UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
July 20, 2009
ALICIA EVANS, PLAINTIFF,
SOUTHERN CALIFORNIA GAS COMPANY, DEFENDANTS.
The opinion of the court was delivered by: Dean D. Pregerson United States District Judge
ORDER GRANTING MOTION TO REMAND [Motion filed on April 28, 2009]
This matter comes before the Court on Plaintiff Alicia Evans' Motion to Remand. Evans' Complaint alleges various state law causes of action related to the disability leave policy (and particular actions related to her use of the disability policy) used by her former employer, Southern California Gas Company. Defendant Southern California Gas Company removed this action from California state superior court on the basis of federal preemption by ERISA and the Labor Management Relations Act. Arguing that her causes of action are outside the scope of both preemption provisions, Plaintiff moves to remand. After reviewing the materials submitted by the parties and hearing oral argument, the Court grants the Motion and remands the action.
Plaintiff Alicia Evans ("Plaintiff" or "Evans") brings this suit against her former employer, Southern California Gas Company ("Defendant" or "SCGC"). Plaintiff alleges that she was employed at SCGC from April 1993 through her termination date of August 12, 2008. Compl. ¶ 6. At all times during her employment, Plaintiff was represented by the Utility Workers Union of America, AFL-CIO. Franke Decl. in Support of Notice of Removal ("Franke Decl."), ¶ 3. SCGC maintains a Pension and Benefit Agreement Plan Document, which is Appendix D to the Collective Bargaining Agreement between SCGC and the Utility Workers Union of America AFL-CIO. Notice of Removal, Exs. C-D. The Plan covers all of SCGC's represented employees.
Union employees are entitled to 9 weeks of paid sick time per year. Starratt Decl., ¶ 7. The Plan provides long-term disability benefits. For employees who have completed less than 15 years of service, long-term disability benefits are available for sixty consecutive months. Notice of Removal, Ex. C at 36.
According to Defendant's Disabilities Management Services ("DMS") Manager, which acts as Plan Administrator, Evans took a series of leaves of absences beginning in 1998 for varying medical reasons. Starratt Decl., ¶ 5. In March 2000, Evans took a two-month leave of absence for gastric bypass procedure, and returned to work on May 15, 2000. Id. at ¶ 6. In fall of 2000, Evans filed a claim with DMS for the removal of a cyst and for post-surgical nerve damage. On May 21, 2003, Evans filed a new disability claim for abdominal pannus surgery. Id. at ¶ 7.
Plaintiff alleges that during her employment she became disabled as a result of work-related injuries primarily to her left hand and wrist, left elbow, and low back. Compl. ¶ 8. Additionally, Plaintiff had developed breathing difficulties, which had progressively worsened by August 2004. Id. After consulting with a doctor, Plaintiff was placed on restricted duty for a short period of time and had attempted to return to work thereafter through the Work Hardening Program. Id. at ¶ 9. A workers' compensation claim was filed on her behalf. Id.; Starratt Decl., ¶ 10 (workers' compensation claim filed on September 8, 2004). Plaintiff alleges that Defendant's Human Resources Director*fn1 would not allow Plaintiff to resume her job duties and informed her that the company could not accommodate her restrictions. Compl. ¶ 10.
As of November 2006, Plaintiff's breathing difficulties had increased. Id. at ¶ 11. As a result, Plaintiff had an angioplasty procedure in the throat in January 2007. Id. Following a medical exam related to her workers' compensation case, Plaintiff was diagnosed with cervical strain and lateral epicondylitis of the left elbow. Id. at ¶ 12. The doctor's work restrictions for Plaintiff consisted of "no very heavy work." Id. When Plaintiff attempted to return to work in April/May of 2008, the Human Resources Director told her that she would not be able to return until she was cleared by her back doctor and the doctor for her arm. Id. at ¶ 13.
Plaintiff's eligibility for the Plan's long-term disability benefits began on August 12, 2003. Starratt Decl., ¶ 7 & Ex. A. In a letter dated August 11, 2008, SCGC informed Plaintiff that her employment had been terminated effective August 12, 2008 because her long term disability benefits had expired. Compl. ¶ 15. In particular, the letter stated: "Under the terms of the Disability Plan Benefit, your eligibility for benefits ended on August 12, 2008, and accordance with the terms of the Plan, your employment will be terminated effective that date." Id.
