule applies.
See Beneficial Nat’l Bank, 539 U.S. at 6-7; Caterpillar, 482 U.S. at 393 (“The complete
pre-emption corollary to the well-pleaded complaint rule is applied primarily in cases
raising claims preempted by § 301 of the LMRA.”); Roddy v. Grand Trunk W. R.R. Inc.,

7

395 F.3d 318, 323 (6th Cir. 2005); Alongi v. Ford Motor Co., 386 F.3d 716, 723-24 (6th
Cir. 2004).
Unlike the situation in Wayt, defendants here removed plaintiffs’ state law
claims to this Court on the strength of § 301 preemption. While complete preemption is
“of very limited application[,]” Wayt, 2013 WL 3459229, at *3, suits asserting “violation
of contracts between an employer and a labor organization[,]” id. at *4, n.3, such as the
present case, are the very type of state law actions for which the complete preemption
rule was meant to apply. 29 U.S.C. § 185(a); see, e.g., Farmer v. Gen. Mills Cereals
Prop., LLC, No. C-1-05-100, 2005 WL 1705090, at *4-5 (S.D. Ohio July 20, 2005)
(former employee’s breach of contract claim, premised on his company’s refusal to honor
a restructuring agreement between the employer and the union, was preempted by § 301
of the LRMA).
Plaintiffs’ reliance on the decision in Dobrski does not change the analysis
or the conclusion. There, the plaintiff brought suit against the defendant in state court,
asserting claims sounding in defamation and libel. The plaintiff’s complaint did not
reference any federal law, or otherwise suggest that any asserted rights flowed from a
labor contract. The defendant removed the claims raising federal preemption as a defense
and suggesting that plaintiffs’ concerns stemmed from a collective bargaining agreement.
In remanding the case to state court, the district court echoed the Supreme Court’s
caution that “‘a § 301 question, in a defensive argument does not overcome the
paramount policies embodied in the well-pleaded complaint rule-that the plaintiff is the
master of the complaint, that a federal question must appear on the face of the complaint,
and that the plaintiff may, by eschewing claims based on federal law, choose to have the
8

cause heard in state court.’” Dobrski, 2014 WL 185789, at *2 (quoting Caterpillar, 482
U.S. at 398-99).
As this Court has previously determined, a federal question appears on the
face of plaintiffs’ complaint because their contract and tort claims arise out of, and are
entirely dependent upon, defendants’ alleged breach of the memorandum agreement.4
(Opinion at 172-73; see Compl. ¶ 32 [defendants “breached the [m]emorandum
[a]greement by modifying [the agreement] to the detriment of [p]laintiffs as intended or
creditor beneficiaries, causing damage . . . .”], ¶ 35 [defendants caused “Hayes Lemmerz
to breach the [m]emorandum [a]greement”], ¶ 36 [the breach resulted in damages to
plaintiffs].) Section 301 preemption, therefore, has not been raised in a defensive
argument. Because the memorandum agreement, in turn, qualifies as a labor contract
under § 301, plaintiffs’ reliance upon it supplies the necessary federal jurisdiction to
support defendants’ removal. See Beneficial Nat’l Bank, 539 U.S. at 6-7; Alongi, 386
F.3d at 723-24. Under these circumstances, “removal [was] at defendant[s’] option.”
Caterpillar, 482 U.S. at 393.
The Court finds no reason to disturb its initial determination that this case
was properly removed. Plaintiffs’ motion for reconsideration, therefore, is DENIED.

4

Plaintiffs’ argument that there is no dispute as to whether defendants violated the terms of the
memorandum agreement misses the point. (Mot. at 176 [While conceding that the memorandum agreement
is “at the center of the dispute[,]” plaintiffs argue that “legal interpretation of [the] terms is not at issue
given the undisputed refusal by [d]efendants to honor the memorandum agreement.” (Id. at 176-77.) The
contract claim is, by its very nature, a suit “for violation of [a] contract[] between an employer and a labor
organization[.]” 29 U.S.C. § 185(a); see Textron Lycoming Reciprocating Engine Div., Avco Corp. v.
U.A.W., 523 U.S. 653, 656, 118 S. Ct. 1626, 140 L. Ed. 2d 863 (1998).

