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COMMONWEALTH EDISON CO. v. IBEW

December 31, 1996

COMMONWEALTH EDISON COMPANY, Plaintiff,
v.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NO. 15, Defendant.



The opinion of the court was delivered by: ANDERSEN

 Plaintiff International Brotherhood of Electrical Workers, Local Union No. 15 ("Local 15") filed suit against Commonwealth Edison Company ("ComEd"), Kincaid Generation, L.L.C. ("Kincaid"), and the Illinois Commerce Commission ("ICC") in the Circuit Court of Sangamon County, Illinois, alleging that the Asset Sale Agreement negotiated between ComEd and Kincaid for the sale of the Kincaid Generating Station (the "Generating Station") in Sangamon and Christian Counties, Illinois, is in direct violation of the Illinois Collective Bargaining Successor Employer Act, 820 ILCS 10/1. ComEd and Kincaid subsequently removed the case to the United States District Court for the Central District of Illinois where Judge Richard Mills entered an order transferring the case to this Court. Local 15 now moves to remand this case to the Circuit Court of Sangamon County, Illinois, pursuant to 28 U.S.C. § 1447. For the following reasons, the motion to remand is denied.

 BACKGROUND

 Defendant ComEd is a public utility company that provides electrical power to customers in the State of Illinois. Plaintiff Local 15 is the exclusive bargaining representative of ComEd's bargaining unit employees, including all of the bargaining unit employees at ComEd's Generating Station in Sangamon and Christian Counties, Illinois.

 Local 15 and ComEd are parties to a collective bargaining agreement that governs the terms and conditions of employment for ComEd's bargaining unit employees, including all employees at the Generating Station. The collective bargaining agreement provides in part:

 
This agreement shall be binding upon the parties and their respective successors and assigns. Subject to the Company obtaining all necessary approval of any governmental authority or regulatory body, including but not limited to the Illinois Commerce Commission, and except in cases of liquidation or condemnation or sale or transfer (i) to an entity which has the authority to initiate condemnation proceedings, or (ii) pursuant to any right granted prior to the date hereof, in the event the Company sells or otherwise transfers all or substantially all of its assets to another person, company, corporation, or firm during the term of this Agreement, the Company will require such purchaser or transferee to assume the obligations under this Agreement until the expiration of the term of this Agreement.

 (Compl. P 5; Answer P 5). The agreement expires on September 30, 1997.

 Defendant Kincaid is a Virginia limited liability company which operates public utility companies. On April 17, 1996, Kincaid entered into an Asset Sale Agreement (the "Sale Agreement") with ComEd for the purchase of ComEd's Generating Station in Sangamon and Christian Counties, Illinois. The Sale Agreement expressly provides that Kincaid is not required to assume ComEd's obligations under the collective bargaining agreement negotiated with Local 15. (Compl. PP 12-13; Answer PP 12-13).

 The sale of the Generating Station is subject to approval by the ICC. On May 13, 1996, ComEd filed a petition with the ICC pursuant to section 7-102 of the Illinois Public Utilities Act, 220 ILCS 5/7-102, requesting the ICC's approval of the Sale Agreement. Local 15 opposes the sale and, consequently, moved to intervene in the proceedings. The ICC granted Local 15's motion to intervene in the proceedings on September 25, 1996. The proceedings before the ICC are currently pending and a ruling on ComEd's petition is not expected until February of 1997.

 Local 15 objects to the sale of the Generating Station because the Sale Agreement does not require Kincaid to assume ComEd's obligations under the collective bargaining agreement negotiated with Local 15. According to Local 15, this constitutes a violation of the Illinois Collective Bargaining Successor Employer Act, 820 ILCS 10/1, (the "Illinois successor statute") which provides in part:

 
Where a collective bargaining agreement between an employer and a labor organization contains a successor clause, such clause shall be binding upon and enforceable against any successor employer who succeeds to the contracting employer's business, until the expiration date of the agreement therein stated. No such successor clause shall be binding upon or enforceable against any successor employer for more than 3 years from the effective date of the collective bargaining agreement between the contracting employer and the labor organization.

 820 ILCS 10/1(a). A "successor employer" is defined as "any purchaser, assignee, or transferee of a business the employees of which are subject to a collective bargaining agreement, if such purchaser, assignee, or transferee conducts or will conduct substantially the same business operation, or offer the same service, and use the same physical facilities, as the contracting employer." 820 ILCS 10/1(b). The statute further provides:

 
An employer who is a party to a collective bargaining agreement containing a successor clause has the affirmative duty to disclose the existence of such agreement and such clause to any successor employer. Such disclosure requirement shall be satisfied by including in any contract of sale, agreement to purchase, or any similar instrument of conveyance, a statement that the successor employer is bound by such successor clause as provided for in the collective bargaining agreement. Failure of an employer to disclose the existence of a collective bargaining agreement containing a successor clause as required by subsection (d) shall not effect the enforceability of such collective bargaining agreement against a successor employer.

