Opinion
Civil Action No. 3:00-CV-1614-L
May 18, 2001
MEMORANDUM OPINION AND ORDER
Before the court is Defendant's Motion to Dismiss Plaintiff's Complaint, filed September 11, 2000. For the reasons stated herein, the court determines that it lacks subject matter jurisdiction over this case, and sua sponte remands the action to state court.
I. Factual and Procedural Background
On June 23, 2000, Plaintiff Marla Shaw ("Plaintiff" or "Shaw") filed a class action lawsuit against Defendant ATT Wireless Services, Inc. ("Defendant" or "ATT") in the 44th Judicial District Court, Dallas County, Texas. The purported class includes Plaintiff and all individuals having cellular telephone service in effect on or after January 1, 2000, with cellular telephone area code numbers of (214), (972), (817), (562) and (940), and whose service was provided by Defendant. Plaintiff's Petition asserts a state law cause of action against ATT for violation of the Texas Deceptive Trade Practices-Consumer Protection Act ("DTPA"), Tex. Bus. Com. Code Ann. § 17.41 et seq. (Vernon 1987 Supp. 2001). On July 26, 2000, Defendant removed the action to federal court based on federal question jurisdiction and diversity jurisdiction. ATT now moves to dismiss the action, contending, inter alia, that Plaintiff's DTPA claim is preempted by the Federal Communications Act of 1934 ("FCA"), 47 U.S.C. § 151 et seq. In her response to Defendant's Motion to Dismiss, Plaintiff states in a footnote that she disagrees that removal is proper. See Pl.'s Resp. to Mot. to Dismiss Compl. at 2. Although Plaintiff has not moved to remand this action, the court is obligated to raise the issue of subject matter jurisdiction sua sponte. See HD Tire Automotive-Hardware, Inc. v. Pitney Bowes, Inc., 227 F.3d 326, 328 (5th Cir. 2000).
Section 332 of the FCA provides that "no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service. . . ." 47 U.S.C. § 332 (c)(3)(A).
II. Analysis
A. Federal Question Jurisdiction
Under the general federal removal statute, a defendant in state court may remove a suit to federal court if federal subject matter jurisdiction existed at the time the complaint was initially filed. See 28 U.S.C. § 1441 (a). The burden is on the party removing the action to establish that federal jurisdiction exists and that removal is proper. See St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); Asociacion Nacional de Pescadores a Pequena Escala O Artesanales de Colombia (ANPAC) v. Dow Quimica de Colombia S.A., 988 F.2d 559, 563 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994), abrogated on other grounds, Marathon Oil Co. v. Ruhrgas, 145 F.3d 211 (5th Cir. 1998). Federal question jurisdiction arises when the allegations asserted in a plaintiff's complaint are "founded on a claim or right arising under the Constitution, treaties or laws of the United States." See 28 U.S.C. § 1441 (b), § 1331; see also Hart v. Bayer Corp., 199 F.3d 239, 243 (5th Cir. 2000). Generally, the issue of federal question jurisdiction is resolved by application of the "well-pleaded complaint" rule. See Hart, 199 F.3d at 243. The rule provides that federal jurisdiction exists only when a federal question is presented on the face of a plaintiff's properly pleaded complaint. Id. As such, jurisdiction may not be sustained on a theory that the plaintiff has not advanced, Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804, 809 n. 6 (1986), and a plaintiff may avoid federal jurisdiction by exclusive reliance on state law. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).
As Plaintiff's Complaint sets forth only state law claims, Defendant relies upon the "complete preemption" exception to the well-pleaded complaint rule in its attempt to establish removal jurisdiction. Under this doctrine, the court, if it finds that a federal law "completely preempts" a field of state law, may recharacterize a plaintiff's state law claim as stating a federal cause of action — therefore making removal proper on the basis of federal question jurisdiction. See Hart, 199 F.3d at 244. (citations omitted). Complete preemption, however, is a narrow exception, within which few statutes fall. See Johnson, 214 F.3d at 632. Indeed, "the Supreme Court has clearly sanctioned the rule only in the area of federal labor relations and the Employee Retirement Income Security Act of 1974." Id. (citing Heimann v. National Elevator Indus. Pension Fund, 187 F.3d 493, 500 (5th Cir. 1999)). To establish complete preemption, ATT must show that 1) the statute contains a civil enforcement provision that creates a cause of action that both replaces and protects the analogous area of state law; 2) there is a specific jurisdictional grant to the federal courts for enforcement of the rights; and 3) there is a clear Congressional intent that claims brought under the federal law be removable. Id. Applying this analysis to the instant case, the court concludes that Defendant has failed to establish that the FCA satisfies the test for complete preemption.
