Trans Penn Wax Corp. v. McCandlessTrans Penn Wax Corp. v. McCandless
Case Information
*2 Before: SCIRICA, LEWIS and ROSENN, Circuit Judges (Filed February 28, l995) ROBERT E. RIGRISH, ESQUIRE (Argued) Clark, Paul, Hoover & Mallard 1360 Peachtree Street, Suite 900 Atlanta, Georgia 30309 KENNETH W. WARGO, ESQUIRE Quinn, Buseck, Leemhuis, Toohey & Kroto 2222 West Grandview Boulevard Erie, Pennsylvania 16506-4508 Attorneys for Petitioners *4 JOSEPH E. ALTOMARE, ESQUIRE (Argued) Altomare & Barnhart 228 East Central Avenue P.O. Box 373
Titusville, Pennsylvania 16354 Attorney for Respondents __________________ OPINION OF THE COURT __________________
SCIRICA, Circuit Judge.
In this appeal, we must decide whether section 301 of
the Labor Management Relations Act ("LMRA"),
The employees brought suit in the Court of Common Pleas
of Crawford County, Pennsylvania, alleging breach of contract,
fraud, intentional infliction of emotional distress, and
violations of the Racketeer Influenced and Corrupt Organizations
Act ("RICO"),
Trans Penn now petitions for a writ of mandamus
directing the nominal respondent, Maurice Cohill, Jr., District
Judge for the United States District Court for the Western
District of Pennsylvania, to rescind his order remanding this
case to the Court of Common Pleas of Crawford County,
Pennsylvania and to exercise jurisdiction over the employees'
claims. We have jurisdiction to address this claim under the All
Writs Act,
We hold that resolution of the employees' contract and tort claims is not substantially dependent upon an analysis of the collective bargaining agreement and therefore section 301 does not require preemption. We also find the district court *6 acted within its sound discretion in remanding after the employees withdrew their federal claims. We will deny the petition for a writ of mandamus.
I.
A. Trans Penn is a Pennsylvania corporation engaged in the manufacture of industrial wax products in Titusville, Pennsylvania. The Oil, Chemical, and Atomic Worker's International Union ("OCAWI") represented Trans Penn employees for the purpose of collective bargaining beginning in 1988. On January 15, 1990, OCAWI and Trans Penn entered into a collective bargaining agreement in which the company recognized OCAWI as the exclusive representative of full-time employees at the Titusville plant.
On April 27, 1990, a majority of the bargaining unit members voted to decertify OCAWI as their bargaining representative. The election was certified by the National Labor Relations Board on May 7, 1990. On the eve of the decertification election, Trans Penn presented the employees with a written "contract" for employment and guarantee of job security. The document is entitled "Guarantee" and states:
This is our PERSONAL GUARANTEE and your LEGAL CONTRACT that you . . . will have a job here . . . as long as you perform your work satisfactorily, follow our customary rules, and we are economically able to operate this institution successfully and work is available. This GUARANTEE is given to you because of the FALSE UNION RUMOR that you will lose your job if the Union loses the *7 election . . . . This is our WRITTEN LEGAL CONTRACT AND GUARANTEE TO YOU . . . .
App. at 62.
On October 30, 1991, Trans Penn terminated the six employees who are plaintiffs in this action, and later contracted with Manpower, Incorporated to provide temporary production workers.
B.
