Opinion ID: 2971666
Heading Depth: 4
Heading Rank: 2

Heading: “Workmen’s Compensation Laws”

Text: The next question is whether Michigan’s wrongful discharge cause of action for violating the antiretaliation public policy is itself a “workmen’s compensation law[].” If so, the claim would not be removable. As noted above, the federal question jurisdiction statute uses similar language as § 1445(c), providing that the district courts shall have original jurisdiction in actions “arising under the …laws …of the United States.” 28 U.S.C. § 1331 (emphasis added). Construing this language, the Supreme Court has held, “Federal common law as articulated in rules that are fashioned by court decisions are ‘laws’ as that term is used in § 1331.” Nat’l Farmers Union Ins. Co. v. Crow Tribe of Indians, 471 U.S. 845, 850 (1985) (citations omitted). Based on Nat’l Farmers, it might be argued that Congress intended § 1445(c), which prevents the removal of civil actions “arising under the workmen’s compensation laws of [a] State,” to reach not only statutory enactments of a state’s workmen’s compensation law, but also common law extensions of those enactments, such as through judicially-created exception to a state’s employment at-will doctrine for retaliation claims premised on a worker’s compensation statute. E.g., Thompson v. Cort Furniture Rental Corp., 797 F. Supp. 618, 621-22 (W.D. Tenn. 1992). According to this argument, but for the existence of the worker’s compensation statute, there would be no common law wrongful discharge action. Nearly 90 years ago, Justice Holmes, writing for the Supreme Court, addressed a similar argument and rejected it. In American Well Works, supra, a pump manufacturer sued a competitor in state court for libel and slander after the competitor allegedly made statements suggesting that the plaintiff’s pump infringed on the defendant’s pump and the defendant began to file lawsuits against parties who were using the plaintiff’s pump. 241 U.S. at 258. The defendant removed the case to federal court on the ground that the action arose under federal patent law. Id. The Court held that removal was improper, reasoning as follows: A suit for damages to business caused by a threat to sue under the patent law is not itself a suit under the patent law. And the same is true when the damage is caused by a statement of fact, – that the defendant has a patent which is infringed. What makes the defendants’ act a wrong is its manifest tendency to injure the plaintiff’s business; and the wrong is the same 3 Unpublished opinions of this Court are not binding authority, but nevertheless can be persuasive authority. Agnew v. BASF Corp., 286 F.3d 307, 310 n.3 (6th Cir. 2002) (citing E.E.O.C. v. Harbert-Yeargin, Inc., 266 F.3d 498, 518 (6th Cir. 2001)). No. 03-2081 Harper v. AutoAlliance Int’l, et al. Page 9 whatever the means by which it is accomplished. But whether it is a wrong or not depends upon the law of the state where the act is done, not upon the patent law, and therefore the suit arises under the law of the state. A suit arises under the law that creates the cause of action. The fact that the justification may involve the validity and infringement of a patent is no more material to the question under what law the suit is brought than it would be in an action of contract.… The state is master of the whole matter, and if it saw fit to do away with actions of this type altogether, no one, we imagine, would suppose that they still could be maintained under the patent laws of the United States. Id. at 259-60. Justice Holmes’s words clarify that, for a state common law cause of action to arise under a federal statute, there must be more than a relationship between the two. Moreover, just because the common law cause of action (e.g., libel or slander) would be eviscerated by the elimination of the statute on which the suit is premised (e.g., patent law), it does not follow that the cause of action arises under that statute. As a corollary, just because there is a “but for” relationship between Michigan’s worker’s compensation statute and the common law cause of action for retaliation in violation of public policy, it does not follow that the common law tort claim arises under that statute. As the Seventh Circuit opined in Spearman, “That workers’ compensation law is a premise of the tort does not mean that the tort ‘arises under’ the workers' compensation laws, any more than a state tort based on the violation of a federal safety standard ‘arises under’ that standard for purposes of the federal question jurisdiction in 28 U.S.C. § 1331.” Spearman, 16 F.3d at 725 (citation omitted); see also id. (“[I]f there were no copyright laws, there could be no dispute about who owns a copyright. Yet it is settled that a dispute about the ownership of a copyright arises under