Court Opinion

ID: 9428411
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:23:40.794235+00
Date Added: 2024-06-11T17:18:11.906466
License: Public Domain

Justice Brennan,
dissenting.
In its eagerness to correct the decision of the Court of Appeals for the Ninth Circuit, the Court today disregards statutory restrictions on federal-court jurisdiction, and, in the process, confuses rather than clarifies long-established principles of res judicata. I therefore respectfully dissent.
I
Respondent Floyd R. Brown1 filed this class action (Brown II) against petitioners in California state court. The com*405plaint stated four state-law causes of action: (1) fraud and deceit, (2) unfair business practices, (3) civil conspiracy, and (4) restitution. Plaintiffs’ Complaint, ¶¶ 11-14, App. 99-101. It alleged “not less than $600” damages per class member, and in addition sought “appropriate multiple damages,” exemplary and punitive damages, interest from date of injury, attorney’s fees and costs, and other relief. Id., at 101-102. All four of the causes of action rested wholly on California statutory or common law; none rested in any fashion on federal law.
Nonetheless, petitioners removed the suit to the United States District Court for the Northern District of California, where respondent Brown filed a motion to remand on the ground that his action raised no federal question within the meaning of 28 U. S. C. § 1441 (b). Respondent’s motion was denied by the District Court, which stated that “[f]rom start to finish, plaintiffs have essentially alleged violations by defendants of federal antitrust laws.” App. 192. The court reasoned that “[a]rtful pleading” by plaintiffs cannot “convert their essentially federal law claims into state law claims,” and held that respondent’s complaint was properly removed “because [it] concerned federal questions which could have been originally brought in Federal District Court without satisfying any minimum amount in controversy.” Ibid. The court then dismissed the action, holding that, under the doctrine of res judicata, Brown II was barred by the adverse decision in an earlier suit in federal court (Brown I) involving “the same parties, the same alleged offenses, and the same time periods.” Ibid.
The Court of Appeals affirmed the District Court’s decision not to remand, stating that “[t]he court below correctly held that the claims presented were federal in nature.” 611 F. 2d 1267, 1268 (CA9 1980) (memorandum on denial of reconsideration). However, the Court of Appeals reversed the District Court’s order of dismissal, and remanded for trial.
*406II
The provision authorizing removal of actions from state to federal courts on the basis of a federal question 2 is found in 28 ü. S. C. § 1441 (b):
“Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties.”
Removability depends solely upon the nature of the plaintiff’s complaint: an action may be removed to federal court only if a “right or immunity created by the Constitution or laws of the United States [constitutes] an element, and an essential one, of the plaintiff’s cause of action.” Gully v. First National Bank in Meridian, 299 U. S. 109, 112 (1936). An action arising under state law may not be removed solely because a federal right or immunity is raised as a defense. Tennessee v. Union & Planters’ Bank, 152 U. S. 454 (1894).
An important corollary is that “the party who brings a suit is master to decide what law he will rely upon and therefore does determine whether he will bring a 'suit arising under’ the . . . law[s] of the United States” by the allegations in his complaint. The Fair v. Kohler Die & Specialty Co., 228 U. S. 22, 25 (1913); accord, Great Northern R. Co. v. Alexander, 246 U. S. 276, 282 (1918). Where the plaintiff’s claim might *407be brought under either federal or state law, the plaintiff is normally free to ignore the federal question and rest his claim solely on the state ground. If he does so, the defendant has no general right of removal. Jones v. General Tire & Rubber Co., 541 F. 2d 660, 664-665 (CA7 1976); La Chemise Lacoste v. Alligator Co., 506 F. 2d 339, 346 (CA3 1974), cert. denied, 421 U. S. 937 (1975); Warner Bros. Records, Inc. v. R. A. Ridges Distributing Co., 475 F. 2d 262, 264 (CA10 1973); Coditron Corp. v. AFA Protective Systems, Inc., 392 F. Supp. 158, 160 (SDNY 1975).
This corollary is well grounded in principles of federalism. So long as States retain authority to legislate in subject areas in which Congress has legislated without pre-empting the field, and so long as state courts remain the preferred forum for interpretation and enforcement of state law, plaintiffs must be permitted to proceed in state court under state law. It would do violence to state autonomy were defendants able to remove state claims to federal court merely because the plaintiff could have asserted a federal claim based on the same set of facts underlying his state claim. As this Court stated in Shamrock Oil & Gas Corp. v. Sheets, 313 U. S. 100, 108-109 (1941):
“The power reserved to the states under the Constitution to provide for the determination of controversies in their courts, may be restricted only by the action of Congress in conformity to the Judiciary Articles of the Constitution. ‘Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the statute has defined.’ ” (Quoting Healy v. Ratta, 292 U. S. 263, 270 (1934).)
The general rule that a plaintiff basing his claim solely on state law thereby avoids removal applies only where state substantive law has not been pre-empted by federal law.
