Opinion
Case Number CIV-04-1150-C.
December 2, 2005
MEMORANDUM OPINION AND ORDER
Now before the Court is a Motion to Remand filed by Plaintiff Rodney Scott Brewer (Brewer). Defendant United Parcel Service, Inc. (UPS) filed a response; therefore, the motion is ripe for disposition. The Court, after consideration of the litigants' submissions and the applicable law, now GRANTS Brewer's Motion to Remand and REMANDS this case to the District Court of Oklahoma County, State of Oklahoma.
BACKGROUND
Brewer, a former employee of UPS, originally filed suit in the District Court of Oklahoma County, State of Oklahoma, alleging that UPS terminated his employment for reporting UPS's alleged violations of Oklahoma Department of Transportation regulations. In his state petition, Brewer contends that UPS's actions violated Oklahoma's public policy and breached an implied employment contract. UPS originally filed its answer in state court but timely removed the suit to federal court under both diversity and federal question jurisdiction. After removal, the Court granted Brewer's uncontested motion to amend his complaint and add four individual, non-diverse defendants. Brewer now moves the Court to remand the action to state court.
The Court will refer to Brewer's claim for a violation of Oklahoma's public policy as a Burk claim. See Burk v. K-Mart Corp., 1989 OK 22, 770 P.2d 24.
DISCUSSION
The core issue in dispute is whether the Court maintains subject matter jurisdiction over Brewer's removed action. Brewer contends that remand is proper as the Court lacks subject matter jurisdiction in any form. UPS proffers four arguments in response: that the Court has federal question jurisdiction as Brewer's claims are preempted by the Labor Management Relations Act (LMRA), 29 U.S. § 141, et seq.; that the Court has diversity jurisdiction as all elements of the diversity statute are met; that the Court should disregard the citizenship of the four individual non-diverse defendants in its diversity analysis as Brewer's claims against them are meritless; and that UPS will be prejudiced if the Court remands this action. UPS's arguments are unpersuasive.
I. Federal Court Jurisdiction over the Removed Action.
The existence of the Court's subject matter jurisdiction under the federal question statute, 28 U.S.C. § 1331, is determined at the time Brewer filed his petition in state court. Wisconsin Dep't of Corr. v. Schacht, 524 U.S. 381, 390 (1998). In contrast, if the diversity statute, 28 U.S.C. § 1332, is the basis for subject matter jurisdiction, diversity jurisdiction must exist at the time Brewer filed his petition in state court and at the time UPS sought removal to federal court. Young v. Ewart, 132 U.S. 267, 270-71 (1889). The litigants may neither waive subject matter jurisdiction nor confer it upon the Court in any manner. Basso v. Utah Power Light Co., 495 F.2d 906, 909 (10th Cir. 1974). Indeed, within the context of a removed action, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).
A. The Existence of Federal Question Jurisdiction.
UPS argues that federal question jurisdiction exists under § 301 of the LMRA, as the resolution of Brewer's state law claims is dependant upon the Court's interpretation of a collective bargaining agreement (CBA); therefore, UPS properly removed the action to federal court. Although UPS admits in its response that Brewer is not covered by the CBA, it argues that interpretation of the CBA is necessary as it fired Brewer for teaching a bargaining-unit employee to not adhere to certain terms of the CBA. Brewer contends that its claims are not premised upon the CBA; therefore, federal question jurisdiction does not exist.
Venue, amount, and citizenship — Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
29 U.S.C. § 185(a).
LRMA § 301 preempts all state law-based claims if the claims either directly involve a provision of the CBA or are substantially dependant upon the analysis of a provision of the CBA. Caterpillar Inc. v. Williams, 482 U.S. 386, 394 (1987). Here, Brewer's original petition alleged a Burk claim and a breach of implied contract claim against UPS premised upon UPS's policy manual. To demonstrate a Burk claim, Brewer must prove that he was an at-will employee; that UPS actually or constructively terminated his employment; that UPS's decision to discharge him violated Oklahoma's public policy; and that the public policy in question was well-established in Oklahoma's law. Barker v. State Ins. Fund, 2001 OK 94, ¶ 14, 40 P.3d 463, 468. To demonstrate a breach of an implied contract claim, Brewer must prove that UPS's policy manual created an implied contract and that UPS breached the implied contract. See Dixon v. Bhuiyan, 2000 OK 56, ¶ 10, 10 P.3d 888, 891. UPS's argument fails as Brewer's state law-based claims are independent of the CBA for § 301 preemption purposes, that is, they exist from rights and duties created by state law and neither directly involve nor require the Court to interpret, or even refer to, the provisions of the CBA.Caterpillar, 482 U.S. at 395; Karnes v. Boeing Co., 335 F.3d 1189, 1193-94 (10th Cir. 2003).
UPS's argument also fails as it endeavors to justify removal premised on facts Brewer did not allege in his complaint — that UPS fired him for teaching a bargaining-unit employee not to abide by the CBA's terms. UPS attempts to inject a federal question into an action asserting state law claims via a defensive argument. "Congress has long since decided that federal defenses do not provide a basis for removal." Caterpillar, 482 U.S. at 399.
The Court finds that Brewer's claims do not arise under federal law and his suit may not be removed to federal court under the federal question statute. Accordingly, the Court turns to the diversity statute as a basis for removal jurisdiction.
