Opinion
Case No. 15-cv-00673-JCS
06-12-2015
JUAN ROMO, Plaintiff, v. SHIMMICK CONSTRUCTION COMPANY, INC., Defendant.
ORDER GRANTING MOTION TO REMAND AFTER SECOND REMOVAL AND DENYING FOR LACK OF JURISDICTION MOTION TO COMPEL ARBITRATION
Re: Dkt. Nos. 16, 26
I. INTRODUCTION
This case is before the Court after Defendant Shimmick Construction Company, Inc. ("Shimmick") removed the case from state court for a second time. As on the previous removal, Plaintiff Juan Romo again moves to remand, and Shimmick again moves to stay the action and compel arbitration. The Court finds the matter suitable for resolution without oral argument and vacates the hearing scheduled for June 19, 2015. See Civ. L.R. 7-1(b). Shimmick's successive removal is procedurally improper, and Shimmick has once again failed to establish federal subject matter jurisdiction. Romo's Motion to Remand (dkt. 16) is therefore GRANTED, and Shimmick's Motion to Compel Arbitration (dkt. 26) is DENIED without prejudice for lack of jurisdiction.
On the previous removal, the parties consented to the jurisdiction of the undersigned magistrate judge to "conduct all further proceedings in this case" pursuant to 28 U.S.C. § 636(c). See Case No. 14-cv-02403-JCS (N.D. Cal.) dkts. 9, 12. Although as an administrative matter a new case number was assigned on the second removal, this is nevertheless a "further proceeding" of the same case, and the parties' consent remains valid.
II. BACKGROUND
A. Factual and Procedural Background
Romo filed this action against Shimmick on April 17, 2014, in the Superior Court of California, Alameda County, Case No. HG14721863, on behalf of himself and all other similarly situated individuals. See Bogdan Decl. in support of 2d Notice of Removal, Ex. K-5 (1st Am. Compl., dkt. 3-1). Romo alleges that he was continuously employed by Shimmick from October 2011 to approximately April 23, 2013. Id. ¶ 18. His claims are based at least in part on his work on the "San Vicente dam project." Id. ¶ 22.
The First Amended Complaint includes seven statutory claims under state law: failure to pay employees for hours worked in violation of California Labor Code section 1194; failure to provide meal and rest periods in violation of Labor Code sections 512 and 226.7 and California IWC Wage Order 16; failure to reimburse employees for necessary business expenses in violation of Labor Code section 2802; failure to include accurate information in employees' wage statements in violation of Labor Code section 226; failure to provide all compensation upon termination of employment in violation of Labor Code sections 201 through 203; conduct in violation of Business Professions Code section 17200; and a Private Attorneys General Act claim under Labor Code sections 2698 through 2699.5.
Shimmick previously removed this case to federal district court asserting federal question jurisdiction on the basis that certain claims are preempted by section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). See 1st Notice of Removal (Case No. 14-cv-2403, dkt. 1). According to Shimmick, Romo was an employee of a joint venture between Shimmick and Obayashi Corporation, known as the Shimmick Construction Company Inc./Obayashi Corporation JV (the "Joint Venture"), which was created to perform a portion of the San Vicente dam project.
The Joint Venture had signed a Letter of Assent agreeing to be bound by the Emergency Storage Project Labor Agreement (the "Project Labor Agreement") dated June 1, 1999 between Parsons Constructors, Inc., the Building and Construction Trades Department, AFL-CIO, and other international and local unions including Laborers' International Union of North America, Local No. 89 ("Local 89"). Article II, section 4 of the Project Labor Agreement provides:
The Letter of Assent is Exhibit 2 to the May 22, 2014 declaration of Scott Fairgrieve, which is in turn Exhibit K-9 to the declaration of William Bogdan in support of Shimmick's second Notice of Removal. See dkt. 3-3. Multiple copies of the Project Labor Agreement appear in the record, including as Exhibit D to the declaration of Valentine Macedo in opposition to the Motion to Remand. See dkt. 23-3.
The provisions of this Project Labor Agreement (including the Schedule A's, which are the local Collective Bargaining Agreements between bona fide contractor groups or representatives and the signatory Unions having covered work that corresponds to Qualifying Work on the Project) shall apply to the work covered by this Agreement . . . .Macedo Decl. Ex. D at 6, § 4. Thus, Shimmick asserted (and continues to assert) that through the Project Labor Agreement, the Joint Venture became party to multiple collective bargaining agreements ("CBAs"). See Fairgrieve Decl. (Case No. 14-cv-2403, dkt. 14-1) ¶ 5 & Exs. 4-5; Macedo Decl. ¶ 5 & Exs. A-C. There was no evidence on the first removal that Shimmick itself, as opposed to the Joint Venture, entered into or agreed to be bound by any CBA relevant to this case.
