In the

United States Court of Appeals

For the Seventh Circuit

No. 00-3823

City of Beloit,

Plaintiff-Appellant,

v.

Local 643 of the American Federation of State,

County and Municipal Employees, AFL-CIO,

Defendant-Appellee.

Appeal from the United States District Court

for the Western District of Wisconsin.

No. 00 C 220--Barbara B. Crabb, Judge.

Argued March 26, 2001--Decided April 20, 2001

 Before Flaum, Chief Judge, and Bauer and Rovner,

Circuit Judges.

 Flaum, Chief Judge. The city of Beloit

("Beloit") appeals the dismissal of its

declaratory judgment action against Local 643,

American Federation of State, County and

Municipal Employees, AFL-CIO ("Local 643"). This

action seeks to determine whether Beloit is

required to arbitrate a grievance filed by Local

643. Beloit challenges the district court’s

determination that federal subject matter

jurisdiction over its suit is absent. For the

reasons stated herein, we affirm.

I. Background

 Beloit receives grants from the federal

government to fund its public transit system as

provided in the Urban Mass Transit Act ("UMTA"),

49 U.S.C. sec. 5301, et seq. Beloit and Local 643

have what is known as a sec. 13(c) agreement,

named after a section of the original UMTA. This

section, now codified at 49 U.S.C. sec. 5333(b),

requires a recipient of financial assistance

under the UMTA to arrange for the protection of

employees who are involved in the public transit

system.

 The sec. 13(c) agreement between Beloit and

Local 643 provides that no employee represented
by Local 643 can be laid off or otherwise have

his or her employment condition worsened as a

result of the receipt of federal funds. Another

part of the agreement states that its protections

do not apply to changes in business brought about

by causes other than Beloit’s use of the federal

assistance. An unexecuted addendum to the sec.

13(c) agreement states that if a dispute under

the agreement is not resolved, Local 643 can file

a written notice with the Wisconsin Employment

Relations Commission ("WERC") and have the

dispute submitted to arbitration.

 The number of people using Beloit’s mass

transit system has declined every year since

1992, while the costs of operating the system

have risen. Because of the financial difficulties

caused by these trends, Beloit decided to lay off

two part-time employees and not to fill a vacancy

created by another worker who left the city’s

employ. Local 643’s representative sent a

grievance form to Beloit, claiming that the sec.

13(c) agreement required Beloit to notify the

union of any layoffs. Beloit responded that the

matter was not grievable because the reduction in

force was caused by external economic conditions

not related to the receipt of federal assistance.

Local 643 then filed a notice with the chairman

of WERC and demanded binding arbitration.

 Beloit then filed a declaratory judgment action

in federal court seeking a determination that its

employment decisions were not covered by the sec.

13(c) agreement and thus it was not required to

submit to arbitration. Local 643 responded with

a motion to dismiss for lack of subject matter

jurisdiction under Federal Rule of Civil

Procedure 12(b)(1). The district court dismissed

Beloit’s suit, finding no basis for federal

jurisdiction.

II. Discussion

 Beloit’s primary argument to this court is

based on 49 U.S.C. sec. 5333(b)(1), which states

"As a condition of financial assistance . . . ,

the interests of employees affected by the

assistance shall be protected under arrangements

the Secretary of Labor concludes are fair and

equitable" (emphasis added). The "arrangements"

described in this section are provisions that

would be included in a sec. 13(c) agreement. 49

U.S.C. sec. 5333(b)(2). Beloit contends that the

language of sec. 5333(b)(1) indicates that such

arrangements apply only when employees are

negatively "affected by the assistance" of

federal funding. It claims that this statutory

language of the UMTA requires a nexus between the

receipt of any federal funds and an adverse

employment action before the protections of a
sec. 13(c) agreement can be invoked. This

interpretation of the UMTA presents a federal

question, and thus the federal courts have

subject matter jurisdiction under 28 U.S.C. sec.

1331.