The employees filed a complaint in the Court of Common
Pleas of Crawford County, Pennsylvania, alleging Trans Penn had
committed: (1) breach of contract by terminating the "Guarantee";
(2) fraud in making false and misleading statements concerning
the "Guarantee" upon which the employees relied in decertifying
the union; (3) intentional infliction of emotional distress; and
(4) RICO violations under
Based on the employees' RICO claims, Trans Penn removed
the action to the United States District Court for the Western
District of Pennsylvania. The employees then sought leave to
withdraw their RICO claims and remand the case to the Court of
Common Pleas of Crawford County. The District Court granted the
request and remanded the case to state court. Trans Penn asked
for reconsideration, arguing section 301 of the LMRA preempted
the employees' claims so that federal questions remained even
after dismissal of the RICO claims. Trans Penn also claimed the
employees had alleged unfair labor practices under sections 7 and
8 of the National Labor Relations Act ("NLRA"),
The district court denied Trans Penn's motion for
reconsideration. McCandless,
Trans Penn petitions for a writ of mandamus, contending the employees' claims substantially depend on an interpretation of the collective bargaining agreement between OCAWI and Trans Penn and therefore are preempted by section 301 of the LMRA. Alternatively, if those claims are not preempted, Trans Penn characterizes the employees' deletion of their RICO claims as "forum shopping" and asserts the district court abused its discretion in remanding the case to state court. Trans Penn does not raise the NLRA claim in its petition.
II.
A.
We must first address the threshold issue of whether we
have jurisdiction to address this petition for a writ of
mandamus. The power of the courts of appeals to review district
court remand orders is circumscribed by
The Supreme Court has interpreted the bar of
Thermtron and its progeny provide jurisdiction for
appellate courts to review remand orders other than in cases
removed "improvident[ly] and without jurisdiction." That is,
. . . ."
Forty years before Thermtron, the Supreme Court had
created another partial exception to the bar on review in Waco v.
United States Fidelity & Guaranty Co.,
Courts of appeals have applied the exceptions to the
bar of
Kentucky-Ohio Transp., Inc.,
Selecting the appropriate analytical framework has
proved difficult. One important element is the timing of the
lack of subject matter jurisdiction, as a remand only falls under
So many different patterns underlie remand decisions
that we cannot comprehensively categorize them here. We can,
however, set the present case within the remand jurisprudence.
This case was originally removed based on federal question
jurisdiction because the complaint included counts alleging RICO
*14
violations.
After dismissing the RICO counts, the district court
declined to exercise supplemental jurisdiction and remanded the
case to state court. We would have had jurisdiction to review
the remand had defendants petitioned for a writ of mandamus at
that point. As the Supreme Court has said, "Section[] . . .
1447(c) . . . do[es] not apply to cases over which a federal
court has pendent jurisdiction. Thus, the remand authority
conferred by the removal statute and the remand authority
conferred by the doctrine of pendent jurisdiction overlap not at
all." Carnegie-Mellon ,
We have allowed review of discretionary remands based
on the decision to decline supplemental jurisdiction. In PAS v.
Travelers Insurance Co.,
After concluding that the state statutes were not
preempted by ERISA, the district court exercised its discretion
to remand the state claim because it involved a "novel and
complex issue of state law," a basis for remand provided by
We held in PAS that jurisdiction to review the remand
decision was proper, notwithstanding § 1447(d). Id. at 352. The
district court's decision was neither for a defect in the removal
*16
procedure nor for lack of district court subject matter
jurisdiction, but rather was based on an exercise of the district
court's discretion to decline to exercise supplemental
jurisdiction. Section 1447(c) and (d) therefore did not apply
and review was proper. Id.; cf. Carr v. American Red Cross, 17
F.3d 671 (3d Cir. 1994).
[5]
We then proceeded to consider the
merits of defendant's claim that ERISA did in fact preempt the
state law claim. PAS,
Here, as in PAS , the district court properly removed the case based on federal question jurisdiction and exercised its discretion under the supplemental jurisdiction statute [6] to remand *17 the case. Also in both cases the district court determined the state claims were not preempted. The only difference between this case and PAS is that the district court here made the preemption decision on a motion for reconsideration after, rather than before, it had granted plaintiff's motion for remand. We see no reason why this should require a different result.
The timing of the motion for reconsideration, after the district court's remand, raises a potential problem for our review of the remand order. The question is whether after (..continued)
sustain the exercise of pendent jurisdiction.'" Lovell Mfg. v.
Export-Import Bank of the United States,
Lovell was decided prior to the passage of the current version of§ 1367 . The language in§ 1367 expressly contradicts [this] reading of Lovell in that it states that federal courts shall exercise supplemental jurisdiction over pendent claims arising out of the same case or controversy and may decline to exercise jurisdiction if all federal claims are dismissed.
