Moore-Thoms v. Alaska Airlines ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALGIA MOORE-THOMAS, 
individually, and on behalf of all
other persons similarly situated, No. 06-35923
Plaintiff-Appellant,
v.  D.C. No.
CV-06-00652-BR
ALASKA AIRLINES, INC., a Foreign OPINION
Corporation,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Oregon
Anna J. Brown, District Judge, Presiding
Argued and Submitted
October 24, 2008—Portland, Oregon
Filed January 27, 2009
Before: A. Wallace Tashima and Milan D. Smith, Jr.,
Circuit Judges, and George H. Wu,* District Judge.
Opinion by Judge Milan D. Smith, Jr.
*The Honorable George H. Wu, United States District Court Judge for
the Central District of California, sitting by designation.
977
MOORE-THOMAS v. ALASKA AIRLINES, INC. 979
COUNSEL
A.E. Bud Bailey, Jacqueline L. Koch, and Gary A. Parks, Bai-
ley Pinney & Associates, LLC, Vancouver, Washington, for
the plaintiff-appellant.
Brenda K. Baumgart, Barren Liebman, LLP, Portland, Ore-
gon, for the defendant-appellee.
OPINION
MILAN D. SMITH, JR., Circuit Judge:
Plaintiff-Appellant Algia Moore-Thomas (Moore-Thomas)
appeals the district court’s dismissal of her uncertified class
action in which she alleges that Defendant-Appellee Alaska
Airlines, Inc. (Alaska) willfully failed to pay her and other
former employees all wages due upon termination, at the time
and in the manner required by Oregon Revised Statutes (Or.
Rev. Stat.) § 652.140. Moore-Thomas argues that the district
980 MOORE-THOMAS v. ALASKA AIRLINES, INC.
court erred by concluding that the Railway Labor Act (RLA),
45 U.S.C. §§ 151-63, 181-88, completely pre-empts her state
law claim, by denying her motion to remand, and by granting
Alaska’s motion to dismiss for lack of subject matter jurisdic-
tion. Because the RLA does not completely pre-empt Moore-
Thomas’s claim, we reverse and remand with instructions to
vacate the judgment and remand the action to state court.
FACTUAL AND PROCEDURAL BACKGROUND
Alaska employed Moore-Thomas as a customer service
agent in Portland, Oregon. A collective bargaining agreement
(CBA) between Alaska and its clerical, office, and passenger-
service employees governed her employment.
In March 2006, Moore-Thomas and certain other former
Alaska employees filed a class-action complaint against
Alaska in Oregon state court. Their complaint asserts that
Alaska willfully failed to pay them all wages due on termina-
tion of their employment, in violation of Or. Rev. Stat.
§ 652.140. Moore-Thomas seeks statutory penalties, costs and
disbursements, pre- and post-judgment interest, and reason-
able attorneys’ fees on behalf of herself and all others simi-
larly situated.
Alaska timely removed the action to the district court, pur-
suant to 28 U.S.C. §§ 1441(a) and 1446(b). In its removal
petition, Alaska stated that the district court had jurisdiction
pursuant to 28 U.S.C. § 1331 because the RLA governed the
action.1
Once in federal court, Alaska filed a motion to dismiss pur-
suant to Rule 12(b)(1) of the Federal Rules of Civil Proce-
1
Alaska did not rely on diversity of citizenship as an alternate ground
to sustain removal jurisdiction in either its removal petition or its opposi-
tion to Moore-Thomas’s motion to remand. We therefore do not consider
that ground on appeal.
MOORE-THOMAS v. ALASKA AIRLINES, INC. 981
dure, alleging that the district court lacked subject matter
jurisdiction because the RLA pre-empts Moore-Thomas’s
state law claim, and because she had not complied with the
RLA’s mandatory arbitration provisions. Moore-Thomas then
filed a motion to remand the action to state court, arguing that
the district court lacked subject matter jurisdiction because the
RLA does not pre-empt her claim.
