Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01081/USCOURTS-caed-2_05-cv-01081-1/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

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

SUTTER HEALTH, a California

Nonprofit Public Benefit

Corporation, et al.,

NO. 2:05-CV-1081 MCE-PAN

Plaintiffs,

v. MEMORANDUM AND ORDER

UNITE HERE, an Unincorporated

Association, and DOES 1

through 100,

Defendants.

----oo0oo----

The present action concerns an allegedly defamatory postcard

written and distributed by Defendant UNITE HERE (“UNITE”), an

unincorporated labor union operating in the State of California. 

Plaintiffs, Sutter Health and Sutter hospitals (collectively

“Sutter”), sued UNITE in Placer County Superior Court for damages

and injunctive relief. UNITE removed to this Court based on

federal question jurisdiction. Sutter now moves to remand this

action back to the Placer County Superior Court on the grounds

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Because oral argument would not be of material assistance, 1

this matter was deemed suitable for decision without oral

argument. E.D. Local Rule 78-230(h).

Some of the Sutter facilities contract with a company 2

called Golden State Services, Inc. However, Golden State is

entirely owned and operated by Angelica.

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that this Court lacks subject matter jurisdiction pursuant to 28

U.S.C. section 1447(c). Sutter further seeks an award of costs

and attorney fees.

For the reasons set forth below, Sutter’s motion to remand

is GRANTED. However, Sutter’s request for costs and attorney 1

fees is DENIED.

BACKGROUND

Sutter operates several hospitals throughout Northern

California. Most or all of its facilities have contracted with

Angelica Textile Services, Inc. (“Angelica”) to receive linen 2

services. In April 2005, Sutter renewed all but one of its linen

service contracts with Angelica.

UNITE represents employees at the Angelica and Golden State

facilities in Antioch, Turlock, and Sacramento, California. 

Recently, UNITE and Angelica became embroiled in a labor dispute

for reasons not material to this action. On February 18, 2005,

UNITE sent a letter to Sutter, allegedly requesting a meeting

with Sutter representatives to discuss UNITE’s dispute with

Angelica. Sutter declined UNITE’s request.

Soon thereafter, UNITE mailed an allegedly defamatory

postcard to “past, present, and prospective” Sutter patients

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throughout Northern California. The following are among the

allegedly defamatory statements within the postcard:

“You may be bringing home more than your baby if you

deliver at a Sutter birthing center. . . . Reports

have surfaced that Angelica, the laundry service

utilized by Sutter, does not ensure that ‘clean’ linens

are free of blood, feces, and harmful pathogens. . . . 

Protect your newborn. Choose your birthing center

wisely. . . .”

Pls’ Compl., ¶ 17 (emphasis in original). UNITE admits that it

distributed the postcard. Defs’ Answer, ¶ 18. On April 28,

2005, Sutter filed suit against UNITE alleging four state-law

claims: (1) libel, (2) trade libel, (3) intentional interference

with prospective business economic relations (“business

interference”), and (4) unfair business practices (“UCL”). UNITE

seeks to have these claims adjudicated in this federal forum,

while Sutter seeks to have this action remanded to state court

where it originally brought suit.

STANDARD

A defendant may remove any civil action from state court to

federal district court if the district court has original

jurisdiction over the matter. 28 U.S.C. § 1441(a). Generally,

district courts have original jurisdiction over civil actions in

two instances: (1) where there is complete diversity between the

parties, or (2) where a federal question is presented in an

action arising under the Constitution, federal law, or treaty. 

28 U.S.C. §§ 1331 and 1332. 

The removing party bears the burden of establishing federal

jurisdiction. Ethridge v. Harbor House Rest., 861 F.2d 1389,

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While UNITE does not contend that Sutter’s claims are 3

necessarily federal in character, the Court acknowledges its

obligation to raise the issue sua sponte to determine whether

jurisdictional requirements are met. See Grupo Dataflux v. Atlas

Global Group, L.P., 541 U.S. 567, 593 (2004). The Court has

analyzed this exception to the well-pleaded complaint rule and

has concluded that Sutter’s claims are not federal in character. 

