Cedarpids, Inc. v. Chicago, Central & Pacific R., No. C02-0081.

CourtUnited States District Courts. 8th Circuit. Northern District of Iowa
Writing for the CourtReade
Citation265 F.Supp.2d 1005
Docket NumberNo. C02-0081.
Decision Date21 May 2003
PartiesCEDARAPIDS, INC., Plaintiff, v. CHICAGO, CENTRAL & PACIFIC RAILROAD COMPANY D/B/A CANDIAN NATIONAL/ILLINOIS CETRAL RAILROAD (CN/IC), Defendant.
265 F.Supp.2d 1005
CEDARAPIDS, INC., Plaintiff,
v.
CHICAGO, CENTRAL & PACIFIC RAILROAD COMPANY D/B/A CANDIAN NATIONAL/ILLINOIS CETRAL RAILROAD (CN/IC), Defendant.
No. C02-0081.
United States District Court, N.D. Iowa, Cedar Rapids Division.
May 21, 2003.

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COPYRIGHT MATERIAL OMITTED

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James A Fletcher, Myles L Tobin, James D Helenhouse, Fletcher & Sippel, LLC, Chicago, IL, Edward J Krug, Krug & Beckelman, Cedar Rapids, IA for Defendant.

Paul Petersen, Mark A Roberts, Mark A Roberts, Morf, Simmons Perrine Albright Ellwood, Cedar Rapids, IA, for Defendant.

OPINION AND ORDER REGARDING PLAINTIFF'S MOTION TO REMAND AND DEFENDANT'S MOTION TO DISMISS

READE, District Judge.


I. INTRODUCTION

On October 13, 1995, plaintiff Cedarapids, Inc. ("Cedarapids") and defendant Chicago, Central & Pacific Railroad Company d/b/a Canadian National/Illinois Central Railroad ("CC & P") entered into a real property lease pursuant to which CC & P leased to Cedarapids property which included a railroad right-of-way across the property generally located between 17th Street Northeast and 20th Street Northeast in Cedar Rapids, Iowa (the "tracks"). The lease was for a term of one year with a provision that after the term expired, the lease became a month-to-month lease until terminated. In the lease, CC & P reserved to itself and its licensees numerous rights, including all railroad operating rights associated with the premises. The tracks are a portion of a line of railroad that runs from approximately milepost 86.4 near "C" Avenue in Cedar Rapids to approximately milepost 88.5 northeast of Cedar Rapids.

CC & P subsequently served notice on Cedarapids that CC & P intended to use the tracks for the storage and operation of rail cars. Cedarapids responded by filing suit in the Iowa District Court for Linn County seeking to enjoin CC & P from using such tracks and seeking rescission of the October 13, 1995 lease of the right-ofway and restitution for all amounts paid to CC & P thereunder. In support of its request for injunctive relief (Count I), Cedarapids alleges that CC & P has no right to use the tracks in question because CC & P's interest therein has been extinguished by its lack of use of the tracks under Iowa Code sections 327G.76 and 327G.77 and because CC & P's alleged abandonment of the tracks has resulted in the reversion to Cedarapids of all right, title and interest in such property as the owner of the adjoining property under Iowa Code Chapter 649. In support of its request for rescission of the lease and restitution for amounts paid thereunder (Count II), Cedarapids alleges that CC & P falsely represented to Cedarapids whether the land

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would be used as live tracks and such misrepresentations were material to Cedarapids' decision to enter into the lease. Cedarapids asserts, in the alternative, that the parties were mutually mistaken with respect to their rights under the lease and this mistake entitles Cedarapids to rescission of the lease and restitution of the amounts paid thereunder.

On May 30, 2002, CC & P removed the action to this Court alleging that this Court has original jurisdiction of the action under 28 U.S.C. § 1331 because Cedarapids seeks in its Complaint an order requiring that CC & P abandon its line of railroad and, pursuant to 49 U.S.C. §§ 10501(b), 10902 and 10906, the issue of whether a carrier may abandon a line of railroad is within the exclusive jurisdiction of the Surface Transportation Board (the "STB"). CC & P asserts that federal law completely preempts Cedarapids' claims and Cedarapids' claims therefore arise under the Constitution, laws or treaties of the United States.