“[W]here the plaintiff has a right to relief either under *408federal law or under state law as an independent source of that right, the federal court on removal proceedings may not generally look beyond the face of the initial pleading in the state action to determine whether a federal question is presented. In certain areas, however, this either-or option is no longer available, for Congress has deemed that federal substantive law should altogether preempt and supplant state law. In such a case, where Congress has explicitly said that the exclusive source of a plaintiff's right to relief is to be federal law, it would be unacceptable to permit that very plaintiff, by the artful manipulation of the terms of a complaint, to defeat a clearly enunciated congressional objective.” Hearst Corp. v. Shopping Center Network, Inc., 307 F. Supp. 551, 556 (SDNY 1969) (emphasis in original) (citation omitted).
The federal court must therefore scrutinize the complaint in the removed case to determine whether the action, though ostensibly grounded solely on state law, is actually grounded on a claim in which federal law is the exclusive authority. See Sheeran v. General Electric Co., 593 F. 2d 93, 96 (CA9), cert. denied, 444 U. S. 868 (1979); North American Phillips Corp. v. Emery Air Freight Corp., 579 F. 2d 229, 233-234 (CA2 1978); New York v. Local 144, Hotel Nursing Home and Allied Health Services Union, 410 F. Supp. 225, 226-229 (SDNY 1976).3
*409This lawsuit concerns the area of antitrust in which federal laws have not displaced state law. See generally Mosk, State Antitrust Enforcement and Coordination with Federal Enforcement, 21 A. B. A. Antitrust Section 358, 361-368 (1962). Thus, respondent Brown had the option of proceeding under state or federal law, or both. So far as is apparent from the complaint, which was carefully limited to four California state-law causes of action, this case arises wholly without reference to federal law. Under settled principles of federal jurisdiction, therefore, respondent’s lawsuit should not have been removed to federal court. See Gully v. First National Bank in Meridian, 299 U. S., at 113.
The Court today nonetheless sustains removal of this action on the ground that “at least some of the claims had a sufficient federal character to support removal.” Ante, at 397, n. 2. I do not understand what the Court means by this. Which of the claims are federal in character? Why are the claims federal in character? In my view, they are all predicated solely on California law.4 Certainly, none of them purports to state a claim under the federal antitrust laws, and the mere fact that plaintiffs might have chosen to proceed under the Clayton Act surely does not suffice to transmute their state claims into federal claims.
The Court relies on what it calls a “factual finding” by the District Court,5 with which the Court of Appeals agreed, that “respondents had attempted to avoid removal jurisdiction by ‘artful [ly]’ casting their ‘essentially federal law claims’ as state-law claims.” Ibid. But this amounts to no more than *410a pejorative characterization of respondents’ decision to proceed under state rather than federal law. “Artful” or not, respondents’ complaints were not based on any claim of a federal right or immunity, and were not, therefore, removable.6
III
Even assuming that this Court and the lower federal courts have jurisdiction to decide this case, however, I dissent from the Court’s disposition of the res judicata issue. Having reached out to assume jurisdiction, the Court inexplicably recoils from deciding the case. The Court finds it “unnecessary” to reach the question of the res judicata effect of Brown I on respondents’ “state-law claims.” Ante, at 402 (emphasis in original). “It is enough for our decision here,” the Court says, “that Brown I is res judicata as to respondents’ federal-law claims.” Ibid. But respondents raised only state-law claims; respondents did not raise any federal-law claims. *411Thus, if the Court fails to decide the disposition of respondents’ state-law claims, it decides nothing. And in doing so, the Court introduces the possibility — heretofore foreclosed by our decisions7 — that unarticulated theories of recovery may survive an unconditional dismissal of the lawsuit.
Like Justice Blackmun, I would hold that the dismissal of Brown I is res judicata not only as to every matter that was actually litigated, but also as to every ground or theory of recovery that might also have been presented. See ante, p. 402 (opinion concurring in judgment); 1B J. Moore & T. Currier, Moore’s Federal Practice ¶ 0.410 [2], p. 1163 (1980). An unqualified dismissal on the merits of a substantial federal antitrust claim precludes relitigation of the same claim on a state-law theory. Woods Exploration & Producing Co. v. Aluminum Co. of America, 438 F. 2d 1286, 1312-1315 (CA5 1971), cert. denied, 404 U. S. 1047 (1972); Ford Motor Co. v. Superior Court, 35 Cal. App. 3d 676, 680, 110 Cal. Rptr. 59, 61-62 (1973); see Restatement (Second) of Judgments § 61.1, Reporter’s Note to Illustration 10, Comment e, pp. 178-179 (Tent. Draft No. 5, Mar. 10, 1978). The Court’s failure to acknowledge this basic principle can only create doubts and confusion where none were before, and may encourage litigants to split their causes of action, state from federal, in the hope that they might win a second day in court.
I therefore respectfully dissent, and would vacate the judgment of the Court of Appeals with instructions to remand to the District Court with instructions to remand to state court.

