Duane Carlson v. Arrowhead Concrete

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 05-3100
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Duane Carlson, *
*
Plaintiff-Appellee, *
* Appeal from the United States
v. * District Court for the District
* of Minnesota.
Arrowhead Concrete Works, Inc., *
*
Defendant-Appellant. *
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Submitted: March 13, 2006
Filed: April 19, 2006
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Before MURPHY, BOWMAN, and BENTON Circuit Judges.
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MURPHY, Circuit Judge.
Duane Carlson (Carlson) brought this action in state court against his former
employer Arrowhead Concrete Works, Inc. (Arrowhead) for retaliatory discharge and
failure to recall, in violation of the Minnesota Occupational Safety and Health Act and
the state whistleblower statute. Arrowhead removed the case to the federal district
court, alleging complete preemption under § 301 of the Labor Management Relations
Act (LMRA), and then moved to dismiss. The district court1 denied the motion to
dismiss and remanded the case after concluding that it lacked subject matter
1
The Honorable Richard H. Kyle, United States District Judge for the District
of Minnesota.
jurisdiction over Carlson's claims because they were not completely preempted.
Arrowhead appeals, but we dismiss the appeal for lack of jurisdiction.
I.
Arrowhead hired Carlson as a pump truck operator in December 2002. The
terms of his employment were governed by a collective bargaining agreement (CBA)
between the local Teamsters Union and Arrowhead. The CBA and the accompanying
memorandum of understanding provide that no driver shall be required to drive a
truck that does not comply with all state and local safety regulations. There are also
detailed provisions governing seniority, layoffs, and recall rights and a grievance
arbitration provision for disputes about the CBA.
In early 2003 Arrowhead sent Carlson to a safety training course conducted by
the pump truck manufacturer, Swing America (Swing). After his training Carlson
became concerned about the safety of two of the trucks, and he reported his concerns
to Arrowhead owners, Jim and Gerry Carlson (no relation to Duane). Carlson told Jim
and Gerry that driving these trucks would violate various laws, including the
Occupational Safety and Health Act (OSHA). Although he asked them to have the
trucks inspected, they did not. Carlson also contacted Swing and Concrete Pump
Repair (CPR) to report safety issues with the trucks, and they suggested he bring the
trucks in for repairs.
During the summer of 2003 Carlson continued to raise safety concerns with Jim
and Gerry, who suggested that the trucks could be serviced in the winter when they
were not in use. Carlson also took one truck into CPR to fix a crack on the bottom,
and CPR told him that many more repairs were needed. Gerry instructed Carlson to
return the truck without making the repairs. In August Carlson noticed more serious
structural problems with the truck and told Jim and Gerry that if the truck were not
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repaired, it could seriously injure or kill someone. Jim responded "you should keep
your mouth shut and do what you are told."
After talking with the union and gaining its support, Carlson informed
Arrowhead on August 28, 2003 that he was resigning from his pump truck driving
position in two weeks and would exercise his seniority rights under the CBA to work
in another position. He added, however, that he would continue to drive the trucks if
they were repaired. On September 10, 2003, Carlson left his pump truck position and
began working on a mixer truck. That same day Jim told Carlson to start the pump
truck for a job, and Carlson refused. Jim responded "[l]isten you little cocksucker, get
in that truck right fucking now and get it ready. I am sick of your whining." He also
told Carlson that "some fuckers are going down the road and getting laid off. You're
going to be the first one you son of a bitch." Carlson reported this incident to the
union, but it declined to file a grievance. Later that fall Carlson was given permission
to get one of the trucks inspected. The mechanic at CPR found the truck extremely
unsafe, but when Gerry was told the cost of the repairs he ordered Carlson to return
the truck without having it fixed. Carlson refused. In November 2003 he was laid off,
along with six other workers. In June 2004 some of the workers were called back to
work, but despite Carlson's length of service he was not among those recalled.
