John Krakowski v. Allied Pilots Association ( 2020 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 19-1816
___________________________
John Krakowski, individually and on behalf of all others similarly situated
Plaintiff - Appellant
v.
Allied Pilots Association
Defendant - Appellee
____________
Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: January 15, 2020
Filed: August 28, 2020
____________
Before BENTON, GRASZ, and STRAS, Circuit Judges.
____________
STRAS, Circuit Judge.
A union representing airline pilots collected dues on profit-sharing payments.
When one pilot, John Krakowski, sued to get his money back, the central question
became whether the lawsuit belonged in state or federal court. Once the union
removed the case to federal court, it never went back. The district court allowed it
to remain under the complete-preemption doctrine. We reverse to have this case
returned to state court.
I.
Like many companies, American Airlines decided to share its profits with its
employees through annual cash payments. Krakowski received one but was allowed
to keep only part of it. American Airlines withheld one percent for Allied Pilots
Association, his union, for “dues.” Krakowski believes that the whole payment
belongs to him, and he asked for it back.
When Allied Pilots refused, Krakowski sued in state court for conversion and
unjust enrichment. His theory was that he was entitled to keep the whole payment
because it is not “contractual pay” under Allied Pilots’s constitution. Believing his
claims to be completely preempted by the Railway Labor Act, the union removed
the case to federal court. Krakowski requested remand to state court, but the district
court agreed with the union.
With both claims preempted, Krakowski faced a choice: amend the complaint
or have the suit dismissed. He chose the first option, adding claims based on two
federal statutes, including one under the Railway Labor Act. Allied Pilots responded
with a motion to dismiss or, in the alternative, for summary judgment. According
to the district court, the state-law claims fell away due to preemption, and though the
federal claims remained, they did not survive summary judgment. Krakowski
appeals both parts of the ruling, as well as the earlier decision not to remand the case
back to state court.
II.
The critical decision in this case was the denial of Krakowski’s remand
motion. To get there, the district court relied on the complete-preemption doctrine:
the idea that the Railway Labor Act “wholly displace[d]” his conversion and unjust-
enrichment claims and left only federal claims in their place. Beneficial Nat’l Bank
v. Anderson, 539 U.S. 1, 8 (2003). Whether the district court correctly applied the
-2-
doctrine presents an issue of law that we review de novo. See Gaming Corp. of Am.
v. Dorsey & Whitney, 88 F.3d 536, 542 (8th Cir. 1996).
With complete preemption, the normal rules of federal jurisdiction do not
apply. See Johnson v. MFA Petroleum Co., 701 F.3d 243, 248 (8th Cir. 2012).
Rather than determining whether a federal question exists by looking only at the face
of a well-pleaded complaint, complete preemption requires a peek behind it. See
Markham v. Wertin, 861 F.3d 748, 754 (8th Cir. 2017); M. Nahas & Co. v. First
Nat’l Bank of Hot Springs, 930 F.2d 608, 611–12 (8th Cir. 1991). The reason is that
some statutes have such “extraordinary pre-emptive power” that state claims turn
into federal claims, even if none actually appear in the complaint. Gaming Corp. of
Am., 88 F.3d at 543 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)).
Complete preemption “rare[ly]” occurs, Johnson, 701 F.3d at 248, and even then,
only when a statute “provide[s] the exclusive cause of action for the claim asserted
and . . . set[s] forth procedures and remedies governing” it, Beneficial Nat’l Bank,
539 U.S. at 8.
A.
The Railway Labor Act is one of those statutes. See Deford v. Soo Line R.R.
Co., 867 F.2d 1080, 1086 (8th Cir. 1989). When it applies, it completely preempts
state-law claims that “depend[] on an interpretation of [a collective-bargaining
agreement].” Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 261 (1994); Gore v.
Trans World Airlines, 210 F.3d 944, 949 (8th Cir. 2000).
Here is why. The Railway Labor Act requires “employees” (like Krakowski)
and “carriers” (like American Airlines) to arbitrate “minor disputes,” Deford, 867
F.2d at 1085 & n.4, exclusively before adjustment boards. 45 U.S.C. § 153 First (i);
see Andrews v. Louisville & Nashville R.R. Co., 406 U.S. 320, 321–22 (1972)
(holding that the arbitration provisions of section 153 First (i) are mandatory). Only
certain disputes qualify: those “between an employee or group of employees and a
carrier or carriers” that “grow[] out of grievances or out of the interpretation or
-3-
application of agreements concerning rates of pay, rules, or working conditions.” 45
U.S.C. § 153 First (i); see Deford, 867 F.2d at 1085 (“[S]tatutory grievance
procedures under the [Railway Labor Act] are the mandatory and exclusive federal
remedy for resolving minor disputes.”).
In complete-preemption terms, this means that when an employee sues a
carrier (or vice versa) and the claim “depends on an interpretation of [a collective-
bargaining agreement],” Norris, 512 U.S. at 261, the Railway Labor Act “provide[s]
the “exclusive cause of action,” Johnson, 701 F.3d at 248 (quotation marks omitted).