Id. at 1285 n.14. Because at the time of removal "there was a
colorable federal claim" under RICO, the district court had
original jurisdiction of that claim, Weaver,
as a basis to assert jurisdiction in the first instance, the bar
of § 1447(d) may well apply and it is not clear that the Waco
exception could be used. See, e.g., Nutter v. Monongahela Power
Co.,
The general rule is that a district court loses
jurisdiction over a case once it has completed the remand by
sending a certified copy of the remand order to the state court.
See Hunt v. Acromed Corp.,
(..continued)
the court's findings regarding preemption and jurisdiction are
indistinguishable," and thus § 1447(d) applies to bar review;
Waco would also not provide an exception to allow review);
Whitman v. Raley's Inc.,
The courts of appeals have debated the issue of whether
a district court can freely reconsider its own remand order when
the bar of
615-16 (5th Cir. 1994) (holding a remand based on
Other courts have construed the district court's
jurisdiction to reconsider remand orders more narrowly. In Three
J Farms, Inc. v. Alton Box Bd. Co.,
Our own precedent is inconclusive on the issue of when
a district court's jurisdiction to reconsider its own remand
order ends. One case, Hunt v. Acromed Corp.,
Cir. 1992), appears to take a narrow view of the district court's
jurisdiction to reconsider a case once it has remanded it. In
Hunt, we held the district court lost jurisdiction after sending
a certified copy of the order of remand to the state court so
that it could not consider a motion to file an amended notice of
removal.
Santiago Plaza than to J.O or Thomas (where an exception to
Thus, where the bar of
Because this issue has not been squarely presented to
us before, we look to a persuasive decision from the Court of
Appeals for the Fifth Circuit, Thomas v. LTV Corp,
In sum, with respect to the rather intricate
jurisdictional posture of this case, we hold: this case falls
under the Thermtron exception to
B.
Had we determined this case fell under the Waco line of
cases we would review the decision underlying the remand order
(if at all) as an appeal. Also we would have had to address the
question of finality, the question of the appropriate standard of
review of the preemption issue, and whether the remand order
itself could be reviewed. But the appropriate manner of review
under Thermtron of a remand order is mandamus, and Trans Penn has
properly petitioned for mandamus rather than filed an appeal.
The All Writs Act,
*24 [B]ecause an order remanding a removed action does not represent a final judgment reviewable by appeal, "[t]he remedy in such a case is by mandamus to compel action, and not by writ of error to review what has been done." Absent statutory prohibitions, when a remand order is challenged by a petition for mandamus in an appellate court, "the power of the court to issue the mandamus would be undoubted."
Thermtron,
A petition for a writ of mandamus must demonstrate the
district court committed a "clear error of law `at least
approach[ing] the magnitude of an unauthorized exercise of
judicial power, or a failure to use that power when there is a
duty to do so.'" Richman Bros. Records, Inc. v. U.S. Sprint
Communications Co.,
III.
Ordinarily, a case is not removable to federal court
simply because, as here, the defendant raises federal preemption
as a defense. Rather, removal on the basis of federal question
jurisdiction,
Trans Penn contends that plaintiffs' claims in this case are, in fact, "completely preempted" in this manner, requiring the district court to retain jurisdiction over the case because of the implicit federal questions that Trans Penn believes are raised on the face of the complaint. In answer, we first discuss the contours of section 301 preemption and then evaluate whether plaintiffs' claims are, indeed, preempted.
A.
*26 Section 301 of the Labor Management Relations Act provides for federal jurisdiction over disputes regarding collective bargaining agreements, and mandates the application of uniform federal law to resolve such disputes. The statute provides:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . 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.
The Supreme Court has set forth a clear "principle of § 301 pre-emption" to guide our inquiry:
[I]f the resolution of a state-law claim depends upon the meaning of a collective- *27 bargaining agreement, the application of state law (which might lead to inconsistent results since there could be as many state- law principles as there are States) is pre- empted and federal labor-law principles-- necessarily uniform throughout the Nation-- must be employed to resolve the dispute.