"Complete preemption" differs from "ordinary preemption" (also known as "conflict preemption"), in that the former creates federal removal jurisdiction, while the latter does not. See Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir.), cert. denied, 121 S.Ct. 567, 148 L.Ed.2d 486 (2000). As explained by the Fifth Circuit:
[o]rdinarily, the term federal preemption refers to ordinary preemption, which is a federal defense to the plaintiff's suit and may arise either by express statutory term or by a direct conflict between the operation of federal and state law. Being a defense, it does not appear on the face of a well-pleaded complaint, and, thus, does not authorize removal to a federal court. By way of contrast, complete preemption is jurisdictional in nature rather than an affirmative defense to a claim under state law. As such, it authorizes removal to federal court even if the complaint is artfully pleaded to include solely state law claims for relief or if the federal issue is initially raised solely as a defense.Johnson, 214 F.3d at 632 ( quoting Heimann v. National Elevator Indus. Pension Fund, 187 F.3d 493, 500 (5th Cir. 1999)). That a given federal law might "apply" or even provide a defense to a state law cause of action, however, is alone insufficient to establish federal question jurisdiction. Hart, 199 F.3d at 244. To give rise to federal question jurisdiction, the court must find complete preemption. Id.
As noted by one court in this district, complete preemption has also been found in certain Indian land grant right cases. See Bryceland v. ATT Corp., 122 F. Supp.2d 703, 707 n. 4 (N.D. Tex. 2000) ( citing Marcus v. ATT Corp., 138 F.3d 46, 54 (2d Cir. 1998) citing Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666-67 (1974)).
Defendant contends that Plaintiff's Petition presents a direct challenge to ATT's infrastructure and quality of service, which if true, would be preempted under Section 332 of the Act. Plaintiff, on the other hand, insists that she is complaining about ATT's marketing of its wireless service. Specifically, she contends that ATT markets its wireless service without disclosing that the ratio of subscribers to the wireless service to the capacity of the network facilities operated by its affiliates results in persistent problems in Plaintiff's ability to make calls on her cellular phone (referred to by Plaintiff as Overbooking), and that the failure of ATT to disclose its practice of Overbooking and the magnitude of its impact on ATT's services constitute violations of the DTPA. See Pl.'s Resp. to Def.'s Mot. to Dismiss at 1-2. Plaintiff's Petition, however, is not so succinct. Contrary to these contentions, Plaintiff Petition alleges that:
Plaintiff purchased a cellular phone and a subscription for wireless telephone services provided by Defendant. Plaintiff's Home Calling Area includes the Dallas, Fort Worth metroplex. Defendant has inadequate equipment and/or network capacity to service Plaintiff's cellular phone, resulting in Plaintiff's inability to complete a call each time she desires.See Pl.'s Pet. at 2. Although she asserts a cause of action for violation of the DTPA, Plaintiff's Petition alleges no particular representations made by ATT, and alleges no specific false, misleading or deceptive acts made by Defendant to implicate the DTPA. Thus, based on the Petition's "Statement of Facts," it appears at first blush that Plaintiff is, as Defendant contends, complaining about the quality of ATT's wireless service. Plaintiff's allegations, however, do not end with the Petition's "Statement of Facts." While Plaintiff's Petition is by no means a model of pellucid draftsmanship, it manages to set forth allegations which arguably support Plaintiff's claim against Defendant for violations of the DTPA. In this regard, Plaintiff's Petition alleges:
As Defendant notes, "`a complaint that service quality is poor is really an attack on the rates charged for the service' and is preempted under Section 332." Def.'s Reply Br. in Support of Mot. to Dismiss at 1 (quoting Bastien v. ATT Wireless Serv's., Inc., 205 F.3d 983, 989 (7th Cir. 2000) ( citing American Tel. Tel. Co. v. Central Office Tel. Inc., 524 U.S. 214, 223 (1998)).
