Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_07-cv-05847/USCOURTS-cand-4_07-cv-05847-1/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 29:185 Employee Pension Plan

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JERRY MITCHELL, et al.,

Plaintiffs, No. C 07-05847 PJH

v. ORDER GRANTING MOTION TO

REMAND AND GRANTING MOTION

MIRANT CALIFORNIA, LLC, TO DISMISS COUNTERCLAIM

Defendant.

_______________________________/

On February 20, 2008, the court heard argument in plaintiffs’ motion to remand and

motion for attorney’s fees; in the motion of plaintiffs and counterdefendants Jerry Mitchell,

Eddie Williams, Jr., Edward S. Medina, and David Walters to strike or dismiss the

counterclaim; and in the motion of counterdefendant International Brotherhood of Electrical

Workers Local 1245 (“Local 1245") to dismiss the counterclaim. Plaintiffs appeared by their

counsel Daniel B. Siegel and Dan L. Gildor; Local 1245 appeared by its counsel Philip C.

Monrad; and defendant appeared by its counsel Margaret Hart Edwards and Kimberly L.

Owens. 

Having read the parties’ papers and carefully considered their arguments and the

relevant legal authority, and good cause appearing, the court hereby GRANTS the motion

to remand, DENIES the motion for fees, and GRANTS the motions to dismiss the

counterclaims as follows and for the reasons stated at the hearing. 

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BACKGROUND

The named plaintiffs in this proposed class action are four individuals who work for

defendant Mirant California, LLC (“Mirant”), a company that operates power plants and

sells electricity. Plaintiffs are power plant operators seeking to represent a class of more

than 80 individuals. 

Plaintiffs filed the original complaint in San Francisco Superior Court on October 17,

2007, alleging three causes of action under the California Labor Code (failure to provide

meal periods, failure to provide rest periods, and recovery of waiting time penalties), a

claim under Business & Professions Code § 17200, and a claim for declaratory relief. 

Mirant removed the action on November 19, 2007, alleging federal question

jurisdiction. Mirant claims that plaintiffs’ claims arise under § 301 of the LaborManagement Relations Act (“LMRA”), 29 U.S.C. § 185. Under § 301, federal law

exclusively governs suits for violation of contracts between an employer and a labor

organization representing employees in an industry affecting commerce. Caterpillar, Inc. v.

Williams, 482 U.S. 386, 394 (1987). 

Specifically, Mirant asserts that plaintiffs’ claims directly reference and require

substantial interpretation of a disputed term of a collective bargaining agreement (“CBA”)

between Mirant and the International Brotherhood of Electrical Workers, Local 1245 (“Local

1245"), and that the action is therefore preempted by § 301. 

On November 28, 2007, Mirant filed a counterclaim against the named plaintiffs and

Local 1245, asserting a single cause of action for declaratory relief, which seeks an

interpretation of the provisions in the CBA that govern meal and rest periods, and an

agreement regarding “on duty” meal periods.

On January 11, 2008, Local 1245 filed a motion to dismiss Mirant’s counterclaim for

lack of jurisdiction and for failure to join an indispensable party. On January 14, 2008,

plaintiffs filed a motion to remand and a request for fees, and also filed a motion to dismiss

the counterclaim as redundant of plaintiff’s claim for declaratory relief, for lack of

jurisdiction, and for failure to state a claim. All these motions are now before the court.

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DISCUSSION

A. Motion to Remand and Motion for Attorney’s Fees

A defendant may remove a civil action filed in state court if the action could have

originally been filed in federal court. 28 U.S.C. § 1441. A plaintiff may seek to have a case

remanded to the state court from which it was removed if the district court lacks jurisdiction

or if there is a defect in the removal procedure. 28 U.S.C. § 1447(c). 

The removal statutes are construed restrictively, so as to limit removal jurisdiction. 

Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). There is a “strong

presumption” against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.

1992). The burden of establishing federal jurisdiction for purposes of removal is on the

party seeking removal. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004). 

Doubts as to removability are resolved in favor of remanding the case to state court. 

Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). 

Plaintiffs argue that the case must be remanded because there is no § 301

preemption, and thus, no federal question. They also seek fees incurred in connection with

their motion to remand. 

“Federal question” cases are those cases “arising under the constitution, laws, or

treaties of the United States.” Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987)

(quoting 28 U.S.C. § 1331). The presence or absence of federal question jurisdiction is

governed by the “well-pleaded complaint” rule, which provides that federal jurisdiction exists

only when a federal question is presented on the face of the plaintiff’s properly pleaded

complaint. Caterpillar, 482 U.S. at 392. 

