        12-0630; 12-0670
        Hinterberger v. Catholic Health; Gordon v. Kaleida Health




                         UNITED STATES COURT OF APPEALS
                             FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION
     TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED
     AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS
     COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT
     FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX
     OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A
     PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY
     NOT REPRESENTED BY COUNSEL.

 1           At a stated term of the United States Court of Appeals
 2      for the Second Circuit, held at the Thurgood Marshall United
 3      States Courthouse, 40 Foley Square, in the City of New York,
 4      on the 21st day of August, two thousand thirteen.
 5
 6      PRESENT:
 7                   DENNIS JACOBS,
 8                        Chief Judge,
 9                   GUIDO CALABRESI,
10                   RALPH K. WINTER,
11                        Circuit Judges.
12
13      - - - - - - - - - - - - - - - - - - - -X
14      GAIL HINTERBERGER, BEVERLY WEISBECKER,
15      CYNTHIA WILLIAMS, MARCIA CARROLL, on
16      behalf of themselves and all other
17      employees similarly situated,
18
19                          Plaintiffs -Appellants,
20
21      v.                                                          12-0630
22
23      CATHOLIC HEALTH SYSTEMS, INC., JOSEPH
24      MCDONALD, MICHAEL MOLEY, CHESTNUT RIDGE
25      MEDICAL SUPPLIES, INC., CATHOLIC HEALTH
26      SYSTEM PROGRAM OF ALL INCLUSIVE CARE FOR THE
 1   ELDERLY, INC., CATHOLIC HEALTH SYSTEM
 2   CONTINUING CARE FOUNDATION, KENMORE MERCY
 3   HOSPITAL, MCAULEY SETON HOME CARE
 4   CORPORATION, MERCY HOSPITAL OF BUFFALO,
 5   NAZARETH HOME OF THE FRANCISCAN SISTERS OF
 6   THE IMMACULATE CONCEPTION, NIAGARA HOMEMAKER
 7   SERVICES, INC., SISTERS OF CHARITY HOSPITAL
 8   OF BUFFALO, NEW YORK, ST. ELIZABETH'S HOME
 9   OF LANCASTER, NEW YORK, ST. FRANCIS
10   GERIATRIC AND HEALTHCARE SERVICES, INC., ST.
11   FRANCIS HOME OF WILLIAMSVILLE, NEW YORK, ST.
12   JOSEPH HOSPITAL OF CHEEKTOWAGA, NEW YORK,
13   ST. JOSEPH'S MANOR OF OLEAN, N.Y., ST.
14   VINCENT'S HOME FOR THE AGED, ST. CLARE MANOR
15   OF LOCKPORT, N.Y., ST. LUKE MANOR OF
16   BATAVIA, N.Y., OUR LADY OF VICTORY
17   RENAISSANCE CORPORATION, CHESTNUT RIDGE
18   FAMILY PRACTICE, PLLC, ST. MARY'S MANOR,
19
20                   Defendants-Appellees.
21
22
23   - - - - - - - - - - - - - - - - - - - -X
24   CATHERINE GORDON, JAMES SCHAFFER, TERESA
25   THOMPSON, PAMELA MIKA, JENNIFER PFENTNER,
26   DIANA GALDON, on behalf of themselves
27   and all other employees similarly
28   situated,
29
30                   Plaintiffs- Appellants,
31
32   v.                                              12-0670
33
34   KALEIDA HEALTH, JAMES R. KASKIE, DAVID R.
35   WHIPPLE, MFHS MANAGED CARE, INCORPORATED,
36   FAMILY PHARMACEUTICALS, WESTLINK CORPORATION,
37   COMMUNITY MEDICAL PC, GENERAL PHYSICIANS PC,
38   MILLARD FILLMORE AMBULATORY SURGERY CENTER,
39   VISITING NURSING ASSOCIATION OF WESTERN NEW
40   YORK, INCORPORATED, VNA HOME CARE SERVICES,
41   INCORPORATED, VNA OF WNY, INCORPORATED,
42   GENERAL HOMECARE, INCORPORATED, WATERFRONT