 820 ILCS 10/1(d). Additionally, the statute imposes a fine not to exceed $ 5,000 on an employer that fails to comply with its provisions. 820 ILCS 10/2.

 On July 1, 1996, ComEd filed suit against Local 15 in the United States District Court for the Northern District of Illinois, Eastern Division (Case No. 96 C 3989) seeking, among other things, a declaration that ComEd has not violated the Illinois successor statute because it is completely preempted by § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq. Jurisdiction over this action is premised on 28 U.S.C. § 1331 and 29 U.S.C. § 185. ComEd has also filed a motion for a judgment on the pleadings which is currently pending before this Court.

 On July 18, 1996, Local 15 filed the instant law suit (Case No. 96 C 7295) against ComEd, Kincaid, and the ICC in the Circuit Court of Sangamon County, Illinois, alleging that the Sale Agreement between ComEd and Kincaid for the sale of the Generating Station is in direct violation of the Illinois successor statute because the Sale Agreement expressly provides that Kincaid is not required to assume ComEd's obligations under the collective bargaining agreement negotiated with Local 15. (Compl. P 17-18). Local 15 seeks an order compelling ComEd to incorporate in the Sale Agreement the terms of the current collective bargaining agreement between ComEd and Local 15 and an order that those terms and conditions are binding on Kincaid. (Compl. P 19). Local 15 further requests that "the Court enjoin the ICC, ComEd, and Kincaid, from the continued processing of a Petition before the ICC containing an Asset Sale Agreement with provisions that are in direct violation of an Illinois statute; that the Court enjoin the ICC from issuing an Order consenting to and/or approving a Petition for the sale of certain utility property, including the Kincaid Generating Station, by ComEd to Kincaid when the Petition contains an Asset Sale Agreement which is in direct violation of an Illinois statute." (Compl. P 25).

 On August 9, 1996, ComEd and Kincaid filed a timely notice of removal, see 28 U.S.C. § 1446(b), pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 185 asserting that the Illinois successor statute is completely preempted by § 301 of the LMRA. Consequently, the case was removed to the United States District Court for the Central District of Illinois. The ICC did not join in the petition for removal. ComEd and Kincaid asserted that the ICC's consent to removal was not necessary because it was fraudulently joined as a party to this suit. ComEd answered the complaint on August 16, 1996. On August 29, 1996, ComEd and Kincaid filed separate motions for a judgment on the pleadings asserting that the Illinois successor statute is preempted by § 301 of the LMRA and by the NLRA.

 On September 6, 1996, Local 15 filed a timely motion to remand the case to the Circuit Court of Sangamon County, Illinois, for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1447. Local 15 asserted that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption. Local 15 further emphasized that removal was improper because the ICC did not join in the petition for removal with ComEd and Kincaid.

 
Because all three preemption doctrines have been raised in the Northern District case and only one has been raised here, it makes sense to consolidate these cases. It would be a waste of judicial resources to have two cases pending when the parties and the issues are nearly identical and the results of one case would be res judicata on the other. See Kearney & Trecker Corp. v. Cincinnati Milling Mach. Co., 254 F. Supp. 130, 133 (N.D.Ill. 1966). Furthermore, it would conserve judicial resources to have all preemption issues relating to the same statute decided in one forum.

 International Brotherhood of Electrical Workers, AFL-CIO, Local Union 15 v. Commonwealth Edison Company. Kincaid Generation L.L.C., and Illinois Commerce Commission, No. 96-3228, slip op. at 5-6 (C.D.Ill. Oct. 30, 1996). In the interest of justice, Judge Mills transferred the case to this Court pursuant to 28 U.S.C. § 1404(a). Id. at 6. *fn1" Judge Mills also denied all pending motions as moot and granted the parties leave to refile them before this Court. Id.

 On or about November 5, 1996, Local 15 filed the instant renewed motion to remand the case (Case No. 96 C 7295) to the Circuit Court of Sangamon County, Illinois, for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1447. Local 15 argues that, contrary to defendants' assertions, this case does not involve the interpretation of a collective bargaining agreement. Thus, Local 15 asserts, the Illinois successor statute is not completely preempted by § 301 of the LMRA, 29 U.S.C. § 185. Local 15 further argues that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption. Additionally, Local 15 challenges removal on the grounds that the ICC failed to join the petition for removal and has not waived its sovereign immunity under the Eleventh Amendment.

 LEGAL STANDARD

 The burden of establishing federal jurisdiction falls on the party seeking to preserve removal. Shaw v. Dow Brands, Inc., 994 F.2d 364, 366 (7th Cir. 1993); Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 66 L. Ed. 144, 42 S. Ct. 35 (1921). Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum. Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993). Any doubts regarding jurisdiction should be resolved ...


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