Opinion
Civil No. 04-00035 HG-LEK.
April 30, 2004
FINDINGS AND RECOMMENDATION DENYING PLAINTIFF'S MOTION TO REMAND
On January 5, 2004, Plaintiff International Longshore and Warehouse Union, Local 142, AFL-CIO ("Plaintiff"), filed a Complaint in the Circuit Court of the First Circuit, State of Hawaii against Defendants Foodland Super Market Limited, and Sack 'N Save Foods ("Defendant Foodland," "Defendant Sack 'N Save," and collectively "Defendants"), seeking a provisional remedy of a preliminary injunction and appointment of members to an arbitration panel. On January 21, 2004, Defendants filed a Notice of Removal in the United States District Court for the District of Hawaii, pursuant to 28 U.S.C. §§ 1441, 1446, and 1331 and 29 U.S.C. § 185(a).
On February 20, 2004, Plaintiff filed the instant Motion to Remand ("Motion"), which District Judge Helen Gillmor referred to this Court pursuant to 28 U.S.C. § 636(b)(1)(B) on February 24, 2004. Defendants filed an opposition on March 9, 2004, and Plaintiff replied on March 23, 2004. Pursuant to Local Rule 7.2(d), the Court finds this matter suitable for disposition without a hearing. After careful consideration of the parties' submissions and arguments, this Court FINDS that the action was properly removed from State court, and thus, RECOMMENDS that Plaintiff's Motion be DENIED in its entirety.
BACKGROUND
In 1959, Plaintiff became the exclusive bargaining representative of employees of Defendant Foodland and has represented employees at Defendant Foodland through a series of collective bargaining agreements ("CBAs") since that time. (Pl.'s Mem. in Supp. of Mot. at 4.) Plaintiff has represented employees at Defendant Sack 'N Save since 1985, also through a series of CBAs. (Id. at 5.) The CBAs at issue, both signed in 2000, expire on October 31, 2004, for Defendant Foodland and expired on March 31, 2004, for Defendant Sack 'N Save. (Id.)
These CBAs contain similar provisions for arbitration. Both allow for arbitration in the instance that "an employee covered . . . alleges a grievance against the Company by reason of a violation of the terms of this agreement." (Ex. 3 to Pl.'s Mot., § 7.1; Ex. 5 to Pl.'s Mot., § 8.1.) To select the arbitrator, the CBAs contain a list of five potential candidates. (Ex. 3 to Pl.'s Mot., § 7.6; Ex. 5 to Pl.'s Mot., § 8.6.) To determine the arbitrator of a grievance, both CBAs allow each party to "alternately strike one name from the list until one remains as the arbitrator chosen by the parties and empowered to arbitrate the dispute." (Ex. 3 to Pl.'s Mot., § 7.6; Ex. 5 to Pl.'s Mot., § 8.6.) As a remedial provision, the CBAs allow the arbitrator to set aside any discipline or discharge upon finding "that such discipline or discharge was improper." (Ex. 3 to Pl.'s Mot., § 7.10; Ex. 5 to Pl.'s Mot., § 8.10.)
Three people appear on both lists — Stanley Ling, Ted Tsukiyama, and Thomas Gilson. In addition to these three, Frank Damon and Tamotsu Tanaka appear on the list for Defendant Foodland, and Ed King and Edward Parnell appear on the list for Defendant Sack 'N Save.
On or about October 1, 2003, Defendants sent Plaintiff notification of an addition to Defendants' house rules concerning absenteeism. (Defs.' Mem. in Opp'n at 3.) This proposed addition would give Defendants the ability to discipline an employee who exceeds a total of six spells during a rolling twelve month period. (Id.) If an employee incurs eleven spells over a rolling twelve month period, this proposed addition would give Defendants the power to terminate the employee. (Pl.'s Mem. in Supp. of Mot. at 7.) Defendants had planned upon implementing the proposed addition on November 1, 2003. (Ex. 8 to Pl.'s Mot., ¶ 5.)
Defendants define a spell as "one or more days of illness (due to the same cause) or an unexcused non-illness absence." (Ex. 6 to Pl.'s Mot., ¶ 3.) Additionally, an employee would not incur a new spell if, within a week of returning to work, that employee missed work because of the same illness. (Id.)
On October 29, 2003, Plaintiff filed written grievances relating to the attendance additions. (Pl.'s Mem. in Supp. of Mot. at 7.) The parties processed their dispute through the grievance procedure, which required Plaintiff to submit its complaint to the General Manager. (Ex. 4 to Pl.'s Mot., § 8.3) On November 12, 2003, Plaintiff notified Defendants of its intent to arbitrate these grievances. (Pl.'s Mem. in Supp. of Mot. at 7-8.)
