Retail Prop. Trust v. UBCJA

Section 303 of the Labor Relations Management Act does not completely preempt state claims because it is not written in a way and is not intended to so thoroughly occupy the field of federal labor law that it replaces state law claims.

This action began when members of the United Brotherhood of Carpenters and Joiners of America Local 803 (“UBCJA”) protested at a mall, which the Retail Property Trust (“RPT”) owns, because the RPT hired nonunion subcontractors for a store’s renovation. The RPT filed a state court complaint alleging trespass and nuisance. This was later removed to federal court when the RPT added a claim under the Labor Relations Management Act, 29 U.S.C. § 187 (the “LRMA”). The district court granted the UBCJA’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), in terms of the state law claims, but denied it in terms of the LRMA claim. Its reasoning was centered on the LRMA’s preemption of the state law claims, thus exclusively providing a federal cause of action. On appeal, the Ninth Circuit considered whether this reasoning was correct. Part of the well-pleaded complaint rule is the “complete preemption” doctrine. Through it, some federal statutes have the “extraordinary preemptive power” to convert a state law claim into a federal claim. This occurs when it is clear that Congress intended for the federal law to be so broad that it completely replaces the state law claim. The panel found that the LRMA, Section 303, did not completely preempt the state law claims because this section was not intended to be so broad and the conduct of the defendants was only a “peripheral concern of the federal labor law.” Further, the state law claims were not conflict-preempted because it would not “frustrate effective implementation of federal labor policy.” However, the claims were rightfully in federal court because the RPT alleged a cause of action under the federal LRMA statute. AFFIRMED in part, REVERSED in part, REMANDED.