Unpublished Disposition, 912 F.2d 468 (9th Cir. 1986)

MEMORANDUM^** 

Hotel Employees and Restaurant Employees Union Local No. 9 ("the Union") appeals the district court's order remanding to state court Sharlene Baker's suit alleging various state law claims against the Union arising from its successful effort to have her fired for failure to pay union membership dues. We dismiss the Union's appeal for lack of jurisdiction.

FACTS AND PROCEDURAL HISTORY

Sharlene Baker joined the Union in 1957. She began to work for Stewart Sandwiches in 1978 as a production worker making sandwiches on an assembly line. Stewart Sandwiches is a "union shop" requiring regular membership in the Union as a condition of employment; the collective bargaining agreement ("CBA") contained a union security clause obligating Stewart, at the Union's request, to fire an employee for failure to pay union dues.

On May 8, 1986, the Union notified Baker that she was delinquent in her union membership dues and that if she failed to pay, the Union would seek her termination of employment. Baker did not pay her dues. On May 22, 1986, abiding by the security clause and at the request of the Union, Stewart Sandwiches fired Baker.

Baker filed an unfair labor practice charge with the National Labor Relations Board (NLRB) in June 1986. The basis of Baker's complaint is unclear, but she appears to have challenged the manner in which the Union obtained her discharge. Concluding that the Union and Stewart had followed proper procedures in enforcing the union security clause, the NLRB dismissed Baker's charge in July, and she did not appeal.

In November 1986, Baker obtained information indicating that the Union considered her to be a "passive member" of the Union as a consequence of the supervisory responsibilities assigned her by her employer in 1980. This special status derives from the Union's By-Laws and is defined as follows:

Any person who is a manager, owner or proprietor or any person who is employed outside the jurisdiction of this Local Union and not employed in the jurisdiction of this Local Union may be accepted for or hold membership in this Local Union only as a passive member, provided such person maintains no affiliation with a proprietors' organization hostile to this Union.

(a) Passive members shall not be entitled to voice or vote or to attend meetings of the Local Union. They shall be ineligible for election to any office in this Union or for any position as a delegate representing the Union....

Baker asserts, and the Union does not appear to dispute, that passive members are not covered by the CBA. Additionally, the CBA and Sec. 2(3) and Sec. 14(b) of the NLRA specifically exclude "supervisors" from the definition of "employees."

With the benefit of this new information, Baker called the NLRB in November 1986. However, an NLRB "officer" informed Baker that as a passive union member, she had no rights to make any claims with the NLRB. Baker then obtained an attorney and filed this suit in state court in April 1987 alleging breach of contract, intentional interference with economic rights, breach of fiduciary duty and negligence.

Alleging federal question jurisdiction under 29 U.S.C. § 185(a), Sec. 301 of the Labor Management Relations Act of 1947 ("LMRA"), which provides federal courts with jurisdiction over suits alleging violations or seeking enforcement of collective bargaining agreements, the Union removed the case to federal court. Baker sought to have the case remanded to state court, but the district court held that her motion for remand was "premature" in light of the fact that the issue of whether Baker was a supervisor could not be resolved without reference to the CBA.

Baker then moved for summary judgment on her liability claims for breach of contract, intentional interference with economic rights and breach of fiduciary duty. The Union moved the district court to dismiss Baker's suit on the grounds that it was barred by the statute of limitations governing Sec. 301 suits and that it was preempted both by the Garmon doctrine and by Sec. 301 of the LMRA.¹ 

The district court, adopting the magistrate's finding and recommendations, remanded the case to the state court on the ground that the federal court lacked subject matter jurisdiction. Based on what it characterized as Baker's unrebutted allegations regarding her actual job duties, the magistrate found that Baker was a supervisor and, therefore, not an employee under the meaning of the CBA. Consequently, the magistrate (and the court) concluded, Baker had no claim under either the CBA or under the LMRA (since the definition of supervisor under the CBA is the same as that under the LMRA). Second, because removal jurisdiction was vested pursuant to Sec. 301 of the LMRA, the district court held that it was deprived of jurisdiction to consider the case further. Finally, the court concluded that Garmon preemption doctrine could not apply to preempt Baker's claims; because the LMRA specifically excludes supervisors from its scope, the challenged conduct could not be considered an arguably protected or prohibited activity under the LMRA.

