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  In the
SUPREME COURT OF THE UNITED STATES
October Term, 1993

WALTER SPEARMAN,
Petitioner,

Paul Alan Levy
(Counsel of Record)
Alan B. Morrison
Public Citizen Litigation Group

William G. Kaseberg

Attorneys for Petitioner
May 12, 1994

Does a state claim alleging retaliatory discharge, in violation of a provision of a state workers compensation statute specifically forbidding such conduct, "arise under the workers compensation laws" of the state, so that the defendant is forbidden to remove the claim to federal court?

The names of all parties to the proceeding in the court below appear in the caption of the case.

Walter Spearman petitions this Court to grant a writ of certiorari to review the judgment of the United States Court of Appeals for the Seventh Circuit, which affirmed the removal of his action from state to federal court.

The order of the district court denying petitioner's motion to remand is unreported, and is appended to this petition as pages 24a to 27a (Pet. App. 24a-27a). The opinion of the court of appeals is reported at 16 F.3d 722, and is reproduced at Pet. App. 1a to 23a.

The judgment of the court of appeals was issued on February 11, 1994. Pet. App. 1a. The Court has jurisdiction under 28 U.S.C. § 1254(1).

28 U.S.C. § 1445(c) provides,

A civil action in any State court arising under the workmen's compensation laws of such State may not be removed to any district court of the United States.
 
 

820 Ill. Comp. Stat. § 305/4(h) provides:

It shall be unlawful for any employer, insurance company or service or adjustment company to interfere with, restrain or coerce an employee in any manner whatsoever in the exercise of the rights and remedies granted to him or her by this Act or to discriminate, attempt to discriminate, or threaten to discriminate against an employee in any way because of his or her exercise of the rights or remedies granted to him or her by th[e Workers Compensation] Act.

It shall be unlawful for any employer, individually or through any insurance company or service or adjustment company, to discharge or to threaten to discharge, or to refuse to rehire or recall to active service in a suitable capacity an employee because of the exercise of his or her rights or remedies granted to him or her by this Act.

Until February 3, 1989, petitioner Walter Spearman was employed by respondent Exxon Coal USA as a coal shuttle driver in an underground mine. Under a "last chance agreement" signed by petitioner in September, 1988, following absenteeism problems, petitioner could be fired if he missed 84 hours of work before the end of July, 1989.

In mid-January, 1989, petitioner incurred accidental work-related injuries which kept him out of work for five days, for which he sought benefits for temporary total disability ("TTD") under the Illinois Workers Compensation Act. Under Illinois law, he would have forfeited his TTD rights had he reported to work on these days. Mount Olive Coal Co. v. Industrial Commission, 295 Ill. 429, 129 N.E. 103, 104 (1920). Respondent paid petitioner's TTD benefits for the period of this temporary disability, but it also counted the TTD time, 44 hours and 35 minutes, against him under the absenteeism policy.

After petitioner returned to work, a supervisor sent him home on February 2, 1989, claiming to have smelled alcohol on his breath. The 5 hours, 5 minutes missed on that date brought his total time missed to more than 84 hours. The following day, he was fired because of the time absent from work, including the time he was required to miss in order to exercise his workers compensation rights.

On June 11, 1991, petitioner filed a complaint in the Illinois Circuit Court for Clinton County, alleging that he had been fired in retaliation for having exercised his rights under the worker's compensation law. Respondent removed to the United States District Court for the Southern District of Illinois, based on diversity of citizenship. Four days later, petitioner moved to remand the action to state court, on the ground that his claim was based on the Illinois workers compensation law, and so was exempted from removal by 28 U.S.C. § 1445(c), which bars removal of claims "arising under the workmen's compensation laws of [any] State." The district court denied this motion based on Lingle v. Norge, 823 F.2d 1031 (7th Cir. 1987) (en banc), rev'd on other grounds, 486 U.S. 399 (1988), where the Seventh Circuit had held that section 1445(c) did not bar removal of retaliation claims because, although they are based on a prohibition contained in the Illinois Workers Compensation Act, they are independent tort actions and so do not "arise under" that Act. The court applied Lingle, despite this Court's reversal, because this Court had not reached the removal question (which had not been included in the question presented); according to the district court, the very fact that this Court reached the merits implied that it had decided the jurisdictional question favorably to removal. Pet. App. 26a.

