O'Toole v. Eyelets for Industry, Inc. ( 2014 )

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BRIAN O’TOOLE v. EYELETS FOR INDUSTRY, INC.
(AC 24729)
Gruendel, Keller and Borden, Js.
Argued November 14, 2013—officially released February 25, 2014
(Appeal from Superior Court, judicial district of
Waterbury, Pittman, J.)
Eric R. Brown, for the appellant (plaintiff).
Opinion
BORDEN, J. In this uncontested wrongful termina-
tion action, the plaintiff, Brian O’Toole, appeals from
the trial court’s sua sponte dismissal of his complaint
for lack of subject matter jurisdiction. The plaintiff
claims that the trial court improperly dismissed his
complaint because the court had (1) concurrent juris-
diction to decide his claim brought pursuant to 38 U.S.C.
§ 4301 et seq., and (2) subject matter jurisdiction to
adjudicate his common-law claims of breach of the
covenant of good faith and fair dealing, and intentional
infliction of emotional distress. We agree with the plain-
tiff, and therefore reverse the judgment of the trial
court.
On January 29, 2003, the plaintiff served a copy of
the complaint against the defendant, Eyelets For Indus-
try, Inc. The defendant did not appear, and the court
subsequently granted the plaintiff’s motion against the
defendant for default for failure to appear. Following
a hearing in damages to the court, the court sua sponte
dismissed the action for lack of subject matter jurisdic-
tion. The plaintiff filed a motion to reargue, which the
court denied. This appeal followed.
A more detailed account of the relevant procedural
history is as follows. The first count alleged that the
plaintiff is a member of the United States National
Guard and, accordingly, he performs ‘‘service in the
uniformed services,’’ as defined in 38 U.S.C. § 4303 (13).
The complaint further alleged that the plaintiff was
employed by the defendant as a toolmaker until Octo-
ber, 2002, at which time his employment was terminated
due to ‘‘lack of work.’’ The complaint alleged that the
reason cited for the plaintiff’s termination of employ-
ment was pretextual, and that, in actuality, the defen-
dant unlawfully terminated the plaintiff due to his
military status, in violation of 38 U.S.C. § 4301 et seq.,
the Uniformed Services Employment and Reem-
ployment Rights Act of 1994 (act). The second count
of the complaint alleged that the defendant’s unlawful
termination of the plaintiff’s employment constituted a
breach of the covenant of good faith and fair dealing
implied in the contractual employment relationship
between the parties. The third count of the complaint
alleged that the defendant’s discriminatory conduct
constituted intentional infliction of emotional distress.
The defendant failed to respond in any way to the
plaintiff’s complaint. Consequently, the plaintiff filed
a motion for default for failure to appear against the
defendant. The court granted this motion, and the case
proceeded to a hearing in damages before the court.
Following the hearing in damages, however, the court
dismissed the complaint sua sponte for lack of subject
matter jurisdiction. The court’s memorandum of deci-
sion stated that the act ‘‘provides for a private right of
action for damages against a private employer. 38 U.S.C.
§ 4323 (a) (2) (A). The statute restricts jurisdiction over
actions by an employee against a private employer to
the United States District Courts. 38 U.S.C. § 4323 (b)
(3). The only jurisdiction a state court may exercise is
in the case of an action against a state when the state
is an employer accused of discrimination. 38 U.S.C.
§ 4323 (b) (2). Accordingly, the court finds that it lacks
subject matter jurisdiction and sua sponte dismisses
the action.’’ Subsequently, the plaintiff filed a motion
to reargue in accordance with Practice Book § 11-11,
which the court denied.
On appeal, the plaintiff claims that the court improp-
erly dismissed his complaint because the act does not
confer exclusive jurisdiction upon the federal courts.
Accordingly, the plaintiff argues that the court had con-
current subject matter jurisdiction to adjudicate his
claim under the act. Additionally, the plaintiff claims
that even if the court lacked subject matter jurisdiction
to adjudicate his claim under the act, it improperly
dismissed the complaint with respect to counts two
and three—breach of the covenant of good faith and
fair dealing, and intentional infliction of emotional dis-
tress—because these are state common-law claims over
which the court retained subject matter jurisdiction.
