McArthur v. BNSF Railway Company

Filing 18

ORDER granting Defendant's 6 Motion to Dismiss for Failure to State a Claim; McArthur's complaint is DISMISSED with prejudice, signed by U.S. District Judge John C Coughenour. (SWT)

THE HONORABLE JOHN C. COUGHENOUR

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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STEVEN MCARTHUR,

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Plaintiff,

CASE NO. C17-1314-JCC
ORDER DISMISSING CASE

v.

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BNSF RAILWAY COMPANY,

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Defendant.

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This matter comes before the Court on Defendant BNSF Railway Company’s (“BNSF”)

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motion to dismiss (Dkt. No. 6). Having thoroughly considered the parties’ briefing and the

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relevant record, the Court hereby GRANTS the motion for the reasons explained herein.

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I.

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BACKGROUND
Plaintiff Steven McArthur recently terminated his employment with BNSF. (Dkt. No. 1-2

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at 3.) His position involved travel to various BNSF work locations, with compensation based, in

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part, on the mileage he incurred. (Dkt. Nos. 6 at 1–3, 11 at 1–5.) In a separate case, BNSF

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brought suit seeking to recoup amounts it paid to McArthur and certain fellow employees,

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claiming they fraudulently inflated their mileage. See BNSF Ry. Co. v. McArthur, No. C15-0992,

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slip op. (W.D. Wash. Feb. 9, 2017). Judge Jones dismissed the case due to a lack of subject

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matter jurisdiction because BNSF’s state law claims were preempted by the Railway Labor Act

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(“RLA”), which imposes mandatory arbitration provisions for such wage claims. See Id. at *2
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(citing Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252 (1994)).

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In the instant suit, originally brought in King County Superior Court, McArthur seeks

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$43,119.55 in unpaid vacation and leave time. (Dkt. No. 1-2 at 4.) He asserts BNSF

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impermissibly failed to pay this amount following his termination and is liable under Revised

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Code of Washington §§ 49.48.010, 49.48.030, 49.52.070 for double damages and attorney fees.

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(Id. at 3.) BNSF removed to this Court based on diversity (Dkt. No. 1), and now moves to

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dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Dkt. No. 6). BNSF

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asserts that it properly withheld payment pursuant to the collective bargaining agreements

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(“CBA”) between BNSF and McArthur’s collective bargaining unit, and adjudication of the

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matter outside of arbitration is preempted by the RLA. (Id. at 2.) BNSF also asserts judicial

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estoppel on the basis that McArthur, in the related proceeding before Judge Jones, previously

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argued that mandatory arbitration applies to all wage-related claims. (Id. at 22.)

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II.

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DISCUSSION
BNSF’s 12(b)(1) motion makes the same argument McArthur successfully made to Judge

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Jones—that the pay dispute is subject to the mandatory arbitration provisions of the RLA, 45

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U.S.C. § 151a(5), thereby preempting this suit. (Dkt. No. 6 at 9–13); see BNSF Ry. Co., No. C15-

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0992, slip op. at *2. Therefore, this Court lacks subject matter jurisdiction to adjudicate

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McArthur’s claims.

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Under Federal Rule of Civil Procedure 12(b)(1), a complaint must be dismissed if the

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court lacks subject matter jurisdiction. Jurisdiction is a threshold separation of powers issue, and

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may not be deferred until trial. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–95

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(1998). A motion to dismiss under Rule 12(b)(1) for lack of jurisdiction may be facial or factual.

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See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). In reviewing a factual attack, the Court

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may consider materials beyond the complaint. McCarthy v. U.S., 850 F.2d 558, 560 (9th Cir.

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1988).

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As Judge Jones described when dismissing BNSF’s claims against McArthur, under the

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RLA, arbitration is required to the extent that interpretation of the CBA is necessary to resolve

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claims between McArthur and BNSF. See BNSF Ry. Co., No. C15-0992, slip op. at *2. Here,

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BNSF asserts such interpretation is required to (a) determine the amount of vacation pay it

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rightfully owes McArthur and (b) whether BNSF may offset termination payments against

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amounts it believes McArthur owes. (Dkt. No. 6 at 13.)

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Vacation pay for a BNSF engineer is derivative of the total amount of compensation

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received the prior year, which necessarily includes claimed mileage. (Dkt. Nos. 6 at 4–5, 14 at

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7.) Mileage is based on the distance an engineer travelled by rail or van, reported by the engineer

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using “tie-up tickets,” and reviewed and approved by BNSF’s payroll department. BNSF Ry. Co.

