Legal Document

463 U.S. 1 103 S.Ct. 2841 77 L.Ed.2d 420 FRANCHISE TAX BOARD OF THE STATE CALIFORNIA, Appellant,v.CONSTRUCTION LABORERS VACATION TRUST FOR SOUTHERN CALIFORNIA et al. No. 82-695. Argued April 19, 1983. Decided June 24, Syllabus Appellee Construction Laborers Vacation Trust for Southern California (CLVT) was established by an agreement between construction industry employer associations and a labor union to provide mechanism administering the provisions of collective-bargaining granting workers yearly paid vacation. The trust qualifies as "welfare benefit plan" within meaning § 3 Employment Retirement Income Security Act 1974 (ERISA), hence is subject regulation under ERISA. Appellant Franchise Tax Board filed complaint in state court against CLVT its trustees, alleging two causes action: (1) that had failed comply with certain tax levies issued statute, thereby becoming liable damages such failure, (2) that, view defendants' contention ERISA pre-empted law trustees lacked power honor levies, judgment be declaring parties' respective rights. removed case Federal District Court, which, after denying appellant's motion remand court, held did not pre-empt State's levy on funds CLVT. Court Appeals reversed. Held: removal jurisdiction conferred 28 U.S.C. 1441. Pp. 7-28. (a) Where there no diversity citizenship parties, this case, propriety turns whether falls original "federal question" United States district courts 1331 (1976 ed., Supp. V). Under "well-pleaded complaint" rule, defendant may remove federal unless plaintiff's establishes "arises under" 1331, it basis defense, including defense pre-emption, even if anticipated both parties admit only question truly at issue. 7-12. (b) For first cause action, straightforward application well-pleaded rule precludes federal-court jurisdiction, thus action removable. set conditions, without reference law, which enforced; becomes relevant way obligation created entirely then appellant has made out valid claim relief law. 13-14. (c) Nor second removable court. jurisdictional statutes, feder l do have nor they acquire removal, when presented declaratory judgment, where, plaintiff sought would barred Skelly Oil Co. v. Phillips Petroleum Co., 339 667, 70 876, 94 L.Ed. 1194, lacking if, but availability procedure, arise state-created action. situation suit declaration validity sufficiently from spirit necessity careful limitation informed Court's statutory interpretation Gully First National Bank Meridian, 299 109, 57 96, 81 convince until Congress informs otherwise, courts' jurisdiction. Accordingly, same brought originally 14-22. (d) A authorities statute like involved here does "arise" right enforce central concern statute. Avco Corp. Machinists, 390 557, 88 1235, 20 126, distinguished. Even though preclude enforcement circumstances itself preempted On face are many reasons completely unrelated ERISA's purposes why State or entitled seeks. Moreover, alternative favor enumerates seek 502 Act; anyone other than participants, beneficiaries, fiduciaries ERISA-covered plan express issues case. similar some party "arise provision. 22-27. 679 F.2d 1307 (9th Cir., 1982), vacated remanded. Patti S. Kitching, Los Angeles, Cal., appellant. James P. Watson, appellees. Justice BRENNAN delivered opinion Court. principal dispute Stat. 829, codified 29 §§ 1001 seq., permits collect unpaid income taxes levying taxpayers vacation plan. issue important one, affects thousands federally regulated trusts all non-federal collection systems, must eventually receive definitive, uniform resolution. Nevertheless, involving perhaps more history logic, we hold lower decide before us, vacate instructions removed. 2 * None facts dispute. (CLVT)1 four employers active Council Laborers, arm affiliated locals Laborers' International Union North America. purpose establish administer ng collective bargaining grants vacation.2 expressly proscribes any assignment, pledge, encumbrance CLVT.3 administers unquestionably "employee welfare ERISA, 1002(1), individual extensive titles I III agency charged personal authorizes require person possession "credits property belonging taxpayer" "to withhold . amount tax, interest, penalties due taxpayer transmit withheld Board." Cal.Rev. & Code Ann. 18817 (West Supp.1982). Any who, upon notice Board, fails request personally amounts identified notice. 