B. The Existence of Diversity Jurisdiction.
Diversity jurisdiction is, by Congress' intent, a restrictive form of federal jurisdiction; to effectuate this intent, removal statutes are construed narrowly by the Court. Martin v. Franklin Capital Corp., 251 F.3d 1284, 1289-90 (10th Cir. 2001). For removed cases, the presumption is against removal jurisdiction.Id. at 1289. Consequently, "`where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand.'" Id. at 1290 (quoting Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994)).
UPS argues that the parties were diverse at the time of removal and that once diversity jurisdiction attaches to the removed action it cannot be divested by subsequent actions of the Plaintiff. Brewer argues that the post-removal addition of non-diverse defendants destroys diversity; therefore, remand is appropriate. Brewer's argument is flawed as he looks to the wrong point in time for determining diversity jurisdiction. See Young, 132 U.S. at 270-71. However, UPS's argument is also flawed as it assumes diversity jurisdiction attached to the removed action. A clear distinction exists between post-removal changes in diversity and whether diversity jurisdiction ever existed. Watson v. Blankinship, 20 F.3d 383, 387 (10th Cir. 1994).
UPS correctly asserts that the original litigants were of diverse citizenship upon the filing of both the petition and the notice of removal. Nevertheless, UPS also bears the burden of demonstrating that the requisite amount is in controversy.Martin, 251 F.3d at 1289-90. The jurisdictional amount must be established on the face of either Brewer's original petition or UPS's notice of removal. Id. Here, the jurisdictional amount cannot be determined from the face of the petition as it does not specify in any manner the amount Brewer seeks for his claims. Martin, 251 F.3d at 1290;Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1077 (10th Cir. 1999). As a result, UPS must plead the underlying facts in the notice of removal supporting its contention that the jurisdictional amount exceeds $75.000.00. Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995); see Martin, 251 F.3d at 1290. Accord Karnes, 335 F.3d at 1194. Moreover, the jurisdictional amount must be demonstrated by a preponderance of the evidence. Martin, 251 F.3d at 1290. UPS's conclusory assertion in its notice of removal that "on information and belief, [Brewer] is seeking an amount in excess of $75,000" (Def.'s Notice of Removal, Dkt. No. 1, at 2 ¶ 4) is unsupported by any underlying facts and is thus insufficient to establish the jurisdictional amount by a preponderance. Id.
UPS also never discussed the jurisdictional amount in its response brief; however, had, pleading jurisdictional facts within a brief is insufficient as "the existence of diversity must be affirmatively established on the face of either the [state court] petition or the removal notice." Laughlin, 50 F.3d at 873.
The Court finds that UPS has failed to shoulder the burden of affirmatively establishing that the jurisdictional amount was in controversy at the time Brewer filed his petition. Therefore, diversity jurisdiction never attached to the removed action and the Court is without subject matter jurisdiction to adjudicate this action.
In the alternative, if UPS had properly established diversity jurisdiction, remand would still be proper under the facts of the case. The Court's retention of a removed action premised upon diversity jurisdiction is not absolute. When Congress enacted 28 U.S.C. § 1447(e), it carved out an exception to the general rule that once diversity jurisdiction attaches it may never be divested. In so doing, Congress left decisions involving post-removal joinder of non-diverse, diversity destroying defendants to the Court's sound discretion. Mayes v. Rapoport, 198 F.3d 457, 462 (4th Cir. 1999).
Under § 1447(e), "[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court." The statute's plain language allows the Court only one of two options: deny the motion for joinder, or grant it and remand the action. Mayes, 198 F.3d at 462. Here, the Court exercised its discretion and, without objection from Defendant, granted Brewer's motion to add non-diverse individual defendants since individuals are subject to Burk claims. (Pl.'s Mot., Dkt. No. 13; Order, Dkt. No. 14.) As a result, remand is mandated by § 1447(e) as the Court may not retain jurisdiction once it has exercised its sound discretion and allowed the post-removal joinder of a non-diverse defendant to the action.
C. UPS's Remaining Arguments.
UPS argues that Brewer's claims against the additional non-diverse defendants are meritless; therefore, the non-diverse defendants are not indispensable parties to the action and the Court should disregard the additional defendants in its diversity analysis. UPS's argument is moot for reasons discussed above. Furthermore, to the extent UPS endeavors to proffer a fraudulent joinder argument, that doctrine cannot be applied to parties added post-removal. Cobb v. Delta Exports, Inc., 186 F.3d 675, 677-78 (5th Cir. 1999); Mayes, 198 F.3d at 461, 463.
UPS's final argument is that it will suffer prejudice if the action is remanded as the litigants have used federal, not state, standards and procedures throughout the pre-trial process. Prejudice, however, is neither a proper standard to employ when adjudicating a motion to remand nor a separate stand-alone basis upon which to deny remand. Brewer may file a motion to remand for lack of subject matter jurisdiction at any time prior to final judgment. 28 U.S.C. § 1447(c).
CONCLUSION
The Court finds that it lacks subject matter jurisdiction under either the federal question or diversity statutes. Alternatively, remand would be mandated by 28 U.S.C. § 1447(e) due to the Court's discretionary joinder of post-removal, non-diverse defendants. Therefore, Brewer's Motion to Remand [Dkt. No. 63] is GRANTED. The Clerk of the Court shall take all necessary action to REMAND this case to the District Court of Oklahoma County, State of Oklahoma, without delay. Defendants' Motion for Summary Judgment [Dkt. No. 64] is STRICKEN.
IT IS SO ORDERED.