When the case went to trial, it was petitioner's theory that respondent had discriminated against him for exercising his workers compensation rights. Indeed, he contended that, by conceding that it had counted his TTD time against him for discharge purposes, respondent had, in effect, admitted using its absenteeism policy as an excuse for preventing him from exercising his rights under the workers compensation laws during the effectiveness of the last chance agreement. Petitioner had preferred to be in state court because there was no decision on this latter point in the Illinois Supreme Court or Court of Appeals, and he felt that untested questions of state law are better suited to be litigated in state rather than federal court.

On his appeal, petitioner pointed out that almost every federal court to consider the removal question had held that tort claims based on state laws forbidding retaliation for the exercise of workers compensation rights "arise under the workers compensation laws," and so are protected from removal by section 1445(c). On the merits, petitioner argued that respondent had placed him in the position of having to choose between the exercise of his right to claim TTD benefits and his job, and that the workers compensation law barred an employer from imposing that choice as it had here.

A divided Seventh Circuit affirmed. The majority opinion, by Circuit Judge Frank Easterbrook, held that removal was compelled by that court's previous decision in Lingle, which the majority refused to abandon. According to the majority's analysis, "workers compensation laws," as used in section 1445(c), refer only to no-fault remedies for industrial accidents, and not claims for intentional torts. Pet. App. 4a-5a. Because the Illinois Supreme Court had described a workers compensation retaliatory discharge claim as an "independent tort action," such claims were deemed to fall outside the protective scope of section 1445(c). Pet. App. 5a, citing Kelsay v. Motorola, 74 Ill. 2d 172, 384 N.E.2d 353 (1978). The majority acknowledged that the right at issue is expressly conferred by a provision of the Illinois Workers Compensation Act, but it thought determinative the fact that this part of the Act contains no express enforcement mechanism. Drawing an analogy to a state tort action invoking a duty imposed by a federal safety standard, which does not arise under federal law for purposes of 28 U.S.C. § 1331, Merrell Dow Pharmaceuticals v. Thompson, 478 U.S. 804 (1986), the majority concluded that a state tort action that seeks to enforce a right provided by a state's workers compensation laws does not arise under those laws. Pet. App. 6a-7a.

The majority also rejected petitioner's claim on the merits. Pointing to Illinois decisions that allowed employers to fire employees who, after collecting TTD benefits for several months or years, appeared unable to return to any available job -- which, of course, was not the case here -- the majority concluded that the district judge's instructions were adequate under state law and that there was sufficient evidence in the record to support the jury's verdict.

Circuit Judge Ilana Diamond Rovner filed a strong dissent on the removal issue. Pet. App. 7a-23a. She observed first that Lingle had focused its analysis on federal question jurisdiction by virtue of federal preemption, and thus, especially in light of this Court's reversal on the preemption question, could not control the propriety of removal based on diversity in light of the prohibition of section 1445(c). Pet. App. 8a-12a. Second, she noted that not only the Fifth Circuit, and several district courts in other circuits, but every reported district court decision from the Seventh Circuit following this Court's Lingle decision, had found that section 1445(c) barred removal of claims that were based on anti-retaliation provisions in state workers compensation laws. Pet. App. 13a-14a, 19a.

Third, she reasoned that, because the state cause of action was fashioned by the Illinois Supreme Court in order to implement an express provision of the Workers Compensation Act, the claim arose under that Act just as much as if it had been the state legislature that had created the remedy in order to implement the Act's public policy. Pet. App. 16a-17a. Indeed, she observed, section 1445(c) barred removal of any "civil action" arising under the "workers compensation laws"; it was not limited to workers compensation claims seeking a no-fault award for an industrial accident; thus, the majority was reading a limitation into section 1445(c) where none existed. Pet. App. 18a-19a.

Finally, Judge Rovner made short work of the majority's invocation of principles applicable to federal question jurisdiction under 28 U.S.C. § 1331 in construing the anti-removal provision of section 1445(c). To begin with, section 1331 grants jurisdiction either where federal law creates the cause of action or where a substantial question of federal law is an element of the claim. Here, a section of the workers compensation law created the right at issue but no remedy, and the Illinois courts had repeatedly construed the Workers Compensation Act to determine the state-law elements of the cause of action. They had similarly construed that Act in deciding whether specific kinds of employer action against workers was permitted or forbidden. Pet. App. 20a-21a. Moreover, Merrell Dow was not controlling, Judge Rovner explained, because there Congress had decided not to provide a federal remedy, and so it made no sense to infer a federal cause of action. By contrast, she reasoned, if a federal civil remedy is inferred from a federal statute, the claim arises under federal law and thus is within federal jurisdiction, even though it is a court and not Congress that announces the existence of the federal cause of action. Pet. App. 21a-22a, citing e.g., Cannon v. University of Chicago, 441 U.S. 677 (1979). Similarly, here, the cause of action implied by the state courts from the state workers compensation laws arises under those laws, and its removal is forbidden by section 1445(c). Pet. App. 22a-23a.

