Opinion
Case No. 3:19-cv-2680-M
2020-04-29
SOUTHWEST AIRLINES PILOTS ASSOCIATION, on behalf of itself and its members, Plaintiff, v. The BOEING COMPANY, a corporation, Defendant.
Anthony U. Battista, Diana Gurfel Shapiro, Evan Kwarta, Mary Dow, Condon & Forsyth LLP, New York, NY, Jeffrey W. Hellberg, Jr., Wick Phillips Gould & Martin LLP, Stella Lonjezo Dulanya, J. Paul Davidson, K. Helen Yu, Southwest Airlines Pilots Association, Dallas, TX, for Plaintiff. E. Leon Carter, Courtney Barksdale Perez, Carter Arnett PLLC, Jeremy A. Fielding, Kirkland & Ellis, Dallas, TX, Craig Primis, Pro Hac Vice, Kirkland & Ellis, Washington, DC, Michael Slade, Pro Hac Vice, Kirkland & Ellis LLP, Chicago, IL, for Defendant.
Anthony U. Battista, Diana Gurfel Shapiro, Evan Kwarta, Mary Dow, Condon & Forsyth LLP, New York, NY, Jeffrey W. Hellberg, Jr., Wick Phillips Gould & Martin LLP, Stella Lonjezo Dulanya, J. Paul Davidson, K. Helen Yu, Southwest Airlines Pilots Association, Dallas, TX, for Plaintiff.
E. Leon Carter, Courtney Barksdale Perez, Carter Arnett PLLC, Jeremy A. Fielding, Kirkland & Ellis, Dallas, TX, Craig Primis, Pro Hac Vice, Kirkland & Ellis, Washington, DC, Michael Slade, Pro Hac Vice, Kirkland & Ellis LLP, Chicago, IL, for Defendant.
ORDER
BARBARA M. G. LYNN, CHIEF JUDGE
Before the Court is the Motion to Remand (ECF No. 15), filed by Plaintiff Southwest Airlines Pilots Association ("SWAPA"). On April 14, 2020, the Court held oral argument on the Motion. For the reasons stated on the record at the hearing and below, the Motion is GRANTED, and this case is remanded to state court.
I. Background
SWAPA seeks damages on behalf of itself and its approximately 10,000 pilot members, resulting from alleged false representations and omissions by Defendant the Boeing Company regarding its 737 MAX aircraft.
Boeing announced the launch of the 737 MAX in August 2011. Southwest Airlines ("Southwest"), SWAPA's employer, flies only Boeing 737s, and was one of the first airlines to order the 737 MAX. In 2012, SWAPA's collective bargaining agreement ("CBA") with Southwest, which was executed in 2006, was reopened and actively negotiated for several years. SWAPA and Southwest could not agree to a new CBA, and, in 2016, SWAPA brought a lawsuit against Southwest. See Sw. Airlines Pilots Ass'n v. Sw. Airlines Co. , Case No. 3:16-cv-1346-O, 2016 WL 3098097 (N.D. Tex. 2016). SWAPA alleges that the primary dispute between SWAPA and Southwest in that case was "whether the 737 MAX was a sufficiently different aircraft from prior generations of 737 aircraft, which were enumerated in the CBA, such that SWAPA pilots were not required to operate 737 MAX aircraft[s] under the then-existing CBA." (ECF No. 1-1 ¶ 192). According to SWAPA, Southwest "claimed that it had the right to insist that SWAPA pilots operate the 737 MAX under the then-existing CBA, because it was not a distinct aircraft type but merely a variant of the already-enumerated 737." (Id. ¶ 185). Later in 2016, SWAPA and Southwest agreed on a new CBA, which SWAPA states included "economic advantages [that SWAPA's pilots] believed they would gain by agreeing to fly the 737 MAX." (Id. ¶¶ 197, 199, 202). After fatal crashes of two 737 MAX aircraft in October 2018 and March 2019, all 737 MAXs were grounded and remain so.
