Matthew Dixon v. Coburg Dairy, Incorporated, Equal Employment Advisory Council, Amicus Curiae

369 F.3d 811, 2004 U.S. App. LEXIS 10233, 85 Empl. Prac. Dec. (CCH) 41,659, 2004 WL 1152827

• Court: Court of Appeals for the Fourth Circuit
• Decided: May 25, 2004
• Docket: 02-1266
• Status: Published

Opinions

Reversed and remanded with instructions by published opinion. Judge WILLIAMS wrote the opinion, in which Chief Judge WILKINS and Judges WIDENER, WILKINSON, NIEMEYER, LUTTIG, TRAXLER, SHEDD, and DUNCAN concur. Judge MICHAEL wrote a separate opinion concurring in the judgment. Judge MOTZ concurred in the judgment. Judge KING wrote a separate concurring opinion in which Judge MOTZ joined. Judge GREGORY wrote a separate opinion concurring in the judgment.

OPINION

WILLIAMS, Circuit Judge:

Matthew Dixon initiated this action in South Carolina state court, alleging that Coburg Dairy, Inc. unlawfully terminated his employment in violation of South Carolina law. Coburg removed the ease to the United States District Court for the District of South Carolina, asserting that the court had subject matter jurisdiction over the case because it involved a substantial question of federal law. The district court denied Dixon’s motion to remand the case to state court and granted summary judgment to Coburg on all of Dixon’s claims. Sitting en banc, we hold that the district court lacked subject matter jurisdiction to hear this case. Accordingly, we reverse and remand with instructions that the case be remanded to the South Carolina Court of Common Pleas.

I.

Dixon began working for Coburg in 1997 as a mechanic. Dixon is a member of the Sons of Confederate Veterans, a Tennessee non-profit corporation, “who[se members] can prove genealogically that one of their ancestors served honorably in the armed forces of the Confederate States of America.” See Sons of Confederate Veterans, Inc. v. Comm’n of Va. Dep’t of Motor Vehicles, 288 F.3d 610, 613 n. 1 (4th Cir.2002). Dixon brought with him to work a personal tool box, to which he had affixed two decals depicting the Confederate battle flag. The decals offended one of Dixon’s coworkers, who complained to Coburg management, citing the company’s antihar-assment policy.¹ Coburg asked Dixon to remove the decals from his toolbox and, when he refused, offered to buy him a new, unadorned toolbox. Dixon declined, explaining that “his heritage was ‘not for sale,’ ” and asserting that he had a First Amendment right to display the Confederate battle flag.² (J.A. at 10-11.) Unable to reach a compromise, Coburg terminated Dixon on September 5,2000.

Dixon then filed suit in the South Carolina Court of Common Pleas. The complaint included nine causes of action. Critical to this appeal are the first, third and fourth causes of action, which allege that Dixon was terminated in violation of Section 16-17-560 of the South Carolina Code and that the discharge was in retaliation for his exercise of constitutional rights.³ Section 16-17-560 makes it “unlawful for a person to ... discharge a citizen from employment or occupation ... because of political opinions or the exercise of political rights and privileges guaranteed ... by the Constitution and laws of the United States or by the Constitution and laws of [South Carolina].” S.C. Code Ann. § 16-17-560.

Coburg then removed the case to federal court, asserting that the district court had original jurisdiction pursuant to 28 U.S.C.A. § 1331 (West 1993), because the case involved a substantial question of federal law. Dixon moved for the district court to remand the case to state court, and the district court denied the motion. The parties then filed cross-motions for summary judgment, and the district court granted summary judgment in favor of Coburg on all claims and dismissed the case. Dixon appealed, and a divided panel of this court affirmed the district court’s judgment in part and reversed in part.⁴ Dixon v. Coburg Dairy, Inc., 330 F.3d 250 (4th Cir.) vacated & reh’g en banc granted, (4th Cir. Sept. 16, 2003). A majority of full-time, active circuit judges voted to rehear the case en banc.