The parties disputed a number of fundamental issues, including whether Shimmick or the Joint Venture employed Romo, whether Romo was a member of Local 89, whether the LMRA preempted Romo's purportedly state-law claims, and whether the arbitration agreements in the CBAs were enforceable. After two rounds of supplemental briefing—first to consider additional evidence of whether Romo was a union member, and then to address whether Shimmick could assert the CBAs—the Court granted Romo's motion to remand to state court. See generally Romo v. Shimmick Constr. Co., Inc., No. 14-cv-02403-JCS dkt. 54, 2014 WL 6450249 (N.D. Cal. Nov. 14, 2014) ("1st Remand Order"). The Court held that regardless of whether Romo was employed by Shimmick or by the Joint Venture, there was no basis for federal jurisdiction: if Shimmick was the employer, there was no evidence that it was a party to any CBA that could bring the case within the scope of the LMRA, and if the Joint Venture—which is not a party to the case—was the employer, Shimmick would be entitled to judgment on that basis without any need to examine any CBA. See id. The Court therefore remanded to state court on November 14, 2014, without reaching any of the parties' factual disputes, reserving those issues for the state court. See id. The Court denied for lack of jurisdiction Shimmick's motion to compel arbitration and stay the case pending arbitration. Id. at 11.
B. Second Removal and Present Motions
Shimmick removed the case a second time on February 12, 2015, again arguing that Romo's claims are preempted by the LMRA because his employment was governed by one or more CBAs. See generally 2d Notice of Removal (dkt. 1), Opp'n to Remand (dkt. 17). The case was assigned to the undersigned magistrate judge on May 13, 2015, based on the determination that it is related to (and in fact the same case as) the previous removal. See Order Relating Case (dkt. 41). Romo again moves to remand, and Shimmick again moves to stay the case and compel arbitration. See Mot. to Remand (dkt. 16); Mot. to Compel (dkt. 26).
As is relevant to this Order, Shimmick now argues that there is new evidence proving (1) that Romo was employed by the Joint Venture and not by Shimmick, and (2) that Shimmick was itself a party to the relevant CBAs through its membership in the Associated General Contractors (the "AGC"). For the latter point, Shimmick relies primarily on a declaration by Valentine Macedo, a Local 89 union officer, which includes the conclusory statement that "Shimmick . . . through its membership with the [AGC] . . . was and is bound to" various CBAs. Macedo Decl. (dkt. 23) ¶ 4; see also Opp'n to Remand at 3-4. Shimmick has also submitted a declaration by Wendy Bonnell, a Shimmick payroll manager, stating that "Shimmick . . . was a member in good standing with the [AGC]" during the period Romo alleges that he was employed on the San Vicente dam project. Bonnell Decl. (dkt. 22) ¶ 2. In response, Romo argues that this is not sufficient to show that Shimmick can assert any CBA—each of which, by its terms, governs only members of the San Diego chapter of the AGC—and further argues that Shimmick's present removal is procedurally improper as untimely and duplicative. See Mot. to Remand at 5-6; Reply re Remand (dkt. 25) at 2-5; Opp'n to Mot. to Compel (dkt. 33) at 4-5.
The parties continue to dispute a number of other fundamental issues, including whether Romo's claims implicate overtime pay, whether the LMRA would apply to his claims even if his employment was governed by a CBA, and whether the arbitration provisions of the CBAs are enforceable. Both parties also raise collateral procedural issues. See, e.g., Def.'s Objections to Pl.'s Evidence (dkt. 19); Reply re Remand at 2 (objecting to Shimmick exceeding Judge White's page limit for opposition briefs and to Shimmick filing objections to evidence as a separate document). Because there is no evidence that Shimmick can assert any rights under any CBA, the Court need not reach any of these additional issues.
At the time the parties filed their briefs, the case was before Judge White and had not yet been reassigned to the undersigned magistrate judge.
III. ANALYSIS
A. Legal Standards
1. Removal and Remand
A defendant may remove a civil action filed in state court if the action could have been filed originally in federal court. 28 U.S.C. § 1441. A plaintiff may move to remand the case to the state court from which it was removed if the district court lacks jurisdiction or if there is a defect in the removal procedure. 28 U.S.C. § 1447(c). The removal statutes are construed restrictively so as to limit removal jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). The Ninth Circuit recognizes a "strong presumption against removal." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal quotations omitted). Any doubts as to removability should be resolved in favor of remand. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). The defendant bears the burden of showing that removal is proper. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004).