Carlson brought this action in state court in November 2004, alleging violations
of the Minnesota Whistleblower's Act, Minn. Stat. § 181.932, and the state
Occupational Safety and Health Act (MOSHA), Minn. Stat. § 182.654, based on the
circumstances surrounding his discharge and Arrowhead's failure to rehire him in
accordance with the seniority provisions of the CBA. Arrowhead removed the case
to the federal district court on December 16, 2004, contending that Carlson's claims
were completely preempted2 by § 301 of the LMRA, 29 U.S.C. § 185. After the case
2
Complete preemption permits a party to remove a case from state court based
on federal question jurisdiction. See Caterpillar v. Williams, 482 U.S. 386, 392-94
(1987). It is distinct from the affirmative defense of preemption which contests
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had been removed Arrowhead moved to dismiss, alleging that Carlson's claims were
completely preempted because they required interpretation of the CBA. It also alleged
in the alternative that his claims grew out of conduct arguably protected by the
National Labor Relations Act (NLRA) and were thus preempted under the Garmon
doctrine.3 Carlson responded that his case had been improperly removed to federal
court which lacked jurisdiction over it.
The district court determined that Carlson's state law claims were not
completely preempted by LMRA § 301 because neither required interpretation of the
CBA and that subject matter jurisdiction was therefore lacking.4 It denied
Arrowhead's motion to dismiss and remanded the case to state court pursuant to 28
U.S.C. § 1447(c). Arrowhead appeals.
II.
In every federal case the court must be satisfied that it has jurisdiction before
it turns to the merits of other legal arguments. Krein v. Norris, 309 F.3d 487, 490 (8th
Cir. 2002); Carney v. BIC Corp., 88 F.3d 629, 631 (8th Cir. 1996). Arrowhead asserts
that this court has jurisdiction over its appeal under 28 U.S.C. § 1291 which grants
appellate jurisdiction over appeals from a final order. Alternatively, it argues that the
district court's order is appealable under the collateral order exception to the finality
whether a particular claim may be litigated.
3
The Garmon doctrine originated in San Diego Building Trades Council v.
Garmon, 359 U.S. 236, 244-47 (1959), where the Supreme Court held that neither
state nor federal courts have jurisdiction over claims arising under § 7 or § 8 of the
NLRA which the statute assigns to the National Labor Relations Board. This doctrine
is unrelated to complete preemption under § 301 of the LMRA. Teamsters v. Lucas
Flour Co., 369 U.S. 95, 101 n.9 (1962).
4
Counsel affirmed at oral argument that the parties are not diverse.
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rule. Carlson responds that under 28 U.S.C. § 1447(d) this court lacks jurisdiction
over an appeal from a remand order and that Arrowhead's appeal is not from a final
order or reviewable under the collateral order exception. Appellant Arrowhead bears
the burden to prove that appellate jurisdiction exists. Reinholdson v. Minnesota, 346
F.3d 847, 849 (8th Cir. 2003).
Congress addressed appellate jurisdiction over remand orders in 28 U.S.C. §
1447(d), which provides that except in civil rights cases, "[a]n order remanding a case
to the State court from which it was removed is not reviewable on appeal or
otherwise." (emphasis added). The Supreme Court has instructed that § 1447(d) "must
be read in pari materia with § 1447(c)." Things Remembered, Inc. v. Petrarca, 516
U.S. 124, 127 (1995). Section 1447(c) provides that motions to remand based on a
procedural defect must be made within thirty days of removal and requires that a case
be remanded to state court "[i]f at any time before final judgment it appears that the
district court lacks subject matter jurisdiction." The district court explicitly based its
remand order in this case on § 1447(c).
Under the statutory scheme remand orders based on a procedural defect or lack
of subject matter jurisdiction are unreviewable. Things Remembered, 516 U.S. at 127;
Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 345-46 (1976). So long
as the district court's remand order is based on one of these two grounds, "a court of
appeals lacks jurisdiction to entertain an appeal of the remand order under § 1447(d)."
Things Remembered, 516 U.S. at 127-28; see also Horton v. Conklin, 431 F.3d 602,
604 (8th Cir. 2005).5 This jurisdictional bar applies even if the district court's remand
5
In contrast, if a district court remands a case after the federal claims have been
resolved and it has chosen not to exercise supplemental jurisdiction, its order is
reviewable because it is not covered by § 1447(c). See, e.g., Lindsey v. Dillard's, Inc.,
306 F.3d 596, 598-99 (8th Cir. 2002); Green v. Ameritrade, Inc., 279 F.3d 590, 595
(8th Cir. 2002); St. John v. Int'l Ass'n of Machinists & Aerospace Workers, 139 F.3d
1214, 1216-17 (8th Cir. 1998).