9

III. PLAINTIFFS’ MOTION TO AMEND
A.

Standard of Review

As an alternative avenue for relief, plaintiffs seek leave to amend their
complaint to raise a common law fraud claim. After a responsive pleading is filed, the
complaining party may amend the pleadings only with the opposing party’s written
consent or by leave of court. Fed. R. Civ. P. 15(a)(2). “The court should freely give leave
when justice so requires.” Id. The decision whether to permit the amendment is
committed to the discretion of the trial court. See Zenith Radio Corp. v. Hazeltine
Research, Inc., 401 U.S. 321, 330, 91 S. Ct. 795, 28 L. Ed. 77 (1971); Estes v. Ky. Util.
Co., 636 F.2d 1131, 1133 (6th Cir. 1980). The trial court’s discretion, however, is
“limited by Fed. R. Civ. P. 15(a)’s liberal policy of permitting amendments to ensure the
determination of claims on their merits.” Marks v. Shell Oil Co., 830 F.2d 68, 69 (6th Cir.
1987) (citation omitted).
“Leave to amend may be denied when it would result in undue delay,
prejudice to the opposing party, or repeated failure to cure deficiencies in the complaint.”
Phelps v. McClellan, 30 F.3d 658, 662 (6th Cir. 1994) (citing, among authorities, Foman
v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962)).
When a party has delayed in seeking amendment, the court weighs the
cause shown for the delay against the resulting prejudice to the opposing party. Head v.
Timken Roller Bearing Co., 486 F.2d 870, 874 (6th Cir. 1973). “In determining what
constitutes prejudice, the court considers whether the assertion of the new claim or
defense would: require the opponent to expend significant additional resources to conduct
discovery and prepare for trial; significantly delay the resolution of the dispute; or
10

prevent the plaintiff from bringing a timely action in another jurisdiction.” Phelps, 30
F.3d at 662-63 (citation omitted). The longer the period of unexplained delay, the less
prejudice the adverse party will be required to show to defeat the motion. Id. at 662
(citation omitted).
Additionally, leave to amend should be denied “if the amendment . . .
would be futile.” Carson v. U.S. Office of Special Counsel, 633 F.3d 487, 495 (6th Cir.
2011) (quotation marks and citation omitted); see Perkins v. Am. Elec. Power Fuel
Supply, Inc., 246 F.3d 593, 605 (6th Cir. 2001). “Amendment of a complaint is futile
when the proposed amendment would not permit the complaint to survive a motion to
dismiss.” Miller v. Calhoun Cnty., 408 F.3d 803, 817 (6th Cir. 2005) (citation omitted)
B.

Analysis

As grounds for their motion to amend to add a fraud claim, plaintiffs
represent that they “were deliberately misled on several occasions by [d]efendants and
representatives of [d]efendants into believing their claims pled in this action were being
compromised and resolved to [p]laintiffs’ satisfaction within six months of [p]laintiffs’
awareness of their former employer’s pertinent bankruptcy filings. Plaintiffs believed
they had legal counsel and business representation protecting them as extended by
[d]efendants.” (Mot. at 181.)
Defendants posit that plaintiff’s request for leave to amend should be
denied as futile because plaintiffs’ proposed fraud claim, like the contract and tortious
interference claims, would be completely preempted. In support, defendants direct the
Court’s attention to the Sixth Circuit’s decision in Adkins v. Gen. Motors Corp., 946 F.2d