And with extensive “procedures and remedies governing” this type of claim, id.
(quotation marks omitted), it must be heard in federal court.1
On the other hand, if a dispute is not “minor,” the Railway Labor Act does not
completely preempt it. We have already held, for example, that if the controversy
does not involve the interpretation of a collective-bargaining agreement, then there
is no complete preemption. Evans v. Mo. Pac. R.R. Co., 795 F.2d 57, 58 (8th Cir.
1986); see Deford, 867 F.2d at 1087 (explaining the holding of Evans). We reach
the same conclusion about the requirement that the suit be between at least one
employee and one carrier.
For complete preemption, the cause of action must be exclusive. Here, the
Railway Labor Act does not require disputes between an employee and a union to
be heard by an adjustment board, so there is no federal cause of action at all, much
less an exclusive one. See Verville v. Int’l Ass’n of Machinists & Aerospace
Workers, 520 F.2d 615, 618 (6th Cir. 1975); see also Conley v. Gibson, 355 U.S. 41,
44 (1957) (recognizing that section 153 First (i) “by its own terms applies only to
‘disputes between an employee or group of employees and a carrier or carriers’”
(quoting 45 U.S.C. § 153 First (i))), abrogated on other grounds by Bell Atlantic
1
Indeed, the Railway Labor Act provides limited judicial review of
adjustment-board decisions, 45 U.S.C. § 153 First (q); see Sullivan v. Endeavor Air,
Inc., 856 F.3d 533, 537 (8th Cir. 2017), which is consistent with a scheme that is
completely preemptive, see Johnson, 701 F.3d at 251–52.
-4-
Corp. v. Twombly, 550 U.S. 544, 561–63 (2007). Without a federal cause of action
between these parties, complete preemption is off the table. See Johnson, 701 F.3d
at 252 (explaining that “there is an exceptionally strong presumption against
complete preemption” in the absence of “a federal cause of action which in effect
replaces a state law claim”).
B.
Our precedent is not to the contrary. As far as we can tell, we have never held
that the Railway Labor Act completely preempts “a dispute between a union and a
union member.” Verville, 520 F.2d at 618; see, e.g., Evermann v. BNSF Ry. Co.,
608 F.3d 364, 366 (8th Cir. 2010); Gore, 210 F.3d at 949; Deford, 867 F.2d at 1082.
The closest we have come is Allen v. United Transp. Union, 964 F.2d 818 (8th
Cir. 1992). There, Amtrak employees sued two parties: their union and their
employer. Id. at 820–21. We agreed with the district court that a state-law
misrepresentation claim had to be dismissed under an ordinary-preemption rationale
because it required “an interpretation” of a collective-bargaining agreement. Id. at
822 (analyzing Railway Labor Act preemption as a defense to a federal lawsuit).
Allied Pilots says that Allen fully answers the question here. We disagree for
three reasons. The first is that it involved ordinary, not complete, preemption. See
Johnson, 701 F.3d at 248 (discussing the differences between ordinary and complete
preemption). As we noted in Johnson, ordinary preemption comes into play
whenever “federal law . . . supersede[s] a state[-]law claim,” whereas complete
preemption is “quite rare” and occurs only when “federal preemption is so strong
that ‘there is . . . no such thing as a state-law claim.’” Id. (emphasis added) (quoting
Beneficial Nat’l Bank, 539 U.S. at 11). So Allen never actually reached the issue
presented in this case. See Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 355 (3d Cir.
1995) (explaining that not “all claims preempted by ERISA are subject to removal”);
see also Markham, 861 F.3d at 760 (stating that the defendants were “free to assert
-5-
a preemption defense in state court,” even if their complete-preemption argument
fell short).
The second and third reasons both have to do with the fact that the employees
in Allen also sued Amtrak. Certain disputes between a carrier and its employees, as
we have explained, go straight to an adjustment board. If we were to extend Allen
here, it would be to a new factual context: a lawsuit solely between an employee and
a union. And because no one in Allen thought that the union’s involvement in the
lawsuit might have mattered, it at most “implicit[ly] resol[ved]” the issue that we
face: whether suits between unions and employees are completely preempted.
United States v. Bruguier, 735 F.3d 754, 763 (8th Cir. 2013) (en banc) (quotation
marks omitted); see also Streu v. Dormire, 557 F.3d 960, 964 (8th Cir. 2009)
(holding that later panels are not bound by the “implicit resolution of an issue that
was neither raised by the parties nor discussed by the [court]”). Allen, in other
words, does not tie our hands.
Nor do the other cases cited by Allied Pilots. In the first, Gore, 210 F.3d 944,
we said that complete preemption under the Railway Labor Act and the Labor
Management Relations Act “are governed by . . . virtually identical” standards. Id.
at 949 (quotation marks omitted). In the second, Int’l Brotherhood of Elec. Workers
v. Hechler, 481 U.S. 851, 853–54, 861–62 (1987), the Supreme Court concluded that
a tort dispute between a union and one of its members was completely preempted by
the Labor Management Relations Act. These two cases, according to Allied Pilots,
add up to complete preemption.
