Opinion
No. C-94-2736-DLJ.
October 4, 1994
ORDER
On September 28, 1994, the Court heard plaintiff's motion to remand and defendants' motion to dismiss or, in the alternative, for a more definite statement. Roberta D. Perkins of the law offices of Joe R. McCray appeared for plaintiff and Andrew R. Wiener of Haas Najarian appeared for defendants. Having considered the papers submitted, the arguments of counsel, the applicable law, and the entire record herein, the Court GRANTS plaintiff's motion for remand
I. BACKGROUND
On June 17, 1994, plaintiff Norma Hotaling filed her complaint in Alameda County Superior Court alleging a violation of California Labor Code § 1102.5, violation of public policy, constructive termination, breach of contract, and breach of implied covenants of good faith and fair dealing. As against defendant Brandy Britton, plaintiff asserted two additional claims: defamation per se and defamation. In effect, plaintiff alleged that she was retaliated against by her employer for informing Britton's supervisor that Britton had a substance abuse problem and had falsified research data.
After defendants filed their opposition and plaintiff filed her reply brief referring, among other things, to the federal False Claims Act, defendants removed the action to federal court. Defendants claim that plaintiff was "artfully pleading" in an attempt to avoid federal jurisdiction. They claim that plaintiff is in fact asserting a federal qui tam action under the False Claims Act as her second cause of action. 31 U.S.C. § 3729-3730. Plaintiff contests this interpretation of her claim; she argues that there is no subject-matter jurisdiction and the case should therefore be remanded.
II. DISCUSSION
A. Legal Standard for Removal
A suit filed in state court may be removed to federal court if the federal court could have had original subject matter jurisdiction over that suit. 28 U.S.C. § 1441(a); Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977). Defendants claim that this Court has federal question jurisdiction under 28 U.S.C. § 1331.
28 U.S.C. § 1331 provides that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."
A motion to remand is the proper procedure for challenging removal. Remand may be ordered either for lack of subject-matter jurisdiction or for any defect in removal procedure. See 28 U.S.C. § 1447(c). Plaintiff claims that remand is proper due to lack of subject-matter jurisdiction.
On a motion to remand, the party who invoked the federal court's removal jurisdiction has the burden of establishing federal jurisdiction. See Emrich v. Touche Ross Co., 846 F.2d 1190, 1195 (9th Cir. 1988) (citing Wilson v. Republic Iron Steel Co., 257 U.S. 92, 97 (1921)); Schwarzer, Tashima, Wagstaffe, Federal Civil Procedure Before Trial, ¶ 2:1093 (1992). In this case, defendants have the burden of establishing jurisdiction.
The removal statute is strictly construed against removal jurisdiction and doubt is resolved in favor of remand Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979).
The existence of federal jurisdiction on removal must be determined on the face of the plaintiff's complaint. See Louisville Nashville R.R. v. Mottley, 211 U.S. 149 (1908). A "cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law."Metropolitan Life Ins. Co v. Taylor, 481 U.S. 58, 63 (1987).
B. Application of the Standard
Defendant concedes that nothing on the face of the plaintiff's complaint indicates a federal question. Defendant notes, however, that plaintiff, in support of her second cause of action for "violation of public policy," explained in her reply brief that one of the public policies implicated is the federal policy against the alteration and falsification of documents, as reflected in the False Claims Act, 31 U.S.C. § 3729. After receiving plaintiff's reply brief, defendants removed this action to federal court, on the grounds that plaintiff was artfully pleading a federal qui tam action under the False Claims Act as her second cause of action.
Plaintiff contends that defendants waived their right to remove by filing a responsive pleading before removing the case. There is no such rule in the Ninth Circuit. Cf. Carpenter v. Illinois Central Gulf R. Co., 524 F. Supp. 249, 251 (M.D. La. 1981) (holding that an answer filed in state court does not waive a party's right to remove to federal court). Additionally, defendants could not tell from the face of plaintiff's original complaint that a federal question was potentially contained therein. It was only once plaintiff filed her reply brief containing the basis for her claims that defendants were on notice of the potentially federal nature of the complaint. Upon receiving notice, defendants timely removed. Therefore, the Court does not base its decision on the rationale that defendants have waived their right to remove.
As one commentator has summarized the principle behind the Supreme Court's decisions on federal question jurisdiction:
a case arises under federal law if it apparent from the face of the plaintiff's complaint either that the plaintiff's cause of action was created by federal law; or, if the plaintiff's cause of action is based on state law, a federal law that creates a cause of action is an essential component of the plaintiff's claim.
Erwin Chemerinsky, Federal Jurisdiction, § 5.2.3 (1989). Defendants do not claim that there is a federal element which is an essential component of plaintiff's state law claim. Instead, defendants rest their argument on the contention that plaintiff's second cause of action is created by federal law, the qui tam statute.
The Court does not find that defendants have met their burden of establishing subject-matter jurisdiction. A plaintiff is the master of her complaint. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 22 (1983). Where a plaintiff could plead either a state or federal claim, she is free to ignore the federal question and pitch her claim on the state ground, thereby avoiding federal jurisdiction.Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Here, plaintiff has chosen to pitch her claim on a state cause of action for violation of public policy. She has not included a qui tam cause of action in her complaint, has stated that she does not intend to file a qui tam claim, and has not followed the correct procedures for asserting a qui tam claim. Therefore, plaintiff's claim is not created by federal law, and is not sufficient to confer federal jurisdiction.
There are circumstances where a state court suit is removable to federal court based on a claim of federal preemption. See Caterpillar, 482 U.S. at 393; Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987). In such a circumstance, plaintiff could not avoid removal by artfully pleading only the preempted state law claim. No such claim of federal preemption, however, if before the Court.
Since this Court lacks subject-matter jurisdiction over the case, the case is hereby REMANDED to Alameda County Superior Court for further proceedings.
Because the Court does not have jurisdiction over the case, the Court does not reach the merits of defendants' Rule 12(b)(6) motion to dismiss and Rule 12(e) motion for a more definite statement.
It is so ordered.
JUDGMENT
In accordance with the Order of this Court of October 4, 1994, JUDGMENT is hereby entered remanding the case to Alameda County Superior Court.IT IS SO ADJUDGED.