Plaintiff's Complaint, which was originally filed in the Los Angeles Superior Court, alleges six causes of action arising out of her accommodations and termination. First, Plaintiff alleges that she was subject to discrimination in the form of disparate treatment on the basis of her disability in violation of the California Fair Employment and Housing Act ("FEHA"), California Government Code §§ 12940 et seq. Compl. ¶¶ 18-26. Second, Plaintiff alleges that the Disability Benefit Plan is discriminatory in that it has a disparate impact on employees who are medically disabled. Id. at ¶¶ 27-30. Third, Plaintiff alleges that SCGC violated Government Code § 12940(m) by failing to provide a reasonable accommodation to Plaintiff. Id. at ¶¶ 31-34. Fourth, Plaintiff alleges that SCGC failed to engage in an interactive process in violation of Government Code § 12940(n). Id. at ¶¶ 35-38. Fifth, Plaintiff alleges that SCGC discriminatorily refused to reinstate her once she was able to return to work. Id. at ¶¶ 39-42. Finally, Plaintiff alleges that Defendant retaliated against Plaintiff for participating in activities protected by FEHA. Id. at ¶¶ 43-48. Plaintiff seeks compensatory damages in the form of "[a]ctual medical expenses, actual, consequential and incidental losses, including but not limited to, the loss of income and benefits," as well as emotional distress, punitive damages, attorneys' fees and costs, and other appropriate relief. Id. at 10:11-23.
II. PROCEDURAL STANDARD FOR REMOVAL JURISDICTION AND REMAND
Pursuant to 28 U.S.C. § 1441(a), a district court has removal jurisdiction over actions brought in state court which could have been brought in federal court. 28 U.S.C. § 1441(a). A plaintiff may file a motion to remand for failure to comply with the procedural aspects of removal; alternatively, where the district court lacks subject matter jurisdiction, the case must be remanded.
28 U.S.C. § 1447(c). A defendant has the burden to establish that removal is proper, and a court should resolve any doubt against removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
Only actions that could have been filed in federal court originally may be removed by a defendant. 28 U.S.C. § 1441; Audette v. Int'l Longshoremen's and Warehousemen's Union, 195 F.3d 1107, 1111 (9th Cir. 1999) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)). One category of such cases is "federal question" cases, i.e., cases "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Generally, the presence or absence of federal question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal question jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. Audette, 195 F.3d at 1111. Federal pre-emption, as a federal defense to the plaintiff's suit, "ordinarily" "does not authorize removal to federal court." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). In certain circumstances, however, Congress "may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character" and may be the basis for removal. Id. at 63-64. Claims pre-empted by § 301 of the LMRA receive such treatment. Id. at 64. Additionally, claims that "relate to" an ERISA plan and that fall under the scope of ERISA's civil enforcement provisions are completely preempted such that the "well-pleaded complaint" rule does not apply. Id. at 66-67.
The parties do not dispute that, on its face, Plaintiff's Complaint alleges only state law causes of action. Instead, Defendant argues that Plaintiff's claims are completely preempted by ERISA and/or § 301 of the Labor Management Relations Act. For the reasons discussed below, the Court finds that neither ERISA nor the LMRA completely preempts Plaintiff's claims and that remand is therefore warranted.
A. ERISA Preemption
ERISA completely preempts a state law claim, "permitting the defendant to remove despite the well-pleaded complaint rule," where two circumstances exist: (1) ERISA preempts the plaintiff's cause of action pursuant to 29 U.S.C. § 1144(a), and (2) the cause of action falls within the scope of ERISA's civil enforcement provision, 29 U.S.C. § 1132(a). Rutledge v. Seyfarth, Shaw, Fairweather & Geraldson, 201 F.3d 1212, 1216 (9th Cir. 2000).
Because the Court finds that the cause of action does not fall within the scope of ERISA's civil enforcement provision, the Court does not address whether the claim falls within the scope of ERISA's preemption provision.*fn2
While ERISA's preemption provision, standing alone, may provide a defense to a state cause of action, complete preemption exists only when a cause of action also falls into ERISA's civil enforcement provision, 29 U.S.C. § 1132. That section provides that a participant or beneficiary may bring actions: (1) "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan," see id. at (a)(1)(B); (2) "to enjoin any act or practice which violates [ERISA] or the terms of the plan," id. at (a)(3)(A); (3) "to obtain other appropriate equitable relief (i) to redress... violations [of ERISA or the plan] or (ii) to enforce any provisions of this subchapter or the terms of the plan," id. at (a)(3)(B); or (4) to enforce rights under subsection (c), id. at (a)(1)(A).
Defendant argues that Plaintiff's Causes of Action fall into the scope of § 1132. Defendant argues that Plaintiff's action must be characterized as one for benefits under the plan because the terms and conditions of her leave of absence were governed by the Plan; "[a]s an exclusive right of the Plan alone," Defendant argues, Plaintiff maintained a non-working status and she seeks relief only as a result of the termination of those benefits.
