ANDREW P. GORDON, District Judge.
This lawsuit originally was brought by plaintiff Raymond Garcia, who is a member of the Clark County Public Employees Association, also known as SEIU 1107 (Local 1107). Local 1107 is a union for private and public sector employees in Clark County, Nevada. Garcia brought this lawsuit on Local 1107's behalf in Nevada state court against defendants Service Employees International Union (SEIU), Luisa Blue (the trustee appointed over Local 1107), Mary Henry (president of the SEIU), the Executive Board of Local 1107 (who voted in favor of the trusteeship), and Steve Ury (SEIU counsel who allegedly gave advice to the Executive Board of Local 1107).
In brief, Local 1107 is affiliated with the international union, SEIU. When Local 1107 experienced internal management issues that resulted in the removal of the Local's president and vice president, the Local's executive board voted in favor of SEIU placing the local union in a trusteeship, and the SEIU did so. Garcia contends this action violated the affiliation agreement between Local 1107 and the SEIU, breached Local 1107's constitution, was achieved through misrepresentations and legal malpractice, and constitutes a breach of fiduciary duties.
The defendants removed the case to federal court on the basis that Garcia's claims are completely preempted by section 301 of the Labor Management Relations Act (LMRA) and thus are removable under federal question jurisdiction. Garcia moved to remand. I denied that motion, finding that Garcia's claim that the SEIU breached the parties' affiliation agreement was preempted under section 301 as a claim asserting a breach of a contract between labor organizations. ECF No. 39. After I denied remand, Garcia amended his complaint to add new plaintiffs who are Local 1107 members and are also public sector employees. ECF No. 29.
The plaintiffs now move for reconsideration of my ruling that federal question jurisdiction exists and move to remand to state court. They also request leave to supplement their arguments on the motion to remand. The defendants oppose all motions.
I deny the motion for reconsideration and the motion to remand. I stand by my original ruling that in the context of this case, the plaintiffs' claim that the SEIU breached the affiliation agreement is completely preempted by section 301, thus giving rise to federal question jurisdiction supporting removal. I decline to adopt the plaintiffs' position that complete preemption under section 301 applies only when interpretation of a collective bargaining agreement is at issue. Finally, I grant the motion to supplement. However, the supplemental arguments do not alter my rulings.
Local 1107 entered into an affiliation agreement with the SEIU in 1987. ECF No. 1-1 at 28-39. Paragraph 18 of the affiliation agreement waives Article VIII, Section 7(a)-(f) of the SEIU's constitution, which governs when the SEIU can place a local union into trusteeship. Under paragraph 18 of the affiliation agreement, the SEIU cannot place Local 1107 into a trusteeship "except . . . with the approval of the [Local 1107] Board of Representatives." Id. at 36.
In the fall of 2016, in response to complaints from local union members, defendant Henry—as president of the SEIU—ordered a hearing to determine the validity of charges against the Local's president, Cherie Mancini, and executive vice president, Sharon Kisling. Id. at 41, 180 (Article XVII, Section 2(f) of the SEIU constitution granting the SEIU president the power to assume jurisdiction over charges against a local member or officer in certain circumstances). Henry appointed Carol Nieters as hearing master. Id. Following a hearing, Nieters recommended that Mancini and Kisling be removed from their positions and that the SEIU impose a trusteeship over Local 1107 due to deteriorating conditions there. Id. at 42, 52-54.
Based on these recommendations, Henry issued a letter to Local 1107 members informing them she was invoking her power as SEIU president to remove Mancini and Kisling from their positions. Id. at 56-58. Henry took the trusteeship recommendation under advisement and dispatched SEIU vice president Neal Bisno, deputy chief of staff Deedee Fitzpatrick, and associate general counsel Steve Ury to attend Local 1107's already-scheduled executive board meeting "to discuss how the Local can move forward in the way that best serves its members." Id. at 57.
Local 1107's board met on April 26, 2017, which included a closed session with the SEIU officials. According to the complaint, Ury told the board members that because Local 1107's constitution did not contain provisions for what to do if the president and vice president positions were simultaneously vacant, the board had no choice but to request the SEIU place the Local into trusteeship. Id. at 6. A majority of the board voted to do so, with 17 voting in favor of the trusteeship, 7 against, and 5 abstaining. Id. at 6, 59, 61; ECF No. 11 at 6. Henry then entered an order of trusteeship invoking her powers under Article VIII, Sections 7(a) and (f) of the SEIU constitution and appointed defendant Luisa Blue as Trustee. ECF No. 1-1 at 59, 61.