Id. at 405-06. The preeminence of federal law in interpreting collective bargaining agreements applies to tort as well as contract actions. In Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210-11 (1985), the Court held "the pre-emptive effect of § 301 must extend beyond suits alleging contract violations," to "questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement," whether such questions arise in a tort or contract suit. Thus, where a plaintiff sued his employer, Allis-Chalmers, in tort for the bad-faith handling of his insurance claims and his insurance policy was incorporated by reference in the collective bargaining agreement between the plaintiff's union and his employer, the court held section 301 preempted the tort claims. The Court reasoned, "It is a question of federal contract interpretation whether there was an obligation under this labor contract to provide the payments in a timely manner, and, if so, whether Allis-Chalmers' conduct breached that implied contract provision." Id. at 215.
At the same time, the mere existence of a collective bargaining agreement does not prevent an individual from bringing state law claims based on some independent agreement or obligation. The plaintiffs in Caterpillar had been hired for *28 positions covered by a collective bargaining agreement but later assumed management and other positions outside the bargaining unit. At that time, Caterpillar allegedly made statements to the plaintiffs guaranteeing their employment, and when it later downgraded the plaintiffs to unionized positions it assured them these positions were temporary. When Caterpillar later laid off the plaintiffs, they sued claiming breach of the individual employment contracts.
The Supreme Court held "a plaintiff covered by a
collective-bargaining agreement is permitted to assert legal
rights independent of that agreement, including state-law
contract rights, so long as the contract relied upon is not a
collective-bargaining agreement." Caterpillar, 482 U.S. at
396. The Court observed the plaintiffs' complaint neither relied
on the collective bargaining agreement indirectly nor addressed
the relationship between the individual contracts and the
agreement. Id. at 395. The Court also noted that individual
*29
employment contracts could not subtract from collective
agreements but they could create additional rights. Id. at 396.
Furthermore, a plaintiff may bring a state law tort
action against an employer, even where he could have brought a
similar claim based on a provision in his collective bargaining
agreement, so long as the state claim does not require
interpretation of the collective bargaining agreement. The tort
claim falls under state law even though the claim based on the
bargaining agreement provision must apply federal law pursuant to
section 301. In Lingle ,
The Court held section 301 did not preempt the state law retaliatory discharge claim because it could be resolved without interpretation of the collective bargaining agreement. Id. at 407. The issues raised--whether the employee was discharged or threatened with discharge to deter her from exercising her legal rights--were "purely factual questions pertain[ing] to the conduct of the employee and the conduct and *30 motivation of the employer." Id. It did not matter, the Court said, that the claim under the collective bargaining agreement would involve the same factual issues, for the state law claim was "`independent' of the collective-bargaining agreement in the sense of `independent' that matters for § 301 pre-emption purposes: resolution of the state-law claim does not require construing the collective-bargaining agreement." Id.
We followed this precedent in Berda v. CBS, Inc., 881
F.2d 20 (3d Cir. 1989), cert. denied,
B.
We now turn to the employees' particular claims, which
Trans Penn asserts are inextricably intertwined with and
*31
substantially dependent on the terms of the collective bargaining
agreement. At the outset, we reject Trans Penn's general
contention that because the "foundation" of plaintiffs' state
tort and contract claims--job security in the face of layoffs or
discharge--is a mandatory subject of collective bargaining under
federal labor law and is covered in their bargaining agreement,
the claims are preempted. The employees have not alleged Trans
*32
Penn violated the terms and conditions of the collective
bargaining agreement. While the state law claims here relate to
job security, they are grounded in the guarantee given the
employees by Trans Penn. The collective bargaining agreement
does not mention the individual employment contracts, nor does
Trans Penn explain how the claims are substantially dependent on
analysis of the collective bargaining agreement. The fact that
job security is addressed in the collective bargaining agreement
is "of no consequence, because [the employees] need not refer to
. . . the collective bargaining agreement in order to make out
[their] claim." Berda ,
Berda, Caterpillar, and Lingle show that "there is
nothing novel about recognizing that substantive rights in the
labor relations context can exist without interpreting
collective-bargaining agreements." Lingle,
*33 1. Breach of Contract
The employees charge Trans Penn breached the guarantee contracts when it dismissed them on October 30, 1991. Trans Penn contends that adjudication of the employees' contract claims requires an analysis and interpretation of the terms of the collective bargaining agreement.