 Since the action by respondent Moitie has been voluntarily dismissed, the only remaining issues concern the claims of respondent Brown.

 As the District Court acknowledged, Brown II could not be removed on the basis of diversity of citizenship, because the amount in controversy did not exceed $10,000. App. 190. The court correctly noted, however, that the action could have been removed without regard to the amount in controversy, if it could have been brought as an original action in federal court without meeting any minimum amount in controversy. Ibid. Actions under the Clayton Act, 15 U. S. C. § 15, may be brought in federal court without regard to amount in controversy. See also Pub. L. 96-486, §§ 2 (a), 4, 94 Stat. 2369-2370, 28 U. S. C. § 1331 (1976 ed., Supp. IV), and note following § 1331 (repeal of minimum amount in controversy for federal-question cases pending as of date of enactment).

 In this context, it is often said that a plaintiff may not “fraudulently” defeat removal by manipulation of the complaint. See, e. g., Sheeran v. General Electric Co., 593 F. 2d, at 96; Jones v. General Tire & Rubber Co., 541 F. 2d 660, 664-665 (CA7 1976); see also Great Northern R. Co. v. Alexander, 246 U. S. 276, 281, 282 (1918). Where, however, both state and federal laws would support a claim, it makes little sense to suggest that the plaintiff acts “fraudulently” if he chooses to proceed under state law in state court rather than under federal law in federal court. See Romick v. Bekins Van & Storage Co., 197 F. 2d 369, 371 (CA5 1952).

 Indeed, the Court admits that the additional claims in Brown II, not included in Brown I, such as unfair competition, fraud, and restitution, are “state-law claims.” Ante, at 402.

 The District Court did not consider this conclusion a “factual finding.” It was included in a section of the District Court opinion devoted to legal analysis, not in the section entitled “Facts.” Compare App. 187-190 with id., at 190-192. In any event, a court’s conclusion concerning the legal character of a complaint can hardly be considered a “factual finding.”

 The decisions cited by the Court in support of its approach, all from District Courts, are inapplicable. In re Wiring Device Antitrust Litigation, 498 F. Supp. 79 (EDNY 1980), and Three J Farms, Inc. v. Alton Box Board Co., 1979-1 Trade Cases ¶ 62,423, p. 76,550 (SC 1978), rev’d on other grounds, 609 F. 2d 112 (CA4 1979), cert. denied, 445 U. S. 911 (1980), were cases in which the State itself had confined application of the state antitrust laws to purely intrastate commerce, thus leaving federal law the sole basis for suit. Similarly, Prospect Dairy, Inc. v. Dellwood Dairy Co., 237 F. Supp. 176 (NDNY 1964), concerned a claim of an unfair labor practice, which is governed exclusively by federal law. See 29 U. S. C. § 187; Teamsters v. Morton, 377 U. S. 252 (1964).
Admittedly, some courts have not strictly observed the restrictions on removal jurisdiction. See, e. g., In re Carter, 618 F. 2d 1093, 1101 (CA5 1980), cert. denied sub nom. Sheet Metal Workers v. Carter, 450 U. S. 949 (1981). 14 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §3722, pp. 564-566 (1976), reports that "occasionally the removal court will seek to determine whether the real nature of the claim is federal, regardless of plaintiff’s characterization.” (Footnote omitted.) Perusal of the cited decisions, however, reveals that most of them correctly confine this practice to areas of the law pre-empted by federal substantive law.

 See Brown v. Felsen, 442 U. S. 127, 131 (1979); United States v. Munsingwear, Inc., 340 U. S. 36, 38 (1950); Commissioner v. Sunnen, 333 U. S. 591, 597 (1948); Chicot County Drainage District v. Baxter State Bank, 308 U. S. 371, 378 (1940); Cromwell v. County of Sac, 94 U. S. 351, 352-353 (1877).