Opinion ID: 514778
Heading Depth: 2
Heading Rank: 1

Heading: Removal Jurisdiction--General Principles

Text: 14 The principles of federal removal jurisdiction have been with us for over one hundred years. See Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 7, 103 S.Ct. 2841, 2845, 77 L.Ed.2d 420 (1983). The Court in several recent decisions has re-explored the basic parameters of removal jurisdiction. See, e.g., Caterpillar, Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425, 2429-30, 96 L.Ed.2d 318 (1987); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 1546-48, 95 L.Ed.2d 55 (1987); Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 106 S.Ct. 3229, 3232-37, 92 L.Ed.2d 650 (1986); Franchise Tax Bd., 463 U.S. at 7-12, 103 S.Ct. at 2845-47. Guided by these cases, as well as by the language of the removal statute, see 28 U.S.C. Sec. 1441, we conclude that the district court lacked subject matter jurisdiction over the removed 1986 complaint, and was required to remand the action to state court. See id Sec. 1447(c). 15 The removal statute authorizes a defendant to remove to federal court any civil action brought in a State court of which the district courts of the United States have original jurisdiction. Id. Sec. 1441(a). Consequently, [o]nly [those] state court actions that originally could have been filed in federal court may be removed to federal court by the defendant. Caterpillar, 107 S.Ct. at 2429; see Young v. Anthony's Fish Grottos, Inc., 830 F.2d 993, 997 (9th Cir.1987); Sullivan v. First Affiliated Secs., Inc., 813 F.2d 1368, 1371 (9th Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 150, 98 L.Ed.2d 106 (1987); see also Derrico v. Sheehan Emergency Hosp., 844 F.2d 22, 27 (2d Cir.1988) (Removal is appropriate when a state court action could originally have been filed in federal court.). Absent diversity of citizenship, only cases within the district court's original federal question jurisdiction may be removed from state to federal court. Caterpillar, 107 S.Ct. at 2429. The present case is not a diversity case. 16 Federal question cases are those cases arising under the Constitution, laws, or treaties of the United States. Metropolitan Life, 107 S.Ct. at 1546 (quoting 28 U.S.C. Sec. 1331). It is not always an easy task to determine when a case arises under federal law. The Constitution grants to the judiciary jurisdiction of all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority.... U.S. Const. art. III, Sec. 2. This constitutional arising under jurisdiction has been construed as permitting Congress to extend federal question jurisdiction to any case of which federal law potentially 'forms an ingredient.'  Franchise Tax Bd., 463 U.S. at 8 n. 8, 103 S.Ct. at 2845 n. 8 (quoting Osborn v. Bank of United States, 22 U.S. (9 Wheat.) 738, 823, 6 L.Ed. 204 (1824)). The Court, however, has told us that the statutory grant of federal question jurisdiction is more limited. See Merrell Dow, 106 S.Ct. at 3232; Franchise Tax Bd., 463 U.S. at 8 n. 8, 103 S.Ct. at 2845 n. 8. Nevertheless, 17 the statutory phrase arising under the Constitution, laws, or treaties of the United States has resisted all attempts to frame a single, precise definition for determining which cases fall within, and which cases fall outside, the original jurisdiction of the district courts. Especially when considered in light of Sec. 1441's removal jurisdiction, the phrase arising under masks a welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system. 18 Franchise Tax Bd., 463 U.S. at 8, 103 S.Ct. at 2845. 19 The most familiar definition of arising under jurisdiction is that of Justice Holmes: A suit arises under the law that creates the cause of action. Id. at 8-9, 103 S.Ct. at 2845-46 (quoting American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 586, 60 L.Ed. 987 (1916)). When a plaintiff's complaint relies on federal law as the source of recovery, it is obvious that the case arises under federal law and therefore may be removed to federal court. Id. 463 U.S. at 9, 103 S.Ct. at 2846; see also Merrell Dow, 106 S.Ct. at 3233 ([T]he vast majority of cases brought under the general federal-question jurisdiction are those in which federal law creates the cause of action.). The Holmes definition, however, serves better to describe those cases within the federal question jurisdiction of the federal district courts, than those outside it. Franchise Tax Bd., 463 U.S. at 9, 103 S.Ct. at 2846. This is because the Court has often held that a case 'arose under' federal law where the vindication of a right under state law necessarily turned on some construction of federal law. Id. 4 Because a broad definition of arising under would create the possibility for a number of potentially serious federal-state conflicts, id. at 10, 103 S.Ct. at 2846, the Court has developed the well-pleaded complaint rule, which has become the basic principle marking the boundaries of the federal question jurisdiction of the federal district court. Metropolitan Life, 107 S.Ct. at 1546. 20 The presence or absence of federal-question jurisdiction is governed by the well-pleaded complaint rule, which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law. 21 Caterpillar, 107 S.Ct. at 2429 (citation and footnote omitted); see also Young v. Anthony's Fish Grottos, Inc., 830 F.2d 993, 996 (9th Cir.1987) (quoting Caterpillar ); Paige v. Henry J. Kaiser Co., 826 F.2d 857, 860 (9th Cir.1987) (same), cert. denied, U.S. ----, 108 S.Ct. 2819, 100 L.Ed.2d 921 (1988). 