Court Opinion

ID: 9295
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:44:11+00
Date Added: 2024-06-11T16:46:22.119318
License: Public Domain

United States Court of Appeals,

                                Fifth Circuit.

                                 No. 95-50774

                               Summary Calendar.

 Edward A. KOLLAR; George Natividad, Jr.; Dan Smith; Nickie H.
Keene; Robert Berroteran; John Marcee, Plaintiffs-Appellants,

                                         v.

 UNITED TRANSPORTATION UNION;         Robert A. Cushing;         E.L. Haynes,
Defendants-Appellees.

                                 May 21, 1996.

Appeal from the United States District Court for the Western
District of Texas.

Before SMITH, BENAVIDES and DENNIS, Circuit Judges.

     BENAVIDES, Circuit Judge:

     The single issue in this appeal is whether the plaintiffs'

common-law fraud claim against their union is preempted by the

Railway Labor Act ("RLA"), 45 U.S.C. §§ 151-188.                     Because we

conclude that the fraud claim is preempted, we affirm.

                  FACTUAL AND PROCEDURAL BACKGROUND

     Edward Kollar and his fellow plaintiffs ("Plaintiffs") were

employed by Southern Pacific Railroad and were members of the

United Transportation Union ("the Union"). The Union is a party to

separate    collective       bargaining       agreements   ("CBA")   with   both

Southern    Pacific    and    National        Railroad   Passenger   Corporation

("Amtrak") covering terms and conditions of employment, including

seniority.    In 1986, Amtrak entered into an agreement with the

Union that permitted Southern Pacific employees to transfer to

Amtrak.    In March 1988, the seniority provisions of this agreement

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were modified by a letter agreement between the Union and Amtrak.

     In June 1988, the Plaintiffs (then employees of Southern

Pacific) attended an informational meeting concerning transferring

to Amtrak. Plaintiffs contend that at this meeting representatives

of the Union made representations to them concerning seniority for

conductor positions with Amtrak.             Plaintiffs applied for and

received positions with Amtrak in November 1988.           On December 5,

1988, a seniority roster was posted listings Plaintiffs' positions.

     In July 1989, Plaintiffs discovered that they had actually

received seniority designations lower than had been posted on the

December roster.       Amtrak informed Plaintiffs that the seniority

designation was made pursuant to the letter agreement between the

Union and Amtrak.      Plaintiffs then approached the Union to resolve

the dispute.     In August 1991, Plaintiffs wrote to the Union's

general counsel who informed them that only the General Chairperson

could construe the agreement and that the Union would not waive any

limitations defense to their complaint.          On October 3, 1991, the

General Chairperson replied that Amtrak's interpretation of the

agreement was correct.

     On   July   12,    1993,   Plaintiffs    sued   the   Union   and   its

representatives in Texas state court alleging only a fraud claim.

The Union removed the case to federal district court based upon a

federal question under the RLA.      Subsequently, the Union moved for

summary judgment on limitations grounds.             Plaintiffs moved to

remand the case arguing that their state law fraud claim was not

preempted by the RLA.       Following a hearing on both motions, the

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district court granted the Union summary judgment on limitations

and therefore found the remand motion moot.1     Plaintiffs appeal

contending their fraud claim is not preempted and, therefore, the

district court erred in failing to remand.

                            DISCUSSION

      The denial of a motion to remand an action removed from state

to federal court is a question of federal jurisdiction subject to

de novo review.   Carpenter v. Wichita Falls Indep. Sch. Dist., 44

F.3d 362, 365 (5th Cir.1995).   Likewise, preemption is a question

of law reviewed de novo.   Baker v. Farmers Elec. Coop., 34 F.3d

274, 278 (5th Cir.1994).    Thus we apply de novo review to this

appeal.

      As we have recently noted, one of the goals of the RLA is to

provide prompt and orderly settlement of disputes arising out of

grievances or out of the interpretation or application of a CBA

covering rates of pay, rules, or working conditions.     Hirras v.

National R.R. Passenger Corp., 44 F.3d 278, 280-81 (5th Cir.1995).

