S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Michael O. Lewis, As
Personal Representative
of the Estate of N.G.
Lewis, Deceased, Petitioner,
v.
Local 382, International
Brotherhood of Electrical
Workers (AFL-CIO),
Davis Self, Larry Poole,
Jerome Jenkins, Doris
M. Jones, Bill Davis,
John C. Davis and
Ronald Goodale, Defendants,
Of Whom Local 382,
International
Brotherhood of Electrical
Workers (AFL-CIO) is, Respondent
ON WRIT OF CERTIORARI TO THE COURT OF
APPEALS
Appeal From Lexington County
William P. Keesley, Circuit Court Judge
Opinion No. 24965
Heard December 15, 199,8 - Filed July 12, 1999
p.6
Lewis v. Int'l Brotherhood of Electrical Workers
AFFIRMED IN RESULT
Henry Hammer and Howard Hammer, of Hammer,
Hammer, Carrigg & Potterfield, of Columbia, and Scott
Elliott, of Elliott and Elliott, of Columbia, for petitioner.
Herbert Buhl, III, of Columbia, and Terry R. Yellig, of
Sherman, Dunn, Cohen, Leifer, & Yellig, of Washington,
D.C., for respondent.
WALLER, A.J.: We granted certiorari to review the Court of Appeals'
opinion in Lewis v. Int'l Brotherhood of Electrical Workers, 324 S.C. 412, 481
S.E.2d 135 (Ct. App. 1997). We affirm in result.
FACTS1
Lewis, an electrician,2 was a member of the International Brotherhood of
Electrical Workers (IBEW), Local #382, for approximately 30 years. In 1987,
his membership in the union lapsed when he continued to work for an employer
which had been declared "in difficulty" by the IBEW.3 In February, 1988, the
IBEW informed Lewis he was ineligible to receive retirement benefits from the
IBEW Pension Benefit Fund because he was no longer a member in good
standing.4 Lewis brought this action seeking damages for violation of the South
Carolina Right-to-Work Act, S.C.Code Ann. §§ 41-7-10 through -90 (Rev. 1986
1The reader is directed to the Court of Appeals' opinion for a more
complete recitation of the facts.
2Lewis died in 1990; his son Michael has been substituted as plaintiff.
3 IBEW's Constitution prohibits members from "[w1orking for any ...
company declared in difficulty" with the union. Art. VII, § 11.
4Article XII, Section 1(a)(1) of Union's constitution provides for pension
benefits to "A" members of the IBEW who are in "continuous good standing with
twenty (20) or more years immediately preceding his application, who has
attained the age of sixty-five (65) years."
p.7
Lewis v. Int'l Brotherhood of Electrical Workers
& Supp. 1997).5 The jury returned a verdict in favor of Lewis against the union
and awarded $82,560.00 in actual damages and $25,000 in punitive damages.
In a well reasoned opinion, Judge Anderson, writing for a majority of the Court
of Appeals, held Lewis'claims were preempted by federal law. We agree and,
accordingly, affirm in result.6
ISSUES
1. Is the federal court's order remanding to state court, preclusive
on the preemption issue?
2. Is Lewis' claim preempted under 28 U.S.C. § 185 of the Labor
Management Relations Act (LMRA)?
3. Should the Court of Appeals have addressed Lewis' claim under
the South Carolina Right-To-Work Act?
4. Is Lewis' claim preempted under § 514(a) of the Employee
Retirement Income Security Act (ERISA), 29 U.S.C.§ 1144(a)?
1. PRECLUSION
We concur in the Court of Appeals'holding that the federal court's order
remanding to state court is not preclusive on the issue of preemption.7
As noted by the Court of Appeals, the Fourth Circuit has specifically held
a district court's findings incident to an order of remand have no preclusive
effect. Nutter v. Monongahela, 4 F.3d 319 (4th Cir. 1993)(district court's
holding that ERISA and LMRA did not preempt plaintiff s state-law claims did
5He also filed a claim for outrage; the jury returned a verdict for the
defendants on this claim.
6Except as otherwise noted herein, we agree with and adopt the reasoning
set forth in the Court of Appeals' opinion. Readers are referred to that opinion
for a more detailed and thorough discussion of the issues.
7Lewis initially filed this action in state court, and the matter was
removed to federal court by the IBEW.. In response to Lewis' motion, the
district court remanded to state court, finding removal had been improvident.
