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November 17, 1997

LESLIE J. BAUCHELLE, on behalf of herself and all others similarly situated, Plaintiff,
AT&T CORP., Defendant.

The opinion of the court was delivered by: CHESLER


 I. Introduction

 This matter comes before the Court on the application of Plaintiff Leslie J. Bauchelle for remand of this action to the New Jersey Superior Court. The motion was referred to the undersigned by the Honorable Maryanne Trump Barry, U.S.D.J. Oral argument was heard on August 7, 1997. For the reasons stated below, Plaintiff's motion for remand is granted.

 II. Backgroud

 Plaintiff Leslie J. Bauchelle, on behalf of herself and all others similarly situated, filed this class action Complaint against Defendantt AT&T Corporation on February 18, 1997 in the Superior Court of New Jersey, Bergen County. Plaintiff and the stated Class represent persons who:

since the initiation of AT&T's 10-cents-per-minute long-distance telephone service option for residential customers, contacted AT&T and asked for or about AT&T's least expensive residential long-distance telephone service option, were told that an option other than AT&T's 10-cents-per-minute option was the least expensive option offered to residential customers, and subsequently signed up for an AT&T residential long-distance telephone service option other than the 10-cents-per-minute option.

 (Compl. at P5.) The class excludes Defendant and employees of Defendant. (Id.)

 Defendant provides interstate communications services including long-distance telephone services and is a common carrier subject to the Federal Communications Act ("FCA" or "Act"). 47 U.S.C. § 151 et seq. Section 203(a) of the Act requires carriers to file tariffs, which show the carriers' charges for service, and keep such tariffs open for public inspection in the manner directed by the Federal Communications Commission ("FCC"). Section 203(c) prohibits carriers from charging any rates other than those set forth in the filed tariff for the particular service to which the customer subscribed. Defendant's "One Rate" and "One Rate Plus" residential service plans were both federally tariffed service offerings properly filed with the FCC and were in effect as of the date the above-captioned action was filed in state court.

 Defendant removed this matter to federal court on April 4, 1997, contending that this court has jurisdiction pursuant to 28 U.S.C. § 1331 (federal question jurisdiction). First, Defendant asserts that Plaintiff's claims for fraud and negligent misrepresentation arise under federal common law. Second, Defendant maintains that Plaintiff's statutory claim requires the construction of federal law and depends on the resolution of substantial federal questions. Third, Defendant contends that Plaintiff's claims are completely preempted by the Federal Communications Act.

 Plaintiff filed a motion to remand this matter to state court on the ground that the Complaint arises under state law and that there are no federal questions to be addressed. In determining whether remand is proper, this Court must address each of Defendant's asserted bases for removal. The Court finds that Plaintiff's claims do not arise under federal law nor are they completely preempted by the FCA. Therefore, for the reasons discussed below, the motion to remand the action to the New Jersey Superior Court must be granted.

 III. Discussion

 Defendant removed this action to federal court contending that Plaintiff's statutory claim requires the construction of federal law, that Plaintiff's common law claims arise under federal common law, and that Plaintiff's claims are completely preempted by the FCA. The general federal removal statute, 28 U.S.C. § 1441, allows removal by defendants of any state court action "of which the district courts of the United States have original jurisdiction." Where, as here, the removing party does not allege diversity jurisdiction, this Court's original jurisdiction must be based upon an action "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. A case arises under federal law if the plaintiff's cause of action was created by federal law or if a federal law, which creates a cause of action, is an essential component of the plaintiff's state law claim. "Federal law" includes federal common law. Illinois v. City of Milwaukee, 406 U.S. 91, 100, 31 L. Ed. 2d 712, 92 S. Ct. 1385 (1972). The removing defendant bears the burden of proving that the Court has subject matter jurisdiction. Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990).

 A. The Well-Pleaded Complaint Rule

 It is well settled that federal question jurisdiction is governed by the "well-pleaded complaint rule." This rule provides that federal subject matter jurisdiction exists only when a federal question is pleaded on the face of a properly pleaded complaint. Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 96 L. Ed. 2d 318, 107 S. Ct. 2425 (1987). As a result, a plaintiff -- as master of the complaint -- "may avoid federal jurisdiction by exclusive reliance on state law." Id. In addition, a defendant cannot remove a case "on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue" since such a defense does not appear on the face of a properly pleaded complaint. Id. at 393. Here, each of Plaintiff's specifically alleged causes of action -- violations of the New Jersey Consumer Fraud Act, fraud, and negligent misrepresentation -- on its face is a state law claim.

