McCray v. Marriott Hotel Services, Inc.

          ORDER DENYING MOTION TO REMAND RE: DKT., 10

          NATHANAEL M. COUSINS United States Magistrate Judge

         McCray sues his employer, Marriott Hotel, for paying wages lower than the San Jose City minimum wage ordinance. Marriott argues that the collective bargaining agreement which covers McCray's employment expressly waives the San Jose ordinance, in exchange for providing hourly employees with additional benefits not guaranteed by law. McCray moves to remand the case to state court because the complaint is based only on state law causes of action. Defendants move to dismiss and oppose the motion to remand because cases requiring the interpretation of a collective bargaining agreement are exclusively within the realm of federal jurisdiction.

         Because the Court finds that the San Jose City ordinance provides a waiver of the minimum wage and the CBA expressly waives the minimum wage, the Court concludes that federal jurisdiction is proper and DENIES the motion to remand.

         I. BACKGROUND

         On February 5, 2016, plaintiff Ian McCray sued defendants Marriott Hotel Services, Inc. (a Delaware corporation) and SJMEC, Inc. (a California corporation), in state court, alleging that defendants pay plaintiff and other employees less than minimum wage as required by the city of San Jose. Dkt. No. 1, Exh A. The complaint contains only state law causes of action.

         On April 20, 2016, defendants removed the case to federal court. Dkt. No. 1. In their removal notice, defendants argue that McCray's complaint is preempted by the collective bargaining agreement ("CBA") that governs McCray's employment. Id. at 3. Defendants note that when the interpretation of a collective bargaining agreement is at issue in a case, then federal subject matter jurisdiction is proper. Id.

         On April 27, 2016, defendants filed a motion to dismiss the complaint, arguing that McCray's dispute was governed by the CBA, and as such, McCray had to follow the procedural requirements for dispute resolution there first. Dkt. No. 8. Specifically, McCray should have filed an appropriate grievance, and regardless, the CBA requires parties to attend arbitration. Id. On May 4, McCray moved to remand the case to state court, arguing that federal jurisdiction over the complaint is not proper because McCray did not plead any federal causes of action. Dkt. No. 10. The Court held a hearing on the motions on June 1, 2016, and took the motions under submission.

         The Court first considers the motion to remand. All parties have consented to the jurisdiction of a magistrate judge. Dkt. Nos. 12, 14.

         II. LEGAL STANDARD

         Federal courts are courts of limited jurisdiction and are presumptively without jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Removal of a state court action to federal court is appropriate only if the federal court would have had original subject matter jurisdiction over the suit. See 28 U.S.C. § 1441(a). A federal district court must remand a removed case to state court "[i]f at any time before the final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c). In deciding whether removal was proper, courts strictly construe the removal statute against finding jurisdiction, and the party invoking federal jurisdiction bears the burden of establishing that removal was appropriate. Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (citations omitted). Where doubt exists regarding the right to remove an action, it should be resolved in favor of remand to state court. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

         III. DISCUSSION

         Here, McCray's complaint contains only state law causes of action and no allegation that the parties are diverse. However, Marriott's defense to the complaint is that the CBA governs and contains an express waiver of the relevant state law.

         In the absence of diversity jurisdiction, removal to federal court is only proper when "a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). "Federal jurisdiction cannot be predicated on an actual or anticipated defense . . . [n]or can federal jurisdiction rest upon an actual or anticipated counterclaim. Vaden v. Discover Bank, 556 U.S. 49, 60 (2009).

         However, under Section 301 of the LMRA, disputes regarding collective bargaining agreements are exclusively governed by federal jurisdiction. Section 301 provides, "[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any ...