II.

We review questions of subject matter jurisdiction de novo, “including those relating to the propriety of removal.” Mayes v. Rapoport, 198 F.3d 457, 460 (4th Cir.1999). The burden of demonstrating jurisdiction resides with “the party seeking removal.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994). We are obliged to construe removal jurisdiction strictly because of the “significant federalism concerns” implicated. Id. Therefore, “[i]f federal jurisdiction is doubtful, a remand [to state court] is necessary.” Id.

III.

Section 1441 of Title 28 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 or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C.A. § 1441(a) (West 1994). In this case, Coburg alleges that removal was proper because the district court had original jurisdiction to hear Dixon’s ease under 28 U.S.C.A. § 1331. Section 1331 grants district courts “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C.A. § 1331. Thus, we must decide whether Dixon’s claim “aris[es] under the Constitution, laws, or treaties of the United States.” Id.

The vast majority of lawsuits “arise under the law that creates the cause of action.” Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916) (Holmes, J.); Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986). Thus, we must “first discern whether federal or state law creates the cause of action.... In eases where federal law creates the cause of action, the courts of the United States unquestionably have federal subject matter jurisdiction.” Mulcahey, 29 F.3d at 151. In this case, Dixon’s cause of action was created by South Carolina law not federal law, but our inquiry does not end there. Instead, we must determine whether this case is within the “small class of cases where, even though the cause of action is not created by federal law, the case’s resolution depends on resolution of a federal question sufficiently substantial to arise under federal law within the meaning of 28 U.S.C. § 1331.” Ormet Corp. v. Ohio Power Co., 98 F.3d 799, 806 (4th Cir.1996). Thus, “a case may arise under federal law ‘where the vindication of a right under state law necessarily turn[s] on some construction of federal law,’ ” Merrell Dow, 478 U.S. at 808, 106 S.Ct. 3229 (quoting Franchise Tax Bd. v. Const. Laborers Vac. Trust, 463 U.S. 1, 9, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)), but “only [if] ... the plaintiffs right to relief necessarily depends on a substantial question of federal law,” Franchise Tax Bd., 463 U.S. at 28, 103 S.Ct. 2841 (emphases added). Thus, in the absence of another jurisdictional ground, a defendant seeking to remove a case in which state law creates the plaintiffs cause of action must establish two things: (1) that the plaintiffs right to relief necessarily depends on a question of federal law, and (2) that the question of federal law is substantial. If either of these two elements is lacking, removal is improper and the case should be remanded to state court. As discussed below, we conclude that Dixon’s complaint satisfies neither of these requirements.

A.

A plaintiffs right to relief for a given claim necessarily depends on a question of federal law only when every legal theory supporting the claim requires the resolution of a federal issue. Mulcahey, 29 F.3d at 153 (“[I]f a claim is supported not only by a theory establishing federal subject matter jurisdiction but also by an alternative theory which would not establish such jurisdiction, then federal subject matter jurisdiction does not exist.”); see Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 810, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988)(holding that “a claim supported by alternative theories in the complaint may not form the basis for [patent] jurisdiction unless patent law is essential to each of those theories” and noting the similarities between the patent and federal question jurisdictional statutes). In other words, if the plaintiff can support his claim with even one theory that does not call for an interpretation of federal law, his claim does not “arise under” federal law for purposes of § 1331.

Our opinion in Mulcahey nicely illustrates the foregoing rule. In Mulcahey, the plaintiffs alleged that the Columbia Organic Chemicals Company had negligently released hazardous substances into the soil. Mulcahey, 29 F.3d at 149. The plaintiffs relied on at least the following two alternative theories of liability to establish their negligence claim: (1) Columbia Organic was negligent per se because it had violated several federal environmental statutes; and (2) Columbia Organic was negligent per se because it had violated various state and local environmental laws. Id. at 153-54. The plaintiffs’ negligence claim thus relied on multiple theories of liability, only one of which required the resolution of a federal issue. Id. at 153. In other words, “[e]ven if Columbia Organic was found not to have violated any federal statute, the Plaintiffs might still [have] befen] entitled to recover under an alternative theory of negligence.” Id. We held that in light of Christianson, “because the Plaintiffs’ alternative theory of negligence per se [under the federal environmental statutes] [was] not ‘essential’ to their negligence [claim], no federal subject matter jurisdiction exist[ed].” Id. at 154.

