case shall be remanded." 28 U.S.C. § 1447(c).
Removing defendants bear the burden of proving that this court has jurisdiction. Abels v. State Farm Fire & Casualty Co., 770 F.2d 26, 29 (3d Cir. 1985), citing Pullman Co. v. Jenkins, 305 U.S. 534, 537, 83 L. Ed. 334, 59 S. Ct. 347 (1939). The removal statutes are strictly construed, and all doubts are to be resolved in favor of remand. Steel Valley Authority v. Union Switch & Signal Division, 809 F.2d 1006, 1010 (3d Cir. 1987). At the same time, however, although the court should be wary of any improper basis for invoking federal jurisdiction, it should not erroneously deprive a defendant of the right to a federal forum because a decision to remand may not be reviewed. 28 U.S.C. § 1447(d); Cheshire v. Coca-Cola Bottling Affiliated Inc., 758 F. Supp. 1098, 1100 (D. S.C. 1990); Crier v. Zimmer, Inc., 565 F. Supp. 1000, 1001 (E.D. La. 1983), citing 14A Wright & Miller Federal Practice and Procedure, § 3721 pp. 218-19 ("since the remand of a case to a state court is not a reviewable order, the federal court should be cautious about remand") (footnote omitted). Cf. Rothner v. City of Chicago, 879 F.2d 1402, 1407 (7th Cir. 1989).
There are two means by which a district court may exercise original jurisdiction over a case. The first, of course, is when the case involves "federal question jurisdiction." Title 28, United States Code, section 1331, provides that "the district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." The second, diversity jurisdiction, is present when the case is between citizens of different states and the amount in controversy, exclusive of interest and costs, is more than $ 50,000. 28 U.S.C. § 1332. Of course, the court need only find one basis for jurisdiction; if there is federal question jurisdiction the case need not meet the requirements for diversity jurisdiction, and vice versa.
I. Removal Based Upon Federal Question Jurisdiction: Legal Principles
The first ground defendants advance as a basis for this court's jurisdiction is the presence of a federal question. Under the "well-pleaded complaint rule," a defendant may only remove a case to federal court if the claims contained within the plaintiff's complaint, exclusive of any anticipated defenses, "arise under" federal law. See Franchise Tax Board v. Laborers Vacation Trust, 463 U.S. 1, 10, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983) ("For better or worse, under the present statutory scheme . . ., a defendant may not remove a case to federal court unless the plaintiff's complaint establishes that the case 'arises under' federal law." (Emphasis in original.)); Gully v. First National Bank in Meridian, 299 U.S. 109, 112, 81 L. Ed. 70, 57 S. Ct. 96 (1936) ("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, in the usual case, a defendant may not remove a complaint because federal law may prevent plaintiff from recovering on his or her claim. See Franchise Tax Board, 463 U.S. 1, 77 L. Ed. 2d 420, 103 S. Ct. 2841 ; Railway Labor Executives Association v. Pittsburgh & Lake Erie Railroad Co., 858 F.2d 936, 942 (3d Cir. 1988). Similarly, a normal preemption defense -- that federal law preempts one or more of plaintiff's claims -- will not support removal. United Jersey Banks v. Parell, 783 F.2d 360, 367 (3d Cir. 1986) ("The fact that [plaintiff's] claim under state law may be defeated because of the preemptive effect of federal banking laws does not mean that such federal laws provide the basis of the cause of action, as in the case of § 301 of the LMRA.").
In cases in which a plaintiff's complaint on its face contains only state law causes of action, removal still may be proper if the case falls within one of two categories: cases in which "it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims, or that one [of the claims] is 'really' one of federal law." Franchise Tax Board, 463 U.S. at 13.
A. Cases in Which Some Substantial, Disputed Question of Federal Law is a Necessary Element of One of the Well-Pleaded State Claims
Even if a plaintiffs claim arises under state law:
its case might still 'arise under' the laws of the United States if a well-pleaded complaint established that its right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties.
Franchise Tax Board, 463 U.S. at 13. If, however, "federal law becomes relevant only by way of a defense to an obligation created entirely by state law, and then only if [plaintiff] has made out a valid claim for relief under state law," there is no federal jurisdiction. The case cannot be removed to federal court. Id.
The United States Court of Appeals for the Third Circuit recently proclaimed further that, even if proof of a violation of federal law is a necessary element of plaintiff's state-law cause of action, the district court will be vested with subject matter jurisdiction over the case only if Congress created a private federal remedy for the violation. Smith v. Industrial Valley Title Ins. Co., 957 F.2d 90 (3d Cir. 1992). Following Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 92 L. Ed. 2d 650, 106 S. Ct. 3229 (1986), the court concluded that "when Congress has determined there should be no private, federal remedy for violation of a federal statute, that 'is tantamount to a congressional conclusion that the presence of a claimed violation of the statute . . . is insufficiently "substantial" to confer federal question jurisdiction.'" Smith, 957 F.2d at 93, quoting Merrell Dow, 106 S. Ct. at 3234 n.10.
