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Jeffrey Rutledge v. International Longshoremens As, 16-1306 (2017)

Court: Court of Appeals for the Third Circuit Number: 16-1306 Visitors: 8
Filed: Jul. 07, 2017
Latest Update: Mar. 03, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ Nos. 16-1306 & 16-1331 _ JEFFREY RUTLEDGE v. INTERNATIONAL LONGSHOREMEN’S ASSOCIATION AFL-CIO; NEW YORK SHIPPING ASSOCIATION, INC.; LOCAL 1233; MAHER TERMINALS, LLC; BERNARD DUDLEY; GERARD CROTTY; JOHN DOES 1-10; ABC CORPS 1-10 New York Shipping Association, Inc.; Maher Terminals, LLC; Gerard Crotty, Appellants in No. 16-1306 International Longshoremen’s Association AFL-CIO; Local 1233, ILA AFL-CIO; Bernard Dudley, Appellant
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                                                      NOT PRECEDENTIAL

            UNITED STATES COURT OF APPEALS
                 FOR THE THIRD CIRCUIT
                    ________________

                     Nos. 16-1306 & 16-1331
                       ________________

                      JEFFREY RUTLEDGE

                                 v.

 INTERNATIONAL LONGSHOREMEN’S ASSOCIATION AFL-CIO;
    NEW YORK SHIPPING ASSOCIATION, INC.; LOCAL 1233;
MAHER TERMINALS, LLC; BERNARD DUDLEY; GERARD CROTTY;
            JOHN DOES 1-10; ABC CORPS 1-10


              New York Shipping Association, Inc.;
              Maher Terminals, LLC; Gerard Crotty,
                                  Appellants in No. 16-1306

        International Longshoremen’s Association AFL-CIO;
            Local 1233, ILA AFL-CIO; Bernard Dudley,
                                    Appellants in No. 16-1331

                       ________________

            Appeal from the United States District Court
                    for the District of New Jersey
                     (D.N.J. No. 2-14-cv-05589)
             District Judge: Honorable Claire C. Cecchi
                         ________________

            Submitted Under Third Circuit LAR 34.1(a)
                          May 8, 2017

    Before: AMBRO, RESTREPO, and NYGAARD, Circuit Judges

                   (Opinion filed: July 7, 2017)
                                   ________________

                                       OPINION*
                                   ________________

AMBRO, Circuit Judge

       Appellants in this consolidated matter—the International Longshoremen’s

Association AFL-CIO, Local 1233, the New York Shipping Association, Inc., Maher

Terminals, LLC, Bernard Dudley, and Gerard Crotty (collectively, “Appellants”)—

challenge the District Court’s decision to remand to the New Jersey state courts three of

five claims brought against them by Jeffrey Rutledge. Appellants denied Rutledge the

opportunity to resume employment as a union longshoreman after his completion of

addiction treatment and diversion programs following an arrest for possession of a

controlled substance, so Rutledge brought five state-law claims against them in New

Jersey state court. Contending that the claims were, in substance if not form, federal-law

claims under § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C.

§ 185(a), see Allis-Chalmers Corp. v. Lueck, 
471 U.S. 202
, 220 (1985), Appellants asked

the District Court to dismiss them all as barred by the LMRA’s six-month statute of

limitations, see Albright v. Virtue, 
273 F.3d 564
, 566 (3d Cir. 2001).

       The District Court agreed that two claims were in fact governed by the LMRA and

dismissed them as untimely. See Allis-Chalmers 
Corp., 471 U.S. at 220
(“[W]hen

resolution of a state-law claim is substantially dependent upon analysis of the terms of an



*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

                                             2
agreement made between the parties in a labor contract, that claim must either be treated

as a § 301 claim . . . or dismissed as pre-empted by federal labor-contract law.”). It held,

however, that the three others were state-law claims and, with no federal claims

remaining, remanded them to the New Jersey courts.

