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BOX TREE SOUTH, LTD. v. BITTERMAN

January 17, 1995

BOX TREE SOUTH, LTD., AUGUSTIN VON PAEGE, ROBERT B. TSANEV, and RICARDO COLBOURNE, Plaintiffs, Counterclaim Defendants, against BROOKS BITTERMAN, MIGUEL DELA ROSA, and HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES UNION ("HERE") LOCAL 100, AFL-CIO, Defendants, Counterclaim Plaintiffs.

John G. Koeltl, United States District Judge


The opinion of the court was delivered by: JOHN G. KOELTL

John G. Koeltl, District Judge

 The plaintiffs have moved for an order remanding this action to the New York State Supreme Court, New York County and awarding costs and expenses pursuant to 28 U.S.C. § 1447(c). *fn1" For the reasons stated below, this Court finds that it lacks subject matter jurisdiction over the action and that an award of costs and expenses is unwarranted. Therefore, the case will be remanded to the New York State Supreme Court, New York County.

 I.

 This case is the latest chapter in a bitter labor dispute between the Box Tree Restaurant and defendant Hotel Employees and Restaurant Employees Union ("HERE") Local 100, AFL-CIO ("the Union"). The complaint alleges that plaintiff Box Tree South, Ltd. owns and operates the Box Tree Restaurant and that plaintiffs Augustin Von Paege, Robert B. Tsanev, and Ricardo Colbourne are employed by the restaurant. Defendant HERE Local 100 is a labor association and defendants allege it has been certified as the exclusive collective bargaining representative of the restaurant's employees. Defendant Brooks Bitterman is a union member and plaintiffs allege defendant Miguel Dela Rosa is also a member. Some of the restaurant's employees have been engaged in a strike since mid-December, 1993. The declaration of defendant Bitterman alleges that the strike was provoked by the restaurant's refusal to enter into a collective bargaining agreement with HERE Local 100.

 On January 24, May 2, and May 4, 1994, the Union filed complaints with the National Labor Relations Board (the "NLRB") alleging that the restaurant has been engaging in unfair labor practices within the meaning of the National Labor Relations Act by, among other things, restraining and coercing employees in the exercise of rights guaranteed by the Act and by refusing to collectively bargain. These complaints have been consolidated with a complaint filed by a former restaurant employee alleging that her employment was terminated as a result of her support of the Union. A hearing before an NLRB administrative law judge on the consolidated complaints is scheduled for July 10, 1995.

 The present action was filed on August 25, 1994 in the New York State Supreme Court, New York County. The complaint asserts ten causes of action. One seeks preliminary and permanent injunctive relief pursuant to New York Labor Law § 807. The other nine causes of action seek damages under the New York state common law of defamation.

 The plaintiffs' second through tenth causes of action allege instances in which the Union and on occasion defendant Bitterman have maliciously published various written statements concerning plaintiff Von Paege that are false, defamatory, and libelous, and that the Union and Bitterman knew or should have known to be false. The plaintiffs claim that Von Paege's reputation in the community and his profession have been harmed by these statements. All of the allegedly libelous and defamatory statements involve, among other things, allegations that Von Paege has been engaged in illegal activity, including activities violating federal and state labor laws. The defendants' opposition to the plaintiffs' motion to remand the case to state court places particular reliance on the fact that the second, third, and fourth causes of action allege that the Union and Bitterman sent letters to three different individuals asserting that: "'From the outset, [Augustin Von Paege] has violated Federal laws to deprive the workers of their legal rights.'" Complaint PP 35, 41, 47.

 Under 28 U.S.C. § 1441, removal of a state court action to a federal district court is proper whenever the federal court has original jurisdiction over the action. *fn2" The parties agree that the present action is not within the diversity jurisdiction of the Court. The sole question at issue on the plaintiffs' motion to remand is whether the Court possesses jurisdiction over this action pursuant to 28 U.S.C. § 1331 which provides that:

 
The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

 28 U.S.C. § 1331 (1994).

 The major thrust of the defendants' argument for federal jurisdiction is that the defamation claims in the complaint are necessarily preempted by federal labor law in such a manner that the doctrine of complete preemption is applicable and therefore the claims necessarily arise under federal law within the meaning of 28 U.S.C. § 1331 although the plaintiffs have not pleaded a federal cause of action. As explained below, the plaintiffs' claims do not arise under federal labor laws and the defendants have overstated the breadth and effect of the preemption of state law by federal labor law.

 II.

 The outer boundaries of § 1331's "arising under" jurisdiction are not always precise, but are anchored in the "well-pleaded complaint" rule. In addressing their imprecision in Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983), the Supreme Court explained:

 
One powerful doctrine has emerged, however -- the "well-pleaded complaint" rule -- which as a practical matter severely limits the number of cases in which state law "creates the cause of action" that may be initiated in or removed to federal district court . . .
 
"Whether a case is one arising under the Constitution or a law or treaty of the United States, in the sense of the jurisdictional statute, . . . must be determined from what necessarily appears in the plaintiff's statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may interpose." Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S. Ct. 724, 724, 58 L. Ed. 1218 (1914) . . . .
 
For better or worse, under the present statutory scheme as it has existed since 1887, a defendant may not remove a case to federal court unless the plaintiff's complaint establishes that the case "arises under" federal law. "A right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Gully v. First National Bank, 299 U.S. 109, 112, 57 S. Ct. 96, 97, 81 L. Ed. 70 (1936).

 Id. at 9-11.

 In Travelers Indemnity Co. v. Sarkisian, 794 F.2d 754 (2d Cir.), cert. denied 479 U.S. 885, 93 L. Ed. 2d 253, 107 S. Ct. 277 (1986), the Court of Appeals for the Second Circuit, citing Franchise Tax Board, restated the well-pleaded complaint rule and reiterated that it provides the general principle for determining the removability of actions allegedly arising under the Constitution or laws of the United States: "Normally, removal based on federal question jurisdiction is improper unless a federal claim appears on the face of a well-pleaded complaint." Sarkisian, 794 F.2d at 758. See also, Derrico v. Sheehan Emergency Hosp., 844 F.2d 22, 27 (2d Cir. 1988).

 Under the rule, the determination of whether an action arises under the laws of the United States is made by examining the claims in the complaint rather than the pleaded facts underlying them. Thus the rule makes the plaintiff "master of the complaint," preventing a court from inferring from a state law complaint a basis for federal jurisdiction even though the facts pleaded are sufficient to sustain a federal claim that was not pleaded. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 96 L. Ed. 2d 318, 107 S. Ct. 2425 (1987); Derrico, 844 F.2d at 27.

 The existence of a federal defense to a state law claim is also not generally a basis for removal. Caterpillar, 482 U.S. at 393; Smith v. Dunham Bush, Inc., 959 F.2d 6, 8 (2d Cir. 1992). Some of the defendants' arguments have assumed incorrectly that if the defendants can prove as a defense that the plaintiffs' common law defamation claims are preempted by federal labor law, then this Court has federal question jurisdiction. However, as the Supreme Court explained in Franchise Tax Board:

 
Since 1887 it has been settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit ...

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