We agree.
We begin by setting forth the standard of review for
a motion to dismiss for lack of subject matter jurisdic-
tion. ‘‘A motion to dismiss tests, inter alia, whether, on
the face of the record, the court is without jurisdiction.
. . . [O]ur review of the court’s ultimate legal conclu-
sion and resulting [determination] of the motion to dis-
miss will be de novo. . . . When a . . . court decides
a jurisdictional question raised by a pretrial motion to
dismiss, it must consider the allegations of the com-
plaint in their most favorable light. . . . In this regard,
a court must take the facts to be those alleged in the
complaint, including those facts necessarily implied
from the allegations, construing them in a manner most
favorable to the pleader. . . . The motion to dismiss
. . . admits all facts which are well pleaded, invokes
the existing record and must be decided upon that
alone. . . . In undertaking this review, we are mindful
of the well established notion that, in determining
whether a court has subject matter jurisdiction, every
presumption favoring jurisdiction should be indulged.’’
(Internal quotation marks omitted.) MacDermid, Inc.
v. Leonetti, 310 Conn. 616, 626, 79 A.3d 60 (2013).
We first consider the plaintiff’s claim that the court
improperly dismissed his wrongful termination claim,
brought pursuant to the act, a federal statute enacted in
1994. ‘‘[The act] is the latest in a series of laws protecting
veterans’ employment and reemployment rights going
back to the Selective Training and Service Act of 1940.
[The act’s] immediate predecessor was commonly
referred to as the Veterans’ Reemployment Rights Act
(VRRA), which was enacted . . . [in] 1974. In enacting
[the act], Congress emphasized [its] continuity with the
VRRA and its intention to clarify and strengthen that
law. . . .’’ 20 C.F.R. § 1002.2. The act ‘‘protects individu-
als performing, or who performed, uniformed service in
accordance with 38 U.S.C. [§ 4301 et seq.] from adverse
employment discrimination on the basis of their uni-
formed service, and provides for their prompt restora-
tion to civilian employment when they return to civilian
life.’’ Presidential Memorandum, July 19, 2012, 77 Fed.
Reg. 43,699 (July 25, 2012); see also 38 U.S.C. § 4301.
Under the act, a protected individual who suffers
an adverse employment action (or the United States
bringing the claim on behalf of such individual) has the
right to sue his or her employer (private or state). The
act’s enforcement provisions vary depending on who
the parties are to the suit. The statute provides in rele-
vant part: ‘‘(1) In the case of an action against a State
(as an employer) or a private employer commenced by
the United States, the district courts of the United States
shall have jurisdiction over the action. (2) In the case
of an action against a State (as an employer) by a person,
the action may be brought in a State court of competent
jurisdiction in accordance with the laws of the State.
(3) In the case of an action against a private employer
by a person, the district courts of the United States shall
have jurisdiction of the action.’’ (Emphasis added.)
38 U.S.C. § 4323 (b). The plaintiff’s claim was brought
pursuant to the third provision.
