Opinion ID: 2834679
Heading Depth: 1
Heading Rank: 5

Heading: Preemption of Jurisdiction

Text: Ordinarily, federal preemption operates as an affirmative defense to a plaintiff’s state law claims, but does not deprive a state court of jurisdiction over those claims. Mills v. Warner Lambert Co. , 157 S.W.3d 424, 427 (Tex. 2005) (citing Metro. Life Ins. Co. v. Taylor , 481 U.S. 58, 63 (1987)). There are, however, situations in which federal law may preempt conflicting state-court jurisdiction. Longshoremen , 476 U.S. at 388. See also Gorman v. Life Ins. Co. of N. Am. , 811 S.W.2d 542, 547 (Tex. 1991). State court jurisdiction is affected only when Congress requires that claims be addressed exclusively in a federal forum. Mills , 157 S.W.3d at 425 (citing San Diego Bldg. Trades Council v. Garmon , 359 U.S. 236, 242-45 (1959)). Whether a trial court has subject matter jurisdiction is a legal question we review de novo. Tex. Dep’t of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004); Mayhew v. Town of Sunnyvale , 964 S.W.2d 922, 928 (Tex. 1998). It is clearly within Congress’ powers to establish an exclusive federal forum to adjudicate issues of federal law in a particular area that Congress has the authority to regulate under the Constitution. Whether it has done so in a specific case is the question that must be answered when a party claims that a state court’s jurisdiction is pre-empted. Longshoremen , 476 U.S. at 388 (citation omitted) . See Mills , 157 S.W.3d at 427; Gorman , 811 S.W.2d at 546. The United States Supreme Court refers to the divesture of state-court jurisdiction by federal law as “ Garmon preemption.” Longshoremen , 476 U.S. at 388-89, 391. The bankruptcy courts’ jurisdiction is established by sections 157 and 1334 of title 28 of the United States Code. Celotex, 514 U.S. at 307. Section 1334(a) states that “the district courts shall have original and exclusive jurisdiction of all cases under title 11,” which refers to the bankruptcy petition itself. Wood v. Wood (In re Wood), 825 F.2d 90, 92 (5th Cir. 1987). Section 1334(b) states that “the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” Therefore, although Congress expressed its intent to create an exclusive federal forum with respect to cases “under title 11,” “[i]n other matters arising in or related to title 11 cases, unless the Code provides otherwise, state courts have concurrent jurisdiction.” Sanders v. City of Brady (In re Brady, Tex., Mun. Gas Corp.) , 936 F.2d 212, 218 (5th Cir. 1991). The parties do not dispute that Fuqua’s malicious prosecution claim, or the adversary proceeding upon which it is based, is anything more than merely “related to” a title 11 case, as opposed to a case “under title 11.” Thus, this is not the type of case for which Congress provided explicit forum-preempting language. See, e.g. , Mills , 157 S.W.3d at 427-28 (referring to the holding in Gorman , 811 S.W.2d at 547-49, that state courts have no jurisdiction over certain ERISA claims because 29 U.S.C. § 1132(e)(1) provides that “the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter. . . .”). The lack of explicit forum-preempting language regarding Fuqua’s claim does not mean, however, that Congress did not intend to establish an exclusive federal forum for claims based on abuse of the bankruptcy process. “‘[T]he presumption of concurrent jurisdiction can be rebutted by an explicit statutory directive, by unmistakable implication from legislative history, or by a clear incompatibility between state-court jurisdiction and federal interests.’” Mills , 157 S.W.3d at 428 (quoting Tafflin v. Levitt , 493 U.S. 455, 459-60 (1990)). For instance, in Garmon , the U.S. Supreme Court held that because Congress had enacted such a “complex and interrelated federal scheme of law, remedy, and administration” in the National Labor Relations Act, “due regard for the federal enactment requires that state jurisdiction must yield.” 359 U.S. at 243-44 (citation omitted). Similarly, in Longshoremen , the Court held that neither state courts nor federal courts had jurisdiction to hear claims over which Congress intended the National Labor Relations Board to have exclusive jurisdiction. 476 U.S. at 390-91. But these cases dealt with the unique federal scheme of the National Labor Relations Act and Congress’s intent that both state and federal courts “defer to the exclusive competence of the National Labor Relations Board” to avert “the danger of state interference with national policy.” Longshoremen , 476 U.S. at 390 (quoting Garmon , 359 U.S. at 245). Assuming, as the parties concede, that this claim is “related to” a bankruptcy case, the claim is one of many for which Congress declined to provide exclusive jurisdiction in the federal courts. See 28 U.S.C. §§ 1334(b), 157 (establishing the federal courts’ original, but not exclusive, jurisdiction over “related to” matters and “core proceedings”). The jurisdictional scheme created by Congress thus prevents me from concluding that Congress intended to create an exclusive federal forum for the claims made in an adversary proceeding. Consequently, only a preemption argument related to the choice of law is viable.