SWAPA alleges here that Boeing's misrepresentations and omissions regarding the 737 MAX, including withholding critical safety information, caused SWAPA to agree to include in the 2016 CBA that its pilots would fly the 737 MAX. SWAPA alleges that Boeing purposefully interfered in the CBA dispute between SWAPA and Southwest to ensure that SWAPA pilots would agree, as a term of the 2016 CBA, to operate the 737 MAX. SWAPA asserts that, in agreeing to execute the 2016 CBA, it relied on Boeing's misrepresentations that the 737 MAX was safe and more fuel efficient.
SWAPA, headquartered in Dallas, Texas, filed this action in Texas state court against Boeing, which is headquartered in Illinois and incorporated in Delaware, alleging the following six causes of action: (1) fraudulent misrepresentation, (2) negligent misrepresentation, (3) tortious interference with contractual rights and relationship, (4) tortious interference with an existing business relationship, (5) negligence, and (6) fraud by non-disclosure. SWAPA requests millions of dollars in lost compensation due to the grounding of the 737 MAX. (ECF No. 1-1 ¶ 283). SWAPA also asks for damages connected to its participation in the DOJ's investigation of the 737 MAX, including costs related to subpoenas, document production, and interviews.
On November 8, 2019, Boeing filed a timely Notice of Removal. On December 4, 2019, SWAPA filed its Motion to Remand. The Motion is ripe for review.
II. Analysis
In its Notice of Removal, Boeing argued that this Court has subject matter jurisdiction over this case on three different grounds: (1) federal question jurisdiction under 28 U.S.C. § 1331, because SWAPA's state law claims are completely preempted by the Railway Labor Act ("RLA"); (2) diversity jurisdiction under the Class Action Fairness Act ("CAFA"); and (3) diversity jurisdiction under 28 U.S.C. § 1332(a). The Court will address each ground in reverse order.
Boeing also briefly argued that this Court has federal question jurisdiction under Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg. , 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005). In Grable , the Supreme Court stated that, although federal question jurisdiction typically exists because the plaintiff pleads "a cause of action created by federal law," it may also exist where the plaintiff's "state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." Id. at 312–14, 125 S.Ct. 2363. The Court finds that SWAPA's claims do not raise a stated federal issue, and, therefore, will not base jurisdiction on Grable.
A. § 1332(a) Diversity Jurisdiction
After SWAPA filed a declaration attesting to the citizenship of its members, Boeing conceded that the Court does not have diversity jurisdiction under 28 U.S.C. § 1332(a). The Court agrees that it does not have § 1332(a) diversity jurisdiction.
B. CAFA
At the hearing on this matter, the Court ruled that it does not have diversity jurisdiction under CAFA. CAFA grants district courts broad jurisdiction over two types of cases: "class actions" and "mass actions." 28 U.S.C. § 1332(d). Under CAFA, "class action" means "any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure ...." § 1332(d)(1)(B). A "mass action" is defined as "any civil action ... in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact." § 1332(d)(11)(B)(i).
The Supreme Court has stated that, "[a]ccording to CAFA's plain text, a ‘mass action’ must involve monetary claims brought by 100 or more persons who propose to try those claims jointly as named plaintiffs." Mississippi ex rel. Hood v. AU Optronics Corp. , 571 U.S. 161, 164, 134 S.Ct. 736, 187 L.Ed.2d 654 (2014) (noting that "the statute says ‘100 or more persons,’ not ‘100 or more named or unnamed real parties in interest’ "); see also Thompson v. Louisiana Regional Landfill Co. , 365 F. Supp. 3d 725 (E.D. La. 2019) (determining the court had jurisdiction under CAFA over a putative class action, but noting the case was not a mass action because there was only one named plaintiff); Boulanger v. Devlar Energy Mktg., LLC , 3:15-CV-3032-B, 2015 WL 7076475, at *7 (N.D. Tex. Nov. 13, 2015) (finding the "100 or more persons" requirement of a mass action under CAFA was met where the plaintiffs' petition named 111 actual parties seeking recovery).
