Opinion
Civil Action No. 02-1207, Section: I/5
June 7, 2002
ORDER AND REASONS
Plaintiff, Metropolitan Life Insurance Company ("MetLife"), has filed a motion to remand this action to the state court from which it was removed. Defendants, Lee Balinas, Shelly G. Gaudreau, and Mark Mauer, oppose the motion. For the following reasons, the motion to remand is GRANTED.
Facts
Plaintiff, MetLife, is a New York corporation which sells insurance and other financial products. It is not a citizen of the State of Louisiana. Defendants, Balinas, Gaudreau, and Mauer, are Louisiana citizens who were formerly employed as sales representatives in MetLife's Metairie, Louisiana agency.
Complaint, Rec. Doc. No. 1, para. 1.
Complaint, Rec. Doc. No. 1, para. 2, 4.
On April 5, 2002, plaintiff filed a petition for damages against defendants in the 22nd Judicial District Court for the Parishes of St. Tammany and Washington, State of Louisiana. According to plaintiff, all three defendants terminated their employment and they are now employed by or associated with American United Life Insurance Company. The petition also alleges that during their employment with MetLife, all three defendants signed employment agreements in which they agreed not to induce or attempt to induce any MetLife customer in certain southern Louisiana parishes from replacing or canceling any MetLife policy or financial product for a period of 18 months after the defendants' MetLife employment terminated. In addition to violating non-compete clauses in their employment agreements, plaintiff alleges that defendants violated certain non-recruiting provisions by inducing MetLife sales representatives to leave the employ of MetLife and to violate their employment agreements.
Complaint, Rec. Doc. No. 1.
Complaint, Rec. Doc. No. 1, para. 10.
Complaint, Rec. Doc. No. 1, para. 5-12. According to plaintiff, numerous former MetLife customers have replaced their MetLife policies with American United policies.
Complaint, Rec. Doc. No. 1, para. 19.
Plaintiff has filed this lawsuit against the defendants for breach of contract. It seeks damages for lost profits as well as injunctive relief to prohibit further solicitation.
Complaint, Rec. Doc. No. 1, para. 13-17.
On April 22, 2002, defendants, Balinas, Gaudreau, and Mauer, removed this action to this court, asserting that there is subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and 1332, i.e., diversity of citizenship and federal question jurisdiction. Plaintiff has filed a timely motion to remand, arguing that removal on both grounds was improper.
Notice of Removal, Rec. Doc. No. 1.
Removal
"The burden of establishing federal jurisdiction is placed upon the party seeking removal." Because "removal jurisdiction raises significant federalism concerns," removal jurisdiction must be strictly construed. In order to determine whether the complaint can be removed, the court must "examine the complaint as it existed at the time of removal" and it should not consider subsequent amendments.
Isbell v. Stewart Stevenson Ltd., 9 F. Supp.2d 731 (S.D. Tex. 1998), citing Wilson v. Republic Iron Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921) Allen v. R H Oil Gas Company, 63 F.3d 1326, 1335 (5th Cir. 1995) (other citations omitted)
Isbell, 9 F. Supp.2d at 733, citing Merrill Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 810, 106 S.Ct. 3229, 3233, 92 L.Ed.2d 650 (1986)
Isbell, 9 F. Supp.2d at 733; Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988) (other citations omitted)
Herrington v. J.R. Pounds, Inc., 874 F. Supp. 133, 136 (S.D. Miss. 1995), citing Nutro Products Corporation v. NCNB Texas National Bank, 35 F.3d 1021, 1023 (5th Cir. 1993) (other citations omitted)
Diversity of Citizenship
28 U.S.C. § 1441(b) provides that:
Any civil action of which the district courts have original jurisdiction founded on a claim of 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. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
While there is complete diversity of citizenship between the parties in this action and the jurisdictional amount is present, this action is not removable on the basis of diversity jurisdiction because at least one, and here all three, of the defendants are citizens of Louisiana, the state in which the lawsuit was filed. Accordingly, the plaintiff's removal of this action on the basis of diversity jurisdiction was improper.
Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68-69, 117 S.Ct. 467, 472-473, 136 L.Ed.2d 437 (1996); Hufnagel v. Omega Service Industries, Inc., 182 F.3d 340, 348 (5th Cir. 1999); Marathon Oil Company v. Ruhrgas, 145 F.3d 211, 221 (5th Cir. 1998).
Federal Question
In addition to diversity jurisdiction, defendants also based their removal petition on federal question jurisdiction. Pursuant to 28 U.S.C. § 1331, federal courts have original jurisdiction "of all civil actions arising under the Constitution, laws, or treaties of the United States." Defendants contend that the federal Sherman Antitrust Act is a defense to the complaint and that it completely preempts all state law antitrust claims.
In Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 118 S.Ct. 921, 139 L.Ed.2d 912 (1988), the Supreme Court adopted the following framework for determining whether there is federal question jurisdiction in a removed case:
We have long held that "[t]he 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." Caterpillar v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987) [citation omitted]. A defense is not part of a plaintiff's properly pleaded statement of his or her claim. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987); Gully v. First Nat. Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936) ("To bring a case within the [federal-question removal] statute, 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.") Thus, "a case may be not be removed to federal court on the basis of a federal defense, . . . even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case." Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 14, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983)
Allied as an "independent corollary" to the well-pleaded complaint rule is the further principle that "a plaintiff may not defeat removal by omitting to plead necessary federal questions." Id., at 22, 103 S.Ct., at 2853. If a court concludes that a plaintiff has "artfully pleaded" claims in this fashion, it may uphold removal even though no federal question appears on the face of the plaintiff's complaint. The artful pleading doctrine allows removal where federal law completely preempts a plaintiff's state-law claim. [citations omitted]. Although federal preemption is ordinarily a defense, "[o]nce an area of state law has been completely preempted, any claim purportedly based on that preempted state-law claim is considered, from its inception, a federal claim, and therefore arises under federal law." Caterpillar, 482 U.S., at 393, 107 S.Ct., at 2430.522 U.S. at 474-476, 118 S.Ct. at 925.
Plaintiff argues that the claims in its complaint do not arise under federal law and that the only basis for removing this case is the purported antitrust defense pursuant to the Sherman Act. Under the "well-pleaded complaint rule", plaintiff contends that the action is not removable because there is no federal question which appears on the face of the complaint.
Defendants counter that plaintiff has attempted to "artfully plead" its claim to avoid federal question jurisdiction and that while the Sherman Act provides a defense to the plaintiff's claim, federal antitrust law completely preempts any state law claims asserted by the plaintiff.
In Terrebonne Homecare, Inc. v. SMA Health Plan, Inc., 271 F.3d 186 (5th Cir. 2001), the Fifth Circuit was called to decide whether the "artful pleading doctrine may be invoked to assert federal jurisdiction over a complaint alleging state antitrust claims." Id. at 188. The Fifth Circuit concluded that because plaintiff alleged state law claims in a field not totally preempted by federal law, the artful pleading doctrine was inapplicable Id.; see also , Waste Control Specialists, LLC v. Envirocare of Texas, Inc., 199 F.3d 781, 784 (5th Cir. 2000).
Defendants have filed a counterclaim against the plaintiff, asserting claims under the Sherman Act which they state must be brought in federal court. They argue that because this court has federal question jurisdiction over the counterclaim, it has subject matter jurisdiction over the main demand. However, as recognized by the Fifth Circuit inMetro Ford Truck Sales, Inc. v. Ford Motor Company, 145 F.3d 320, 326-327 (5th Cir. 1998)
Defendants filed their answer and counterclaim in federal court. A reconventional demand was not asserted in state court prior to removal.
When an action is brought to federal court through the § 1441 mechanism, "for both removal and original jurisdiction, the federal question must be presented by plaintiff's complaint as it stands at the time the petition for removal is filed and the case seeks entry into the federal system. It is insufficient that a federal question has been raised as a matter of defense or as a counterclaim." (citation omitted).
Upon review of the allegations in the plaintiff's complaint that are necessary to state a claim, the Court discerns no federally-cognizable matters. The Court, therefore, finds that there is no federal question jurisdiction over the complaint.
See , Isbell, 9 F. Supp.2d at 733 ("The Court must look to the allegations in the complaint that are necessary to state a claim, and assertions of defenses that raise federal issues are insufficient for jurisdictional purposes when the complaint itself does not plead federally-cognizable matters.") (citations omitted).
Conclusion
Upon review of the complaint, the motion and memoranda of counsel, and the law, the Court finds that the action was improperly removed because there is no subject matter jurisdiction over the plaintiff's petition. Accordingly, for the above and foregoing reasons,
IT IS ORDERED that the motion of plaintiff, Metropolitan Life Insurance Company, to remand is hereby GRANTED.
IT IS FURTHER ORDERED that this action is hereby REMANDED to the 22nd Judicial District Court, Parishes of St. Tammany and Washington, State of Louisiana.
IT IS FURTHER ORDERED that the motion of defendants, Lee Balinas, Shelly G. Gaudreau, and Mark Mauer, for summary judgment is hereby DISMISSED WITHOUT PREJUDICE. Defendants may refile the motion before the state court.