Opinion
EP-99-CA-282-DB.
February, 2000.
MEMORANDUM OPINION AND ORDER
On this day, the Court considered the Motion to Remand Plaintiff Community Initiatives, Inc. filed in the above-captioned cause on November 19, 1999. Defendants Chase Bank of Texas, N.A., Al Martinez-Fonts, Bank of America, N.A., David Graham, Norwest Bank of El Paso, N.A., Wells Fargo Company, and Nathan E. Christian (collectively "Defendants") filed a Response to Plaintiff's Motion to Remand on November 30, 1999. After due consideration, the Court is of the opinion that Plaintiff's Motion should be denied for the reasons that follow.
BACKGROUND
On December 22, 1998, Plaintiff commenced this action against Defendants in the 34th Judicial District Court of El Paso County, Texas (the "state court"). Plaintiff's Original Petition ("Petition") filed in the state court alleges the following eight causes of action: (1) Tortious Interference; (2) Negligence; (3) Negligence Per Se, based on a conspiracy to violate Plaintiff's civil rights in violation of 18 U.S.C. § 241; (4) Negligence Per Se, based on a criminal conspiracy to commit an offense against or to defraud the United States in violation of 18 U.S.C. § 371; (5) Negligence Per Se, based on racketeering in violation of the Hobbs Act, 18 U.S.C. § 1951(a); (6) Negligence Per Se based on racketeering in violation of the Travel Act, 18 U.S.C. § 1952(a); (7) Negligence Per Se, based on racketeering in violation of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c)-(d); and (8) Civil Conspiracy.
Because Plaintiff's Petition measures some eighty-two pages including exhibits, the Court will not detail here Plaintiff's complex factual allegations.
Defendants removed the state court cause to this Court on November 15, 1999. In their Joint Notice of Removal, Defendants assert that "Plaintiff's causes of action arise under the laws of the United States, rely on numerous federal statutes and present substantial disputed questions of federal law," and contend that this cause is removable pursuant to Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983).
The instant Motion to Remand followed.
DISCUSSION
As grounds for remand, Plaintiff contends that (1) its claims arise under state law exclusively; (2) resolution of its claims does not depend on substantive issues of federal law; and (3) its alternative theories of recovery in addition to negligence per se prevent removal. The Court disagrees.
The general requirements for removal jurisdiction are well-established. "[A]ny civil action brought in a State court of which the district courts have original jurisdiction may be removed by the defendant or the defendants, to the district court of the place where such action is pending." 28 U.S.C. § 1441(a). As there is no allegation of diversity between the Parties, the propriety of removal in this cause turns on whether any claim falls within the "federal question" jurisdiction conferred by 28 U.S.C. § 1331. Section 1331 provides that the district courts "shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States." 28 U.S.C. § 1331.
In general, the party seeking removal bears the burden of establishing federal jurisdiction. See Wilson v. Republic Iron Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L. Ed. 144 (1921). The appropriate inquiry focuses on the allegations set forth in the plaintiff's complaint, pursuant to the well-pleaded complaint rule:
[A] defendant may not remove a case to federal court unless the plaintiff's complaint establishes that the case "arises under" federal law. A right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action.
Franchise Tax Bd., 463 U.S. at 9-11, 103 S.Ct. at 2846-47 (footnote, internal quotation marks and brackets omitted).
In cases where federal law creates the right a plaintiff seeks to enforce, federal courts unquestionably have federal subject matter jurisdiction. See Merrell Dow Pharm. v. Thompson, 478 U.S. 804, 809, 106 S.Ct. 3229, 3233, 92 L.Ed.2d 650 (1986). A potential defense based upon federal law is insufficient. See Franchise Tax Bd., 463 U.S. at 10, 103 S.Ct. at 2846-47.