18818. 4 In 1980, trustees. heading "First Cause Action," alleged three 18817,4 concluding allegation been "damaged sum exceed $380.56 plus interest 1, 1980." App. 3-8. "Second incorporated previous allegations added: 5 "There time above continues actual controversy concerning their legal rights duties. [appellant] contends defendants [CLVT] obligated required pay over Board's delinquent taxpayers. hand, contend section 514 preempts lack them California. ". [D]efendants will continue refuse 6 regard. fully finally resolve controversy." Id., 8-9. 7 prayer relief, requested failure "legally future 9.5 8 Central California, denied merits, ruled preempt appealed, (CA9 1982). petition rehearing, renewed argument rehearing denied, appeal taken We postponed consideration our pending merits. --- ----, 567, 75 (1982). now 1441, therefore reach merits preemption question.6 II 9 structure remained basically unchanged past century. With exceptions here, "any civil defendants, division embracing place where pending." If appears final prope ly removed, because courts, See 1447(c). case—as cases parties—the courts: "The shall actions arising Constitution, laws, treaties States." V).7 10 Since version enacted, Mar. 3, 1875, ch. 137, 18 470, phrase "arising States" resisted attempts frame single, precise definition determining fall within, outside, courts. Especially considered light 1441's masks welter regarding interrelation authority proper management judicial system.8 11 most familiar Holmes' statement, "A arises creates action." American Well Works Layne Bowler 241 257, 260, 36 585, 586, 60 987 (1916). However, well settled test useful describing vast majority come beyond often "arose vindication necessarily turned see, e.g., Smith Kansas City Title 255 180, 41 243, 65 577 (1921); Hopkins Walker, 244 486, 37 711, 61 1270 (1917), ardent proponent Holmes admitted rejected exclusionary principle, see Flournoy Wiener, 321 253, 270-272, 64 548, 556-557, 708 (1944) (Frankfurter, J., dissenting). also T.B. Harms Eliscu, 823, 827 (CA2 1964) (Friendly, J.). Leading commentators suggested "if order secure he obliged correctness applicability his proposition law." Bator, Mishkin, D. Shapiro H. Wechsler, Hart Wechsler's Courts System 889 (2d ed. 1973) (hereinafter H rt Wechsler); cf. supra ("a 'arise under' discloses need law"). 12 One powerful doctrine emerged, however—the rule—which practical matter severely limits number "creates action" initiated avoiding more-or-less automatically potentially serious federal-state conflicts. 13 "[W]hether one Constitution treaty States, sense determined what statement own bill declaration, unaided anything anticipation avoidance defenses thought interpose." Taylor Anderson, 234 74, 75-76, 34 724, 58 1218 (1914). 14 Thus, presents state-law asserts deprives raise, supra; Louisville Nashville R. Mottley, 211 149, 42, 53 126 (1908), raise sufficient defeat claim, Tennessee Planters' Bank, 152 454, 654, 38 511 (1894). "Although show very likely, course litigation, arise, suit, is, Constitution." supra, U.S., 152, S.Ct., 43. better worse, present scheme existed since 1887, law.9 "[A] immunity laws element, essential 112, 97, (1936). 15 insofar sets bounds operation authority, makes quick thumb. Describing Gully,10 Cardozo wrote: 16 "Petitioner prove obeyed reached administrative conduct inconsistent rule. done taxing officers substance Mississippi assessment shareholders, form bank alone, conclusion inescapable neither debt, apart barriers built. finding evidence compose altogether, leaving room infringed. can say lurking background, just farther background lurks constitutional government. so doubtful conjectural, far plain necessity, unavailing extinguish states." 117, 99-100. 17 however, produce awkward results, especially defendant's factual dispute, decision raised defense. correctly understood apply situations.11 As said Gully, "By unimpeachable act prohibited thereby." 