As stated on the record at the hearing, the Court finds that this case is not a class action, nor is it a mass action, as defined by CAFA, because there is only one named plaintiff—SWAPA. The Court therefore finds that it does not have diversity jurisdiction under CAFA.
C. Preemption
After considering the briefing, the relevant case law, and the parties' arguments at the hearing, the Court determines that the RLA does not support complete preemption, and therefore, the Court does not have federal question jurisdiction.
1. The Well-Pleaded Complaint Rule
Under 28 U.S.C. § 1441, a defendant may remove an action filed in state court to federal court if the federal court would have original subject matter jurisdiction over the action. Federal courts have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. To determine whether the claim arises under federal law, courts apply the "well-pleaded complaint rule." Under the rule, "[a] suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that Constitution. It is not enough that the plaintiff alleges some anticipated defense to his cause of action and asserts that the defense is invalidated by some provision of the Constitution of the United States." Beneficial Nat. Bank v. Anderson , 539 U.S. 1, 6, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003) (internal quotation and citation omitted).
2. Complete Preemption v. Ordinary Preemption
Courts have drawn a distinction between "complete preemption" and "ordinary preemption" in the context of removal. Ordinary preemption is a defense, which does not appear on the face of a well-pleaded complaint, and therefore does not provide a basis for removal. Caterpillar, Inc. v. Williams , 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) ("It is now settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption.").
In contrast, under the complete preemption doctrine, the Supreme Court has concluded that the preemptive force of a statute is so "extraordinary" that it "converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Id. (internal citation omitted).
3. Preemption and the RLA
Courts agree that "[o]rdinary preemption is plainly a viable defense under the RLA: pursuant to 45 U.S.C. §§ 153 (governing railroads) and 184 (governing airlines), minor disputes must be heard in the first instance before arbitral panels, not courts, and state-law claims that are disguised minor disputes are therefore preempted by the RLA." Sullivan v. Am. Airlines, Inc. , 424 F.3d 267, 273 (2d Cir. 2005). The test for finding ordinary preemption under the RLA is the same as the test established by Lingle v. Norge Div. of Magic Chef, Inc. , 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988), with respect to § 301 of the Labor Management Relation Act ("LMRA"). See Hawaiian Airlines, Inc. v. Norris , 512 U.S. 246, 262–63, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994) (holding that Lingle "provides an appropriate framework for addressing pre-emption under the RLA" and "adopt[ing] the Lingle standard to resolve claims of RLA pre-emption").
In Lingle , the Supreme Court held that the LMRA preempts state law only if a state law claim is dependent on the interpretation of a CBA. 486 U.S. at 413, 108 S.Ct. 1877 ; see also Anderson v. Am. Airlines, Inc. , 2 F.3d 590, 595 (5th Cir. 1993) ("In Lingle the Court explained that the LMRA only pre-empts state law claims whose resolution turns on the meaning of a collective bargaining agreement: ‘[I]f the resolution of a state-law claim depends upon the meaning of a collective bargaining agreement, the application of state law ... is pre-empted and federal labor law principles ... must be employed to resolve the dispute.’ "). The Supreme Court has held that § 301 of the LMRA is one of the few statutes that has the requisite extraordinary preemptive force to support complete preemption. See Avco Corp. v. Machinists , 390 U.S. 557, 560, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968).
Courts are split on the question of whether the RLA gives rise to complete preemption. In other words, courts disagree about whether the holding in Hawaiian Airlines means that the analysis of the LMRA's complete preemption also applies to the RLA, or if it means that the RLA provides only ordinary preemption. See Sullivan , 424 F.3d at 273–74 ("The key question, however, is whether the analogy drawn by the Court between RLA and LMRA preemption as to ordinary preemption also extends to complete preemption.") (emphasis in original).