state rather than federal law.”) (citation omitted). After the Michigan legislature incorporated an anti-retaliation provision into the Worker’s Disability Compensation Act , the statute still failed to specify an administrative or judicial remedy for retaliation or the type of relief that a plaintiff may obtain. The clear implication of this fact is that the legislature intended to express its approval of individuals using the judicially-crafted wrongful discharge cause of action to remedy retaliatory discharges. Phillips, 531 N.W. 2d at 148; Delke, 460 N.W.2d at 327. Accordingly, whether a retaliatory discharge is a wrong under Michigan law does not depend upon the worker’s compensation statute, but upon the Michigan courts’ recognition of an exception to the employment at-will doctrine for discharges that violate public policy. If the Michigan courts ceased to permit public policy wrongful discharge actions generally, the remedy for retaliation for exercising rights under the worker’s compensation statute would disappear, unless the courts subsequently recognized an implied cause of action for retaliation directly under the Worker’s Disability Compensation Act . An independent statutory cause of action for retaliation also might arise if the legislature amended the Act so as to supersede the common law claim by creating an exclusive administrative mechanism for adjudicating these claims and/or circumscribing the available remedies. Under current Michigan law, however, the cause of action for retaliatory discharge in violation of the public policy to protect workmen’s compensation claimants is not one of Michigan’s “workmen’s compensation laws,” but merely one iteration of a common law tort that potentially applies to a myriad of different wrongs in the employment setting. Some courts have adopted a test for removability of a workmen’s compensation retaliation claim that focuses primarily on whether (1) the claim evades the state’s summary administrative proceedings for benefit claims and (2) a prevailing plaintiff is entitled to tort-based remedies. In Spearman, the Seventh Circuit discussed the legislative history of § 1445(c) which notes that “[n]early all of the State statutes on workmen’s compensation provide summary proceedings for the expeditio[u]s and inexpensive settlement of claims by injured workmen against the employer.” 16 F.3d at 724 (quoting S. REP. NO. 1830 (1958) (hereafter “LEGISLATIVE HISTORY”), reprinted in 1958 U.S.C.C.A.N. 3099, 3106). Based on the legislative No. 03-2081 Harper v. AutoAlliance Int’l, et al. Page 10 history, the court reasoned that “[a] fault-based regime with common law damages is not a ‘workmen’s compensation law[.]’” Id. at 725.4 The court then held that a tort-based wrongful discharge claim premised on Illinois’ worker’s compensation law, but that does not utilize the statute’s enforcement mechanism or limited remedial scheme, is not a “workmen’s compensation law” and, therefore, is removable under § 1445(c). Id. at 724-26. It is well-established that, when interpreting statutes, courts should not “resort to the legislative history” if the statutory language is straightforward. United States v. Gonzales, 520 U.S. 1, 6 (1997). Here, the term “workmen’s compensation laws” is straightforward. Such laws establish a scheme for compensating employee’s injured on the job, but the extent and character of that scheme varies by state. Indeed, Congress was aware that state workmen’s compensation schemes were not uniform when it enacted § 1445(c), noting that, as of 1958, “[n]early” all of the states had administrative schemes in place for handling compensation claims. LEGISLATIVE HISTORY, 1958 U.S.C.C.A.N. at 3106 (emphasis added). Congress knew that the states might afford, then or in the future, different kinds of remedies and/or mechanisms for handling these claims. Thus, contrary to Spearman’s conclusion, the legislative history does not necessarily reveal a congressional intent to permit removal whenever a plaintiff alleges a faultbased claim and seeks to recover more than lost wages or medical benefits stemming from a personal injury. What is clear in the legislative history is that Congress enacted § 1445(c) to reduce congestion in the federal district courts. Horton v. Lib. Mut. Ins. Co., 367 U.S. 348, 350-51 (1961); see also LEGISLATIVE HISTORY, 1958 U.S.C.C.A.N. at 3105 (“In a number of States the workload of the Federal courts has greatly increased because of the removal of workmen’s compensation cases from the State courts to the Federal courts.”). An interpretation of § 1445(c), such as the Seventh Circuit’s, which automatically deems tortbased retaliation claims to be removable appears more likely to expand the federal courts’ dockets than an approach that deems such claims removable only if their existence is not