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State of New Jersey v. City of Wildwood

October 6, 1998

STATE OF NEW JERSEY,
PLAINTIFF,
V.
THE CITY OF WILDWOOD, A MUNICIPAL CORPORATION, AND THE BOARD OF COMMISSIONERS OF THE CITY OF WILDWOOD,
DEFENDANTS.



The opinion of the court was delivered by: Stephen M. Orlofsky United States District Judge

HON. STEPHEN M. ORLOFSKY

OPINION

ORLOFSKY, District Judge

This case was originally filed in the Superior Court of New Jersey, Cape May County, Chancery Division, by plaintiff, the State of New Jersey (the "State") against defendants, the City of Wildwood (the "City") and the Board of Commissioners of the City of Wildwood (the "Board," collectively "Wildwood"). Wildwood removed the case to this court contending that federal jurisdiction is conferred upon this Court by 28 U.S.C. §§ 1331, 1367.

The State filed this action in the Superior Court of New Jersey, Cape May County, Chancery Division, alleging that Wildwood violated various New Jersey statutes that limit the authority of a municipality to alter its boundaries, that require a municipality to follow specific procedures for the transfer of real property, and that oblige a municipality to give the public notice of proposed official actions. Wildwood filed a notice of removal to this Court, asserting that resolution of the State's claims involved substantial questions of federal law. Thereafter, the State filed a motion to remand this case to the Superior Court of New Jersey, Cape May County, Chancery Division. For the reasons set forth below, I shall grant the State's motion to remand pursuant to 28 U.S.C. § 1447(c), because this Court lacks subject matter jurisdiction.

I. BACKGROUND

Notwithstanding the heated hyperbole of the parties, the State's motion to remand presents for resolution a relatively narrow issue of law. It also represents the latest in a series of confrontations between the State and the City of Wildwood over whether the Delaware Tribe of Western Oklahoma will be allowed to build a casino in Wildwood. The Tribe has also filed an action pending in this Court against the City in which the State has intervened, Delaware Tribe of Western Oklahoma v. City of Wildwood, Civil Action 98-3692(SMO), alleging a violation of the Non-Intercourse Act of 1790. To understand what may fairly be described as the "Wildwood Casino War," I set forth below in some detail the tortuous procedural history of this case.

The City of Wildwood is a municipal corporation, incorporated, existing and subject to the Constitution and laws of the State of New Jersey. See Defendants' Notice of Removal (filed August 20, 1998) ("Defs. Notice"), Exhibit A (Plaintiff's Verified Complaint, dated August 10, 1998), ¶ 2. The Board is the governing body of the City of Wildwood. See id. Exh. A, ¶ 3.

The Delaware Tribe of Western Oklahoma (the "Tribe") filed a complaint against Wildwood in the Superior Court of New Jersey, Cape May County, Chancery Division, Docket No. C-18-98, alleging a violation of the Non-Intercourse Act of 1790, 25 U.S.C. § 177, *fn1 and seeking the return of its aboriginal lands allegedly located within boundaries of the City. See Defendants' Brief in Opposition to Motion to Remand ("Def. Brief"), Exh. A. (Letter Glenn D. McCogney, Esq. to Marcus H. Karavan, Esq., dated July 14, 1998). The State filed a motion to intervene in the suit because it believed that the litigation was "the first step in attempting to bring an Indian Gaming Casino to Wildwood." See Affidavit of William C. Brown, Esq. ("Brown Aff."), ¶ 2. Believing it could not receive a fair resolution of its claim in state court if the State were permitted to intervene, the Tribe, with Wildwood's consent, withdrew the lawsuit prior to any decision on the State's motion to intervene. See id. ¶ 3; see also Def. Brief, Exh. A.

After the state court action had been withdrawn, the Office of the Attorney General of the State of New Jersey, informed Wildwood's solicitor, Marcus H. Karavan, Esq. ("Karavan"), that the State had a "continued interest in any issue related to the Delaware Tribe or Indian Gaming in Wildwood." Brown Aff., ¶ 4. In the months leading up to July, 1998, the State made several requests to the City's Clerk's Office for any new information regarding the Tribe's interest in municipal property. See id. On July 24, 1998, Karavan left a telephone message for Assistant Attorney General, Mark J. Fleming ("Fleming"), stating "that `there may be some activity' at the July 27, 1998 meeting of the Board of Commissioners." Brown Aff., ¶ 5, Exh. B. Fleming and Deputy Attorney General, William H. Brown ("Brown"), attended the Board meeting. See id. ¶ 7.

At the July 27, 1998, meeting, the Board "approved, on first reading," Municipal Ordinance 472-98. See Defs. Notice, Exh. A, ¶ 4. The ordinance approved the transfer of a municipally owned parking lot to the Tribe in return for $1.00 and a "release of any and all claims which [the Tribe] may have against [Wildwood], including, but not limited to, claims relative to any violations of the Indian Non- intercourse Act [sic] of 1790, 25 U.S.C. § 177." See id. During the public comment portion of the meeting, Fleming informed the Board that approval of the ordinance was "beyond the power of the Commissioners and [was] unlawful." Brown Aff., ¶ 11.

