Kobold v. Good Samaritan Regional Medical Center

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SUSAN KOBOLD, No. 13-35528
Plaintiff-Appellant,
D.C. No.
v. 6:12-cv-02082-TC
GOOD SAMARITAN REGIONAL
MEDICAL CENTER,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Oregon
Thomas M. Coffin, Magistrate Judge, Presiding
2 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
LARRY BARR; ANTHONY BARTON; No. 13-35590
STEPHEN BUSCH; BRIAN CARLSON;
PETER DENNIS; DAN DORR; CLARK D.C. No.
GOBLE; WARREN MARTIN; BILLY 3:12-cv-00683-MO
PIERCE; JESSE ROBINSON; DAVID
SHATTO; DOUGLAS TOELKES,
Plaintiffs-Appellants,
v.
ROSS ISLAND SAND & GRAVEL
CO.,
Defendant-Third-Party-Plaintiff-
Appellee,
v.
OREGON TEAMSTERS EMPLOYERS
TRUST; GENERAL TEAMSTERS
LOCAL UNION NO. 162,
Third-Party-Defendant.
Appeal from the United States District Court
for the District of Oregon
Michael W. Mosman, District Judge, Presiding
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 3
ONA C. ALLEN, No. 13-35265
Plaintiff-Appellant,
D.C. No.
v. 3:12-cv-00402-ST
NORTHWEST PERMANENTE, P.C.,
an Oregon corporation, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the District of Oregon
Janice M. Stewart, Magistrate Judge, Presiding
Argued and Submitted November 6, 2015
Portland, Oregon
Filed August 9, 2016
Before: Marsha S. Berzon and Paul J. Watford, Circuit
Judges, and James Alan Soto,* District Judge.
Opinion by Judge Berzon
*
The Honorable James Alan Soto, District Judge for the U.S. District
Court for the District of Arizona, sitting by designation.
4 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
SUMMARY**
Labor Law
The panel ordered consolidated three appeals involving
employees represented by labor unions who sought remedies
under state law against their employers; affirmed the district
court’s grant of summary judgment to the employer in the
first appeal; affirmed in part and reversed and remanded in
part in the second appeal; and affirmed in the third appeal.
In all three cases, there was a collective bargaining
agreement (“CBA”) between the union and the employer
setting out a grievance and arbitration procedure to govern
disputes arising under the agreement. And in all three, a
grievance was filed but did not provide full relief, prompting
the employee to turn to the courts. All the employees initially
filed their cases in state court, but the cases were removed to
federal court on the basis of preemption under § 301 of the
Labor Management Relations Act. In all the cases, the
district court denied a motion to remand and held the state
law claims preempted.
A state law claim is preempted if it either involves a right
conferred upon an employee solely by virtue of a CBA or is
substantially dependent on analysis of a CBA.
In the first case, the panel held that assuming Or. Rev.
Stat. §§ 652.120 and 652.615 conferred upon a nurse the right
to receive premium pay for extra shifts worked, that right was
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 5
substantially dependent on an analysis of the terms of a CBA
in order to determine which shifts qualified for premium pay.
Accordingly, the state law claims were preempted by § 301.
The plaintiff could not pursue her claims under § 301 because
she did not exhaust her remedies under the CBA and did not
allege that her union breached its duty of fair representation.
In the second case, the panel reversed in part, holding that
claims for violation of Or. Rev. Stat. § 652.610(4)
(establishing time limits regarding CBA-authorized paycheck
deductions) and breach of fiduciary duty were not preempted.
The panel affirmed as to a claim for money received. The
panel concluded that § 652.610(4) conferred a right
independent of the plaintiffs’ rights under a CBA, and this
right was not substantially dependent on analysis of the CBA.
The breach of fiduciary duty claim also was not preempted,
but the claim for money received was not independent of the
CBA and therefore was preempted. The panel remanded for
the district court to decide whether to exercise supplemental
jurisdiction over the non-preempted claims.
In the third case, the panel affirmed the district court’s
denial of the plaintiff’s motion to remand and its grant of
summary judgment in favor of the defendant. The panel held
that judicial estoppel did not bar the plaintiff, a nurse
practitioner, from arguing for remand to state court on the
ground that a CBA did not govern a credentialing decision
because the contrary position had been taken by the plaintiff’s
union, not the plaintiff herself, during arbitration. The panel
held that in light of the arbitrator’s decision that the
credentialing decision must be evaluated under the CBA, the
plaintiff’s claim for intentional interference with economic
relations arose out of the CBA, and thus was preempted.
Affirming the district court’s summary judgment on a non-
6 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
preempted defamation claim, the panel held that the claim
was time-barred.
COUNSEL
Thomas K. Doyle (argued), Bennett, Hartman, Morris &
Kaplan, Portland, Oregon, for Plaintiff-Appellant Susan
Kobold.
Kirk Peterson (argued), Bullard Law, Portland, Oregon, for
Defendant-Appellee Good Samaritan Regional Medical
Center.
Elizabeth Farrell Oberlin (argued), Portland, Oregon;
Benjamin Rosenthal, Portland, Oregon; for Plaintiffs-
Appellants Larry Barr, et al.
Ankur H. Doshi (argued) and Kamyavathana Sivanesan,
Portland, Oregon; Sheeba Suhaskumar, law student;
Northwestern School of Law of Lewis & Clark College,
Portland, Oregon; for Defendant-Third-Party-Plaintiff-
Appellee Ross Island Sand & Gravel Co.
Matthew Caruso Ellis (argued), Portland, Oregon; George P.
Fisher, Portland, Oregon; for Plaintiff-Appellant Ona C.
Allen.
Chris Kitchel (argued), James N. Westwood, and Brenda K.
Baumgart; Stoel Rives LLP, Portland, Oregon; for
Defendant-Appellee Northwest Permanente, P.C.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 7
OPINION
BERZON, Circuit Judge:
The three cases in this consolidated appeal—Kobold v.
Good Samaritan Regional Medical Center, Barr v. Ross
Island Sand & Gravel Co., and Allen v. Northwest
Permanente—involve different parties and facts, but are
similar in important ways. All three involve employees
represented by labor unions who seek remedies under state
law against their employers. In all three, there is a collective
bargaining agreement (“CBA”) between the union and the
employer setting out a grievance and arbitration procedure to
govern disputes arising under the agreement. And in all three,
a grievance was filed but did not provide full relief,
prompting the employee to turn to the courts. All the
employees initially filed their cases in state court, but the
cases were removed to federal court on the basis of
preemption under § 301 of the Labor Management Relations
Act (“LMRA”), 29 U.S.C. § 185(a). In all the cases, the
district court denied a motion to remand and held the state
law claims preempted. We consider the § 301 preemption
questions on appeal.
As this court has observed more than once, although
§ 301 preemption questions arise fairly frequently,
“[f]amiliarity . . . has not bred facility.” Cramer v. Consol.
Freightways, Inc., 255 F.3d 683, 689 (9th Cir. 2001) (en
banc) (alteration in original) (quoting Galvez v. Kuhn,
933 F.2d 773, 774 (9th Cir. 1991)). In the hope that doing so
will illuminate the parameters of § 301 preemption analysis,
and so help “[breed] facility,” id., we have consolidated the
three cases for consideration and resolve them in this single
8 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
opinion. We begin with a review of § 301 preemption
doctrine and then proceed to discuss each case.
I. Section 301 Preemption
Section 301 of the LMRA states: “Suits for violation of
contracts between an employer and a labor organization
representing employees in an industry affecting commerce
. . . may be brought in any district court of the United States
having jurisdiction of the parties.” 29 U.S.C. § 185(a).