Coburg asserts that Dixon’s complaint necessarily depends on the resolution of a question of federal law, because, according to Coburg, Dixon must prove that Coburg violated his First Amendment rights to free speech for Coburg to be liable under Section 16-17-560 of the South Carolina Code. Specifically, Coburg asserts that “Dixon pled one violation of constitutional rights claim under Section 16-17-560, with one theory — namely, that Coburg violated his constitutional rights through his discharge.” (Appellee’s Br. at 12-13.) Coburg points to Paragraph 13 of the complaint’s first cause of action to support its narrow reading of Dixon’s complaint. Paragraph 13 reads, “Coburg’s termination of Plaintiff for display of the flag constitutes a violation of his constitutional rights entitling Plaintiff to an award for damages.”⁵ (J.A. at 12.) After considering Dixon’s complaint as a whole, we reject Coburg’s restrictive reading.

Dixon alleges, in his third cause of action, that “Section 16-17-560 provides for a private civil cause of action where the wrongful discharge is a ‘crime against pub-lie policy.’ ” (J.A. at 13.) According to Dixon, “Coburg’s termination of Plaintiff for display of the flag constitutes a violation of this statute entitling Plaintiff to an award for damages.” (J.A. at 13.) Moreover, Paragraph 11 of the complaint, which is part of the same cause of action as the passage that Coburg relies upon for its narrow reading of the complaint, refers specifically to Article I, Section 2 of the South Carolina Constitution, which provides that “[t]he General Assembly shall make no law ... abridging the freedom of speech.” S.C. Const, art. I, § 2 (1977). Similarly, in alleging that he was terminated for exercising “constitutionally protected rights of free speech” in his fourth cause of action, Dixon “reallegefs] and repeat[s]” the pleadings previously alleged, thus including the reference in the first cause of action to Article I, Section 2 of the South Carolina Constitution. (J.A. at 13.)

Therefore, although Dixon’s complaint does reference the First Amendment, none of its causes of action rely exclusively on a First Amendment violation to establish Coburg’s liability under Section 16-17-560. Properly read, Dixon’s complaint alleges a violation of Section 16-17-560 in its entirety. Accordingly, Dixon’s complaint could support a finding of liability for violating Section 16-17-560 under any of the following three theories — (1) Dixon was fired because of his political opinions; (2) Dixon was fired for exercising political rights guaranteed by the United States Constitution; and (3) Dixon was fired for exercising political rights guaranteed by the South Carolina Constitution. See Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) (holding that a complaint is sufficient if it gives “fair notice of what the plaintiffs claim is and the grounds upon which it rests”).

Of the three alternative theories, only the second even arguably involves the resolution of a substantial question of federal law. Because Dixon could prove that Co-burg terminated him in violation of Section 16-17-560 under the first and third theories without proving the second theory, Dixon’s claim that Coburg violated Section 16-17-560 does not necessarily depend on a question of federal law. Mulcahey, 29 F.3d at 154. Accordingly, the district court did not have original jurisdiction to hear this case and removal was improper.⁶

B.