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1201 (6th Cir. 1991), suggesting that the case is on all fours with the factual allegations
presented in plaintiffs’ proposed fraud claim.
In Adkins, plaintiffs, who were former employees of a car manufacturer,
alleged that their former employer colluded with the union in negotiating a collective
bargaining agreement that had the effect of abrogating certain seniority rights contained
in a prior labor contract known as the “bridge agreement.” In their state fraud claim, the
plaintiffs alleged that they were not told that the new collective bargaining agreement
would terminate their rights under the bridge agreement, and that they received
assurances from their union president prior to and after the ratification of the new CBA
that their rights under the bridge agreement would be preserved. According to the
plaintiffs, the union had fraudulently induced them to ratify a CBA that was not in their
interests. Adkins, 946 F.2d at 1203-04.
The court began with the requirements of fraud under Ohio law that there
must be a misrepresentation or concealment of a material fact that the concealing party
knew to false but offered, nonetheless, with the intent to induce the other party to rely to
his or her detriment. In order to make such a determination, the court noted that any trial
court would be required to analyze both the “bridge agreement” and the new collective
bargaining agreement.5 Id. at 1209-10. In finding plaintiffs’ fraudulent inducement claims
preempted under § 301, the court reasoned that the claims were “so intertwined with the
terms of the collective-bargaining agreement present in the case that they may not be

5

The court emphasized that “[t]he critical inquiry is whether a court adjudicating this claim must determine
rights arising under a collective bargaining agreement.” Adkins, 946 F.2d at 1209. It concluded that, in the
case before it, “[i]t surely must, if plaintiffs are alleging that the president of Local 801 concealed from
them the fact of their loss of ‘bridge agreement rights.” Id.
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separated. Id. at 1209-10 (citing Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213, 105
S. Ct. 1904, 85 L. Ed. 2d 206 (1985)).
Defendants insist that Adkins is the beginning and end of the story
because, like the plaintiffs in Adkins, plaintiffs here are attempting to claim that their
union concealed from them the fact that their contract rights would be compromised by a
subsequent agreement. (Opp. at 224.) According to defendants, “Adkins is controlling and
would require dismissal of plaintiffs’ proposed fraud claim.” (Id.) The decision in Adkins
was not, however, the last word on the subject. There were two subsequent decisions that
must be considered before the Court may determine whether plaintiffs’ proposed fraud
claim would be completely preempted.
Eight years after the Sixth Circuit’s decision in Adkins, the Supreme Court
issued its decision in Textron Lycoming Reciprocating Engine Div., Avco Corp. v.
U.A.W., 523 U.S. 653, 118 S. Ct. 1626, 140 L. Ed. 2d 863 (1998). In Textron, the union
and the employer entered into a collective bargaining agreement that prohibited striking
for any reason. Pursuant to a separate agreement, the employer was required to give the
union advance notice of any plans to subcontract out union work. When the employer
subsequently announced that it would subcontract out a volume of work—resulting in the
loss of union jobs—the union brought suit. The union claimed that it was fraudulently
induced by the employer to enter into the collective bargaining agreement. In support, the
union alleged that both before and during negotiations, the union repeatedly asked for any
information on anticipated outsourcing but no such information was forthcoming from
the employer—even though such plans were in existence. Textron, 523 U.S. at 654-55.

13

The Supreme Court found that the fraud claim was not completely
preempted by § 301. Turning to the language of § 301, the Court emphasized that, “[b]y
its terms, this provision confers federal subject-matter jurisdiction only over ‘[s]uits for
violation of contracts.’” Id. at 656. The union, however, had not alleged that the employer
had violated the collective bargaining agreement, and, in fact, the union represented that
both parties were in complete compliance with the agreement. The union merely alleged
that the agreement was the product of fraud. Id. at 658. Without a claim to enforce a labor
agreement, the Court concluded that the action had been improperly brought in federal
court. Id.
The Sixth Circuit revisited the issue of fraud claims in the context of
employer/union relations in its decision in Alongi v. Ford Motor Co., 386 F.3d 716 (6th
Cir. 2004). There, the union and the employer negotiated a six-year collective bargaining
agreement covering plant employees that contained no specific provision for job security.
A year later when the employer announced that it was closing the plant, the laid-off union
employees brought suit. The original complaint contained a fraud claim wherein plaintiffs
alleged that the employer’s representative made knowing misrepresentations during the
CBA negotiations that the plant would remain open for six years. Id. at 720. After the
district court ruled that the claim was preempted by § 301, the plaintiffs amended their
claim to allege that similar representations were made following the ratification of the
agreement. Id. at 721.