Although both parties have agreed to arbitrate the dispute over the change in attendance policy, this case arose because of a disagreement over the arbitration process. At this time, the parties can locate only three potential arbitrators in Defendant Foodland's CBA and two potential arbitrators in Defendant Sack 'N Save's CBA. Despite the mechanism established to resolve employee grievances, neither CBA contains a process for resolving disputes over the interpretation of provisions in the CBAs. On January 5, 2004, Plaintiff filed a complaint with the First Circuit Court, State of Hawai'i asking for: (1) a preliminary injunction restraining Defendants from implementing the addition to the attendance policy until an arbitrator decides the matter; and (2) the court to fill out the lists of potential arbitrators. On January 21, 2004, Defendants filed a Notice of Removal in the United States District Court for the District of Hawai'i, pursuant to 28 U.S.C. §§ 1441, 1446, and 1331 and 29 U.S.C. § 185(a). On February 20, 2004, Plaintiff filed the instant Motion.
REMOVAL STANDARD
Under 28 U.S.C. § 1441, federal district courts have original jurisdiction over civil actions arising from the Constitution, laws, or treaties of the United States. When a plaintiff moves to remand for lack of jurisdiction, the burden of establishing jurisdiction and the propriety of removal rests upon the defendant. See Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996); see also Nishimoto v. Federman-Bachrach Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990). Because the federal courts are courts of limited jurisdiction, the Ninth Circuit strictly construes the removal statute against removal jurisdiction; there is a strong presumption against federal court jurisdiction. See Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992); see also Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988). "[F]ederal jurisdiction `must be rejected if there is any doubt as to the right of removal in the first instance.'"Duncan, 76 F.3d at 1485 (quoting Gaus, 980 F.2d at 566). In determining whether a case should be remanded due to lack of subject matter jurisdiction, district courts should resolve any doubt in favor of remand. See 28 U.S.C. §§ 1441(a), 1447; see also Gaus, 980 F.2d at 566; Saint Francis Hosp. Med. Ctr. v. Blue Cross Blue Shield of Conn., Inc., 776 F. Supp. 659, 661 (D. Conn. 1991).
SECTION 301 PREEMPTION
Because of a lack of diversity in this case, subject matter jurisdiction for this Court must come from § 301 of the Labor Management Relations Act ("LMRA"). See 28 U.S.C. § 1441(a). Section 301 states:
This section has been codified as 29 U.S.C. 185(a).
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 of controversy or without regard to the citizenship of the parties.
To determine if § 301 provides jurisdiction, the Court as a threshold matter must determine whether one or both of the disputes in this case qualify as a "violation of a contract between an employer and labor organization." 29 U.S.C. § 185(a). If so, then federal law preempts the dispute. See id. The Supreme Court has broadened the scope of § 301 preemption to include cases whose resolution are "substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract." See Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985).
Federal labor policy helps in determining whether claims should be preempted. Congress has articulated a policy favoring the uniform interpretation of CBA terms and has provided for "federal labor law uniformly to prevail over inconsistent local rules" to achieve this policy. See id. (quoting Teamsters v. Lucas Flour Co., 369 U.S. 95, 103 (1962)). When applied to claims based upon state law, federal courts may preempt state law claims involving the interpretation of CBAs. See Livadas v. Bradshaw, 512 U.S. 107, 122-23 (1994). Doing so ensures that state laws that purport to determine "questions relating to what the parties to a [CBA] agreed and what legal consequences were intended to flow from breaches" do not frustrate the policy underlying § 301. See id. at 122-23 (quoting Lueck, 471 U.S. at 211). Conversely, § 301 will not preempt cases involving only state claims that do not involve interpreting the CBA. See Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 690 (9th Cir. 2001). Thus, a dispute over the scope of an arbitration clause falls under § 301 preemption because the court must analyze the terms of the CBA to determine the parties' intentions. See Avis Rent a Car Sys., Inc. v. Garage Employees Union, Local 272, 791 F.2d 22, 25 (2d Cir. 1986); see also Local 227, Int'l Hod Carriers, Building Common Laborers Union v. Sullivan, 221 F. Supp. 696 (E.D. Ill. 1963). Finally, § 301 also preempts a state law claim for a preliminary injunction to protect the status quo even when the parties to a CBA have agreed to arbitrate the underlying issue. See Boys Mkts., Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 239-40 (1970) (removal from state court proper to decide whether a preliminary injunction should be issued); see also Amalgamated Transit Union, Div. 1384 v. Greyhound Lines, Inc., 550 F.2d 1237, 1238-39 (9th Cir. 1977) (deciding issue of whether union should be granted a preliminary injunction prohibiting the employer from changing the work schedule pending resolution by an arbitrator).
DISCUSSION
Plaintiff claims in its Motion that the federal court lacks jurisdiction because it asserts claims arising under state law that require the court to, at most, refer to the CBAs. Plaintiff argues that its claim for a preliminary injunction arises under Hawai'i state law and does not involve the interpretation of the CBAs. Specifically, Plaintiff cites to Haw. Rev. Stat. § 658A-8 (2001), which states, "[b]efore an arbitrator is appointed and is authorized and able to act, the court, upon motion of a party to an arbitration proceeding and for good cause shown, may enter an order for provisional remedies to protect the effectiveness of the arbitration proceeding." Plaintiff further argues, citing Haw. Rev. Stat. § 658A-11, that its motion to fill the vacancies on the arbitration panel also arises under state law and does not require the court to interpret the CBA because it does not seek to replace any active arbitrators with different arbitrators. Because Plaintiff does not seek to replace any active panel members, it avers that state law forms the basis for this claim.