This rule makes the plaintiff the master of his complaint, and allows him to avoid

federal jurisdiction by relying exclusively on state law. Thus, a case may not be removed to

federal court on the basis of a federal defense, including a claim of preemption, even if the

defense is anticipated in the complaint. Franchise Tax Bd. of State of Calif. v. Construction

Laborers Vacation Trust for Southern Calif., 463 U.S. 1, 14 (1983). 

There also exists a corollary to the “well-pleaded complaint” rule – the “complete

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preemption doctrine” – under which the preemptive force of some statutes is so strong that

they “completely preempt” an area of state law. Metropolitan Life Ins., 481 U.S. at 65. In

such a case, a claim based on that preempted state law is considered, from its inception, a

federal claim, and therefore “arises under” federal law. Franchise Tax Bd., 463 U.S. at 24. 

The “complete preemption” exception to the “well-pleaded complaint” rule is applied

primarily under § 301 of the LMRA. Section 301 provides that

[s]uits for violation of contracts between an employer and a labor organization

representing employees in an industry affecting commerce as defined in the

Act, 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 § 301 is limited to “[s]uits for violation of contracts,” courts

have concluded that in order to support § 301's policies of promoting arbitration and the

uniform interpretation of collective bargaining agreements, § 301 “complete preemption”

must be construed to cover most state-law actions that require “interpretation of labor

agreements.” Associated Builders & Contractors, Inc. v. Local 302 Int’l Bhd. of Elec.

Workers, 109 F.3d 1353, 1356 (9th Cir. 1997). 

However, not every claim that requires a court to refer to the language of a collective

bargaining agreement is necessarily preempted. Id. at 1357. If the right asserted by the

plaintiff exists independently of the CBA, the court must consider whether it is nevertheless

“substantially dependent on analysis of a collective bargaining agreement.” Caterpillar, 482

U.S. at 394 (citation and quotation omitted). To determine whether a state law claim is

“substantially dependent” on the terms of a CBA, the court must decide whether the claim

can be resolved by “look[ing] to” the CBA, as opposed to interpreting it. Livadas v.

Bradshaw, 512 U.S. 107, 123-26 (1994). If the claim does not require interpreting the CBA,

it is not preempted. 

Here, the court finds that while resolution of plaintiffs’ claims – the determination

whether Mirant has denied plaintiffs and the proposed class members meal and rest breaks

in violation of California law – may require the court to look at the provisions of the CBA, it

will not require any substantial interpretation of the CBA. Accordingly, the court finds there

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is no complete preemption, and that the motion to remand must be GRANTED, based on

lack of subject matter jurisdiction.

Plaintiffs also argue that they are entitled to attorney’s fees under 28 U.S.C. 

§ 1447, which provides, in part, that “[a]n order remanding the case may require payment

of just costs and any actual expenses, including attorney fees, incurred as a result of the

removal.” 28 U.S.C. § 1447(c). 

There is no automatic entitlement to an attorney’s fee award on remand, and no

presumption in favor of – or against – granting fees and costs. Martin v. Franklin Capital

Corp., 546 U.S. 132, 137 (2005). The key factor is the propriety of the removal. “[A]bsent

unusual circumstances, attorney’s fees should not be awarded when the removing party

has an objectively reasonable basis for removal.” Id. at 136. 

Here, the court finds that the removal was not entirely objectively unreasonable. In

particular, the court finds that the inclusion in the complaint of the allegations regarding the

CBA likely contributed to Mirant’s view of plaintiff’s claims as requiring some construction or

interpretation of the CBA. Accordingly, the court finds that the motion for fees must be

DENIED. 

B. Motions to Dismiss Counterclaim

Both plaintiffs and Local 1245 have moved to dismiss the counterclaim. In its notice

of removal, Mirant asserted that removal 

is based on a claim arising under federal law. Specifically, [p]laintiffs’ claims

directly reference and require substantial interpretation of a disputed term of a

collective bargaining agreement (“CBA”) between an Employer and a Union. 

Therefore, the action is preempted by Section 301 of the LMRA, 29 U.S.C. §

185. 

Notice of Removal ¶ 7. 