On its face, § 301 reads as a jurisdictional statute. But not
long after its passage, the Supreme Court held, in Textile
Workers v. Lincoln Mills of Ala., 353 U.S. 448, 451 (1957),
that § 301 is not simply jurisdictional. Instead, it should be
“understood . . . as a congressional mandate to the federal
courts to fashion a body of federal common law to be used to
address disputes arising out of labor contracts.” Allis-
Chalmers Corp. v. Lueck, 471 U.S. 202, 209 (1985). “The
Court subsequently held that this federal common law
preempts the use of state contract law in CBA interpretation
and enforcement.” Cramer, 255 F.3d at 689 (citing Local
174, Teamsters of Am. v. Lucas Flour Co., 369 U.S. 95,
103–04 (1962)). “Once preempted, ‘any claim purportedly
based on [a] . . . state law is considered, from its inception, a
federal claim, and therefore arises under federal law.’”
Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1059 (9th Cir.
2007) (alteration in original) (quoting Caterpillar, Inc. v.
Williams, 482 U.S. 386, 393 (1987)).
In addition to promoting the development of a uniform
federal labor law, § 301 preemption doctrine is designed “in
large part to assure that agreements to arbitrate grievances
would be enforced, regardless of the vagaries of state law and
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 9
lingering hostility toward extrajudicial dispute resolution.”
Livadas v. Bradshaw, 512 U.S. 107, 122 (1994). To give “the
policies that animate § 301 . . . their proper range,” the
Supreme Court has expanded “the pre-emptive effect of § 301
. . . beyond suits alleging contract violations” to state law
claims grounded in the provisions of a CBA or requiring
interpretation of a CBA. Lueck, 471 U.S. at 210–11.
Critically, “not every dispute concerning employment, or
tangentially involving a provision of a collective-bargaining
agreement, is pre-empted by § 301.” Id. at 211. Drawing on
Supreme Court precedent, this court has articulated a two-
step inquiry to analyze § 301 preemption of state law claims.
First, a court must determine “whether the asserted cause of
action involves a right conferred upon an employee by virtue
of state law, not by a CBA. If the right exists solely as a result
of the CBA, then the claim is preempted, and [the] analysis
ends there.” Burnside, 491 F.3d at 1059. If the court
determines that the right underlying the plaintiff’s state law
claim(s) “exists independently of the CBA,” it moves to the
second step, asking whether the right “is nevertheless
‘substantially dependent on analysis of a collective-
bargaining agreement.’” Id. (quoting Caterpillar, 482 U.S. at
394). Where there is such substantial dependence, the state
law claim is preempted by § 301.1 If there is not, then the
claim can proceed under state law. Id. at 1059–60.
To determine whether a right is independent of a
CBA—the first Burnside factor—a court must focus its
inquiry on “the legal character of a claim, as ‘independent’ of
rights under the collective-bargaining agreement []and not
1
We discuss later the consequences of a determination that a state law
claim is preempted by § 301.
10 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
whether a grievance arising from ‘precisely the same set of
facts’ could be pursued.” Livadas, 512 U.S. at 123 (emphasis
added) (internal citation omitted). Only if the claim is
“founded directly on rights created by [a] collective-
bargaining agreement[]” does § 301 preempt it. Caterpillar,
482 U.S. at 394.
The second Burnside factor—whether a plaintiff’s state
law right is “substantially dependent on analysis of [the
CBA],” Burnside, 491 F.3d at 1059—turns on “whether the
claim can be resolved by ‘look[ing] to’ versus interpreting the
CBA. If the latter, the claim is preempted; if the former, it is
not.” Id. at 1060 (quoting Livadas, 512 U.S. at 125)
(alteration in original). This court has previously “stressed
that, in the context of § 301 complete preemption, the term
‘interpret’ is defined narrowly—it means something more
than ‘consider,’ ‘refer to,’ or ‘apply.’” Balcorta v. Twentieth
Century-Fox Film Corp., 208 F.3d 1102, 1108 (9th Cir.
2000). And, notably, “a defendant cannot, merely by injecting
a federal question into an action that asserts what is plainly a
state-law claim, transform the action into one arising under
federal law.” Caterpillar, 482 U.S. at 399. In other words,
“[i]f the claim is plainly based on state law, § 301 preemption
is not mandated simply because the defendant refers to the
CBA in mounting a defense.” Cramer, 255 F.3d at 691(emphasis added).
The Burnside factors reflect two driving concerns of
preemption doctrine: first, preventing “parties’ efforts to
renege on their arbitration promises by ‘relabeling’ as tort
suits actions simply alleging breaches of duties assumed in
collective-bargaining agreements,” Livadas, 512 U.S. at 123(citation omitted), and second, preserving “a central tenet of
federal labor-contract law . . . that it is the arbitrator, not the
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 11
court, who has the responsibility to interpret the labor
contract in the first instance,” Lueck, 471, U.S. at 220.
Notably, there is no basis for scuttling the state law cause
of action if any necessary CBA interpretation can in some
fashion be conducted via the appropriate grievance/arbitration
forum. To allow such scuttling disadvantages employees
covered by CBAs, as they lose state law protections because
of an embedded CBA issue possibly peripheral to their core
cause of action. The interest in sending substantial CBA
issues through grievance/arbitration does not justify creating
this disadvantage unless the interest cannot be otherwise
accommodated. There are, accordingly, circumstances in
which preemption can be avoided by accepting an arbitrator’s
interpretation of the CBA.2 In some instances, for example,
an arbitrator’s interpretation of the CBA may determine
whether an employee’s otherwise independent state law claim
2
For example, where a right arises independently under state law but
may later require interpretation of the CBA to calculate damages, “the
district court will be able to devise processes to preserve the preeminent
role of the CBAs’ dispute resolution processes to address the discrete
dispute then arising.” Burnside, 491 F.3d at 1074 n.19. Similarly, in
“[some] circumstances a practice of deferring the litigation pending an
arbitrator’s resolution of the contract interpretation issues rather than
extinguishing the claim might be appropriate.” Cramer, 255 F.3d at 691
n.2; see also Collyer Insulated Wire, A Gulf & Western Sys. Co.,
192 N.L.R.B. 837 (1971) (holding that where there is an applicable
arbitration clause, NLRB unfair labor practice cases involving
interpretation of the CBAs shall be held in abeyance, and the parties must
arbitrate the interpretation question before returning to the Board for
adjudication of remaining legal and factual issues). Thus, where the claim
cannot be resolved without interpreting the CBA, “[h]olding the plaintiff’s
cause of action substantively extinguished may not . . . always be the only
means of vindicating the arbitrator’s primacy as the bargained-for contract
interpreter.” Livadas, 512 U.S. at 124 n.18.
12 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
in fact asserts a right created by the CBA. See Section IV.C,
infra.
Still, once a state law claim has been found substantially
dependent upon analysis of a CBA under the second prong of
Burnside, most often “that claim must either be treated as a
§ 301 claim, or dismissed as pre-empted by federal labor-
contract law.” Lueck, 471 U.S. at 220 (internal citation
omitted). Under a collective bargaining agreement like the
ones in these cases, an employee usually cannot succeed in a
suit under § 301 to vindicate personal contract-based rights
unless the contractual grievance-arbitration procedure is
invoked on her behalf or on behalf of a group of employees
of which she is part. If the dispute is not ultimately resolved
by an arbitration, the employee must establish that the union
violated its duty of fair representation by failing to pursue the
grievance to arbitration, or pursuing it arbitrarily. See Air
Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 67 (1991);
Vaca v. Sipes, 386 U.S. 171, 190–91 (1967). And, where the
remedies provided in the CBA have been exhausted, judicial
review is extremely limited. See United Paperworkers Int’l
Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 36 (1987); Sw.
Reg’l Council of Carpenters v. Drywall Dynamics, Inc.,
823 F.3d 524, 530 (9th Cir 2016) (noting that “courts
reviewing labor arbitration awards afford a ‘nearly
unparalleled degree of deference’ to the arbitrator’s decision”
(quoting Stead Motors of Walnut Creek v. Auto. Machinists
Lodge No. 1173, Int’l Ass’n of Machinists & Aerospace
Workers, 886 F.2d 1200, 1205 (9th Cir. 1989) (en banc))).