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v. McArthur, Case No. C15-0992-RAJ, Dkt. No. 47 at 4 (W.D. Wash. 2016). Judge Jones

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previously held that interpretation of the CBA is required to determine “whether [McArthur and

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his fellow employees] correctly calculated and reported their traveled miles . . . how that

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translates to wages, and how the employee and employer are to resolve disputes over same.”

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BNSF Ry. Co., No. C15-0992, slip op. at 2. The Court will not disturb this holding as it now

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applies to McArthur’s claims.

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McArthur counters that the disputed vacation pay here is different than the disputed

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wages before Judge Jones because vacation pay is “contractually vested” and, as such, does not

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require interpretation of the CBA to determine the amount owing. (Dkt. No. 11 at 2.) This is not

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a plausible assertion. BNSF is only obligated to pay the amount McArthur rightfully earned.

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(Dkt. No. 14 at 7.) This amount is yet to be determined. What McArthur refers to as

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“contractually vested” is the amount of vacation pay BNSF told McArthur he had earned, before

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it concluded that he inflated his compensation the prior year. (Dkt. Nos. 6 at 12–13, 14 at 7.) Of

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the $43,119.55 McArthur claims owing as termination payments in this case, for which he seeks

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double damages, $32,360.90 represents vacation pay. (Dkt. No. 1-2 at 4.) This is the amount

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subject to CBA interpretation and preemption. The remaining $10,758.65 McArthur seeks is
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leave pay, which is not impacted by mileage. 1 (Dkt. Nos. 6 at 5–6, 11 at 3.) This is the only

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amount not requiring interpretation of the CBA, and is insufficient to support subject matter

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jurisdiction. See 28 U.S.C. § 1332(a).

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Further, interpretation of the CBA is required to determine whether BNSF may offset the

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termination payments it owes McArthur against the amount exceeding $100,000 that it believes

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McArthur owes. (Dkt. No. 6 at 4.) While the CBA does not explicitly allow for such self-help,

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industry practice and custom do. “[P]ractice, usage and custom is of significance in interpreting”

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a CBA between railroad employees and their employer. Consol. Rail Corp. v. Ry. Lab.

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Executives’ Ass’n, 491 U.S. 299, 311 (1989). BNSF persuasively cites a series of Public Law

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Board (“PLB”) decisions supporting this practice. (Dkt. Nos. 6 at 15–16, 9-1 Ex. 1–5.) 2 Rather

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than cite countervailing PLB decisions, McArthur attempts to distinguish these decisions from

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the facts of this case. (Dkt. No. 11 at 13–15.) The Court does not find those distinctions

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meaningful.

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Interpretation of the CBA is required to determine how much vacation pay BNSF owes

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McArthur and whether BNSF may offset termination payments against what it believes

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McArthur misappropriated. On this basis, McArthur’s claims before this Court are preempted.

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This is sufficient for dismissal under Federal Rule of Civil Procedure 12(b)(1), as the Court lacks

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subject matter jurisdiction. The Court need not reach BNSF’s 12(b)(6) or judicial estoppel

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arguments.

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“Dismissal without leave to amend is improper unless it is clear upon de novo review that

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the complaint could not be saved by any amendment.” Krainski v. Nev. ex rel. Bd. of Regents of

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Nev. Sys. of Higher Educ., 616 F.3d 963, 972 (9th Cir. 2010). Under these facts, no amendment

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would confer subject matter jurisdiction on the Court. It would not be appropriate to grant

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Leave pay is based solely on an employee’s basic pay. (Dkt. No. 11 at 3.)

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The RLA created the PLB to hear disputes between railroad employees and their
employers. See United Transp. Union v. BNSF Ry. Co., 710 F.3d 915, 919 (9th Cir. 2013).
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McArthur leave to amend his complaint.

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III.

CONCLUSION

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For the foregoing reasons, BNSF’s motion to dismiss (Dkt. No. 6) is GRANTED.

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McArthur’s complaint is DISMISSED with prejudice. The Clerk is DIRECTED to CLOSE this

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case.

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DATED this 16th day of October 2017.

A

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John C. Coughenour
UNITED STATES DISTRICT JUDGE

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