The employees may assert legal rights, including state
law contract rights, provided they are independent of the
collective bargaining agreement. Caterpillar ,
Under Pennsylvania law, "[i]n order to recover for
damages pursuant to a breach of contract, the plaintiff must show
a causal connection between the breach and the loss." Logan v.
Mirror Printing Co.,
Considering these factors, assessing contract liability
under Pennsylvania law will not require an analysis or
interpretation of the collective bargaining agreement. "Section
301 says nothing about the content or validity of individual
employment contracts." Caterpillar ,
2. Fraud
Trans Penn insists section 301 preempts the employees' fraud claims because proof of fraud requires clear and convincing evidence of justifiable reliance by the recipient upon the misrepresentation. Such an analysis, Trans Penn argues, requires an interpretation of the collective bargaining agreement to determine if the employees justifiably relied on representations guaranteeing job security. We do not agree.
Pennsylvania law requires the plaintiff alleging fraud
to prove the following elements by clear and convincing evidence:
*35
"(1) a misrepresentation; (2) a fraudulent utterance of it; (3)
the maker's intent that the recipient be induced thereby to act;
(4) the recipient's justifiable reliance on the
misrepresentation; and (5) damage to the recipient proximately
caused." Seven v. Kelshaw,
We conclude that the employees need not depend on the
collective bargaining agreement to satisfy these elements of
state law fraud. This is not a situation, as in Allis-Chalmers ,
where the alleged tort is a violation of duties assumed in the
collective bargaining agreement.
3. Intentional Infliction of Emotional Distress Trans Penn maintains resolution of the employees' claim of intentional infliction of emotional distress requires an analysis of the collective bargaining agreement because the terms of that agreement, "which gave the plaintiffs seniority benefits and protection from arbitrary discharge, provide the context against which the relative effects of the `Guarantee' and subsequent layoffs must be measured." Appellants' Br. at 20 *36 (citation omitted). Furthermore, Trans Penn asserts that assessing the "outrageousness" of these facts requires analysis of the terms of the collective bargaining agreement. [17] Id. We disagree.
Pennsylvania courts recognize a cause of action under
the Restatement (Second) of Torts section 46 (1965) for the
intentional infliction of emotional distress.
[18]
Field v.
Philadelphia Elec. Co.,
*37
We fail to see how evaluating Trans Penn's conduct
requires interpretation of the collective bargaining agreement
and substantially depends on its construction. The same is true
for the employees' allegation that they suffered severe mental
distress--the analysis under state law will only focus on Trans
Penn's conduct while inducing the employees to enter into the
"Guarantee" agreement and on the employees' response. This
factual inquiry does not implicate any analysis of terms or
rights created by the collective bargaining agreement. See Lingle,
IV.
Because we conclude that the employees' claims are not preempted under section 301, we turn to Trans Penn's alternative argument. Trans Penn characterizes the employees' deletion of their RICO claims as "forum manipulation" and contends the district court abused its discretion in remanding back to the Court of Common Pleas.
It is settled that district courts have discretion to
remand to state court "a removed case involving pendent claims
upon a proper determination that retaining jurisdiction over the
case would be inappropriate." Carnegie-Mellon Univ. v. Cohill,
The employees note that they propounded and served interrogatories and requests for production on the defendants seeking evidence to substantiate their RICO claims. They say they withdrew the RICO claims because the responses to these discovery requests proved inadequate to substantiate these claims.
The district court held, "Taking into consideration the
values of judicial economy, convenience, fairness and comity, we
do not believe that the present case should remain within our
jurisdiction." McCandless ,
We believe that the district court acted within its sound discretion in remanding the case to the state court.