Against this doctrinal backdrop, we proceed to the
specifics of each case.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 13
II. Kobold v. Good Samaritan Regional Medical Center
A. Factual and Procedural History
Plaintiff-Appellant Sue Kobold worked as an operating
room nurse for Defendant-Appellee Good Samaritan
Regional Medical Center (“Good Samaritan”) beginning in
1996. Nurses at Good Samaritan, including Kobold, are
represented by a union, the Oregon Nurses Association
(“ONA”). Their terms and conditions of employment are
negotiated between Good Samaritan and ONA and spelled
out in a collective bargaining agreement (“GS CBA”).
The GS CBA provides that nurses who work extra shifts
receive premium pay at one and one-half times the regular
rate. In early 2010, Kobold learned that for more than one
year Good Samaritan had not paid her the premium rate for
extra shifts worked. It appears, although the record is not
clear, that Kobold discovered the problem when the operating
room manager informed her that Good Samaritan would only
pay the regular rate, not the premium rate, to nurses who
signed up to work a surgical technician’s “orphan”
shifts—that is, vacant shifts that cannot be covered by staff
members within the same team. Kobold believed that nurses
who signed up to work these orphan shifts should be paid the
premium rate.
The GS CBA prescribes a mandatory five-step grievance
and arbitration procedure for “[p]roblems arising in
connection with the application or interpretation of the
Agreement.” ONA submitted a grievance regarding extra
shift premium pay, and Good Samaritan agreed prospectively
to change its practice and pay the premium rate for extra
operating room shifts. Good Samaritan refused, however, to
14 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
issue retroactive pay for extra shifts already worked. It
claimed that those shifts had been marked as regular pay in
the electronic scheduling software, so the nurses knew the
pay rate before signing up to work the shifts. After ONA
requested arbitration, the union and Good Samaritan settled
the grievance.
As part of the settlement, Good Samaritan paid Kobold
$2,216.68, the equivalent of 45 days of premium pay. That
payment was the full amount to which Kobold was entitled
under the GS CBA, which authorizes grievances to be filed
up to 45 days following the occurrence of the matter being
grieved. Because Kobold believed she was entitled to more
than 45 days of back pay, she filed an action in state court.
Kobold asserted two causes of action in her complaint.
First, she alleged that Good Samaritan failed to pay all wages
owed her at each pay period, in violation of Or. Rev. Stat.
§ 652.120. Or. Rev. Stat. § 652.120(1) requires that “[e]very
employer shall establish and maintain a regular payday, at
which date the employer shall pay all employees the wages
due and owing to them.” Second, she alleged that Good
Samaritan unlawfully deducted from her paycheck amounts
due and owing, in violation of Or. Rev. Stat. § 652.615. Or.
Rev. Stat. § 652.615 creates a private right of action for a
violation of § 652.610(3), which provides that “[a]n employer
may not withhold, deduct or divert any portion of an
employee’s wages unless” an exception applies, one of which
is that “[t]he deduction is authorized by a collective
bargaining agreement to which the employer is a party.” Or.
Rev. Stat. § 652.610(3)(d). Kobold sought $24,000 in unpaid
wages, as well as attorney’s fees, costs, and disbursements.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 15
After Kobold filed her state court suit, Good Samaritan
filed a notice of removal, alleging that Kobold’s state law
claims are preempted by § 301 of the LMRA. On the same
ground, Good Samaritan filed in federal court a motion to
dismiss or, in the alternative, a motion for summary
judgment. The magistrate judge determined that Kobold’s
state law claims were preempted under § 301. He then
concluded that because Kobold failed to allege and could not
prove that she had exhausted her contractual remedies, and
also did not allege that ONA had breached its duty of fair
representation, she could not succeed on a claim under § 301.
He thus recommended that Good Samaritan’s motion for
summary judgment be granted. The district court adopted the
magistrate’s findings and recommendation, granted Good
Samaritan’s motion for summary judgment, and dismissed
the case. We affirm.
B. Kobold’s State Law Claims Are Preempted by § 301
Assuming without deciding that ORS § 652.120 and
§ 652.615 independently confer upon Kobold the right to
receive premium pay for extra shifts worked, that right is
substantially dependent on an analysis of the terms of the GS
CBA. Before a court could calculate the total amount Kobold
is owed, it must determine which of the shifts she worked
qualified for premium pay. The Oregon statutes under which
Kobold seeks relief provide only that an employee be paid
“the wages due and owing to them.” Or. Rev. Stat.
§ 652.120(1). They do not provide any means with which to
assess whether wages are “due and owing.” To answer that
question, a court must consult the GS CBA. In this case,
because of a particular provision of the GS CBA that is in
dispute, a court must interpret, not just refer to or look at, the
GS CBA. See Burnside, 491 F.3d at 1060.
16 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
The GS CBA provides that nurses are to be paid one and
one-half times their regular pay rate for all hours worked
above their regularly scheduled full-time equivalent shifts
“except when there is a change of schedule agreed upon by
the Medical Center and nurse.”3 Thus, for Kobold to succeed
on her state law claim that she was not paid the premium rate
for extra shifts, a court must determine whether Kobold and
Good Samaritan agreed to a change of schedule.
Whether or not there was an agreed upon change of
schedule is exactly what is in dispute between the parties.
Good Samaritan argues that Kobold is not entitled to
premium pay because she agreed to work the extra shifts
“despite conspicuous notice that the shifts would be paid at a
regular rate.” Kobold contends that this reading of the
agreement exception “would undermine the purpose of the
extra shift premium and mean that Defendant would never
pay extra shift premium.”
The GS CBA does not directly and clearly explain what
constitutes a “change of schedule,” nor how an agreement
between Good Samaritan and a nurse is to be made. The
settlement agreement between Good Samaritan and ONA,
through which Kobold was paid 45 days of premium pay
wages, is of no help in resolving this dispute, because the
record does not contain a copy of the agreement or an
explanation of how the total amount paid to Kobold was
calculated. At best, all the settlement demonstrates is that
once the total number of extra shifts worked without
agreement to a change of schedule is known, it is simple to
calculate the amount of premium pay owed. But the
3
We refer to this provision of the GS CBA as the “agreement
exception.”
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 17
settlement, as far as the record reveals, did not shed any light
on how to determine which shifts qualify for premium pay.
Ultimately, then, a court must interpret the meaning of the
agreement exception to resolve Kobold’s state law claims,
without any illumination from the parties’ agreements or
from an arbitrator chosen by the parties to interpret the GS
CBA. Because the state law claims substantially depend on an
interpretation of the GS CBA, Kobold’s state law claims are
to that degree preempted by § 301.
C. Kobold Cannot Pursue Her Claims Under § 301
As we have noted, the conclusion that § 301 precludes
adjudication of a state law claim in whole or part does not
automatically require dismissal of a union-represented
employee’s challenge of an employer’s actions. Here, for
example, Kobold could maintain her claim if she can
demonstrate that her remedies under the GS CBA were
exhausted or can yet be exhausted, see Part I, supra, or that
her union breached its duty of fair representation in failing to
do so, and if this court then determines that litigation of her
state cause of action remains available. Kobold cannot so
demonstrate.
The mandatory grievance procedure outlined in the GS
CBA, which ends with binding arbitration, was never
exhausted regarding premium pay for extra shifts worked
outside the 45-day period covered by the settlement. And
Kobold has not alleged that ONA breached its duty of fair
representation in agreeing to a settlement covering only 45
days instead of further pursuing the grievance. Because
Kobold cannot prove that her contractual remedies were
exhausted, and does not allege that ONA breached its duty of
18 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
fair representation, she cannot pursue any alleged GS CBA
violation.