This statutes states: "Before an arbitrator is appointed and is authorized and able to act, the court, upon motion of a party to an arbitration proceeding and for good cause shown, may enter an order for provisional remedies to protect the effectiveness of the arbitration proceeding." Haw. Rev. Stat. § 658A-11 (2001).
Defendant counters that § 301 preempts this action and gives jurisdiction to the federal courts. Defendants argue that because Plaintiff's motion for injunctive relief and replenishing of the arbitration panel involves disputes over the terms of the respective CBAs, federal labor law preempts these state law claims and gives jurisdiction to this Court. Defendants specifically argue that the motion for an injunction requires the Court to interpret the CBA to determine the merits of Plaintiff's case. Defendants further aver that the arbitration process has not failed and that the parties must go forward with the diminished panel of potential arbitrators. Defendants raise the argument that the parties to the CBA intended "to ride easy in the saddle with the `short' panel, [sic] and to cherry pick from a tree less lush with arbitral fruit." (Defs.' Mem. in Opp. at 20.)
I. Claim to Replenish Arbitration Board
Section 301 preempts the claim to replenish the arbitration panel because this dispute involves the analysis of a provision in the CBA. Although Plaintiff originally filed this complaint under state law, the resolution of the state law claim necessarily involves the interpretation of the arbitration clause. Specifically, the state statute applies only if the agreed upon method of arbitration fails. See Haw. Rev. Stat. § 658A-11 (2001). Plaintiff claims that the method has failed because the entire panel of potential arbitrators is not available, while Defendants claim that the method has not failed because the parties contemplated going to arbitration with a "short" panel when signing the CBA. Consequently, the CBA contains the arbitration provision that gives rise to the state claim, but resolution of the state claim cannot occur without interpreting the arbitration provision of the CBA. Because resolution of the state claim involves interpreting the arbitration clause of the CBA, § 301 preempts this claim. See Espinal v. Northwest Airlines, 90 F.3d 1452, 1457 (9th Cir. 1996).
Further, the federal labor policies of arbitration and uniform interpretation of labor contracts favor § 301 preemption. Courts have announced national labor policies favoring both the arbitration of labor-management disputes, see Inlandboatmens Union v. Dutra Group, 279 F.3d 1075, 1078 (9th Cir. 2002), and the uniform interpretation of CBA provisions using federal labor law, see Lueck, 471 U.S. at 220. Because of the importance of arbitration in federal labor policy, the interpretation of CBA clauses dealing with arbitration also becomes important. Cf. Sullivan, 221 F. Supp. at 700 (vacating arbitration award because it was made by an arbitration panel that did not follow the proper procedures). Composing the arbitration committee through questionable means undermines the arbitration process and the national policy favoring arbitration. See Avis Rent A Car, 791 F.2d at 25. Because of the importance of arbitration clauses in a CBA, § 301 preempts these claims to provide for the uniform interpretation of these clauses using federal labor law.
Accordingly, this Court FINDS and RECOMMENDS that Plaintiff's motion to remand the issue of replenishing the arbitration panel be DENIED.
II. Claim to Issue Preliminary Injunction
Section 301 also preempts the decision over entering the preliminary injunction because it involves interpreting the CBA. In determining whether an injunction should be issued under § 301, this Court must examine the contract and determine the quid pro quo of the CBA. Specifically, the court must decide whether Defendants agreed to maintain the status quo in return for having grievances submitted to an arbitrator. Because this decision requires the Court to interpret the CBA and determine the parties' intentions in entering into the CBA, § 301 preempts these state law claims as well.
Further, the federal labor policy of uniformity favors preemption of claims seeking an injunction when the underlying case involves a CBA. An injunction is such an important remedial device that differences in its availability in various courts will not only frustrate the goal of uniformity in labor disputes but will also encourage rampant forum shopping. See Boys Mkts., 398 U.S. at 245-46. In this case, enforcing the Hawai'i statute in this situation would frustrate the national policy of uniformity in resolving labor-management disputes since the Hawai'i statute uses a different standard. Compare Haw. Rev. Stat. § 658A-8 (2001) (allowing the court to issue an injunction "[b]efore an arbitrator is appointed . . . to protect the effectiveness of the arbitration proceeding") with Greyhound Lines, 550 F.2d at 1239 (court must examine the quid pro quo of the CBA before issuing a preliminary injunction). Enforcing the Hawai'i statute also opens the possibility that parties would shop between state and federal courts in hopes of obtaining a more favorable standard for either granting or denying an injunction. Thus, the federal policies of promoting uniformity in the application of labor-management laws and preventing parties from shopping for the most advantageous forum support § 301 preemption in this matter.
Accordingly, this Court FINDS and RECOMMENDS that Plaintiff's Motion to Remand its claim for preliminary injunction be DENIED.
CONCLUSION
For the foregoing reasons this Court FINDS and RECOMMENDS that Plaintiff's Motion for Remand be DENIED.