Plaintiff is a consumer as the term is defined in Section 17.45 of the Texas Deceptive Trade Practices and Consumer Protection Act.
The representations, acts, conduct, and omissions of Defendant[, which] constitute false, misleading, and deceptive acts or practices in violation of the Deceptive Trade Practices and Consumer Protection Act including, but not limited to, the following:
1. Representing that goods and services had characteristics and/or benefits they did not have [DTPA Sec. 17.46(b)(5)];
2. Representing that goods and services were of a particular standard, quality, or grade when they were of another [DTPA Sec. 17.46(b)(7)];
3. Representing that the agreement between the Plaintiffs and Defendants [sic] conferred or involved rights, remedies or obligations it did not [DTPA 17.46(b)(12)(19)];
4. Failing to disclose information concerning goods or services which was known but not disclosed in order to induce the Plaintiffs to purchase goods and services from Defendants [sic] [DTPA Sec. 17.46(b)(23)];
5. Engaging in unconscionable actions and course of action [DTPA Sec. 17.50(a)(3)].
The above described representations, acts, conduct and omissions by Defendant were false, misleading, and deceptive in violation of Section 17.46 and Section 17.50 of the Texas Deceptive Trade Practices and Consumer Protection Act and were a direct, proximate, and producing cause and responsibility of the Plaintiff's actual damages in an amount in excess of the minimum jurisdictional limits of the Court.
Pl.'s Pet. at 2-3. These additional allegations support Plaintiff's contention that she is not seeking to challenge ATT's provision of services or its rates. When read in conjunction with the allegations asserted in the Petition's "Statement of Facts," it appears that what Plaintiff is attempting to convey is that the quality of Defendant's wireless service is not what ATT represented it to be. In other words, Plaintiff is complaining that ATT made certain representations about its wireless service (that it had characteristics, benefits, and qualitites), which were false, and that it failed to disclose information about its wireless services in order to induce potential customers to subscribe to the service. As such, Plaintiff's alleged injury is based on Defendant's alleged misrepresentations, false, misleading, and deceptive conduct in advertising its services, and failure to disclose material information about those services, rather than the actual quality of the wireless service.
As previously stated, to fall under the complete preemption exception, the FCA must contain a civil enforcement provision that creates a cause of action that both replaces and protects the analogous state law. The civil enforcement provision of the FCA provides:
All charges, practices, classifications, and regulations for and in connection with such communication service, shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful. . . .47 U.S.C. § 201 (b). Any common carrier who violates this provision shall be liable for damages. See 47 U.S.C. § 206. Therefore, a cause of action exists against a common carrier who charges unreasonable rates. Here, while Plaintiff complains about the quality of ATT's wireless service, she does not directly challenge the quality of its services, or ATT's rates. Instead, Plaintiff's Petition complains about ATT's alleged failure to disclose material information (such as its practice of "overbooking") and alleged misrepresentations about its wireless services. As the FCA's enforcement provision does not create a cause of action for this type of conduct, the Act fails to satisfy the first prong of the Fifth Circuits tripartite test for complete preemption. The court therefore concludes that it lacks authority to recharacterize Plaintiff's DTPA claim as exclusively federal.
Moreover, the court finds no evidence that Congress intended for claims such as the one asserted by Plaintiff should be removable. To the contrary, the FCA's savings clause indicates that Congress intended to preserve state law causes of action for breaches of duties that do not exist under the Act. See Weinberg v. Sprint Corp., 165 F.R.D. 431, 439 (D.N.J. 1996) (citations omitted). In Bryceland v. ATT, a case recently decided in this court, the Magistrate Judge considered the issue of whether the FCA completely preempted state law. 122 F. Supp.2d 703 (N.D. Tex. 2000). In that case, the plaintiffs, subscribers of ATT's wireless telecommunication services, brought a class action in federal and state court based on ATT's alleged failure to provide quality of service as advertised. The plaintiff's asserted state law claims for breach of contract, fraud, breach of warranty, negligent misrepresentation, and for violation of the DTPA. ATT removed the state action to federal court (which was subsequently consolidated with the federal action), asserting, inter alia, federal question jurisdiction based on complete preemption. The court determined that ATT failed to establish a clear Congressional intention to permit removal of Plaintiffs' state claims to federal court. In reaching this conclusion, the court examined the savings clause provision of the Act. The court believed that this provision was further evidence that Congress did not intend to invoke the doctrine of complete preemption under the FCA, and cited to other cases supporting this conclusion. The court agrees with this finding, and also concludes that the savings clause preserves Plaintiff's state law claim against ATT as an independent cause of action, separate from and not arising under the FCA. See Weinberg, 165 F.R.D. at 440 (FCA's savings clause preserved plaintiff's state law claims for fraud, negligent misrepresentation, and violation of state's consumer fraud statute as independent from and not arising under the FCA); see also KVHP TV Partners, Ltd. v. Channel 12, 874 F. Supp. 756, 761-62 (E.D.Tex. 1995) (FCA did not completely preempt state law claims for, inter alia, violation of the Texas Deceptive Trade Practices Act). For this additional reason, the court concludes that Defendant has failed to establish that the FCA meets the Fifth Circuit's test for complete preemption, that Plaintiff's state law claim may not be recharacterized as a claim arising under the FCA, and that this action was removed without federal question jurisdiction.
The FCA's savings clause provides that:
Nothing in this chapter contained 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.
The Seventh Circuit reached a different result in Bastien v. ATT Wireless Services, Inc., 205 F.3d 983 (7th Cir. 2000). The court, however, agrees with the Bryceland court's observance that Bastien does not discuss the three-part test for complete preemption followed in this circuit, and is therefore unpersuasive.
B. Diversity of Citizenship
Having determined that federal questions jurisdiction is lacking, the court must now address whether diversity jurisdiction exists under 28 U.S.C. § 1332. Diversity jurisdiction exists if the amount in controversy requirement is satisfied and there is diversity of citizenship between the plaintiff and defendant. See 28 U.S.C. § 1332 (a). In a class action, the citizenship of the parties is determined by the named class representatives and the defendants to the suit. See Quebe v. Ford Motor Co., 908 F. Supp. 446, 449 (W.D. Tex. 1995) ( citing Calagaz v. Calhoon, 309 F.2d 248, 253 (5th Cir. 1962)). Here, it is undisputed that Plaintiff is a citizen of Texas, and that ATT is a citizen of Delaware. Therefore, complete diversity exists between parties. Although Plaintiff has not lodged a specific objection to removal based on the amount in controversy, the court must nevertheless determine the issue because Plaintiff's Petition does not allege a specific amount of damages.
When, as here, Plaintiff's Petition fails to specify a damage amount, and it is not otherwise facially apparent that the damages sought are likely to meet the jurisdictional amount, Defendant, as the removing party, must prove by a preponderance of the evidence that the amount in controversy meets the jurisdictional limits of the court, that is $75,000. See St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); DeAguilar v. Boeing Co., 11 F.3d 55, 58 (9th Cir. 1993). In such instances, the court may rely on summary judgment-type evidence to ascertain the amount in controversy. See St. Paul, 134 F.3d at 1253.
According to Plaintiff's Petition, she is seeking actual damages on behalf of herself and all members of the putative class, attorney's fees as authorized under the DTPA, and additional damages. See Pl.'s Pet. at 4. Although Plaintiff does not allege the size of the class, Defendant contends that the total number of putative class members, by Plaintiff's definition of the class, will exceed 450,000, and submits the affidavit of Chris Beseda, Director of Finance for ATT Wireless, in support of this contention. The court, however, finds this number of no value in its analysis because it necessarily assumes that all putative class members possess the same interests and have suffered the same injury as Plaintiff Shaw. There is simply no evidence in the record to indicate that such is the case, and to reach this conclusion would require a quantum leap of logic, which the court is totally unprepared to make at this juncture. Accordingly, Defendant's contention that at 10¢ per class member the total actual damages sought would exceed $45,000, is of no moment.
Defendant does not indicate how it arrives at damages of approximately 10¢ per member; however, the court assumes that the figure is based on wireless calls at a rate of 10¢ per minute.
Defendant also contends that if she were to prevail on her DTPA claim, Plaintiff would be entitled to an award of three times the amount of economic damages under the DTPA, as well as attorney's fees. Although Plaintiff does not specifically request punitive damages, Defendant contends that because she seeks "additional damages" under the DTPA, such damages are punitive in nature, see Bank One, Texas, N.A. v. Taylor, 970 F.2d 16, 32 n. 16 (5th Cir. 1992), cert. denied, 508 U.S. 906 (1993), and it is therefore proper to aggregate any trebled amount for purposes of determining the amount in controversy. The court disagrees.
While Defendant asserts that actual damages in this case will exceed $45,000, its calculation is based on an erroneous assumption that the claims of the class may be aggregated to meet the jurisdictional amount, and that the purported class has suffered the same damages as Plaintiff Shaw, which on average would amount to at least 10¢ per class member. Damages of individual class members, however, cannot be aggregated across a class to meet the jurisdictional amount. HD Tire Automotive-Hardware, Inc. v. Pitney Bowes, Inc., ___ F.3d ___, 2001 WL 456082, at *1 (5th Cir. 2001). That is the law of this circuit, even with respect to punitive damages. Id. While the court agrees that trebled damages may be included in determining the amount in controversy, see Chittick v. Farmers Ins. Exchange, 844 F. Supp. 1153, 1155 (S.D. Tex. 1994). Defendant cites to no controlling authority establishing that the court may aggregate the individual claims of the purported class and then treble that amount to satisfy the amount in controversy.
The problem with this case is that Plaintiff's Petition provides no base amount from which the court can extrapolate her actual damages, and there is no clear indication in the record setting forth Plaintiff's damages to determine whether the jurisdictional amount is satisfied. Plaintiff alleges that Defendant misrepresented the availability and quality of its wireless services, and that it failed to disclose material information to induce customers to subscribe to its service. Although not specifically alleged, the court will assume for the purpose of its analysis that Plaintiff subscribed to ATT's Service Plan based on ATT's representations, and that she would not have otherwise subscribed to the service or purchased her cellular phone from ATT absent these representations. Consequently, her actual damages could include (at a minimum) the cost of her cellular phone, activation fee, if any, reimbursements for monthly service charges paid during the period of her subscription, and early termination fee, if any. According to documents filed in conjunction with Defendant's motion to dismiss, Plaintiff signed a Subscriber Service Agreement for ATT Wireless Services on May 17, 2000. See Appendix to Def.'s Mot. to Dismiss Pl.'s Compl. (Exh. 1). The agreement indicates that her selected calling plan required a 12-month commitment, with a monthly service charge of $55. Assuming that Plaintiff did not terminate her ATT wireless service after she filed her state court petition (which was on June 23, 2000), and that she continued the service for the length of the Service Agreement, Plaintiff's actual damages would be at a minimum $660 (without inclusion of additional monthly charges or costs). There is no evidence in the record of the amount Plaintiff paid for her cellular phone, but the court will assume that she paid at least $200, thereby making her damages at least $860. Even when this amount is trebled under the DTPA, Plaintiff's actual damages would fall well below $75,000. Insofar as attorney's fees are concerned, Plaintiff's Petition seeks a claim for attorney's fees under the DTPA. Because the DTPA entitles a prevailing party to receive attorney's fees, those fees would also be included in the amount in controversy. See Pitney Bowes, 227 F.3d at 330. Here, however, the court has absolutely no basis in which to compute the amount of attorney's fees, or to determine whether such fees are sufficient to meet the jurisdictional amount. Therefore, it is impossible to say at this juncture that Plaintiff's damages and claim for attorney's fees are anywhere near the jurisdictional amount
Other than stating that her damages exceed the minimum jurisdictional limits of the court in which her petition was filed, Plaintiff's Petition is silent on the actual amount of damages sought, and Defendant has failed to establish that the value of her claim, or that of any purported class member, likely meets the jurisdictional amount of this court. The court therefore concludes that diversity jurisdiction does not exist, and that this action must be remanded to state court for lack of subject matter jurisdiction. III. Conclusion
Having determined that it does not have subject matter jurisdiction over the case, the court does not determine the merits of Defendant's Motion to Dismiss Plaintiff's Complaint.
For the reasons previously stated, the court finds that there is no federal question raised on the face of Plaintiff's state court petition, and that Defendant has failed to establish diversity jurisdiction. The court therefore concludes that it lacks subject matter jurisdiction over the case, and that this action was improperly removed to federal court. Accordingly, pursuant to 28 U.S.C. § 1447 (c). this case is hereby remanded to the 44th Judicial District Court, Dallas County, Texas. Each party shall bear its own costs and actual expenses.
It is so ordered.