Although the interpretation of the act’s enforcement
provisions is an issue of first impression for our courts,
our analysis is guided by an expansive body of case law
establishing well settled principles for distinguishing
between statutes that confer exclusive versus concur-
rent jurisdiction. ‘‘The general principle of state-court
jurisdiction over cases arising under federal laws is
straightforward: state courts may assume subject-mat-
ter jurisdiction over a federal cause of action absent
provision by Congress to the contrary . . . . This rule
is premised on the relation between the States and the
National Government within our federal system. See
The Federalist No. 82 (Hamilton). . . . It is black letter
law . . . that the mere grant of jurisdiction to a federal
court does not operate to oust a state court from concur-
rent jurisdiction over the cause of action.’’ (Citations
omitted; footnote omitted.) Gulf Offshore Co. v. Mobil
Oil Corp., 453 U.S. 473, 477–78, 101 S. Ct. 2870, 69
L. Ed. 2d 784 (1981). Thus, ‘‘[t]o give federal courts
exclusive jurisdiction over a federal cause of action,
Congress must, in an exercise of its powers under the
Supremacy Clause, affirmatively divest state courts of
their presumptively concurrent jurisdiction.’’ Yellow
Freight System, Inc. v. Donnelly, 494 U.S. 820, 823, 110
S. Ct. 1566, 108 L. Ed. 2d 834 (1990); see Burt v. Titlow,
U.S. , 134 S. Ct. 10, 15, 187 L. Ed. 2d 348 (2013);
Foxhall Realty Law Offices, Inc. v. Telecommunica-
tions Premium Services, Ltd., 156 F.3d 432, 435 (2d
Cir. 1998); State v. Sebastian, 243 Conn. 115, 140–41,
701 A.2d 13 (1997), cert. denied, 522 U.S. 1077, 118 S.
Ct. 856, 139 L. Ed. 2d 756 (1998); Shea v. First Federal
Savings & Loan Assn. of New Haven, 184 Conn. 285,
289–90, 439 A.2d 997 (1981). Exclusive federal jurisdic-
tion can be created expressly or by implication. See
Mims v. Arrow Financial Services, LLC, U.S. ,
132 S. Ct. 740, 748, 181 L. Ed. 2d 881 (2012); Stratford v.
Bridgeport, 173 Conn. 303, 310–11, 377 A.2d 327 (1977).
In light of this precedent, we presume that state
courts have concurrent jurisdiction to adjudicate claims
brought pursuant to the act. The question becomes,
then, whether Congress defeated this presumption by
expressly or impliedly creating exclusive federal juris-
diction. To resolve this question, we must apply the
principles of statutory interpretation. Ordinarily, our
analysis would begin with the plain meaning rule, set
forth in General Statutes § 1-2z. Because the act is a
federal statute, however, ‘‘principles of comity and con-
sistency require us to follow the plain meaning rule for
the interpretation of federal statutes because that is the
rule of construction utilized by the United States Court
of Appeals for the Second Circuit.’’ (Internal quotation
marks omitted.) Cambodian Buddhist Society of Con-
necticut, Inc. v. Planning & Zoning Commission, 285
Conn. 381, 401, 941 A.2d 868 (2008).
Before turning to the task of determining whether
the act’s language is plain and unambiguous, however,
we recognize that this act does not come to us
unadorned by prior interpretation. In Tsang v. Kan, 173
F.2d 204 (9th Cir.), cert. denied, 337 U.S. 939, 69 S. Ct.
1515, 93 L. Ed. 1744 (1949), the United States Court of
Appeals for the Ninth Circuit considered whether the
defendant had the right to sue his private employer in
a California state court after he was denied reinstate-
ment to his employment position, in violation of the
reemployment provisions of the Selective Training and
Service Act of 1940 (STSA)—the original progenitor of
the act. Under the enforcement provision of the STSA,
‘‘the district court of the United States for the district
in which such private employer maintains a place of
business shall have power . . . to specifically require
such employer to comply with [the statutory] provisions
. . . .’’ (Emphasis added.) 50 U.S.C. § 308 (e) (1940).
The court referred to the United States Supreme Court’s
decision in Claflin v. Houseman, 93 U.S. 130, 23 L. Ed.
833 (1876), with respect to the principle that ‘‘[t]he mere
giving of . . . jurisdiction to the federal courts does
not thereby exclude that of the state courts.’’ Tsang v.
Kan, supra, 205. Accordingly, the court concluded that
state courts retain their concurrent jurisdiction under
the STSA. Id., 206. Because the act is an extension
of the STSA, and indeed, was enacted ‘‘to clarify and
strengthen that law’’; 20 C.F.R. § 1002.2; we regard this
case as persuasive authority that the act does not confer
exclusive federal jurisdiction.