Before the court of appeals' opinion was issued, it was circulated sua sponte to all members of that court in active service. Of the eleven active judges, Judges Cudahy, Flaum, Ripple and Rovner voted to grant hearing en banc, and two judges did not participate. Pet. App. 4a n.*.

This Court has long held that federal removal statutes are to be construed strictly to defeat removal. E.g., Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941). In flat disregard of that principle, the majority below deliberately created a conflict with a Fifth Circuit decision, as well as other federal courts, almost all of which have held that workers compensation retaliatory discharge claims "arise under" state workers compensation laws, and so are protected from removal by section 1445(c). It acted based on a false analogy with the "arising under" language of section 1331, which not only has opposite purposes but, in comparable cases, would encompass federal causes of action that were related to federal laws in the same way as a state retaliatory discharge action relates to workers compensation laws. Because the decision below expands federal removal in the face of Congress' determination to leave workers compensation cases in the state courts, the Court should grant certiorari and direct the lower courts to remand this case to state court.

1. As the majority below conceded, its holding in this case is in square conflict with Jones v. Roadway Express, 931 F.2d 1086, 1091-1092 (5th Cir. 1991), which held that a state law claim alleging retaliatory discharge based on the exercise of rights under the Texas Workers Compensation Act is protected from removal by section 1445(c). Many district courts have so held as well,⁽¹⁾ although a few district court decisions hold that section 1445(c) does not apply.⁽²⁾ Because district court decisions remanding cases to state court are normally not appealable, 28 U.S.C. § 1447(d), the district court decisions in accord with Jones represent the final word on this question in those courts. Even a decision, such as this one, declining to remand, is appealable only if the case goes to final judgment and the decision is adverse to the plaintiff. Thus, it is the rare case that will reach the court of appeals, let alone this Court, presenting the question, even though it continues to vex the lower courts.

In short, the question of whether section 1445(c) applies to cases like this one has produced sharply conflicting reasoning and results in many different federal courts. This conflict is not going to disappear, and the question is ripe for resolution by this Court.

2. Not only is the majority's holding in square conflict with the holdings of many other federal courts, but its reasoning is based on a deeply flawed analogy to the "arising under" language in 28 U.S.C. § 1331.

The majority thought that, because the state cause of action has been created by the state courts and labeled an "independent" tort, instead of being created by the legislature and incorporated into state law through a statute, it could not "arise under" the compensation statute. There are several flaws in this analysis, the first of which is that it ignores the rule that a claim arises under federal law, regardless of whether Congress has created an express cause of action, so long as an element of a well-pleaded complaint would rely on federal law to provide the rule of decision. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987); Gully v. First Nat'l Bank, 299 U.S. 109 (1936). In this regard, it does not matter whether the federal rule in question is supplied by federal common law or by a statute. Illinois v. City of Milwaukee, 406 U.S. 91, 99-100 (1972). Nor does it matter that Congress may not have provided a remedy under the particular circumstances of the case. Caterpillar v. Williams, 482 U.S. 386, 391 n.4 (1987). Indeed, a cause of action that is inferred from a statute creating a duty may, in some cases, be brought as a federal claim in a federal district court. E.g., Cannon v. University of Chicago, 441 U.S. 677 (1979). If the common law and implied causes of action are among the "laws" of the United States for the purpose of section 1331, it is hard to see why state common law claims created for the purpose of enforcing the public policies of the state workers compensation laws are not among the claims "arising under" the "workers compensation laws" of that State.

The lower court's reliance on Merrell Dow is similarly misplaced. In that case, a state tort claim was filed in state court, alleging in part a violation of a duty created by the Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 301 et seq. The defendant removed, contending that, because the claim was based on a federal duty, the claim necessarily arose under federal law and hence was within the jurisdiction of the federal district courts. This Court disagreed, reasoning that Congress' determination not to provide a remedy in federal district court for alleged violations of such duties implied no more than that Congress did not want to include alleged violations of the FDCA within federal district court jurisdiction. However, as the Court explained, the absence of a federal cause of action should not preclude state courts from adjudicating such cases, unless it could be concluded that Congress meant to preempt states from providing a tort remedy in such circumstances. That inquiry, however, is separate from the issue of jurisdiction.