Accordingly, this exception is inapplicable here.

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1393 (9th Cir. 1988). Furthermore, courts construe the removal

statute strictly against removal. Shamrock Oil & Gas Corp. v.

Sheets, 313 U.S. 100, 108 (1941); Gaus v. Miles, Inc., 980 F.2d

564, 566 (9th Cir. 1992) (citations omitted). If there is any

doubt as to the right of removal in the first instance, remand

must be granted. See Gaus, 980 F.2d at 566. Therefore, if it

appears before final judgment that a district court lacks subject

matter jurisdiction, the case shall be remanded to state court. 

28 U.S.C. § 1447(c).

The district court determines whether removal is proper by

first determining whether a federal question exists on the face

of the plaintiff’s well-pleaded complaint. Caterpillar, Inc. v.

Williams, 482 U.S. 386, 392 (1987). If a complaint alleges only

state-law claims and lacks a federal question on its face, then

the federal court must grant the motion to remand. See 28 U.S.C.

§ 1447(c); Caterpillar, 482 U.S. at 392. Nonetheless, there are

rare exceptions when a well–pleaded state-law cause of action

will be deemed to arise under federal law and support removal. 

They are “ . . . (1) where federal law completely preempts state

law, (2) where the claim is necessarily federal in character, or

(3) where the right to relief depends on the resolution of a

substantial, disputed federal question.” ARCO Envtl. 3

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Remediation, L.L.C. v. Dep’t of Health & Envtl. Quality of Mont.,

213 F.3d 1108, 1114 (9th Cir. 2000) (internal citations omitted).

If the district court determines that removal was improper,

then the court may also award the plaintiff costs and attorney

fees accrued in response to the defendant’s removal. 28 U.S.C. §

1447(c). The court has broad discretion to award costs and fees

whenever it finds that removal was wrong as a matter of law. 

Balcorta v. Twentieth-Century Fox Film Corp., 208 F.3d 1102, 1106

n.6 (9th Cir. 2000).

ANALYSIS

UNITE removed to this Court pursuant to 28 U.S.C. sections

1441 and 1446. UNITE advances two alternative theories upon

which, it argues, federal question jurisdiction exists. First,

UNITE contends that Sutter’s business interference and UCL

claims, while seemingly state-law claims, are completely

preempted by federal labor law. According to UNITE, their

postcard campaign constituted a “secondary boycott” against

Sutter and is governed exclusively by 29 U.S.C. sections 187

(“303”) and 158(b)(4) (“8(b)(4)”) of the federal Labor Management

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Section 8(b)(4) provides, in part: “It shall be an unfair 4

labor practice for a labor organization . . . to threaten,

coerce, or restrain any person engaged in commerce or in an

industry affecting commerce, where in either case an object

thereof is . . . forcing or requiring any person to . . . cease

doing business with any other person.” 29 U.S.C. § 158(b)(4)(B). 

Section 303 provides, in part: “Whoever shall be injured in his

business or property by reason or [sic] any violation of [section

8(b)(4)] . . . may sue therefor in any district court of the

United States . . . or in any other court having jurisdiction of

the parties.” 28 U.S.C. § 187(b).

UNITE admits that Sutter’s libel claims do not create a 5

federal question; however, they argue that this Court has

supplemental jurisdiction over these claims, pursuant to 28

U.S.C. § 1367.

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Relations Act of 1947 (“LMRA”). Alternatively, UNITE argues 4

that Sutter’s business interference and UCL claims arise under

federal law because they necessarily raise a disputed,

substantial federal issue.5

United States Supreme Court and Ninth Circuit precedent

indicate that Sutter’s state-law claims do not create a federal

question because they do not arise under federal law. See Linn

v. United Plant Guard Workers, Local 114, 383 U.S. 53, 60 (1966);

Wayne v. DHL Worldwide Express, 294 F.3d 1179, 1183-84 (9th Cir.