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The court ruled that the amended fraud claim was not preempted by § 301,
noting that it resembled the fraud claim brought in Textron.6 The court reasoned that the
employer’s alleged “individual promises” and “personal guarantees” to the plaintiffs that
the plant would remain open were separate and apart from the collective bargaining
agreement and would not require the fact finder to apply the provisions of the collective
bargaining agreement, “but only to determine whether [the employer’s] representative
made the statements alleged, and whether plaintiffs reasonably relied on them.”7 Id. at
726.
In plaintiffs’ proposed fraud claim, it is alleged that defendants
deliberately misrepresented and concealed facts to plaintiffs during the bankruptcy
proceedings. In particular, plaintiffs claim that defendants led plaintiffs to believe that
“they had legal representation in the Bankruptcy Court through the USW’s in-house
counsel in Pittsburgh,” that defendants “deliberately misled [p]laintiffs into believing
they did not have to file a proof of claim or otherwise protect their own interests in the
Bankruptcy Court[,]” that defendants misrepresented that they had brought plaintiffs’
rights to the attention of the Bankruptcy Court, and that defendants misrepresented that
“notwithstanding anything that might transpire in the Bankruptcy Court, [plaintiffs’]

6

The court also acknowledged its prior decision in Adkins. In rejecting the applicability of that decision,
the court noted that, in Textron, “the Supreme Court made clear that a simple claim of fraudulent
inducement to sign a labor contract, without more, is not a ‘suit for violation of contracts,’ and so is not
pre-empted by § 301.’” Id. at 725 (emphasis in original).
7

The Sixth Circuit also relied upon the decision in Caterpillar, where “the Supreme Court held that claims
that the plaintiffs’ employer had breached individual promises of employment security to the plaintiffs by
firing them, did not give rise to complete preemption under § 301, even though the firings took place
during a time when plaintiffs were unionized employees governed by a CBA.” Id. at 725-26 (citing
Caterpillar, 482 U.S. at 394, 399).

15

rights would be protected by” defendants. (Proposed Am. Compl., Doc. No. 22-1, ¶¶ 4245.) Plaintiffs further allege that they relied on these material misrepresentations to their
detriment. (Id. ¶¶ 46-47.)
The Court finds that the allegations in plaintiffs’ proposed fraud claim
present a close call, but that the analysis in Alongi compels a finding that the claim is not
subject to complete preemption. There is no question that the memorandum agreement—
a § 301 labor contract—is lurking in the shadows of this fraud claim. Nonetheless, the
alleged misrepresentations took place after the memorandum agreement was penned and
are separate from that agreement. A court (or fact finder) would not be required to apply
the provisions of the memorandum agreement, but only to determine whether the
representations were made and whether plaintiffs relied on these representations in not
filing a claim during the bankruptcy proceedings. Under these circumstances, the claim is
not completely preempted by § 301. Cf. Bd. of Tr. of Ohio Laborers’ Fringe Benefits
Programs v. W. End Land Dev., Inc., 664 F. Supp. 2d 850, 856 (S.D. Ohio 2009) (fraud
claim was completely preempted by § 301 where evaluation of a claim that union
misrepresented the scope and nature of the collective bargaining agreement would
“require[] an examination of the actual scope and nature of the terms of the CBA”).
Accordingly, the Court finds that it would not be futile for plaintiffs to

16

amend their complaint to add a claim of fraudulent misrepresentation under Ohio law.8
Plaintiffs’ motion for an extension of time in which to amend to assert a common law
fraud claim is GRANTED. Plaintiffs are granted leave to file an amended complaint that
contains the proposed fraud claim but omits the completely preempted contract and
tortious interference claims. To withstand a finding of complete preemption, the amended
complaint must also omit any request to enforce the memorandum agreement or to seek
damages under that agreement. Assuming plaintiffs timely file a fully complying
amended complaint, the Court shall remand the matter to state court.
IV. PLAINTIFFS’ MOTION TO CERTIFY
Plaintiffs have also moved the Court “to certify its Order as final and
appealable, pursuant to 28 U.S.C. § 1292(b), ‘Interlocutory decisions,’ and to stay
proceedings in this Court pending hearing of the interlocutory appeal by the Sixth