"As a general rule, 'the presence or absence of federal-question jurisdiction is governed by the well-pleaded complaint rule, which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.'" ARCO Envtl. Remediation, L.L.C. v. Dep't of Health & Envtl. Quality, 213 F.3d 1108, 1113 (9th Cir. 2000) (quoting Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, (1987)) (alterations omitted). "The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law." Caterpillar, 482 U.S. 386 at 392. The corollary to this rule, however, is the "complete preemption" doctrine, which states that the preemptive force of some statutes is so strong that they "completely preempt" an area of state law. See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
2. Preemption by the LMRA
In this case, Shimmick seeks to apply the "complete preemption" doctrine through section 301 of the LMRA, which states:
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). The Supreme Court has held that the preemptive scope of section 301 encompasses cases where resolution "is substantially dependent upon analysis of the terms of [a CBA]." Allis-Chambers Corp. v. Lueck, 471 U.S. 202, 220 (1985); see also Ramirez v. Fox Television Station, 998 F.2d 743, 748 (9th Cir. 1993) (holding that preemption applies to claims "either based upon a collective bargaining agreement or dependent upon an interpretation of the agreement"). "Accordingly, preemption based on section 301 is proper 'even in some instances in which the plaintiffs have not alleged a breach of contract in their complaint, if the plaintiffs' claim is either grounded in the provisions of the labor contract or requires interpretation of it.'" Rodriguez v. Pac. Steel Casting Co, No. 12-0353 NC, 2012 WL 2000793, at *3 (N.D. Cal. June 1, 2012) (quoting Burnside v. Kiewit Pac. Corp, 491 F.3d 1053, 1059 (9th Cir. 2007)).
3. Timing of Removal and Successive Removals
A case must be removed from state court either within thirty after the defendant receives the initial pleading, or "if the case stated by the initial pleading is not removable, . . . within thirty days after receipt by the defendant, . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b)(1), (3). The Ninth Circuit has held that "notice of removability under § 1446(b) is determined through examination of the four corners of the applicable pleadings, not through subjective knowledge or a duty to make further inquiry." Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005). "Thus, even if a defendant could have discovered grounds for removability through investigation, it does not lose the right to remove because it did not conduct such an investigation and then file a notice of removal within thirty days of receiving [an] indeterminate document." Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1125 (9th Cir. 2013). Instead, "§§ 1441 and 1446, read together, permit a defendant to remove outside the two thirty-day periods on the basis of its own information, provided that it has not run afoul of either of the thirty-day deadlines," id., and "as long as the complaint or 'an amended pleading, motion, order or other paper' does not reveal that the case is removable, the 30-day time period never starts to run and the defendant may remove at any time," Rea v. Michaels Stores Inc., 742 F.3d 1234, 1238 (9th Cir. 2014).
If a case has already been remanded once, a "successive removal petition is permitted only upon a 'relevant change of circumstances'—that is, 'when subsequent pleadings or events reveal a new and different ground for removal.'" Reyes v. Dollar Tree Stores, Inc., 781 F.3d 1185, 1188 (9th Cir. 2015) (quoting Kirkbride v. Cont'l Cas. Co., 933 F.2d 729, 732 (9th Cir. 1991)). "Of course, defendants are not entitled to more than one bite at the apple . . . ." Id. at 1189. Absent any such "intervening events," a remand order is the law of the case, and therefore generally will not be revisited. Benson v. SI Handling Sys., Inc., 188 F.3d 780, 783 (7th Cir. 1999) (citing Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816-17 (1988)). In the Ninth Circuit, a "court may have discretion to depart from the law of the case [only] where: 1) the first decision was clearly erroneous; 2) an intervening change in the law has occurred; 3) the evidence . . . is substantially different; 4) other changed circumstances exist; or 5) a manifest injustice would otherwise result." United States v. Alexander, 106 F.3d 874, 876 (9th Cir. 1997) (citing Thomas v. Bible, 983 F.2d 152, 155 (9th Cir. 1993)) (emphasis added); see also Kirkbride, 933 F.2d at 732 (holding that the law of the case doctrine does not apply where applicable law has changed in the intervening period between removals).
B. Timeliness and Propriety of Second Removal
This case strains the bounds of the Ninth Circuit's holdings in Harris and Roth. Shimmick's failure to earlier raise any arguments regarding its own participation in any CBA appears to have been based on its erroneous view that—despite both of Romo's complaints naming Shimmick, and only Shimmick, as the defendant—the case should be construed as an action against the Joint Venture. Even after the Court, at the September 19, 2014 hearing, requested supplemental briefing "on the question of whether Shimmick Construction can even raise the collective bargaining agreement in this case," Shimmick never suggested that Shimmick was itself a party to any CBA.
