Opinion
CIVIL ACTION MDL No. 1371
May 10, 2002
ORDER AND REASONS
Before the Court is the plaintiff's' motion to remand. For the reasons that follow, the motion is GRANTED.
Background
On November 19, 2001, the plaintiff's filed this lawsuit against the defendant, the Life Insurance Company of Georgia, in Georgia state court charging that the company engaged in racebased underwriting for so-called industrial life insurance policies. On January 4, 2002, the defendant timely removed the case to the United States District Court for the Middle District of Georgia. The defendant asserts that the plaintiffs' state court petition implicates federal race discrimination claims under 42 U.S.C. § 1981, and, therefore, removal is appropriate. On February 7, 2002, the casc was transferred to this Court by the Judicial Panel on Multidistrict Litigation. Asserting that they have only pleaded state law claims, the plaintiffs seek remand.
Law and Analysis
Although the plaintiffs challenge removal in this case, the removing defendant carries the burden of showing the propriety of this Court's removaljurisdiction. University of South Alabama v. American Tobacco Co., 168 F.3d 405, 411-12 (11th Cir. 1999); Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996), cert denied, 117 S.Ct. 1349 (1997). In addition, any ambiguities are construed against removal because the removal statute should be strictly construed in favor of remand. Burns v. Windsor Ins. Co., 31 F.2d 1092, 1095 (11th Cir. 1994).
The defendant urges removal under 28 U.S.C. § 1331 which announces jurisdiction over federal questions. To remove this case, it must anchor in federal law. Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). To "arise under" federal law for jurisdictional purposes, federal law must create the cause of action stated in the complaint or the state law action must require some construction of federal law. Smith v. Kansas City Tile Trust, Co., 255 U.S. 180, 199, 41 S.Ct. 243, 245, 65 L.Ed. 577 (1921). A federal court has jurisdiction to hear "only those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28, 103 S.Ct. 2841, 2855, 77 L.Ed.2d 420 (1983). Under the well-pleaded complaint rule, "federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429 96 L.Ed.2d 318 (1987).
In this case, the defendant asserts that plaintiff's have used artful pleading in their complaint to avoid federal jurisdiction. The plaintiffs maintain that the artful pleading doctrine is not available because federal law does not completely preempt the state law claims raised in this case, and, therefore, the Court does not have federal question jurisdiction. Plaintiffs invokes Waste Control Specialists, L.L.C v. Envirocare of Texas, Inc., 199 F.3d 781 (5th Cir. 2000), cert. denied, 121 S.Ct. 377 (2000) and Terrebonne Homecare, Inc. v. SMA Health Plan, Inc., 271 F.3d 186 (5th Cir. 2001). Tn those cases, the Fifth Circuit held that the artful pleading doctrine applied only to cases where federal law completely preempts state law. Although Waste Control andTerrebonne Homecare are persuasive, the Court is bound by the Eleventh Circuit's rulings in Ayres v. General Motors Corp., 234 F.3d 514 (11th Cir. 2000) (removal from Georgia state court proper when proving violation of federal statutes was essential to plaintiff's ease and created a federal question) and Jairath v. Dyer, 154 F.3d 1280, 1282 (11th Cir. 1998) ("[F]ederal-question jurisdiction may be available if a substantial, disputed question of federal law is a necessary element of a state cause of action."). Although the Court of Appeals did not specifically address the artful pleading doctrine or the well-pleaded complaint rule in Ayres and Jairath, it did set forth two situations in which the federal question jurisdiction existed when only state law claims were asserted in a complaint: 1) "in cases that arise under federal law that creates the cause of action", and 2) in cases where a "substantial, disputed question of federal law is a necessary element of a state cause of action." Jairath, 154 F.3d at 1282 (citing City of Huntsville v. City of Madison, 24 F.3d 169, 171-72 (11th Cir. 1994) However, even though a case "may arise under federal law `where the vindication of a right under state law necessarily turned on some construction of federal law, the mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction'." Ayres, 234 F.3d at 518 (citations omitted). Thus, if a substantial, disputed question of federal law is a necessary element of plaintiffs' state cause of action, federal question jurisdiction may be available.
The Court relies on Eleventh Circuit precedent because this MDL case originated in the United States District Court for the Middle District of Georgia and is only before this Court for consolidated pre-trial proceedings.
Here, the Court finds that the defendant has not shown that a violation of the federal discrimination statutes is an essential element of plaintiffs' cause of action for fraud under Georgia law; the defendant has not satisfied its burden of showing that removal is proper. Although the complaint implicates race discrimination issues, the "mere presence of a federal issue in a state cause of action does not automatically confer federal jurisdiction." Id. To rule otherwise would inappropriately serve to federalize a local grievance. The defendant has not shown that a finding of racial motive or intent is required for plaintiffs to succeed on their state law claims of fraud. Thus, because any ambiguities are construed against removal, the Court declines to accept jurisdiction
Accordingly, the plaintiffs' motion to remand is GRANTED.
DOCKET NO. 1390
BEFORE THE JUDICIAL PANEL ON MULTIDISTRICT LITIGATION IN RE LIFE INSURANCE CO. OF GEORGIA INDUSTRIAL LIFE INSURANCE LITIGATION
Willie Jackson v. Life Insurance Co. of Georgia, et al., N.D. Mississippi, C.A. No. 2:02-17
ORDER VACATING CONDITIONAL TRANSFER ORDER AND VACATING THE MAY 30, 2002 HEARING SESSION
A conditional transfer order was filed in this action ( Jackson) on February 26, 2002. Prior to expiration of that order's fifteen-day stay of transmittal, plaintiff in Jackson filed a notice of opposition to the proposed transfer and the subsequent motion and brief to vacate the conditional transfer order. The Panel has now been advised that Jackson was dismissed and closed in the Northern District of Mississippi on April 26, 2002, pursuant to plaintiff's notice of voluntary dismissal.IT IS THEREFORE ORDERED that the Panel's conditional transfer order designated as "CTO-12" ffied on February 26, 2002, is VACATED insofar as it relates to this action.
IT IS FURTHER ORDERED that the Hearing Session Order and the attached Schedule filed on April 16, 2002, are VACATED insofar as they relate to this action.
FOR THE PANEL:
________________________ Wm. Terrell Hodges Chairman