Spencer v. PeaceHealth

• Court: District Court, W.D. Washington
• Decided: May 3, 2024
• Docket: 3:24-cv-05138
• Status: Unknown

Opinion

1 2 3 4

5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 KATHLEEN SPENCER, 9 Plaintiff, Case No. C24-5138-MLP 10 v. ORDER 11 PEACEHEALTH, 12 Defendant. 13

14 I. INTRODUCTION 15 This matter is before the Court on Defendant PeaceHealth’s Motion to Dismiss, filed on 16 February 27, 2024.1 (Mot. (dkt. # 6).) On March 15, 2024, Plaintiff Kathleen Spencer filed an 17 amended complaint (Am. Compl. (dkt. # 9)), and on March 25, 2024, she filed an opposition to 18 the Motion (Resp. (dkt. # 12)). On March 29, 2024, PeaceHealth filed its reply. (Reply (dkt. 19 # 13).) The Court held oral argument on April 24, 2024. (Dkt. # 15.) Having considered the 20 parties’ submissions, oral argument, the governing law, and the balance of the record, the Court 21 DENIES PeaceHealth’s Motion (dkt. # 6) and REMANDS this action to Clark County District 22 Court. 23

1 The parties consented to proceed before the undersigned Magistrate Judge. (Dkt. # 7.) 1 II. BACKGROUND 2 On January 29, 2024, Ms. Spencer, a former employee of PeaceHealth, filed this action in 3 Clark County District Court. (Compl. (dkt. # 1-1) at ¶ 6.) Ms. Spencer alleges she is “a member 4 of the union, Oregon Federation of Nurses and Health Professionals[,]” that entered into a

5 collective bargaining agreement (“CBA”) with PeaceHealth. (Id. at ¶ 8.) Ms. Spencer alleged 6 PeaceHealth “retaliated against her by eliminating her position and knowingly terminated her in 7 violation of the [CBA] for exercising her rights under the [CBA].” (Compl. at ¶ 10.) Ms. Spencer 8 further alleges PeaceHealth “failed to provide sufficient notice to Ms. Spencer that her position 9 was being ‘eliminated’ as it was claimed by PeaceHealth.” (Compl. at ¶ 12.) Ms. Spencer asserts 10 a single claim against PeaceHealth for “wrongful termination in violation of public policy” on 11 the grounds that her termination was “retaliation against Ms. Spencer for exercising her rights 12 under the [CBA].” (Compl. at ¶¶ 13-17 (emphasis omitted from first quotation).) 13 On February 20, 2024, PeaceHealth removed the action to this Court on the grounds that, 14 “[b]ecause Plaintiff’s termination is prescribed and governed by the applicable [CBA], Plaintiff’s

15 claim arises under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185.” (Dkt. 16 # 1 at 2.) 17 III. DISCUSSION 18 PeaceHealth contends Ms. Spencer’s claims must be dismissed pursuant to Federal Rule 19 of Civil Procedure (“Rule”) 12(b)(6) for failure to state a claim. (Mot. at 3.) PeaceHealth 20 contends dismissal is required because: (1) Ms. Spencer failed to follow the mandatory grievance 21 procedure set forth in the CBA prior to filing suit; (2) her claim alleges violation of the CBA and 22 thus is preempted by the Labor Management Relations Act (“LMRA”); and (3) her claim 23 arguably alleges violation of, and is thus preempted by, the National Labor Relations Act 1 (“NLRA”) pursuant to San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959). (Id. at 2 1-2.) Ms. Spencer counters: (1) she exhausted her CBA remedies; (2) retaliation is not covered 3 by the CBA and thus the LMRA does not apply and this Court accordingly lacks jurisdiction 4 over the action; and (3) her claim does not implicate the NLRA. (Resp. at 3-4.) Ms. Spencer