The district court ruled that the RLA completely pre-empts
Moore-Thomas’s action because her claim requires interpreta-
tion of the CBA. Accordingly, the district court concluded
that removal was proper, denied Moore-Thomas’s motion to
remand, and granted Alaska’s motion to dismiss for lack of
subject matter jurisdiction in light of the parties’ failure to
arbitrate the claim pursuant to the RLA. Moore-Thomas
timely appealed.
STANDARD OF REVIEW AND JURISDICTION
We review both the district court’s pre-emption analysis
and denial of the motion to remand de novo. Olympic Pipe
Line Co. v. City of Seattle, 437 F.3d 872, 877 n.12 (9th Cir.
2006) (pre-emption analysis); Ritchey v. Upjohn Drug Co.,
139 F.3d 1313, 1315 (9th Cir. 1998) (motion to remand). We
have jurisdiction over Moore-Thomas’s appeal pursuant to 28
U.S.C. § 1291.
DISCUSSION
Moore-Thomas argues that the district court erred in deny-
ing her motion to remand because the RLA does not com-
pletely pre-empt her state law claim.
A. Pre-emption and Subject Matter Jurisdiction
[1] Under 28 U.S.C. § 1441, a defendant may remove an
action filed in state court to federal court if the federal court
would have original subject matter jurisdiction over the
982 MOORE-THOMAS v. ALASKA AIRLINES, INC.
action. Federal courts have original jurisdiction over “all civil
actions arising under the Constitution, laws, or treaties of the
United States.” 28 U.S.C. § 1331. To determine whether an
action arises under federal law, a court applies the “ ‘well-
pleaded complaint rule.’ ” Toumajian v. Frailey, 135 F.3d
648, 653 (9th Cir. 1998) (quoting Metro. Life. Ins. Co. v. Tay-
lor, 481 U.S. 58, 63 (1987)). Under this rule, a claim arises
under federal law “only when a federal question is presented
on the face of the plaintiff’s properly pleaded complaint.”
Valles v. Ivy Hill Corp., 410 F.3d 1071, 1075 (9th Cir. 2005).
[2] “A resulting corollary to the well-pleaded complaint
rule, known as the complete preemption doctrine, provides
that ‘Congress may so completely preempt a particular area
that any civil complaint raising this select group of claims is
necessarily federal in character.’ ” Toumajian, 135 F.3d at
653 (quoting Metro. Life, 481 U.S. at 63-64). “[I]f a federal
cause of action completely preempts a state cause of action[,]
any complaint that comes within the scope of the federal
cause of action necessarily ‘arises under’ federal law.” Fran-
chise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S.
1, 24 (1983).
A motion to remand is the proper procedure for challenging
removal. 28 U.S.C. § 1447(c). The removal statute is strictly
construed, and any doubt about the right of removal requires
resolution in favor of remand. Gaus v. Miles, Inc., 980 F.2d
564, 566 (9th Cir. 1992). The presumption against removal
means that “the defendant always has the burden of establish-
ing that removal is proper.” Id.B. Pre-emption Under the RLA
[3] In Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246(1994), the Supreme Court held that the pre-emption standard
applied under § 301 of the Labor Management Relations Act
(LMRA), 29 U.S.C. § 185, is also appropriate for addressing
questions of RLA pre-emption—i.e., that the RLA similarly
MOORE-THOMAS v. ALASKA AIRLINES, INC. 983
“pre-empts state law only if a state-law claim is dependent on
the interpretation of a CBA.” Hawaiian Airlines, 512 U.S. at262-63 & n.9. Given the intra-circuit conflict in some of our
cases (infra), the district court here understandably impliedly
interpreted the analogy drawn between LMRA and RLA pre-
emption in Hawaiian Airlines as rendering the two standards
fully coequal such that LMRA complete pre-emption applies
in the RLA context as well. Specifically, the district court
noted that “the preemption standard in the RLA context ‘is
virtually identical to the pre-emption standard . . . in cases
involving § 301 of the LMRA . . . .’ ” (quoting Hawaiian Air-
lines, 512 U.S. at 260). The district court then stated, “LMRA
§ 301 completely preempts ‘claims founded directly on rights
created by collective bargaining agreements, and also claims
substantially dependent on analysis of a collective bargaining
agreement,’ ” (quoting Cramer v. Consol. Freightways, Inc.,
255 F.3d 683, 689 (9th Cir. 2001) (en banc) (internal quota-
tion marks omitted)), and assumed throughout the rest of the
opinion that the RLA is also subject to complete pre-emption.