116, 99.12 Simply these principles hand. Appellants' forth ' action," refers ERISA; either comes whole 1441(c). Although specifically assert particular entitlement seeks, language suggests (and dispute) "first states Tax.Code 18818, 5-6, "second California's Declaratory Judgment Act, Cal.Civ.Proc.Code 1060 1980). initial proposition, then, "law unavailable substantial, disputed necessary element claims, "really" A. 19 might still requires resolution substantial parties. action—to levy, 18818—a 11-12. framed deal precisely situation. discuss above, 1887 preemption, complaint, Appellant's poses difficult problem. Whereas potential claim. 1060, bring another party's duties respect showing "actual relating duties" questions Not clearly encompass governed identifies Such judgment.13 Therefore, clear obtain seeks ("[t]hat declare legally [CLVT]," 9) and/or adjudication preemptive effect constitutionality—all 21 argues foreclosed 1194 (1950). directly controlling. 22 Oil, contract, sale natural gas, seller—Skelly Oil—to terminate contract December 1946, Power Commission yet certificate convenience third party, pipeline company whom intended resell gas purchased Oil. Their began November 30 conditional certificate, make public 2. By notified contract. 2201, seeking effect. 669-671, 877-878, 879. 23 There Phillips' 1331. reasoned: 24 " '[T]he 25 procedural only.' Aetna Life Ins. Haworth, 300 227, 240 [57 461, 463-464, 617]. enlarged range remedies available extend When concerned inferior entertain litigation restricted area Acts confine them, 'jurisdiction' means kinds give entrance Jurisdiction altered Act. Prior asked immediately enforceable remedy money injunction, could given requisites diversity, provided foundation resort allowed recognizing immediate asked. But requirements jurisdiction—the limited matters alone authorized adjudicate—were impliedly repealed modified." 671-672, 26 observed question. 672, stand "if, lacking." 10A C. Wright, Miller M. Kane, Practice Procedure 2767, 744-745 1983). Cf. Public Service Comm'n Wycoff, 344 237, 248, 73 236, 242-243, 97 291 (1952) (dictum).14 27 1. matter, 1331—and extension 1441—when judgment. Apparently, impression.15 passage quoted clear, relied significantly contours 674, 880 (stressing "the Act"). emphasis affect court's critical reasoning. Our force antedate Developments Law Judgments—1941-1949, 62 Harv.L.Rev. 787, 790-791 (1949).16 Nashville, St. L.R. Wallace, 288 249, 264-265, 345, 348-349, 730 (1933) (Supreme appellate judgment). Yet while fidelity leads us well. take claims raising regard fede al Act—with limitations read into it—would become dead letter. available, litigants get despite simply pleading adequate Having interpreted 1934 include suits, should extremely hesitant interpret Judiciary 1875 amendments renders later nugatory. statutes stand17 bar question, 2201.18 somewhat unclear. regularly suits coercive rights, question.19 Section 502(a)(3) plans injunctive issue, exclusively law.20 injunction regulations acts ERISA,21 law? think not. always called current legislation March 1875," 673, 879, eye practicality necessity. "What needed something common-sense accommodation kaleidoscopic situations characterizes treatment causation selective process picks web lays ones aside." 117-118, good possibly conflicting prejudiced inability advance possible regulation. They variety suffer tested there.22 grant infra, 25, presumably enter further statute's purposes.23 It go themselves choose sue. either.24 B 31 "causes are, substance, claims. repeated who brings master rely upon," Fair Kohler Die Specialty 228 22, 33 410, 411, 716 (1913), independent corollary omitting plead Aero Lodge 735, Int'l Assn. 376 337, 339-340 (CA6 1967), aff'd, (1968). 32 CLVT's best stems 735. petitioner respondent, union, respondent agreed submit grievances binding arbitration sanction "work stoppages, strikes, slowdowns." officials violated participating sanctioning work temporary permanent injunctions breaches. 