5 requests the Court remand the case to state court and award her attorney’s fees. (Id. at 2.) 6 On reply, PeaceHealth contends Ms. Spencer’s amended complaint does not cure the 7 defects in her original complaint. (Reply at 2-3.) PeaceHealth requests Ms. Spencer’s claim for 8 wrongful termination be dismissed with prejudice. (Id. at 10.) 9 A. Rule 12(b)(6) Standards 10 On a motion to dismiss, Rule 12(b)(6) requires a court to assume the truth of the 11 complaint’s factual allegations and credit all reasonable inferences arising from those allegations. 12 Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). “To survive a motion to dismiss, a 13 complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 14 plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

15 Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads 16 factual content that allows the court to draw the reasonable inference that the defendant is liable 17 for the misconduct alleged.” Id. at 677-78. “A pleading that offers ‘labels and conclusions’ or ‘a 18 formulaic recitation of the elements of a cause of action will not do.’ . . . Nor does a complaint 19 suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Id. at 678 20 (quoting Twombly, 550 U.S. at 555, 557). 21 Although a subsequent amended complaint typically moots a motion to dismiss for 22 failure to state a claim, an amended complaint “substantially identical to the original complaint 23 . . . will not moot the pending motion to dismiss.” Oliver v. Alcoa, Inc., 2016 WL 4734310, at *2 1 (W.D. Wash. Sept. 12, 2016). Here, neither party contends the amended complaint moots 2 PeaceHealth’s Motion. (See Resp.; Reply at 2-3.) The amended complaint is substantially 3 identical to the original, largely adding argument as to why the matter is not removable. (See, 4 e.g., Am. Compl. at ¶ 5 (“Plaintiff alleges that the federal court lacks subject matter jurisdiction

5 and this case must be remanded.”).) Accordingly, the Court concludes PeaceHealth’s Motion is 6 not moot. 7 B. Jurisdiction 8 1. Removal 9 Federal courts have “original jurisdiction of all civil actions arising under the 10 Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Such actions, when filed 11 in a State court, may be removed to federal court. 28 U.S.C. § 1441(a). “The burden of 12 establishing federal jurisdiction is on the party seeking removal, and the removal statute is 13 strictly construed against removal jurisdiction.” Russell v. United Ass’n of Journeymen & 14 Apprentices of Plumbing & Pipefitting Indus. of United States & Canada, 2011 WL 13354076,

15 at *5 (W.D. Wash. Feb. 15, 2011). 16 2. Labor Management Relations Act 17 Under the LMRA, lawsuits alleging “violation of contracts between an employer and a 18 labor organization representing employees” in applicable industries may be brought in federal 19 district courts. 29 U.S.C. § 185(a). Section “301 is not simply jurisdictional. [It authorizes] a 20 body of federal common law [that] preempts the use of state contract law in CBA interpretation 21 and enforcement.” Kobold v. Good Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir. 22 2016) (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209 (1985); Cramer v. Consol. 23 Freightways, Inc., 255 F.3d 683, 689 (9th Cir. 2001)). “Section 301 is one of just three federal 1 statutes that the Supreme Court has held to ‘so preempt their respective fields as to authorize 2 removal of actions seeking relief exclusively under state law.’” Garcia v. Serv. Emps. Int’l 3 Union, 993 F.3d 757, 762 (9th Cir. 2021) (quoting In re Miles, 430 F.3d 1083, 1088 (9th Cir. 4 2005)).

5 “‘[T]he pre-emptive effect of § 301 [extends] beyond suits alleging contract violations’ to 6 state law claims grounded in the provisions of a CBA or requiring interpretation of a CBA.” 7 Kobold, 832 F.3d at 1032 (quoting Lueck, 471 U.S. at 210-11). “Once preempted, any claim 8 purportedly based on a state law is considered, from its inception, a federal claim, and therefore 9 arises under federal law.” Id. (cleaned up). 10 The Ninth Circuit has articulated a two-step inquiry to analyze § 301 preemption of state 11 law claims. First, if the asserted cause of action involves a right that “exists solely as a result of 12 the CBA, then the claim is preempted[.]” Kobold, 832 F.3d at 1032 (citation omitted). Second, 13 even where the right is “conferred upon an employee by virtue of state law, not by a CBA” and 14 “exists independently of the CBA,” the state law claim is preempted if “the right is nevertheless