DISCUSSION

28 U.S.C. § 1441(a) provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction" may be removed by the defendant to the federal district court. However, if that court finds that the case was removed "improvidently and without jurisdiction," Sec. 1447(c) directs that the case be remanded to state court, and Sec. 1447(d) imposes a general prohibition on appellate review of a district court's remand order:

An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it is removed pursuant to section 1443 [civil rights actions] of this title shall be reviewable by appeal or otherwise.

Remand orders are immune from review even if the district court erred in determining that the case was removed improvidently and without jurisdiction. Schmitt v. Insurance Co. of North America, 845 F.2d 1546, 1549 (9th Cir. 1988).

The Union removed Baker's state court action pursuant to 28 U.S.C. § 1441, asserting that Baker's claims actually were subject to Sec. 301 of the NLRA. The district court, concluding it had no subject matter jurisdiction, remanded the case to state court. Consequently, 1447(d) bars this court from reviewing the lower court proceedings.

The Union cites, without explanation, Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976) to support its claim that this court has jurisdiction. The Union's reliance on Thermtron is wrong. It is true that the Supreme Court did find that under certain conditions Sec. 1447(d) does not bar review of remand orders. Section 1447(d) only precludes appellate review when a case is remanded for the reasons stated in Sec. 1447(c); a remand order that is not based on statutory grounds is reviewable because there "is no indication whatsoever that Congress intended to extend the prohibition against review to reach remand orders entered on grounds not provided by the statute." Thermtron, 423 U.S. at 350. In Thermtron the district court had remanded a properly removed action solely because the district court's docket was more crowded than that of the state court. The Court held that review was appropriate because Sec. 1447(d) restrictions on reviewability apply only to those cases in which the remand order is based on Sec. 1447(c) (cases removed "improvidently and without jurisdiction"). Thus, under Thermtron, remands for reasons stated in Sec. 1447(c) are not reviewable; only if the court remands for reasons other than lack of subject matter jurisdiction is the order subject to review. The present case, unlike Thermtron, involves a remand based on the district court's explicit determination that it lacked subject matter jurisdiction--the paradigmatic case for applying Sec. 1447(d) to insulate the remand order from review.

In Scott v. Machinists Automotive Trades D. Lodge 190, 827 F.2d 589, 592 (9th Cir. 1987), the Ninth Circuit interpreted Thermtron to permit review of a remand order when the district court declines on discretionary grounds to exercise pendent jurisdiction over state law claims and instead remands them to state court. Though Scott may appear to allow review in the present case, it is inapposite. In Scott, the federal district court had already held that it had jurisdiction over three of plaintiff's claims, which it found to be disguised Sec. 301 claims. The court dismissed those claims on the merits and remanded the remaining state law claims to the state court. Among the issues presented on appeal was whether the remand was proper. The court reasoned that since the district court had an independent basis for federal jurisdiction, it had pendant jurisdiction over the state claims. Scott, 827 F.2d at 592. Its decision not to hear those state claims was discretionary; the decision to remand, therefore, was not "jurisdictional." Since the remand was not issued pursuant to 1447(c), Sec. 1447(d) did not bar appellate review. Scott does not apply to the present case because here the lower court did not find original jurisdiction over any of the claims. Therefore, there was no independent predicate of federal jurisdiction, and the court's remand was not discretionary. Accord, Schmitt, 845 F.2d at 1551, Hansen v. Blue Cross of California, 891 F.2d 1384 (9th Cir. 1989).

Nor does the Union's appeal fall within our circuit's exception to nonreviewability for remand orders that are "based on 'a substantive decision on the merits apart from any jurisdictional decision.' " Clorox Co. v. U.S. Dist. Ct. for N.D. of California, 779 F.2d 517, 520 (9th Cir. 1985) (quoting Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 276 (9th Cir. 1983)). Assuming the district court's determination that Baker was a supervisor is a substantive decision on the merits, the question remains whether that finding was "apart from the question of subject matter jurisdiction" or was "necessary to determine" jurisdiction. Hansen, 891 F.2d at 1288.