I.     BACKGROUND

       Rutledge became a longshoreman in the Port of New York and New Jersey in

2003. In New York and New Jersey the privilege of working as a longshoreman is

jealously guarded, so to begin his employment Rutledge had to satisfy several

interlocking requirements: he had to join the appropriate union, Local 1233 of the

International Longshoreman’s Association (“ILA”), which required the sponsorship of

his employer, Maher Terminals, LLC; he then had to register with and obtain approval

from the New York Waterfront Commission, a bi-state agency of New York and New

Jersey; and the Waterfront Commission, in turn, required Rutledge’s registration to be

sponsored by his union as well as the New York Shipping Association (“NYSA”), Inc.

Having satisfied these requirements, Rutledge began his work at the Port.

       In October 2006, Rutledge was arrested and charged with possession of a small

amount of cocaine, but he was never convicted of that crime. Instead, the charge was

initially downgraded to “failure to deliver a controlled dangerous substance to the

police[,]” a disorderly persons offense. J.A. 26. The downgraded charge was eventually

dismissed entirely when Rutledge successfully completed a conditional discharge

program.



                                              3
       Unfortunately for Rutledge, however, the collateral consequences of his arrest

would be worse than the criminal sanctions. Following his arrest, Maher and Local 1233

terminated their sponsorships of Rutledge. The Waterfront Commission responded by

revoking Rutledge’s registration in March 2008, effectively terminating his ability to

work as a longshoreman.

       Rutledge went on to complete a drug and alcohol rehabilitation program, but about

the same time he was diagnosed with and treated for cancer. The treatment left him with

significant hearing loss, requiring use of a cochlear implant.

       Following his recovery, Rutledge sought reinstatement in March 2010 of his

registration with the Waterfront Commission. The procedures governing reinstatement

are contained in a Collective Bargaining Agreement (the “CBA”) to which NYSA, ILA,

Maher, and Local 1233 are parties. Per those procedures, the joint NYSE-ILA Seniority

Board, an arbitral panel, considered and denied his request in May 2010, citing “the

current depressed economic environment and [Rutledge’s] arrest for possession of a

controlled dangerous substance[.]” J.A. 27. He appealed to the NYSA-ILA Contract

Board, which denied his appeal in December 2010, relying exclusively on Rutledge’s

arrest. In April 2013, Rutledge submitted a second request for reinstatement to the

Seniority Board, which it denied in July 2013, citing the Contract Board’s 2010 decision.

       In August 2014 Rutledge filed a complaint in New Jersey state court, which

Appellants removed to the District Court. As noted in summary fashion above, that Court

held that two of Rutledge’s claims—breach of collective bargaining agreement and

breach of the duty of fair representation—were not state-law claims at all, but constituted

                                             4
a single “hybrid suit” under LMRA § 301. A section 301 hybrid suit exists when a

plaintiff simultaneously sues his employer for wrongful discharge and his union for

breach of its duty of fair representation by failing to pursue a grievance based on the

wrongful discharge. See United Parcel Serv., Inc. v. Mitchell, 
451 U.S. 56
, 66 (1981).

These suits are governed by a six-month statute of limitations, 29 U.S.C. § 160(b), that

Rutledge had not met, so the Court dismissed his first two claims. See 
Albright, 273 F.3d at 572
–73.

       The Court concluded that Rutledge’s three remaining claims—violation of the

New Jersey Law Against Discrimination (“NJ LAD”), N.J. Stat. § 10:5-1, et seq.;

common law fraud, deceit, and misrepresentation; and tortious interference with a

prospective economic advantage—were not preempted by the LMRA and remanded them

to state court over Appellants’ objection. See Carnegie-Mellon Univ. v. Cohill, 
484 U.S. 343
, 348 (1988) (“[A] district court has discretion to remand a removed case to state

court when all federal-law claims have dropped out of the action and only pendent state-

law claims remain.”). Appellants ask that we reverse the District Court’s remand of the

remaining claims, hold that they too are governed by § 301, and dismiss them as

untimely.