2002). While the quarrel between UNITE and Sutter may

technically be called a labor dispute, that characterization

alone does not automatically invoke federal labor law. At most,

sections 8(b)(4) and 303 of the LMRA may provide UNITE with a

defense against Sutter’s allegations. However, a suit may not be

removed to federal court based solely on a federal defense. 

Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987). As

delineated below, UNITE’s failure to establish federal

jurisdiction mandates that Sutter’s motion to remand be granted.

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1. Well-Pleaded Complaint Rule

UNITE contends that Sutter’s business interference and UCL

claims are completely preempted as secondary boycott activity

governed by the LMRA. Sutter rebuts that it has not raised any

claims subject to the LMRA. Rather, Sutter urges that it is

entitled to rely on the well-pleaded complaint rule and have its

wholly state-law claims adjudicated in state court. Sutter

further argues that while section 185(a) (“301(a)”) of the LMRA

does completely preempt, section 303 does not. This Court

agrees.

For nearly a century, the well-pleaded complaint rule has

governed removal actions. See Aetna Health, Inc. v. Davila, 542

U.S. 200, 124 S.Ct. 2488, 2494 (2004); Franchise Tax Board of

Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1,

9-10 (1983); Louisville & Nashville R.R. Co. v. Mottley, 211 U.S.

149, 152 (1908). The rule states that if a federal question is

not presented on the face of the plaintiff’s complaint, then the

action cannot be removed to federal court. Franchise Tax Board,

463 U.S. at 10-11.

Unlike state courts, federal courts are courts of limited

jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511

U.S. 375, 377 (1994). Thus, the well-pleaded complaint rule

operates to avoid upending federalism and creating serious

jurisdictional conflicts between federal and state courts. 

Franchise Tax Board, 463 U.S. at 9-10.

In the present action, Sutter likely could have raised a

federal question by alleging a section 303 unfair labor practice

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claim. See San Antonio Cmty. Hosp. v. S. Cal. Dist. Council of

Carpenters, 125 F.3d 1230, 1234-35 (9th Cir. 1997) (in federal

court, plaintiff alleged federal section 303 claim for illegal

secondary boycott with state law-claims of libel and business

interference). Nonetheless, Sutter chose not to avail itself of

that remedy. Instead, it chose to seek redress in a state forum

as it is legally permitted to do.

The well-pleaded complaint rule “makes the plaintiff the

master of the claim.” Caterpillar, Inc. v. Williams, 482 U.S.

386, 392 (1987). Thus, Sutter successfully avoided raising a

federal question by relying exclusively on California state law. 

See Id. Absent an exception to this rule, the Court must remand

this action as no federal question is presented on the face of

Sutter’s complaint.

2. Exceptions to the Well-Pleaded Complaint Rule

a. Complete Preemption

UNITE contends that sections 8(b)(4) and 303 of the LMRA

completely preempt any state-law actions concerning secondary

labor activity. According to UNITE, Congress intended federal

labor law to provide the exclusive remedy for parties injured by

secondary labor activity. Because its postcard campaign against

Sutter is a secondary boycott, UNITE reasons, Sutter’s business

interference and UCL claims are completely preempted and must be

heard in this federal forum. We disagree.

As explained above, the Supreme Court has recognized the

complete preemption doctrine as an exception to the well-pleaded

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complaint rule. Pursuant to this doctrine, a wholly state-law

claim can still present a federal question where Congress has

intended for a particular federal statute to provide the

exclusive cause of action, procedures, and remedies for the claim

asserted. Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 9 n. 5

(2003). Complete preemption converts a state-law claim into a

federal claim, allowing the claim to be removed while avoiding

the scythe of the well-pleaded complaint rule. See Caterpillar,

Inc. v. Williams, 482 U.S. 386, 393 (1987).

