Opinion ID: 376851
Heading Depth: 1
Heading Rank: 3

Heading: Propriety of the Remand Order

Text: 14 Although our notion of fair play is seriously offended when a party seeks removal of a case to a federal court, permits it to be tried and to proceed to judgment, and seeks a remand order only when the judgment turns out to be an unfavorable one, if the asserted ground for remand is the federal court's lack of subject matter jurisdiction, the concepts of equity, waiver, and estoppel are inapplicable. The subject matter jurisdiction of federal courts is limited by the Constitution and the Congress, and cannot be expanded by judicial interpretation or by the acts or consent of the parties to a case. American Fire & Casualty Co. v. Finn, 341 U.S. 6, 17-18, 71 S.Ct. 534, 541-542, 95 L.Ed. 702 (1951); Amco Construction Co. v. Mississippi State Building Comm'n, 602 F.2d 730, 733 (5th Cir. 1979). 15 The district court noted in its remand order that the requirements for diversity jurisdiction were lacking because Carter was a citizen of Georgia and the union, having members of Georgia citizenship, was deemed to be a citizen of that state under United Steelworkers of America v. R. H. Bouligny, Inc., 382 U.S. 145, 146-47, 86 S.Ct. 272, 273, 15 L.Ed.2d 217 (1967). Federal question jurisdiction therefore provides the only basis for removal of this case. The basic federal question statute is 28 U.S.C. § 1441(b), which provides: 16 Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. 17 For a case to arise under one of the stated sources of federal law, a right or immunity created by one of those sources must be an element, and an essential one, of the plaintiff's cause of action. . . . (That) right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another. Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936) (citations omitted). The federal controversy must be disclosed upon the face of the complaint, unaided by the answer or by the petition for removal. Id. at 113, 57 S.Ct. at 98; see also Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908); Tennessee v. Union & Planters' Bank, 152 U.S. 454, 14 S.Ct. 654, 38 L.Ed.2d 511 (1894). On the other hand, the accepted rule in this circuit is that upon removal the removal court should inspect the complaint carefully to determine whether a federal claim is necessarily presented, even if the plaintiff has couched his pleading exclusively in terms of state law. See Romick v. Bekins Van & Storage Co., 197 F.2d 369 (5th Cir. 1952). The reviewing court looks to the substance of the complaint, not the labels used in it. See Smith v. Local 25, Sheet Metal Workers Int'l Ass'n, 500 F.2d 741, 748-49 n.6 (5th Cir. 1974). 18 In his order remanding the case, the district court stated, At pre-trial, it clearly developed that the only claim plaintiff had was a state law claim for the intentional infliction of emotional distress by 'outrageous conduct.' See Farmer v. Carpenters, 430 U.S. 290, (97 S.Ct. 1056), 51 L.Ed.2d 338 (1977). (emphasis in the original). The court then concluded that because diversity of citizenship was absent, the court had no jurisdiction over this state law claim. The trial court erred by viewing the pleading in the wrong time frame. 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. Pullman Co. v. Jenkins, 305 U.S. 534, 537-38, 59 S.Ct. 347, 348-49, 83 L.Ed. 334 (1939); Westmoreland Hospital Ass'n v. Blue Cross, 605 F.2d 119, 123 (3d Cir. 1979). When a subsequent narrowing of the issues excludes all federal claims, whether a pendant state claim should be remanded to state court is a question of judicial discretion, not of subject matter jurisdiction. Rosado v. Wyman, 397 U.S. 397, 403-05, 90 S.Ct. 1207, 1213-15, 25 L.Ed.2d 442 (1970); United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); Hudak v. Economic Research Analysts, Inc., 499 F.2d 996, 1001 (5th Cir. 1974), cert. denied, 419 U.S. 1122, 95 S.Ct. 805, 42 L.Ed.2d 821 (1975); Webb v. Bladen, 480 F.2d 306, 309 (4th Cir. 1973). Indeed, it has often been stated that the plaintiff cannot rob the district court of subject matter jurisdiction by electing to amend away the grounds for federal jurisdiction. E. g., St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938). We therefore review first, whether a substantial federal question exists, and, if so, second, whether judicial discretion requires this remand in any event.