8

Defendants also argue that plaintiffs’ motion should be denied on the basis of bad faith because plaintiffs
allegedly chose to “hold their fraud claim in reserve” while the Court considered whether the initially plead
claims were completely preempted. (Opp. at 222.) In support, defendants cite Commercial Money Ctr., Inc.
v. Ill. Union Ins. Co., 508 F.3d 327, 347 (6th Cir. 2007) (undue delay in seeking amendment where plaintiff
made a strategic decision to wait to amend justified denying leave to amend), and Jones v. W. Reserve
Transit Auth., 455 F. App’x 640, 654 (6th Cir. 2012) (a plaintiff’s “strategic decisions to strip the district
court of jurisdiction [a]re surely not what the Supreme Court had in mind” when it said amendments should
be freely allowed so that claims could be heard on the merits). Plaintiffs state that they “expressly avoided
bringing any federal claims and reluctantly avoid specifying in detail the basis for their existing fraud
claim, confident their Complaint belonged in state court.” (Mot. at 182.) While the Court is troubled by the
fact that plaintiffs appear to have been aware of the factual predicate for their fraud claim at the outset of
this litigation, the Court is also mindful that plaintiffs are the masters of their complaint and have a right to
choose to plead claims based strictly on state law to avoid federal jurisdiction. “The well-pleaded complaint
rule generally provides that the plaintiff is the master of his complaint, and the fact that the wrong asserted
could be addressed under either state or federal law does not ordinarily diminish the plaintiff’s right to
choose a state law cause of action.” Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 943 (6th Cir. 1994)
(citing, among authorities, Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S.
Cal., 463 U.S. 13, 22, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983)). While complete preemption is the
corollary to the well-pleaded complaint rule, a plaintiff still retains the right to plead a claim outside of the
realm of preemption, if the facts will support such a claim. The Court finds that plaintiffs did not act in bad
faith, and it will not penalize plaintiffs for their failure to properly calculate the reach of § 301 preemption.
Moreover, given the fact that it is still early in this case and no discovery has taken place, defendants will
not be prejudiced by the amendment.
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Circuit.” (Mot., Doc. No. 16, at 179.) In support of their request for immediate
certification, plaintiffs cite to the unreported decisions in Wayt and Dobrski, and suggest
that the “issue is one that bears further review.” (Id.) Because the Court views plaintiffs’
motion as a request for alternative relief, and the Court has granted their motion for an
extension of time in which to amend, the Court DENIES this motion as moot.9
V. CONCLUSION
For all of the foregoing reasons, plaintiffs’ motion for reconsideration is
DENIED, plaintiffs’ motion for an extension of time in which to amend the complaint is
GRANTED, and plaintiffs’ motion to certify is DENIED as moot. Plaintiffs shall have
leave until October 2, 2014, to file an amended complaint that asserts a common law
fraud claim that is fully compliant with the requirements set forth in this Opinion and
Order.10 Should plaintiffs timely file such an amended pleading, the Court shall remand
this matter to the state court. Should plaintiffs fail to file an amended pleading that
relieves this Court of subject matter jurisdiction, the Court shall dismiss the complaint as

9

In any event, plaintiffs failed to meet their burden under § 1292. This Court may certify an interlocutory
appeal of its prior order if the Court “shall be of the opinion that such order involves a controlling question
of law as to which there is substantial ground for difference of opinion and that an immediate appeal from
the order may materially advance the ultimate termination of the litigation[.]” 28 U.S.C. § 1292(b).
Plaintiffs’ reference to two unreported district court cases that are easily distinguished, and do not identify a
change in or uncertainty regarding the law, fails to demonstrate a controlling question of law on which
there could be substantial ground for a difference of opinion.
10

The Court will determine, without additional briefing by the parties, whether any amended complaint
plaintiffs may file is fully compliant with the Court’s instructions in this Opinion and Order.
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preempted under § 301 of the LRMA.
IT IS SO ORDERED.
Dated: September 25, 2014
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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