Opinion
CIVIL ACTION NO. 02-656, SECTION "A"(1)
May 28, 2002
MINUTE ENTRY
Before the Court is a Motion to Dismiss Plaintiff's Petition (Rec. Doc. 6) pursuant to Federal Rule of Civil Procedure 12(b)(6) filed by defendants, The Prudential Insurance Company of America and Prudential Select Life Insurance Company of Americana (collectively "Prudential"). Plaintiff opposes the motion. The motion, set for hearing on May 8, 2002, is before the Court on briefs without oral argument. For the reasons that follow, the motion is DENIED.
Background
Plaintiff Timothy Watson ("Watson") was employed by prudential as an agent from 1977 to 2001 when he was fired due to low production. Watson was paid commissions on a weekly basis based upon a "10 week roll." Under that payment scheme, a portion off Watson's weekly commissions was accumulated and held by Prudential during a nine week period. At the tenth week, full commission was paid, with the following weekly commissions being calculated as the average of the previous ten weeks of commissions. Plaintiff's Petition at ¶ IV. Upon termination from employment Watson demanded payment of the accumulated commissions but Prudential refused to pay.
Watson filed a grievance pursuant to the terms of the Collective Bargaining Agreement ("CBA") entered into between Prudential and his union. Prudential still refused payment. He then filed the instant lawsuit in state court, on behalf of himself and all others similarly situated, claiming that Prudential's refusal to pay was a breach of contract under Louisiana law, and that Prudential was liable for penalties and attorney's fees under La. R.S. 23:631 23:632.
Prudential removed the case to this Court and now moves to dismiss Watson's petition pursuant to Federal Rule of Civil Procedure 12(b) (6). Prudential argues that Watson's petition fails to state a claim because his state law claims are preempted by section 301 of the Labor Management Relations Act.
Discussion
1. Preemption Under the LMRA
Section 301 of the LMRA provides in part:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.29 U.S.C. § 185 (a)
Section 301 preempts state causes of action that allege a violation of a collective bargaining agreement affecting interstate commerce. Branson v. Greyhound Lines, Inc., 126 F.3d 747, 753, (5th Cir. 1997) (citingAllis-Chambers Corp., 47l U.S. at 210, 105 S.Ct. at 1911; Eitmann v. New Orleans Pub. Serv. Inc., 730 F.2d 359 (5th Cir. l984)). When resolution of a state law claim substantially depends on the meaning of a collective bargaining agreement courts must treat the claim as one made under section 301 or dismiss the claim as preempted by federal law. Id. (citingAllis-Chambers v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 1916, 85 L.Ed.2d 206 (1985); Thomas v. LTV Corp., 39 F.3d 611 (5th Cir. 1994). Preemption occurs when a decision on the state claim is inextricably intertwined with consideration of the terms of the labor contract or when the application of state law to a dispute requires interpretation of the collective bargaining agreement. Thomas v. LTV Corp., 39 F.3d 611, 616 (5th Cir. 1994) (citing Lingle v. Norge Div., Magic Chef, Inc., 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988); Allis-Chambers, 471 U.S. at 213, 105 S.Ct. at 1912). The preemptive effect of section 301 applies to causes of action arising in both contract and tort. Id. (citingUnited Steelworkers v. Rawson, 495 U.S. 362, 110 S.Ct. 1904, 109 L.Ed.2d 362 (1990); Allis-Chambers Corp., 471 U.S. at 210-11, 105 S.Ct. at 1910-11).
Section 301 does not, however, preempt every state law claim between the parties to a collective bargaining agreement, nor does it oreempt claims only tangentially related to the agreement. Branson, 126 F.3d at 753 (citing Lingle, 486 U.S. at 409-11, 108 S.Ct. at 1883-85);Allis-Chambers, 471 U.S. at 211-12, 105 S.Ct. at 1911-12,; Thomas, 39 F.3d at 617). Although claims for breach of the collective bargaining agreement itself are automatically preempted, claims arising out the breach of other contracts between plaintiff and the employer, claims whose resolution do not involve an interpretation of the collective bargaining agreement, are not ordinarily subject to preemption. See Parham v. Carrier Corp., 9 F.3d 383, 390 (5th Cir. 1993). Thus, in order to determine whether a given state law contract claim is preempted by federal law, the court will necessarily consider the specific contract upon which plaintiff bases his claim as well as the defenses the employer is asserting. See Branson, 126 F.3d at 754.
2. Standards Governing Motions to Dismiss
In the Fifth Circuit, a motion to dismiss under Rule 12(b)(6) "is viewed with disfavor and is rarely granted." Shipp v. McMahon, 234 F.3d 907, 911 (5th Cir. 2000) (quoting Kaiser Aluminum Chem. Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982). When deciding a Rule 12(b)(6) motion the complaint must be liberally construed in favor of the plaintiff, and all facts pleaded in the complaint must be taken as true. Id. (citing Campbell v. Wells Fargo Bank, 781 F.2d 440, 442 (5th Cir. 1986). The district court may not dismiss a complaint under Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)). The question is whether in the light most favorable to the plaintiff and with every doubt resolved in his behalf, the complaint states any valid claim for relief. Id. (quoting 5A Charles A. Wright Arthur R. Miller, Federal Practice and Procedure § 1357 (2nd ed. 1990)).
3. Prudential's Motion
Plaintiff's petition alleges that Prudential contracted with Plaintiff "to pay him in accordance with an established schedule of commissions" and that Prudential's refusal to pay Plaintiff those commissions constitutes "a breach of contract under Louistana law." (Rec. Doc. 3, Plaintiff Petition at ¶¶; IX X) The petition is silent, however, as to the specific contract upon which the alleged breach is based. As noted above, if the CBA itself is the contract in question, the Plaintiff's claims are unarguably preempted by federal law.
Although Prudential asserts that Article 4 of the CBA is the only source of rights upon which Plaintiff's breach of contract claims are based, it is unclear which specific sections of the CBA are implicated by Plaintiff's petition. As Prudential notes in its memorandum in support, Article 4 is lengthy to say the least, and Prudential refers the Court to no less than 10 separate sections of that article, spanning nearly 60 pages. While those sections do in fact address compensation to agents such as Plaintiff, many, if not most, of the sections cited do not appear to be applicable to Plaintiff's claims.
Moreover, much of section H, which governs "Termination Settlements," a section upon which Prudential relies for much of its Preemption argument, appears to be inapplicable to the situation at hand. Given the paucity of evidence in the record, and the lack of clarity as to which specific portions of the CBA the Court would have to interpret in order to resolve the state law claims, Prudential's arguments are conclusory in nature and therefore cannot form the basis for a dismissal at this time. Construing the petition and any doubts in favor of Plaintiff, Prudential's motion to dismiss must be denied.
The Court also notes that remand to state court might later be necessary if Prudential cannot eventually show that the state law claims are completely preempted by federal law. The amount in controversy for Watson's individual claim is well below the jurisdictional amount for diversity jurisdiction. Although the attorney fee award for the class is attributable to Watson as class representative for jurisdictional purposes, see In re Abbott Laboratories, 51 F.3d 524 (5th Cir. 1995), a class has yet to be certified.
Accordingly;
IT IS ORDERED that Prudential's Motion to Dismiss Plaintiff's Petition (Rec. Doc. 6) should be and is hereby DENIED.