dependent upon a remedial scheme set forth in a worker’s compensation statute. Congress easily could have used more specific language to prohibit the removal of only non-benefit, non-fault-based, claims, but it did not.5 Thus, rather than resorting to an ambiguous legislative history, the more logical course is to focus on whether the existence of the worker’s compensation retaliation claim is necessarily dependent upon the administrative mechanisms and/or remedies of the applicable worker’s compensation statute. Cf. Humphrey v. Sequentia, Inc., 58 F.3d 1238, 1245-46 (8th Cir. 1995) (holding that a claim for retaliatory discharge premised on Missouri’s worker’s compensation law “arises under” that law for purposes of § 1445(c) because anti-retaliation provision also authorized the filing of a civil action for damages; the anti-retaliation right established by the Missouri worker’s compensation statute “is an essential element of plaintiff’s claim”). For the reasons discussed above, such retaliation claims under Michigan law are removable 4 After examining the history of workers’ compensation laws, the Fourth Circuit concluded that, at the time of § 1445(c)’s enactment, “the typical state act included the following features: (1) negligence and fault of the employer and employee were immaterial to recover, (2) common law suits against the employer were barred, (3) medical expenses were capped at a percentage of the employee's wage, (4) an administrative agency ran the system with relaxed rules of procedure to facilitate prompt compensation, and (5) state court review of agency decisions occurred on a deferential basis.” Arthur v. E.I. DuPont de Nemours & Co., 58 F.3d 121, 125 (4th Cir. 1995.) Similar to the Seventh Circuit’s definition, the Fourth Circuit held that “the ordinary (shorthand) meaning of ‘workmen’s compensation laws’ in 1958 was this: a statutorily created insurance system that allows employees to receive fixed benefits, without regard to fault, for work-related injuries.” Id. 5 Cf. Horton, 367 U.S. at 352 (holding that the plain language of the diversity jurisdiction statute permitted a workmen’s compensation claim to be filed as an original action in federal court, even though Congress clearly intended to prohibit the removal of such claims: “Congress used language specifically barring removal of such cases from state to federal courts and at the same time left unchanged the old language which just as specifically permits civil suits to be filed in federal courts in cases where there are both diversity of citizenship and the prescribed jurisdictional amount. In this situation we must take the intent of Congress with regard to the filing of diversity cases in Federal District Courts to be that which its language clearly sets forth. Congress could very easily have used language to bar filing of workmen’s compensation suits by the insurer as well as removal of such suits, and it could easily do so still.”) No. 03-2081 Harper v. AutoAlliance Int’l, et al. Page 11 because their existence is not necessarily dependent upon the procedures or remedies provided by the Worker’s Disability Compensation Act. 3. Supplemental Jurisdiction over Harper’s State Law Claims. After determining that it had subject matter jurisdiction over Harper’s Title VII claim, the district court chose to exercise supplemental jurisdiction over Harper’s state law claims and denied Harper’s first motion to remand. We hold that the district court did not abuse its discretion. In any action in which the district court has original jurisdiction, it also has “supplemental jurisdiction over all other claims that are so related to claims in the action within such jurisdiction that they form part of the same case or controversy.” 28 U.S.C. § 1367(a). Claims form part of the same case or controversy when they “derive from a common nucleus of operative facts.” Ahearn v. Charter Township of Bloomfield, 100 F.3d 451, 454-55 (6th Cir. 1996). Harper’s claim under Michigan’s Elliot-Larson Civil Rights Act, MICH. COMP. LAWS § 37.2701, like his Title VII claim, was premised on the identical allegation that Defendants retaliated against him for filing a complaint of race discrimination with the EEOC. Similar to the Title VII retaliation claim, Harper’s abuse of process claim and his claim of retaliation for filing a worker’s compensation claim related to facts precipitating or arising out of his termination; the complaint alleged that the “animus and malice” that led to his retaliatory termination also motivated Defendant Kelly and Childress’s decision to seek personal protection orders against Harper. Because these claims shared the same nucleus of operative facts, the district court did not abuse its discretion in exercising supplemental jurisdiction over them. After the district court denied