 We review de novo the district court’s

dismissal for lack of subject matter

jurisdiction. Sapperstein v. Hager, 188 F.3d 852,

855 (7th Cir. 1999). The only possible basis for

subject matter jurisdiction in this case would

appear to be federal question jurisdiction. The

well-pleaded complaint rule requires a federal

question to be evident from the face of the

plaintiff’s complaint for jurisdiction under 28

U.S.C. sec. 1331 to exist. Rivet v. Regions Bank

of La., 522 U.S. 470, 475 (1998); see also

Louisville & Nashville R.R. Co. v. Mottley, 211

U.S. 149 (1908). In a declaratory judgment

action, the well-pleaded complaint rule requires

this court to determine whether a federal

question would be present on the face of a

complaint by the declaratory defendant in a

presumed suit against the declaratory plaintiff,

unless the declaratory defendant is a government

entity. Norfolk S. Ry. Co. v. Guthrie, 233 F.3d

532, 535 (7th Cir. 2000); Northeast Ill. Reg’l

Commuter R.R. Corp. v. Hoey Farina & Downes, 212

F.3d 1010 (7th Cir. 2000) ("Metra").

 Because Local 643, the declaratory defendant, is

a private entity, we examine whether federal

question jurisdiction would have existed over any

claims it could have raised in a suit against

Beloit. As described in Beloit’s complaint, Local

643 contends that the sec. 13(c) agreement

requires the city to send a formal notice to the

union regarding any layoffs of transit workers,

but Beloit refused to provide this notice. Thus,

an action by Local 643 would be premised on a

breach of the sec. 13(c) agreement. A claim that

a sec. 13(c) agreement has been violated does not

state a cause of action on which relief can be

granted in a federal court, Jackson Transit Auth.

v. Local Div. 1285, Amalgamated Transit Union,

457 U.S. 15 (1982), and so the union’s suit would

be dismissed. In this presumed action, Beloit’s

argument based on the lack of a nexus between the

federal funds and the adverse employment action

asserted to be required by the UMTA would be

raised only as a defense, and so would not

satisfy the well-pleaded complaint rule. Rivet,

522 U.S. at 475. Thus, even if interpretation of

the UMTA would be required, this would not be

evident from the face of the union’s complaint

and we would lack jurisdiction in this putative

suit. Because federal jurisdiction would be

absent in a suit by Local 643 against Beloit, we

also lack jurisdiction to consider Beloit’s

declaratory action against Local 643.
 Beloit has a few responses to this line of

reasoning, but these are unsuccessful. The

initial two concern substantive arbitrability,

that is, the question of whether a party can be

required to arbitrate a dispute. Beloit’s first

contention is that the putative suit filed by

Local 643 could have been a declaratory action

asking a federal court to find that the sec.

13(c) agreement provided for arbitration, rather

than a simple breach of contract suit. Beloit

conjectures that the union might have done this

because, according to its complaint, the only

mention of arbitration is contained in an

unexecuted addendum to the sec. 13(c) agreement,

and Local 643 could have had concerns about

whether Beloit could be forced into arbitration

on this basis. The second claim is that under

federal law whether an employer must arbitrate a

dispute with a union is a matter for a court

rather than an arbitrator. 

 The problem with both of Beloit’s related

contentions is that an issue of substantive

arbitrability standing alone does not present a

federal question; rather, some other basis for

jurisdiction must present. Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25

n.32 (1983); Caudle v. American Arbitration

Ass’n, 230 F.3d 920, 922 (7th Cir. 2000). Thus,

Beloit’s first argument would not establish

jurisdiction because the mere fact that Local 643

might wish to determine whether it could force

the city to arbitrate would not cause the union’s

suit to arise under federal law. Such a suit by

Local 643 would raise questions only of

interpreting the sec. 13(c) agreement to

determine what it requires. Under Jackson

Transit, 457 U.S. at 29, such issues are to be

decided by state courts rather than federal ones.

 Regarding Beloit’s second argument, the city is

correct that under federal law substantive

arbitrability is usually an issue for the courts.