V.
Trans Penn has not demonstrated a clear and undisputable right to mandamus. Section 301 preempts the application of state law only if the application substantially depends on an interpretation of the collective bargaining agreement. In concluding the employees' claims were not *39 preempted and remanding them, the district court neither engaged in the unauthorized use of judicial power nor abused its discretion. Trans Penn has failed to satisfy the stringent standard necessary to issue a writ of mandamus.
For the foregoing reasons, we will deny Trans Penn's petition for a writ of mandamus.
Notes
[1] . The text of
[2] . At the time Thermtron was decided, § 1447(c) provided in part: If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case . . . .
[3] . For the text of § 1447(c) at the time Thermtron was decided, see supra note 2.
[4] . Indeed, we have held more generally that remands not covered
by § 1447(c) are not barred from review by § 1447(d). See, e.g.,
Foster v. Chesapeake Ins. Co.,
[5] . In Carr, federal jurisdiction was predicated on the joinder
of the Red Cross, whose federal charter conferred federal
jurisdiction over cases to which it was a party. Carr, 17 F.3d
at 674. The Red Cross was subsequently dismissed as a party, and
the district court remanded the case pursuant to
[6] . Prior to the 1990 enactment of this version of
[8] . Where the district court's reconsideration of its own remand
is appropriate because the bar of § 1447(d) does not apply, some
courts have been indifferent as to whether a certified copy of
the remand order was sent. In re Digicon Marine, Inc., 966 F.2d
158, 160-61 (5th Cir. 1992). Thus, the issue of whether a
certified copy of the remand order has been sent to the state
court may only be relevant when the bar of § 1447(d) applies.
See In re Shell Oil Co.,
[9] . The district court's remand order was entered on October 12, 1993, and on October 29, 1993, Trans Penn filed its motion for reconsideration.
[10] . On allowing review of the remand order itself (rather than just review of the decision underlying the remand), compare Waco,293 U.S. at 143 (holding no review of the order of remand allowed), with Carr,17 F.3d at 680 (holding review of the order of remand allowed when the Waco exception applies).
[11] . We have discussed elsewhere the contours of the well-
pleaded complaint rule and its corollary principle, the "complete
preemption doctrine," and need not duplicate that discussion
here. See Goepel,
[12] . The Court had noted this limit on § 301 in Allis-Chalmers :
Of course, not every dispute concerning
employment, or tangentially involving a
provision of a collective-bargaining
agreement, is pre-empted by § 301 or other
provisions of the federal labor law. . . .
[I]t would be inconsistent with congressional
intent under that section to pre-empt state
rules that proscribe conduct, or establish
rights and obligations, independent of a
labor contract.
[13] . Trans Penn seeks support for this proposition in Angst v.
Mack Trucks, Inc.,
[14] . We have stated, "[E]mployees who are members of a collective
bargaining unit cannot negotiate individual contracts that are
inconsistent with the . . . collective bargaining agreement."
Malia v. RCA Corp.,
[15] . The complaint states, "Plaintiffs believe and therefore aver that their termination from employment with Defendants did not result from any diminution in Defendants' business sufficient to justify termination under the terms of the Contract." First Am. Compl. ¶ 26. The "Contract" refers to the guarantee, not the collective bargaining agreement.
[16] . The employees allege, in part, "[Trans Penn] knowing the same to be false and misleading when made, and never intending to honor same, . . . intentionally, recklessly, [and] maliciously . . . represented and promised job security [for the purpose of inducing the work force to decertify the union]." Id. ¶ 35.
[17] . The employees' complaint alleges "the conduct of the Defendants with respect to this Plaintiff was intentional, wanton, malicious, reckless and outrageous. As a direct and proximate result of the conduct . . . this Plaintiff has suffered great, severe and actual mental distress and chronic depression . . . ." Id. ¶¶ 47 & 48.
[18] . The Restatement provides: (1) One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm. Restatement (Second) of Torts § 46 (1965).