In the counterclaim, Mirant alleged that the court has supplemental jurisdiction of the

counterclaim under 28 U.S.C. § 1367(a) “because it arises out of the same transaction or

occurrence that is the subject matter of” the complaint;” and that the court has original

jurisdiction of the counterclaim under § 301 of the LMRA “because this counterclaim seeks

interpretation of the [CBA] between Mirant and . . . Local 1245" and “requests a declaratory

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judgment as to rights and obligations under the CBA.” Counterclaim ¶¶ 1, 2. 

In order to exercise supplemental jurisdiction over a counterclaim, the court must

first have original jurisdiction over the complaint. Herman Family Rev. Trust v. Teddy Bear,

254 F.3d 802, 805 (9th Cir. 2001). In view of the finding that the case was improperly

removed because there is no § 301 preemption and therefore no federal question

jurisdiction, the court cannot exercise supplemental jurisdiction over the counterclaim. 

Thus, the only question is whether the court has original jurisdiction over the counterclaim.

There are two independent reasons that the court does not have original federal

subject-matter jurisdiction over Mirant’s counterclaim. First, a counterclaim cannot serve as

the basis for original federal question subject matter jurisdiction. Second, Mirant’s claim for

declaratory relief regarding the CBA does not create federal question jurisdiction under

LMRA § 301.

1. Counterclaim cannot create original federal question jurisdiction 

If the complaint fails to state a claim “arising under” federal law, the fact that the

counterclaim asserts such a claim does not give the court subject matter jurisdiction over

the action. Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830-31

(2002). 

In Holmes, a household fan manufacturer (Holmes) filed suit in federal court seeking

a declaratory judgment that its products did not infringe the trade dress of a competitor

(Vornado). Vornado’s answer asserted a compulsory counterclaim alleging patent

infringement. The district court granted the declaratory judgment, and the Tenth Circuit

affirmed. Vornado appealed to the Federal Circuit, which remanded the case for further

consideration in light of a Supreme Court decision issued after the district court had ruled. 

The Supreme Court granted certiorari to consider whether the Federal Circuit had

properly asserted jurisdiction over the appeal. The Federal Circuit had exercised

jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (jurisdiction over appeal from final decision

of district court if jurisdiction of that court was based on 28 U.S.C. § 1338 – actions relating

to patents). The Supreme Court held that the “well-pleaded complaint” rule, which provides

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that whether a case “arises under” federal law, must be determined from the plaintiff’s

statement of his own claim in the complaint. Holmes, 535 U.S. at 830-31. 

The Court concluded that because the question whether a case arises under federal

patent law cannot depend on the answer to the complaint, “[i]t follows that a counterclaim –

which appears as part of a defendant’s answer, not as part of the plaintiff’s complaint –

cannot serve as the basis for ‘arising under’ jurisdiction.” Id. at 831. 

Although the Holmes case involved the narrower question of a challenge to the

Federal Circuit’s exercise of jurisdiction over a patent infringement counterclaim, the

general rule articulated by the Court can be extended to this case. In particular, the Court

noted that the “well-pleaded complaint” rule “has long governed whether a case ‘arises

under’ federal law for purposes of § 1331,” and then noted that the “well-pleaded complaint”

rule had “appropriately” been adapted to § 1338(a). Id. at 830 (quotation and citation

omitted). 

The Court added that “‘[l]inguistic consistency’ requires us to apply the same test to

determine whether a case arises under § 1338(a) as under § 1331.” Id. It was because

Vornado’s well-pleaded complaint did not assert any claim arising under federal patent law

that the Court concluded that the Federal Circuit had erred in asserting jurisdiction over the

appeal. Id. 

2. Counterclaim does not state federal question claim under LMRA § 301

The counterclaim is brought under the Declaratory Judgment Act, which provides, in

part, that “[i]n a case of actual controversy within its jurisdiction . . . any court of the United

States . . . may declare the rights and other legal relations of any interested party seeking

such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). 

Thus, the party seeking declaratory relief must show the existence of an actual controversy

regarding subject matter within federal court jurisdiction.

In the counterclaim, Mirant alleges that “[a]n actual controversy has arisen between

[p]laintiffs and IBEW Local 1245, on the one hand, and Mirant, on the other hand.” 

Counterclaim ¶ 21. Mirant asserts that “[t]he parties dispute the validity of a contract and

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dispute the meaning of terms of a contract,” and that “[d]eclaratory relief is also required to

determine Mirant’s rights and obligations with respect to the claims asserted by [p]laintiffs in

their Complaint.” Id. 