Here, by contrast, the question is not whether the claim arises under federal or state law -- it concededly arises under state law -- but rather whether the state claim is based on that category of state rules that is comprehended by the term "workers compensation laws." Where a state court has implied a remedy for the purpose of enforcing an aspect of the state's workers compensation laws, as is clearly the case here, see, e.g., Gonzalez v. Prestress Engineering, 115 Ill.2d 1, 12, 13, 503 N.E.2d 308 (1986); Midgett v. Sackett-Chicago, 105 Ill.2d 143, 148, 437 N.E.2d 1280 (1984), a claim seeking that remedy "arises under" the workers compensation laws under section 1445(c), and nothing in Merrell Dow suggests a contrary result.

Finally, the analysis of the court below ignores the opposite roles played by the "arising under" language in the two statutes. Section 1331 sweeps cases "arising under" federal law within federal jurisdiction, allowing cases over which the state courts might otherwise have exclusive power to be subjected to federal adjudication instead. Federal courts are courts of limited jurisdiction, and federal jurisdiction is narrowly construed out of "due regard for the rightful independence of state governments." Victory Carriers v. Law, 404 U.S. 202, 212 (1971). Moreover, when Congress creates a federal standard without creating a federal remedy, the modern presumption requires a demonstration that Congress intended to give federal courts the right to enforce that standard. Karahalios v. National Fed'n of Fed. Emp. Local 1263, 489 U.S. 527, 532-533 (1989). As Merrell Dow noted, however, 478 U.S. at 816, state courts are allowed to provide such enforcement, unless Congress intended to preempt state authority; again, this Court presumes there is no preemption absent clear Congressional intent. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 634 (1981). All of these doctrines create a pressure to construe the "arising under" doctrine of section 1331 narrowly, leaving cases in state court unless it is fairly clear that Congress intended to provide federal jurisdiction.

In section 1445(c), however, the "arising under" language defines cases whose removal is to be barred, and longstanding authority requires removal statutes to be strictly construed to prevent removal. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941). Because this phrase's function in section 1445(c) is the opposite of its function in section 1331, courts should not readily import doctrines using the "arising under" language to exclude cases from federal jurisdiction under section 1331, to control the circumstances in which removal is authorized on the ground that the case does not "arise under" state workers compensation laws.

3. It is primarily in the past fifteen years that state courts have begun to provide tort remedies to enforce the anti-retaliation provisions in state workers compensation laws. Such provisions had previously lain dormant, either because there were no enforcement provisions, or because only the criminal laws could be invoked against violators. For these reasons, state law determining the circumstances in which the anti-retaliation provisions may be invoked, and establishing the elements and defenses to such claims, is relatively undeveloped.

Many courts have warned plaintiffs not to file cases in federal courts when they expect to rely on untested theories of state law. E.g., Tidler v. Eli Lilly & Co., 851 F.2d 418 (D.C. Cir. 1988). Although, in theory, a federal court should be as ready as a state court to adopt novel theories, it can do so only by predicting that a state supreme court would adopt that view, and many federal courts are reluctant to do so. Thus, in many circumstances, a claim that a state supreme court might have been willing to recognize will be rejected in federal court.⁽³⁾

That has certainly been true in the area of Illinois retaliatory discharge claims. The Seventh Circuit has repeatedly rejected such claims, predicting that the Illinois courts would not recognize them, only to have the Illinois Supreme Court express its disagreement later. E.g., Lamb v. Briggs Mfg., 700 F.2d 1092 (7th Cir. 1983), rejected in Midgett v. Sackett-Chicago, 105 Ill.2d 143, 148, 473 N.E.2d 1280 (1984); Loucks v. Star City Glass Co., 551 F.2d 745 (7th Cir. 1977), rejected in Kelsay v. Motorola, 74 Ill.2d 172, 182, 384 N.E.2d 353 (1978). Even after the Illinois Supreme Court had stated (in Sackett-Chicago and Prestress Engineering, supra) that the elements of the claim did not require consideration of whether there was just cause under a collective bargaining agreement, the Seventh Circuit insisted in Lingle that that question would be relevant under state law, a misconstruction of state law that the Illinois Supreme Court again had to correct in Ryherd v. General Cable Co., 124 Ill.2d 418, 426, 530 N.E.2d 431 (1988).