Moore-Thomas contends that the district court erred in its
reasoning because the RLA is subject to “ordinary” rather
than “complete” pre-emption. She asserts that the distinction
is crucial because, under the complete pre-emption exception
to the well-pleaded complaint rule, “federal law displaces a
plaintiff’s state-law claim, no matter how carefully pleaded.”
Valles, 410 F.3d at 1075. By contrast, under ordinary pre-
emption, the well-pleaded complaint rule applies such that
“[a] federal law defense to a state-law claim . . . , even if the
defense is that of federal pre-emption and is anticipated in the
plaintiff’s complaint,” is insufficient to confer federal juris-
diction if the complaint on its face does not present a federal
question. Id. Because only ordinary pre-emption applies, she
argues, and because her complaint presents only state law
questions, the district court impermissibly relied on Alaska’s
pre-emption defense in concluding that the RLA governed her
action. We agree that the RLA does not provide a basis for
finding complete pre-emption in this case and that, as a result,
984 MOORE-THOMAS v. ALASKA AIRLINES, INC.
Alaska’s removal on the grounds of the RLA’s governing this
action was improper. We, therefore, do not reach the question
of whether ordinary pre-emption serves as a defense to
Moore-Thomas’s claim.
[4] In Sullivan v. American Airlines, 424 F.3d 267 (2d Cir.
2005), the Second Circuit concluded that the Supreme Court’s
decision in Beneficial National Bank v. Anderson, 539 U.S. 1(2003), clarified that complete pre-emption does not apply
under the RLA. Sullivan, 424 F.3d at 275. The Second Circuit
cited the Supreme Court’s observation in Beneficial National
Bank to the effect that “ ‘[i]n the two categories of cases
where this Court has found complete preemption—certain
causes of action under the LMRA and ERISA[2]—the federal
statutes at issue provided the exclusive cause of action for the
claim asserted and also set forth procedures and remedies
governing that cause of action.’ ” Sullivan, 424 F.3d at 275(quoting Beneficial Nat’l Bank, 539 U.S. at 8 (emphasis
added)). According to the Second Circuit, “[h]ad Hawaiian
Airlines established that § 184 of the RLA, like § 301 of the
LMRA, completely preempted state-law causes of action
within its scope, the Court in Beneficial National Bank would
have discussed three, not two, categories of cases involving
complete preemption.” Id.
[5] Although the Supreme Court in Beneficial National
Bank actually added a third category of cases requiring com-
plete pre-emption by holding that the National Bank Act, 12
U.S.C. §§ 85-86, completely pre-empts state usury claims,
Beneficial Nat’l Bank, 539 U.S. at 11, we are persuaded by
the reasoning of Sullivan, and likewise hold that the RLA is
not subject to complete pre-emption. Our holding is but-
tressed by the Supreme Court’s explanation that a federal stat-
ute must provide the “exclusive cause of action” for complete
pre-emption to apply:
2
The Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq.
MOORE-THOMAS v. ALASKA AIRLINES, INC. 985
Does the National Bank Act provide the exclusive
cause of action for usury claims against national
banks? If so, then the cause of action necessarily
arises under federal law and the case is removable.
If not, then the complaint does not arise under fed-
eral law and is not removable.
