Biloxi Freezing & Processing, Inc. v. Miss. Power Co.

• Decision Date: 17 November 2016
• Docket Number: CIVIL ACTION NO. 1:16-cv-301(DCB)(MTP)
• Parties: BILOXI FREEZING & PROCESSING, INC., GULFSIDE CASINO PARTNERSHIP and JOHN CARLTON DEAN PLAINTIFFS v. MISSISSIPPI POWER COMPANY and SOUTHERN COMPANY DEFENDANTS
• Court: U.S. District Court — Southern District of Mississippi

BILOXI FREEZING & PROCESSING, INC.,GULFSIDE CASINO PARTNERSHIP and JOHN CARLTON DEAN PLAINTIFFS v. MISSISSIPPI POWER COMPANY and SOUTHERN COMPANY DEFENDANTS

CIVIL ACTION NO. 1:16-cv-301(DCB)(MTP)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI SOUTHERN DIVISION

November 17, 2016

MEMORANDUM OPINION AND ORDER

This cause is before the Court on the plaintiffs Biloxi Freezing & Processing, Inc., Gulfside Casino Partnership, and John Carlton Dean's Motion to Remand (docket entry 22).¹ Having carefully considered the motion, the defendants' response, the parties' memoranda and the applicable law, and being fully advised in the premises, the Court finds as follows:

This action was commenced by the filing of the plaintiffs' original Complaint on July 11, 2016, in the First Judicial District of the Circuit Court of Harrison County, State of Mississippi. On August 12, 2016, the plaintiffs filed their First Amended Complaint (hereafter "Complaint"). The Complaint asserts claims for (1)violations of the Mississippi Consumer Protection Act ("MCPA")(Miss. Code Ann. § 75-24-1, et seq.), (2) injunctive relief under Mississippi law, (3) fraud and concealment under Mississippi law, and (4) unjust enrichment under Mississippi law.

On August 12, 2016, the defendants removed the action to this Court. The defendants also filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, a Motion to Dismiss for Failure to State a Claim or for Judgment on the Pleadings, and a Motion to Stay Discovery. Defendant Mississippi Power Company also filed a Motion for Costs of Previously Dismissed Action.

A defendant may effect proper removal of a case from state court to federal district court where the action is one over which the federal district court has original jurisdiction. See 28 U.S.C. § 1441(a). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). The removing party bears the burden of establishing that a state court suit is properly removable to federal court. Manguno v. Prudential Prop. & Cas. Ins., 276 F.3d 720, 723 (5^th Cir. 2002); see also Coury v. Prot, 85 F.3d 244, 248 (5^th Cir. 1996)("[T]here is a presumption against subject matter jurisdiction that must be rebutted by the party bringing an action to federal court."). Doubts about the propriety of removal are to be resolved in favor of remand. Manguno, 276 F.3d at 723. See also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.100, 108-109 (1941)(Congress intended to restrict jurisdiction of federal courts on removal and its "successive acts ... regulating the jurisdiction of federal courts is one calling for the strict construction of such legislation."); Gash v. Hartford Accident & Indemnity Company, 491 F.3d 278, 281-282 (5^th Cir. 2007)("The removal statute is ... to be strictly construed, and any doubt about the propriety of removal must be resolved in favor of remand."). "When considering a motion to remand, the district court accepts as true all relevant allegations contained in the complaint and construes all factual ambiguities in favor of the plaintiff." Palermo v. Letourneau Tech., Inc., 542 F.Supp.2d 499, 506 (S.D. Miss. 2008)(citing Willy v. Coastal Corp., 855 F.2d 1160, 1163-64 (5^th Cir. 1988)).

Whether a federal question sufficient to confer jurisdiction on the federal court exists is resolved by application of the "well-pleaded complaint" rule. See Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152-53 (1908). Under this rule, the language of the plaintiff's complaint governs the jurisdictional inquiry: "If, on its face, the plaintiff's complaint raises no issue of federal law, federal question jurisdiction is lacking." Hart v. Bayer Corp., 199 F.3d 239, 244 (5^th Cir. 2000)(citing Franchise Tax Bd. v. Laborers Vacation Trust, 463 U.S. 1, 10 (1983)); see also Anderson v. American Airlines, Inc., 2 F.3d 590, 593 (5^th Cir. 1993)(If a question of federal law does not appear inthe complaint, then federal question jurisdiction does not exist and removal is improper). "The rule makes the plaintiff master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law." Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 (1987).

In addition, a case does not arise under federal law on the basis of an anticipated or even an inevitable federal defense. See Carpenter v. Wichita Falls Independent School District, 44 F.3d 362, 366 (5^th Cir. 1995); Franchise Tax Bd., 463 U.S. at 12 ("By unimpeachable authority, a suit brought upon a state statute does not arise under [federal law] because [it is] prohibited thereby"); Hood v. AstraZeneca Pharm., LP, 744 F.Supp. 2d 590, 607 (N.D. Miss. 2010)("A necessary result of the well-pleaded complaint rule is that a defendant may not remove a case on the basis of a federal statutory or constitutional defense, even if the defense is anticipated in the complaint and both parties admit that the only question for decision is raised by the federal defense").