                                        2
 1   HEALTH CARE CENTER, INCORPORATED, KALEIDA
 2   HEALTH FOUNDATION, WOMEN AND CHILDREN'S
 3   HOSPITAL OF BUFFALO FOUNDATION, KALEIDA IPA,
 4   LLC, KALEIDA MCO, LLC, GRACE MANOR HEALTH
 5   CARE FACILITY, INCORPORATED, SCHENK PHYSICAL
 6   THERAPY, PC,
 7
 8                   Defendants-Appellees.
 9
10   - - - - - - - - - - - - - - - - - - - -X
11
12   FOR APPELLANTS:                 GUY A. TALIA (J. Nelson Thomas,
13                                   Michael J. Lingle, on the
14                                   brief), Thomas & Solomon LLP,
15                                   Rochester, NY.
16
17   FOR APPELLEES:                  MARK A. MOLLOY & SUSAN C. RONEY
18                                   (Todd R. Shinaman, Joseph A.
19                                   Carello, Lynnette Nogueras-
20                                   Trummer, on the brief), Nixon
21                                   Peabody LLP, Buffalo, NY.
22
23        Appeals from judgments of the United States District
24   Court for the Western District of New York (Skretny, C.J.).
25
26        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
27   AND DECREED that the judgments are VACATED AND REMANDED.
28
29        Gail Hinterberger, Beverly Weisbecker, Cynthia

30   Williams, Marcia Carroll, Catherine Gordon, James Schaffer,

31   Teresa Thompson, Pamela Mika, Jennifer Pfentner, and Diana

32   Galdon (collectively, the “employees”) appeal from the

33   judgments of the United States District Court for the

34   Western District of New York (Skretny, C.J.), denying their

35   motions to remand to state court, and dismissing their

36   complaints.    We review a denial of a motion to remand to


                                        3
 1   state court de novo.   Shafii v. British Airways, PLC, 83

 2   F.3d 566, 570 (2d Cir. 1996).       We also review the grant of a

 3   motion to dismiss de novo.     City of Omaha v. CBS Corp., 679

 4   F.3d 64, 67 (2d Cir. 2012).     We assume the parties’

 5   familiarity with the underlying facts, the procedural

 6   history, and the issues presented for review.