The Court: "I think we need to brief the predicate, which is, because the collective— why does Shimmick Construction get to assert that the collective bargaining agreement governs this action, when the Joint Venture which signed the collective bargaining agreement is not a party. That's the issue." [. . .] The Court: "When do you want to file simultaneous briefs on the question of whether Shimmick Construction can even raise the collective bargaining agreement in this case?" Defense counsel: "We would be fine with one week, your honor."
Although Harris and Roth set a permissive standard for the timing of a removal, neither of those decisions addressed a case that had already been removed once and remanded to state court for lack of federal jurisdiction. See Harris, 425 F.3d at 691-92; Roth, 720 F.3d at 1123. Even if a defendant generally has no "duty of inquiry if the initial pleading or other document is 'indeterminate' with respect to removability," Roth, 720 F.3d at 1125, there may be valid policy reasons to impose such a duty once a plaintiff has filed a motion to remand to state court, in order to avoid wasteful and duplicative cycles of removal and remand.
That is particularly true in the case at hand where, during the previous removal, the Court specifically asked the parties to address whether Shimmick could invoke any collective bargaining agreement, and where the information in question—whether Shimmick was a party to a contract—should have been uniquely within Shimmick's knowledge. Further, it is doubtful whether Shimmick purportedly being party to collective bargaining agreements several years ago is a "new" ground for removal, and whether invoking the same agreements that Shimmick sought to invoke on the last removal is sufficiently "different." See Reyes, 781 F.3d at 1188 (holding that successive removal requires a "new and different ground for removal"). Courts in this District have remanded cases on procedural grounds under similar circumstances. See Allen v. UtiliQuest, LLC, No. C 13-4466 SBA, 2014 WL 94337, at *1 (N.D. Cal. Jan. 9, 2014) (remanding where "the 'new' factual information cited by Defendant was readily available when it filed its opposition to Plaintiff's original motion to remand"); Fed. Nat'l Mortgage Ass'n v. Luna, No. C-12-6432 EMC, 2013 WL 450843, at *2 (N.D. Cal. Feb. 5, 2013) (finding removal improper where "[a]t the time of the first removal, [the defendant] knew or should have been aware of the alleged facts giving rise to [federal] jurisdiction.") Accordingly, the Court finds this second removal improper, and remands the case to state court. Moreover, as discussed in the following sections, the Court finds remand to be warranted even assuming for the sake of argument that Shimmick's second removal was procedurally proper under Harris, Roth, and Reyes.
C. Romo's Employer
Shimmick bases its current removal in part on the contention that the Joint Venture, rather than Shimmick itself, was Romo's employer, and that Romo's claims therefore implicate the CBAs governing Local 89's relationship with the Joint Venture. See Opp'n to Remand at 5, 7-8. The Court addressed this argument in its previous order remanding the case, and held that removal is proper regardless of which entity employed Romo. See 1st Remand Order at 9.
In order to justify removal on the LMRA preemption theory that Shimmick has pursued, the case must require the Court to analyze the terms of a collective bargaining agreement. See Allis-Chambers, 471 U.S. at 220. Romo has chosen to bring this case against Shimmick, on the theory that Shimmick was his employer, and not against the Joint Venture, which he claims was not his employer. If, as Shimmick contends, Romo was in fact employed by the Joint Venture, then Shimmick would be entitled to judgment not based on any provision of a CBA, but simply because it had no duty to pay Romo anything whatsoever—because, under that theory, Shimmick was not his empoyer. Shimmick's evidence that the Joint Venture is the employer could therefore only serve to show that the case can be resolved without reference to any CBA—and thus was improperly removed. Despite Shimmick's assertion to the contrary, neither this Order nor the Court's previous Order makes any finding as to the adequacy of that evidence, because as discussed further below, either alternative leads to the conclusion that the case should be remanded.
The Court previously held that Romo's First Amended Complaint does not plead any theory of vicarious liability, and that it is limited to the theory that Shimmick is Romo's direct employer. 1st Remand Order at 9-10.
Shimmick asserts that "Magistrate Judge Spero ruled that based on the evidence available at the time, Shimmick could not establish that plaintiff was an employee of the JV . . . ." Reply re Mot. to Compel (dkt. 34) at 2. The Court made no such ruling, and in fact specifically declined to reach that issue.