A plaintiff may avoid federal jurisdiction by carefully pleading around a federal claim, electing to proceed in state court on the exclusive basis of state law. See Merrell Dow, 478 U.S. at 809 n. 6, 106 S.Ct. at 3233 n. 6; see also Avitts v. Amoco Prod. Co., 53 F.3d 690, 693 (5th Cir. 1995) ("[W]hen both federal and state remedies are available, plaintiff's election to proceed exclusively under state law does not give rise to federal jurisdiction."). "However, in certain situations, where the Plaintiff necessarily has available no legitimate or viable state cause of action, but only a federal claim, he may not avoid removal by artfully casting his federal suit as one arising exclusively under state law." Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1988) (citing Avco Corp. v. Aero Lodge No. 735, Int'l Assn. of Machinists, 390 U.S. 557, 559, 88 S.Ct. 1235, 1237, 20 L.Ed.2d 126 (1968)). The so-called "artful pleading doctrine" is an exception to the well-pleaded complaint rule, allowing a court to determine that "although a defense, preemption may so forcibly and completely displace state law that the plaintiff's cause of action is either wholly federal or nothing at all." Id.; see also Franchise Tax Bd., 463 U.S. at 24, 103 S.Ct. at 2854 ("[I]f a federal cause of action completely preempts a state cause of action, any complaint that comes within the scope of the federal cause of action necessarily 'arises under' federal law."). Thus, as the Fifth Circuit recently made clear in Waste Control Specialists, LLC v. Envirocare of Texas, Inc., No. 98-50952, 2000 WL 2597, at *2 (5th Cir. January 18, 2000), "[w]ithout complete preemption, the artful pleading doctrine does not apply."
Here, Plaintiff claims that it states only causes of action arising under state law, not federal law. Defendants, in response, assert that Plaintiff's seventh cause of action — negligence per se based on violation of RICO — incorporates federal law, RICO, as an essential element and, as such, is an action based upon federal law. Both Plaintiff and Defendants contend that Merrell Dow supports their respective arguments. Defendants further contend that each of Plaintiff's other negligence per se causes of action — three through six — present substantial questions of federal law.
At first glance, Plaintiff's Petition certainly appears to allege only state causes of action: tortious interference, general negligence, and negligence per se. However, each of Plaintiff's claims for negligence per se — causes of action three through seven — hook liability on Defendants' alleged violation of federal statutes. Plaintiff asserts in its Petition as to each negligence per se cause of action that a federal statute gives Plaintiff certain rights; that Defendants were required to comply with the respective federal statute; that Defendants violated the applicable federal statute; and that Plaintiff was injured as a result of the Defendants' violation of the federal statute.
Because Plaintiff set forth five different causes of action for "negligence per se," the Court assumes that Plaintiff, which is the "master" of its complaint, see Carpenter, 44 F.3d at 366, alleges five wholly separate injuries, each granting a separate entitlement to relief. See FED. R. CIV. P. 8(a)(2).
In Merrell Dow, the Supreme Court held that "a complaint alleging a violation of a federal statute as an element of a state cause of action, when Congress has determined that there should be no private, federal cause of action for the violation, does not state a [federal question]." Merrell Dow, 478 U.S. at 819, 106 S.Ct. at 3237. There, the plaintiff brought a multi-count complaint alleging, in part, that the defendant's violation of the Federal Food, Drug and Cosmetic Act ("FDCA") gave rise to a rebuttable presumption of negligence in his state court action — i.e., negligence per se. The fact that the FDCA did not provide a private right of action in federal court to enforce violations figured prominently in the Supreme Court's analysis.
The Court wrote:
[T]he congressional determination that there should be no federal remedy for the violation of this federal statute is tantamount to a congressional conclusion that the presence of a claimed violation of the statute as an element of a state cause of action is insufficiently substantial to confer federal question jurisdiction.
Merrell Dow, 478 U.S. at 814, 106 S.Ct. at 3235 (internal citation removed). Thus, the Supreme Court held that the plaintiff's allegation of the violation of federal law as an element in a state tort action was not sufficient to confer federal question jurisdiction.