 7       The employees argue that the case should have been

 8   remanded to state court because the district court lacked

 9   jurisdiction over their claims.       “[F]ederal subject-matter

10   jurisdiction can be founded only on those allegations in a

11   complaint that are well pleaded.”       Sullivan v. Am. Airlines,

12   Inc., 424 F.3d 267, 271 (2d Cir. 2005) (internal quotation

13   marks omitted).   “The artful-pleading doctrine, a corollary

14   to the well-pleaded-complaint rule, rests on the principle

15   that a plaintiff may not defeat federal subject-matter

16   jurisdiction by artfully pleading his complaint as if it

17   arises under state law where the plaintiff’s suit is, in

18   essence, based on federal law.”       Id. at 272 (internal

19   quotation marks omitted).     “The artful pleading doctrine

20   allows removal where federal law completely preempts a

21   plaintiff’s state-law claim.”       Rivet v. Regions Bank of La.,

22   522 U.S. 470, 475 (1998).     However, only a handful of



                                     4
 1   federal statutes support “complete preemption.”      Sullivan,

 2   424 F.3d at 272 (noting that the Supreme Court has only

 3   recognized the Employee Retirement Income Security Act

 4   (“ERISA”), Labor-Management Relations Act (“LMRA”), and the

 5   National Bank Act as members of this select group).     In

 6   cases involving these statutes, federal law “substitutes a

 7   federal cause of action for the state cause of action,

 8   thereby manifesting Congress’s intent to permit removal.”        7

 9   Charles Alan Wright & Arthur R. Miller, Federal Practice and

10   Procedure § 3722.2 (4th ed. 2012).

11       Here, the district court held that it had subject

12   matter jurisdiction because the Fair Labor Standards Act

13   (“FLSA”) precluded the employees’ claims “to the extent

14   [they were] seeking unpaid overtime wages that are available

15   under the FLSA”.    Hinter[b]erger v. Catholic Health Sys.,

16   No. 08 Civ. 948S (WMS), 2012 WL 125152, at *4-7 (W.D.N.Y.

17   Jan. 17, 2012).    The court reasoned: “[a]lthough the Second

18   Circuit has held that statutory wage claims under the

19   NYLL . . . are not preempted by the FLSA, it has not yet

20   considered whether preemption applies when unpaid wages are

21   sought . . . via common law claims.”    Id. at *5.    This was

22   error.   The Supreme Court has not extended complete



                                    5
 1   preemption to the FLSA.    The district court had no subject

 2   matter jurisdiction on the basis of the FLSA.1

 3        However, it is possible that the district court did

 4   have jurisdiction on the basis of “complete” LMRA

 5   preemption.   “[T]he preemptive force of [LMRA] § 301 is so

 6   powerful as to displace entirely any state cause of action

 7   ‘for violation of contracts between an employer and a labor

 8   organization.’   Any such suit is purely a creature of

 9   federal law, notwithstanding the fact that state law would

10   provide a cause of action in the absence of § 301.”

11   Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463

12   U.S. 1, 23 (1983) (citation omitted).     If the named

13   plaintiffs were covered by collective bargaining agreements

14   (“CBAs”), then the district court had subject matter

15   jurisdiction over their claims.     Otherwise state law would

16   apply, and remand to state court would be appropriate

17   because there would be no other basis for subject matter

18   jurisdiction alleged.

19


          1
           The health systems may still have an opportunity later down
     the line to present an ordinary FLSA preemption defense, but it
     is not sufficient to vest federal subject matter jurisdiction.
     Domnister v. Exclusive Ambulette, Inc., 607 F.3d 84, 92 (2d Cir.
     2010); Sullivan, 424 F.3d at 277-78.

                                     6
 1       The employees argue that LMRA preemption is irrelevant

 2   because the health systems failed to cross-appeal on that

 3   issue.   However, “[a] cross-appeal . . . is not necessary to

 4   challenge the subject-matter jurisdiction of the district

 5   court, under the well-established rule that both district

 6   court and appellate courts are obliged to raise such

 7   questions on their own initiative.”     15A Charles Alan Wright

 8   & Arthur R. Miller, Federal Practice and Procedure § 3904

 9   (4th ed. 2012); see Mitchell v. Maurer, 293 U.S. 237, 244

10   (1934) (“An appellate federal court must satisfy itself not

11   only of its own jurisdiction, but also of that of the lower

12   courts in a cause under review.” (citations omitted)).

13       Unfortunately, the record does not indicate whether the

14   named plaintiffs are union members bound by CBAs.     The

15   district court observed that it lacked adequate information

16   to determine “which Plaintiffs are members of a bargaining

17   unit or which CBAs are relevant.”     Hinter[b]erger, 2012 WL

18   125152, at *4.

19       This precise problem was encountered in a related class

20   action suit before the First Circuit.     See Pruell v. Caritas

21   Christi, 645 F.3d 81, 83 (1st Cir. 2011).     As the First

22   Circuit did, we remand for limited discovery to determine

23   whether the plaintiffs were union members.     See id. at 84.

                                   7
 1       Following the procedures set forth in United States v.

 2   Jacobson, 15 F.3d 19, 22 (2d Cir. 1994), a mandate shall

 3   issue forthwith remanding the case to the district court for

 4   it to decide, after any discovery proceedings it deems

 5   necessary, whether the named plaintiffs were union members

 6   subject to CBAs, and whether it has subject matter

 7   jurisdiction as a result.   Either party to this appeal may

 8   restore jurisdiction to this court within 30 days of entry

 9   of the district court’s judgment by letter to the Clerk’s

10   Office, without need for a new notice of appeal.     The

11   Clerk’s Office will then set a briefing schedule and refer

12   the appeal to this panel for disposition without oral

13   argument unless otherwise ordered.

14       We have considered all of the employees’ remaining

15   arguments and find them to be without merit.   Accordingly,

16   the judgments of the district court with respect to subject

17   matter jurisdiction are hereby VACATED AND REMANDED.

18
19                               FOR THE COURT:
20                               Catherine O’Hagan Wolfe, Clerk




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