We now return to an examination of the language of
the act and its interpretation under the guidance of the
United States Court of Appeals for the Second Circuit.
‘‘[W]e begin with the text of the statute to determine
whether the language at issue has a plain and unambigu-
ous meaning. . . . A particular statute’s plain meaning
can best be understood by looking to the statutory
scheme as a whole and placing the particular provision
within the context of that statute. . . . [W]e attempt
to ascertain how a reasonable reader would understand
the statutory text, considered as a whole. . . . If we
can ascertain the plain meaning of the statutory text
by examining it in the context of the statute as a whole,
we need proceed no further. If, however, the plain
meaning is ambiguous, we may consult other sources.
Extrinsic materials have a role in statutory interpreta-
tion . . . to the extent they shed a reliable light on
the enacting Legislature’s understanding of otherwise
ambiguous terms. . . . We turn to the legislative his-
tory only when the plain statutory language is ambigu-
ous or would lead to an absurd result.’’ (Citations
omitted; internal quotation marks omitted.) Louis Vuit-
ton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 108 (2d
Cir. 2012).
We will consult the legislative history for two reasons.
First, we conclude that the act is not plain and unambig-
uous. It does not expressly state that federal courts
have exclusive jurisdiction. In Tafflin v. Levitt, 493 U.S.
455, 471, 110 S. Ct. 792, 107 L. Ed. 2d 887 (1990) (Scalia,
J., concurring), Justice Scalia identified three phrases
typically used by Congress to expressly confer exclu-
sive federal jurisdiction: ‘‘In the standard fields of exclu-
sive federal jurisdiction, the governing statutes
specifically recite that suit may be brought only in fed-
eral court . . . that the jurisdiction of the federal
courts shall be exclusive . . . or indeed even that the
jurisdiction of the federal courts shall be exclusive of
the courts of the States . . . .’’ (Citations omitted;
internal quotation marks omitted.) Id. (citing various
federal statutes using this specific language to confer
expressly exclusive federal jurisdiction). The act does
not utilize any of this paradigmatic language, but
instead, states that ‘‘the district courts of the United
States shall have jurisdiction of the action.’’ 38 U.S.C.
§ 4323 (b) (3). Accordingly, the statute does not plainly
and unambiguously confer exclusive federal juris-
diction.
Second, reading the act as a whole, a reasonable
reader would find that the plain statutory language
yields an absurd result. For instance, as to those claims
brought pursuant to 38 U.S.C. § 4323 (b) (1) and (3),
the statute provides that ‘‘the district courts of the
United States shall have jurisdiction . . . .’’ (Emphasis
added.) By contrast, pursuant to 38 U.S.C. § 4323 (b) (2),
claims brought by an individual against a state employer
‘‘may be brought in a State court of competent jurisdic-
tion in accordance with the laws of the State.’’ (Empha-
sis added.) Generally, ‘‘when the same [statute] uses
both may and shall, the normal inference is that each
is used in its usual sense—the one act being permissive,
the other mandatory.’’ (Internal quotation marks omit-
ted.) Weinstein v. Albright, 261 F.3d 127, 137 (2d Cir.
2001); see also Jama v. Immigration & Customs
Enforcement, 543 U.S. 335, 346, 125 S. Ct. 694, 160
L. Ed. 2d 708 (2005). If this ‘‘normal inference’’ were
applicable to the act, then 38 U.S.C. § 4323 (b) (3) would
effectively confer exclusive federal jurisdiction because
the word ‘‘shall’’ would require aggrieved parties to
bring suit in federal court.
Here, however, this inference leads to an absurd
result. Specifically, reading the word ‘‘may’’ in 38 U.S.C.
§ 4323 (b) (2) as permitting an aggrieved individual to
sue a state employer in either state or federal court
would violate the doctrine of sovereign immunity set
forth in the eleventh amendment to the United States
constitution. See U.S. Const., amend. XI. This doctrine
limits judicial authority under article three of the United
States constitution and, accordingly, bars an individual
from suing a state in federal court on grounds not set
forth within the fourteenth amendment to the United
States constitution. See Seminole Tribe of Florida v.
