Source: https://case-law.vlex.com/vid/138-f-3d-46-594897466
Timestamp: 2019-04-20 14:35:37+00:00

Document:
138 F.3d 46 (2nd Cir. 1998), 96-9244, Marcus v. AT&T Corp.
Docket Nº: Docket Nos. 96-9244, 96-9256.
Party Name: Lawrence MARCUS; Marc Kasky, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. AT&T CORP., Defendant-Appellee. Jeffrey A. MOSS, on behalf of himself and all others similarly situated, Plaintiff-Appellant, Donna Borok Moss, Plaintiff, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Defendant-Appellee.
AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Defendant-Appellee.
Arthur R. Miller, Cambridge MA (Michael C. Spencer, Milberg Weiss Bershad Hynes & Lerach, New York City, Janine L. Pollack, New York City, on the brief) for Marcus Plaintiffs-Appellants.
Steven R. Rhoads, The Mills Law Firm, Greenbrae, CA (Robert W. Mills, Greenbrae, CA, Donald M. Lefari, Sails & Lefari, New York City, on the brief) for Moss Plaintiffs-Appellants.
Howard J. Trienens, Sidley & Austin, New York City (Steven M. Bierman, Elizabeth M. Sacksteder, New York City, on the brief, Marc E. Manly, Howard Spierer, Office of the Solicitor General, AT&T Corp., Liberty Corner, NJ, of counsel), for Defendant-Appellee.
Before: WINTER, Chief Judge [*], MESKILL and WALKER, Circuit Judges.
On appeal, plaintiffs-appellants in Marcus v. AT & T, No. 96-9244 (the "Marcus appellants"), and in Moss v. AT & T, No. 96-9256 (the "Moss appellants"), two separate class actions alleging similar deceptive billing practices by defendant-appellee AT & T Corporation, challenge the order of the United States District Court for the Southern District of New York (Michael B. Mukasey, District Judge) dismissing their complaints for failure to state a claim upon which relief can be granted. In addition, the Marcus appellants contend that, there being no basis for federal jurisdiction over their complaint, the district court improperly denied their motion to remand their complaint to state court.
The Marcus and Moss appellants (collectively "appellants"), subscribers to AT & T's residential long-distance services, allege in two separate class action complaints that AT & T deceives its customers "by failing to disclose that residential customers are billed per minute rounded up to the next higher full minute for long distance service." Marcus Complaint p 2. AT & T's billing practice of rounding up does not appear on AT & T bills or on any material sent to AT & T's customers. Thus, for example, a telephone conversation that lasts one minute and one second is billed as a two-minute call, but the customer is not informed of the actual duration of the call. Appellants acknowledge that AT & T has disclosed its rounding-up practice in tariffs filed with the Federal Communications Commission (the "FCC") as required by the Federal Communications Act of 1934 (the "FCA"), 47 U.S.C. §§ 151 et seq., but contend that AT & T makes no effort--in its advertising, marketing, customer bills, or in any other manner--to inform customers that its billing practice of rounding up may be discovered by reviewing the tariffs it has filed with the FCC.
disgorgement or imposing a constructive trust upon AT & T for the revenue received as a result of its allegedly illegal billing practices. On November 17, 1995, AT & T removed the Marcus action to federal district court pursuant to 28 U.S.C. § 1441(a). Following a pre-trial conference, the Marcus appellants moved to remand the case to state court. AT & T then moved to dismiss the Marcus complaint for failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6).
On December 8, 1995, the Moss appellants filed their complaint in New York State Supreme Court. As in Marcus, the Moss action was removed to federal district court. Unlike the Marcus appellants, the Moss appellants did not make a motion to remand. Instead, the Moss appellants amended their complaint to assert, in addition to their state law claims, a federal common law fraud claim. The Moss amended complaint asserted causes of actions for (1) common law fraud and deceit in violation of both New York and federal common law; (2) state common law negligent misrepresentation; (3) deceptive acts in violation of N.Y.Gen.Bus.L. §§ 349-50; (4) false advertising in violation of N.Y.Gen.Bus.L. § 350; and (5) unjust enrichment and imposition of constructive trust. The Moss complaint sought damages, the disgorgement of all revenue AT & T received as a result of its allegedly wrongful practices, and injunctive relief requiring AT & T to notify its customers and the public of its rounding up billing policy. On January 4, 1996, AT & T moved to dismiss the Moss complaint pursuant to Fed.R.Civ.P. 12(b)(6).
The two class actions were consolidated for consideration of the Marcus appellants' motion to remand their case and AT & T's motions to dismiss both actions. On August 21, 1996, the district court denied the Marcus appellants' motion to remand and granted AT & T's motions to dismiss both the Moss and Marcus complaints. See Marcus v. AT & T Corp., 938 F.Supp. 1158, 1164 (S.D.N.Y.1996).
On appeal, the Marcus appellants argue that the district court erred in finding that removal was proper and in dismissing their causes of action. The Moss appellants argue that the district court erred in dismissing their causes of action, but only to the extent that they are prohibited from seeking injunctive relief.
Any action that was originally filed in state court may be removed by a defendant to federal court only if the case originally could have been filed in federal court. 28 U.S.C. § 1441(a); see Hernandez v. Conriv Realty Assocs., 116 F.3d 35, 38 (2d Cir.1997). Where, as here, there is no diversity of citizenship, "federal-question jurisdiction is required" for removal. Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987); 28 U.S.C. § 1331. On this appeal, the Marcus appellants claim that removal was improper and that the district court erred in denying their motion to remand their class action to state court.
The presence or absence of federal question jurisdiction is governed by the well-pleaded complaint rule. That rule provides that federal question jurisdiction exists only when the plaintiff's own cause of action is based on federal law, see Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 43, 53 L.Ed. 126 (1908), and only when plaintiff's well-pleaded complaint raises issues of federal law, see Gully v. First Nat'l Bank, 299 U.S. 109, 112-13, 57 S.Ct. 96, 97-98, 81 L.Ed. 70 (1936). Under the well-pleaded complaint rule, the plaintiff is the master of the complaint, free to avoid federal jurisdiction by pleading only state claims even where a federal claim is also available. See Caterpillar, 482 U.S. at 392, 107 S.Ct. at 2429-30.
removed to federal court on that basis, "even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue." Id. at 393, 107 S.Ct. at 2430; see also Hernandez, 116 F.3d at 38; Richard H. Fallon, et al., Hart & Wechsler's The Federal Courts and the Federal System 949 (4th ed.1996).
On occasion ... the pre-emptive force of a statute is so "extraordinary" that it "converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law.

References: v. 
 v. 
 v. 
 v. 
 v. 
 § 1441
 § 350
 v. 
 § 1441
 v. 
 v. 
 § 1331
 v. 
 v.