445, O.T.1967, 2-9. invoked it, 301 Labor Management Relations 1947 (LMRA), 185, Textile Workers Lincoln Mills, 353 448, 923, 972 (1957), tate scope controlled Teamsters Local 174 Lucas Flour 369 95, 103-104, 82 571, 576-577, 593 (1962). time, impossible sought. Sinclair Refining Atkinson, 370 195, 1328, 440 (1962) (later overruled Boys Markets, Inc. Retail Clerks 770, 398 235, 90 1583, 199 (1970)). held, F.2d, 340, affirmed, 560, 1237, petitioner's 301, although undoubtedly pleaded contracts ground displace "for violation organization."25 purely creature notwithstanding fact absence 301. stands analogy meant create body common document 'arises Brief Appellees 20-21. contains creating series plans, Secretary Labor. 502(a), 1132(a).26 Avco, coming 502(a) otherwise were law.27 follow, 35 phrasing instructive. specifies persons—participants, fiduciaries, Labor—may relief. denies governments, purpose. purport every covered ERISA.28 Furthermore, 514(b)(2)(A) 1144(b)(2)(A), intend plans. important, limitations, "nothing subchapter construed relieve regulates insurance, banking, securities." Against 18818 Unlike reason, 11-12, seeks.29 supplied replace correct Once again, sought—that trustees' "power California," —is involves enforceability forbidding assign alienate trust, 4-5 n. 2, class law.30 502(a)(3)(B) participant, beneficiary, fiduciary determine plan's trust.31 reason above. carefully 502; provision.32 IV consistent system conferring years. interpretations, hear, those depends pursuant employee plan, decla e remanded Superior County Angeles. 39 ordered. Along itself, appellants. At various points throughout opinion, referred collectively "CLVT." part hourly compensation unit members, CLVT, places account each employee. year, distributes kept, complies procedures. employees fail timely used defray expenses. generally Agreement, art. IX, 45-51 ("The Plan"). This up large members typically several during year. Article ¶ 9.08 provides part: "[N]o payments Fund monies accounts Plan manner anticipation, alienation, sale, transfer, charge persons void ineffective. credited withdrawal distribution times, specified Agreement." 49. 404(a)(1) 1104(a)(1) V), discharge "solely participants beneficiaries," exclusive providing benefits defraying reasonable expenses plan," "in accordance documents instruments governing 1104(a)(1), (A), (D). 1977 1978, notices requesting approximately $380 taxes, individuals. individuals beneficiaries holding them. acknowledged receipt pellant letter Administrator Pension Welfare Benefit Programs Department permitted levy. received Labor, Board. took January 1980 requested. concluded: "[I]t position unemployment insurance contributions participant beneficiary [29 1144]." 71. 7, counsel furnished copy letter, stated intention recommend disburse identify requested; indeed, mentioned 13. least below 1254(2). "Act regulating commerce" 1337, distinguished standards 1337 See, tracks III, permitting "forms ingredient," Osborn Wheat. 738, 204 (1824), legislative 44th "confer conferred," Cong.Rec. 4986 (1874) (remarks Sen. Carpenter). recently reaffirmed long recognized—that "Article 'arising broader 1331." Verlinden B.V. Nigeria, 1962, 1972, (1983). applies Texaco, Inc., 415 125, 127, 1002, 1003-1004, 209 (1974) (per curiam) (case court); Pan 366 656, 663, 1303, 1307-1308, 584 (1961) (attack court). conceive rational answer consulted determination co-extensive. Indeed, 373, 552, amended Aug. 13, 1888, 866, 433, applied full court; furnish guarantee Railroad Mississippi, 102 135, 140, 96 (1880); Gold-Washing Water Keyes, 199, 203-204, 656 (1877). Commentators repeatedly proposed permit dispositive. Institute, Study Division Between 1312, 188-194 (1969) (ALI Study); Jur sdiction Revision Judicial Code, Contemp. Prob. 216, 233-234 (1948). proposals adopted. authorities, claiming predecessor corporation whereby, according State, promised predecessor's liabilities. 111-112, 97. defeated, lay shares national banks origin measure statute" "by implication counts suing tax." E.g., Trent Realty Associates Savings Loan Assn., 657 29, 34-35 (CA3 1981); Aberdeen 627 843, 850-852 (CA8 1980); Washington League Professional Baseball Clubs, 460 660 1972); Greenwald, 591 417, 422-423 (CA1 1979). Note, 20. And, course, mean forum heard. reject ultimately reviewed Fidelity de la Cuesta, 458 3014, 664 (1982) (deciding Realty, ). To "facts existence parties." Wellenkamp America, Cal.3d 943, 947, 148 Cal.Rptr. 379, 381, 582 P.2d 970, (1978). transported films Utah regulatory commission forbid transport routes Interstate Commerce Commission. "[i]t offered whatever past, threatened Commission." 