People of State of Ill. v. Kerr-McGee Chemical Corp., KERR-M

• Citation: 677 F.2d 571
• Decision Date: 04 May 1982
• Docket Number: 81-1152,KERR-M,Nos. 81-1110,s. 81-1110
• Parties: , 12 Envtl. L. Rep. 20,623 PEOPLE OF the STATE OF ILLINOIS, Plaintiff-Appellant, v.cGEE CHEMICAL CORPORATION, Defendant-Appellee. and CITY OF WEST CHICAGO, a Municipal Corporation, Plaintiff-Appellant, v.cGEE CHEMICAL CORPORATION, a Delaware Corporation, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 571

677 F.2d 571

17 ERC 1681, 12 Envtl. L. Rep. 20,623

PEOPLE OF the STATE OF ILLINOIS, Plaintiff-Appellant, v. KERR-McGEE CHEMICAL CORPORATION, Defendant-Appellee. and CITY OF WEST CHICAGO, a Municipal Corporation, Plaintiff-Appellant, v. KERR-McGEE CHEMICAL CORPORATION, a Delaware Corporation,

Defendant-Appellee.

Nos. 81-1110, 81-1152.

United States Court of Appeals,

Seventh Circuit.

Argued Oct. 2, 1981.

Decided May 4, 1982.

Anne Rapkin, Asst. Atty. Gen., Environmental Control Div., Tyrone C. Fahner, Atty. Gen., Chicago, Ill., Bruce R. Kelsey, West Chicago, Ill., for plaintiffs-appellants.

John C. Berghoff, Jr., Chicago, Ill., for defendant-appellee.

Before SPRECHER and WOOD, Circuit Judges, and BROWN, Senior District Judge. ^*

SPRECHER, Circuit Judge.

These cases concern approximately forty-three acres of land which defendant Kerr-McGee Chemical Corporation owns and operates within the limits of the City of West Chicago, Illinois. The site consists of eight acres containing twenty-one factory and other buildings, twenty-seven acres used for waste disposal, and eight acres separating the factory and disposal areas. Since at least World War II, the facility has been used by Kerr-McGee and its predecessor companies to produce various compounds derived from radioactive natural ores. These activities generated large quantities of solid and liquid wastes.

Since 1956 the facility has been licensed by the Atomic Energy Commission (AEC) and its successor, the Nuclear Regulatory Commission (NRC). ¹ Kerr-McGee ceased all operations on the site in 1973 but continued, under license from the NRC, to possess and store thorium ores there. ² Since 1975 Kerr-McGee has been working, at the NRC's direction, to formulate a plan for decommissioning and stabilizing the site. Both the State of Illinois and the City of West Chicago have commented on the proposed plan, and the NRC is currently preparing an environmental impact statement on the project.

On April 28, 1980, the State of Illinois filed a complaint against Kerr-McGee in the Circuit Court of Illinois for DuPage County. The complaint alleged that Kerr-McGee's operation and maintenance of the site violate the Illinois Environmental Protection Act, Ill.Rev.Stat. ch. 1111/2, § 1001 et seq., and other state statutes pertaining to the disposal of hazardous wastes. On June 13, 1980, the City of West Chicago filed suit in the same court, charging Kerr-McGee with maintenance of a public nuisance, unlawful condemnation of public property, and violation of state and city regulations.

Kerr-McGee petitioned to have both cases removed to federal court. With regard to the City of West Chicago's case, the grounds for removal were that the complaint stated a controversy arising under the laws of the United States and that there was diversity of citizenship between the parties. Removal of the state's suit was based solely on the argument that the complaint raised a federal question.

The city did not contest removal of its suit. The state, however, moved to remand to state court, arguing that it had pleaded no federal cause of action. Denying the state's motion for remand, the district court found that the federal regulatory scheme under the Atomic Energy Act has preempted state regulation of radioactive waste disposal. Since the state's complaint necessarily involved the interpretation of federal law, the district court held that the case was properly removed. Illinois v. Kerr-McGee Chemical Corp., No. 80 C 2776 (N.D.Ill. Aug. 15, 1980).

Kerr-McGee subsequently moved to dismiss both complaints. The district court granted the motions, finding that federal law conferred exclusive jurisdiction upon the NRC to regulate radiation hazards and, therefore, preempted state and local legislative and administrative regulatory schemes. Illinois v. Kerr-McGee Chemical Corp., Nos. 80 C 2776 and 80 C 3357 (N.D.Ill. Jan. 8, 1981). These appeals followed. Because we decide the state's and the city's appeals on different grounds, we will consider each case separately.

I Illinois v. Kerr-McGee Chemical Corp., No. 81-1110

The State of Illinois argues that the case was improperly removed to federal court and that federal law has not preempted the state regulatory scheme at issue. We find that the state's case against Kerr-McGee was improperly removed to federal court. We have no occasion, therefore, to consider the question of preemption with regard to the state's case.

