APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA D.C. Civil No. 78-1928
Before Hunter, Weis and Garth, Circuit Judges.
1. In this appeal we have raised, sua sponte, the question of subject matter jurisdiction.*fn1 The original action was filed in state court by five employees against their former employer, Boeing Vertol Company. The employer filed a third party action against the union, Local 1069 of the United Automobile, Aerospace and Agricultural Implement Workers of America, which had represented the employees. The case was removed by the union to federal district court without objection where it was decided on the merits. Because we conclude that the district court did not have subject matter jurisdiction to adjudicate plaintiffs' claims we will vacate the judgment of the district court and remand to the district court with instructions to remand the case to the state court.
2. Plaintiffs, five former employees of Boeing Vertol, were originally laid off by the company between 1969 and 1970. In early 1973 they were sent notices offering them reinstatement with their previously accrued seniority if they accepted immediately. Each plaintiff promptly quit other jobs and accepted the offer.
3. Shortly after their return to Boeing Vertol, however, they were informed by the company that it had erroneously interpreted the relevant provision of the collective bargaining agreement and that, in fact, they were not entitled to their prior seniority. In May 1973 the Union filed a grievance on behalf of the employees. The grievance claimed that the company's original interpretation of the collective bargaining agreement was correct and that the new interpretation constituted a unilateral change in the binding agreement by the company. The dispute was eventually submitted to arbitration and, on July 17, 1975, was resolved in favor of the company's interpretation of the contract.
4. Meanwhile, in May 1975, the plaintiffs were once again laid off. In March 1977 four of the plaintiffs brought this action in the Court of Common Pleas of Delaware County, Pennsylvania alleging misrepresentation in the reinstatement letter and breach of the contract created by the letter. They were joined in February 1978 by the fifth plaintiff.*fn2
5. Boeing Vertol, in defense, alleged that the layoffs in 1975 took place pursuant to the collective bargaining agreement and that the only contract between Boeing and the plaintiffs was that agreement. Moreover, Boeing asserted that all five plaintiffs were, at all relevant times, employees of the Company and that the collective bargaining agreement provides that "the exclusive remedy for the disposition of any claim, dispute or grievance of any kind of any employee against the Company" shall be the grievance procedure of the bargaining agreement. Therefore, the company argues, the failure to process their misrepresentation and breach of contract claim through the grievance procedure forestalls the instant lawsuit.
6. In May of 1978, Boeing Vertol filed a third party complaint which joined Local 1069 as an additional defendant in the suit. See Pa.R.Civ.P. 2252-2255. The complaint by the company against the union contains two counts. It alleges first, that it was the union's false representation which misled the plaintiffs and caused their injury, and second, that the union should have processed the plaintiffs' misrepresentation claim through the mandatory grievance procedure. On each of these counts, Boeing Vertol contends, in the alternative, that the union is solely liable to the plaintiffs, but that if Boeing is liable, the union is jointly and severally liable, and that if Boeing is liable, it is entitled to recover all amounts it has expended, in indemnity from the union.
7. The union promptly removed the case to federal court on the ground that Boeing Vertol's complaint stated a federal cause of action against the union. Removal was not challenged, and the district court proceeded to trial on the merits of the case. The trial, however, was terminated at the conclusion of the employees' case. No evidence was received on the third party claim.
8. At the outset, we must emphasize the nature of our inquiry. Because removal was not challenged in this case, our purpose is not to review the procedures utilized in this case for compliance with the general federal removal statute. 28 U.S.C. § 1441 (1976). Grubbs v. General Electric Credit Corp., 405 U.S. 699, 702, 92 S. Ct. 1344, 1347, 31 L. Ed. 2d 612 (1972). Any irregularity in these procedures has been waived. See American Fire & Cas. Co. v. Finn, 341 U.S. 6, 16-17, 71 S. Ct. 534, 541, 95 L. Ed. 702 (1951).
9. It is beyond dispute, however, that failure to challenge removal cannot confer subject matter jurisdiction which it does not otherwise possess upon the federal district court. See Id. at 17-18, 71 S. Ct. at 542 ("The jurisdiction of the federal court is carefully guarded against expansion by judicial interpretation or by prior action or consent of the parties.") It is the responsibility of this court to inquire, sua sponte, into the question of the subject matter jurisdiction of the district court. Pharmadyne Laboratories, Inc. v. Kennedy, 596 F.2d 568, 570 n. 3 (3d Cir. 1979); In re Trimble Co., 479 F.2d 103, 110 (3d Cir. 1973); see Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152, 29 S. ...