III. Barr v. Ross Island Sand & Gravel Co.
A. Factual and Procedural History
Plaintiffs-Appellants (collectively referred to as “Barr”)
are or formerly were truck drivers employed by Defendant-
Appellee Ross Island Sand & Gravel Co. (“RISG”). Barr is
represented by General Teamsters Local Union No. 162
(“Teamsters”). In 2008, Teamsters and RISG agreed to a two-
year collective bargaining agreement (“RISG CBA”).
The RISG CBA provided that RISG and Barr would each
contribute to the cost of Barr’s health and welfare benefits.
RISG was to pay 90% of the cost of benefits, and would
deduct the other 10% from employees’ paychecks. RISG was
to remit its contributions and the employees’ paycheck
deductions to the Oregon Teamsters Employers Trust Fund
(“OTET”), which managed the health insurance plan. The
RISG CBA also set out a mandatory multi-step grievance
procedure culminating in arbitration. The grievance
procedure was to be “the sole method of resolving disputes
during the life of [the RISG CBA].”
In 2010, RISG “failed to timely provide premium
payments to OTET.” Teamsters filed a class action grievance
in May 2010, which RISG resolved by making the necessary
payments.
The 2008 RISG CBA expired at the end of December, but
Teamsters and RISG maintained it until November 2011
while they negotiated a new collective bargaining agreement.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 19
During that time, RISG allegedly again failed to make
contributions to OTET, causing Barr’s health insurance
benefits to lapse. RISG and Teamsters ratified a new RISG
CBA in November 2011, which ran retroactively from the
beginning of 2011 through the end of 2014. The new RISG
CBA retained the same 90/10 contribution to OTET for
employee health benefits and the same grievance procedure.
Barr filed suit in state court, alleging that RISG had, since
April 2011, deducted funds from their paychecks but failed to
remit the funds to OTET, causing Barr to lose his health
benefits. Barr’s complaint pleaded three state law claims:
violations of Or. Rev. Stat. § 652.610(3), breach of fiduciary
duty, and money had and received. Barr sought unpaid
wages; medical expenses sustained as a result of not having
health benefits; emotional distress damages; and pre-
judgment interest. RISG filed a notice of removal on the
basis, inter alia, that Barr’s claims were preempted by § 301
of the LMRA; Barr filed a motion to remand, but the district
court denied it, reasoning that the question of when RISG was
required to remit the paycheck deductions to OTET required
interpretation of the RISG CBA.
After Barr filed his complaint but before the district court
denied his motion to remand, Teamsters and RISG continued
to negotiate the deductions issue. During that period,
Teamsters filed a grievance on behalf of Barr individually (as
opposed to the group of plaintiffs we refer to throughout as
Barr), alleging that RISG had not kept his health benefits
current and requesting that RISG pay the premiums owed.
Teamsters later instituted a class grievance covering all
employees who had lost OTET coverage because of RISG’s
failure to make the monthly payments, and settled that
grievance.
20 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
Eventually, RISG and Teamsters negotiated settlements
and resolved the outstanding grievances. Under the terms of
the settlement, RISG agreed to pay the past due health
insurance premiums. Because the settlement did not fully
compensate Barr for his economic damages, non-economic
injuries, attorney’s fees and costs, or potential punitive
damages, he maintained his lawsuit.
RISG moved for summary judgment. In Barr’s
memorandum in opposition, he argued that RISG’s failure to
remit the paycheck deductions to OTET was a violation of
Or. Rev. Stat. § 652.610(4). Barr had not previously
specifically mentioned Or. Rev. Stat. § 652.610(4); his
complaint referred to § 652.610(3). Under Or. Rev. Stat.
§ 652.610(3)(d), “[a]n employer may not withhold, deduct or
divert any portion of an employee’s wages unless . . . [t]he
deduction is authorized by a collective bargaining agreement
to which the employer is a party.” Or. Rev. Stat. § 652.610(4)
establishes time limits regarding CBA-authorized deductions.
It provides:
When an employer deducts an amount from
an employee’s wages as required or
authorized by law or agreement, the employer
shall pay the amount deducted to the
appropriate recipient as required by the law or
agreement. The employer shall pay the
amount deducted within the time required by
the law or the agreement or, if the time for
payment is not specified by the law or
agreement, within seven days after the date
the wages from which the deductions are
made are due. Failure to pay the amount as
required constitutes an unlawful deduction.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 21
Id. In his opposition to summary judgment, Barr argued that
although the deductions were authorized by the RISG CBA,
they became unlawful pursuant to § 652.610(4) when RISG
failed to pay the deductions to OTET within seven days.
The district court held that Barr’s state law claims were
preempted under § 301 of the LMRA because the dispute
could not be resolved without “referencing the CBA and
related principles.” On the ground that the RISG CBA’s
grievance and arbitration procedure was not exhausted, the
district court granted RISG’s motion for summary judgment
and dismissed the case with prejudice. Barr timely appealed.
We reverse as to preemption of Plaintiffs’ § 652.610(4) and
breach of fiduciary duty claims, but affirm as to the money
had and received claim.
B. Barr’s Or. Rev. Stat. § 652.610(4) Claim
Although Barr did not mention § 652.610(4) in his
complaint as a ground for relief, we shall consider Barr’s
argument. “[U]nder the Federal Rules of Civil Procedure, a
complaint need not pin plaintiff’s claim for relief to a precise
legal theory.” Skinner v. Switzer, 562 U.S. 521, 530 (2011).
Here, Or. Rev. Stat. § 652.610(4) is not so much a new claim
as a more precise and accurate framing of Barr’s original
allegation. Or. Rev. Stat. §§ 652.610(3) and (4) work in
tandem: section 652.610(3) permits an employer to deduct a
portion of an employee’s wages if authorized to do so by a
CBA, and § 652.610(4) makes such deductions unlawful if
the funds are not properly paid within the time specified by
the CBA or, if the CBA is silent, within the statutorily-
supplied seven-day time period. The interaction between the
two provisions of § 652.610 is key to Barr’s suit. As Barr
argues, “such allegation is so strongly suggested by the facts
22 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
that only an unreasonable defendant would fail to make the
connection.”4
Having concluded that we may evaluate Barr’s
§ 652.610(4) argument, we reject RISG’s request that we
certify to the Oregon Supreme Court the question whether
§ 652.610(4) creates a private right of action. Whether a
statute grants a private right of action is not a jurisdictional
question. See Verizon Md., Inc. v. Pub. Serv. Comm’n of Md.,
535 U.S. 635, 642–43 (2002). Nor is deciding the private
right of action question an essential prerequisite to
conducting a § 301 preemption inquiry. The preemption
analysis is concerned with whether a claim is properly
pursued under state or federal law. If federal law, then the
4
Even if the § 652.610(4) reliance were seen as a separate claim, “[t]he
district court should have construed [the matter raised in opposition to the
motion for summary judgment] as a request pursuant to rule 15(b) of the
Federal Rules of Civil Procedure to amend the pleadings out of time.”
Desertrain v. City of L.A., 754 F.3d 1147, 1154 (9th Cir. 2014) (quoting
Apache Survival Coal v. United States, 21 F.3d 895, 910 (9th Cir. 1994)).
Had it done so, the pertinent factors should have counseled the district
court to grant leave to amend. See id. There is no evidence of bad faith.
Raising § 652.610(4) at the summary judgment stage did not cause RISG
to seek additional discovery nor did it cause any delays. RISG was already
on notice from the complaint that Barr’s claims stemmed from RISG’s
failure timely to remit the paycheck deductions to OTET. The district
court also discussed the timeliness issue with counsel at several points
during oral argument on Barr’s motion to remand. And RISG had full
opportunity to argue that the § 652.610(4) claim could not succeed as a
matter of law; it did so in its reply brief on its motion for summary
judgment. As Desertrain held, a claim of prejudice is unpersuasive where
defendants fully argued an issue in the summary judgment briefing.