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decision was in error. Thermtron, 423 U.S. at 343 ("this section prohibits review of
all remand orders...whether erroneous or not"); see also Vincent v. Dakota, Minnesota
& Eastern R.R. Corp., 200 F.3d 580, 581 (8th Cir. 2000); Transit Cas. Co. v. Certain
Underwriters at Lloyd's of London, 119 F.3d 619, 623 (8th Cir. 1997). Where the
district court has remanded under § 1447(c), the scope of our review is limited to
verifying that the actual basis for remand was lack of subject matter jurisdiction.
Lindsey v. Dillard's, Inc., 306 F.3d 596, 598 (8th Cir. 2002); Kennedy v. Lubar, 273
F.3d 1293, 1297 (10th Cir. 2001); Transit Cas. Co., 119 F.3d at 624; Mangold v.
Analytic Servs., Inc., 77 F.3d 1442, 1450 (4th Cir. 1996).
The doctrine of complete preemption "converts an ordinary state...law
complaint into one stating a federal claim" providing a basis for removal of the state
court action to federal court. Caterpillar v. Williams, 482 U.S. 386, 393 (1987).
Section 301 of the LMRA preempts state law claims "where the resolution of the state
claim substantially depends on the interpretation of terms or provisions of a collective
bargaining agreement," Hanks v. General Motors Corp., 906 F.2d 341, 343 (8th Cir.
1990) (internal quotations omitted), or where it is "inextricably intertwined" with
consideration of the CBA. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213 (1985).
On the other hand, "[m]ere reference to a collective bargaining agreement is not
sufficient to result in preemption," Thomas v. Union Pac. R.R. Co., 308 F.3d 891, 893
(8th Cir. 2002), and "when the meaning of contract terms is not the subject of dispute,
the bare fact that a collective-bargaining agreement will be consulted in the course of
state-law litigation plainly does not require the claim to be extinguished." Livadas v.
Bradshaw, 512 U.S. 107, 124 (1994). Complaints alleging a violation of state law
without asserting a breach of the CBA have been found not preempted by federal law.
See Deneen v. Northwest Airlines, Inc., 132 F.3d 431 (8th Cir. 1998); Welch v. Gen.
Motors Corp., Buick Motor Div., 922 F.2d 287 (6th Cir. 1990). It is the plaintiff who
controls the wording of the complaint, and reliance on the terms of a CBA to establish
a state law claim can lead to complete preemption. See Fant v. New England Power
Serv. Co., 239 F.3d 8, 14-16 (1st Cir. 2001) (affirming district court decision that state
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law claim for failure to recall was preempted by the LMRA because it was based on
seniority provisions of the CBA); Anderson v. Gen. Motors Corp., 35 Fed. Appx. 175,
179 (6th Cir. 2002) (same); Pandil v. Illinois Cent. Gulf R.R., 312 N.W.2d 139, 143
(Iowa App. 1981).
In this case Carlson's complaint does refer to the seniority provision of the
CBA, directly quote language from this provision, and cite the alleged breach of the
CBA as proof of his whistleblower claim. See Complaint, ¶¶ 29-30, 38. The
whistleblower statute does not address employee recall, and the recall rights Carlson
asserts are only found in the CBA. Although adjudication of Carlson's claims could
require more than reference to the CBA, it has not been shown that it would involve
interpretation of the CBA. The district court opinion shows that its decision was
based on lack of subject matter jurisdiction and it explicitly remanded the case
pursuant to § 1447(c), making the remand unreviewable under § 1447(d). The
jurisdictional situation is even clearer here than in our Vincent decision where we
reasoned that the remand order must have been based on § 1447(c) because the "only
basis for remand discussed by the district court was whether it had subject matter
jurisdiction." Vincent, 200 F.3d at 582; see also Transit Cas. Co., 119 F.3d at 625;
Whitman v. Riley's Inc., 886 F.2d 1177, 1181 (9th Cir. 1989); Soley v. First Nat'l
Bank of Commerce, 923 F.2d 406, 409 (5th Cir. 1991).