Harper’s first motion to remand, Harper amended his complaint to eliminate the Title VII claim, leaving only the state law claims. Defendants argue that, even after Harper dismissed his Title VII claim, the district court had original federal question jurisdiction because Harper’s state law claims were pre-empted by § 301 of the LMRA. Defendant Kelly argues that Harper’s retaliatory discharge claims require interpretation of the applicable collective bargaining agreement, in particular, an assessment of whether Defendant Kelly mishandled his grievance over his termination. According to Kelly, “[s]uch an assessment requires interpretation of the agreement.” We disagree. It is undisputed that theft is a dischargeable offense under the CBA and that Harper had certain grievance rights thereunder. But Harper’s retaliation claims were not “inextricably intertwined” with the meaning of these CBA provisions. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213 (1985) (holding that question of whether a state law tort claim was pre-empted by the LMRA focused on “whether evaluation of the tort claim is inextricably intertwined with consideration of the terms of the labor contract”). Harper needed to prove only that the ostensible reason for his termination – theft of a co-worker’s cell phone – was a pretext for retaliation for exercising his rights under the anti-discrimination laws and in contravention of Michigan’s public policy against retaliation for exercising worker’s compensation rights. At most, the terms of the CBA were relevant background for Harper’s termination. For these reasons, Harper’s state law claims for retaliation, which were independent of the CBA, were not pre-empted by § 301 of the LMRA. See Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 407 (1988) (holding that the factual questions underlying the tort of retaliatory discharge for filing a worker’s compensation claim, including whether the employer had a nonretaliatory reason for the discharge, would not “require[] a court to interpret any term of a collective-bargaining agreement” and would “not turn on the meaning of any provision of a collective-bargaining agreement”); Smolarek v. Chrysler Crop., 879 F.2d 1326, 1331, 1334 (6th Cir. 1989) (en banc) (holding that plaintiff’s retaliatory discharge claim under Michigan law was not preempted because “the state-law tort of retaliatory discharge creates rights independent of those established by the collective bargaining agreement”; further holding that discrimination claim was not preempted even though the employer was likely to rely on provisions of the CBA in its defense); Jones, 931 F.2d at 1090 (“Roadway may have had other reasons, even reasons which No. 03-2081 Harper v. AutoAlliance Int’l, et al. Page 12 the CBA justified, for dismissing Jones. But if retaliation was a factor, then for the purposes of Jones’… claim [for retaliation in violation of Texas’ worker’s compensation law], an interpretation of the CBA is not inextricably intertwined with the state-law claim.”). It follows that no federal question remained in the case once Harper dismissed his Title VII claim. The remaining question is whether the district court properly retained supplemental, or “pendent,” jurisdiction over Harper’s remaining state law claims. “Generally, ‘if the federal claims are dismissed before trial, ... the state claims should be dismissed as well.’” Taylor v. First of Am. Bank-Wayne, 973 F.2d 1284, 1287 (6th Cir. 1992) (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966)) (other citation omitted). Dismissal is not mandatory, however, because supplemental jurisdiction “‘is a doctrine of discretion, not of plaintiff’s right.’” Id. (quoting Baer v. R & F Coal Co., 782 F.2d 600, 603 (6th Cir.1986) (quoting Gibbs, 383 U.S. at 726)) (other citations omitted.) See also Rosado v. Wyman, 397 U.S. 397, 405 (1970) (“We are not willing to defeat the commonsense policy of pendent jurisdiction – the conservation of judicial energy and the avoidance of multiplicity of litigation – by a conceptual approach that would require jurisdiction over the primary claim at all stages as a prerequisite to resolution of the pendent claim.”). Harper argues that the filing of his amended complaint, without the Title VII claim, deprived the district court of subject matter jurisdiction over his remaining state law claims because the amendment “related back” to the filing date of his first complaint, thereby depriving the court of original federal question jurisdiction (and thus supplemental jurisdiction) from the inception of the case. See FED. R. CIV. P. 15(c) (providing that “[a]n amendment of a pleading relates back to the date of the original pleading” under certain circumstances). Harper’s argument is wrong as a matter of law. The existence of subject matter jurisdiction is