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Lewis v. Int'l Brotherhood of Electrical Workers
not prevent defendant from raising preemption as a defense in state court).8
Accordingly, the Court of Appeals properly held the federal court's remand
order was not preclusive. Accord Nichols v. Amalgamated Clothing, 305 S.C.
323~ 408 S.E.2d 237 (1991)(addressing merits of preemption issue after remand
from federal court).
2. PREEMPTION UNDER LMRA
If a state-law cause of action does not exist independently of a labor
contract, it is pre-empted by Section 301 of the Labor Management Relations
Act ( LMRA). Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85
L.Ed.2d 206 (1985); Nash v. AT & T Nassau Metals, 298 S.C. 428, 381 S.E.2d
206 (1989); Butts v. AVX Corp., 292 S.C. 256, 355 S.E.2d 876 (Ct.App.1987).
In Nash v. AT & T Nassau Metals, 381 S.E.2d 206, 208, 298 S.C. 428 (1989), we
stated:
This test is one of whether the state claim exists independently of
the collective bargaining agreement or whether it is "inextricably
intertwined" with a consideratio n of the terms of the agreement.
If the state claim does not exist independently of the agreement, it
is preempted by federal law.
The Court of Appeals found Lewis' claim was substantially dependent
upon an analysis of the IBEW constitution because interpretation of the
constitution was essential to a determination of whether Lewis had any
property rights in the pension benefit fund. We agree.
Lewis' tort claim intrinsically relates to the nature of the IBEW
constitution. His complaint states that the IBEW, "in violation of the Right-To-
8The rationale for holding a district court's remand order has no
preclusive effect on the issue of preemption is that such remand orders are not
subject to appellate review under 28 U.S.C. § 1447(d). Since Nutter, the United
States Supreme Court decided Quackenbush v. Allstate Ins. Co., 517 U.S. 706,
116 S.Ct. 1712,135 L.Ed. 2d 1 (1996) in which it held a remand order which is
not based upon either subject matter jurisdiction or defects in the removal
procedure (i.e., pursuant to §1447(d)), is subject to appellate review such that
it may be given preclusive effect. (Quackenbush involved a remand based on
abstention principles). Here, it is impossible to determine for certain the basis
of the federal court's remand order as it merely states removal was improvident.
Accordingly, we decline to give it preclusive effect.
p.9
Lewis v. Int'l Brotherhood of Electrical Workers
Work Act, attempted to interfere with [Lewis'] exercise of his Right-To-Work
and did, thereby cause him to lose his pension benefits," and that as a result
Lewis "has suffered the loss of his pension benefits." It is impossible to
ascertain, without reference to IBEW's constitution, whether the union acted
properly in denying Lewis his pension benefits. Accordingly, we concur with the
Court of Appeals' analysis that resolution of the case was "substantially
dependent" upon the union's constitution so as to be preempted under the
LMRA.9
Finally, Lewis relies on this Court's opinion in Layne v. Int'l Brotherhood
of Elec. Workers, 271 S.C. 3462 247 S.E.2d 346 (1978), in which we held, under
similar facts, the plaintiffs state law claim under the Right-To-Work Act was
not preempted by the Labor-Management Reporting and Disclosure Act of 1959
(LMRDA), 29 U.S.C. s 411 et seq. Layne dealt with Section 413 of the LMRDA
which specifically states, "Nothing contained in this subchapter ( 29 U.S.C. §§
411- 415) shall limit the rights and remedies of any member of a labor
organization under any State or Federal law or before any court or other
tribunal, or under the constitution and bylaws of any labor organization."
9We agree with the Court of Appeals that our holding in Nichols v.
Amalgamated Clothing and Textile Workers Union, AFL-CIO, CLC, 305 S.C.
323~ 408 S.E.2d 237 (1991) is not controlling. The United States Supreme
Court, in Wooddell v. International Brotherhood of Elec. Workers Local 71, 502
U.S. 931 112 S.Ct. 494~ 116 L.Ed.2d 419 (1991), extended the preemption
provision of the LRMA to union constitutions. Nichols specifically held the
employee's complaint was not preempted because the circuit court needed only
to focus upon ACTWU's constitution, by-laws, and prior practices.
Accordingly, to the extent Nichols conflicts with Wooddell, it is overruled.