E.g., AT&T Techs., Inc. v. Communications Workers

of Am., 475 U.S. 643, 649 (1986). However, as

stated above, a question of substantive

arbitrability does not establish a basis for

federal jurisdiction. Since no foundation for

jurisdiction is present in this case, we lack the

power to determine whether Beloit should be

required to arbitrate. By comparison, in all of

the cases cited by Beloit for the principle that

substantive arbitrability is a matter for the

courts, federal jurisdiction was based on 29

U.S.C. sec. 185(a), which provides for subject

matter jurisdiction for "[s]uits for violation of

contracts between an employer and a labor

organization." See, e.g., AT&T Techs., 475 U.S.

at 646 & n.4. However, as noted by the district
court, "employer" is defined as excluding "any

State or political subdivision thereof." 29

U.S.C. sec. 152(2). Thus, Beloit cannot take

advantage of this provision to establish

jurisdiction.

 Beloit’s last argument is based on case law,

but the decisions it cites are distinguishable

because of the nature of the defendants in those

suits. Two of these, United Transp. Union v.

Brock, 815 F.2d 1562 (D.C. Cir. 1987) and

Amalgamated Transit Union Int’l v. Donovan, 767

F.2d 939 (D.C. Cir. 1985), each involved a

challenge to the Secretary of Labor’s

("Secretary") decision to certify a sec. 13(c)

agreement. The Secretary’s approval of a sec.

13(c) agreement is required by what is now 49

U.S.C. sec. 5333(b)(1), and in each case a union

was claiming that the Secretary erred in granting

certification because the agreement in question

did not adequately protect the interests of

transit workers. Neither case discusses subject

matter jurisdiction, but a basis for such is

readily apparent. Suits against federal officers

or agencies arise under the laws of the United

States, unless a statute precludes judicial

review, and thus 28 U.S.C. sec. 1331 provides a

basis for subject matter jurisdiction. See

Califano v. Sanders, 430 U.S. 99, 105 (1977). In

both United Transportation and Amalgamated

Transit, the plaintiff unions were suing the

Secretary, no statute precluded review,/1 and

thus each action raised a federal question. By

contrast, Beloit is suing a private organization

rather than a federal agency or officer, and so

cannot rely on the same basis for jurisdiction

that was present in the D.C. Circuit cases.

 The final case relied on by Beloit is City of

Independence, Mo. v. Bond, 756 F.2d 615 (8th Cir.

1985). This case involved the interpretation of

an agreement formed pursuant to a provision in

the Job Training Partnership Act ("JTPA")/2

rather than a sec. 13(c) agreement under the

UMTA, but Beloit argues that the two situations

are analogous. Even if the two statutes are

similar, City of Independence cannot aid Beloit.

As explained in Metra, 212 F.3d 1015-16, when a

declaratory action is filed against a state

government entity, the complaint of the

declaratory plaintiff determines whether the

well-pleaded complaint rule is satisfied. City of

Independence was a declaratory judgment action

naming the governor of Missouri, the executive of

a county, and the county itself, which are all

government entities or officers, as declaratory

defendants. 756 F.2d at 616. Thus, the

declaratory complaint, rather than a presumed

complaint by the declaratory defendant, would

have been examined to determine whether a federal
question was well pleaded. The plaintiff city’s

complaint raised the need to interpret the JTPA

on its face, id. at 617-18, and so jurisdiction

arose under 28 U.S.C. sec. 1331. By contrast,

Local 643 is a private organization and so, as

discussed earlier, different principles for

determining whether federal question jurisdiction

exists over a declaratory judgment action apply

and differentiate this case from City of

Independence.

III. Conclusion

 Under Jackson Authority, federal jurisdiction

would not exist over a suit by Local 643 against

Beloit for a breach of the sec. 13(c) agreement.

For this reason and because Local 643 is a

private organization, we lack jurisdiction to

entertain a declaratory judgment action by Beloit

seeking to preempt Local 643’s attempt to require

the city to arbitrate the alleged breach.

Therefore, the district court’s dismissal of this

action because of the absence of subject matter

jurisdiction is Affirmed.

/1 In Amalgamated Transit, the Secretary argued that

the Administrative Procedure Act shielded his

actions from judicial scrutiny, but this

contention was rejected by the D.C. Circuit. 767

F.2d at 944-46.

/2 The JTPA has since been superseded by the

Workforce Investment Act of 1998, 29 U.S.C. sec.

2801, et seq. See 29 U.S.C. sec. 2940(b).