19 The relevant portions of Carter's complaint follow: 2. 20 Beginning in January of 1972, the defendants (Sheet Metal Workers International Association and Local 85 of Sheet Metal Workers' International Association) conspired together, maliciously and wilfully, to deprive the plaintiff of his employment in the Sheet Metal Industry and of his means of livelihood, to cause the plaintiff to be denied employment in this Industry, to deny the plaintiff his right and privilege to be a member of defendants' union, to impair the plaintiff's reputation among prospective employers, and to subject the plaintiff to embarrassment, scorn and derision among his friends, associates, relatives and fellow employees. 3. 21 In January of 1972, pursuant to, and in furtherance of, said conspiracy defendants' agents, officers and members, acting for and under the specific instructions of all defendants herein, maliciously, and without probable cause therefor, used the threat of union coercion and pressure to cause the plaintiff to be denied employment of a job in his industry for which he was ready, willing and able to perform. 4. 22 In March of 1972, pursuant to this same scheme and conspiracy these individuals coerced and forced an employer of the plaintiff to dismiss the plaintiff from a job in his industry which he then presently held. 23 Carter's complaint clearly alleges tortious conduct under Georgia law, as was established in another appeal during this protracted litigation. Sheet Metal Workers Int'l Ass'n v. Carter, 133 Ga.App. 872, 212 S.E.2d 645 (1975), cert. denied, 423 U.S. 1078, 96 S.Ct. 866, 47 L.Ed.2d 89 (1976). The question is whether it also alleges actions within the jurisdiction of the federal courts. 24 The International's removal petition, filed June 14, 1978, discloses its initial position that the allegations of Carter's complaint sufficiently pleaded a federal claim, as to which removal would be proper. Specifically, the International asserted that Carter's allegations that he had been denied employment in the sheet metal industry through some conduct by the International, and that he had been denied a right to be a member of that union were claims arising under the Labor Management Reporting and Disclosure Act, 29 U.S.C. §§ 401, 402, and 411 and under the Labor Management Relations Act, 29 U.S.C. §§ 158, 159 or 29 U.S.C. § 185. 25 1. LMRDA. The Labor Management Reporting and Disclosure Act of 1959 (LMRDA), also known as the Landrum-Griffith Act, contains a congressional finding that there have been breaches of trust and failures in the observance of high standards of responsibility in the labor and management fields. The Act was passed for the purposes declared including the elimination of improper practices. Clinton v. Hueston, 308 F.2d 908, 910 (5th Cir. 1962). The bill of rights of the LMRDA is found at 29 U.S.C. § 411 (1976). Presumably the International intended to rely on some provision in that section when, in its Petition for Removal, it said: (T)he allegation of denial of membership falls squarely within the LMRDA, 29 U.S.C. § 401, § 402, § 411. These sections guarantee members equal rights to nominate candidates, to vote, to attend meetings, to meet with other members, to express views, and to institute court actions. The sections also regulate the union's ability to increase dues, and to fine, suspend, expel, or otherwise discipline members. 26 Whether Carter's allegations stated a claim under the LMRDA was a question without a clear answer at the time the petition for removal was filed. The LMRDA accords rights to every member. That term is broader in scope than one might originally think in that Congress defined the term to include any person who has fulfilled the requirements for membership in such organization. 29 U.S.C. § 402(o ) (1976). In Hughes v. Local 11 of Int'l Ass'n of Bridge, Structural and Ornamental Ironworkers, 287 F.2d 810 (3d Cir.), cert. denied, 368 U.S. 829, 82 S.Ct. 51, 7 L.Ed.2d 32, the Third Circuit held that a dismissal for lack of subject matter jurisdiction was improper once the plaintiff had alleged a substantial claim under the LMRDA. Whether the plaintiff actually was a member was a question of whether the complaint asserted a claim upon which relief could be granted, not a question of jurisdiction. Id. at 813-14. Several cases expressly or impliedly followed this lead. Gavin v. Structural Iron Workers Local No. 1, 553 F.2d 28 (7th Cir. 1977); Parish v. Legion, 450 F.2d 821 (9th Cir. 1971); Sheridan v. United Bhd. of Carpenters, 306 F.2d 152, 156 (3d Cir. 1962); Addison v. Grand Lodge of Int'l Ass'n of Machinists, 300 F.2d 863, 868 (9th Cir. 1962); Vincent v. Plumbers & Steamfitters Local No. 198, 384 F.Supp. 1379 (M.D. La.1974); Axelrod v. Stoltz, 264 F.Supp. 536 (E.D.Pa.1967), aff'd, 391 F.2d 549 (3d Cir. 1968); Cornelio v. Metropolitan District Council of Philadelphia, 243 F.Supp. 126 (E.D.Pa.1965), aff'd, 358 F.2d 728 (3d Cir. 1966), cert. denied, 386 U.S. 975, 87 S.Ct. 1167, 18 L.Ed.2d 134 (1967); Ferger v. Local 483 of Int'l Ass'n of Bridge, Structural & Ornamental Iron Workers, 238 F.Supp. 1016 (D.N.J.1964), aff'd, 342 F.2d 430 (3d Cir. 1965). See also Moynahan v. Pari-Mutuel Employees Guild of California, 317 F.2d 209, 211 n.3 (9th Cir.), cert. denied, 375 U.S. 911, 84 S.Ct. 207, 11 L.Ed.2d 150 (1963). This distinction is clearly correct. The district court has jurisdiction if a complaint states a substantial federal claim, and the court can then assess the legal sufficiency of the complaint. Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 105, 53 S.Ct. 549, 550, 77 L.Ed. 1062 (1933). A complaint's allegations are insubstantial if they are obviously without merit or if prior decisions foreclose controversy on the subject. Id. at 105, 53 S.Ct. at 550. See also Romero v. International Terminal Operating Co., 358 U.S. 354, 359, 79 S.Ct. 468, 473, 3 L.Ed.2d 368 (1959); Montana-Dakota Utilities Co. v. North-Western Public Service Co., 341 U.S. 246, 249, 71 S.Ct. 692, 694, 95 L.Ed. 612 (1951); Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946). 27 As indicated above, the claim under the LMRDA was not obviously meritless. Some courts had indicated, however, that the LMRDA does not countenance a claim for wrongful denial of membership. Abrams v. Carrier Corp., 434 F.2d 1234, 1254 (2d Cir. 1970), cert. denied, 401 U.S. 1009, 91 S.Ct. 1253, 28 L.Ed.2d 545 (1971). See also Gavin v. Structural Iron Workers Local No. 1, 553 F.2d 28 (7th Cir. 1977); Moynahan v. Pari-Mutuel Employees Guild of California, 317 F.2d at 210; MacKenzie v. Local 624, Int'l Union of Operating Engineers, 472 F.Supp. 1025 (N.D.Miss.1979); Vincent v. Plumbers & Steamfitters Local No. 198, 409 F.Supp. 206 (M.D.La.1976). The cases distinguished situations such as in Hughes, in which plaintiffs who were members of the national and one local attempted to transfer to another. See Parish v. Legion, 450 F.2d at 824. In Hughes the transferee local had not reserved the right to refuse membership. See also Gavin v. Structural Iron Workers, 553 F.2d at 30-31. If the local reserved that right, or required a vote for admittance, the plaintiff had not fulfilled the requirements for membership, and was not a member eligible to sue under the LMRDA. See Moynahan v. Pari-Mutuel Employees, 317 F.2d at 210. 28 Construing the complaint liberally, the allegations are sufficient to state a substantial federal claim under the LMRDA. The viability of an action for denial of membership was not such a settled question that the district court was deprived of subject matter jurisdiction, especially since the Supreme Court and this circuit have never ruled on the issue. Furthermore, the allegations in the complaint do not foreclose the possibility that Carter was attempting to transfer local membership or that the local had not reserved power to refuse membership. 9 In addition, the claim that the unions attempted to deny him employment in the industry arguably could be an allegation of improper disciplinary action. See Keene v. International Union of Operating Engineers, 569 F.2d 1375, 1379-81 (5th Cir. 1978) (blacklisting may be other discipline under 29 U.S.C. § 411(a)(5)). The district court had jurisdiction over the LMRDA claim. Whether relief could have been granted is a separate question which we need not, and therefore will not, decide at this time. 29 2. LMRA Section 301. The federal district courts have jurisdiction over suits for violations of contracts between an employer and a labor organization under section 301(a) of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185(a) (1976). An employee can bring suit under section 301 against his union for breach of the collective contract when the breach is related to breach of the union's duty of fair representation. Humphrey v. Moore, 375 U.S. 335, 84 S.Ct. 363, 11 L.Ed.2d 370 (1964). See Amalgamated Ass'n of Street, Electric Railway & Motor Coach Employees of America v. Lockridge, 403 U.S. 274, 299, 91 S.Ct. 1909, 1924, 29 L.Ed.2d 473 (1971); Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). 30 In its Petition for Removal, the International asserted: One of the duties arising under section 301 is the Union's duty to fairly represent all employees coming under the protection of a collective bargaining agreement. Although the union does have this duty, a breach of the duty of fair representation is not always also a breach of the collective contract. See Smith v. Local 25, Sheet Metal Workers Int'l Ass'n, 500 F.2d 741, 745-46 (5th Cir. 1974). The duty of fair representation is an independent statutory duty that arises from the union's position as exclusive bargaining agent under sections 8 and 9 of the labor laws. Ford Motor Co. v. Huffman, 345 U.S. 330, 337, 73 S.Ct. 681, 685, 97 L.Ed. 1048 (1953). When the allegations assert a breach of the duty of fair representation without a corresponding breach of the collective contract, federal jurisdiction cannot be grounded on section 301. 