240, 238-239. essentially "not matured point what, any, concrete develop." 245, 241. "Where essence impending character federal-question threatens assert, involve establishing dubious right, reality nature seize litigations merely normally defendant, goes begin federal-law begins 242-243. noted leading judgments interim indication outside III's "case controversy" us. E. Borchard, Judgments 298-300 (1934). enacted thirteen years c. 463, 1921 Cal.Stats. 689. having substantive According commentator "Declaratory special proceeding. classified equitable type offered. ." B. Witkin, 705(c), 2329 1971). Adams Cook, Cal.2d 352, 362, 101 484, 489 (1940); Mefford Tulare, Cal.App.2d 919, 922, 847, 849 (1951) (declaratory liquidate uncertainties controversies"). Western Guaranty Sacramento San Joaquin Drainage Dist., 235 815, 822, 45 578, (1965) (citing cases). confer law—within Oil's 1969 ALI report strongly criticized doctrine: "If changes arguable language, historical seems embody, repudiated." 1311, 170-171. declined change. point, adjustment evolved Congress. seem odd proper, analyze continuously objected trying along. That irony, constant feature filed. Contemp.Prob. instance, consistently adjudicated patent infringers invalid, theory infringement Edelmann Triple-A 852 (CA7 1937); Wechsler 896-897. Taking dictum Wycoff (1952), 14, lawsuit designed right. 15-18, 23-25 provides: "[A brought] (A) enjoin practice violates provision terms (B) appropriate (i) redress violations (ii) 1132(a)(3). (federal exclusive, law). able sue him regulations, run afoul doctrine. Lake Carriers' MacMullan, 406 498, 506-508, 92 1749, 1755-1756, 257 (1972); Rath Packing Becker, 530 1295, 1303-1306 1975), aff'd sub nom. Jones 430 519, 1305, 51 604 (1977); Boston 423, 8. invalid Injunction 1341. Grace Brethren Church, 2498, 93 so, "speedy efficient remedy" exception strategy shows, willing great lengths avoid Realistically, little prospect flood actions; note considerations comity reluctant snatch demands it. nn. 20, supra. Alleged infringers, example, swift validity—they infringing patent, frequently delicate network contractual arrangements dependent sell license product. Parties schemes sorting government's threat liability quickly clear. treat dismiss counterclaim reaching 9-11; 423; Wong Bacon, 445 F.Supp. 1177, 1183-1184 (ND Cal.1977). never stipulated cross-motion summary decided basis. Juris. Statement (District "Findings Fact Conclusions Law"). circumstances, decline adopt broad pleadings. Oneida Indian Nation Oneida, 414 661, 677, 772, 782, (1974), that—unlike ejectment derives grant, (1914)—an based title possessory tribal lands, "wholly separately protect possession." 682-683, 784-785 (REHNQUIST, concurring). fiduciary," except recover due, clarify benefits, concurrent 502(e)(1), 1132(e)(1). addition, indicates act's virtually unique provision, 514, 1144, "a developed obligations private pension plans." 120 29,942 Javits). precedent General Investment Shore M.S.R. 260 261, 287-288, 43 106, 67 (1922); Koppers Continental Casualty 337 499, 501-502 (Blackmun, contrast, 301(a) LMRA "[s]uits organization representing affecting commerce organizations." restrictive contracts, Evening News 371 83 267, 246 (1962); Lewis Benedict Coal Corp., 361 459, 80 489, 442 (1960); Nedd Mine Workers, 556 190, 196-198 1977), Lion Dry Goods, 17, 541, 503 Black-Clawson, Machinists 335, 313 179, 181-182 1962) (suit 301). intimated coverage section. battery growing violent strike employer-union Auto Russell, 356 634, 640-642, 78 932, 936-937, 1030 (1958). (looking complaint), turn improper complie 99-100, (1937). real estate owned. taxes. Art. V, 5.21(k), 29. 26. Of suggesting is—as subset general CLVT—a forbids trust. true entirely. Merely prejudge Cutaiar Marshall, 590 523, 527 repeat, caveat expressed 21, itself. 19. 28, connection too attenuated

Classification Label: 8