anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue." Caterpillar, 482 U.S. at 393.
There exist, however, two exceptions to the well-pleaded complaint rule. First, under the doctrine of complete preemption, "on occasion. . . the pre-emptive force of a [federal] statute is so 'extraordinary' that it 'converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.'" Id. (quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987)). Second, a "case might still 'arise under' the laws of the United States if a well-pleaded complaint established that [plaintiffs'] right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties." Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 13, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983). Legg Mason invokes both these exceptions. See Amended notice of removal, PP 4(a), 4(b). I will address the arguments in turn.
Are Plaintiffs' State-Law Claims Completely Preempted b y Federal Law?
"The complete preemption doctrine holds that 'Congress may so completely preempt a particular area, that any civil complaint raising this select group of claims is necessarily federal in character.'" Railway Labor Executives Ass'n v. Pittsburgh & L.E.R.R., 858 F.2d 936, 939 (3d Cir. 1988) (quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987)). "In such cases, 'any complaint that comes within the scope of the federal cause of action [created by the federal statute] necessarily "arises under" federal law' for purposes of removal based on federal question jurisdiction." Id. (quoting Franchise Tax Bd., 463 U.S. at 24). Ordinary preemption, which governs whether federal or state substantive law controls an ostensibly state-law claim filed in either federal or state court, differs from complete preemption, which governs not only that question but also whether such a claim filed in state court is removable to federal court. Krashna v. Oliver Realty, Inc., 895 F.2d 111, 114 n.3 (3d Cir. 1990). Simply because a defendant may ultimately prove that a plaintiff's state-law claim is preempted under federal law (and therefore must be dismissed) does not establish that the claim is removable to federal court. Id. (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 398, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987); Railway Labor, 858 F.2d at 941). This Court is keenly aware that complete preemption "operates in a very narrow area." Railway Labor, 858 F.2d at 942.
The Third Circuit has set out a two-part test to determine whether a state-law claim is completely preempted by federal law. First, the civil enforcement provision of the allegedly preemptive federal statute must "create a federal cause of action vindicating the same interest that the plaintiff's cause of action seeks to vindicate." Allstate Ins. Co. v. 65 Sec. Plan, 879 F.2d 90, 93 (3d Cir. 1989) (citing Railway Labor, 858 F.2d at 942-43); accord Krashna, 895 F.2d at 114. Second, there must be "affirmative evidence of a congressional intent to permit removal despite the plaintiff's exclusive reliance on state law." Allstate, 879 F.2d at 93 (citing Railway Labor, 858 F.2d at 942-43); accord Krashna, 895 F.2d at 114.
Arguing that the first requirement is met here, Legg Mason contends that the civil enforcement provision found in 26 U.S.C. § 7426 vindicates the same interest that the plaintiffs seek to vindicate in their state-law claims -- their interest in getting back their property. But section 7426 creates a cause of action against the federal government only, not against a third party who surrenders levied property. Because the plaintiffs in this case have chosen to sue the surrendering third party rather than the government, arguably section 7426 does not vindicate the same interest as does plaintiffs' state-law claims. Cf. Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 560-61, 88 S. Ct. 1235, 20 L. Ed. 2d 126 (1968) (holding that plaintiff's state-law claim was completely preempted under federal statute, even though relief sought -- an injunction -- was not available under the federal statute); Railway Labor, 858 F.2d at 942 (holding that federal statute did not vindicate same rights as did plaintiff's state-law claims because it did not create a cause of action in favor of someone in plaintiff's position). I need not, however, make that determination, because it is clear that the second requirement of the two-part test is not met.
The complete preemption doctrine does not apply unless "there is a clear indication of a Congressional intention to permit removal despite the plaintiff's exclusive reliance on state law." Railway Labor, 858 F.2d at 942 (citing Metropolitan Life Ins. Co.v. Taylor, 481 U.S. 58, 65-66, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987)) (emphasis added). Significantly, "the relevant congressional intent [must be] not an intent that the statute should displace state law, but rather an intent that claims purportedly based on state law be removable." 858 F.2d at 941 (citing Metropolitan Life, 481 U.S. at 67-68 (Brennan, J., concurring)). Understandably, this sort of congressional intent is rarely expressed in a statute or the legislative history behind it. Indeed, the Supreme Court has found the expression of such congressional intent in -- and therefore found complete preemption under -- the civil enforcement provisions of only two federal statutes: section 301(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), and section 502(a) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a). Burda v. M. Ecker Co., 954 F.2d 434, 438 n.5 (7th Cir. 1992).
In finding complete preemption under § 301(a) of the LMRA, the Supreme Court discerned the requisite congressional intent from the language of the statute itself:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect of the amount in controversy or without regard to the citizenship of the parties.
29 U.S.C. § 185(a), quoted in Caterpillar Inc. v. Williams, 482 U.S. 386, 394, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987); see also Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 559, 88 S. Ct. 1235, 20 L. Ed. 2d 126 (1968).
In finding complete preemption under § 502(a) of ERISA,
the Supreme Court relied on the similarity between the language of § 502's jurisdictional provision and the language of § 301(a) of the LMRA, a House conference report, and remarks by senators who sponsored ERISA. The Court stated:
Even with a provision such as § 502(a)(1)(B) that lies at the heart of a statute with the unique preemptive force of ERISA, . . . we would be reluctant to find that extraordinary pre-emptive power, such as has been found with respect to § 301 of the LMRA, that converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule. But the language of the jurisdictional subsection of ERISA's civil enforcement provision closely parallels that of § 301 of the LMRA. Section 502(f) [of ERISA] says: