Opinion
Civil No. 04-CV-3002-HA.
July 30, 2004
Caren J. Rovics, Stephen K. Bushong, William E. Brickey, Oregon Department of Justice, Salem, Oregon, Attorneys for Plaintiff.
William F. Martson, Jr., Steven M. Wilker, Paul W. Conable, Tonkon Torp, Portland, Oregon, Attorneys for Defendant.
OPINION AND ORDER
The Attorney General moves for an order remanding this matter to state court (Doc. # 9). For the reasons outlined below, the Attorney General's motion is GRANTED.
BACKGROUND
The Attorney General of the State of Oregon, seeks to investigate Portland General Electric Company (PGE) through a Civil Investigative Demand (CID) issued pursuant to the Oregon Unlawful Trade Practices Act (UTPA), O.R.S. 646.618, and through an Investigative Subpoena issued pursuant to the Oregon Racketeer Influenced and Corrupt Organization Act, O.R.S. 166.730. The investigation concerns PGE's electricity trading practices and the alleged manipulation of electricity transmissions.
The Attorney General served PGE with the CID and Investigative Subpoena on November 7, 2003. PGE did not respond. On December 16, 2003, the Attorney General filed a motion in Multnomah County Circuit Court for an Order to Show Cause based on PGE's failure to respond to the CID and Investigative Subpoena. The state court ordered PGE to appear on January 9, 2004, to show cause for failing to comply with the investigation.
PGE removed the investigation to this court pursuant to 28 U.S.C. § 1441. Asserting that this court lacks jurisdiction to hear the case, the Attorney General seeks to remand the matter to state court. 28 U.S.C. § 1447(c).
STANDARDS
There is a "strong presumption" against removal, and the burden of persuasion lies with the party seeking removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Nishimoto v. Federman-Bachrach Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990); Emrich v. Touche Ross Co., 846 F.2d 1190, 1195 (9th Cir. 1988)). Federal question jurisdiction is informed by the well-pleaded complaint rule, which provides that federal jurisdiction exists if a federal question is presented on the face of the complaint. Ansley v. Ameriquest Mortgage Co., 340 F.3d 858, 861 (9th Cir. 2003) (citing Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998)). The complete preemption doctrine provides a narrow exception to the well-pleaded complaint rule in cases in which a federal statute completely preempts an area of state law. Id at 861-62 (citing Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1107 (9th Cir. 2000)). "In such instances, any claim purportedly based on that preempted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Id. (citing Balcorta, 208 F.3d at 1107.
DISCUSSION
The federal removal statute specifically identifies a "civil action brought in a State court of which the district courts of the United States have original jurisdiction" as the type of action that may be removed. 28 U.S.C. § 1441(a). The term "civil action" as used in 28 U.S.C. § 1441(a) has been construed broadly by the federal courts and has included proceedings involving condemnation and garnishment, as well as actions to compel arbitration. See Chicago, R.I. P.R. Co. v. Stude, 346 U.S. 574 (1954) (condemnation); Johnson v. England, 356 F.2d 44 (9th Cir. 1966) (arbitration); Swanson v. Liberty Nat'l Ins. Co., 353 F.2d 12 (9th Cir. 1965) (garnishment).
Although the term "civil action" as defined by 28 U.S.C. § 1441(a) is not necessarily limited to traditional civil complaints, it does not encompass the present matter. The current investigative proceedings cannot expose PGE to monetary damages or equitable relief unless the Attorney General files a civil action, which may be removed to this court to determine whether complete preemption applies. As the Oregon Supreme Court has noted, the CID process allows the Attorney General "to determine whether any violation has occurred." State ex rel. Redden v. Discount Fabrics, Inc., 615 P.2d 1034, 1038 n. 6 (Or. 1980). It is possible that no civil action will be filed because the Attorney General's investigation may not uncover evidence of unlawful conduct. Without a civil action before it, this court has no jurisdiction to strip the Attorney General of his state-created power to investigate possible unlawful conduct.
In Swanson, the Ninth Circuit considered whether a garnishment proceeding brought in the Superior Court of Alaska was a separable civil action that could be removed. In evaluating the substance of the action, the Ninth Circuit observed that the state court's "characterization" of a proceeding is entitled to "great weight." Swanson, 353 F.2d at 13. After evaluating the Alaska Rules of Civil Procedure, the Ninth Circuit determined that state law would "set up garnishment for this case as an independent civil action." Id.
In contrast to Swanson, the courts of the State of Oregon do not treat CIDs as independent civil actions. The Oregon Court of Appeals has determined that "the applicability of the UTPA to the conduct of the recipient of an investigative demand is not subject to judicial determination at the investigative stage. . . ." State ex. rel. Kulongoski v. Cunning, 912 P.2d 958, 959 (Or.App. 1996). Thus, an investigative demand proceeding is not the appropriate forum for deciding whether the party being investigated is subject to the UTPA. Vendall Marketing Corp. v. Dept. of Justice, 863 P.2d 1263 (Or. 1993). In fact, " any person who is believed to have information" relevant to a "suspected violation" of the UTPA can be investigated. Id. at 1263 n. 1 (citing O.R.S. 646.618(1) (emphasis added). Therefore, the Attorney General is authorized to investigate PGE if he believes PGE possesses relevant information, even if a civil action flowing from the investigation is filed against individuals or entities unrelated to PGE.
PGE contends that this entire matter is preempted by the Federal Power Act (FPA), 16 U.S.C. § 791a et seq. In People of California ex rel. Lockyer v. Dynegy, Inc., Nos. 02-16619, 03-15588, 02-16625, 02-16629, 2004 WL 1488195 (9th Cir. July 6, 2004), the Ninth Circuit recently determined that claims brought by the State of California against several power companies for alleged violations of California's unfair competition law were preempted by the FPA. Id. at *13-16. Lockyer suggests that any civil action resulting from the current investigation will likely be preempted by the FPA. However, without a civil action before it, the court cannot make this determination.
Unlike the current investigation, Lockyer involved " causes of action against the companies for violating state unfair competition law with respect to the ancillary services market." Id. at *2 (emphasis added). There is no "state law claim" here as there was in Lockyer. Id. at *4.
If, following its investigation, the Attorney General chooses to file a complaint in state court and PGE attempts to remove the action here, the court will consider whether federal question jurisdiction exists and whether the matter is preempted by the FPA. However, removal is improper at this time because the current investigation is not a "civil action brought in a State court. . . ." 28 U.S.C. § 1441(a).
CONCLUSION
Because this court lacks original jurisdiction to review the current investigation, the matter is remanded to state court. Accordingly, the Attorney General's Motion to Remand (Doc. # 9) is GRANTED. The matter is remanded to Multnomah County Circuit Court.IT IS SO ORDERED.