D. Shimmick's Standing to Enforce the CBAs
Shimmick also argues that removal is proper because Shimmick was itself a party to the purportedly applicable CBAs. The only purported evidence tying Shimmick itself to any CBA is the declaration by Valentine Macedo, a Local 89 union officer, that "Shimmick Construction Co., Inc. through its membership with the Association of General Contractors [sic] (AGC) was and is bound to" multiple agreements between Local 89 and "the Associated General Contractors of America San Diego Chapter, Inc." Macedo Decl. ¶ 4 (emphasis added). "[D]eclarations present[ing] legal conclusions without underlying factual support" are not cognizable evidence. See Plush Lounge Las Vegas LLC v. Hotspur Resorts Nev., Inc., 371 F. App'x 719, 720 (9th Cir. 2010); see also Wicker v. Oregon ex. rel. Bureau of Labor, 543 F.3d 1168, 1177 (9th Cir. 2008); Maffei v. N. Ins. Co. of N.Y., 12 F.3d 892, 898-99 (9th Cir. 1993). Further, Macedo's declaration sets forth no basis for his personal knowledge of Shimmick's contractual relationship with the AGC or any of its local chapters. See Fed. R. Evid. 602. Although the record also includes a Shimmick employee's declaration that Shimmick was a member of the AGC during the relevant time period, see Bonnell Decl. (dkt. 22) ¶ 2, there is no evidence that Shimmick was a member of the San Diego chapter.
The distinction is significant because the CBAs at issue are between Local 89 and the AGC's San Diego chapter, not the AGC itself. See Macedo Decl. Exs. A-C. Both the 2007 CBA and 2012 CBA state that they are "made for and on behalf of and shall be binding upon all . . . eligible members of the Association," which is in turn defined as "the Associated General Contractors of America, San Diego Chapter, Inc." Id. Ex. A §§ 1.A.2, 4.A.2; Ex. C §§ 1.A.2, 4.A.2 (emphasis added). Shimmick has not identified, and the Court has not found, any provision of either CBA that would bind or grant standing to a member of the AGC national organization that is not also a member of the San Diego chapter. Strangely, Shimmick spends a portion of one of its briefs discussing the naming conventions of the Oklahoma chapter of the AGC—see Reply re Mot. to Compel (dkt. 34) at 3, Bogdan Reply Decl. (dkt. 36) ¶ 3 & Ex. Q—but does not address whether Shimmick is or was a member of the San Diego chapter, or whether members of the national association have standing to assert rights under an agreement that by its terms only binds members of the San Diego chapter.
Shimmick's assertions that each CBA was "signed by the Associated General Contractors" is false. See Reply re Mot. to Compel at 2. The CBAs were signed by the "Associated General Contractors of America, San Diego Chapter, Inc.," not by the national organization. See Macedo Decl. Exs. A-C (emphasis added).
With no evidence that Shimmick is a member of the San Diego AGC chapter, there is no more basis to conclude that Shimmick can assert rights under the CBAs than was available on Shimmick's last removal to this Court. Accordingly, for the reasons stated in the Court's previous Order, and again taking into account the Ninth Circuit's "strong presumption against removal," Gaus, 980 F.2d at 566, the case must be remanded. See generally 1st Remand Order. The Court need not and does not reach the parties' remaining arguments.
E. Attorneys' Fees
Romo requests attorneys' fees and costs pursuant to 28 U.S.C. § 1447(c), arguing that there is no new evidence that was unavailable at the time of the previous removal, and that Shimmick had no reasonable basis for a second removal. See Mot. at 16. An award of attorneys' fees may be appropriate where removal has been "sought for the purpose of prolonging litigation and imposing costs on the opposing party," and "the standard for awarding fees should turn on the reasonableness of the removal." Martin v. Franklin Capital Corp., 546 U.S. 132, 140-41 (2005). In this Court's view, both parties have taken unreasonable positions over the course of this litigation. A sanction against only one party would not serve the interests of justice. Further, while the removal was objectively improper, there is no indication of actual bad faith. The Court therefore declines to award Romo his attorneys' fees associated with Shimmick's present unsuccessful removal, but notes that any further unfounded and procedurally improper attempts at removal could tip the balance toward an award of fees.
Romo's Motion erroneously cites § 1447(d), which does not address attorneys' fees.
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IV. CONCLUSION
For the reasons stated above, Romo's Motion to Remand is GRANTED, although his request for attorneys' fees is DENIED. Shimmick's Motion to Stay and Petition to Compel Arbitration is DENIED without prejudice for lack of jurisdiction. The case is hereby REMANDED to the Superior Court of California, Alameda County, and the clerk is instructed to close the file in this Court.
IT IS SO ORDERED. Dated: June 12, 2015
/s/_________
JOSEPH C. SPERO
Chief Magistrate Judge