Opinion ID: 1372750
Heading Depth: 2
Heading Rank: 1

Heading: A.2. Application of Arbaugh in the Sixth Circuit

Text: After oral argument in this case, this Court reexamined Bauer and its § 301 jurisprudence in light of the Arbaugh decision. Winnett v. Caterpillar, Inc., 553 F.3d 1000, 1004-07 (6th Cir.2009). In Winnett, this Court overruled the Bauer decision and held that the existence of a union contract is an element of Plaintiffs' merits claim, not a limit on federal subject-matter jurisdiction. Id. at 1007. In reaching this decision, the Winnett Court started with an examination of Congressional intent. Id. at 1005-06 ( Arbaugh now tells us to ask: Did Congress `clearly state[],' 546 U.S. at 515, 126 S.Ct. 1235, that the existence of a union contract is a jurisdictional prerequisite for a Section 301(a) claim?). In determining whether Congress intended a contract to be a jurisdictional prerequisite, the Court noted that the only reference to jurisdiction in § 301 was to personal jurisdiction and in that reference the statute had not impose[d] new barriers to federal courts, but had ease[d] access. Id. at 1006. Additionally, § 301 includes all of the prima facie elements of the cause of action in the jurisdiction-conferring provision. The Court reasoned that, if a contract is a jurisdictional prerequisite, then likely each other prima facie requirement in § 301 functions as a jurisdictional prerequisite. The Winnett Court was reluctant to conclude that Congress intended to create a cause of action that has no non-jurisdictional elements. Id. After finding no indication that Congress clearly state[d] that courts should treat a contract as jurisdictional, the Court went on to address the real-world considerations associated with treating a contract as jurisdictional. Id. This additional analysis after examining Congressional intent was drawn from the Arbaugh decision:  Arbaugh also tells us not to just look at labels but also pragmatically to consider the consequences of giving a jurisdictional label to an element of a cause of action. Id. The Winnett Court then pointed out that, when a district court finds a jurisdictional defect, the court must dismiss even meritorious pendent state-law claims, despite the time and resources the court and parties have expended on the case. Id. at 1007 (noting the wasteful inefficiencies on the parties or the courts). As directed by the Supreme Court in Arbaugh and the Winnett Court, we conclude that Congress did not clearly state[ ] an intent to treat the violation language as jurisdictional. See id. at 1005-06. Additionally, after examining the real-world considerations of labeling the violation language as jurisdictional, we find the district court's interpretation would wreak havoc. See id. at 1006. The Winnett Court has already determined that Congress did not intend the contract language in § 301 as jurisdictional. We agree and hold that Congress did not clearly state[ ] that courts should treat the violation language as jurisdictional for the same reasons identified by the Winnett Court. The language of § 301 suggests that a violation is not a prerequisite to jurisdiction: Suits for violation of contracts ... may be brought in any district court of the United States having jurisdiction of the parties.... 29 U.S.C. § 185(a) (emphasis added.) If we were to consider a violation a jurisdictional prerequisite, Congress would be requiring a district court to determine whether a violation had occurred before it could decide at the merits stage whether a violation had occurred. This cannot be the result intended by Congress with the use of the violation language. This conclusion is bolstered here, even more so than in Winnett, by the real-world considerations associated with labeling a violation as a jurisdictional prerequisite. Winnett, 553 F.3d at 1006. First, the LMRA gives the district court jurisdiction over [s]uits for violation of contracts. Section 301 does not limit jurisdiction to suits where a violation of contract has been established. The district court will consider the same set of underlying facts when deciding if there was a violation to support jurisdiction and when deciding if the Plaintiffs should ultimately succeed on the merits of their claim. Any merits-related fact-finding by a district court during a jurisdictional determination undercuts the jury's traditional role as the proper trier of contested facts. See Arbaugh, 546 U.S. at 514, 126 S.Ct. 1235 (citations omitted). Second, as both Winnett and Arbaugh noted, when a court lacks subject matter jurisdiction over a claim, it must immediately dismiss not just that claim but any pendent state-law claims as well  no matter how late in the case the district or appellate court identifies the jurisdictional defect. Winnett, 553 F.3d at 1007 (citing Arbaugh, 546 U.S. at 514, 126 S.Ct. 1235). For example, a case may go all the way to a jury trial on a § 301 claim and pendent state-law claims. If the jury finds that the state-law claims are meritorious but also that a plaintiff did not establish a violation of a labor contract, the court would be required to dismiss these meritorious state-law claims after expending considerable judicial resources on their adjudication. This required dismissal may impose ... wasteful inefficiencies on the parties or the courts. Id. These inefficiencies become exacerbated in the context of a § 301 action. In Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962), the Supreme Court addressed concurrent federal and state court jurisdiction over claims for a violation of a collective bargaining agreement. The Court held that state courts have concurrent jurisdiction over § 301 claims. Id. at 521-22, 82 S.Ct. 519 (We agree with the Supreme Judicial Court of Massachusetts that the courts of that Commonwealth had jurisdiction in this case, and we accordingly affirm the judgment before us.); see also, Valinski v. Detroit Edison, 197 Fed.Appx. 403, 407 (6th Cir.2006) (State courts have concurrent jurisdiction over § 301 claims, but must of course apply federal law.). If Plaintiffs' claim for breach of contract is dismissed for lack of jurisdiction, res judicata does not prevent re-litigation of the breach of contract claim in a state court with plenary jurisdiction. See 18A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 4436 (The basic rule that dismissal for lack of subject-matter jurisdiction does not preclude a second action on the same claim is well settled.). Accordingly, we hold that the district court erred in dismissing the Plaintiffs' claims for lack of subject-matter jurisdiction. [5]