As a general rule, disputes arising out of grievances or out of the

interpretation or application of a CBA are preempted by the RLA's

mandatory arbitration provisions.    Id. at 280.    The preemptive

power of the RLA extends to state-law claims;   however, not every

state-law claim is automatically preempted.   Following the Supreme

Court's recent opinion in Hawaiian Airlines, Inc. v. Norris, ---

U.S. ----, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994), this Circuit

     1
      Plaintiffs do not challenge on appeal the district court's
holding on limitations under the RLA.   Their sole complaint is
jurisdictional.

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holds that "a claim is preempted by the RLA only if it relies on

the interpretation of a provision of the CBA;       if the claim is

brought under state law without any reference to the CBA, then it

is not preempted."    Id. at ----, 114 S.Ct. at 282.   Thus, the sole

issue in this case is condensed into whether Plaintiffs' common-law

fraud claim involves interpretation of the CBA.

      Under Texas law a claim for fraud requires that:          1) a

material representation was made; 2) the representation was false;

3) the speaker knew the representation was false or made it

recklessly; 4) the speaker made the representation with the intent

that it should be acted upon by the party;    5) the party acted in

reliance upon the representation;       and 6) the party suffered

injury.   Eagle Properties, Ltd. v. Scharbauer, 807 S.W.2d 714, 723

(Tex.1990).     The gravamen of Plaintiffs' fraud claim is that the

Union made false and misleading statements concerning Plaintiffs'

seniority rights to induce them to transfer from Southern Pacific

to Amtrak. Plaintiffs contend that under Hirras, their fraud claim

is not preempted because "the CBA contains no provision related to

the issue at hand-fraud." Plaintiffs' reliance on Hirras, however,

is misplaced.

     In Hirras, we held that the plaintiff's intentional infliction

of emotional distress claim was not preempted by the RLA because

the terms of CBA were not relevant to the resolution of that claim.

We specifically noted that there was no provision in the CBA

relating to the underlying issue of sexual harassment present in

that case.    Hirras, 44 F.3d at 283-84 & n. 11.   In stark contrast,

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the    relevant    underlying      issue       in     this   case    is     Plaintiffs'

seniority.        Seniority is controlled by the CBA and modifying

agreements.     While Plaintiffs couch their claim in terms of fraud,

resolution of their claim nonetheless requires interpretation of

the CBA.     To prove the falsity of the representations, Plaintiffs

would have to show that the relevant seniority provisions of the

CBA, the transfer agreement, and modifying letter agreement, differ

from   the    representations      made        by   the   Union.       This   requires

interpretation       of   the    CBA    left        appropriately     to    procedures

established under the RLA.

       The weight of authority supports this view.                   Plaintiffs have

been unable to direct this Court to any authority holding that a

state-law fraud claim premised on a denial of seniority is not

preempted by the RLA.           On the contrary, every circuit addressing

the question in similar contexts holds that the fraud claims are

preempted.     See Allen v. United Trans. Union, 964 F.2d 818, 821-22

(8th   Cir.1992)     (state     law    misrepresentation            claim   concerning

seniority preempted by RLA);            Melanson v. United Air Lines, Inc.,

931 F.2d 558, 562-63 (9th Cir.) (state law fraud claim preempted by

RLA), cert. denied, 502 U.S. 865, 112 S.Ct. 189, 116 L.Ed.2d 150

(1991);      see also Adkins v. General Motors Corp., 946 F.2d 1201,

1209-10 (6th Cir.1991) (state law fraud claim concerning seniority

preempted under Labor Management Relations Act), cert. denied, 504

U.S. 908, 112 S.Ct. 1936, 118 L.Ed.2d 543 (1992).

                                   CONCLUSION

       Plaintiffs'    complaint        clearly       requires   reference       to   and

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interpretation of the CBA.     As a result, we hold that their

common-law fraud claim is preempted by the RLA.   Consequently, the

district court did not err in failing to remand the case to state

court.   The judgment of the district court is AFFIRMED.

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