Arrowhead nonetheless urges that we retain appellate jurisdiction over this case
under 28 U.S.C. § 1291. Section 1291 vests the circuit courts with jurisdiction over
appeals from "all final decisions of the district courts of the United States," and it has
also been interpreted to permit appeals from collateral orders which would otherwise
not be reviewable. See Quackenbush v. Allstate Insur. Co., 517 U.S. 706, 712 (1996).
Arrowhead argues that the remand order in this case was a final order, but
alternatively that it should be considered a collateral order subject to appeal.
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A decision is considered "final and appealable under § 1291 only if it 'ends the
litigation on the merits and leaves nothing for the court to do but execute the
judgment.'" Quackenbush, 517 U.S. at 712; Reinholdson, 346 F.3d at 849.
Arrowhead's finality argument relies primarily on Hill v. Bellsouth Communs., Inc.,
364 F.3d 1308 (11th Cir. 2004), an easily distinguishable case since it did not consider
the reviewability of a remand order issued under § 1447(c). Hill turned instead on the
appealability of an order remanding state law claims where the district court had
declined to exercise supplemental jurisdiction over them. 364 F.3d at 1314. It is thus
inapposite.
Arrowhead argues that the portion of the district court's order denying its
motion to dismiss Carlson's complaint is a final order appealable under § 1291.
Whether the denial of the motion to dismiss may be deemed a final order under § 1291
turns on whether it was only part of the whole district court remand order or whether
it is severable. An order is severable from a remand order and subject to appellate
review if (1) it precedes the order of remand “in logic and in fact” and was issued
while the district court had control of the case, and if (2) the order sought to be
separated is “conclusive.” City of Waco v. United States Fidelity & Guar. Co., 293
U.S. 140, 143 (1934). We examine each element in turn.
Whether the denial of Arrowhead's motion precedes the remand portion of the
court's order in logic and fact depends in part upon the significance we give to the
sequence of the rulings made by the district court. In its order the district court denied
the motion to dismiss before remanding the case to state court. Had the district court's
denial of Arrowhead's motion to dismiss followed the remand portion of the order, the
denial of the motion would have been superfluous since the court would have already
determined it lacked jurisdiction and divested itself of the case. Arrowhead has not
referenced, nor have we found, any case where a similar chronology within an order
was determinative of the final order issue. We have recently dismissed an appeal for
lack of jurisdiction in another case with a similar scenario, where the district court first
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denied a motion to dismiss and then remanded for lack of subject matter jurisdiction.
See Horton, 431 F.3d 603 (appeal dismissed under § 1447(d) for lack of appellate
jurisdiction); see also Whitman, 886 F.2d 1177 (same). The significance given to the
sequence within the court's order is unsurprising since "[a]ny order remanding a
matter to state court for lack of subject matter jurisdiction necessarily denies all other
pending motions." Dahiya v. Talmidge Int'l, Ltd., 371 F.3d 207, 210 (5th Cir. 2004).
Even if the denial of the motion to dismiss preceded the remand order in logic
and fact, that portion of the order would not be severable unless the denial was
"conclusive." A federal district court ruling is conclusive if it is functionally
unreviewable in state court. City of Waco, 293 U.S. at 143; Arnold v. State Farm Fire
and Cas. Co., 277 F.3d 772, 777 (5th Cir. 2001). Since the district court's decision
was based on lack of federal subject matter jurisdiction, the denial of the motion to
dismiss is not considered conclusive. See Dahiya, 371 F.3d at 210 (refusal to compel
arbitration was jurisdictional and thus not conclusive); Angelides v. Baylor Coll. of
Med., 117 F.3d 833 (5th Cir. 1997) (denial of a motion to dismiss was jurisdictional
decision reviewable by state court and not conclusive). Here, the district court only
ruled on the issue of complete preemption under LMRA § 301 and specifically noted
that it was not addressing any other arguments in Arrowhead's motion to dismiss.
Carlson v. Arrowhead Concrete Works, Inc., 375 F. Supp. 2d 835, 839 n.3 (D. Minn.
2005). Although portions of orders dismissing a party or a claim have sometimes
been found conclusive, final, and subject to appellate review, see, e.g., City of Waco,
293 U.S. at 142-43; Allen v. Ferguson, 791 F.2d 611, 613 (7th Cir. 1986); Katsaris v.
United States, 684 F.2d 758, 761 (11th Cir. 1982), the test is whether those portions
affected "the parties' substantive rights." Nutter v. Monongahela Power Co., 4 F.3d
319, 321 (4th Cir. 1993).
