Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-04829/USCOURTS-cand-3_07-cv-04829-0/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

HIPOLITO ACOSTA, JESUS ACOSTA,

FILEMON GARCIA, ENRIQUE JAUREGUI,

SAUL LOZANO, RICARDO MUNGUIA, JUAN

M. NAVARRO, JUAN RODRIQUEZ,

EVERARDO VILLA,

Plaintiffs,

 v.

AJW CONSTRUCTION, a California

Corporation; and Does I through XX,

Defendants.

 

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Case No. 07-4829 SC

ORDER GRANTING

PLAINTIFFS' MOTION TO

REMAND

I. INTRODUCTION

On August 17, 2007, the plaintiffs Acostas, Garcia, Jauregui,

Lozano, Munguia, Navarro, Rodriguez and Villa ("Plaintiffs") filed

a Complaint in the Alameda Superior Court of California. See

Notice of Removal, Docket No. 1, Ex. A. The defendant AJW

Construction ("Defendant") filed a Notice of Removal ("Notice")

with this Court on September 20, 2007. Id. Plaintiffs then filed

a Motion to Remand Removed Action and For Attorney Fees and Costs

("Motion") on October 12, 2007. See Docket No. 6. Defendant

submitted an Opposition and Plaintiffs filed a Reply. See Docket

Nos. 10, 15.

For the following reasons, the Court GRANTS Plaintiffs'

Motion.

///

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II. BACKGROUND

Plaintiffs' Complaint alleges two causes of action: recovery

of unpaid wages and statutory penalties pursuant to California

Labor Code sections 203 and 226.3, and unfair business practices

pursuant to California Business and Professions Code section 17200

et seq. Defendants have asserted in their Notice that the terms

and conditions of Plaintiffs' employment were subject to a

collective bargaining agreement. Opp'n at 2. Defendant removed

to this Court pursuant to 28 U.S.C. § 1441(b). Although

Plaintiffs only raise California state-law claims, Defendant

asserts that the action is removable to federal court because the

claims arise under the Labor Management Relations Act ("LMRA"), 29

U.S.C. § 301 et seq., and under the Employment Retirement and

Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq.

Plaintiffs argue that their claims are premised wholly on

California state law and, as such, create no federal jurisdiction.

III. DISCUSSION

"The burden of establishing federal jurisdiction is upon the

party seeking removal . . . and the removal statute is strictly

construed against removal jurisdiction." Emrich v. Touche Ross &

Co., 846 F.2d 1190, 1194-95 (9th Cir. 1988) (internal citations

omitted). "Federal jurisdiction must be rejected if there is any

doubt as to the right of removal in the first instance." Gaus v.

Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

Ordinarily, "federal jurisdiction exists only when a federal

question is presented on the face of the plaintiff's properly

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pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386,

392 (1987). Thus, "the plaintiff [is] the master of the claim; he

or she may avoid federal jurisdiction by exclusive reliance on

state law." Id. 

One exception to this, however, is the doctrine of complete

preemption. Id. at 393. According to complete preemption, the

force of certain federal statutes, including the LMRA and ERISA,

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 rule." Id. (internal quotation marks

omitted); see also Metro. Life Ins. Co. v. Taylor, 481 U.S. 58,

64-67 (1987). In the present case, Defendant argues that federal

jurisdiction is created by preemption under both the LMRA and

ERISA.

A. Preemption Under the LMRA

Section 301 of the LMRA provides, in part: 

Suits for violation of contracts between

an employer and a labor organization

representing employees in an industry

affecting commerce . . . may be brought

in any district court of the United

States having jurisdiction of the

parties.

29 U.S.C. § 185(a).

"Section 301 governs claims founded directly on rights

created by collective-bargaining agreements, and also claims

'substantially dependent on analysis of a collective-bargaining

agreement.'" Caterpillar, 482 U.S. at 394 (citing Elec. Workers

v. Hechler, 481 U.S. 851, 859 n.3 (1987)). Where a state-law

claim requires interpretation of a collective bargaining

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1 Although Plaintiffs also assert a cause of action under

California's Business and Professions Code § 17200, only the unpaid

wages claim is relevant to the present motion.