754 F.3d at 1155. Finally, as we later discuss, considering Or. Rev. Stat.
§ 652.610(4) would not be futile. And Barr did not otherwise amend his
complaint.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 23
claim would proceed in accord with § 301, and it would not
matter whether the state statute provides a private cause of
action. That issue arises, in other words, only if RISG’s
preemption contention fails. As the parties have thus far
litigated only the preemption question, consideration of the
state law private cause of action theory is premature—and,
indeed, the issue may be litigated in state rather than federal
court. See Section III.D, infra.
Having settled these predicate issues, we proceed to the
merits of the § 301 preemption issue.
On the first Burnside factor, Livadas is closely analogous
to this case and confirms that § 652.610(4) confers a right
independent of Barr’s rights under the RISG CBA. Livadas
dealt with a California statute that, like Or. Rev. Stat.
§ 652.610(4), governs an employer’s failure properly to remit
employee payment in a timely manner.5 512 U.S. at 111. And,
as in this case, the terms and conditions of the plaintiff’s
employment were subject to a CBA. Id. at 110.
When Livadas was discharged, she demanded that her
employer immediately pay the wages owed her, and, when
there was a delay in payment, the prescribed statutory
penalty.6 Id. at 111. When no penalty was paid, Livadas sued
5
Cal. Lab. Code § 201 provides: “If an employer discharges an
employee, the wages earned and unpaid at the time of discharge are due
and payable immediately.” Livadas, 512 U.S. at 111 n.3.
6
Cal. Lab. Code § 203 provides that when an employer “willfully fails”
to comply with § 201, “the wages of such employees shall continue as a
penalty from the due date thereof at the same rate until paid or until an
action therefor is commenced; but such wages shall not continue for more
than 30 days.” Livadas, 512 U.S. at 112 n.4.
24 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
under the state statute. The Supreme Court held Livadas’ state
law claim not preempted under § 301 of the LMRA, because
“the primary text for deciding whether Livadas was entitled
to a penalty was not the [CBA], but a calendar.” Id. at 124.
The only question that needed to be decided was “whether
[the employer] ‘willfully fail[ed] to pay’ [Livadas’s] wages
promptly upon severance”—“a question of state law, entirely
independent of any understanding embodied in the collective-
bargaining agreement between the union and the employer.”
Id. at 124–25 (quoting Cal. Lab. Code § 203).
This case is similar to Livadas in all pertinent respects.
Barr alleges RISG violated Or. Rev. Stat. § 652.610(4) when
it failed to remit the paycheck deductions to OTET for
payment of Barr’s health insurance premiums. Article 11 of
the 2008 and 2011 RISG CBAs provides that the employees’
health insurance premiums are monthly premiums and that
RISG “agrees to make the appropriate monthly contribution”
to OTET. But the RISG CBA does not provide a specific due
date each month for transmitting such payments. Section
652.610(4) fills that gap by requiring that where the pertinent
employment contract is silent as to when deductions must be
remitted, the employer pay the amount deducted within seven
days of the date wages are due. As in Livadas, then, the
primary text for determining whether RISG violated
§ 652.610(4) is a calendar, not the RISG CBA. Barr’s claim
therefore is independent of his rights under the RISG CBA.
At the second step of the § 301 preemption inquiry, we
must determine whether Barr’s state law right to payment
within seven days is “substantially dependent on analysis of
[the RISG CBA].” Burnside, 491 F.3d at 1059 (internal
quotation marks omitted). It is not.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 25
RISG argues that an evaluation of Barr’s claim requires
this court to “interpret several key provisions of the contract.”
Specifically, RISG lists seven issues that would allegedly
require interpretation:
RISG’s obligations to make any deductions
from employee’s paychecks; the amount and
frequency of deductions taken; increases in
monthly premium changes; coverage
requirements of employees; RISG’s
obligations to return deductions upon
remittance to OTET; RISG’s obligations to
pay out of pocket medical expenses as alleged
in the Complaint; and the governing effect of
the subscription agreements that controlled
coverage of the Plaintiffs’ health and welfare
benefits under OTET and their relation to the
2008 CBA and 2011 CBA.
None of these matters require CBA interpretation. The
2008 and 2011 RISG CBAs unambiguously specify: RISG’s
obligation to deduct funds from Barr’s paychecks; the amount
and frequency of the deductions; to whom the deduction must
be remitted and for what purpose; and the terms of employee
eligibility for the health benefits. The RISG CBA does not
address whether RISG is obligated to return deductions it
ultimately remitted to OTET or to pay out-of-pocket medical
expenses incurred when Barr’s health insurance lapsed.
Rather, these are pure statutory questions concerning the
remedies available under Or. Rev. Stat. § 652.610(4). As to
these issues as well, then, there is nothing in the RISG CBA
to interpet. Barr’s § 652.610(4) claim thus is not § 301
preempted under the second prong of the Burnside analysis
either.
26 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
C. Barr’s Breach of Fiduciary Duty Claim
Barr alleges that RISG’s obligations as a fiduciary arise
under Or. Rev. Stat. §§ 652.710 and/or 652.720.7 Or. Rev.
Stat. § 652.710(1) provides that “[a]ll moneys collected by an
employer from employees or retained from their wages . . .
pursuant to a contract are trust funds and shall be placed and
kept in separate accounts by the employer and shall promptly
be paid over to the contractor.” And § 652.720(1) provides
that “[n]o employer shall retain, directly or indirectly, from
employees or from their wages any part of the money
collected or retained under Or. Rev. Stat. 652.710 for use or
benefit of the employer.” These statutory provisions create
and impose duties on an employer independent of a CBA. See
Burnside, 491 F.3d at 1059. Enforcing those duties does not
substantially depend on interpreting the RISG CBA. A court
need only determine whether RISG kept the health insurance
funds in a separate account, promptly turned them over, and
did not keep them for its own use or benefit; such a
determination does not require a court to do any more than
look at or refer to the RISG CBA, if that. See Balcorta,
208 F.3d at 1108. Barr’s breach of fiduciary duty claim thus
is not preempted.8
7
In his complaint, Barr alleged that RISG’s fiduciary obligations “arose
under one or more of the following statutory provisions”: Or. Rev. Stat.
§§ 652.610, 652.710, and 652.720. Because we conclude that the latter
two provisions create duties independent of the RISG CBA and are not
substantially dependent on the RISG CBA, we do not also consider the
first provision, which, in relevant part, permits an employer to deduct a
portion of an employee’s wages as authorized by a CBA. § 652.610(3)(d).
8
Whether Or. Rev. Stat. §§ 652.710 and 652.720 actually are fiduciary
duties is a matter of state law, which we do not address, as the question is
not before us.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 27
D. Barr’s Money Had and Received Claim
Barr’s money had and received claim, however, is
preempted. A money had and received claim is rooted in “the
equitable principle that one who has been unjustly enriched
by another should be required to make restitution. The action
may be maintained whenever one has money in his hands
belonging to another, which, in equity and good conscience,
he ought to pay over to that other.” Briggs v. Lamvik, 242 Or.
App. 132, 143 (2011) (internal citation and quotation marks
omitted). Oregon courts have declared that such a claim is
“based on a contract implied in law.” Williamson v. Gov’t
Emps. Ins. Co., 247 Or. App. 48, 53 (2011).
Here, RISG’s authority to deduct funds from Barr’s
paychecks and Barr’s right to have those funds applied
toward his health insurance premiums are purely contractual
entitlements. Without those provisions in the RISG CBA,
Barr would have no basis upon which to bring the money had
and received claim. “State law does not exist as an
independent source of private rights to enforce collective
bargaining contracts.” Caterpillar, 482 U.S. at 394 (quoting
Avco Corp. v. Machinists, 376 F.2d. 337, 340 (6th Cir. 1967),
aff’d, 390 U.S. 557 (1968)). Because Barr’s money had and
received claim is not independent of the RISG CBA, it is
preempted under § 301.