Mirant claims that “[t]he parties dispute the interpretation of [§§ 16.5 and 16.7 of the

CBA and the agreement regarding waiver of second meal periods] and thus require an

interpretation of the CBA and other agreements between the parties, and a determination

as to their respective rights and obligations with respect thereto.” Id. ¶ 22. Mirant seeks a

judicial declaration “ that Sections 16.5 and 16.7 of the CBA and the agreement regarding

waiver of second meal periods were and are enforceable and not inconsistent with or in

violation of any California statute or administrative regulations.” Id., Prayer for Relief, ¶ 1.

The Declaratory Judgment Act creates a federal remedy; it does not provide an

independent basis for federal jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S.

667, 671 (1950). Before declaratory relief can be granted, federal subject matter

jurisdiction requirements must be satisfied. Id. Thus, actions for declaratory relief must

either be between parties of diverse citizenship, or “arise under” federal law. 28 U.S.C. 

§§ 1331, 1332. 

In declaratory relief actions, whether a question “arises under” federal law is

determined by the nature of the underlying coercive claim – that is, the claim that the

declaratory judgment defendant may conceivably assert against the declaratory judgment

plaintiff. As the Supreme Court has noted, “Federal courts have regularly taken jurisdiction

over declaratory judgment suits in which, if the declaratory judgment defendant brought a

coercive action to enforce its rights, that suit would necessarily present a federal question.” 

Franchise Tax Bd., 463 U.S. at 19. 

If, on the other hand, the underlying coercive claim does not “arise under” federal

law, there is no federal question jurisdiction over the declaratory judgment cause of action. 

Republican Party of Guam v. Gutierrez, 277 F.3d 1086, 1090 (9th Cir. 2002). Moreover, if

the federal claim would arise only as a defense to a state-law cause of action, there is no

federal jurisdiction. Franchise Tax Bd., 463 U.S. at 16. 

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As indicated above, Mirant argues that the basis for original jurisdiction is § 301 of

the LMRA. “By its terms, [§ 301] confers federal subject-matter jurisdiction only over

“[s]uits for violation of contracts.” Textron Lycoming Reciprocating Engine Div., AVCO

Corp. v. United Auto., Aerospace, and Agr. Implement Workers of America, 523 U.S. 653,

656 (1998). “‘Suits for violation of contracts’ under § 301 are not suits that claim a contract

is invalid, but suits that claim that a contract has been violated.” Id. at 658.

In Textron, the union sought a declaratory judgment that its CBA with the employer

(Textron) was invalid, after Textron announced that it would subcontract out a substantial

volume of work, causing half the members of the union to lose their jobs. The union

asserted that Textron had fraudulently induced it to sign the agreement by concealing its

plans to subcontract work. The union did not allege, however, that Textron had ever

violated the terms of the CBA. The Supreme Court concluded that because the complaint

alleged no violation of the CBA, “neither we nor the federal courts below have subject

matter jurisdiction over this case under § 301(a) of the [LMRA].” Id. at 661-62. 

The Court explained further that “[t]his does not mean that a federal court can never

adjudicate the validity of a contract under § 301.” Id. at 657. For example, if, in a suit

alleging that the defendant violated the CBA, the defendant interposes as an affirmative

defense the allegation that the contract was invalid, or if a declaratory-judgment plaintiff

accused of violating a CBA asks the court to declare the agreement invalid, the federal

court can adjudicate the question of the contract’s validity. “But in these cases, the federal

court’s power to adjudicate the contract’s validity is ancillary to, and not independent of, its

power to adjudicate “[s]uits for violation of contracts.” Id. at 658.

Here, neither the plaintiffs’ claims in the complaint, nor the declaratory judgment

counterclaim, nor the “threatened coercive action” (the plaintiffs’ state law claims) can be

viewed as a claim that the CBA was violated by either Mirant or Local 1245. The court also

notes that Mirant did not allege federal question jurisdiction under 28 U.S.C. § 1331, but

only under LMRA § 301. Specific jurisdictional provisions such as § 301 are grants of

jurisdiction over cases in which the claimant is pressing a particular federal cause of action

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– in the case of § 301, it is a suit for violation of a contract between an employer and a

labor organization.

CONCLUSION

In accordance with the foregoing, the court GRANTS the motion to remand, DENIES

the motion for attorney’s fees, and GRANTS the motions to dismiss for lack of subject

matter jurisdiction.

IT IS SO ORDERED.

Dated: February 21, 2008 ______________________________

PHYLLIS J. HAMILTON

United States District Judge

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