The Second Circuit has held that the RLA does not support complete preemption. Id. at 273. In Sullivan , the Second Circuit determined that, in light of the Supreme Court's decision in Beneficial National Bank v. Anderson , 539 U.S. 1, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003), Hawaiian Airlines ' analogy between the RLA and LMRA does not extend to complete preemption. Id. at 275. In Beneficial National Bank , the Supreme Court stated that it had previously found complete preemption under only the LMRA and ERISA: "In the two categories of cases where this Court has found complete pre-emption—certain causes of action under the LMRA and ERISA—the federal statutes at issue provided the exclusive cause of action for the claim asserted and also set forth procedures and remedies governing that cause of action." 539 U.S. at 8, 123 S.Ct. 2058. The Second Circuit reasoned that if Hawaiian Airlines had established that the RLA completely preempted state law causes of action within its scope, the Supreme Court in Beneficial National Bank would have listed the RLA as a third category of complete preemption. 424 F.3d at 275.
Later in the Beneficial National Bank opinion, the Court determined that the National Bank Act also gave rise to complete preemption. 539 U.S. at 10–11, 123 S.Ct. 2058.
The Second Circuit summarized the test that the Beneficial National Bank Court laid out to determine whether a statute gives rise to complete preemption: "removal of state-law claims based on complete preemption becomes possible not solely by virtue of the preemptive force of a substantive federal statute such as the LMRA, ERISA, or the National Bank Act, but rather because a federal statute with completely preemptive force also gives rise to original federal jurisdiction, and as a consequence allows removal under 28 U.S.C. § 1441." Sullivan , 424 F.3d at 276. The Second Circuit determined that because "a state-law-based RLA minor dispute cannot be brought within the original jurisdiction of the federal courts and is thus not removable under § 1441," the RLA does not give rise to complete preemption. Id.
The Third, Sixth, Seventh, Ninth, and Eleventh Circuits have determined the issue consistently with the Second Circuit's conclusion in Sullivan. See Ry. Labor Executives Ass'n v. Pittsburgh & Lake Erie R.R. Co. , 858 F.2d 936, 942–43 (3d Cir. 1988) (finding no complete preemption under the RLA); Roddy v. Grand Trunk W. R. Inc. , 395 F.3d 318, 326 (6th Cir. 2005) (same); Hughes v. United Air Lines, Inc. , 634 F.3d 391, 395 (7th Cir. 2011) (same); Moore-Thomas v. Alaska Airlines, Inc. , 553 F.3d 1241 (9th Cir. 2009) (same); Geddes v. Am. Airlines, Inc. , 321 F.3d 1349, 1357 (11th Cir. 2003) (same).
In contrast, the Eighth Circuit has found complete preemption under the RLA. Deford v. Soo Line R.R. Co. , 867 F.2d 1080, 1085 (8th Cir. 1989).
The Fifth Circuit has not expressly stated whether the RLA supports complete preemption. In Kollar v. United Transportation Union , the Fifth Circuit held that the district court did not err in failing to remand the case, because the plaintiffs' complaint "clearly requires reference to and interpretation of the CBA ...," and therefore, plaintiffs' claim "is preempted by the RLA." 83 F.3d 124, 126 (5th Cir. 1996). In reaching this conclusion, the Fifth Circuit relied on Hawaiian Airlines ' holding that "a claim is preempted by the RLA only if it relies on the interpretation of a provision of the CBA; if the claim is brought under state law without any reference to the CBA, then it is not preempted." Kollar , 83 F.3d at 126 (internal citation and quotation omitted). The Fifth Circuit did not discuss, analyze, or make an express holding as to whether the RLA supports complete preemption. If it were the case that the need for the Court to interpret the CBA were definitive on the issue of complete preemption, as Kollar seems to suggest, this Court would sustain the removal here, because the Court believes that it would have to determine whether the 2006 CBA required SWAPA pilots to fly the 737 MAX. But at oral argument, both counsel conceded that this Court only has federal question jurisdiction if the RLA provides complete preemption:
[JUDGE LYNN]: If I hold that I have to construe the Collective Bargaining Agreement but I find that there is not complete preemption, are you saying that a state court judge would be construing the Collective Bargaining Agreement?
[SWAPA COUNSEL]: That is correct. The case would need to be remanded because there's no federal jurisdiction.