22 The well-pleaded complaint rule, for reasons involving perhaps more history than logic, Franchise Tax Bd., 463 U.S. at 4, 103 S.Ct. at 2843, has generated certain principles that govern its application. As a general proposition, the plaintiff is master of his or her complaint. Sullivan v. First Affiliated Secs., Inc., 813 F.2d 1368, 1371 (9th Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 150, 98 L.Ed.2d 106 (1987). If the plaintiff may sue on either state or federal grounds, the plaintiff may avoid removal simply by relying exclusively on the state law claim. Id. at 1372. For better or worse, under the present statutory scheme as it has existed since 1887, a defendant may not remove a case to federal court unless the plaintiff's complaint establishes that the case 'arises under' federal law. Franchise Tax Bd., 463 U.S. at 10, 103 S.Ct. at 2846 (emphasis in original; footnote omitted). It necessarily follows that [t]he defendant cannot obtain removal jurisdiction merely by asserting a federal defense. Sullivan, 813 F.2d at 1371. As the Supreme Court has explained, 23 Thus, it is now settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, 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. 24 Caterpillar, Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987) (emphasis in original) (citing Franchise Tax Bd., 463 U.S. at 12, 103 S.Ct. at 2847); see also Franchise Tax Bd., 463 U.S. at 10, 103 S.Ct. at 2846; Sullivan, 813 F.2d at 1371-72. 25 In Ethridge's 1986 complaint, he relies exclusively on state law to define his claims against Harbor House. Nowhere on the face of his complaint does he seek a recovery under federal law. Yet Harbor House sought and obtained removal. It did so in spite of the well-pleaded complaint rule by pointing to Ethridge's allegations of retaliatory discharge. Harbor House contended that these allegations set forth a claim under sections 7 and 8 of the NLRA, which Harbor House argues completely preempts Ethridge's state law claims, thus providing a basis for removal jurisdiction. 26 In its Franchise Tax Board, Metropolitan Life and Caterpillar decisions, the Court has explained that 27 [t]here ... exist[s] ... an independent corollary to the well-pleaded complaint rule known as the complete pre-emption doctrine. On occasion, the Court has concluded that 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. 28 Caterpillar, 107 S.Ct. at 2430 (citations and footnote omitted) (analyzing Franchise Tax Board, 463 U.S. at 22, 24, 103 S.Ct. at 2852, 2854, and Metropolitan Life, 107 S.Ct. at 1547). In applying the complete preemption doctrine, we have emphasized that it is not enough that federal law preempts state law, federal law also must supplant [the state law claim] with a federal claim. Young v. Anthony's Fish Grottos, Inc., 830 F.2d 993, 997 (9th Cir.1987). 29 The federal claim requirement arises from the limitations on removal jurisdiction contained in 28 U.S.C. Sec. 1441. If the plaintiff could not have asserted a federal claim based on the allegations of her state law complaint, she could not have brought the case originally in federal court as required for removal jurisdiction under section 1441. 30 Id. 31 In deciding whether sections 7 and 8 of the NLRA completely preempt Ethridge's state law claim for retaliatory discharge, we note that the well-pleaded complaint rule is a function of federalism. See, e.g., Franchise Tax Bd., 463 U.S. at 9-10, 103 S.Ct. at 2846 (explaining that the well-pleaded complaint rule minimizes federal-state conflicts by limiting the number of cases in which state law 'creates the cause of action' that may be initiated in or removed to federal district court); see Price v. PSA, Inc., 829 F.2d 871, 873 (9th Cir.1987); cert. denied, --- U.S. ----, 108 S.Ct. 1732, 100 L.Ed.2d 196 (1988). We are also mindful that deciding whether federal law completely preempts state law calls for a careful evaluation of congressional intent. See, e.g., Metropolitan Life, 107 S.Ct. at 1548 ([T]he touchstone of the district court's removal jurisdiction is not the 'obviousness' of the pre-emption defense but the intent of Congress.); Merrell Dow, 106 S.Ct. at 3234-35 (observing that congressional intent to provide federal private right of action is test for removal jurisdiction over state law claim that requires resolution of a substantial disputed issue of federal law); Paige v. Henry J. Kaiser Co., 826 F.2d 857, 861 (9th Cir.1987) (In determining whether the federal law preempts the state law, the essential inquiry is the intent of Congress in enacting the federal statute.), cert. denied, --- U.S. ----, 108 S.Ct. 2819, 100 L.Ed.2d 921 (1988). Thus, when we consider whether the NLRA provides a complete preemption basis for removal, which trumps the well-pleaded complaint rule, we must heed the Court's admonition that in exploring the outer reaches of Sec. 1331 [the federal question statute], determinations about federal jurisdiction require sensitive judgements about congressional intent, judicial power, and the federal system. Merrell Dow, 106 S.Ct. at 3233. 32