See Opp. at 12. In other words, Defendant essentially argues that Plaintiff seeks to challenge the denial of benefits available under the Plan, which falls within the scope of § 1132.
Plaintiff's claim is not stated in such a way that makes clear she seeks to enforce the terms of the plan or to recover benefits she claims to deserve under the plan. Rather, her claim for benefits is framed as part of her compensatory damages. While Defendant urges that Plaintiff's claims must nevertheless be read in this way, the Court disagrees. Plaintiff seeks to state a claim for discrimination. Although ERISA prohibits discrimination on the basis of the participant's exercise of a right, see 29 U.S.C. § 1140, Defendant has not pointed to (and the Court has not independently found) ERISA provisions prohibiting discrimination on the basis of disability such that Plaintiff's claims could fairly be read on 29 U.S.C. § 1132(a)(3)(A). For example, Plaintiff's claim for retaliation is allegedly based on her exercise of rights granted by FEHA, not by the Plan. Accordingly, the Court finds that there is no complete preemption under ERISA.
B. Preemption Under § 301 of the LMRA
As an alternative basis for federal question jurisdiction, Defendant argues that Plaintiff's claims are completely preempted by section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). There appears to be no dispute that the disability benefits plan of which Plaintiff was a part is a collective bargaining agreement ("CBA"), and therefore could give rise to federal preemption. As discussed in more detail below, however, the Court finds that the LMRA does not preempt Plaintiff's claims.
1. Legal Framework for LMRA Preemption
Section 301 of the LMRA provides that "[s]uits 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). In light of the policies behind continuity of labor management law, see Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-04 (1962), the Supreme Court has held that "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'"; as a result, a complaint alleging such an action "necessarily 'arises under' federal law." Franchise Tax Bd. of State of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 23-24 (1983).
The basic rule is that § 301 preempts both state law claims directly addressed to a violation of a contract between an employer and a labor organization and those claims in which "resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract." Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985). Where a claim is "inextricably intertwined with consideration of the terms of the labor contract," it will be preempted. Id. at 213. That said, the reach of LMRA preemption has its limits: "[c]learly, § 301 does not grant the parties to a collective-bargaining agreement the ability to contract for what is illegal under state law," and § 301 does not "preempt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract." Id. at 212. "Causes of action that only tangentially involve a provision of a collective-bargaining agreement" and those which "assert nonnegotiable state-law rights independent of any right established by contract" are not preempted. Ramirez v. Fox Television Station, Inc., 998 F.2d 743, 748 (9th Cir. 1993) (internal quotation marks and brackets omitted).
"The demarcation between preempted claims and those that survive § 301's reach is not... a line that lends itself to analytical precision." Cramer v. Consolidated Freightways, Inc., 255 F.3d 683, 691 (9th Cir. 2001) (en banc). In Cramer, the Ninth Circuit explained the various considerations that bear on whether the LMRA preempts an asserted state law claim involving a collective bargaining agreement. In general, "[a] state law claim is not preempted under § 301 unless it necessarily requires the court to interpret an existing provision of a CBA that can reasonably said to be relevant to the resolution of the dispute." 255 F.3d at 693. In doing this analysis, the plaintiff's claim, as opposed to potential defenses, is central: "[t]he plaintiff's claim is the touchstone for this analysis; the need to interpret the CBA must inhere in the nature of the plaintiff's claim. If 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." Id. at 691. The connection between the claim and the terms of the CBA must "reach a reasonable level of credibility" -- "[a] creative linkage between the subject matter of the claim and the wording of a CBA provision is insufficient." Id. at 692.
The inquiry has been alternatively framed as two steps.
First, the court conducts an inquiry "into whether the asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a CBA." Burnside v. Kiewit Pacific Corp., 491 F.3d 1053, 1059 (9th Cir. 2007). In determining whether a particular right "inheres in state law or, instead, is grounded in the CBA," a court must consider the legal character of claim. Id. at 1060. "If the right exists solely as a result of the CBA, then the claim is preempted." Id. at 1059. On the other hand, if "the right exists independently of the CBA," the court's analysis requires a second step. The Court must "consider whether [the claim] is nevertheless 'substantially dependent on analysis of a collective-bargaining agreement.'" Id. (quoting Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987)). To resolve this question, a court determines "whether the claim can be resolved by 'looking to' versus interpreting the CBA." Id. (brackets omitted); see also Humble v. Boeing Co., 305 F.3d 1004, 1008 (9th Cir. 2002) ("To balance properly the policy considerations [of LMRA preemption], mere consultation of the CBA's terms, or a speculative reliance on the CBA will not suffice to preempt a state law claim."). Preemption does not exist, for example, where a court must consult the CBA to discern that none of the terms is reasonably in dispute or to refer to bargained-for wage rates in computing a penalty or consult the requirements of a CBA whose terms are not in dispute. Burnside, 491 F.3d at 1060; Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 993 (9th Cir. 2007).