 1. Federal Law As a Necessary Element of Plaintiff's State Law Claims

 If a disputed question of federal law exists as part of Plaintiff's state law cause of action, federal question jurisdiction might still be found. In such a circumstance, the existence of a "substantial, disputed question of federal law" is a threshold issue to support federal question jurisdiction. United Jersey Banks v. Parell, 783 F.2d 360, 366 (3d Cir. 1986). A federal question is substantial when the federal issue is decisive because vindication of rights depends on construction of federal law. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983). Jurisdiction exists "only if that question also 'is a necessary element of one of the well-pleaded state claims.'" Parell, 783 F.2d at 366 (emphasis added). *fn1" A substantial disputed federal question, however, is insufficient by itself to confer jurisdiction. Thus, where Plaintiff's causes of action are created by state law, and no disputed question of federal law is a necessary element of one of those state law claims, there is no federal jurisdiction over the matter.

 Defendant contends that all of Plaintiff's claims require the construction of a substantial disputed issue of federal law. Defendant characterizes Plaintiff's complaint as one which alleges that Defendant induced Plaintiff to sign up for the "One Rate" plan, rather than the "One Rate Plus" plan, by misrepresenting that the "One Rate" plan was the "least expensive." Should Plaintiff prevail, therefore, any damage calculation would compute the difference between the two rates filed in accordance with 47 U.S.C. § 203. Defendant relies on this indirect reference to the federal statute as a basis for conferring federal question jurisdiction over the complaint since Plaintiff "would have no right to relief . . . were it not for the fact that AT&T had filed with the FCC the 'One Rate Plus' plan." (Defendant AT&T Corp.'s Memorandum of Law In Opposition to Plaintiff's Motion to Remand, p. 17 [hereinafter D. Mem.]).

 Defendant's argument fails in two respects. First, there is no disputed issue of federal law. It is not contested that, if Plaintiff prevails, damages would be the difference between the two filed rates. In addition, there is no dispute over the rates charged by Defendant: Plaintiff explicitly did not challenge the rates under the "One Rate" and "One Rate Plus" plans. See Compl. P 20 ("This action expressly does not challenge AT&T's rates nor the reasonableness of those rates charged to AT&T's residential long-distance telephone service customers.") Accordingly, the indirect reference to federal law through the computation of damages does not create a "substantial, disputed question of federal law" and therefore is inadequate to confer subject matter jurisdiction on this Court.

 Second, Defendant's contention that Plaintiff's right to relief arises from the properly filed tariffs is insufficient for the Court to find federal question jurisdiction. The analogous case of Gully v. First Nat'l Bank, 299 U.S. 109, 81 L. Ed. 70, 57 S. Ct. 96 (1936), is instructive. In Gully, the Mississippi state tax collector sued to collect taxes from a national bank. Because national banks are immune from state taxation except to the extent that Congress has allowed by statute, the lower courts held that the case was properly removed from state court. The lower courts reasoned that the power to tax national banks has its origins in a federal statute and that by "necessary implication a plaintiff counts upon the statute in suing for the tax." The Supreme Court rejected this analysis and found federal question jurisdiction to be lacking. 299 U.S. at 116. The Court stated:

That there is a federal law permitting such taxation does not change the basis of the suit, which is still the statute of the state, though the federal law is evidence to prove the statute valid.
The argument for the respondent [the defendant Bank] proceeds on the assumption that, because permission at times is preliminary to action, the two are to be classed as one. But the assumption will not stand. . . . The federal nature of the right to be established is decisive -- not the source of the authority to establish it. Here the right to be established is one created by the state. If that is so, it is unimportant that federal consent is the source of state authority. . . .

 Id. at 115-16 (internal citations and quotations omitted).

 Likewise, in this case, that a federal statute permits Defendant to charge the rates filed in the "One Rate" and "One Rate Plus" tariffs does not change the bases of the lawsuit, which are state common law and a state statute. Although such authorization does gram Plaintiff the right to subscribe to either of the calling plans -- as the statute in Gully allowed the plaintiff to collect taxes -- such permission should not be conflated with Defendant's obligations, pursuant to state law, to truthfully advertise and market its calling plans. The rights asserted by Plaintiff, therefore, are not federal in nature. Plaintiff ...

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