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Franco v. E-3 Systems

United States District Court, N.D. California

November 8, 2019

JOSE FRANCO, Plaintiff,
v.
E-3 SYSTEMS, Defendant. JOSE FRANCO, Plaintiff,
v.
E-3 SYSTEMS, Defendant.

          ORDER DENYING PLAINTIFF'S MOTION TO REMAND RE: DKT. NO. 8, RE: DKT. NO. 9

          HAYWOOD S. GILLIAM, JR., UNITED STATES DISTRICT JUDGE

         Plaintiff Jose Franco filed these putative class and representative actions in state court. Case No. 19-cv-1453-HSG, Dkt. No. 1, Ex. A (“Mot.”); Case No. 19-cv-2854-HSG, Dkt. No. 1, Ex. A.[1] Defendant removed the actions to federal court based on federal preemption under § 301 of the Labor Management Relations Act of 1974 (“LMRA”), 29 U.S.C. § 185. Dkt. No. 1; Case No. 19-cv-2854-HSG, Dkt. No. 1. Plaintiff now seeks to remand the actions back to state court. After carefully considering the parties' arguments, the Court DENIES Plaintiff's motion.

         I. LEGAL STANDARD

         “Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed” to federal court. 28 U.S.C. § 1441(a). Federal district courts are courts of limited jurisdiction, and “[n]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341 (2006) (citation and quotations omitted and alterations in original). Consistent with this foundational principle, there is a “‘strong presumption' against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citation omitted).

         If the district court lacks jurisdiction over an action, a plaintiff may seek remand to state court. See 28 U.S.C. § 1447(c). “Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566. Accordingly, “[t]he strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper . . . .” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009).

         In the context of diversity jurisdiction, the Supreme Court has held that the defendant bears the burden of establishing jurisdiction by a preponderance of the evidence. Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 88 (2014); see also 28 U.S.C. § 1446. District courts in this circuit have applied this standard in the § 301 preemption context. See, e.g., Huffman v. Pac. Gateway Concessions LLC, No. 19-CV-01791-PJH, 2019 WL 2563133, at *2 (N.D. Cal. June 21, 2019); Van Bebber v. Dignity Health, No. 119CV00264DADEPG, 2019 WL 4127204, at *8 (E.D. Cal. Aug. 30, 2019).

         II. DISCUSSION

         Plaintiff is a citizen of California and worked as a non-exempt hourly employee for Defendant E-3 Systems from August 18, 2014 to May 15, 2018. Dkt. No. 1, Ex. A (“Compl.”); Dkt. No. 9-1, Ex. B, Declaration of Albert Gonzales (“Gonzales Decl.”) ¶ 3. E-3 Systems is a California corporation with its headquarters in Union City, California. Compl. ¶ 5. On February 13, 2019, Plaintiff filed this putative labor class action alleging claims under the California Labor Code, including a claim for failure to pay overtime under § 510. Compl. ¶¶ 34-75. The putative class period is “any time within four (4) years of the filing of this lawsuit.” Id. ¶ 23.

         After Defendant removed the putative class action on March 20, 2019, Plaintiff filed another action in state court, Case No. 19-cv-2854-HSG. The complaint is based on the same set of facts as those in his putative class action complaint, although Plaintiff asserts that the complaint is a representative and “PAGA-only” action. Case No. 19-cv-2854-HSG, Dkt. No. 1, Ex. A (“PAGA Compl.”). That complaint only includes PAGA claims, but the predicate California Labor Code violations for which Plaintiff seeks penalties are the same as those in Case No. 19-cv-1453-HSG. See generally id. Defendant removed that action on May 23, 2019. Case No. 19-cv-2854-HSG, Dkt. No. 1.

         A. Section 301 Preemption

         Under § 301 of the LMRA, “[s]uits for violation of contracts between an employer and a labor organization … may be brought in any district court of the United States.” 29 U.S.C. § 185(a). As recently reaffirmed by the Ninth Circuit, the Supreme Court has interpreted the LMRA to authorize federal courts “to create a uniform body of federal common law to adjudicate disputes that arise out of labor contracts.” Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1155 (9th Cir. 2019) (citations omitted). “A state rule that purports to define the meaning or scope of a term in a contract suit therefore is pre-empted by federal labor law.” Id. at 1152 (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210 (1985)). Although federal preemption is a defense that does not generally authorize removal to federal court, the Supreme Court has held that § 301 has such “extraordinary pre-emptive power” that it “converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Metro. Life Ins. v. Taylor, 481 U.S. 58, 65 (1987).

         However, § 301 “cannot be read broadly to pre-empt nonnegotiable rights conferred on individual employees as a matter of state law.” Curtis, 913 F.3d at 1152 (quoting Livadas v. Bradshaw, 512 U.S. 107, 123 (1994)). Further, “not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is preempted by § 301 or other provisions of federal labor law.” McCray v. Marriott Hotel Servs., Inc., 902 F.3d 1005, 1009 (9th Cir. 2018) (quoting Lueck, 471 U.S. at 211). Claims which have no relationship to a collective-bargaining agreement “beyond the fact that they are asserted by an individual covered by such an agreement are simply not pre-empted by § 301.” Id. (citation and quotations omitted).

         The Ninth Circuit has employed a two-step test to ensure that § 301 preemption “extends only as far as necessary to protect the role of labor arbitration in resolving CBA disputes.” Curtis, 913 F.3d at 1153 (citation and quotations omitted). First, the court asks whether the asserted cause of action involves a “right [that] exists solely as a result of the CBA.” Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1059 (9th Cir. 2007). “If the right exists solely as a result of the CBA, then the claim is preempted, and our analysis ends there.” Id. (citing Lueck, 471 U.S. at 210). If not, the court proceeds to the second step and asks “‘whether a plaintiff's state law right is substantially dependent on analysis of [the CBA],' which turns on whether the claim cannot be resolved by simply ‘look[ing] to' versus ‘interpreting' the CBA.” Curtis, 913 F.3d at 1153 (citations and quotations omitted and alterations in original). Interpretation is construed narrowly in this context. Id. If claims are dependent on interpretation of the CBA, then the claim is preempted by § 301; if not, the claim may proceed under state law. Burnside, 491 F.3d at 1059- 60.

         i. Step 1: Whether Plaintiff's Overtime Right Exists ...


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