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Burgo v. Volkswagen of America

January 29, 2002

JUDY & MICHAEL BURGO, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
VOLKSWAGEN OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Lifland, District Judge

FOR PUBLICATION

FOR PUBLICATION

MEMORANDUM AND ORDER

This issue in this case is whether the Court has subject matter jurisdiction over Plaintiffs' claims. The Court must apply the doctrine of the well-pleaded complaint, and the corollary complete preemption exception, to the language of the federal Motor Vehicle Safety Act ("MVSA" or the "Act"). Plaintiffs Judy and Michael Burgo move to remand this action to state court pursuant to 28 U.S.C. § 1447(c). Defendants Volkswagen of America, Inc., doing business as Audi of America, Inc. and Bridgestone / Firestone, Inc., removed the action to this Court, and now oppose remand. They argue that this Court has federal question subject matter jurisdiction under 28 U.S.C. §1331 because the MVSA completely preempts any state law authority to order automobile recalls. As discussed below, while the MVSA may, or may not, provide the Defendants a preemption defense, it does not completely preempt state law, and therefore does not create federal question jurisdiction over this case. Accordingly, since this Court lacks subject matter jurisdiction, the case will be remanded to state court.

BACKGROUND

This action arises out of the sale of allegedly defective automobile tires. The Plaintiffs filed a complaint in the Law Division of the Superior Court of New Jersey, Hudson County, on April 11, 2001. The Plaintiffs seek certification of their complaint as a class action on behalf of persons who owned or leased Audi models S4 or TT with specified tire models prior to December 1, 2000. Compl. ¶¶ 39-40. Plaintiffs allege that these tires suffer from a variety of defects that may lead to failure during operation. Compl. ¶¶ 11-15. Although the Defendants offered to replace the allegedly defective tires, Plaintiffs claim that the substitution is an insufficient remedy. Compl. ¶ 31. Plaintiffs thus filed this complaint alleging breach of the implied warranty of merchantability, violation of the Magnuson Moss Warranty Act, 15 U.S.C. §§ 2301-2312, *fn1 and consumer fraud. Plaintiffs seek money damages and replacement tires, as well as "final injunctive relief compelling Defendants to recall their applicable automobiles and tires." Compl. ¶ 72.

On May 18, 2001, Defendants removed this action pursuant to 28 U.S.C. §§ 1441(a) and 1446(a). Defendants claim the existence of a federal question under 28 U.S.C. § 1331, based on the Plaintiffs' request for an order compelling a recall. Defendants argue that the authority to administer automobile and tire recalls under the Motor Vehicle Safety Act is completely vested in the National Highway Traffic Safety Administration ("NHTSA"). Notice of Removal ¶ 9. The Defendants reason that because the MVSA completely preempts state authority over automotive recalls, the Plaintiffs' demand for a recall states a federal question within the meaning of 28 U.S.C. § 1331.

STANDARD OF REVIEW

An action filed in state court may be removed to a federal court if the case could have originally been brought in that federal forum. 28 U.S.C. § 1441(a); 1446(a); City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 163 (1997). Any action removed to federal court shall be remanded to the state court, if "at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c). The facts supporting jurisdiction are evaluated "according to the plaintiffs' pleading at the time of the petition for removal," and the removing party carries the burden of establishing federal subject matter jurisdiction. Int'l College of Surgeons, 522 U.S. at 163; Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 359 (3d Cir. 1995); Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir.1985). The limited scope of federal jurisdiction demands that the removal statutes be strictly construed. Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). All doubts concerning removal jurisdiction should therefore "be resolved in favor of remand." Brown v. Francis, 75 F.3d 860, 864-65 (3d Cir. 1996); Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987).

ANALYSIS

A case removed on the basis of a federal question must contain a claim that "arises under the Constitution, treaties, or laws of the United States." 28 U.S.C. § 1331, 1441(b); Dukes, 57 F.3d at 353. To arise under federal law, the federal question must appear on the face of the plaintiff's "well-pleaded complaint." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 9-10 (1983); Dukes, 57 F.3d at 353. The well-pleaded complaint rule recognizes that the plaintiff is the "master of the complaint," and may choose to assert only state law claims, despite the availability of federal remedies. Caterpillar Inc. v. Williams, 482 U.S. 386, 398-99 (1987); United Jersey Banks v. Parell, 783 F.2d 360, 365 (3d Cir. 1986) (citations omitted).

Federal jurisdiction cannot be created by anticipating a federal defense to the plaintiff's state law claims. Gully v. First Nat'l Bank, 299 U.S. 109, 115-18 (1936); Caterpillar, 482 U.S. at 398-99. Therefore, a defendant may not ordinarily remove a case by demonstrating that the plaintiff's cause of action is preempted by federal law. Caterpillar, 482 U.S. 386 at 398; Railway Labor Execs. Assoc. v. Pittsburgh & Lake Erie R.R. Co., 858 F.2d 936, 939 (3d Cir. 1988). In this case, the Defendants do not claim that the Plaintiffs' complaint raises a federal issue on its face. Rather, the Defendants argue that an exception to the well-pleaded complaint rule, complete preemption, supports jurisdiction. *fn2

Although a mere defense based on federal preemption is insufficient to confer jurisdiction, the doctrine of complete preemption is "a corollary or an exception to the `well-pleaded complaint' rule." Wood v. Prudential Ins. Co. of Am., 207 F.3d 674, 678 (3d Cir. 2000) (citing Metropolitan Life v. Taylor, 481 U.S. 58, 63-64 (1987)). The complete preemption doctrine holds that "Congress may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Metropolitan Life, 481 U.S. at 63-64. Where complete federal preemption exists, removal is proper despite the absence of a federal cause of action on the face of the complaint. Rivet v. Regions Bank of L.A., 522 U.S. 470, 475 (1998). In a case where the "preemptive force" of federal law "is so powerful as to displace entirely any state cause of action" for the same claim, the state claim "necessarily `arises under' federal law." Franchise Tax Bd., 463 U.S. at 23-24.

Courts are cautioned against finding complete preemption too readily. Railway Labor, 858 F.2d at 940-41. Complete preemption is an extraordinary doctrine "that converts an ordinary state common law complaint into one stating a federal claim." Metropolitan Life, 481 U.S. at 65. Recognizing the very narrow scope of the doctrine, the Third Circuit has established a two-part test for determining whether a federal statute so completely preempts state law that federal question ...


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