The 2008 and 2011 RISG CBAs set out a mandatory and
exclusive grievance procedure for resolving disputes
“concerning the meaning, violation, and/or interpretation of
the Agreement.” The multi-step grievance procedure
culminates in arbitration. Barr therefore can only maintain a
claim under § 301 if he can demonstrate that his remedies
28 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
under the RISG CBA were exhausted.9 The Teamsters settled
or abandoned all grievances related to RISG’s failure to remit
paycheck deductions to OTET; the grievances were never
submitted to an arbitrator.10 Because the contractual remedies
were not exhausted, and Barr does not allege that Teamsters
breached its duty of fair representation, he cannot pursue his
money had and received claim as a § 301 claim.
All three of Barr’s claims “have ‘a common nucleus of
operative fact.’” Osborn v. Haley, 549 U.S. 225, 245 (2007)
(quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715,
725 (1966)); see 28 U.S.C. § 1367(a). The district court
therefore should decide on remand whether to exercise
supplemental jurisdiction over Barr’s Or. Rev. Stat.
§ 652.610(4) and breach of fiduciary duty claims.11
9
Barr does not allege that Teamsters breached its duty of fair
representation.
10
Barr’s counsel agreed during oral arguments on RISG’s motion for
summary judgment that the RISG CBA grievance and arbitration
procedures had not been exhausted; Barr does not argue otherwise on
appeal.
11
Before the district court addresses whether to exercise supplemental
jurisdiction, it should more fully consider whether the claims are
completely preempted by the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), and raise a
federal issue for that reason. See Aetna Health Inc. v. Davila, 542 U.S.
200, 210 (2004). RISG raised complete ERISA preemption as an
affirmative defense in its answer to Plaintiffs’ complaint, and the parties
addressed ERISA preemption in their memoranda on Plaintiffs’ motion to
remand to state court. The district court rejected RISG’s ERISA
preemption argument without explanation.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 29
IV. Allen v. Northwest Permanente
A. Factual and Procedural History
Plaintiff-Appellant Ona Allen is a nurse practitioner
formerly employed by Kaiser Foundation Health Plan of the
Northwest (“HP”). The terms and conditions of Allen’s
employment were subject to a collective bargaining
agreement (“Nurses’ CBA”) negotiated between HP and
Allen’s union, the Oregon Federation of Nurses and Health
Professionals (“Nurses Union”). Defendant-Appellee
Northwest Permanente, P.C. (“NWP”), is an association of
physicians. HP and NWP are separate entities but both, as
well as a third organization, Kaiser Foundation Hospitals
(“KFH”), operate under the umbrella of their parent
organization, Kaiser Permanente Northwest (“KPNW”).
Allen was required, as a condition of her employment, to
be re-credentialed every two years. The credentialing process
involves review of an employee’s work performance by the
KPNW Credentials Committee, made up of representatives of
HP, KFH, and NWP. According to KPNW’s Credentialing &
Recredentialing Manual (“the Manual”), the Credentials
Committee “is a sub-committee of the NWP” board of
directors; HP “designate[s] the KPNW Credentials
Committee to make recommendations regarding credentialing
decisions.” An individual practitioner “may not provide care
to KPNW members until the Credentials Committee makes
a final decision to recommend the applicant.” HP, KFH, and
NWP thus “each have a separate responsibility and
accountability to credential practitioners who are employed
or contracted to treat members” based upon the
recommendations of the Committee.
30 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
The Manual provides that “[w]hen quality of care/service
issues arise, KPNW may initiate disciplinary action and/or
reduce, suspend, or terminate privileges or staff status.”
While the Nurses’ CBA covering Allen’s terms and
conditions of employment is silent regarding the credentialing
requirement or procedures, the Manual indicates that HP
“Union Staff,” including nurse practitioners such as Allen,
may appeal disciplinary actions based on credentialing
decisions through the grievance procedure detailed in the
Nurses’ CBA.
In July 2008, Allen submitted to the Credentials
Committee an application for the renewal of her credentials.
The Credentials Committee conferred regarding Allen’s
application and concluded that she needed to be placed on a
Work Improvement Plan (“WIP”) as a result of certain low
performance scores and multiple patient complaints.
Allen was on approved personal leave in New York when
she learned from an HP supervisor that the Credentials
Committee was requiring her to agree to a WIP as a condition
for recredentialing. At the time, Allen “told [the supervisor]
she was confused about why a WIP was necessary” and
believed the plan would violate her collective bargaining
rights. According to Allen, she was told that she was being
“uncooperative” and received no further explanation.
Several weeks later, the Credentials Committee met again
to discuss Allen’s application for recredentialing. At that
meeting, HP’s Primary Care Director explained that Allen
had neither signed nor responded to the WIP prepared for her.
The Committee also discussed “several complaints from
patients” regarding Allen’s care. At the conclusion of the
meeting, “[t]he committee recommended termination of Ms.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 31
Allen’s credentialing based on patient safety concerns
because of repeated instances of not examining patients.” The
next day, HP placed Allen on unpaid administrative leave,
because, without credentials, she was unable to care for
patients.
Allen was notified of the Credentials Committee’s
negative decision by a letter, which notified her that she was
“entitled to appeal the Committee’s determination, in
accordance with the terms of the KFHP Labor Contracts-
[Nurses Union] Agreement, Article 11, Grievance
Procedure.”12 In accord with this advice, Allen’s union filed
a grievance on her behalf, and pursued it to binding
arbitration.
At arbitration, the parties stipulated that “the grievance is
arbitrable and includes an appeal of the Credentials
Committee’s adverse recommendation pursuant to
Credentialing Policy No. 26.” The primary disputed issue was
whether the Nurses’ CBA’s provision that “corrective action
shall be for just cause only” applied to the Committee’s
decision.
Addressing that issue, the arbitrator in his opinion first
explained that “[r]esolving the issues presented entails an
examination of the power of the Credentials Committee and
the nature of its action” denying Allen’s application. After
observing that the Manual indicates that HP is responsible for
credentialing its own staff and that the Credentials Committee
merely “formulates recommendations to” HP, the arbitrator
noted that HP nonetheless “regarded the Credentials
12
The reference to Article 11 is an error; the grievance procedure is
actually found in Article 19 of the Nurses’ CBA.
32 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
Committee’s action as a denial” rather than a
recommendation. Both parties, moreover, “seem[ed] to agree
that the grievant’s credentials were terminated by the
Credentials Committee,” even though such a termination
would appear to exceed the jurisdiction of the Committee.
Given that agreement, and because HP’s Board of Directors
made “no further determination,” the arbitrator concluded, the
Credentials Committee’s action “should be treated as a final
decision denying the grievant’s application for
recredentialing.”
The arbitrator went on to rule that the Nurses’ CBA’s
“just cause” standard was applicable. HP had “effectively
fired the grievant,” and “[i]nsofar as the Credentials
Committee’s decision was the foundation of the Employer’s
discharge of the grievant, it must be reviewed, to some
degree, under the just cause standard.”
Finally, the arbitrator ruled that the Credentials
Committee’s actions violated the just cause standard. He
concluded that Allen’s failure to cooperate with the
Credentials Committee was “excusable because she was on
vacation.” Rather than denying Allen’s application outright,
the Credentials Committee “should have recommended a
short term extension of the grievant’s credentials,” which
would have allowed the parties to address the “legitimate,
albeit debatable, concerns” raised by the committee. Because
of this shortcoming, Allen’s discharge was not for just cause.
Having so concluded, the arbitrator vacated the Committee’s
decision, remanded Allen’s credentialing application for
further proceedings by the Committee, and placed Allen on
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 33
paid administrative leave for 60 days, but declined to award
back pay.13
Unhappy with the arbitration award, Allen sued in state
court, naming NWP as the defendant and alleging state law
claims, including intentional interference with economic
relations/contract; defamation; breach of contract; and breach
of the duty of good faith. NWP removed the case to federal
court, arguing that the court had original jurisdiction under
28 U.S.C. § 1331 because Allen’s claims “arise under, and
require interpretation of” her CBA, and were thus preempted
by § 301 of the LMRA. In response, Allen filed a motion to
remand, contending that NWP’s credentialing process was
not governed by the Nurses’ CBA and that none of her claims
required interpretation of the Nurses’ CBA.
