Opinion
CASE NO. 03-CV-0676 W (POR).
June 13, 2003.
ORDER REMANDING ACTION TO SAN DIEGO SUPERIOR COURT No: GIC 806155
Putative class action Plaintiff Dennis Gregory ("Plaintiff") commenced this action against Defendant Sprint Spectrum, L.P. ("Defendant") in San Diego Superior Court. After Defendant removed the action, this Court entered an order to show cause why the case should not be remanded to state court and requested briefing on the issue. All parties are represented by counsel. Having considered the parties' papers and applicable law, without oral argument [see Civil Local Rule 7.1(d.1)], the Court REMANDS this matter to San Diego Superior Court.
I. BACKGROUND
Defendant operates the nationwide "Sprint PCS" wireless telephone network. In January 2002 Defendant began billing its mobile phone customers for an item entitled "USA Regulatory Obligations and Fees." Plaintiff contends that these extra charges are undisclosed rate increases disguised as government imposed taxes. Defendant contends the surcharge was added in accordance with Federal Communications Act ("FCA") regulatory action to fund federally mandated mobile phone technology enhancements such as 911 emergency call improvements.
Plaintiff commenced this putative class action in San Diego Superior Court alleging various state law claims, including: (1) violations of California's Consumers Legal Remedies Act and Business and Professions Code; (2) breach of contract; (3) unjust enrichment; (4) fraud; and (5) money had and received. Defendant removed the case to federal court under 28 U.S.C. § 1441(b) and this Court's purported federal question jurisdiction.
II. LEGAL STANDARD
Defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." City of Chicago v. International College of Surgeons, 522 U.S. 156, 163 (1997) (quoting 28 U.S.C. § 1441(a)). "The propriety of removal thus depends on whether the case originally could have been filed in federal court." Id. "As a general rule, absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege a federal claim." Beneficial National Bank v. Anderson, 2003 WL 21251449, at *3 (U.S. June 2, 2003).
Federal courts are under a continuing duty to confirm their jurisdictional power and are "obliged to inquire sua sponte whenever a doubt arises as to [its] existence[.]" Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 278 (1977) (citations omitted). In a removal action, a district court must remand a case to state court if, at any time before final judgment, the court determines that it lacks subject matter jurisdiction or when the notice of removal contains plain jurisdictional defects. See 28 U.S.C. § 1447 et seq. The party seeking to invoke removal jurisdiction bears the burden of supporting its jurisdictional allegations with competent proof.Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam); Emrich v. Touche Ross Co., 846 F.2d 1190, 1195 (9th Cir. 1988).
Under the well-pleaded complaint rule, "federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). "A suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that Constitution." Louisville Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908) (emphasis supplied). "The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law." Caterpillar, 482 U.S. at 392. Thus, the court's removal jurisdiction must be analyzed on the basis of the pleadings at the time of removal. See Sparta Surgical Corp. v. National Ass'n of Sec. Dealers, 159 F.3d 1209, 1213 (9th Cir. 1998). District courts must construe the removal statutes strictly against removal and resolve any uncertainty as to removability in favor of remanding the case to state court. Gaus, 980 F.2d at 566.
III. DISCUSSION
As an initial matter, the Court notes Plaintiff's Complaint does not facially present a federal question. Plaintiff's claims all arise under state law. Nevertheless, "[a] state-created cause of action can be deemed to arise under federal law (1) where federal law completely preempts state law . . .; [and] (2) where the right to relief depends on the resolution of a substantial, disputed federal question." ARCO Environmental Remediation. LLC v. Dep't of Health and Environmental Quality of the State of Montana, 213 F.3d 1108, 1114 (9th Cir. 2000) (internal citations omitted). This Court will address federal jurisdictional bases in turn.
A. THE COMPLETE PREEMPTION DOCTRINE DOES NOT CONFER REMOVAL JURISDICTION OVER THIS CASE
Defendant argues that federal question jurisdiction exists because the FCA completely preempts Plaintiff's state law claims. This Court respectfully disagrees.
When a federal claim completely preempts a state claim, "any complaint that comes within the scope of the federal cause of action necessarily `arises under' federal law." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 24 (1986). The complete preemption doctrine applies when the preemptive force of a federal statute is so "extraordinary" that it transforms an ordinary state claim into a federal claim for well-pleaded complaint rule purposes. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
The complete preemption doctrine is construed narrowly. See Holman v. Laulo-Rowe Agency, 994 F.2d 666, 668 (9th Cir. 1993). "Preempted state law claims may be removed to federal court only in the rare instances where Congress has chosen to regulate the entire field." ARCO, 213 F.3d at 1114. Whether a federal statute confers removal jurisdiction on the federal courts depends on whether Congress clearly intended to convert state law claims into federal question claims. Taylor, 481 U.S. at 66. For example, the Supreme Court applied the complete preemption doctrine to the LMRA after it found a manifest Congressional intent to establish a uniform body of federal law governing collective bargaining agreements. Teamsters Union v. Lucas Flour Co., 369 U.S. 95, 104 (1962). Similarly, the doctrine was extended to ERISA claims after the Supreme Court found that ERISA's jurisdictional provisions parallel the LMRA's. Taylor, 481 U.S. at 65. In both cases, "the federal statutes at issue provided the exclusive cause of action for the claim asserted and also set forth procedures and remedies governing that cause of action." Beneficial National Bank, 2003 WL 21251449, at *4.
