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Class Action Defense Cases–Moore-Thomas v. Alaska Airlines: Ninth Circuit Reverses Dismissal Of Class Action For Failure To Arbitrate Under RLA And Holds Class Action Improperly Removed To Federal Court

Defendant Improperly Removed Labor Law Class Action to Federal Court and Therefore District Court Erred in Dismissing Class Action for Lack of Subject Matter Jurisdiction Ninth Circuit Holds

Plaintiff filed a class action against Alaska Airlines alleging labor law violations; the class action complaint asserted that defendant willfully failed to pay its former employees all wages due upon termination as required by Oregon law. Moore-Thomas v. Alaska Airlines, Inc., ___ F.3d ___ (9th Cir. January 27, 2009) [Slip Opn., at 979]. Plaintiff, a customer service agent employed by defendant and subject to a collective bargaining agreement (CBA), filed a class action in Oregon state court, seeking “statutory penalties, costs and disbursements, pre- and post-judgment interest, and reasonable attorneys’ fees,” id., at 980. Defense attorneys removed the class action to federal court, and argued that the district court had jurisdiction under 28 U.S.C. § 1331 because the class action was governed by the Railway Labor Act, id. Defense attorneys then moved to dismiss the class action for lack of subject matter jurisdiction, arguing that the RLA preempts the class action’s state law claims, and therefore that the class action must be dismissed because plaintiff had not complied with the mandatory arbitration provisions of the RLA, id., at 980-81. Plaintiff moved to remand her class action to state court on the grounds that the RLA did not preempt her claims and so the federal court lacked subject matter jurisdiction, id., at 981. The district court ruled that the RLA preempts the claim in plaintiff’s class action “because her claim requires interpretation of the CBA”; thus, removal was proper, and the class action was dismissed for lack of subject matter jurisdiction because plaintiff failed to arbitrate her claim pursuant to the RLA. Id. Plaintiff appealed, and the Ninth Circuit reversed.

Relying on the Supreme Court opinion in Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246 (1994), which considered preemption under the Labor Management Relations Act (LMRA), the Ninth Circuit explained that “the RLA similarly ‘pre-empts state law only if a state-law claim is dependent on the interpretation of a CBA.’” Moore-Thomas, at 982-83 (quoting Hawaiian Airlines, 512 U.S. at 262-63 & n.9). The Circuit Court found that “the district court here understandably impliedly interpreted the analogy drawn between LMRA and RLA preemption in Hawaiian Airlines as rendering the two standards fully coequal such that LMRA complete pre-emption applies in the RLA context as well.” Id., at 983. Plaintiff argued that the district court erred because “the RLA is subject to ‘ordinary’ rather than ‘complete’ pre-emption.” Id. The Ninth Circuit explained, “[Plaintiff] asserts that the distinction is crucial because, under the complete pre-emption exception to the well-pleaded complaint rule, ‘federal law displaces a plaintiff’s state-law claim, no matter how carefully pleaded.’” Id. (citation omitted). Based on its analysis, see id., at 984-87, the Court agreed that the RLA “does not provide a basis for finding complete pre-emption in this case and that, as a result, Alaska’s removal on the grounds of the RLA’s governing this action was improper.” Id., at 983. Accordingly, the Ninth Circuit concluded that the district court erred in dismissing the class action, and held that the class action was improperly removed to federal court, id., at 987. The Circuit Court therefore remanded the class action to the district court with orders to deny the motion to dismiss and to remand the class action to state court, id.

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