In Clorox the plaintiff instituted a state court action alleging several claims under the employee welfare benefit plan operated by defendant Clorox. Clorox removed the action to federal court, alleging federal question jurisdiction under ERISA. Plaintiff then moved the court to remand the action on the grounds that (1) her complaint asserted only state claims and made no claims under ERISA; (2) Clorox could not remove the action to federal court because ERISA provides concurrent jurisdiction and (3) Clorox expressly waived its right to removal by stating in its employee handbook that suits may be filed in state or federal court. We found the remand order reviewable. If the Clorox district court's remand had been based on lack of subject matter jurisdiction presented by the alleged ERISA preemption, Clorox would provide authority for this court to assert jurisdiction over the Union's appeal. However, the Clorox court's grant of remand was based solely on its finding that the statements made in the employee handbook estopped Clorox from asserting its right to removal. The court did not conclude it lacked jurisdiction, but rather that one party had waived its right to removal. Clorox at 520.

Similarly, in Pelleport, the plaintiff sought to remand based on two theories: (1) the court lacked subject matter jurisdiction over certain defendants, and (2) the parties had entered into a valid forum selection clause mandating that any dispute be litigated in state court. Again, the district court remanded the suit based on its finding that the parties' contract was enforceable. This court noted that if the district court's remand order had been based on the first theory, 1447(d) would "no doubt apply, because, even if clearly erroneous, a district court's decision that it lacks subject matter jurisdiction to hear a case is not reviewable." 741 F.2d at 276. Since remand instead was based on a contractual waiver, we held that the remand order was reviewable because the district court reached a substantive decision on the merits apart from any jurisdictional decision. In Baker, the lower court's analysis was related only to the presence of subject matter jurisdiction, rather than directed at interpreting an independent forum selection contract or a contractual waiver of right of removal as in Clorox and Pelleport. Though the Baker court's decision required a determination of the intermediary question of Baker's employment status, this was not "apart from" the jurisdictional question, but rather was necessary to that determination.

More to the point is our recent decision in Hansen, 891 F.2d 1384 (9th Cir. 1989), in which the plaintiff, a participant in a benefit plan, filed a class action suit in state court against the administrators of the plan. Blue Cross, arguing that ERISA preempted plaintiffs' state law claims, removed the action on the basis of federal question jurisdiction. The district court held that it lacked subject matter jurisdiction after it concluded that plaintiff's plan was not an ERISA plan because the individuals paid their own premiums. We rejected Blue Cross' argument that the remand order was reviewable under Pelleport; we held that Blue Cross had failed to demonstrate how the district court's legal decision was apart from the question of subject matter jurisdiction, as required to place the appeal within the exception to nonreviewability. The court's reasoning governs the present case:

Because the complaint alleged only state law claims, removal was only proper if there was federal question jurisdiction based on the complete preemption doctrine. Consequently, subject matter jurisdiction existed only if Hansen's group insurance plan was subject to ERISA. The district court's decision that Hansen's plan was not subject to ERISA, rather than being apart from the question of subject matter jurisdiction, was necessary to determine whether such jurisdiction existed.

Id. at 1388.² 

If a federal court's determination of a substantive issue is binding in subsequent proceedings, denial of appellate review would seem unnecessarily unjust. It is, however, up to the state court to decide what res judicata effect to give to the court's determination. The Hansen court explicitly rejected Blue Cross's argument that the remand order should be reviewable because the district court's decision might affect Blue Cross' ability to raise ERISA as a defense to further actions in state court and might affect the substantive rights of the parties if the state court were to give res judicata effect to the determination or invoke the doctrine of law of the case. To this the court responded:

Although we see the potential for a problem, section 1447(d) precludes appellate review when a district court remands a case based on a lack of subject matter jurisdiction. The district court's ultimate conclusion was that it lacked jurisdiction over the entire case, and we need not resolve whether a state court would be required to invoke res judicata to determinations involved in reaching that decision. See In re Life Ins. Co. of North America, 857 F.2d at 1193 (" ' [W]hen a lower federal court has jurisdiction over the subject matter and the parties, its adjudication is the law of the case and its judgment is binding on all other courts, subject only to the appellate process.' ".) We confine our holding to our lack of appellate jurisdiction.

Id. at 1390 (citations omitted) (emphasis in original).

CONCLUSION

The lower court determined that it lacked subject matter jurisdiction over Baker's suit. Under Section 1447(d), Thermtron, 423 U.S. 336, and Hansen, 891 F.2d 1384, this court lacks jurisdiction over this appeal. The Union's appeal is DISMISSED.