No comparable Congressional intent may be found to confer removal jurisdiction under the FCA. TPS Utilicom v. AT T Corp., 223 F. Supp.2d 1089 (C.D. Cal. 2002). The FCA does not completely occupy the field of telephone communications. In fact, the FCA includes a savings clause which states: "[n]othing in this chapter shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies." 47 U.S.C. § 414 (emphasis supplied). Notably, both the LMRA and ERISA lack an analogous savings clause. TPS, 223 F. Supp. at 1099. Thus, it is clear from the FCA's plain words that Congress did not intend the FCA's preemptive force to be so "extraordinary" as to convert an ordinary state law claim into a federal question claim.
Preemption can also originate from a conflict between federal and state law. See ARCO, 213 F.3d at 1114. However, in such cases, preemption is a defense to a state law cause of action and does not confer independent federal jurisdiction. Id. Here, Defendant argues that federal question jurisdiction exists because the FCA preempts all state wireless phone rate regulations. The FCA states that "no state or local government shall have any authority to regulate the entry of or the rates charged by any [wireless carrier]." 47 U.S.C. § 332(c)(3)(A). However, Defendant's argument is without merit.
Removal jurisdiction based on the federal preemption defense would violate the well-pleaded complaint rule and clearly established Supreme Court precedent. It is "settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption."Franchise Tax Bd., 463 U.S. at 14. The federal preemption defense "does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court." Taylor, 481 U.S. at 63. Accordingly, this Court concludes that neither the complete preemption doctrine nor the federal preemption defense are sufficient to confer removal jurisdiction.
B. THE COMPLAINT DOES NOT PRESENT A SUBSTANTIAL DISPUTED QUESTION OF FEDERAL LAW
Defendant alleges that federal removal jurisdiction exists because Plaintiff's unjust enrichment, money had and received, and breach of contract claims require resolution of a substantial federal question. This Court respectfully disagrees.
Removal jurisdiction is proper, despite a federal question's absence from the complaint's four corners, if a state law cause of action requires a court to resolve a substantial federal question. Franchise Tax Bd., 463 U.S. at 13. The substantial federal question exception is only available when it appears that some substantial, disputed federal question is a necessary element of one of the well-pleaded state claims. Id.
Removal jurisdiction is only proper when a substantial federal question is disputed by the parties. Id. Defendant contends that this Court cannot resolve Plaintiff's claims without determining whether the Defendant exceeded the FCA's authority by billing its customers for the USA regulatory surcharge. However, the Defendant's authority under the FCA to impose this surcharge is not in dispute; Plaintiff merely challenges the Defendant's characterization of the surcharge as a mandatory tax. As currently presented, Plaintiff's claims do not arise under federal law. Remand is therefore appropriate.
Furthermore, in order for the substantial federal question doctrine to apply, a substantial federal question must be a necessary element of a well-pleaded state claim. Franchise Tax Bd., 463 U.S. at 13. Defendant has not provided this Court with any evidence to suggest that such a necessary element exists. Accordingly, Defendant has failed to demonstrate that federal removal jurisdiction is proper. See Gaus, 980 F.2d at 566.
Finally, the Court rejects the most recent arguments tendered by Defendant's response to Plaintiff's submission of supplemental authority. If anything, Defendant's belatedBeneficial National Bank analysis simply reaffirms this Court's well supported conclusion that this suit does not involve the substantive interpretation of federal law, but rather, the characterization of charges authorized by federal law and imposed here in a manner which may violate state law. This Court need not and will not adjudicate whether the characterizations run afoul of state law insofar as this Court does not retain federal subject matter jurisdiction.
IV. CONCLUSION AND ORDER
In light of the foregoing, the Court REMANDS this matter to the San Diego Superior Court, Case No. GIC 806155. See 28 U.S.C. § 1447(c). Upon remand, the Clerk of Court shall close the district court case file.
IT IS SO ORDERED.
ORDER GRANTING EX PARTE APPLICATION
Putative class action Plaintiff Dennis Gregory ("Plaintiff") commenced this action against Defendant Sprint Spectrum, L.P. ("Defendant") in San Diego Superior Court. After Defendant removed, this Court entered an order to show cause why the case should not be remanded to state court and requested briefing by the parties.On April 23, 2003 Defendant submitted a memorandum of points and authorities in response to this Court's order to show cause. On May 9, 2003 Plaintiff submitted an opposing brief. On June 2, 2003 the United States Supreme Court issued an opinion bearing on the issues addressed by the parties' briefs. See Beneficial National Bank v. Anderson, 2003 WL 21251449, at *3 (U.S. June 2, 2003). On June 9, 2003 Plaintiff submitted a notice of supplemental authority, alerting this Court to the Supreme Court's Beneficial National Bank decision. On the same day Defendant applied ex parte for leave to file a supplemental response. The Court decides the matter on the papers submitted and without oral argument. See Civil Local Rule 7.1 (d. 1). Having read and considered the parties' papers and applicable law, the Court GRANTS Defendant's ex parte application. The Court shall accept for filing Defendant's supplemental response.