II.    JURISDICTION

       Before we may consider Appellants’ requests, we must assure ourselves that we

have jurisdiction to do so. See Pa. Nurses Ass’n v. Pa. State Educ. Ass’n, 
90 F.3d 797
,

801 (3d Cir. 1996). Appellants dedicate a significant portion of their brief to overcoming

28 U.S.C. § 1447’s bar on appellate review. That is unsurprising, as the District Court

                                             5
cited § 1447 as the basis for its remand decision, J.A. 12, and that section provides in part

that “[a]n order remanding a case to the State court from which it was removed is not

reviewable on appeal or otherwise[,]” see 28 U.S.C. § 1447(d).

       “This bar to review, however, has been held to apply only to remand orders issued

pursuant to 28 U.S.C. § 1447(c), that is, where the case was remanded due to a defect in

the removal procedures or for lack of subject matter jurisdiction.” Pa. Nurses 
Ass’n, 90 F.3d at 801
(emphasis added). But the District Court did not remand the state-law claims

for either of these reasons. Despite its citation of § 1447, it in fact exercised authority

granted by 28 U.S.C. § 1367, which provides supplemental jurisdiction over state-law

claims as well as the discretion to “decline to exercise supplemental jurisdiction over a

claim . . . if . . . the district court has dismissed all claims over which it has original

jurisdiction[.]” 28 U.S.C. § 1367(c). When § 1367(c) supplies the basis for remand,

§ 1447 does not block appellate review. Pa. Nurses 
Ass’n, 90 F.3d at 801
.

       But that is not the end of the inquiry. Even if § 1447 is no bar, we must determine

whether the requirements of 28 U.S.C. § 1291 have been satisfied. “[In] accordance with

§ 1291, [w]e have jurisdiction to review only those orders of the district courts that are

considered final.” Papotto v. Hartford Life & Accident Ins. Co., 
731 F.3d 265
, 269 (3d

Cir. 2013) (internal quotation marks omitted). In cases following Quackenbush v. Allstate

Ins. Co., 
517 U.S. 706
, 715 (1996), we have held that because “[a] district court’s remand

order divest[s] the federal court of all control over the action,” we have jurisdiction to

review it. Pa. Nurses 
Ass’n, 90 F.3d at 801
; see also In re FMC Corp. Packaging Sys.

Div., 
208 F.3d 445
, 449 (3d Cir. 2000) (while remand orders do not meet the traditional

                                                6
definition of finality, they should be deemed final for jurisdictional purposes in accord

with the Supreme Court’s decision in 
Quackenbush, 517 U.S. at 712
). Thus we proceed

to the merits of this appeal.

III.   ANALYSIS

       LMRA § 301 provides federal courts with jurisdiction over “[s]uits for violation of

contracts between an employer and a labor organization representing employees in an

industry affecting commerce.” That section “not only provides the federal courts with

jurisdiction over controversies involving collective-bargaining agreements but also

authorizes the courts to fashion ‘a body of federal law for the enforcement of these

collective bargaining agreements.’” United Steelworkers of Am., AFL-CIO-CLC v.

Rawson, 
495 U.S. 362
, 368 (1990) (quoting Textile Workers v. Lincoln Mills of Ala., 
353 U.S. 448
, 451 (1957)). Thus § 301 preempts state-law “claims founded directly on rights

created by collective-bargaining agreements, and also claims substantially dependent on

analysis of a collective-bargaining agreement.” Caterpillar Inc. v. Williams, 
482 U.S. 386
, 394 (1987) (internal quotation marks omitted). Put differently,

       if the resolution of a state-law claim depends upon the meaning of a
       collective-bargaining agreement, the application of state law (which might
       lead to inconsistent results since there could be as many state-law principles
       as there are States) is pre-empted and federal labor-law principles—
       necessarily uniform throughout the Nation—must be employed to resolve
       the dispute.