Based on these allegations, Garcia brought suit in Nevada state court as a member of Local 1107. Among his claims was that the SEIU breached the affiliation agreement between the two unions. Id. at 9-10.
The defendants removed the case to this court on the basis of federal question jurisdiction, arguing that although Garcia's claims were styled as state law claims, section 301 of the LMRA completely preempts the breach of contract claims. Garcia moved to remand, arguing that because both the Local and the SEIU have public sector employees to which the LMRA does not apply, his claims were not preempted.
I held a hearing on the motion to remand (along with a pending motion for a temporary restraining order). ECF No. 39. At that hearing, I denied Garcia's motion to remand. Id. at 90. I ruled that based on section 301's plain language, this lawsuit fell within that section's complete preemptive force for lawsuits involving a "violation of contracts between . . . labor organizations." Id. I rejected Garcia's attempt to rely on the public employee exemption in the LMRA, which essentially defines public sector employers and employees out of the LMRA's scope. Id.; see also 29 U.S.C. §§ 152(2), (3), (5). I concluded that the cases on which Garcia relied were distinguishable because here, "the unions are labor organizations in the context of a breach of [the] two unions' Affiliation Agreement that has no specific relation to public employees, a public employer, or a public Collective Bargaining Agreement." ECF No. 39 at 91.
At the end of the hearing, Garcia's counsel asked for clarification about whether my ruling hinged on the fact that Garcia was not a public sector employee. Id. at 96. I stated that my ruling did not rely on that fact and that I did not deny the motion to remand "just because the plaintiff is a private employee. . . ." Id. I also advised Garcia's counsel that I was aware he could simply amend to add a public sector employee, but that would not result in a different ruling on jurisdiction. Id. at 96-97 ("It's bigger than just that issue.").
Garcia then amended his complaint to add three public sector employees as plaintiffs. ECF No. 29. The plaintiffs move for reconsideration of my prior order on the jurisdictional question, asserting that now that public sector employees are plaintiffs, section 301 does not apply. They also move for remand, arguing that section 301's preemptive force applies only when the plaintiff's claim requires interpreting a collective bargaining agreement. Because that would not be required to resolve the plaintiffs' claims in this case, they contend their claims are not completely preempted so there is no federal question jurisdiction. Finally, they request leave to supplement their remand motion with arguments involving a related case filed in this district. The defendants oppose all motions.
The plaintiffs move for reconsideration of my prior ruling that the claim that the SEIU breached the two unions' affiliation agreement is completely preempted by section 301 of the LMRA. The plaintiffs argue reconsideration is warranted due to new facts, specifically, that three public sector employees are now plaintiffs. They also contend my ruling is contrary to the LMRA's plain language and caselaw holding that when a public sector employer or employee is involved, the LMRA does not apply. Finally, they contend I erred by importing the "mixed union" exception in the Labor Management Reporting and Disclosure Act (LMRDA) context into the LMRA complete preemption analysis.
A district court "possesses the inherent procedural power to reconsider, rescind, or modify an interlocutory order for cause seen by it to be sufficient," so long as it has jurisdiction. City of L.A., Harbor Div. v. Santa Monica BayKeeper, 254 F.3d 882, 885 (9th Cir. 2001) (quotation and emphasis omitted); see also Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 12 (1983) (citing Fed. R. Civ. P. 54(b)). "Reconsideration is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law." Sch. Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). A court also may reconsider its decision if "other, highly unusual, circumstances" warrant it. Id.
I find no basis to reconsider my prior ruling. Although the plaintiffs contend I ignored section 301's text, my ruling was based on a plain language analysis of the statute.
Section 301 of the LMRA provides:
29 U.S.C. § 185(a). An "agreement of affiliation between unions is a contract between labor organizations." United Bhd. of Carpenters & Joiners of Am., Lathers Local 42-L v. United Bhd. of Carpenters & Joiners of Am., 73 F.3d 958, 961 (9th Cir. 1996). In count two of the second amended complaint, the plaintiffs allege the SEIU breached the affiliation agreement between the two unions. The parties dispute whether the SEIU and the Local qualify as "labor organizations" under the LMRA.