Florida, 517 U.S. 44, 59–72, 116 S. Ct. 1114, 134 L. Ed.
2d 252 (1996). Thus, as a matter of law, the word ‘‘may’’
in 38 U.S.C. § 4323 (b) (2) of the act is not a permissive
term, thereby defeating the normal inference that when
‘‘may’’ and ‘‘shall’’ appear in the same statute, the former
is permissive and the latter mandatory. We thus exam-
ine the act’s legislative history to illuminate the meaning
of 38 U.S.C. § 4323 (b) (3).
The legislative history of the act demonstrates that
Congress did not intend to confer exclusive federal
jurisdiction. The act was amended in 1998 to respond
to concerns that it violated the doctrine of sovereign
immunity, in light of the United States Supreme Court’s
decision in Seminole Tribe of Florida v. Florida, supra,517 U.S. 44. See Townsend v. University of Alaska, 543
F.3d 478, 482–84 (9th Cir. 2008) (discussing legislative
history of the act amendments of 1998), cert. denied,
556 U.S. 1166, 129 S. Ct. 1907, 173 L. Ed. 2d 1058 (2009);
H.R. 3213, 105th Cong. (1998). In the United States
House of Representatives, Representative Jack Quinn
stated that ‘‘[t]his bill would substitute the United States
for an individual veteran as the plaintiff in enforcement
actions in cases where the Attorney General believes
that a State has not complied with [the act]. . . . Indi-
viduals not represented by the Attorney General would
be able to bring enforcement actions in State court.’’
(Emphasis added.) 144 Cong. Rec. at H1398 (1998). He
further stated, ‘‘[i]n summary . . . we are looking at
State employees to be granted the same rights under
[the act] as any other veteran or member of the Guard
and Reserve who works in the private sector or the
Federal Government.’’ (Emphasis added.) Id. Because
Congress expressly stated that state employees have
the right to sue their employers in state court, and that
the intent of the 1998 amendments was to grant state
employees the same rights as employees in the private
sector, it follows that employees have the right to sue
their private employers in state court under the act.
Our conclusion is also consistent with the United
States Supreme Court’s policy that the STSA ‘‘is to be
liberally construed for the benefit of those who left
private life to serve their country in its hour of great
need.’’ Fishgold v. Sullivan Drydock & Repair Corp.,
328 U.S. 275, 285, 66 S. Ct. 1105, 90 L. Ed. 1230 (1946).
The Supreme Court further stated that courts must
‘‘construe the separate provisions of the [STSA] as parts
of an organic whole and give each as liberal a construc-
tion for the benefit of the veteran as a harmonious
interplay of the separate provisions permits.’’ Id.; see
also Feore v. North Shore Bus Co., 161 F.2d 552, 553–54
(2d Cir. 1947) (STSA must be liberally construed ‘‘to
effectuate the congressional purpose of insuring that
the returning veteran be not penalized employmentwise
because of his military service’’). This policy of liberal
construction is applicable to the act, to the extent that,
in enacting the act, ‘‘Congress . . . emphasized that
Federal laws protecting veterans’ employment and
reemployment rights for the past fifty years had been
successful and that the large body of case law that had
developed under those statutes remained in full force
and effect, to the extent it is consistent with [the act].’’
20 C.F.R. § 1002.2. It follows, then, that in light of prior
case law broadly interpreting the STSA as conferring
concurrent jurisdiction, such as Tsang v. Kan, supra,
173 F.2d 206, the act must also be construed liberally
to permit concurrent jurisdiction.
Finally, the court also improperly dismissed the plain-
tiff’s second and third counts. They are simply state
common-law claims over which our courts have long
exercised subject matter jurisdiction.
The judgment is reversed and the case is remanded
for a new hearing in damages and for further proceed-
ings according to law.
In this opinion the other judges concurred.