Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-01799/USCOURTS-cand-3_05-cv-01799-1/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 28:1441 Petition for Removal

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United States District Court

For the Northern District of California

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1Defendants in this case are: American Airlines, Inc., Delta Airlines, Inc., Continental

Airlines Inc., Northwest Airlines, Inc., United Airlines, Inc., Virgin Atlantic Airways Limited,

Air Canada, Air China, Air France, Air New Zealand, Air Trans Airways, Alaska Airlines, Inc.,

British Airways, Plc., Japan Airlines International Company Ltd., KLM Royal Dutch Airlines,

Lufthansa, and Air Wisconsin Airlines Corporation.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ENVIRONMENTAL WORLD

WATCH, INC.,

Plaintiff,

v.

AMERICAN AIRLINES, INC., et al.,

Defendants.

NO. C05-1799 TEH 

ORDER GRANTING PLAINTIFF’S

MOTION TO REMAND

This matter came before the Court on Monday, June 27, 2005, on Plaintiff

Environmental World Watch’s motion to remand. After carefully considering the parties’

written and oral arguments, relevant case law, and the factual allegations in this case, the Court

now GRANTS Plaintiff's motion for the reasons discussed below.

BACKGROUND

Plaintiff Environmental World Watch claims that various commercial airlines1 which

regularly operate in California violated California Health and Safety Code Section 25249.6,

commonly known as “Proposition 65.” Proposition 65 requires businesses with ten or more

employees that operate or sell products in California to provide clear and reasonable warnings

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before knowingly and intentionally exposing a person to certain listed chemicals through a

medium other than drinking water.

Proposition 65 lightens traditional standing requirements and permits suits brought in

the interest of the public. Both public and private parties who provide statutory notice of an

intent to sue at least sixty days before filing suit may sue alleged violators of Proposition 65

“in the public interest” even in the absence of any personal or individualized losses. Cal. Code

Regs. tit. 11, § 3000.

 In a single cause of action, Plaintiff’s complaint alleges that Defendants caused

environmental exposure (to airport visitors and other individuals) and occupational exposure

(to airline employees) from aircraft emissions containing carcinogens and reproductive toxins

identified in Proposition 65 without providing warnings required by the statute. Plaintiff has

admittedly sustained no injury and is bringing this matter as a private attorney general, on

behalf of the general public. Dunlap Decl. ¶ 2.2

This lawsuit was originally filed in San Francisco Superior Court on March 24, 2005. 

Subsequently, a single Defendant, Air New Zealand, removed the entire action to federal court

pursuant to the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1330 and 1441(d). 

Plaintiff does not contest that Air New Zealand is a foreign sovereign. Instead, Plaintiff argues

that this Court lacks subject matter jurisdiction due to a defect in standing, and that the entire

action must therefore be remanded to state court. Only Defendant Air New Zealand opposes

Plaintiff’s motion for remand.

LEGAL STANDARD

If, at any point prior to final judgment, a federal court determines that it lacks subject

matter jurisdiction over a case that was removed from state court, the court shall remand the

case back to state court. 28 U.S.C. § 1447(c). The removing party has the burden of showing

that the action properly belongs in federal court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th

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Cir. 1992). Moreover, federal courts must “strictly construe the removal statute against

removal jurisdiction.” Id. 

DISCUSSION

Motion To Remand

The general rule is that a cause of action may be removed to federal court only if it

could have been brought originally in federal court. Teledyne v. Kone, 892 F.2d 1404, 1407

(9th Cir. 1989). Defendant Air New Zealand argues that removal to federal court was proper

because the FSIA provides district courts with original jurisdiction over “any nonjury civil

action against a foreign state . . . with respect to which the foreign state is not entitled to

immunity.” 28 U.S.C. § 1330. It appears that Defendant Air New Zealand is a foreign state

within the meaning of 28 U.S.C. § 1603, and Plaintiff does not contest this point.

The FSIA codifies a restrictive theory of sovereign immunity. Verlinden B. V. v.