We likewise agree with the Court of Appeals' analysis regarding this
Court's opinion in Kimbrell v. Jolog Sportswear, Inc., 239 S.C. 415~ 123 S.E.2d
524 (1962), in which we held an action for wages under this state's statutory
law was not preempted by the NLRA. In Kimbrell, there was no conflict with
federal jurisdiction and the National Labor Relations Act afforded no remedy
to plaintiffs for the wrongs done them. Here, there is a conflict with federal
jurisdiction, inasmuch as the Court would be required to interpret the union's
constitution. Moreover, in the present case, counsel for the IBEW advised the
Court at oral argument that Lewis may file a claim for unfair labor practices
with the National Labor Relations Board, or may have a claim for unfair labor
practices under section 301 of the LMRA. Accordingly, unlike the plaintiff in
Kimbrell, Lewis is not without a remedy.
p.10
Lewis v. Int'l Brotherhood of Electrical Workers
However, Section 413 of the LMRDA limits its application to that subchapter
of the LMRDA.10Section 413 of the LMRDA does not apply to Section 301 of
the LMRA. To hold otherwise would completely eviscerate the preemption
provisions of Section 301 of the LMRA.11
3. PREEMPTION UNDER ERISA
Finally, a majority of the Court of Appeals held Lewis' claim was
preempted by Section 514(a) of ERISA as his claim for damages "related to" an
employee benefit plan within the scope of ERISA's preemption clause.12It held
the resolution of Lewis' claim directly affected the pension fund as it
"potentially alters the criteria for receipt of benefits." 481 S.E.2d at 142. We
agree.
Any and all State laws insofar as they relate to employee benefit plans
are preempted by ERISA. 29 U.S.C. § 1144(a); Duncan v. Provident Mut. Life
Ins. Co. of Philadelphia, 310 S.C. 4652 427 S.E.2d 657 (1993). This Court has
recognized that the pre-emptive effect of ERISA is a broad one. Baker Hosp. v.
Isaac, 301 S.C. 248, 391 S.E.2d 549 (1990). A state law "relates to" an
ERISA-governed employee benefit plan, "if it has a connection with or reference
to such a plan." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890,
2896, 77 L.Ed.2d 490 (1983). Further, a state law "relates to" an ERISA plan if
the rights or restrictions it creates are predicated on the existence of such a
plan. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S.Ct. 478, 112
L.Ed.2d474(1990). However, those state actions which affect employee benefit
plans in "too tenuous, remote or peripheral a manner" do not relate to the plan.
Shaw v. Delta Air Lines, supra.
10The subchapter of the LMRDA in question, § 411(a)(5) deals with due
process measures a union member must be afforded prior to being disciplined.
As we read Section 413, it was intended to permit union members the
procedural due process afforded by state law if it was greater than that
permitted by Section 411.
11 Moreover, the issue of Section 301 preemption was not raised in Layne.
This Court will not generally raise issues sua sponte. Smith v. Phillips, 318 S.C.
453, 458 S.E.2d 427 (1995)(but for very few exceptional circumstances,
appellate court will not sua sponte raise issues).
12There is no dispute but that Lewis'pension plan is an "employee benefit
plan" within the meaning of ERISA, 29 U.S.C.§§1002(2)(A)(I) & 1002(3).
p.11
Lewis v. Int'l Brotherhood of Electrical Workers
A state rule of law may be preempted even though it has no direct nexus
with ERISA plans if its effect is to dictate or restrict the choices of ERISA plans
with regard to their benefits, structure, reporting and administration, or if
allowing states to have such rules would impair the ability of a plan to function
simultaneously in a number of states. Keystone Chapter, Assoc. Builders v.
Foley, 37 F.3d 945, 955 (3d Cir. 1994), cert. denied, ___ U.S.___ 115 S.Ct. 1393,
131 L.Ed.2d 244 (1995).
Here, it is inescapable that Lewis' claim is predicated upon the existence
of IBEW's plan, i.e., is premised on the notion that the union's violation of the
Right-To-Work Act resulted in the loss of his pension. Accordingly, we affirm
the Court of Appeals'ruling.