Lingle v. Norge Div. of Magic Chef, Inc., 
486 U.S. 399
, 405–06 (1988).

       “At the same time, the mere existence of a collective bargaining agreement does

not prevent an individual from bringing state law claims based on some independent


                                             7
agreement or obligation.” Trans Penn Wax Corp. v. McCandless, 
50 F.3d 217
, 229 (3d

Cir. 1995). “[A] state-law claim may depend for its resolution upon both the

interpretation of a collective-bargaining agreement and a separate state-law analysis that

does not turn on the agreement. In such a case, federal law would govern the

interpretation of the agreement, but the separate state-law analysis would not be thereby

pre-empted.” 
Lingle, 486 U.S. at 413
n.12. “[N]ot every dispute concerning employment,

or tangentially involving a provision of a collective-bargaining agreement, is pre-empted

by § 301 or other provisions of the federal labor law.” Allis-Chalmers 
Corp., 471 U.S. at 211
.

       Nonetheless Appellants contend that Rutledge’s three state-law claims are

“‘completely preempted’ [by § 301 and thus] requir[e] the district court to retain

jurisdiction over the case because of the implicit federal questions that [they] believe[]

are raised on the face of the complaint.” Trans Penn Wax 
Corp., 50 F.3d at 228
.1

       A.     New Jersey Law Against Discrimination

       Rutledge claims that Appellants violated the NJ LAD by denying him

reinstatement as a longshoreman because their denial was motivated by his history with

cancer and use of a cochlear implant. Appellants contend that Rutledge’s discrimination

claim is preempted by § 301.


1
 “Ordinarily, a case is not removable to federal court simply because, as here, the
defendant raises federal preemption as a defense.” Trans Penn Wax 
Corp., 50 F.3d at 228
. But claims properly governed by § 301 of the LMRA are an exception to this rule
and are removable notwithstanding a plaintiff’s decision to frame his claims as governed
by state law. 
Id. 8 The
Supreme Court recognized in Lingle that the LMRA does not preempt state-

law claims of retaliatory discharge following an employee’s filing of a worker’s

compensation 
claim. 486 U.S. at 406
. It noted that the elements of retaliatory discharge

rest on “purely factual questions pertain[ing] to the conduct of the employee and the

conduct and motivation of the employer” that “do[] not turn on the meaning of any

provision of a collective-bargaining agreement.” 
Id. at 407.
“Thus,” it held, “the state-law

remedy . . . is ‘independent’ of the collective-bargaining agreement in the sense of

‘independent’ that matters for § 301 pre-emption purposes: resolution of the state-law

claim does not require construing the collective-bargaining agreement.” 
Id. The Court
went on to note that there is no reason to distinguish between state

workers’ compensation laws and state anti-discrimination laws. 
Id. at 413.
Furthermore,

       [t]he operation of the antidiscrimination laws . . . illustrate[s] the relevant
       point for § 301 pre-emption analysis[:] that the mere fact that a broad
       contractual protection against discriminatory—or retaliatory[—]discharge
       may provide a remedy for conduct that coincidentally violates state-law
       does not make the existence or the contours of the state law violation
       dependent upon the terms of the private contract.

Id. at 412–13.
Put differently, just because a CBA also prohibits discrimination does not

mean that state anti-discrimination laws are preempted by § 301.

       Appellants note that Rutledge’s complaint makes numerous references to duties

and obligations created by the CBA. Thus they contend that his NJ LAD claim concerns

the CBA itself. But Appellants cast too wide a net.

       First of all, it is unsurprising that Rutledge’s complaint would discuss the CBA at

length: the District Court held that two of his claims were in fact governed by the CBA


                                             9
and thus preempted by the LMRA. But the question we must answer is whether his

NJ LAD claim “requires” construing the CBA. 
Lingle, 486 U.S. at 407
. It does not.