Central Bank of Nigeria, 461 U.S. 480, 488 (1983). Pursuant to § 1604, a foreign state is

normally immune from the jurisdiction of federal and state court, subject to a set of

exceptions specified in §§ 1605 and 1607. Id. A sovereign is not immune for actions based

upon commercial activities carried on in the United States. 28 U.S.C. § 1605(a)(2). The

subject matter jurisdiction granted to the district courts by the FSIA is federal question

jurisdiction. Verlinden, 461 U.S. at 493-494. Further, the FSIA does not create an

independent cause of action. 15 Moore’s Federal Practice § 104.4 (2005). 

Congress drafted a specific subsection of the removal statute to deal with foreign

sovereigns. 28 U.S.C. § 1441(d). Section 1441(d) states that “any civil action brought in State

court against any foreign state . . . may be removed by the foreign state.” Id. The Ninth Circuit

has noted that Congress specifically drafted § 1441(d) to exempt foreign sovereigns from

some generally applicable rules of removal. Teledyne, 892 F.2d at 1409. “Ordinarily, a case

may not be removed (1) if any defendant objects, or (2) in cases where jurisdiction is founded

on diversity of citizenship, if any defendant is a citizen of the state in which the action was

brought. Under the FSIA, these restrictions do not apply.” Id. (internal citations omitted).

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In the instant case, Defendant Air New Zealand contends that removal pursuant to the

FSIA grants the Court subject matter jurisdiction. Verlinden, 461 U.S. at 493-494; Eie Guam

Corp. v. Long Term Credit Bank of Japan, 322 F.3d 635, 647 (9th Cir. 2003). While

Defendant correctly notes that actions removed under the FSIA “arise under” Article III,

Defendant’s analysis is incomplete. Id. Although the FSIA presents federal question

jurisdiction in a suit against a foreign sovereign engaged in commercial activity, compliance

with the statute does not necessarily satisfy all aspects required for a federal court to have

jurisdiction. While the FSIA can provide a basis to overcome statutes that narrow the scope of

federal jurisdiction under Article III, a congressional statute cannot form the foundation to

supersede a constitutionally imposed jurisdictional requirement. Verlinden, 461 U.S. at 491. 

Defendant Air New Zealand asserts that this Court should adjudicate the entire action –

claims against both sovereign and non-sovereign Defendants – because foreign sovereigns are

entitled “an absolute right to a federal forum.” Teledyne, 892 F.2d at 1409. Indeed, the Ninth

Circuit noted that “at the very least, § 1441(d) expresses an intention to give sovereign foreign

defendants an absolute right to a federal forum coupled with an unusually strong preference for

the consolidation of claims.” Id. However, the authority granted to federal courts under the

FSIA and § 1441(d) must still fall within the scope of the Constitution because “Congress may

not expand the jurisdiction of the federal courts beyond the bounds established by the

Constitution.” Verlinden, 461 U.S. at 491. Defendant Air New Zealand never addresses the

tension between the FSIA’s grant of subject matter jurisdiction and Plaintiff’s apparent lack of

standing to pursue the action in this Court.

Although § 1441(d) provides a basis for removing “any civil action,” this broad

authority refers more to statutory barriers to jurisdiction, such as the limitations of

supplemental jurisdiction, complete diversity, or notice for removal. Teledyne, 892 F.2d at

1409; Eie Guam Corp., 322 F.3d at 649 (noting that the timing for notice of a removal

pursuant to § 1446(b) may be enlarged at any time for cause shown by a foreign state). 

Although Congress may have intended to give foreign sovereigns a right to a federal forum, the

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breadth of “any civil action” in § 1441(d) must still fall within the constitutional grant of

authority to federal courts. See Verlinden, 461 U.S. at 491; Teledyne, 892 F.2d at 1409.

Federal courts are courts of limited jurisdiction and the outer bounds of their authority

are determined by Article III of the Constitution. Verlinden, 461 U.S. 480, 491 (1983). 

Under Article III, a federal court may only hear matters arising out of a case or controversy,

and standing “is an essential and unchanging part of the case-or-controversy requirement of

Article III.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); see also Bender v.

Williamsport Area School District, 475 U.S. 534, 541-543 (1986) (holding that standing is an

integral component of subject matter jurisdiction).

Further, the Supreme Court has established that the “irreducible constitutional

minimum” of standing contains three elements. Lujan, 504 U.S. at 560. First, the plaintiff

must have suffered an “injury in fact” -- an invasion of a legally protected interest which is

“concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id.