A

Under 28 U.S.C. § 1441(a) and (b), any or all defendants may remove a civil action brought in state court to federal court if the action is founded on a claim "arising under" federal law or if none of the defendants are citizens of the state where the action was brought. ³ Removal jurisdiction is thus keyed to the federal courts' original jurisdiction over federal question and diversity suits. ⁴ The general rule is that a case can be removed from state court only if the federal court would have had original jurisdiction over the action had it been brought there initially. Arkansas v. Kansas & Texas Coal Co., 183 U.S. 185, 189, 22 S.Ct. 47, 48, 46 L.Ed. 144 (1901); First National Bank v. Aberdeen National Bank, 627 F.2d 843, 848 (8th Cir. 1980). Because there can be no diversity of citizenship between the State of Illinois and Kerr-McGee, ⁵ we will examine only the removability of claims "arising under" federal law.

The current removal statute, 28 U.S.C. § 1441, is heir to a large body of case law that began with interpretations of the 1887 removal statute. Act of Mar. 3, 1887, ch. 373, 24 Stat. 552. That case law embodies a number of principles used by federal courts in deciding whether a case involves a federal question warranting removal. First among these principles is that the existence of a federal question must appear on the face of the plaintiff's complaint. See Phillips Petroleum Co. v. Texaco Inc., 415 U.S. 125, 127, 94 S.Ct. 1002, 1003, 39 L.Ed.2d 209 (1974); Gully v. First National Bank, 299 U.S. 109, 112-13, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936); Tennessee v. Union and Planters' Bank, 152 U.S. 454, 460, 14 S.Ct. 654, 656, 38 L.Ed. 511 (1894); Nuclear Engineering Co. v. Scott, 660 F.2d 241, 249 (7th Cir. 1981). Thus a defendant's assertion of an issue of federal law in the pleadings or in the petition for removal does not create a federal question. Phillips Petroleum Co. v. Texaco Inc., 415 U.S. 125, 127-28, 94 S.Ct. 1002, 1003, 39 L.Ed.2d 209 (1974); Arkansas v. Kansas & Texas Coal Co., 183 U.S. 185, 188, 22 S.Ct. 47, 48, 46 L.Ed. 144 (1901); Nuclear Engineering Co. v. Scott, 660 F.2d 241, 249 (7th Cir. 1981). A plaintiff who has both federal and state causes of action may choose to ignore the federal claims and pursue only the state claims in state court. See Pan American Petroleum Corp. v. Superior Court, 366 U.S. 656, 663, 81 S.Ct. 1303, 1307, 6 L.Ed.2d 584 (1961); Great Northern Railway Co. v. Alexander, 246 U.S. 276, 282, 38 S.Ct. 237, 239, 62 L.Ed. 713 (1918); Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir. 1976). The defendant is entitled to have the case removed to federal court, however, if the plaintiff is attempting to avoid having an essentially federal claim adjudicated in a federal forum merely by artfully drafting the complaint in terms of state law. See Nuclear Engineering Co. v. Scott, 660 F.2d 241, 249 (7th Cir. 1981); Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir. 1976). Nevertheless, the federal question must be an essential element of the plaintiff's complaint to provide grounds for removal. Phillips Petroleum Co. v. Texaco Inc., 415 U.S. 125, 127, 94 S.Ct. 1002, 1003, 39 L.Ed.2d 209 (1974); Gully v. First National Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936); Nuclear Engineering Co. v. Scott, 660 F.2d 241, 249 (7th Cir. 1981); Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir. 1976).

A problematic aspect of removal jurisdiction is that it is derivative, that is, a case can be removed to federal court only if it was properly before the state court. If the state court lacks jurisdiction over either the subject matter or one of the parties, the federal court cannot acquire jurisdiction on removal. This is true even if the case properly could have been brought in federal court in the first instance. See Lambert Run Coal Co. v. Baltimore & Ohio Railroad Co., 258 U.S. 377, 382, 42 S.Ct. 349, 351, 66 L.Ed. 671 (1922); Washington v. American League of Professional Baseball Clubs, 460 F.2d 654, 658 (9th Cir. 1972); Koppers Co. v. Continental Casualty Co., 337 F.2d 499, 501 (8th Cir. 1964). As others have noted, this is exactly the type of "legal tour de force" that lay persons abhor. See, e.g., Washington v. American League of Professional Baseball Clubs, 460 F.2d 654, 658 (9th Cir. 1972). However, the rule is so well-entrenched now that it would take legislative action to dislodge it. 14 Wright, Miller & Cooper, Federal Practice and Procedure § 3722, at 576 (1976). ⁶

One final principle to be considered is that the removal statute should be construed narrowly and against removal. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941); Arkansas v. Kansas & Texas Coal Co., 183 U.S. 185, 188, 22 S.Ct. 47, 49, 46 L.Ed. 144 (1901); La Chemise Lacoste v. Alligator Co., 506 F.2d 339, 344 (3d Cir. 1974), cert. denied, 421 U.S. 937, 95 S.Ct. 1666, 44 L.Ed.2d 94 (1975). This has been the policy of Congress since at least 1887, ⁷ and it is evident in successive versions of the removal statute. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941). The Supreme Court has been loathe to expand the federal courts' removal jurisdiction and has continually refused to recognize exceptions to the general principles discussed above. See, e.g., Phillips Petroleum Co. v. Texaco, Inc., 415 U.S. 125, 127-28, 94 S.Ct. 1002, 1003, 39 L.Ed.2d 209 (1974). Indeed, almost all...