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agreement, such a claim will be preempted by § 301. See Lingle v.

Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413 (1988) (stating

"an application of state law is pre-empted by § 301 of the Labor

Management Relations Act of 1947 only if such application requires

the interpretation of a collective bargaining agreement"). Where

the dispute hinges on a "purely factual inquiry [which] does not

turn on the meaning of any provision of a collective-bargaining

agreement," id., however, the "state law remedy . . . is

'independent' of the collective-bargaining agreement . . . ." Id.

In addition, "§ 301 cannot be read broadly to pre-empt

nonnegotiable rights conferred on individual employees as a matter

of state law." Livadas v. Bradshaw, 512 U.S. 107, 123 (1994). 

"[W]hen the meaning of contract terms is not the subject of

dispute, the bare fact that a collective-bargaining agreement will

be consulted in the course of state-law litigation plainly does

not require the claim to be extinguished." Id. at 124.

Plaintiffs' first cause of action is for unpaid wages.1 

Defendant argues that regardless of Plaintiffs' theory for

recovery of unpaid wages, Plaintiffs' claims will require the

interpretation of the collective bargaining agreement that governs

the terms of Plaintiffs' employment. Therefore, according to

Defendant, the state-law claim is preempted by the LMRA.

Contrary to Defendant's assertion, however, Plaintiffs'

claims do not appear to require any meaningful interpretation of

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the collective bargaining agreement. The dispute does not hinge

on the calculation of each Plaintiff's hourly wages. Plaintiffs

have specified the individual hourly wage that each is owed and

Defendant has not contested these hourly rates. Instead, the

claims will hinge on the number of hours Plaintiffs worked for

which they were not paid. Such calculations, while perhaps

requiring some consultation with the collective bargaining

agreement, do not, according to Defendant's Opposition, require

the interpretation of the contract terms themselves. See Livadas,

512 U.S. at 123 (stating that "when the meaning of contract terms

is not the subject of dispute, the bare fact that a collectivebargaining agreement will be consulted in the course of state-law

litigation plainly does not require the claim to be

extinguished"). 

Ultimately, Defendant has not demonstrated that Plaintiffs'

unpaid wages claims are "substantially dependent on an analysis of

a collective bargaining agreement." Firestone v. S. Cal. Gas Co.,

219 F.3d 1063, 1065 (9th Cir. 2000) (internal quotation marks

omitted). Instead, from all appearances, the dispute requires

little, if any, interpretation of the collective bargaining

agreement. The dispute does not hinge on whether Plaintiffs were

paid at the appropriate hourly rates but rather on whether

Plaintiffs were paid for all of the time they worked. Such a

dispute is more analogous to the facts of Livadas, where "the

primary text for deciding whether [the plaintiff] was entitled to

a penalty was not [the collective bargaining agreement], but a

calender." 512 U.S. at 124. For these reasons, the Court finds

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that Plaintiffs' state-law claims are not preempted by § 301 of

the LMRA. 

B. Preemption Under ERISA

Defendant also argues that Plaintiffs' claims for unpaid

wages are preempted by ERISA. Specifically, Defendant asserts

that because "Plaintiffs are seeking accrued vacation time

pursuant to Labor Code Section 227.3," and Defendant "only offers

paid vacation to its Union employees pursuant to the employee

benefit plan," ERISA preempts Plaintiffs' state law claim. Opp'n

at 5.