In dissent, Judge Cureton points to a recent United States Supreme Court
opinion narrowing the scope of ERISA preemption. New York State Conference
of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, ___, 115
S.Ct. 1671, 16771 131 L.Ed.2d 695 (1995). In Travelers, the Court noted the
listarting presumption that Congress did not intend to supplant state law, 514
U.S. at 654, 115 S.Ct. at 1676, stating if "relate to" were taken to extend to the
furthest stretch of its indeterminacy, then for all practical purposes pre-emption
would never run its course, for "really, universally, relations stop nowhere."
The Travelers court acknowledged, however, that "a state law might produce
such acute, albeit indirect, economic effects, by intent or otherwise, as to force
an ERISA plan to adopt a certain scheme of substantive coverage or effectively
restrict its choice of insurers, and that such a state law might indeed be
pre-empted under Section 514. 514 U.S. at 668, 115 S.Ct. at 1683 Even under
the more narrow view of Travelers. allowing Lewis' claim in this case would
essentially render the union liable for the benefits, notwithstanding its
constitutional provisions to the effect that only members in good standing are
entitled to benefits. As such, it would, by indirect means, force the union to
adopt a certain scheme of substantive coverage contrary to its constitutional
provisions. Such a holding is contrary to Travelers.
Finally, the dissent cites several cases for the proposition that ERISA
does not preempt state claims where employees merely seek lost pension
benefits as a measure of damages. See Pizlo v. Bethlehem Steel Corp ., 884 F.2d
116 (4th Cir.1989); Hospice of Metro Denver, Inc. v. Group Health Ins.. of
Oklahoma, Inc., 944 F.2d 752 (10th Cir.1991); Howard v. Indiana Michigan
Power Co., 812 F.Supp. 135 (S.D.Ind. 1992); Schlenz v. United Airlines, Inc., 678
F.Supp. 230 (N.D.Cal.1988). We are unpersuaded by this authority. The
dissent directly cites Pizlo for the following proposition:
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Lewis v. Int'l Brotherhood of Electrical Workers
The claims here would not submit [the employer] to "conflicting
employer obligations and variable standards of recovery",
"determine whether any benefits are paid" nor "directly affect the
administration of benefits under the plan." The claims do not
bring into question whether Plaintiffs are eligible for plan benefits,
but whether they were wrongfully terminated from employment
after an alleged oral contract of employment for a term.
324 S.C. at 436,481 S.E.2d at 147. Here, Lewis' claim would subject the IBEW
to conflicting obligations (i.e., it is liable under state law for the pension, but it
is not liable under its constitution for the pension), and would bring into
question whether or not Lewis was eligible for plan benefits. Accordingly, we
do not find Pizlo dispositive. Further, the other case directly quoted by Judge
Cureton, Hospice of Metro Denver, Inc. v. Group Health Ins. of Oklahoma, Inc.,
944 F.2d 752 (10th Cir.1991), did not involve beneficiaries of an ERISA plan.
Moreover, Hospice is contrary to this Court's recent opinion in Baker Hospital
v. Isaac, 301 S.C. 248, 391 S.E.2d 549 (1990)(holding ERISA preempted a
hospital's contract, promissory estoppel, negligence, and misrepresentation
claims).
4. RIGHT-TO-WORK ACT
The Court of Appeals held Lewis had failed to state a cause of action as
the conduct he complained of did not constitute a violation of the Right-To-Work
Act. Given its holding that Lewis' claim was preempted, it was unnecessary for
the Court of Appeals to address this issue. Accordingly, we vacate the portion
of the Court of Appeals' opinion holding Lewis failed to state a claim under the
Right-To-Work Act.
CONCLUSION
We concur with the majority opinion of the Court of Appeals that Lewis'
claims are preempted by both the LMRA and ERISA, since he is essentially
seeking to recover his pension benefits, albeit under the guise of a Right-To
Work claim. Accordingly, we affirm, in result. However, to the extent the Court
of Appeals addressed the viability of Lewis' state law claim, its opinion is
vacated.
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Lewis v. Int'l Brotherhood of Electrical Workers
AFFIRMED IN RESULT. 13
FINNEY, C.J., TOAL, MOORE, and BURNETT, JJ., concur.
13We also granted certiorari to review the Court of Appeals' unpublished
opinion in this matter, Op. No. 96-UP-335 (S.C. Ct. App. filed October 15,1996),
concerning Lewis' entitlement to attorneys' fees. In light of our holding in this
case, we affirm the Court of Appeals' dismissal of that appeal as moot.
p.14