Beneficial Nat’l Bank, 539 U.S. at 9. Accordingly, even
though the petitioners’ removal petition in Beneficial National
Bank demonstrated that § 85 of the National Bank Act would
provide a complete federal defense, removal was proper only
in light of the “Court’s longstanding and consistent construc-
tion of the National Bank Act as providing an exclusive fed-
eral cause of action for usury against national banks.” Id. at
10.
By contrast, the RLA does not provide an exclusive federal
cause of action. Rather than allowing disputes between air-
lines and their employees that “grow[ ] out of grievances, or
out of the interpretation or application of agreements concern-
ing rates of pay, rules, or working conditions” to be filed ini-
tially in federal court, the RLA instead requires submission of
such disputes to internal dispute-resolution processes and then
to a division of the National Adjustment Board or an arbitra-
tion board selected by the parties. 45 U.S.C. §§ 153 and 184.
Only after “the grievance has been heard by the adjustment
board [does] exclusive jurisdiction rest[ ] with the federal
court.” Schroeder v. Trans World Airlines, Inc., 702 F.2d 189,
192 (9th Cir. 1983).
[6] Given the Supreme Court’s ruling in Beneficial
National Bank, it is clear that the district court erred when it
assumed that the RLA is subject to complete rather than ordi-
nary pre-emption in holding that removal was proper. See 15
MOORE’S FEDERAL PRACTICE § 103.45[3][b] (3d ed. 2008) (cit-
ing Beneficial National Bank for the proposition that: “[T]he
Railway Labor Act . . . does not completely preempt state law
claims arising out of railroad labor disputes and, therefore,
986 MOORE-THOMAS v. ALASKA AIRLINES, INC.
does not provide a ground for removal of such claims to fed-
eral court. The Act does not provide a federal cause of action,
without which complete preemption . . . cannot exist.”).
In the past, certain of our precedents created an intra-circuit
conflict on the question of whether the RLA completely pre-
empts state law claims. In Holman v. Laulo-Rowe Agency,
994 F.2d 666, 669 n.4 (9th Cir. 1993), we observed:
There is apparently a conflict in this circuit over
whether complete preemption applies to suits involv-
ing the Railway Labor Act (RLA), 45 U.S.C. § 151,
et seq. Compare Price v. PSA Inc., 829 F.2d 871 (9th
Cir. 1987) . . . (RLA does not have complete pre-
emptive power) with Grote v. Trans World Airlines,
Inc., 905 F.2d 1307 (9th Cir. 1990)[ ] (citing Price
with approval on a related issue, but then holding,
without discussion, that RLA does have complete
preemptive power.)
[7] In light of the Supreme Court’s ruling in Beneficial
National Bank, we hold that to the extent this court’s prior
decision in Grote v. Trans World Airlines, Inc., 905 F.2d
1307, 1310 (9th Cir. 1990), ruled that the RLA is subject to
complete pre-emption, that holding is clearly irreconcilable
with Beneficial National Bank, and is effectively overruled.
See Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (en
banc) (noting that “where intervening Supreme Court author-
ity is clearly irreconcilable with our prior circuit authority[,]
. . . a three-judge panel of this court and district courts should
consider themselves bound by [that] intervening higher
authority and reject the prior opinion of this court as having
been effectively overruled”). We also hold that to the extent
Schroeder ruled that federal question jurisdiction always or
automatically exists whenever a removal petition contains
additional facts evidencing “[t]he application of [the RLA]
and the necessity of its interpretation,” 702 F.2d at 191, that
MOORE-THOMAS v. ALASKA AIRLINES, INC. 987
holding is also effectively overruled by Beneficial National
Bank.
CONCLUSION
[8] Even assuming that Alaska’s removal petition demon-
strates that the RLA provides a complete federal defense to
Moore-Thomas’s state wage and hour claim, because the
RLA is subject to ordinary rather than complete pre-emption,
her complaint does not arise under federal law and is not
removable. The district court erred in determining otherwise
and, as a result, we reverse and remand with instructions to
vacate the judgment and remand the action to state court for
lack of subject matter jurisdiction.
REVERSED and REMANDED, with INSTRUCTIONS.