determined by examining the complaint as it existed at the time of removal. See Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 758 (6th Cir. 2000) (holding that the district court was not divested of subject matter jurisdiction upon the dismissal of the plaintiff’s federal claims) (citing In re Carter, 618 F.2d 1093, 1101 (5th Cir. 1980) for the following proposition: “It is a fundamental principle of law that whether subject matter jurisdiction exists is a question answered by looking to the complaint as it existed at the time the petition for removal was filed.... When a subsequent narrowing of the issues excludes all federal claims, whether a pendant [sic] state claim should be remanded to state court is a question of judicial discretion, not of subject matter jurisdiction.” (emphasis added; citations omitted in Long)). Accordingly, because the district court’s jurisdiction originally was premised on a federal claim and that claim subsequently was dismissed, remand to the state court was a matter of discretion. “‘A trial court must balance the interests ... when deciding whether to resolve a pendent state claim on the merits.’” Id. (quoting Aschinger v. Columbus Showcase Co., 934 F.2d 1402, 1412 (6th Cir.1991) (quoting Province v. Cleveland Press Publishing Co., 787 F.2d 1047, 1055 (6th Cir.1986)). “A district court should consider the interests of judicial economy and the avoidance of multiplicity of litigation and balance those interests against needlessly deciding state law issues.” Landefeld, 994 F.2d at 1182 (quoting Aschinger, 934 F.2d at 1412). The court also may consider whether the plaintiff has used “manipulative tactics” to defeat removal and secure a state forum, such as “simply by deleting all federal-law claims from the complaint and requesting that the district court remand the case.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 357 (1988) (“If the plaintiff has attempted to manipulate the forum, the court should take this behavior into account in determining whether the balance of factors to be considered under the pendent jurisdiction doctrine support a remand in the case.”). In Taylor, this Court affirmed the district court’s retention of supplemental jurisdiction under the following facts: No. 03-2081 Harper v. AutoAlliance Int’l, et al. Page 13 Here, the interests of judicial economy and fairness both favored the district court’s retention of jurisdiction. First, this case had been on the district court’s docket for almost two years. Second, the parties had completed discovery and compiled a voluminous record. Third, plaintiffs’ federal claim was not abandoned until the filing of the amended complaint. Fourth, an extensively briefed summary judgment motion was ripe for a ruling by the district court. Thus, as remand could have wasted judicial resources and resulted in additional delay, the district court’s discretion was not abused in denying the motion to remand. Taylor, 973 F.2d at 1288 (emphasis in original). Taylor is virtually on point: This case had been on the district court’s docket for a substantial amount of time (11 months); the parties had completed discovery; Harper did not abandon his federal claim until he filed his amended complaint; and Defendants’ summary judgment motions were ripe for decision. In addition, the court had made several substantive rulings, including on Harper’s initial motion to remand, Harper’s motion for protective order, and Defendant AAI and Childress’s motion to compel an independent medical examination. Thus, the district court was familiar with the facts of the case and already had invested significant time in the litigation. See J.A. 103 (“This matter has been pending on the court’s docket for nearly one year, court-supervised discovery has been completed, the court has gained significant insight regarding this case through earlier motions and communications with counsel, and two summary judgment motions filed by Defendants are fully briefed and ripe for decision.”). There also was evidence that Harper was attempting to engage in forum manipulation. It was only after the district court had denied his first motion to remand that Harper dropped his Title VII claim. Then, Harper did not immediately move for remand, but instead proceeded with his remaining claims in federal court for almost six months more. Only after discovery had been completed, the dispositive motion deadline had passed, and Harper was faced with dismissal of all of his claims on summary judgment, did he again seek remand to the state court. We agree with the district court that “[s]uch timing appears suspicious and raises questions about Plaintiff’s motives in seeking remand.” Accordingly, we hold that the district court did not abuse its discretion in retaining supplemental jurisdiction over Harper’s state law claims.