Even if Dixon’s claim had relied exclusively on the First Amendment to establish a violation of Section 16-17-560 and thus necessarily depended on a question of federal law, the question of federal law raised by his complaint is not substantial. See Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 814, 817, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986) (holding that “a complaint alleging a violation of a federal statute as an element of a state cause of action, when Congress has determined that there should be no private, federal cause of action for the violation” does not raise a substantial question of federal law). In Memll Dow, the Court reasoned that to ignore Congress’ decision not to create a private federal remedy during the § 1331 jurisdictional inquiry would “flout, or at least undermine, congressional intent.” Id. at 812, 106 S.Ct. 3229; see also id. at 811, 106 S.Ct. 3229 (noting that congressional silence is an important indication of congressional intent when determining if there is a private federal remedy); Cort v. Ash, 422 U.S. 66, 82-84, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). Congress has extended numerous constitutionally inspired protections to members of the private workplace, see, e.g., 42 U.S.C.A. § 2000e-2 (West 2003) (making it an illegal employment practice to “discriminate against any individual ... because of such individual’s race, color, religion, sex, or national origin.”), but notably has refrained from extending free speech rights to the private work force. We believe that Congress’ decision not to create a federal remedy for members of the private workforce whose employers restrict their freedom of speech is “tantamount to a congressional conclusion that the presence of a claimed violation of the [First Amendment] as an element of a state cause of action is insufficiently ‘substantial’ to confer federal-question jurisdiction.” Merrell Dow, 478 U.S. at 814, 106 S.Ct. 3229.

Moreover, even when Congress does create a private cause of action for the violation of a federal law, federal question jurisdiction may be lacking over a state law claim predicated on a violation of that law. Mulcahey, 29 F.3d at 152-53. If a particular plaintiff is barred from bringing the private, federal cause of action, either substantively or procedurally, no federal subject matter jurisdiction exists over that plaintiffs state cause of action predicated on a violation of the same federal law. Mulcahey, 29 F.3d at 152-53. In Mulcahey, we “conclude[d] that the Plaintiffs’ inability to proceed under [a federal] statutef ] constitute^] a ‘congressional conclusion that the presence of a claimed violation of the statute[] as an element of a state cause of action [wa]s insufficiently “substantial” to confer federal question jurisdiction.’ ” Id. at 153 (quoting Merrell Dow, 478 U.S. at 814, 106 S.Ct. 3229).

Here, Congress has created a private cause of action to remedy violations of the rights secured by the United States Constitution, see 42 U.S.C.A. § 1983 (West 2003) (“Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State ... subjects ... any ... person ... to the deprivation of any rights, privileges, or immunities secured by the Constitution ... shall be liable to the party injured in an action at law .... ”), but that remedy is unavailable to Dixon, because Coburg did not terminate Dixon under color of state law. We believe “that [Dixon’s] inability to proceed under [§ 1983] constitutes a ‘congressional conclusion that the presence of a claimed violation of the [First Amendment] as an element of a state cause of action is insufficiently “substantial” to confer federal question jurisdiction.’ ” Mulcahey, 29 F.3d at 153 (quoting Merrell Dow, 478 U.S. at 814,106 S.Ct. 3229).

Accordingly, even if we construed Dixon’s complaint in such a way that it necessarily depended on federal law, we would conclude that the question of federal law that it raises is not substantial. Thus, the district court did not have original jurisdiction to hear this case and removal was improper.

IV.

For the foregoing reasons, we reverse the judgment of the district court and remand with instructions that the case be remanded to the South Carolina Court of Common Pleas.

REVERSED AND REMANDED WITH INSTRUCTIONS

1 . The policy prohibits "any form of ... harassment because of race, color, religion, sex, age, disability, national origin, or status as a Vietnam era or disabled veteran.” (J.A. at 42.) It specifies that harassment may take the form of "visual conduct such as derogatory posters, cartoons, drawings or gestures.” (J.A. at 42.)

2 . In early 2000, South Carolinians were involved in a heated debate about whether to remove the Confederate battle flag from atop their state capítol building. Dixon points out that this was "a burning issue in the State of South Carolina,” during a "period of intense national scrutiny and public debate.” (Appellant’s Br. at 4.)

3 .The relevant portions of the complaint read as follows:

FOR A FIRST CAUSE OF ACTION

(Violation of Constitutional Rights)

All of the pleadings previously alleged are hereby realleged and repeated and made a part of the pleadings contained herein.

11. SC Code § 16-17-560 states it is unlawful to discharge a citizen from employment because of the exercise of political rights and privileges guaranteed under the Constitution of the United States and this state. The First Amendment to the U.S. Constitution and S.C. Constitution Article I, Section 2, provide for freedom of speech, assembly and the right to redress of grievances.

12. Plaintiff's termination arose from the exercise of his right of free speech to display the Confederate flag. Coburg violated the constitutional rights of its employee by its termination of Plaintiff.

13. Coburg's termination of Plaintiff for display of the flag constitutes a violation of his constitutional rights entitling Plaintiff to an award for damages.

FOR A THIRD CAUSE OF ACTION

(Violation of Public Policy)

All of the pleadings previously alleged are hereby realleged and repeated and made a part of the pleadings contained herein.

16. SC Code § 16-17-560 provides for a private civil cause of action where the wrongful discharge is a "crime against public policy.”

17. The Defendant's termination of the Plaintiff for display of the Confederate flag. Defendant's actions constitute a violation of South Carolina criminal law and therefore a violation of the public policy of this State. 18. Coburg's termination of Plaintiff for display of the flag constitutes a violation of this statute entitling Plaintiff to an award for damages.

FOR A FOURTH CAUSE OF ACTION

(Retaliatory Discharge)

All of the pleadings previously alleged are hereby realleged and repeated and made a part of the pleadings contained herein.

19. Coburg’s actions, through its agents attempts to control the content of Plaintiff’s right of free speech through constant and repeated efforts to get him to abandon his constitutionally protected rights of free speech by demanding that he remove the flag from his tool box and then, ultimately, terminating him for exercise of that same right, constitute retaliatory discharge of Plaintiff.

20. Coburg's termination of Plaintiff for retaliatory discharge entitles Plaintiff to an award for actual and punitive damages in an amount to be determined by the trier of fact.

(J.A. at 12-14.)

4 . The panel majority opinion reversed the grant of summary judgment on the first cause of action under the insubstantiality doctrine, holding that the district court lacked jurisdiction over the claim. Dixon v. Coburg Dairy, Inc., 330 F.3d 250, 255 (4th Cir.) (citing Hagans v. Lavine, 415 U.S. 528, 536-37, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974)), vacated & reh’g en banc granted, (4th Cir. Sept. 16, 2003). The panel majority affirmed the district court's grant of summary judgment on the remaining causes of action. Id.

5 . To the extent that Dixon's complaint can be interpreted as stating a cause of action based directly on the First Amendment, such a claim would be too insubstantial to invoke federal question jurisdiction because the First Amendment does not apply to private employers. Hagans v. Lavine, 415 U.S. 528, 536-37, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974) C[F]ed-eral courts are without power to entertain claims otherwise within their jurisdiction if they are so attenuated and unsubstantial as to be absolutely devoid of merit, wholly insubstantial, obviously frivolous, plainly unsubstantial, or no longer open to discussion.”) (internal quotation marks and citations omitted); see also Davis v. Pak, 856 F.2d 648, 651 (4th Cir.l988)(same).

6 . Coburg also relies on “another underlying federal issue in this case — the scope and uniformity of Title VII of the Civil Rights Act.’’ (Appellee’s Br. at 17.) In essence, Coburg argues that Title VII, 42 U.S.C.A. § 2OOOe-2(a) (West), preempts Section 16-17-560, at least as Dixon interprets it to apply in this case. At most, Coburg has alleged conflict preemption. Because conflict preemption is a defense to a cause of action, the well-pleaded complaint rule bars its use as a foundation for federal question jurisdiction. Sonoco Products Co. v. Physicians Health Plan, Inc., 338 F.3d 366, 371 (4th Cir.2003) (citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)).