Tantaros v. Fox News Network, LLC

Background

Andrea Tantaros filed a state-court action against Fox News, LLC, the Estate of Roger Ailes, William Shine, Irena Briganti, Suzanne Scott, and Dianne Brandi. She sought temporary, preliminary, and permanent injunctive relief and a declaration that she could not be compelled to arbitrate her sexual-harassment allegations under New York Civil Practice Law and Rules § 7515.

Fox News had previously started an arbitration proceeding against Tantaros for alleged breach of her employment agreement. That agreement required disputes arising from the agreement or her employment to be brought before a three-member arbitration panel. After Tantaros filed claims alleging sexual harassment, retaliation, and a hostile workplace, the New York Supreme Court granted Fox News’s motion to compel arbitration on February 15, 2017.

New York later enacted § 7515, which prohibited employment agreements entered into on or after its effective date from requiring arbitration of claims involving sexual harassment, except where inconsistent with federal law. On July 15, 2019, Tantaros asked the state court to stay the arbitration and sought injunctions and declaratory relief. The respondents removed the case to federal court. Tantaros then moved to remand, meaning she asked the federal court to send the case back to state court.

Jurisdictional Standard

A defendant may remove a state-court action if a federal district court would have original jurisdiction over it. Federal-question jurisdiction usually exists when federal law creates the claim. It can also exist in the limited category of state-law cases that necessarily raise a disputed and substantial federal issue that a federal court can resolve without upsetting the intended division of work between state and federal courts.

The court applied the four-part test from Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing and Gunn v. Minton. The federal issue must be necessarily raised, actually disputed, substantial to the federal system as a whole, and capable of resolution in federal court without disrupting the federal-state balance.

Court’s Analysis

The court concluded that Tantaros’s claims necessarily raised the question whether § 7515 was inconsistent with the Federal Arbitration Act. Section 7515 expressly stated that its prohibition applied except where inconsistent with federal law. In the court’s view, Tantaros therefore had to establish that her claims were consistent with federal law for her state-law claims to succeed.

The court rejected Tantaros’s argument that the federal-law language in § 7515 had no legal significance. It found the respondents’ position more persuasive: the statutory language made consistency with federal law an element of Tantaros’s claims rather than merely a defense to those claims.

The court also found the federal issue substantial. It identified a federal interest in the uniform enforcement of the Federal Arbitration Act, which reflects a federal policy favoring arbitration. The court stated that the question whether § 7515 conflicted with the Federal Arbitration Act was a pure legal question that could affect mandatory arbitration agreements in New York.

Finally, the court concluded that exercising federal jurisdiction would not disrupt the federal-state balance. It explained that the federal court would decide only the federal question concerning the relationship between § 7515 and the Federal Arbitration Act. The underlying state-law claims would be resolved either by a state court, if § 7515 did not conflict with the Federal Arbitration Act, or by arbitrators, if it did.

Disposition

Judge Andrew L. Carter, Jr. denied Tantaros’s motion to remand. The opinion did not decide whether Tantaros’s allegations of sexual harassment, retaliation, or a hostile workplace were valid. It decided only that the federal court had jurisdiction over the removed action because the state-law claims necessarily raised a disputed and substantial federal question.