15 substantially dependent on analysis of a collective-bargaining agreement.” Id. Otherwise, “the 16 claim can proceed under state law.” Id. 17 C. Analysis 18 The Court must assess PeaceHealth’s preemption arguments based on Ms. Spencer’s 19 original complaint. “[P]ost-removal amendments to the pleadings cannot affect whether a case is 20 removable, because the propriety of removal is determined solely on the basis of the pleadings 21 filed in state court.” Williams v. Costco Wholesale Corp., 471 F.3d 975, 976 (9th Cir. 2006). 22 PeaceHealth contends Ms. Spencer’s complaint is “predicated on rights created by the 23 CBA” and “‘substantially dependent’ on the interpretation of the CBA.” (Reply at 5.) Ms. 1 Spencer contends her claim, that she was fired in retaliation for utilizing the grievance 2 procedures in the CBA, is governed by state law and requires no interpretation of the CBA. 3 (Resp. at 2-3.) 4 The Court recently applied the Ninth Circuit’s two-step inquiry to determine that a claim

5 for wrongful termination in violation of Washington public policy is not preempted by § 301. 6 Sellar v. Woodland Park Zoological Soc’y, 2023 WL 5425490 (W.D. Wash. Aug. 23, 2023). In 7 that case, the plaintiff alleged, inter alia, constructive discharge after the defendant retaliated 8 against plaintiff for complaints and advocacy regarding diversity-related issues. Id. at *1. 9 At the first step of the analysis, the Court found “a claim for wrongful termination in 10 violation of Washington’s public policy is a nonnegotiable right independent of a CBA.” Sellar, 11 2023 WL 5425490, at *4. Merely “referencing the grievance process” in her complaint did not 12 mean that plaintiff’s claims were based on “a breach of the CBA[.]” Id. At the second step, the 13 Court found plaintiff’s claim was not “substantially dependent” on analysis of the CBA because 14 there was “no provision of the CBA that must be interpreted to resolve” the claim. Id. at *5.

15 “Determining whether the [employer] undertook . . . retaliatory actions will, instead, likely focus 16 on ‘purely factual questions pertaining to the conduct and motivation’ of the [employer], not 17 disputed terms of the CBA.” Id. (internal alterations omitted) (quoting Milne Emps. Ass’n v. Sun 18 Carriers, Inc., 960 F.2d 1401, 1408 (9th Cir. 1991)). 19 Similarly, here, at step one the Court finds Ms. Spencer’s claim is based on a right 20 conferred by virtue of state law and exists independently of a CBA. Washington law makes clear 21 that the tort of wrongful termination in violation of public policy is grounded in state law, 22 regardless of whether the employee is subject to a CBA. 23 1 “[I]n Washington the tort of wrongful discharge is not designed to protect an employee’s 2 purely private interest in his or her continued employment; rather, the tort operates to vindicate 3 the public interest in prohibiting employers from acting in a manner contrary to fundamental 4 public policy.” Smith v. Bates Tech. Coll., 139 Wn. 2d 793, 801 (Wash. 2000). “A cause of

5 action for wrongful discharge in violation of public policy exists where an employee is fired for 6 exercising a legal right or privilege.” Id. at 807. In Bates, the Washington Supreme Court held 7 “Washington [statutes and] precedent establish [an] employee’s pursuit of a grievance is a 8 protected legal right” that can support such a cause of action. Id. Moreover, an employee’s “right 9 to be free from wrongful termination in contravention of public policy may not be altered or 10 waived by private agreement,” and thus “is independent of any underlying contractual agreement 11 between employee and employer.” Wilson v. City of Monroe, 88 Wash. App. 113, 115, 117 12 (Wash. Ct. App. 1997). 13 Other federal courts have recognized a wrongful termination in violation of Washington 14 public policy claim “is independent of the CBA: it is based on Washington public policy.”