Second, there must be a causal connection between the injury and the conduct complained of;

the injury has to be “fairly . . . trace[able] to the challenged action of the defendant, and not . . .

the result [of] the independent action of some third party not before the court.” Id. Third, it

must be “likely,” that the injury will be “redressed by a favorable decision.” Id. at 561. If a

plaintiff’s claim is deficient with respect to any of these three elements, the plaintiff lacks

standing and no federal court has jurisdiction to hear the claim. Since Plaintiff admittedly has

suffered no “injury in fact,” this Court has no authority to hear the claim because it does not

fall within in the scope of authority granted to it by Article III of the Constitution.

Plaintiff properly commenced this action in state court because Proposition 65 eases

state standing requirements by permitting suits brought in the public interest. Cal. Code Regs.

tit. 11, § 3000. However, Proposition 65’s expanded conception of standing has no authority

to alter the scope of federal jurisdiction. Fiedler v. Clark, 714 F.2d 77, 80 (9th Cir. 1983). 

As the Ninth Circuit noted in Fiedler, while having “extensive . . . power to create and define

substantive rights, the states have no power directly to enlarge or contract federal jurisdiction.” 

Id. The Ninth Circuit noted that actions brought pursuant to a Hawaii statute, which permitted

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3The prudential limitations of standing are not at issue in this case. However, the Ninth

Circuit has recognized at least three prudential limitations on standing. McMichael v. County

of Napa, 709 F.2d 1268, 1270 (9th Cir. 1983). First, the plaintiff must assert his own rights

and cannot rest his claim to relief on the legal rights or interests of third parties. Id. Second,

the plaintiff’s injury must not be shared in substantially equal measure by all or a large class of

citizens rendering it a generalized grievance not normally appropriate for judicial resolution. 

Id. Third, the plaintiff’s injury must arguably be within the zone of interest to be protected or

regulated by the statute or constitutional guarantee in question. Id. These requirements limit

the scope of federal jurisdiction further than what the Constitution would permit. Id.

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suit by a private attorney general to enforce federal statutes, lacked standing if brought in

federal court when the federal statute itself did not provide for a private right of action. Id. at

79-80. Similarly, under a Proposition 65 case brought by a private attorney general which was

removed on the basis of diversity, a California district court remanded the case, noting that it

lacked subject matter jurisdiction because the injury requirement was not met. Toxic Injuries

Corp. v. Safety-Kleen Corp., 57 F. Supp. 2d 947, 953-954 (C.D. Cal. 1999). Further, other

California district courts, including one in the Northern District of California, have held that a

state-created statutory right to act as a private attorney general does not confer injury on the

plaintiff sufficient to satisfy federal standing requirements. E.g., As You Sow v. SherwinWilliams Co., 1993 U.S. Dist. LEXIS 18310, *6 (N.D. Cal. Dec. 27, 1993) (holding that a

state-created statutory right to act as a private attorney general, under Proposition 65, does not

confer injury on the plaintiff sufficient to satisfy federal standing requirements).

Moreover, the FSIA, a congressional statute, cannot provide a basis to circumvent

Plaintiff’s lack of standing. Mangini v. R.J. Reynolds Tobacco Co., 793 F. Supp. 925, 929

(N.D. Cal. 1992). The district court in Mangini noted that Congress may, by legislation,

“expand standing to the full extent permitted by Art. III, thus permitting litigation by one ‘who

otherwise would be barred by prudential standing rules.’” Id.3 However, under no

circumstances can Congress “abrogate the Art. III minima.” McMichael v. County of Napa,

709 F.2d 1268, 1270 (9th Cir. 1983). Therefore, even if Congress intended to grant foreign

sovereigns broad authority to remove pursuant to the FSIA, the FSIA cannot provide a

foundation to trump the “injury in fact” requirement. In the instant case, Plaintiff has no

standing to be in federal court because it has suffered no injury. Thus, despite the broad power

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4Thus, the Court need not consider the remaining issues raised by the parties: e.g.,

whether this Court should retain jurisdiction over all Defendants, or consider the various

issues raised in Defendants’ motions to dismiss, if jurisdiction over Air New Zealand were

proper.

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to remove held by Air New Zealand as a foreign sovereign, this Court lacks subject matter

jurisdiction over the case.