This history is the principal reason, apart from a preference for the location and procedures of the local courts, why Spearman filed his case in state court and opposed its removal to federal court. A number of state decisions hold that, if a worker claims and receives temporary total disability benefits for several months or years, the employer may conclude that the worker is never going to be able to return to work, and so dismiss the worker altogether (on payment of permanent disability benefits). Hartlein v. Illinois Power Co, 151 Ill.2d 142, 601 N.E.2d 720 (1992); Miller v. Jones Co., 225 Ill. App.3d 799, 587 N.E.2d 654 (1992). On the other hand, the right to stop working during the period when TTD benefits may be protected by section 305/4(h), even though it is not specifically enumerated in the statute. Netzel v. UPS, 181 Ill. App.3d. 808, 537 N.E.2d 1348, 1351 (1989). The Illinois courts had not decided whether an employee who misses a few days because of a temporary disability, but then returns to work after he has recovered, may be fired simply because he was absent during the days of temporary disability. Because respondent's admissions established that this is why petitioner was fired, it was his contention that respondent's own admissions showed its liability, and he desired to present his case in the Illinois courts based on that interpretation of state law.

As it had in previous retaliatory discharge situations, the Seventh Circuit concluded that the state decisions barred petitioner's theory on the merits. Petitioner believes that his state law claims will receive a more sympathetic consideration in the Illinois courts, and that Congress' enactment of section 1445(c) was intended to allow him to make that choice. Indeed, there is no federal interest in the resolution of cases like this one, and no policy reason why such cases need to be added to crowded federal court dockets. The Court should grant certiorari in order to decide whether Congress intended cases like petitioner's to be left to the state courts, which are better equipped to develop state law in such cases.

The petition for a writ of certiorari should be granted.

Respectfully submitted,
 
 

Paul Alan Levy

(Counsel of Record)

Alan B. Morrison

Public Citizen Litigation Group
 

William G. Kaseberg
 

Attorneys for Petitioner

May 10, 1994

1. Pettaway v. Wayne Poultry Co., 791 F. Supp. 290 (M.D. Ala. 1992); Thompson v. Cort Furniture Rental Corp., 797 F. Supp. 618 (W.D. Tenn. 1992); Hummel v. Kamehameha Schools, 749 F. Supp. 1023, 1027 (D. Haw. 1990); Kilpatrick v. Martin Eby Constr. Co., 708 F. Supp. 1241 (N.D. Ala. 1989); Wallace v. Ryan Walsh Stevedoring Co., 708 F. Supp. 144 (E.D. Tex. 1989); Roberts v. Citicorp Diners Club, 597 F. Supp. 311 (D. Md. 1984); Thomas v. Kroger Co., 583 F. Supp. 1031 (S.D. W. Va. 1984); Green v. Hajoca Corp., 573 F. Supp. 1120 (E.D. Va. 1983); Kemp v. Dayton Tire & Rubber Co., 435 F. Supp. 1062 (W.D. Okla. 1977); Fernandez v. Reynolds Metals Co., 384 F. Supp. 1281 (S.D. Tex. 1974). After this Court reversed the Seventh Circuit in Lingle v. Norge, several lower court rulings in that circuit held that section 1445(c) barred removal. E.g., Rosell v. Roadway Express, 702 F. Supp. 681, 683-684 (N.D. Ill. 1988); Rodkey v. W.R. Grace & Co., 764 F. Supp. 1313 (N.D. Ill. 1991).

2. Sorenson v. Holman Erection Co., 1992 U.S. Dist. LEXIS 303, at 4 (D. Ore. 1992); Smith v. Union Carbide Co., 664 F. Supp. 290 (E.D. Tenn. 1987). A few pre-Jones district court decisions in the Fifth Circuit followed Lingle. E.g., Richardson v. Owens-Illinois Glass Container, 698 F. Supp. 673 (W.D. Tex. 1988). Gonzalez v. City of Mesa, 779 F. Supp. 1050 (D. Ariz. 1991), also refused to remand under section 1445(c) because Arizona's workers compensation law did not expressly prohibit retaliation, but suggested that the result would be different if, as here, such a provision existed.

3. A recent petition for certiorari involves the question whether this reluctance is appropriate. First Interstate Bank of Denver v. Duffield, No. 93-1602 (filed April 12, 1994).

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