15 McFarland v. BNSF Ry. Co., 2016 WL 10515857, at *3 (E.D. Wash. May 5, 2016). Ninth 16 Circuit case law also indicates wrongful termination in violation of public policy claims rely on 17 State law, not a CBA. “This Court long ago recognized that Section 301 does not preempt the 18 California tort of wrongful discharge.” Romero v. San Pedro Forklift, Inc., 266 F. App’x 552, 19 555 (9th Cir. 2008) (citing Paige v. Henry J. Kaiser Co., 826 F.2d 857, 863 (9th Cir. 1987); 20 Harper v. San Diego Transit Corp., 764 F.2d 663, 668 (9th Cir. 1985)). “[T]he tort of wrongful 21 discharge in violation of public policy exists independent of any contractual right.” Paige, 826 22 F.2d at 863. “Although these cases address California law, there is no basis for distinguishing 23 this law from the Washington tort of wrongful discharge in violation of public policy.” Russell, 1 2011 WL 13354076, at *3. Ms. Spencer’s claim rests on rights arising from Washington law and 2 public policy. The Court concludes, at step one, that the claim is not preempted by § 301. 3 With regard to step two, PeaceHealth argues that the Court must interpret CBA 4 provisions related to discipline, grievance procedures, and layoffs to adjudicate Ms. Spencer’s

5 claim. (Reply at 5.) PeaceHealth does not explain why those provisions are central to the claim, 6 however, or identify any provisions that are actually in dispute. “Interpretation” of a CBA is 7 defined narrowly. Garcia, 993 F.3d at 765. Merely considering, referring to, or applying the 8 language of a CBA is not sufficient to trigger preemption. Id. “There is not substantial 9 dependence ‘when the meaning of contract terms is not the subject of dispute[.]’” Id. (quoting 10 Livadas v. Bradshaw, 512 U.S. 107, 124 (1994)). Here, in the absence of any relevant disputed 11 provision, PeaceHealth has not shown § 301 applies. 12 The analysis in Russell is instructive. A union employee plaintiff sued for wrongful 13 termination in violation of public policy, alleging he was terminated in retaliation for complaints 14 that defendants violated the union constitution (a contract subject to § 301). Russell, 2011 WL

15 13354076, at *1, 3. The Court found the “allegations simply serve as context for plaintiff’s 16 complaint against” the defendants but “do not in any way implicate the union constitution in 17 such a way as to trigger § 301 preemption. While they may possibly require a court to ‘look to’ 18 the union constitution, they do not require the court to interpret its terms or resolve a dispute 19 about the meaning of its terms.” Id. at *4. 20 PeaceHealth has not established that Ms. Spencer’s claims require the Court to resolve 21 any disputed CBA terms. “Preemption does not take place where a court simply consults the 22 requirements of a CBA (or constitution) whose terms are not in dispute.” Russell, 2011 WL 23 13354076, at *4; see also Sellar, 2023 WL 5425490, at *5 (“Ms. Sellar’s acknowledgment of the 1 grievance process that occurred is incidental to her claims and does not necessitate the 2 interpretation of the CBA.”); Wilson, 88 Wn. App. at. at 119 (Washington Court of Appeals 3 found a plaintiff’s claim of wrongful termination in violation of public policy “may be resolved 4 without interpreting the CBA[.]”).

5 PeaceHealth cites Atkins v. Praxair Inc. to argue that the Ninth Circuit has held wrongful 6 termination in violation of public policy claims are “inextricably intertwined” with a CBA. 182 7 F. App’x 724, 726 (9th Cir. 2006). In that case, however, the plaintiffs’ factual allegations did 8 not match the claim. “Although [the employees] argue that they only allege wrongful termination 9 in violation of public policy, the plain language of the Complaint belies this.” Id. at 727. Here, 10 Ms. Spencer alleges that after she filed numerous complaints under the CBA, PeaceHealth 11 “terminated her . . . for exercising her rights under the [CBA].” (Compl. at ¶¶ 9-10.) Ms. 12 Spencer’s factual allegations are consistent with her claim for wrongful termination in violation 13 of public policy. 14 PeaceHealth also cites cases where plaintiffs alleged wrongful termination premised on