       To state a claim under the NJ LAD, Rutledge must show that: (1) he has a

disability; (2) he was qualified for the work for which he applied; (3) he was not hired;

and (4) the employer continued to seek others with the same qualifications or hired

someone with the same or lesser qualifications who was not disabled. Victor v. State,

4 A.3d 126
, 141 (N.J. 2010). These are factual questions that do not turn on an

interpretation of the CBA.2

       Appellants’ likely response to Rutledge’s claim that his application was denied

because of his disability is what the Seniority and Contract Boards already noted: his

application was denied because of his arrest. But whether this is the true reason or mere

pretext does not depend on an interpretation of the CBA.

       Finally, Appellants contend that the NJ LAD claim requires interpretation of the

CBA because, according to them, the remedy Rutledge requests is reinstatement as a

longshoreman, and that can only be done under the procedures required by the CBA. But

just a glance at Rutledge’s complaint reveals that the relief he requests is different. He

asks for “back pay, front pay, actual and general damages, compensatory, incidental,

consequential, and punitive or treble damages[,] . . . granting . . . attorney’s fees,

interests, and costs of suit[,] and/or . . . such further relief as the Court may deem

equitable and just.” J.A. 29. Notably absent from the list is reinstatement.

2
  It is possible that construction of a CBA term may prove necessary in some contexts to
determine a plaintiff’s qualification for a particular position, but Appellants have not
identified such a provision of the CBA that would be controlling here.
                                              10
       But even if a remedy Rutledge seeks might depend, in part, on the CBA, his claim

is not necessarily preempted. 
Lingle, 486 U.S. at 413
n.12 (“A [CBA] may, of course,

contain information such as rate of pay and other economic benefits that might be helpful

in determining the damages to which a worker prevailing in a state-law suit is entitled.

Although federal law would govern the interpretation of the agreement to determine the

proper damages, the underlying state-law claim, not otherwise pre-empted, would stand.”

(internal citation omitted)).

       Accordingly, we hold that Rutledge’s NJ LAD claim is not preempted, and the

District Court did not abuse its discretion by remanding it to the New Jersey state courts. 3

       B.     Fraud

       The next contested claim is one for fraud, deceit, and misrepresentation brought

under New Jersey common law. Rutledge claims that Appellants defrauded him by

falsely stating that he was denied union sponsorship “because of economic conditions and

his having been charged with a controlled dangerous substance offense.” J.A. 30. To state

a claim of fraud under New Jersey law a plaintiff must allege (1) that the defendant made

a material misrepresentation of a currently existing or past fact, (2) which he knew or

believed to be false, (3) upon which he intended the plaintiff to rely, (4) and on which the

plaintiff reasonably did rely, (5) with resulting damages. In re Resorts Int’l, Inc., 181

3
 Appellants argue in the alternative that, even if Rutledge’s NJ LAD claim is not
preempted, it is barred by the law’s two-year statute of limitations because Rutledge was
aware of a possible discrimination claim in 2010. See Montells v. Haynes, 
627 A.2d 654
,
658-60 (N.J. 1993). Noting that when Rutledge became aware of his claim is a factual
question that would benefit from a more developed record, the District Court declined to
answer it, leaving the issue to the state trial court that will hear the claim. We do the
same.
                                             
11 F.3d 505
, 509 (3d Cir. 1999) (citing Jewish Ctr. v. Whale, 
432 A.2d 521
, 524

(N.J. 1981)). Not one of these elements necessarily requires interpretation of the CBA.

See Trans Penn Wax 
Corp., 50 F.3d at 232
.

       We have ruled that a fraud claim may require interpretation of a CBA. See, e.g.,

Beidleman v. Stroh Brewery Co., 
182 F.3d 225
, 232–33 (3d Cir. 1999). But in Beidleman

the misrepresentation alleged was one party’s refusal to acknowledge the validity of a

labor agreement. 
Id. We noted
that “for a court to decide the merits of th[at] claim it

must interpret those terms in the agreement setting forth the appellees’ obligations, for if

the [relevant] agreement does not contain terms that bind the appellees, then no

‘misrepresentation’ exists.” 
Id. Appellants contend
that Rutledge’s fraudulent representation claim depends on the

CBA because the only purported misrepresentations Rutledge identifies are the grounds

given by the Seniority and Contract Boards for denying his application for reinstatement.