Based on Merrell Dow, Plaintiff argues that, because RICO does not provide a private cause of action, Plaintiff's seventh cause of action does not turn on a "right or immunity created by . . . federal law," Franchise Tax Bd. 463 U.S. at 9-11, 103 S.Ct. at 2846-47, and, thus, "does not raise a 'substantial' federal question." Plaintiff, however, conveniently ignores 28 U.S.C. § 1964(c), which provides: "Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefore in any appropriate United States district court . . . ." The Court assumes, without engaging in a detailed analysis, that Plaintiff at least could have asserted a claim under § 1964(c). Accordingly, Merrell Dow's chief premise — that Congress did not intend to create federal jurisdiction where it did not provide a private cause of action — vanishes with respect to RICO. Thus, the Court finds that federal law creates an essential element to Plaintiff's seventh cause of action, and, thus, that claim "arises under federal law." Consequently, because Plaintiff's seventh cause of action could have been brought originally in federal court, the Court is of the opinion that Defendants have established removal jurisdiction in this cause. See 28 U.S.C. § 1441(a).
Although Plaintiff does not expressly state that RICO does not provide a private cause of action, Plaintiff's argument cannot be understood in any other way.
Section 1962, in turn, establishes RICO's substantive prohibitions. See 28 U.S.C. § 1962.
Defendants further assert that Plaintiff's other "negligence per se" causes of action "also present substantial questions of federal law," and, quoting Milan Express Co. v. Western Surety Co., 886 F.2d 783, 787 (6th Cir. 1989), Defendants imply that those causes of action should be heard in federal court in order to avoid "the peculiarities of interpretation in fifty different state forums." In this respect, the Supreme Court in Merrell Dow dismissed the contention that a federal interest in uniform interpretation of federal laws gave rise to jurisdiction, noting that it could directly review the disposition of a decisive federal issue in a state court even if no original district court jurisdiction existed. See 478 U.S. at 814, 106 S.Ct. at 3236.
Finally, Plaintiff contends that Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988), requires remand where a claim is supported by alternate theories of recovery in addition to one which arises out of federal law. Plaintiff argues that, "aside from raising negligence per se causes of action, [Plaintiff] also asserts tortious interference, negligence, and civil conspiracy as additional theories of recovery that do not involve federal criminal statutes. These alternative causes of action are independent of the negligence per se claims." The Court finds this argument unpersuasive.
Plaintiff misunderstands the difference between a cause of action (or claim) and a theory of recovery. Here, Plaintiff asserts eight separate causes of action in its Petition, each cause of action constituting a separate actionable injury. See generally, 5 Charles A. Wright Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE: Civil 2d §§ 1215-1216, 1219 (West 1990) (discussing FED. R. CIV. P. 8(a) and meaning of "claim for relief"). While a "cause of action" is the "fact or facts which give a person a right to judicial redress," BLACK'S LAW DICTIONARY 221 (6th ed. 1990), a theory of recovery is the legal basis upon which those facts constitute a cause of action. See generally, 5 Wright Miller, Civil 2d § 219. Moreover, each cause of action may be supported by several alternative theories of recovery. See, e.g., Christianson, 486 U.S. at 810, 108 S.Ct. at 2174 (noting that single claim for relief supported by two different theories, only one alleging violation of federal patent law, insufficient because federal law not essential to claim); Willy v. Coastal Corp. 855 F.2d 1160, 1169-70 (5th Cir. 1988) (wrongful termination cause of action supported by two theories, terminated for refusing to violate federal laws and terminated for refusing to violate state laws, insufficient).
Here, Plaintiff's tortious interference, negligence and non-RICO-based negligence per se claims are not alternative theories of recovery; rather, each "cause of action" is a "statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2); see also, 5 Wright Miller, Civil 2d §§ 1215-1216, 1219. Accordingly, the Court finds that Christianson is of no use to Plaintiff here.
Having found that Plaintiff's seventh cause of action gives this Court removal jurisdiction under 28 U.S.C. § 1441(a), the Court further finds that Plaintiff's other causes of action come within the Court's supplemental jurisdiction. See 28 U.S.C. § 1367(a) ("[T]he district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.")
Accordingly, IT IS HEREBY ORDERED that Plaintiff's Motion for Remand is DENIED.