[...]
[JUDGE LYNN]: Do you agree that if I found that there was not complete preemption, that whether or not I have to construe the Collective Bargaining Agreement would be irrelevant?
[BOEING COUNSEL]: Your Honor, if you find that there's not complete preemption, ... then it would -- that answers the question as to whether there would be federal question jurisdiction. I do agree with [SWAPA counsel] on that ....
(ECF No. 33, Hr'g Tr. 9:6–10:2).
In 2006, Judge Godbey determined that Kollar supported the conclusion that the RLA provides complete preemption. Sw. Airlines Employees Ass'n v. Sw. Airlines Co. , 3:05-CV-1192-N, 2006 WL 8437550, at *2 (N.D. Tex. Feb. 1, 2006) (Godbey, J.). He stated, "[b]y finding jurisdiction in Kollar , the Fifth Circuit necessarily implied complete preemption, even though Kollar did not expressly address the complete/ordinary preemption distinction." While Judge Godbey acknowledged that the Beneficial National Bank decision "may cast doubt" as to such a conclusion, he declined to find that Beneficial National Bank rose to "the level of a clear conflict [with] or implicit overruling" of Kollar. Sw. Airlines Employees Ass'n , 2006 WL 8437550, at *2–3.
This Court respectfully disagrees with Judge Godbey's conclusion, and finds that Beneficial National Bank overrules any implicit holding in Kollar that the RLA supports complete preemption. In Beneficial National Bank , the Supreme Court stated that it had previously found complete preemption only under the LMRA and ERISA. 539 U.S. at 8, 123 S.Ct. 2058. As the Second Circuit concluded in Sullivan , "[h]ad Hawaiian Airlines established that § 184 of the RLA, like § 301 of the LMRA, completely preempted state-law causes of action within its scope, the Court in Beneficial National Bank would have discussed three, not two, categories of cases involving complete preemption." Sullivan , 424 F.3d at 275.
After Judge Godbey's decision, the Fifth Circuit addressed complete preemption of another statute in Elam v. Kansas City S. Ry. Co. , 635 F.3d 796 (5th Cir. 2011). In Elam , the Fifth Circuit held that the district court had removal jurisdiction because the Interstate Commerce Commission Termination Act ("ICCTA") supported complete preemption. The plaintiffs in that case referenced Sullivan and asked the Fifth Circuit to find that the ICCTA does not support complete preemption. While the Fifth Circuit ultimately found complete preemption, it distinguished Sullivan , the RLA case, because it was holding that the district court would have had original jurisdiction over the plaintiffs' claims under the ICCTA. Importantly, the Court was contrasting the ICCTA with the RLA. This analysis further convinces this Court that, postBeneficial National Bank , the Fifth Circuit would agree with the circuits that have found that the RLA does not support complete preemption.
Further, this Court agrees with the Second Circuit's determination that applying Beneficial National Bank 's test for complete preemption leads to the conclusion that the RLA does not support complete preemption, because a minor dispute under the RLA cannot be brought within the original jurisdiction of a federal court. See 45 U.S.C. § 184 (primary jurisdiction over RLA minor disputes exists with the adjustment boards); Consol. Rail Corp. v. Ry. Labor Executives' Ass'n , 491 U.S. 299, 304, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989) ("The Board (as we shall refer to any adjustment board under the RLA) has exclusive jurisdiction over minor disputes."). Thus, the Court finds that it does not have federal question jurisdiction under the complete preemption doctrine, even though the case will require interpretation of the CBA.
III. Conclusion
Because this Court does not have subject matter jurisdiction, it must remand the case to the state court. Therefore,
IT IS ORDERED that the Motion to Remand (ECF No. 15) is GRANTED. This case is REMANDED to the 160th Judicial District Court, Dallas County, Texas. SWAPA's request for costs and expenses under 28 U.S.C. § 1447(c) is DENIED, because Boeing had "an objectively reasonable basis for seeking removal." Martin v. Franklin Capital Corp. , 546 U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005).