A magistrate judge concluded otherwise. She
recommended that the motion to remand be denied, holding
that “most of [Allen’s] claims substantially depend on an
analysis of the CBA, and, thus, are preempted.”14
Alternatively, the magistrate judge decided, Allen was
“taking the opposite position now than she took in the
arbitration” regarding whether the Committee’s actions were
governed by the Nurses’ CBA’s substantive standards, and
was therefore judicially estopped from arguing that they were
not. Allen filed no objection to the Findings and
Recommendation, and the district court adopted it.
13
On remand, the Credentialing Committee again denied Allen’s
credentialing application, and her union declined to pursue arbitration.
Those subsequent developments are not at issue in this appeal.
14
NWP conceded that Allen’s defamation claim was not preempted.
34 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
Following limited discovery, Allen filed a motion for
reconsideration of the motion to remand, as well as a Fourth
Amended Complaint, in which she abandoned all of her
substantive claims except for defamation. NWP filed a
motion for summary judgment on the defamation claim. The
district court denied the motion for reconsideration and
granted NWP’s motion for summary judgment. We affirm.
B. Judicial Estoppel
Before turning to the substance of the preemption issue,
we address the district court’s alternative holding—that
Allen’s central argument is barred by judicial estoppel. “We
review the district court’s application of the doctrine of
judicial estoppel to the facts of this case for an abuse of
discretion.” Hamilton v. State Farm Fire & Cas. Co.,
270 F.3d 778, 782 (9th Cir. 2001).
“Judicial estoppel is an equitable doctrine that precludes
a party from gaining an advantage by asserting one position,
and then later seeking an advantage by taking a clearly
inconsistent position.” Hamilton, 270 F.3d at 782. Three
factors “inform the decision whether to apply the doctrine in
a particular case.” New Hampshire v. Maine, 532 U.S. 742,
750 (2001): “First, a party’s later position must be ‘clearly
inconsistent’ with its earlier position.” Id. (quoting United
States v. Hook, 195 F.3d 299 (7th Cir. 1999)). “Second,
courts regularly inquire whether the party has succeeded in
persuading a court to accept that party’s earlier position, so
that judicial acceptance of an inconsistent position in a later
proceeding would create ‘the perception that either the first
or the second court was misled.’” Id. (quoting Edwards v.
Aetna Life Ins. Co., 690 F.2d 595, 599 (6th Cir. 1982)). “A
third consideration is whether the party seeking to assert an
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 35
inconsistent position would derive an unfair advantage or
impose an unfair detriment on the opposing party if not
estopped.” Id. at 751.
The district court concluded that judicial estoppel barred
Allen from arguing for remand on the ground that the
Credentials Committee’s adverse recommendation was not
governed by the Nurses’ CBA. As the district court
recognized, however, the contrary position was taken by
Allen’s union, not Allen herself, during the arbitration.
It is a core principle of labor law that “[t]he collective
bargaining system . . . of necessity subordinates the interests
of an individual employee to the collective interests of all
employees in a bargaining unit.” Vaca, 386 U.S. at 182. As a
corollary of this principle, a union representing an individual
in an arbitration proceeding has an obligation first to act for
the benefit of the bargaining unit as a whole, even where the
interests of the bargaining unit may diverge from those of the
individual grievant. See id.; Local 13, Int’l Longshoremen’s
& Warehousemen’s Union v. Pac. Mar. Ass’n, 441 F.2d 1061,
1067 (9th Cir. 1971).
We thus have recognized that when a union attorney
appears on behalf of an individual during a grievance
proceeding, while “the attorney may well have certain ethical
obligations to the grievant, his principal client is the union; it
is the union that has retained him, is paying for his services,
and is frequently the party to the arbitration proceedings.”
Peterson v. Kennedy, 771 F.2d 1244, 1258 (9th Cir. 1985).
Peterson held that a union member could not sue a union
lawyer for malpractice on the basis of the lawyer’s handling
of a grievance because there was no attorney-client
relationship between the lawyer and the union member. Id.36 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
at 1261. For the same reason—because there was no
attorney-client relationship between Allen and her union
attorney during the arbitration—the attorney’s argument
about the applicability of the Nurses’ CBA, made on behalf
of the union, cannot be imputed to Allen for judicial estoppel
purposes. Because Allen herself took no position at all during
the arbitration, her litigating position cannot be “clearly
inconsistent” with a nonexistent earlier position. The district
court thus abused its discretion in concluding that judicial
estoppel barred her argument about the applicability of the
Nurses’ CBA.
C. Section 301 Preemption
Like the parties’ arguments, our preemption discussion
focuses on Allen’s claim for intentional interference with
economic relations. As we have noted, see Section IV.A,
supra, Allen’s Fourth Amended Complaint dropped that
claim. But, “[i]n determining the existence of removal
jurisdiction, based upon a federal question, the court must
look to the complaint as of the time the removal petition was
filed. Jurisdiction is based on the complaint as originally filed
and not as amended.” Abada v. Charles Schwab & Co.,
300 F.3d 1112, 1117 (9th Cir. 2002) (quoting O’Halloran v.
Univ. of Wash., 856 F.2d 1375, 1379 (9th Cir. 1988))
(internal quotation marks omitted). Our preemption analysis,
therefore, must take into account Allen’s claims at the time of
removal, including her claim for intentional interference.
At first blush, Allen’s intentional interference claim does
not appear to fit comfortably into either prong of the Burnside
test. Allen argues that NWP, a third party to her employment
relationship with HP acting through the Credentialing
Committee, caused her discharge by its misconduct during
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 37
the course of the credentialing process. As she points out, the
Nurses’ CBA governs only her relationship with HP; it says
nothing at all about the credentialing process. On its face,
therefore, her “asserted cause of action involves a right”—the
right to be free from harmful interference by a third party in
an employment relationship—“conferred upon an employee
by virtue of state law, not by a CBA.” Burnside, 491 F.3d at
1059. And by the same token, she argues, evaluating the
merits of her claim cannot be “‘substantially dependent on
analysis of a collective-bargaining agreement’” that is silent
on the relevant issues. Id. (quoting Caterpillar, 482 U.S. at
394).
But our analysis cannot end there. Under longstanding
labor law principles, the scope and meaning of a collective
bargaining agreement is not limited to the text of the
agreement. Instead, “the industrial common law—the
practices of the industry and the shop—is equally a part of the
collective bargaining agreement although not expressed in it.”
United Steelworkers of Am. v. Warrior & Gulf Nav. Co.,
363 U.S. 574, 581–82 (1960). Because of the centrality of
industrial common law in collective bargaining relationships,
when an arbitrator interprets a collective bargaining
agreement, he is “entitled, and is even expected, to range
afield of the actual text of the collective bargaining agreement
he interprets.” Stead Motors of Walnut Creek, 886 F.2d at
1206. The arbitrator’s decision, in turn, conclusively
determines the meaning of the agreement. See Misco,
484 U.S. at 38. Thus where, as here, a plaintiff’s initial claim
did progress through arbitration, the question whether that
claim is based on a right conferred by the CBA must be
considered in light of the arbitrator’s decision.
38 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
Put differently, for preemption purposes, an employee
may assert a right that arises from a CBA as interpreted by an
arbitrator even where the right is not explicitly mentioned in
the text of the agreement. See Lueck, 471 U.S. at 215–16.