The math simply does not work, and text of the relevant statutes reveals why.2
The Labor Management Relations Act authorizes “[s]uits for violation[s] of
contracts between an employer and a labor organization representing employees . . .
2
The standards for complete preemption under the Railway Labor Act and
Labor Management Relations Act are “virtually identical,” as we have said, but we
still have to pay attention to the text to figure out what is completely preempted.
Gore, 210 F.3d at 949 (quotation marks omitted).
-6-
or between any such labor organizations.” 29 U.S.C. § 185(a). The word “between”
modifies “contracts,” not “suits,” so the text only limits the subject of the suit, not
who may sue. Smith v. Evening News Ass’n, 371 U.S. 195, 198 (1962); see also
Barnhart v. Thomas, 540 U.S. 20, 26 (2003) (describing the grammatical rule of the
last antecedent). This reading aligns with precedent, under which we have held that
employees can sue their unions under the Labor Management Relations Act for
breaching “contractual duties.” St. John v. Int’l Ass’n of Machinists & Aerospace
Workers, 139 F.3d 1214, 1218 n.2 (8th Cir. 1998).
Not so under the Railway Labor Act. The key language, as relevant here,
covers “disputes between an employee or group of employees and a carrier or
carriers.” 45 U.S.C. § 153 First (i). This time, the word “between” modifies
“disputes.” See Barnhart, 540 U.S. at 26. The plain language sends disputes
between certain parties—the carrier and its employees—to an adjustment board. See
Verville, 520 F.2d at 618. The Railway Labor Act’s party-focused language is
precisely why complete preemption is lacking here. Although it creates a “cause of
action” between employees and carriers, it has nothing comparable for disputes
between employees and unions. See Johnson, 701 F.3d at 253 (explaining that there
was no complete preemption because the relevant part of the statute had “no
language creating a federal cause of action which could substitute for Johnson’s
state[-]law claim” (emphasis added)).
C.
Allied Pilots has a backup complete-preemption theory. This one is based on
the duty of fair representation, which protects union members from “arbitrary,
discriminatory, or [] bad[-]faith” actions by a union. Air Line Pilots Ass’n, Int’l v.
O’Neill, 499 U.S. 65, 67 (1991); see also id. at 73–77 (discussing this duty); Steele
v. Louisville & Nashville R.R. Co., 323 U.S. 192, 199–208 (1944) (establishing a
cause of action for a breach of this duty). Krakowski’s only option, according to
Allied Pilots, was to sue for a breach of the duty of fair representation, not for
conversion and unjust enrichment. Once again, we disagree.
-7-
Complete preemption does not come so easy. It is rare precisely because
Congress must have both made the federal cause of action “exclusive” and “set forth
procedures and remedies governing” it. Johnson, 701 F.3d at 248 (quoting
Beneficial Nat’l Bank, 539 U.S. at 8). For the duty of fair representation, Congress
did neither.
First, fair-representation claims are a “judicial creation,” not an exclusive
statutory remedy. Wrobbel v. Asplundh Const. Corp., 549 F. Supp. 2d 868, 874–75
(E.D. Mich. 2008) (emphasis omitted); see also Amalgamated Ass’n of St., Elec. Ry.
& Motor Coach Emps. of Am. v. Lockridge, 403 U.S. 274, 301 (1971) (“The duty of
fair representation was judicially evolved . . . .”). To be sure, the Supreme Court has
inferred that the duty exists based primarily on two Railway Labor Act provisions.
See Steele, 323 U.S. at 199–202. One gives employees “the right to organize and
bargain collectively through representatives of their own choosing” and empowers
them “to determine who shall be the[ir] representative.” 45 U.S.C. § 152 Fourth.
The other requires “[a]ll disputes between a carrier or carriers and its or their
employees [to] be considered, and, if possible, decided, with all expedition, in
conference between representatives designated and authorized.” 45 U.S.C. § 152Second. But even if this is enough to imply a cause of action, Congress did not make
it exclusive.3
Second, with an implied cause of action, it is unsurprising that there are no
statutory “procedures and remedies.” Johnson, 701 F.3d at 253. Unlike “disputes
between” carriers and employees, fair-representation claims do not even have an
“available administrative remedy” before an adjustment board. Steele, 323 U.S. at
205, 207 (quotation marks omitted); see also Czosek v. O’Mara, 397 U.S. 25, 27–28
(1970). Without specific “procedures and remedies,” there can be no complete
preemption. Beneficial Nat’l Bank, 539 U.S. at 8; see Johnson, 701 F.3d at 252–53.
3
We have reached the same conclusion under the National Labor Relations
Act. See Markham, 861 F.3d at 758–59.
-8-
III.
We accordingly reverse, vacate the district court’s judgment, and instruct the
court on remand to return this case to state court.4
______________________________
4
Now that we have decided that remand to state court is necessary, there is no
need to address the viability of the claims in Krakowski’s amended complaint. See
In re Atlas Van Lines, Inc., 209 F.3d 1064, 1067 (8th Cir. 2000).
-9-