At the conclusion of the meeting, Karavan provided Fleming with a copy of a letter from the Tribe's counsel to Karavan. See id. ¶ 12. The letter, dated July 14, 1998, informed Wildwood that the Tribe intended to pursue its claim in federal court "unless the City transfer[red] to the Tribe the land which had been promised by prior agreement between the parties." *fn2 Def. Brief, Exh. A. Enclosed with the letter was a copy of a federal complaint alleging the same claim which formed the subject matter of the state court action, namely, an alleged violation of the Non-Intercourse Act of 1790. See Brown Aff., Exh. F.

On August 7, 1998, the Tribe filed a complaint in this Court against the City of Wildwood, asserting a claim based upon an alleged violation of the Non-Intercourse Act of 1790. See Delaware Tribe of Western Oklahoma v. City of Wildwood, ("Delaware Tribe") Civil Action 98-3692(SMO) (Complaint, filed August 7, 1998). On August 20, 1998, the State filed an unopposed motion to intervene as a defendant in the Tribe's federal suit against the City. See id. (Notice of Motion to Intervene, filed August 20, 1998). On August 31, 1998, the Court granted the State's motion for leave to intervene. See id. (Order of the Court, entered August 31, 1998).

On August 10, 1998, the State filed a complaint in the Superior Court of New Jersey, Cape May County, Chancery Division, seeking declaratory and injunctive relief. See Defs. Notice, Exh. A. The State's complaint asserts three claims. First, the State alleges that only the State Legislature can alter the boundaries of a municipality, and any attempt to do so is beyond Wildwood's authority. See id., Exh. A (Count I). Second, the State alleges that the transfer of municipal land to the Tribe is a "sale," and as such, subject to the Local Lands and Buildings Law, N.J. Stat. Ann. § 40A:12-1 et seq., which requires sale by public auction. See id., Exh. A (Count II). Finally, the State alleges that Wildwood failed to give the public notice of the official action to be taken, regarding the Tribe's claim, at the July 27, 1998, Board meeting, in violation of the Open Public Meetings Act, N.J. Stat. Ann. § 10:4-6 et seq. See id., Exh. A (Count III).

On August 20, 1998, Wildwood filed its Notice of Removal in this Court. See Defs. Notice. In its Notice of Removal, Wildwood contends that the jurisdictional basis for removal is this Court's federal question jurisdiction. See Defs. Notice, ¶¶ 9-11. Wildwood further states that the State's claims are related to the claim set forth in the Tribe's federal complaint, already pending in this Court. See id.; Delaware Tribe, Civil Action 98-3692(SMO). Wildwood also argues that "[t]he State's right to obtain relief in this case is . . . contingent upon the resolution of the [Tribe's] right to recover possession of its aboriginal land under the Non[-I]ntercourse Act[; and that] [t]his is a substantial question of federal law." Defs. Notice, ¶ 9. Wildwood further argues that resolution of the Tribe's federal law claims is a prerequisite and essential element to the resolution of the State's claims, and that whether the state court can enjoin Wildwood from settling a federal lawsuit is a question of federal law. See id. ¶¶9- 11. In addition, Wildwood contends that this Court should treat this case as consolidated with Delaware Tribe of Western Oklahoma v. City of Wildwood, Civil Action 98-3692(SMO), and apply 28 U.S.C. § 1441(c) to "the extent that this case raises claims that will be resolved solely by reference[] to state law." Defs. Notice, ¶ 12.

On September 3, 1998, the State filed a motion to remand this case to the Superior Court of New Jersey, Cape May County, Chancery Division. *fn3 See Plaintiff's Notice of Motion to Remand (filed September 3, 1998). In support of its motion to remand, the State contends that its complaint raises only narrow issues of state law, involving the relationship between the State and a municipality created pursuant to state law. See Plaintiff's Brief in Support of Motion to Remand ("Pl. Brief") at 8-16. In addition, the State argues that removal is improper because this Court lacks subject matter jurisdiction to resolve these narrow issues of state law. See id.

II. LEGAL STANDARD FOR REMOVAL

Under 28 U.S.C. § 1441(a), *fn4 a defendant may remove to federal court any case over which the federal court would have had original jurisdiction. See 28 U.S.C. § 1441(a) (1998); see also Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 8 (1983); Gateway 2000, Inc. v Cyrix Corp., 942 F. Supp. 985, 989-90 (D.N.J. 1996) (Lechner, J.). Federal district courts are courts of limited jurisdiction, with original jurisdiction over two categories of disputes: (1) cases involving diversity jurisdiction pursuant to 28 U.S.C. § 1332, encompassing, for the most part, those disputes between citizens of different states involving the requisite amount in controversy; and (2) cases involving federal question jurisdiction pursuant to 28 U.S.C. § 1331, encompassing those disputes "arising under the Constitution, laws or treaties of the United States." 28 U.S.C. § 1331; see Caterpillar, 482 U.S. at 392; Gateway 2000, 942 F. Supp. at 989. Since this dispute is between the State of New Jersey ...


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