That is precisely what happened in this case. Even though the
Manual, in terms, limited the Committee to making a
recommendation and provided that only HP itself could take
“corrective action” subject to the just cause standard, the
arbitrator relied on the functional understanding of the parties
to the Nurses’ CBA regarding the nature and effect of the
Committee’s recommendation. Because the parties agreed
that Allen’s credentials were, as a practical matter, terminated
by the Committee’s decision, and that that decision directly
precipitated her termination, the arbitrator ruled, the
Committee’ decision must be evaluated under the just cause
standard of the Nurses’ CBA. In other words, the arbitrator
relied on the “industrial common law”—the “practices of the
industry and the shop,” Warrior & Gulf Nav. Co., 363 U.S. at581–82—to interpret the just cause provision as extending to
the actions of the Credentials Committee. Under this
interpretation, Allen’s allegation in her complaint at the time
of removal concerning the conduct of the Committee is
necessarily an allegation that she was fired without just cause
in violation of her CBA.
In short, the arbitrator decided the question raised under
the first Burnside factor—whether Allen’s claims arise out of
the Nurses’ CBA or, rather, “exist independently” of it. In
asking us to conclude that her claims are independent of the
Nurses’ CBA, Allen is, in effect, asking us to overturn the
arbitrator’s interpretation of the contract. That we cannot do.
One of the central goals of LMRA preemption is
“preserv[ing] the central role of arbitration in our ‘system of
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 39
industrial self-government.” Lueck, 471 U.S. at 219 (quoting
Warrior & Gulf Nav. Co., 363 U.S. at 581). Lueck recognized
that “[a] rule that permitted an individual to sidestep available
grievance procedures would cause arbitration to lose most of
its effectiveness, as well as eviscerate a central tenet of
federal labor-contract law under § 301 that it is the arbitrator,
not the court, who has the responsibility to interpret the labor
contract in the first instance.” Id. at 220 (citation omitted).
And an arbitrator’s interpretation of a collective bargaining
agreement is conclusive; a reviewing court cannot second-
guess it. “[E]ven if we were convinced that the arbitrator
misread the contract or erred in interpreting it, such a
conviction would not be a permissible ground for vacating the
award.” Sw. Reg’l Council of Carpenters v. Drywall
Dynamics, Inc., 823 F.3d 524, 530 (9th Cir. 2016) (quoting
Va. Mason Hosp. v. Washington State Nurses Ass’n, 511 F.3d
908, 913–14 (9th Cir. 2007)). Indeed, “[s]ince the labor
arbitrator is designed to function in essence as the parties’
surrogate, he cannot ‘misinterpret’ a collective bargaining
agreement.” Stead Motors, 886 F.2d at 1205. In this sense,
“his award is their contract.” Id. (quoting Theodore J. St.
Antoine, Judicial Review of Labor Arbitration Awards: A
Second Look at Enterprise Wheel and its Progeny, 75 Mich.
L. Rev. 1137, 1140 (1977)); see also Lueck, 471 U.S. at 219.
Here, the arbitrator’s award determined that Allen’s
claims came within the scope of the Nurses’ CBA, and the
arbitrator then determined the appropriate remedy under that
agreement. That “award, just as a contract, is the expression
of the parties’ will and must be enforced as expressed.” Stead
Motors, 886 F.2d at 1206. Just as an award more strongly in
Allen’s favor would have bound her employer in any
subsequent litigation, so too must Allen abide by the
arbitrator’s understanding of the meaning and reach of the
40 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
CBA.
We therefore agree with the district court that Allen’s
non-defamation claims are preempted under § 301, because
they involve rights arising under her CBA.15 Because those
claims were preempted at the time of removal, the district
court properly denied Allen’s motion to remand and retained
jurisdiction over her remaining claims.
D. Summary Judgment on Allen’s Defamation Claim
As noted, supra, note 14, NWP concedes that Allen’s
defamation claim is not preempted. The district court granted
summary judgment to NWP on that claim for three separate
reasons: (1) the claim was time-barred; (2) Allen failed to
allege any defamatory statements; and (3) NWP was
protected by qualified privilege.16 We agree that the claim
15
Because we affirm the preemption issue on this ground, we do not
consider NWP’s alternative argument that any error on the part of the
district court was invited by Allen’s amendment of her complaint.
16
Allen argues that the district court abused its discretion by denying her
discovery at two different points. We disagree. “Broad discretion is vested
in the trial court to permit or deny discovery, and its decision to deny
discovery will not be disturbed ‘except upon the clearest showing that
denial of discovery results in actual and substantial prejudice to the
complaining litigant.’” Sablan v. Dep’t of Fin. of Com. of N. Mariana
Islands, 856 F.2d 1317, 1321 (9th Cir. 1988) (quoting Butcher’s Union
Local No. 498 v. SDC Investment, Inc., 788 F.2d 535, 540 (9th Cir. 1986))
(some internal quotation marks omitted). No such showing has been made.
We further agree with the district court that Allen waived any
argument that the district court improperly considered documents not
referenced in the compliant.
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 41
was time-barred and affirm on that basis.17
The statute of limitations for a defamation claim in
Oregon is one year. Or. Rev. Stat. § 12.120(2). Allen filed her
complaint on December 29, 2011.18 Allen’s complaint was
based on statements allegedly made to the Credentials
Committee by Dr. Hotaki in 2008, well prior to December 29,
2010.
Allen’s injury from the defamatory statements, according
to her own complaint, was her “discharge” from HP in 2008,
which “injured her professional reputation.” This injury
flowed from the discharge itself; if anything, the arbitrator’s
decision cured her injury, by vacating the recommendation of
the Credentials Committee. The reputational injury began
well outside the limitations period. Further, to the extent that
Allen argues that her injury was the arbitrator’s refusal to
“make Allen whole” with an award of back pay, the denial of
a retrospective remedy was not itself the tortious injury; the
injury, instead, was her loss of income as a result of her loss
of reputation.
Finally, although Allen argued to the district court that
she could not have been aware of the allegedly defamatory
17
We also affirm the district court’s grant of summary judgment on
Allen’s claim for “equitable relief” based on a supposed separate contract
between her and NWP. Allen never presented any evidence of such a
contract.
18
The district court stated that Allen had filed her initial complaint “on
some unspecified date (but after November 2011).” Allen gives a specific
date in her briefing on appeal. Whether the complaint was filed on
December 29 or December 1 (the earliest possible date according to the
district court) makes no difference.
42 KOBOLD V. GOOD SAMARITAN REG’L MED. CTR.
statements until the arbitrator issued his written decision on
February 18, 2011, in her briefing on appeal she states that
she became aware of the statements upon attending the
arbitration hearings, the last of which took place on
November 23, 2010. That date is also prior to December 29
(or December 1), 2010. So Allen’s defamation claim was
filed more than a year after her awareness of the defamatory
statements. Thus, even if one focuses on when Allen became
aware of the defamatory statements themselves, the
limitations period had expired when the suit was filed.
Contrary to Allen’s submission, equitable tolling cannot
excuse her default. As the district court noted, “[e]quitable
tolling is used sparingly in Oregon.” Rodriguez v. Williams,
No. CIV. 08-290-ST, 2010 WL 1542092, at *3 (D. Or. Feb.
25, 2010) report and recommendation adopted, No. CV 08-
290-ST, 2010 WL 1541962 (D. Or. Apr. 14, 2010) aff’d,
447 F. App’x 850 (9th Cir. 2011). Allen has put forward no
plausible argument to excuse her failure to comply with the
statute of limitations.
For these reasons, we affirm the district court’s grant of
summary judgment to NWP on statute of limitations grounds.
Conclusion
In Kobold, we AFFIRM the district court’s grant of
summary judgment to Good Samaritan. In Barr, we
AFFIRM the district court’s grant of summary judgment to
RISG as to Barr’s money had and received claim, but
REVERSE as to Plaintiffs’ Or. Rev. Stat. § 652.610(4) and
breach of fiduciary duty claims, and REMAND to the district
court to decide whether to exercise supplemental jurisdiction
over the § 652.610(4) and breach of fiduciary duty claims. In
KOBOLD V. GOOD SAMARITAN REG’L MED. CTR. 43
Allen, we AFFIRM the district court’s denial of Allen’s
motion to remand as well as its grant of summary judgment
to NWP.