In evaluating whether FEHA disability discrimination suits assert a state-law right independent of the CBA, the Ninth Circuit has also used a three-question framework. That framework asks:
(1) whether the CBA contains provisions that govern the actions giving rise to a state claim, and if so, (2) whether the state has articulated a standard sufficiently clear that the state claim can be evaluated without considering the overlapping provisions of the CBA, and (3) whether the state has shown an intent not to allow its prohibition to be altered or removed by private contract. A state law will be preempted only if the answer to the first question is 'yes,' and the answer to either the second or third is 'no.'
Miller v. AT&T Network Sys., 850 F.2d 543, 548 (9th Cir. 1988); see Jimeno v. Mobil Oil Corp., 66 F.3d 1514, 1523-28 (9th Cir. 1995); Espinal v. Northwest Airlines, 90 F.3d 1452, 1457 (9th Cir. 1996).
Evans seeks relief on the basis of six causes of action, each of which alleges that Defendant's action somehow violated FEHA.*fn3
Because the preemption inquiry turns on Plaintiff's claims, the Court's analysis must consider whether any of the alleged causes of action are preempted. As discussed in more detail below, the majority of the FEHA claims can be treated together for the purposes of that analysis. Although the parties do not focus on the distinctions between the claims in their discussion, the Court notes that the disparate impact claim is perhaps anomalous in that it argues that portions of the Plan, which are part of the CBA, violate FEHA. The Court finds none of the claims presents a basis for complete LMRA preemption.
Where rights exist in state law independently of the CBA and are not directly addressed by the CBA, the Ninth Circuit has found that they are not preempted. In Cramer, for example, the plaintiffs alleged state law privacy violations for their employer's placing of cameras in bathrooms. The defendant argued that the provisions of the CBA that addressed cameras and drug testing applied. The Ninth Circuit found that the state privacy claims were not preempted, in part because the claims were "based on California's constitutional and statutory rights of privacy guaranteed to all persons, whether or not they may happen to work subject to a CBA." 255 F.3d at 694. Moreover, the court held, "[e]ven if the CBA did expressly contemplate the use of two-way mirrors to facilitate detection of drug users, such a provision would be illegal under California law" and Plaintiffs would still have an independent right to sue on the basis of those rights without requiring recourse to the CBA. Id. at 695-96.
When it has considered state discrimination law, the Ninth Circuit has tended to find no LMRA preemption. In Humble v. Boeing Co., 305 F.3d 1004 (9th Cir. 2002), the court addressed whether reasonable accommodation and retaliation claims brought under the State of Washington's disability discrimination law were preempted by the LMRA. The court held that there was no preemption of those claims. Id. at 1012. In coming to its conclusion, the court's discussion rejected a number of arguments presented by the defendant employer. First, the court rejected the defendant's argument that rights at issue were derived from the CBA. Id. at 1009. The defendant had argued that a provision of the CBA preempted the plaintiff's reasonable accommodation claim because it prescribed procedures by which a disabled employee would be considered for other jobs and therefore directly "covered" the subject matter of the case. Id. The court found that these procedures did not preempt a state disability discrimination claim, even if the plaintiff could alternatively go through the grievance process because the right to reasonable accommodation was a distinct right. See id. Second, the court found that the intricate scheme of seniority provided by the CBA did not render the CBA "intertwined" with the plaintiff's claim because the seniority scheme was only potentially relevant to the claim. Id. at 1010-11. Finally, the defendant argued that the CBA may provide it with the defense of a non-discriminatory justification. Id. at 1011. The court noted that defensive reliance on the CBA did not trigger preemption, in light of both the Circuit's decision in Cramer and the fact that a "reasonable accommodation" claim "does not hinge on discriminatory animus, leaving this possible basis for preemption in the realm of the hypothetical." Id. at 1012 (footnote omitted). See also Miller v. AT&T Network Systems, 850 F.2d 543, 549 (9th Cir. 1988) (rejecting preemption argument for claims brought under Oregon state disability law).