31 Carter's complaint nowhere mentions the collective bargaining agreement. While mindful that the courts should construe duty of fair representation complaints to guard against their dismissal, Czosek v. O'Mara, 397 U.S. 25, 27, 90 S.Ct. 770, 772, 25 L.Ed.2d 21 (1970), in the absence of any mention of the collective bargaining contract we find it necessary to hold that there is no jurisdiction under section 301. Cf. Smith v. Local 25, Sheet Metal Workers Int'l Ass'n, 500 F.2d at 744, 745-46 (plaintiffs had not alleged violation of collective agreement; no section 301 suit based solely on duty of fair representation). 32 3. Sections 8 & 9. A union has a duty to represent fairly all the employees in a bargaining unit because of the rights granted the union under sections 8(b) and 9(a) of the federal labor laws, 29 U.S.C. §§ 158(b), 159(a) (1976). Vaca v. Sipes, 386 U.S. at 177, 87 S.Ct. at 909; Smith v. Local 25, Sheet Metal Workers Int'l Ass'n, 500 F.2d at 746. These sections are part of an Act of Congress regulating commerce over which the district courts have original jurisdiction under 28 U.S.C. § 1337 (1976). 10 See Amalgamated Ass'n of Street, Electric Railway & Motor Coach Employees v. Lockridge, 403 U.S. at 274, 91 S.Ct. at 1909; Smith v. Local 25, Sheet Metal Workers Int'l Ass'n, 500 F.2d at 748-49. Unlike plaintiffs under section 301, Carter need not be a member of the union to assert a duty of fair representation claim; the union's duty extends to all those in the unit. A union breaches its duty if its conduct reflects hostile discrimination based on irrelevant and invidious considerations. Steele v. Louisville & Nashville R. R., 323 U.S. 192, 203, 65 S.Ct. 226, 232, 89 L.Ed. 173 (1944). A breach of the statutory duty of fair representation occurs only when a union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith. Vaca v. Sipes, 386 U.S. at 190, 87 S.Ct. at 916 (1967). 33 Carter's complaint clearly meets these standards. He alleges the unions discriminated against him without cause by maliciously conspiring to deprive him of employment, by maliciously causing him denial of employment in January of 1972, and by forcing an employer to dismiss him in March of 1972. The district court had federal question jurisdiction over the breach of the duty of fair representation claim.
34 Because the district court had jurisdiction over at least two federal questions in this suit, it also had the jurisdictional power to decide Carter's state law claims which arose from the same nucleus of operative fact. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). Pendent jurisdiction is a doctrine of discretion: Its justification lies in considerations of judicial economy, convenience and fairness to litigants . . . . Id. at 726, 86 S.Ct. at 1139. Some of the factors to be considered are whether the federal claims were dismissed before trial, whether the state claims predominate, whether the state claims are closely tied to questions of federal policy, and whether the jury is likely to be confused by the treatment of divergent legal theories of relief. Id. at 726-27, 86 S.Ct. at 1139-40. Any speculation that Gibbs required dismissal when all federal claims were eliminated before trial was soundly quieted in Rosado v. Wyman : 35 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. The Court has shunned this view. 36 397 U.S. 397, 405, 90 S.Ct. 1207, 1214, 25 L.Ed.2d 442 (1970) (footnotes and citations omitted). 37 A review of the factors influencing discretion reveals that while the district court could have dismissed the state claim, it would not have been a clear abuse of discretion to refuse to do so after the final judgment. Certainly judicial economy would weigh against a third trial. Fairness to Carter, upon whom the International imposed federal jurisdiction, also militates for retention of pendent jurisdiction over the claim. Although the Court noted in Gibbs that it might even be appropriate to dismiss a pendent state claim after full trial, this case is not one in which the plaintiff was asking the federal court to tolerate a purely state claim. 383 U.S. at 727, 86 S.Ct. at 1139. The district court could have properly decided to retain pendent jurisdiction over the state law case. See Hudak v. Economic Research Analysts Inc., 499 F.2d 996, 1001 (5th Cir. 1974). Because the district court reluctantly concluded it had no jurisdiction, however, it never reached this question. We therefore return the case to the district court for consideration of whether, under all the surrounding circumstances, it should accept the state law claim under a discretionary exercise of pendent jurisdiction thus avoiding further duplicitous judicial efforts. 38 The writ is GRANTED. The case is returned to the district court with directions to VACATE the remand order, thereby allowing consideration of the pendent jurisdiction questions.