ERISA defines an employee benefit plan as any plan, fund, or

program maintained by an employer or employee organization for the

purpose of providing various benefits, including medical and

vacation. 29 U.S.C. § 1002. Whether a certain benefit plan falls

within the coverage of ERISA is often a complicated question and

requires a case-by-case analysis. For example, the Supreme Court

has held that a "multiemployer fund created to provide vacation

benefits for union members who typically work for several

employers during the course of a year . . . . falls within the

scope" of ERISA. Mass. v. Morash, 490 U.S. 107, 114 (1989). "In

addition, the creation of a separate fund to pay employees

vacation benefits would subject a single employer to the

regulatory provisions of ERISA." Id. Certain policies, however,

that pay employees for unused vacation time do not constitute

employee welfare benefit plans. Id. 

In another example of the analysis required to determine

whether a vacation benefit plan falls under ERISA, a court in this

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2

 The Supreme Court has stated: "In enacting ERISA, Congress'

primary concern was with the mismanagement of funds accumulated to

finance employee benefits and the failure to pay employees benefits

from accumulated funds." Morash, 490 U.S. at 109.

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district, after thoroughly examining the plan, found that where

vacation benefits "must be used by the employee during the

calender year in which they accrue, or else they are forfeited,"

the plan is not covered by ERISA. Czechowski v. Tandy Corp., 731

F. Supp. 406, 408 (N.D. Cal. 1990). The court held that because

the employer disbursed vacation benefits directly to the employees

and was then reimbursed by the vacation benefit plan, the "trust

[did] not implicate any concerns over mismanagement since no funds

are accumulated in it." Id. In addition, because "the risk an

employee [bore was] precisely the same as his employment risk,"

the principles justifying the protections provided by ERISA were

not implicated.2 Id. 

Defendant offers the declaration of Alfonso Quintor,

president of AJW Construction, as proof that the vacation plan at

issue is covered under ERISA. Quintor Decl. ¶ 3. Quintor,

however, provides no explanation for this other than the

conclusory statement that "[t]he collective bargaining agreement

governing Plaintiffs' employment with AJW establishes several

employee benefits . . . pursuant to a jointly administered multiemployer employee benefit plan regulated by the Employment [sic]

Retirement and Income Security Act of 1974." Id. As noted above,

however, determination of whether a vacation benefit plan is in

fact covered by ERISA turns on the terms and conditions of the

individual plan. 

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Recognizing this, Defendant also cites to Section 28A of the

collective bargaining agreement to support the ERISA preemption

argument. Section 28A, however, merely establishes a payment

schedule for employer contributions to various funds, including

health, pension and vacation. See Quintor Decl., Ex. A at 22. 

The Court cannot glean, from the less than two pages that comprise

Section 28A, sufficient details regarding the vacation plan to

determine whether it falls under ERISA. Nor has Defendant

provided the Court with any other information regarding the terms

of the vacation plan, how it is administered, or even the benefits

that employees receive under it. Ultimately, Defendant, having

the burden to demonstrate federal jurisdiction, has failed to

provide the Court with the support necessary to determine whether

the vacation plan at issue is covered by ERISA.

Finally, even assuming, arguendo, that the vacation plan was

covered by ERISA, Plaintiffs' claims for unpaid wages accrued

during paid time off appear to require little more than cursory

consultation with the collective bargaining agreement. See

Livadas, 512 U.S. at 123. Plaintiffs' allegations that they have

accrued paid time off is not, in and of itself, enough to create

ERISA preemption. For these reasons, the Court finds that

Plaintiffs' action is not preempted by ERISA.

C. Attorneys' Fees

In addition to remanding the case, Plaintiffs also seek

attorneys' fees and costs in the amount of $900.00 for the filing

of the instant motion. Although 28 U.S.C. § 1447(c) authorizes

the imposition of attorneys' fees when a case is remanded, the

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Court declines to do so. 

IV. CONCLUSION

For the reasons discussed herein, the Court GRANTS

Plaintiffs' Motion to Remand. The case is therefore REMANDED to

the Alameda Superior Court. Plaintiffs' Motion for Attorneys'

Fees is DENIED.

IT IS SO ORDERED.

Dated: November 30, 2007 

UNITED STATES DISTRICT JUDGE

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