They argue the “falsity [of these reasons] depends on whether the collective bargaining

agreement recognizes the[se] ground[s] as a valid reason for denying reinstatement.”

Appellants’ Br. at 24.

       Appellants’ logic is faulty. Whether the grounds cited by the Seniority and

Contract Boards for denial are their true reasons for denying his application or merely

pretense has nothing to do with what the CBA says. The grounds themselves, Rutledge’s

arrest and criminal charge as well as the state of the economy, may be permissible

grounds for denial and yet not be the real reasons his application was denied.



                                             12
Alternatively, these may not be permissible grounds for denial under the CBA and yet in

fact be the reasons behind the Seniority and Contract Boards’ denial of his application.

       Appellants also contend that, instead of a fraud claim, Rutledge “should have

brought an action challenging [the] arbitral decisions based upon a recognized ground for

overturning an arbitration award [under LMRA § 301,] such as bias, fraud, or

dishonesty[.]” Appellants’ Br. at 24. But the law is clear that “a plaintiff may bring a

state law tort action against an employer, even where he could have brought a similar

claim based on a provision in his collective bargaining agreement, so long as the state

claim does not require interpretation of the collective bargaining agreement.” Trans Penn

Wax 
Corp., 50 F.3d at 229
. That Rutledge could have brought a different claim does not

undermine the state-law character of the claim before us.

       C.     Tortious Interference

       Finally, Rutledge alleges that the Appellants tortiously interfered with a

prospective economic advantage that he expected to receive by denying his reinstatement

as a longshoreman. To succeed on a claim of tortious interference with a prospective

economic advantage, a plaintiff must identify, among other things, “some protectable

right—a prospective economic or contractual relationship[;] [a]lthough the right need not

equate with that found in an enforceable contract, there must be allegations of fact giving

rise to some reasonable expectation of economic advantage.” MacDougall v. Weichert,

677 A.2d 162
, 174 (N.J. 1996) (internal quotation marks omitted). Appellants argue that

the only protectable rights that could be implicated by Rutledge’s claim (e.g., industry

reinstatement eligibility, seniority, pay level, or employment position) are those provided

                                             13
by the CBA. Thus, they contend, determining whether Rutledge has a reasonable

expectation of economic advantage (and whether Appellants interfered with it)

necessarily requires interpretation of the CBA.

       We agree. Unlike his two other remaining state-law claims, resolution of

Rutledge’s final tort claim requires interpretation of the CBA because it is impossible to

determine whether Rutledge had a reasonable expectation of future employment as a

longshoreman without looking to the CBA provisions that govern the process for

reinstating his eligibility for that work. Cf. Capraro v. United Parcel Serv. Co., 
993 F.2d 328
, 333 (3d Cir. 1993) (resolution of tortious-interference-with-contract claim

necessarily required interpretation of collective bargaining agreement). This claim is thus

preempted by § 301.

       The District Court held that all of Rutledge’s claims governed by § 301 were filed

after that section’s statute of limitations had run, and Rutledge does not challenge that

holding on appeal. Accordingly, his tortious-interference claim must be dismissed. See

Albright, 273 F.3d at 566
.

                               *      *      *       *      *

       For these reasons we affirm the District Court’s remand of the Rutledge’s state-

law claims under the New Jersey Law Against Discrimination and New Jersey common

law of fraud, deceit, and misrepresentation. However, we reverse the decision with

respect to his claim of tortious interference with a prospective economic advantage,

which is preempted by LMRA § 301 and must be dismissed as untimely.



                                             14

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