"'[F]ederal jurisdiction exists only when a federal question is presented on the face of plaintiff's properly pleaded complaint.'" Adams v. Gen. Motors Acceptance Corp., 307 F.Supp. 2d 812, 815-16 (N.D. Miss. 2004)(quoting Terrebonne Homecare, Inc. v. SMA Health Plan, Inc., 271 F.3d 186, 188 (5^th Cir. 2001)). "'When a plaintiff has a choice between federal and state law claims, she may proceed in state court on the exclusive basis of state law,thus defeating the defendant's opportunity to remove.'" Id. (quoting Medina v. Ramsey Steel Co., 238 F.3d 674, 680 (5^th Cir. 2001)).

The plaintiffs do not include any federal causes of action in their Complaint. Rather, they allege (1) violations of the Mississippi Consumer Protection Act (Miss. Code Ann. §75-24-1, et seq.), (2) injunctive relief under Mississippi law, (3) fraud and concealment under Mississippi law, and (4) unjust enrichment under Mississippi law. Complaint, ¶¶ 74-97. None of the plaintiffs' state law causes of action rely on federal law for "a necessary element" of their claims for relief thereunder. See Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 699 (2006); Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 376 (2004)(civil rights claim arose under Civil Rights Act because the cause of action was "made possible by that Act").

The plaintiffs' Complaint explicitly states that the lawsuit "does not implicate any Federal Energy Regulatory Commission [("FERC")] tariff, order, regulation, or rule." Complaint, p. 1. The Complaint also disclaims any relevance to wholesale tariffs or rates. Id., pp. 1-2. The law provides that such disclaimers are to be credited in favor of remand. See, e.g., Caldwell v. Am. Home Prod. Corp., 210 F.Supp.2d 809, 811 (S.D. Miss. 2002)(remand appropriate where plaintiff had disavowed federal claims); Petty v. Gulf Guar. Ins. Co., 303 F.Supp.2d 815, 818 n.3 (N.D. Miss. 2003)(same); Lott v. Nationscredit Fin. Servs. Corp., 2004 WL 741681, at *3 (N.D. Miss. Feb. 5, 2004)(same).

The defendants contend that two sentences in the Complaint's prayer for relief "directly attack[] the Federal Energy Regulatory Commission's acceptance of Mississippi Power's operation of the [Kemper] Plant" and challenge federal tariffs, such that "a determination of this action necessarily involves the interpretation and enforcement of both the Federal Powers Act ["FPA"] and Federal Energy Regulatory Commission orders, rules and regulations." Notice of Removal, pp. 17-18. However, the Supreme Court previously rejected this approach in Franchise Tax Bd., supra. In that case, the California state taxing authority requested damages for the defendants' failure to honor certain tax levies, and a declaration that defendants were "legally obligated to honor all future levies by the Board." Id. at 7. The defendant asserted that the federal Employment Retirement Income Security Act of 1974 (ERISA) preempted the state tax laws at issue, and that the trustees lacked power to honor the levies. Id. at 6-7. The Supreme Court held that federal jurisdiction was improper because California law was the sole textual basis of the complaint:

California law establishes a set of conditions, without reference to federal law, under which a tax levy may be enforced; federal law becomes relevant only by way of a defense to an obligation created entirely by state law, and then only if appellant has made out a valid claim for relief under state law. ... The wellpleaded complaint rule was framed to deal with precisely such a situation. As we discuss above, since 1887 it has been settled lawthat 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.

Id. at 13-14. See also Mungin v. Florida E. Coast Ry. Co., 416 F.2d 1169, 1175 (5^th Cir. 1969)("subject matter jurisdiction seldom depends on the precise relief sought. The caboose does not run the train;" instead, relief depends "not on the prayer but on what the facts show to be appropriate"); Louisville & Nashville R. Co. v. Mottley, 211 U.S. at 152 (no federal jurisdiction over lawsuit for specific performance of railroad's promise of free passes based on railroad's defense that passes were banned under federal law); Carpenter, 44 F.3d at 366 (state court complaint alleging free speech right violations under Texas Constitution was not federal in nature and district court lacked jurisdiction over complaint); Palermo v. Letourneau Techs., Inc., 542 F.Supp. 2d 499, 510-11 (S.D. Miss. 2008)("the alleged preemptive effect of the LHWCA is nothing more than a statutory defense to the plaintiffs' state law cause of action. Thus, the LHWCA does not provide LTI [(Letorneau)] with a basis for removal of the plaintiffs' purely state law...