Section 1447(c) expressly states that a federal court shall remand a case back to state

court if at any point prior to final judgment the court determines that there is a defect in

subject matter jurisdiction. 28 U.S.C. §1447(c). Defendant Air New Zealand posits that

Plaintiff’s failure to cite authority on point that indicates a case removed under the FSIA must

be remanded if it fails to present an Article III case or controversy is fatal to Plaintiff’s

motion. However, the burden falls on the removing party to show that the Court has

jurisdiction. Gaus, 980 F.2d at 566. Defendant Air New Zealand has not directly addressed

this Court’s lack of standing and has failed to demonstrate that assuming subject matter

jurisdiction under the FSIA does not violate Article III where there is no case or controversy

between the parties. Since this Court lacks subject matter jurisdiction over all Defendants,

including Air New Zealand, because of the defect in standing, the proper procedure is to

remand this action back to San Francisco Superior Court.4

Attorney Fees

The remaining issue is whether the Court shall award attorney fees and costs under

§ 1447(c). An order remanding a case to state court “may require payment of just costs and

actual expenses, including attorney fees, incurred as result of removal.” 28 U.S.C. § 1447(c). 

A district court may exercise its discretion to award fees and costs even absent a finding of bad

faith on the part of the removing party. Moore v. Permanente Medical Group, Inc., 981 F.2d

443, 448 (9th Cir. 1992). A district court’s award of attorney fees and costs under § 1447(c)

is reviewed for abuse of discretion. K.V. Mart Co. v. United Food and Commercial Workers

Int’l Union, Local 324, 173 F.3d 1221, 1223 (9th Cir. 1999). Where removal involves

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complicated issues, and is not frivolous or improper, an award of attorney fees is unwarranted. 

Toxic Injuries Corp., 57 F. Supp. 2d at 957-958. 

In Toxic Injuries Corp., the district court refused to award attorney fees to a private

attorney general suing under Proposition 65 when the action was improperly removed to

federal court on the basis of diversity. Id. There, although plaintiff had sent defendant a

lengthy letter noting why removal was improper despite the presence of diversity, neither the

Supreme Court nor the Ninth Circuit had addressed the issue. Id. The district court held that,

“[d]efendant’s removal was not so obviously barred as to warrant an award.” Id. at 958.

 In this case, there is no evidence that Defendant Air New Zealand acted in bad faith in

removing this action. While Plaintiff correctly notes that attorney fees may be awarded for an

improper removal even in the absence of bad faith, the decision is still within the discretion of

the Court. Moore, 981 F.2d at 448. There is no authority specifically dealing with the injury

requirement and the FSIA. Neglecting the defect in standing, Defendant Air New Zealand met

the requirements of the FSIA. Given the paucity of authority dealing with standing under the

FSIA, and following the logic of Toxic Injuries Corp., this Court exercises its discretion to

DENY Plaintiff’s request for attorney fees.

CONCLUSION

Removal of this action was improper because this Court lacks subject matter

jurisdiction. Plaintiff has no standing to sue in federal court because it has not met the injury

requirement. Thus, this case presents is no Article III “case or controversy.” Although the

FSIA provides a basis for foreign sovereigns to remove actions against them to federal court, a

Congressional statute cannot abrogate the limitations imposed on this Court by the

Constitution. Moreover, a state statute cannot enlarge the scope of federal jurisdiction. 

Defendant Air New Zealand has not shown why the application of subject matter jurisdiction

under the FSIA does not violate Article III where there is no case or controversy between the

parties. Since this Court lacks subject matter jurisdiction over the entire action, the proper

procedure is to remand the case back to San Francisco Superior Court under § 1447(c). 

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Accordingly, with good cause appearing, Plaintiff’s motion to remand is GRANTED, and the

Clerk shall close the file.

IT IS FURTHER ORDERED that Plaintiff’s motion for attorney fees is DENIED. This

is a complex issue and there is no authority on point. Thus, the Court finds it appropriate to

exercise its discretion to deny Plaintiff’s request for fees even though removal was improper.

IT IS SO ORDERED.

DATED 08/03/05 /s/ 

THELTON E. HENDERSON, JUDGE

UNITED STATES DISTRICT COURT

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