15 rights arising under a contract or CBA, not premised on violation of public policy. (Mot. at 9; 16 Reply at 5.) These cases are inapposite. For example, in Andrews v. Louisville & Nashville 17 Railroad Company, the Supreme Court noted that “the only source of petitioner’s right not to be 18 discharged, and therefore to treat an alleged discharge as a ‘wrongful’ one that entitles him to 19 damages, is the collective-bargaining agreement between the employer and the union.” 406 U.S. 20 320, 324 (1972). Here, however, as discussed above, the source of Ms. Spencer’s rights is 21 Washington law and public policy. 22 23 1 At step two, the Court concludes Ms. Spencer’s claim is not substantially dependent on 2 interpretation of the CBA. Accordingly, the Court concludes Ms. Spencer’s claim is not 3 preempted by § 301 and may proceed under state law. See Kobold, 832 F.3d at 1032. 4 D. Remand

5 PeaceHealth removed the action to this Court pursuant to 28 U.S.C. § 1441(a) on the 6 grounds that Ms. Spencer’s claim arose under § 301, thus providing federal subject matter 7 jurisdiction. (Dkt. # 1 at 1-2.) Because the Court concludes § 301 does not apply to Ms. 8 Spencer’s claim, PeaceHealth has shown no basis for federal jurisdiction.2 9 The burden of establishing federal jurisdiction is on the party seeking removal, and the 10 removal statute is strictly construed against removal jurisdiction. Oregon Bureau of Lab. & 11 Indus. ex rel. Richardson v. U.S. W. Commc’ns, Inc., 288 F.3d 414, 417 (9th Cir. 2002). Any 12 doubts regarding the right to removal must be resolved in favor of remand back to state court. 13 Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 690 (9th Cir. 2006). If at any time before 14 judgment it appears that this Court lacks subject matter jurisdiction, it must remand. 28 U.S.C.

15 § 1447(c); Kelton Arms Condominium Owners Ass’n v. Homestead Ins. Co., 346 F. 3d 1190, 16 1192 (9th Cir. 2003). 17 This Court lacks subject matter jurisdiction over Ms. Spencer’s claim.3 Accordingly, the 18 action must be remanded to Clark County District Court. 19 20 21

2 PeaceHealth concedes that its argument that Ms. Spencer’s claim is subject to “Garmon preemption is 22 not a basis for removal[.]” (Reply at 8.)

23 3 “[A] federal court always has jurisdiction to determine its own jurisdiction.” United States v. Ruiz, 536 U.S. 622, 628 (2002). Having settled that issue, however, this Court cannot address PeaceHealth’s other arguments concerning exhaustion under the CBA or Garmon preemption. 1 E. Attorney’s Fees 2 Ms. Spencer makes a cursory request for attorney’s fees pursuant to 28 U.S.C. § 1447, 3 without any supporting argument. (Resp. at 2.) The Court denies the request. An order of remand 4 “may” require payment of attorney’s fees incurred as a result of the removal. 28 U.S.C.

5 § 1447(c). A court may make such an award “where the removing party lacked an objectively 6 reasonable basis for seeking removal.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 141 (2005). 7 The Court finds PeaceHealth “did not lack an objectively reasonable basis to seek removal. 8 Section 301 preemption is a large body of case law that remains confusing.” Sellar, 2023 WL 9 5425490, at *7. PeaceHealth’s “arguments were not without support in the case law and were not 10 frivolous.” Id. The Court concludes payment of attorney’s fees is not warranted here. 11 IV. CONCLUSION 12 For the foregoing reasons, the Court DENIES PeaceHealth’s Motion (dkt. # 6) and 13 REMANDS this action to Clark County District Court. 14 Dated this 3rd day of May, 2024.

15 A 16 MICHELLE L. PETERSON United States Magistrate Judge 17 18 19 20 21 22 23