The LMRA defines "labor organization" as "any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work." 29 U.S.C. § 152(5). The definition thus turns on the definitions of employers and employees. The statute expressly excludes as employers "any State or political subdivision thereof." Id. § 152(2) (defining employer and stating that term "shall not include the United States or any wholly owned Government corporation . . . or any State or political subdivision thereof. . . ."). The definition of an employee turns on the definition of an employer, so it likewise excludes public sector employees. Id. § 152(3) (defining employee to exclude a person employed "by any other person who is not an employer as herein defined").
Here, both unions have public sector employees. ECF No. 1-1 at 70-71, 150. However, both also have private sector employees. See id. The labor organization definition states that it applies to an organization in which "employees" participate and that exists for the purpose, "in whole or in part," to bargain with "employers." Because Local 1107 and SEIU have members who are private sector employees, both unions have "employee" participants and these unions exist at least "in part" to bargain with "employers." Thus, under a plain language reading, they qualify as "labor organizations" under section 301. The plaintiffs' motion elides the statutory language's reference to the organization existing for the purpose "in whole or in part" to bargain with employers. See ECF No. 32 at 7. But I cannot ignore that statutory language.
The cases on which the plaintiffs rely are distinguishable. All involve scenarios where the union represents only public sector employees or the plaintiff's claim relates to some aspect of a dispute or collective bargaining agreement with a public sector employer. See, e.g., Pac. Maritime Ass'n v. Local 63, Int'l Longshoremen's & Warehousemen's Union, 198 F.3d 1078 (9th Cir. 1999) (local union which represented only public sector employees dismissed for lack of jurisdiction; other two local unions remained in the case and went to arbitration); Richards v. Ohio Civil Serv. Emps. Ass'n, 205 F. App'x 347, 354 (6th Cir. 2006) (union was "mixed," meaning it represented both public and private sector employees; section 301 held not to apply to lawsuit filed by only public sector employees who sued union in relation to a bargaining agreement with the State of Ohio); Cunningham v. Local 30, Int'l Union of Operating Eng'rs, 234 F.Supp.2d 383, 385 (S.D.N.Y. 2002) (similar scenario of mixed union and lawsuit involving only public sector employees suing over negotiation of a specific contract with city employer).
In sum, under a plain reading of the LMRA's definition sections, and in the context of the plaintiffs' claim in this case, Local 1107 and SEIU are "labor organizations" because they are organizations in which "employees" participate and they exist for the purpose, at least "in part," of bargaining with "employers." This interpretation is consistent with Congress's goal of making union agreements subject to uniform federal law. See United Association of Journeymen & Apprentices of Plumbing & Pipefitting Industry of U.S. & Canada, AFL CIO v. Local 334, United Association of Journeymen & Apprentices of Plumbing & Pipefitting Industry of U.S. & Canada, 452 U.S. 615, 624-27 (1981) (stating that "Congress could conclude that the enforcement of the terms of union constitutions—documents that prescribe the legal relationship and the rights and obligations between the parent and affiliated locals—would contribute to the achievement of labor stability"; that Congress chose to have "contracts between labor organizations enforced by the federal courts"; and that the "substantive law to apply is federal law, which the courts must fashion from the policy of our national labor laws" (quotation omitted)). Consequently, the claim for breach of the affiliation agreement falls within section 301, is completely preempted,
In their motion to remand, the plaintiffs argue that section 301's preemptive force does not apply unless resolution of the plaintiffs' state law claims requires analysis of a collective bargaining agreement. The defendants respond that section 301 preempts claims involving contracts between unions even without reference to a collective bargaining agreement.
This question has already been answered by the Supreme Court. A claim that a contract between two unions has been breached falls within section 301's complete preemptive ambit and is therefore removable. In United Association of Journeymen & Apprentices of Plumbing & Pipefitting Industry of U.S. & Canada, AFL CIO, a local union sued the international union with which it was affiliated after the international union declared it was consolidating several local unions. 452 U.S. at 616-17. The local sued in state court and asserted the international had violated its own constitution in declaring the consolidation. Id. at 617-18. The international removed the case to federal court. Id. at 618. The district court found it had subject matter jurisdiction under section 301, but the Third Circuit reversed with instructions to remand to state court. Id. at 619.