I need not discuss this potential ground for jurisdiction, for defendants do not contend that the court has jurisdiction based upon this principle; rather, I will proceed to the elusive concept of "complete preemption."
B. Cases in Which at Least One of Plaintiff's Claims is "Really" One of Federal Law
The second method of removal when a plaintiff's claims all bear state-law "labels" applies if the claims are federal in substance. "It is an independent corollary of the well-pleaded complaint rule that a plaintiff may not defeat removal by omitting to plead necessary federal questions in a complaint." Franchise Tax Board, 463 U.S. at 22. In other words, a plaintiff may not use "artful pleading" in order to try to avoid federal court. See generally Parell, 783 F.2d at 367-68.
The Supreme Court has indicated that this concept of "complete preemption" applies in a narrow category of cases in which the preemptive force of a statute is so extraordinary that it converts an ordinary state-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule. Caterpillar, 482 U.S. at 393. "Once an area of state law has been completely preempted, any claim purportedly based on that preempted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Id.
In cases involving claims for ERISA benefits, for example, ERISA completely preempts any state-law cause of action for benefits. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987). Because Congress has explicitly stated that claims asserted by ERISA participants, beneficiaries and fiduciaries are to be brought in federal court, any plaintiff asserting a state-law claim for benefits in state court will end up in federal court, with his or her claim automatically "restated" as an ERISA claim. Similarly, § 301 of the Labor Management Relations Act completely preempts all cases in which plaintiffs claim rights pursuant to a collective bargaining agreement. Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 20 L. Ed. 2d 126, 88 S. Ct. 1235 (1968). See also Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 39 L. Ed. 2d 73, 94 S. Ct. 772 (1974).
On the other hand, however, a plaintiff remains the master of his or her own case. Franchise Tax Board, 463 U.S. at 22. See also Parell, 783 F.2d at 368 (the "artful pleading doctrine" should be construed narrowly because "an expansive application of the doctrine could effectively abrogate the rule that a plaintiff is master of his or her complaint"). Thus, in a case in which plaintiffs who had been employed under a collective bargaining agreement filed suit in California state court alleging breach of separate, individual employment agreements which applied to certain portions of their jobs, the defendant could not remove based upon complete preemption under § 301. Caterpillar, 482 U.S. 386, 96 L. Ed. 2d 318, 107 S. Ct. 2425. In other words, if a plaintiff who is covered by a collective bargaining agreement expressly seeks vindication of interests independent of those embodied in the agreement, the suit is not completely preempted by § 301 even if it concerns the plaintiff's employment relationship with the defendant. Krashna, 895 F.2d at 115. See also Franchise Tax Board, 463 U.S. 1, 77 L. Ed. 2d 420, 103 S. Ct. 2841 .
The United States Court of Appeals for the Third Circuit has explained that complete preemption exists if: (1) "the statute relied upon by the defendants as preemptive contains civil enforcement provisions within the scope of which the plaintiff's state claim falls;" and (2) "there is a clear indication of a Congressional intention to permit removal despite plaintiffs exclusive reliance on state law." Railway Labor Executives Assoc., 858 F.2d at 942. With regard to the first prong of this test, if there is "no federal cause of action vindicating the same interest the plaintiffs state cause of action seeks to vindicate," the court cannot permit removal by recharacterizing plaintiff's claim as a federal one. Id. Similarly, regarding the second prong, "if there is no affirmative indication of the requisite Congressional intent to permit removal, there can be no 'complete preemption.'" Id. Even if the defendant's substantive defense is preemption, the court should not address the case if there is no affirmative Congressional intent to permit removal. In such a case, the preemption defense must be left for the state court to decide on remand. Id.
II. Federal Question Jurisdiction Exists in These Cases
In the cases before this court, plaintiffs' complaints contain only state-law causes of action. Defendants claim that the cases are completely preempted by the National Bank Act (the "NBA"), which governs the defendants who are national banks.
In other words, they contend that plaintiffs, by artful pleading, are attempting to avoid federal law which necessarily governs. Specifically, they argue that section 86 of the NBA vindicates the interest plaintiffs seek to protect and that Congress intended that section 86 be the exclusive remedy against national banks for the charges and fees at issue.
Plaintiffs focus on the principle that a plaintiff is the master of his or her complaint and may choose to plead state rather than federal claims as long as there is no complete preemption. As discussed above, even if a federal claim would preempt a plaintiff's state law claims, federal jurisdiction does not exist unless the federal claim gives rise to complete preemption. Plaintiffs, of course, argue that complete preemption is not present.
A. Vindication of the Interest Plaintiffs Seek to Protect
Section 86 of the NBA provides:
Usurious interest; penalty for taking; limitations