i. Complete Preemption Under Section 301(a) Only

Contrary to UNITE’s position, the Supreme Court has

clarified that because complete preemption disturbs federalism by

replacing state law with federal law, courts should find complete

preemption only when the federal statute has “‘extraordinary’

[preemptive force].” Id., citing Metro. Life Ins. Co. v. Taylor,

481 U.S. 58, 65 (1987); see also ARCO Envtl. Remediation, L.L.C.

v. Dep’t of Health and Envtl. Quality of Mont., 213 F.3d 1108,

1114 (9th Cir. 2000). While the Supreme Court has found such

extraordinary preemptive force with respect to section 301(a) of

the LMRA, it has not done so with section 303. See Avco Corp. v.

Aero Lodge No. 735, 390 U.S. 557, 559-60 (1968).

The Supreme Court has explained that section 301(a)

completely preempts state-law claims because the statute itself

limits to federal fora private remedies for collective bargaining

agreement violations. Id. at 559-60, 561-62; see 29 U.S.C. §

185(a). The Court has further clarified that Congress, under its

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commerce clause power, intended section 301(a) to exclusively

occupy the field of labor concerning collective bargaining

agreements. See Franchise Tax Board of Cal. v. Constr. Laborers

Vacation Trust for S. Cal., 463 U.S. 1, 23 (1983).

Since Avco, the Supreme Court and the Ninth Circuit have

expressly limited complete preemption under the LMRA to disputes

arising from collective bargaining agreements under section

301(a). See Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 7-8

(2003); Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987);

Wayne v. DHL Worldwide Express, 294 F.3d 1179, 1183-84 (9th Cir.

2002). No collective bargaining agreements are implicated in the

present action, and the Court finds no authority to extend the

complete preemption doctrine to secondary boycotts.

ii. Ordinary Preemption, Not Complete Preemption

UNITE relies on the Supreme Court ruling in Local 20,

Teamsters, Chauffeurs & Helpers Union v. Morton, 377 U.S. 252

(1964) to argue that Congress intended the LMRA to occupy the

entire field of secondary labor activity. In Morton, the

defendant union persuaded three of the plaintiff’s customers and

suppliers to stop doing business with the plaintiff during a

labor dispute. The plaintiff sued in federal district court

alleging both section 303 violations and state law violations. 

Overturning the district court’s finding for the employer, the

Supreme Court ruled that where federal and state law conflict

regarding secondary labor activities, federal law preempts. 

Morton, 377 U.S. at 259-60, 261.

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Morton is a classic case of ordinary, or conflict,

preemption between federal and state law and does little to

advance UNITE’s argument that complete preemption should apply

here. In fact, conflict preemption merely allows defendants to

invoke a defense under federal law that preempts a conflicting

state law claim. Caterpillar, 482 U.S. at 392; ARCO, 213 F.3d at

1114. These two preemption doctrines must be separated, and

UNITE does a poor job of it. Furthermore, Morton was decided

four years prior to Avco, wherein the Court introduced the

complete preemption doctrine. As a result, Morton clearly does

not stand for the proposition advanced by UNITE.

UNITE also contends that the Ninth Circuit recently ruled

that section 303 completely preempts state-law economic

interference claims in San Antonio Cmty. Hosp. v. S. Cal. Dist.

Council of Carpenters. 125 F.3d 1230 (1997). In San Antonio,

the defendant union was embroiled in a labor dispute with a

construction company hired to build a hospital wing for the

plaintiff. During a secondary boycott, the union displayed a

large banner outside the hospital that read, “THIS MEDICAL

FACILITY IS FULL OF RATS.” The hospital filed suit in federal

district court, alleging libel, trade libel, and intentional

interference with economic advantage under California law, as

well as a federal claim for unlawful secondary boycott under

section 303. The district court granted a preliminary injunction

in favor of the hospital.

On appeal, the Ninth Circuit affirmed, but stated that the

“interference with prospective economic advantage and contractual

rights claims are preempted by section 303 of the LMRA.” Id. at

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1235. Based on San Antonio, UNITE contends that Sutter’s similar

business interference and UCL claims are completely preempted. 