Claims brought under California's disability discrimination laws have fared similarly. The Ninth Circuit has tended to find that state claims brought under FEHA were not preempted. In Jimeno v. Mobil Oil Corp., 66 F.3d 1514 (9th Cir. 1995), applying the three-pronged approach of Miller, the court found that § 301 of the LMRA did not preempt the plaintiff's FEHA claim. First, the court noted that the CBA did not govern the plaintiff's FEHA claim. Id. at 1524. The plaintiff's prima facie case could be evaluated without construing the CBA because, though the CBA established some physical disability determinations, it was "silent regarding possible management responses when an employee [was] determined to be unfit to continue in a position without work restrictions." Id. Additionally, the presence of a potential defense did not require interpretation of the CBA because the CBA contained no provisions that would bear on the reasonableness of the employer's actions.
Id. Second, the court noted that "clear statutory and regulatory standards provide a means to determine 'reasonable accommodation' without reference tot he CBA." Id. at 1527. And third, the court explained that California has shown an intent not to allow its prohibition on discrimination to be waived through private contract by "explicitly establish[ing] the right to employment without discrimination based on physical handicap as a public policy of the state." Id. at 1528 (citing Cal. Gov't Code § 12920). See also Ackerman v. Western Elec. Co., 860 F.2d 1514 (9th Cir. 1988) (FEHA disability discrimination); Ramirez v. Fox Television Station, inc., 998 F.2d 743, 748 (9th Cir. 1993) (FEHA race discrimination); Chmiel v. Beverly Wilshire Hotel Co., 873 F.2d 1283 (9th Cir. 1989) (age discrimination).
With this jurisprudential backdrop in mind, the Court finds that § 301 of the LMRA does not preempt Plaintiff's First and Third through Sixth Causes of Action. First, the rights on which Plaintiff's legal claims rest are independent of her CBA. Defendant's characterization of Plaintiff's allegations notwithstanding,*fn4 it is well-established that FEHA violations arise independently of a CBA. Second, the Court concludes that these provisions also do not require "interpretation" of the provisions of the plan. With respect to the relevance of the procedures for accommodations, the seniority structure, and Defendant's potential defenses, the Court finds the Ninth Circuit's decision in Humble applicable here.*fn5 Moreover, to the extent Defendant urges the Court to apply the test employed by the Miller court, the Court notes that Jimeno resolves the second and third prongs of that inquiry against Defendant. In the same vein, to the extent that Defendant suggests that the Court will need to determine whether the CBA "waives" any provisions of state law, the Court is not persuaded: FEHA claims may not be waived, and any other potentially waived rights are either too speculative to satisfy the § 301 inquiry or rest on a mischaracterization of Plaintiff's claims. Overall, while the Court acknowledges that the CBA may be a relevant reference in adjudicating Plaintiff's claims, the Court is not convinced that the potential interpretation of the CBA is any more than speculative or inheres in Plaintiff's claims.
The Second Cause of Action presents a closer call, however. In the Second Cause of Action, Plaintiff alleges that a provision of the CBA -- the "100% healed" provision -- has a discriminatory impact on the medically disabled in a way that violates FEHA.
See Compl. ¶¶ 27-30. As mentioned above, Plaintiff's right to be free from discrimination under FEHA is a right independent of the CBA. In Madison v. Motion Picture Set Painters & Sign Writers Local 729, the court addressed a similar claim and found no preemption. 132 F. Supp. 2d 1244, 1252-53 (C.D. Cal. 2000) (Morrow, J.). There, the plaintiff challenged the CBA's hiring procedures on the ground that they permitted or facilitated disparate treatment of African-Americans. Id. at 1252. Although the plaintiff alleged that the CBA terms themselves violated the law, the court found that the challenge was not preempted because the parties did not contest the meaning of the provisions or argue that they were improperly applied. Id. at 1252-53. But see Vera v. Saks & Co., 335 F.3d 109, 116 (2d Cir. 2003); Medrano v. Excel Corp., 985 F.2d 230, 234 (5th Cir. 1993).
The Court finds Judge Morrow's reasoning in Madison persuasive and applicable here. Plaintiff does not suggest that Defendant misinterpreted or misapplied the "100% policy," and Defendant does not clearly articulate a dispute about the meaning of the term. Rather than being "substantially dependent" on an analysis of the CBA terms, the question is whether the construction disparately impacts certain disabled individuals in violation of the law. See Madison, 132 F. Supp. 2d at 1252-53 & n.18. Although Defendant's argument has some persuasive force and some support in the analytical thicket of LMRA preemption, the Court finds that Plaintiff's claims are not preempted by the LMRA.
Because the Court finds that neither ERISA nor the LMRA provide a basis for complete preemption on the arguments presented to the Court, the Court finds that it does not have subject matter jurisdiction, grants Plaintiff's motion, and remands the action to state court.
IT IS SO ORDERED.