Caterpillar, Inc. v. Williams
482 U.S. 386 (1987)

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U.S. Supreme Court

Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987)

Caterpillar, Inc. v. Williams

No. 86-526

Argued April 21, 1987

Decided June 9, 1987

482 U.S. 386

Syllabus

Caterpillar Tractor Co. (Caterpillar) hired respondents to work at its San Leandro, California, facility in positions covered by its collective bargaining agreement with a union. Respondents eventually assumed management and other positions outside the bargaining unit, and allegedly were repeatedly assured by Caterpillar that, if the San Leandro facility ever closed, Caterpillar would employ them at other facilities. Subsequently, they were downgraded to unionized positions, but allegedly assured that the downgrades were temporary. However, Caterpillar later notified them that its San Leandro plant would close and that they would be laid off. Respondents then filed this action, based solely on state law, in a California state court, alleging that Caterpillar thereby breached their individual employment contracts. Caterpillar removed the action to Federal District Court, arguing that removal was proper because any individual employment contracts made with respondents were, as a matter of federal substantive labor law, merged into and superseded by the collective bargaining agreement. Respondents denied that they alleged any federal claim, and sought remand of the action to the state court. The Federal District Court held that removal was proper, and dismissed the case when respondents refused to amend the complaint to attempt to state a claim under § 301 of the Labor Management Relations Act, 1947, which confers federal jurisdiction as to suits for violations of collective bargaining agreements. The Court of Appeals reversed, holding that the case was improperly removed.

Held: Respondents' state law complaint for breach of the individual employment contracts is not removable to Federal District Court. Pp. 482 U. S. 391-399.

(a) The presence or absence of federal question jurisdiction that will support removal is governed by the "well-pleaded complaint rule," under which federal jurisdiction exists only when a federal question is presented on the face of the properly pleaded complaint. Ordinarily, a case may not be removed on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the complaint, and even if both parties concede that the federal defense is the only question truly at issue. However, under the "complete preemption doctrine," which is a corollary to the well-pleaded complaint rule, once an area of state law has been completely preempted, any claim purportedly

Page 482 U. S. 387

based on that preempted state law is considered, from its inception, a federal claim, and therefore arises under federal law. Pp. 482 U. S. 391-394.

(b) Respondents' state law contract claims are not "completely preempted" § 301 claims. Section 301 governs claims founded directly on rights created by collective bargaining agreements and claims substantially dependent on analysis of such agreements. However, respondents alleged that Caterpillar breached individual employment contracts with them, and § 301 says nothing about the content or validity of such contracts. Although respondents, as bargaining unit employees at the time of the plant closing, could have brought suit under the collective agreement, they, as masters of the complaint, chose not to do so. Moreover, their complaint is not substantially dependent upon interpretation of the collective bargaining agreement. Pp. 482 U. S. 394-395.

(c) J. I. Case Co. v. NLRB, 321 U. S. 332, does not support Caterpillar's contention that, when respondents returned to the collective bargaining unit, their individual employment contracts were subsumed into, or eliminated by, the collective bargaining agreement so as to be preempted by § 301. That decision does not stand for the general proposition that all individual employment contracts are inevitably superseded by a subsequent collective agreement. The fact that an employer may raise such a question in state court and might ultimately prove that the employee's claims are preempted does not establish that they are removable. Pp. 482 U. S. 395-398.

(d) There is no merit to Caterpillar's argument that § 301 preempts a state law claim when the employer raises only a defense that requires a court to interpret or apply a collective bargaining agreement, such as Caterpillar's defense claiming that, in its collective bargaining agreement, its unionized employees waived any preexisting individual employment contract rights. The presence of a federal question, even a § 301 question, in a defensive argument does not overcome the paramount policies embodied in the well-pleaded complaint rule. Pp. 482 U. S. 398-399.

786 F.2d 928, affirmed.

BRENNAN, J., delivered the opinion for a unanimous Court.

Page 482 U. S. 388

Primary Holding
A plaintiff's compliant must present a federal question on its face for federal jurisdiction to be proper.
Facts
Caterpillar hired Williams and other individuals for positions that were covered by the local collective bargaining agreement. They were eventually promoted to positions that were outside the agreement's coverage and then downgraded to positions that were again covered by the agreement before being terminated. They argued that Caterpillar had breached its employment contracts with them under California law and filed an action in California state court. Caterpillar argued that federal labor law applied instead because the collective bargaining agreements controlled the employment relationship. It removed the case to federal court, which ruled that removal was proper and dismissed the case when the plaintiffs did not amend their complaint to state a claim under Section 301 of the Labor Management Relations Act. On appeal, the Ninth Circuit ruled that removal had been improper.

Opinions

Majority

  • William Joseph Brennan, Jr. (Author)
  • William Hubbs Rehnquist
  • Byron Raymond White
  • Thurgood Marshall
  • Harry Andrew Blackmun
  • Lewis Franklin Powell, Jr.
  • John Paul Stevens
  • Sandra Day O'Connor
  • Antonin Scalia

When a defendant plans to raise an argument that implicates a federal question, the plaintiff remains the master of the complaint, and jurisdiction cannot be supported in federal court if the complaint is properly pleaded and does not contain a federal question on its face. Plaintiffs have the right to avoid introducing federal questions into the dispute and thus ensure that the case is heard in state court. Defendants cannot remove that right by introducing defenses reliant on federal law and turning the action into a case that can be heard only in federal court.

Case Commentary

While this is the general rule, there have been situations in which removal to federal court is proper because a federal statute has such a strong preemptive effect that a well-pleaded complaint would inevitably integrate that issue, even if it were brought under state law. Section 301 of the LMRA sometimes does raise this exception, but in this situation it did not preempt state law because it did not relate to individual employment contracts. Even if a defendant might eventually succeed on a preemption argument, a federal court cannot hear the dispute in anticipation of that possible outcome.

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