However, this Court does not agree with UNITE’s reading of San

Antonio.

The issue before the San Antonio court was whether the

remedy sought under plaintiff’s state-law business interference

claims, which allow for injunctive relief, conflicted with its

section 303 claim, which does not provide for injunctive relief. 

Id. Thus, the court found conflict preemption under section 303,

but did not discuss complete preemption. As is the case with the

Morton decision, San Antonio deals with conflict preemption

rather than complete preemption and is equally inapposite to the

case at bar.

iii. Statutory Construction and Legislative Intent

Section 303 provides that a person’s ability to sue in

federal court for illegal secondary labor activity is “ . . .

subject to the limitations and provisions of section [301] . . .”

regarding suits by and against labor unions. 29 U.S.C. § 187. 

UNITE argues that this statutory link between sections 301 and

303 extends the complete-preemptive force behind section 301 to

section 303. However, UNITE reads the statute too broadly.

The limitations and provisions in section 301 act to: (a)

grant federal district courts original jurisdiction over suits

regarding contract violations; (b) make unions liable for the

acts of their agents, give unions the right to sue for its

employees, and relieve individual union members from liability

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for judgments against the union; (c) define personal jurisdiction

over unions; (d) describe service of process requirements; and

(e) define who is an agent of a union. A plain reading of these

provisions reveals that none of them extend complete preemption

to section 303. Rather, they define many aspects of suits

concerning unions without conferring any special grant of

jurisdiction.

Unlike section 301, section 303 has scant legislative

history. The little historical guidance that does exist fails to

indicate any Congressional intent that sections 8(b)(4) and 303

be the exclusive remedy for persons injured by secondary labor

activities. Accordingly, there is no authority for this Court to

extend the reach of the complete preemption doctrine, and we

decline to do so.

b. Claims Raise No Substantial Federal Question

UNITE contends that the federal government’s very strong

interest in adjudicating secondary boycott claims implicates a

substantial federal question, under the third exception to the

well-pleaded complaint rule. However, UNITE’s argument is

baseless because section 303 grants concurrent jurisdiction to

both federal and state courts over secondary boycott claims. See

29 U.S.C. § 187. If Congress had a strong interest in

adjudicating section 303 claims, it would have limited

jurisdiction to federal fora, as it did in section 301(a). Thus,

this exception to the well-pleaded complaint rule does not apply

and UNITE fails to establish a basis for removal.

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4. Costs and Attorney Fees.

Because UNITE’s removal was improper as a matter of law, the

Court can consider whether to award costs and attorney fees to

Sutter. “An 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). Congress gave

the federal district courts wide discretion to award costs and

fees when it amended § 1447(c) in 1988. Courts need not find bad

faith on the part of the removing party, but may award costs

whenever it is found that the court lacks subject matter

jurisdiction. However, even if it is found that removal is wrong

as a matter of law, awarding fees and costs may be inappropriate

where the removal was “fairly supportable.” Balcorta v.

Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1106 n.6 (9th

Cir. 2000) (internal citation omitted).

UNITE based its argument for removal on a tortured reading

of Supreme Court and Ninth Circuit precedent, citing scores of

cases outside of the Ninth Circuit. However, the Court

understands that Supreme Court and Ninth Circuit precedent

surrounding sections 303 and 8(b)(4) can be complicated and

somewhat contradictory. Since removal under section 303 is

fairly supportable, this Court declines to award Sutter its costs

and fees incurred as a result of opposing this removal action.

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CONCLUSION

Based on the foregoing, this Court GRANTS Plaintiffs’ motion

to remand. The Court DENIES Plaintiffs’ request for an award of

costs and attorney fees.

IT IS SO ORDERED.

DATED: August 10, 2005

_____________________________

MORRISON C. ENGLAND, JR

UNITED STATES DISTRICT JUDGE

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