Here, the denial of Arrowhead's motion to dismiss did not alter the substantive
rights of either party. Nothing in the district court's order prevents Arrowhead from
raising the affirmative defense of preemption or from bringing a motion to dismiss in
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the state court proceedings below. See Vincent, 200 F.3d at 582 (rejecting appellant's
argument that the preemption decision had preclusive effect in state court); Nutter, 4
F.3d at 321 (same). Indeed, "because the district court remanded for lack of subject
matter jurisdiction, it lacked jurisdiction to make any substantive rulings, and thus no
rulings of the federal court have any preclusive effect on the substantive matters
before the state court." Transit Cas. Co., 119 F.3d at 624. We therefore conclude that
the portion of the district court's order denying Arrowhead's motion to dismiss is not
severable from its remand order, and thus not separately appealable under § 1291.
Arrowhead also contends that this court has appellate jurisdiction over the
remand order of the district court under the collateral order exception. This doctrine
establishes a narrow exception to the final order rule and permits an appeal if the
district court order (1) conclusively determined a disputed question; (2) resolved an
important issue completely separate from the merits of the action; and (3) is
effectively unreviewable on appeal from a final judgment. See Quackenbush, 517 U.S.
at 712; Cooper & Lybrand v. Livesay, 437 U.S. 463, 468 (1978); Cohen v. Beneficial
Indus. Loan Corp., 337 U.S. 541, 546 (1949). Arrowhead argues that all three parts
of this test are met in this case: the district court's order conclusively determined
whether § 301 of the LMRA completely preempts state law; its resolution of the
jurisdictional issue was a question separate from the merits; and any state court
determination upon remand will be effectively unreviewable in federal court.
Arrowhead cites no case, and we have found none, which has treated a district
court remand order under § 1447(c) as a reviewable collateral order. See Excimer
Assocs., Inc. v. CLA Vision, Inc., 292 F.3d 134, 138 (2d Cir. 2002) (noting that "[w]e
have not found a single case in which this Court has invoked the collateral order
doctrine to confer appellate jurisdiction where the district court's remand order was
based on a determination that it lacked subject matter jurisdiction"). To the contrary,
courts of appeal have consistently held that § 1447(d) bars review of remand orders
by the district court when they are based on the lack of complete preemption under §
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301 of the LMRA. See Dahl v. Rosenfeld, 316 F.3d 1074 (9th Cir. 2003) (dismissing
for lack of jurisdiction based on district court's finding that § 301 of the LMRA did
not preempt state law); Kennedy, 273 F.3d at 1297 (same); Nutter, 4 F.3d 319 (same);
Soley, 923 F.2d 406 (same); Whitman, 886 F.2d at 1182 (same). And while our court
has not previously had occasion to address appellate jurisdiction over a remand order
based on the lack of complete preemption, we have determined that a § 1447(c)
remand order in analogous circumstances was unreviewable. See Vincent, 200 F.3d
at 581-82 (jurisdiction lacking over § 1447(c) remand order holding state law claims
not completely preempted by the Railway Labor Act).
Arrowhead's invocation of the collateral order rule in these circumstances
would virtually eviscerate § 1447(d) by allowing review of essentially any remand
order if it were framed by the appealing party as a collateral order. See In re WTC
Disaster Site, 414 F.3d 352, 368 (2d Cir. 2005); Good v. Voest-Alpine Indus., Inc.,
398 F.3d 918, 926 (7th Cir. 2005) ("If every remand decision could be relabeled as a
collateral order, there would be nothing left of...§ 1447(d)."). Moreover, such a
holding would directly contradict the rationale and purpose of § 1447(d) which is to
prevent the delay of state court proceedings by the federal appeals process. See
Thermtron, 423 U.S. at 351. We therefore conclude that the remand order in this case
is not a collateral order reviewable under 28 U.S.C. § 1291.
Because the district court's remand order was issued pursuant to § 1447(c) for
lack of subject matter jurisdiction and does not qualify as an a final order or collateral
order appealable under § 1291, we lack jurisdiction under § 1447(d) to review the
merits of the case. Accordingly, the appeal is dismissed.
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