The Supreme Court reversed the Third Circuit and ruled that because the international constitution was a contract between labor organizations, "the plain meaning of the `contracts between labor organizations' clause of section 301(a) supports jurisdiction. . . ." Id. at 622. The Supreme Court stated that "Congress chose in section 301(a) to have contracts between labor organizations enforced by the federal courts," and that Congress "intended the federal courts to enjoy wide ranging authority to enforce labor contracts under section 301." Id. at 626-27. The Supreme Court thus ruled that the case was properly removed to federal court under § 301(a) as a lawsuit alleging a breach of a contract between labor organizations. Id. at 627. Likewise, here, the plaintiffs' claim that the SEIU breached the affiliation agreement is a claim that a contract between labor organizations was breached. That claim is completely preempted by section 301, so removal was proper.
The plaintiffs' argument that a collective bargaining agreement must be at issue to support section 301 complete preemption ignores that section 301 creates federal court jurisdiction for two types of suits alleging breach of contract: one for contracts "between an employer and a labor organization," and the other for contracts "between any such labor organizations." See 29 U.S.C. § 185(a). There is no support in the statutory language for the plaintiffs' position that the statute has complete preemptive force over only one type of suit. The plaintiffs cite no case that has held section 301's complete preemptive force does not apply to a claim alleging a breach of a contract between labor organizations. Other courts have rejected the plaintiffs' argument.
The plaintiffs move for leave to supplement their motion to remand. They seek to make new arguments about a related case recently filed in this district: Mancini, et al. v. SEIU, et al., 2:17-cv-02137-APG-NJK. The plaintiffs in that case sue under the LMRDA to challenge the SEIU's imposition of the trusteeship on Local 1107. The plaintiffs in this case assert that the LMRDA claims in that case show section 301 cannot completely preempt their own state law claims challenging the same trusteeship. The plaintiffs argue that because they could have brought their claims under the LMRDA, the defendants cannot choose on removal that the LMRA is the applicable statute (not the LMRDA). They contend that would undermine the doctrines of complete preemption, the well-pleaded complaint rule, and the presumption against removal jurisdiction. The defendants respond that the availability of another federal remedy does not negate their argument that the LMRA preempts state law breach of contract claims if those claims fall within section 301's scope.
I grant the plaintiffs' motion to supplement, but their arguments do not persuade me to change my jurisdictional ruling. Complete preemption applies only to state law claims. See, e.g., Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998) ("The artful pleading doctrine allows removal where federal law completely preempts a plaintiff's state-law claim."); Franchise Tax Bd., 463 U.S. at 23 (stating "the preemptive force of § 301 is so powerful as to displace entirely any state cause of action for violation of contracts between an employer and a labor organization" (quotation omitted)). "Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Retail Prop. Tr. v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 947 (9th Cir. 2014) (quotation omitted). "Complete preemption is really a jurisdictional rather than a preemption doctrine, as it confers exclusive federal jurisdiction in certain instances where Congress intended the scope of federal law to be so broad as to entirely replace any state-law claim." Id.
In contrast, a claim brought under the LMRDA is a federal cause of action governed by federal law, even if it can be pursued in state court. The fact that Congress has chosen to give litigants another federal remedy to challenge particular conduct related to union trusteeships does not mean that section 301 no longer has complete preemptive force over state law breach of contract claims that fall within its scope.
The plaintiffs contend this analysis deprives them of the ability to be the masters of their complaint because the defendants have been able to choose which federal law, the LMRA as opposed to the LMRDA, should apply to the plaintiffs' claim. But the plaintiffs were the masters of their complaint.
There is no choice to be made about which federal statute preempts the state law claim. The parties agree the LMRDA does not have complete preemptive force in the context of the plaintiffs' claims. ECF Nos. 39 at 12-14; 59 at 3 (citing 29 U.S.C. § 523(a), which provides that "[e]xcept as explicitly provided to the contrary, nothing in this chapter shall reduce or limit the responsibilities of any labor organization . . . under any other Federal law or under the laws of any State, and . . . nothing in this chapter shall take away any right or bar any remedy to which members of a labor organization are entitled under such other Federal law or law of any State").
IT IS THEREFORE ORDERED that the plaintiffs' motion for reconsideration
IT IS FURTHER ORDERED that the plaintiffs' motion to remand
IT IS FURTHER ORDERED that the plaintiffs' motion for leave to supplement
