B & S Holdings, LLC v. BNSF Ry. Co.

• Decision Date: 11 September 2012
• Docket Number: No. 12–CV–0387–TOR.,12–CV–0387–TOR.
• Citation: 889 F.Supp.2d 1252
• Court: U.S. District Court — District of Washington
• Parties: B & S HOLDINGS, LLC, a Washington limited liability company, Plaintiff, v. BNSF RAILWAY COMPANY, a Delaware corporation, et al., Defendant.

889 F.Supp.2d 1252

B & S HOLDINGS, LLC, a Washington limited liability company, Plaintiff,

v.BNSF RAILWAY COMPANY, a Delaware corporation, et al., Defendant.

No. 12–CV–0387–TOR.

United States District Court,

E.D. Washington.

Sept. 11, 2012.

Donald L. Dimmitt, Jeffers Danielson Sonn & Aylward, PS, Wenatchee, WA, for Plaintiff.

Leslie Richard Weatherhead, Nathan G. Smith, Witherspoon Kelley Davenport and Toole, PS, Spokane, WA, for Defendant.

ORDER ON MOTION TO REMAND AND MOTION TO DISMISS

THOMAS O. RICE, District Judge.

BEFORE THE COURT are Plaintiff's Motion to Remand, ECF No. 3, and Defendant BNSF Railway Company's Motion to Dismiss, ECF No. 10. The motions were heard without oral argument on August 6, 2012. The Court has reviewed the motions, the responses, the reply and supporting documentation and is fully informed.

BACKGROUND

B & S Holdings, LLC (“B & S Holdings”) brought this suit against BNSF Railway Company (“BNSF”), and others, seeking to obtain fee simple title to part of BNSF's property that it owns in fee simple along its rail line located in Wenatchee, Washington. ECF No. 1. BNSF removed this action to federal court on the basis of federal question jurisdiction. ECF No. 1 at 2. No other party has yet appeared. B & S Holdings has now moved for an order remanding this case back to the Chelan County Superior Court for the State of Washington on the grounds that no federal question is presented. BNSF cross moves for dismissal on the ground that exclusive jurisdiction resides with the Surface Transportation Board under the express terms of a federal statute.

According to the complaint, B & S Holdings owned certain property adjoining property owned by BNSF in Chelan County, Washington. ECF 1–1 at 18–19. On March 8, 2012, B & S Holdings sold its property to the Wenatchee School District No. 246. Id. B & S Holdings contends that its formerly owned building and fenced parking area encroach on the adjacent BNSF property. Id. at 20. B & S Holdings claims that it has established adverse possession of this property by reason of its encroachment and seeks quiet title to the same for the benefit of its successor in interest, Wenatchee School District No. 246. Id. at 20–21.

DISCUSSION

The question before the Court is whether removal of this action to this Court was valid due to the complete preemption of Plaintiff's state law adverse possession cause of action under the Interstate Commerce Commission Termination Act of 1995 (“ICCTA”), Pub. L. No. 104–88, 109 Stat. 803. In the alternative, the Court must decide whether there is diversity jurisdiction over the plaintiff's state adverse possession claim which would support the removal of this action. Finally, if the Court has jurisdiction, the Court must then decide whether it should yield to the Surface Transportation Board to decide the underlying controversy.

I. REMOVAL

A defendant may remove an action to federal court based on federal question jurisdiction or diversity jurisdiction. 28 U.S.C. § 1441. However, “ ‘[i]t is to be presumed that a cause lies outside [the] limited jurisdiction [of the federal courts] and the burden of establishing the contrary rests upon the party asserting jurisdiction.’ ” Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 684 (9th Cir.2006) ( quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)) (alterations in original). The “strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper,” and the court resolves all ambiguity in favor of remand to state court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992) (per curiam) (internal quotation marks omitted).

A. FEDERAL QUESTION

The threshold requirement for removal under 28 U.S.C. § 1441 is a finding that the complaint contains a cause of action that is within the original jurisdiction of the district court. Ansley v. Ameriquest Mortgage Co., 340 F.3d 858, 861 (9th Cir.2003) ( quoting Toumajian v. Frailey, 135 F.3d 648, 653 (9th Cir.1998)). In determining federal question jurisdiction, the well-pleaded complaint rule provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. The plaintiff is the master of his complaint and may avoid federal question jurisdiction by relying exclusively on state law. See Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987).

“A case ‘arises under’ federal law within the meaning of § 1331 ... if ‘a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law.’ ” Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 689–90, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006) ( quoting Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 27–28, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (brackets omitted)). It is settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case. Hunter v. Philip Morris USA, 582 F.3d 1039, 1042–1043 (9th Cir.2009) (internal quotation marks and citations omitted); see also Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. at 14, 103 S.Ct. 2841 (“since 1887 it has been settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption.”).

One exception to the statutory “well-pleaded complaint” rule is when Congress “so completely pre-empt[s] a particular area that any civil complaint raising this select group of claims is necessarily federal in character.” Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63–64, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); see also Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists, 390 U.S. 557, 560, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968). Under complete preemption, if “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,’ ” then “any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law.” Caterpillar, 482 U.S. at 393, 107 S.Ct. 2425.

The question in complete preemption analysis is whether Congress intended the federal cause of action to be the exclusive cause of action for the particular claims asserted under state law.” [New Orleans & Gulf Coast Ry. Co. v.] Barrois, 533 F.3d [321,] [ ] 331;see also Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 8, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003).

Elam v. Kansas City Southern Ry. Co., 635 F.3d 796, 803 (5th Cir.2011). Here, Plaintiff's complaint relies exclusively on state property law, specifically, Washington State's adverse possession law. Accordingly, if not for diversity jurisdiction, discussed infra, only complete preemption can provide federal jurisdiction sufficient to support removal in this case.

The Interstate Commerce Act, ch. 104, 24 Stat. 379 (1887), which, as amended, still governs federal regulation of railroads, has been recognized as “among the most pervasive and comprehensive of federal regulatory schemes.” City of Auburn v. United States, 154 F.3d 1025, 1029 (9th Cir.1998) ( citing Chi. & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 318, 101 S.Ct. 1124, 67 L.Ed.2d 258 (1981)). For more than a century, the Supreme Court has made it clear that under the U.S. Constitution's Supremacy Clause (Art. VI, cl. 2), state laws or regulations that are inconsistent with the agency's plenary authority or with the Congressional policy reflected in the Interstate Commerce Act are preempted. See id.

The jurisdiction of the [Surface Transportation] Board over—

(1) transportation by rail carriers, and the remedies provided in this part with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and

(2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State,

is exclusive. Except as otherwise provided in this part, the remedies provided under this part with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.

49 U.S.C. § 10501(b) (emphasis added).

As the agency authorized by Congress to administer the [ICCTA], the Transportation Board is uniquely qualified to determine whether state law should be preempted by the [ICCTA].” Emerson v. Kansas City S. Ry. Co., 503 F.3d 1126, 1130 (10th Cir.2007) (alterations in original) ( quoting Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638, 642 (2d Cir.2005)).

New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 331–332 (5th Cir.2008).

There is no Ninth Circuit precedent on the issue of whether complete preemption exists under the ICCTA in the context of state law adverse possession claims to railroad property. However, the Ninth Circuit does provide a test for determining what weight to give the Surface Transportation Board's interpretation of statutes it administers:

Congress gave the Board primary authority for enforcement of the Interstate Commerce Act. Fulfillment Servs., Inc. v. United Parcel Serv., Inc., 528 F.3d 614, 616–17 (9th Cir.2008). “Where there is a challenge to the agency's interpretation of the statute that it administers, we apply the analytical framework set forth...