Rains v. Criterion Systems

80 F.3d 339, 96 Daily Journal DAR 3405, 96 Cal. Daily Op. Serv. 2009, 11 I.E.R. Cas. (BNA) 936, 1996 U.S. App. LEXIS 5409, 68 Empl. Prac. Dec. (CCH) 44,008, 70 Fair Empl. Prac. Cas. (BNA) 635
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 26, 1996
Docket93-17168
StatusPublished
Cited by3 cases

This text of 80 F.3d 339 (Rains v. Criterion Systems) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rains v. Criterion Systems, 80 F.3d 339, 96 Daily Journal DAR 3405, 96 Cal. Daily Op. Serv. 2009, 11 I.E.R. Cas. (BNA) 936, 1996 U.S. App. LEXIS 5409, 68 Empl. Prac. Dec. (CCH) 44,008, 70 Fair Empl. Prac. Cas. (BNA) 635 (9th Cir. 1996).

Opinion

80 F.3d 339

70 Fair Empl.Prac.Cas. (BNA) 635,
68 Empl. Prac. Dec. P 44,008, 64 USLW 2616,
11 IER Cases 936, 96 Cal. Daily Op. Serv. 2009,
96 Daily Journal D.A.R. 3405

Randolph S. RAINS, Plaintiff-Appellant,
v.
CRITERION SYSTEMS, INC., a California corporation; Kaiser
Permanente Hospital Inc., a California
corporation; Anthon Freitas, and Paul
Fice, Defendants-Appellees.

No. 93-17168.

United States Court of Appeals,
Ninth Circuit.

Argued and Submitted March 13, 1995.
Decided March 26, 1996.

Leo F. Donahue and Christopher H. Whelan, Gold River, California, for plaintiff-appellant.

Fred A Schwartz, Rust, Armenis & Schwartz, Sacramento, California, for defendant-appellee Kaiser Permanente Inc.

Mark S. Spring, Diepenbrock, Wulff, Plant & Hannegan, Sacramento, California, for defendant-appellee Criterion Systems Inc.

Appeal from the United States District Court for the Eastern District of California, No. CV-92-013-LKK GGH; Lawrence K. Karlton, District Judge, Presiding.

Before: FLETCHER, REINHARDT, and NOONAN, Jr., Circuit Judges.

REINHARDT, Circuit Judge:

This appeal raises the question whether a plaintiff may allege a violation of Title VII of the Civil Rights Act of 1964's policy against religious discrimination as part of a state law cause of action without converting his claim into a Title VII action or an action that depends on a substantial federal question. We hold that he may, and that in this case he did. We therefore conclude that the district court lacked jurisdiction. Accordingly, we vacate the district court's order granting summary judgment against the plaintiff and direct that court to remand the case to state court.

Since our opinion turns on federal question jurisdiction, not the merits of plaintiff's claims, we will provide an abbreviated version of the facts and allegations underlying this lawsuit. In 1989, Criterion Systems, a California-based medical equipment consulting firm, hired Randolph Rains as a hospital equipment-planner. In the summer of 1990, Anthon Freitas, the owner of Criterion Systems, placed Rains in charge of a number of projects in San Diego for a major client, Kaiser Permanente.

On October 30, 1990, Rains became involved in a discussion concerning religion with Paul Fice, the Kaiser employee responsible for monitoring Criterion's work on the San Diego projects. During the discussion, the district court concluded that "Fice proselytized and preached to plaintiff concerning Jesus Christ and the need to be saved." One week later, Fice called Freitas. The defendants contend that Fice informed Freitas that he had received a phone call from a female Kaiser employee whom he did not name. Fice allegedly stated that the female employee had complained that "Rains had made advances of a personal nature towards her." Criterion states that as a result of Rains' alleged behavior toward the female employee, Fice "indicated that he did not want Randolph Rains on the Kaiser-San Diego project any more. Fice indicated that if Rains was not removed from the Kaiser-San Diego account, CRITERION would lose the Kaiser-San Diego business as well as other Kaiser business in southern California." Freitas states in his declaration that it was Fice's phone call that led him to decide to terminate Rains' employment.1

Rains filed suit in California state court against Criterion Systems Inc., Kaiser Permanente, Freitas, and Fice. He alleged eight separate causes of action, only two of which are relevant here: (1) Freitas and Criterion committed the tort of wrongful termination in violation of public policy by terminating him "for refusing to adopt the said religious opinions of FICE." (2) Kaiser and Fice committed the tort of intentional interference with contractual relations by supplying Freitas with "false allegations." The case was removed to federal district court; the defendants moved for summary judgment on all counts; and the district court granted the motion. Rains appealed and raised several issues that we do not need to reach, because we determine that the district court lacked jurisdiction.

Rains did not contest the removal and did not challenge the district court's jurisdiction to hear his complaint until we ordered supplemental briefing on that issue. This court, however, must consider whether federal jurisdiction exists, even if no objection is made to removal, Harris v. Provident Life and Acc. Ins. Co., 26 F.3d 930, 932 (9th Cir.1994), and even if both parties stipulate to federal jurisdiction, Washington Local Lodge No. 104 v. Intern. Broth. of Boilermakers, 621 F.2d 1032, 1033 (9th Cir.1980); see also FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 229, 110 S.Ct. 596, 606-07, 107 L.Ed.2d 603 (1990) ("federal courts are under an independent obligation to examine their own jurisdiction"). Moreover, we must do so even though the district court has issued a judgment on the merits. Grubbs v. General Electric Credit Corporation, 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612 (1972).

Once judgment has been entered in a case that was removed to federal court, the question a court of appeals must ask in determining whether jurisdiction was proper changes slightly. The issue becomes not whether the removal was proper, but whether the district court had jurisdiction at the time it issued its judgment. Id. at 705, 92 S.Ct. at 1348-49 ("the requirement that jurisdiction exist at the time of judgment ... is satisfied here"). In this case, the question, both at the time the case was removed and at the time the district court entered its judgment, was whether either Rains' claim of wrongful termination or his claim of intentional interference with contractual relations arose under federal law.

There are three possible grounds for federal question jurisdiction in this case. The first is that Rains asserted a federal (Title VII) claim in his complaint, i.e., that federal law creates the cause of action he asserted. The second is that under the artful pleading doctrine, one or more of Rains' state law claims should have been recharacterized as a federal claim. The third is that one or more of Rains' state law claims necessarily turned on the construction of a substantial, disputed federal question. Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 807-10, 106 S.Ct. 3229, 3231-33, 92 L.Ed.2d 650 (1986); Franchise Tax Bd. of State of Cal. v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 7-12, 27-28, 103 S.Ct. 2841, 2845-48, 2855-56, 77 L.Ed.2d 420 (1983). Since any of the three possible grounds for jurisdiction could establish that the court had jurisdiction when it entered its summary judgment order, we consider each in turn.

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80 F.3d 339, 96 Daily Journal DAR 3405, 96 Cal. Daily Op. Serv. 2009, 11 I.E.R. Cas. (BNA) 936, 1996 U.S. App. LEXIS 5409, 68 Empl. Prac. Dec. (CCH) 44,008, 70 Fair Empl. Prac. Cas. (BNA) 635, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rains-v-criterion-systems-ca9-1996.