On June 6, 2002, CC & P filed a Motion to Dismiss Cedarapids' Complaint (docket no. 5) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Cedarapids resisted this Motion. On July 2, 2002, Cedarapids filed a Motion to Remand (docket no. 12) and CC & P resisted Cedarapids' Motion. On December 16, 2002, CC & P filed counterclaims against Cedarapids alleging that Cedarapids had breached the October 13, 1995 lease by failing to pay rent thereunder since September 2001 (Count I) and that Cedarapids had failed to pay license fees to CC & P pursuant to the terms of three different License Agreements between CC & P and Cedarapids for licenses to construct and maintain an 18 inch steel casing and one 15 inch sewer pipe running underneath certain property of CC & P located in Cedar Rapids, Iowa (Counts II, III and IV). Cedarapids filed a Motion to Dismiss CC & P's counterclaims on January 14, 2003 (docket no. 24) and CC & P resisted Cedarapids' Motion. Because the Court's consideration of Cedarapids' Motion to Remand may obviate the need for the Court to rule on CC & P's Motion to Dismiss and on Cedarapids' Motion to Dismiss CC & P's Counterclaim, the Court will first consider Cedarapids' Motion to Remand and will then consider the remaining two motions as necessary.

II. LEGAL ANALYSIS
A. Motion to Remand

Cedarapids moves to remand this case to the Iowa District Court for Linn County asserting that it was improperly removed because each of the claims set forth in Cedarapids' Complaint arises under Iowa law. Cedarapids argues that the standards for removal of a case from state court to federal court have not been met in this case because the Interstate Commerce Commission Termination Act of 1995, codified at 49 U.S.C. §§ 10101, et seq., (the "ICCTA") does not, by its terms, make this action removable to federal court. Cedarapids further contends that the complete preemption doctrine does not apply to Cedarapids' state law claims in this case.

In opposition to Cedarapids' Motion to Remand, CC & P asserts that removal is proper because the complete preemption doctrine applies. CC & P posits that, by enacting the ICCTA, Congress has so pervasively regulated the area of abandonment of railroad lines that state law claims involving abandonment, which CC & P argues is the nature of Cedarapids' state law claims in this case, necessarily invoke federal law. Cedarapids asserts, in response to this argument, that the tracks in question are spur tracks which are not governed by the abandonment provisions of the ICCTA.

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Under 28 U.S.C. § 1441, which governs a federal court's removal jurisdiction, a federal court may exercise removal jurisdiction over "any civil action brought in the State court of which the district courts of the United States have original jurisdiction," 28 U.S.C. § 1441(a), or "[a]ny civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States." 28 U.S.C. § 1441(b). Thus, where a district court does not have original jurisdiction because it lacks subject matter jurisdiction over a plaintiffs claims, removal is improper and the case must be remanded to state court in accordance with 28 U.S.C. § 1447(c). International Primate Protection League v. Administrators of Tulane Educ. Fund, 500 U.S. 72, 87, 111 S.Ct. 1700, 114 L.Ed.2d 134 (1991); Shaw v. Dow Brands, Inc., 994 F.2d 364, 366 (7th Cir.1993). A district court has no discretion, however, to remand a claim that states a federal question. Gaming Corp. of Am. v. Dorsey & Whitney, 88 F.3d 536, 542 (8th Cir.1996). The party seeking removal and opposing remand has the burden of estabhshing subject matter jurisdiction, see In re Business Men's Assur. Co. of Am., 992 F.2d 181, 183 (8th Cir.1993), and the court's removal jurisdiction must be strictly construed. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Mulcahey v. Columbia Organic Chem. Co., Inc., 29 F.3d 148, 151 (4th Cir.1994).

The issue of whether a federal court has removal jurisdiction over claims originally filed in state court must be determined from the face of the plaintiffs well-pleaded complaint as it stands at the time of removal. M. Nahas & Co. v. First Nat'l Bank of Hot Springs, 930 F.2d 608, 611 (8th Cir.1991). Under the "well-pleaded complaint" rule, a federal cause of action must be stated on the face of a plaintiffs complaint before a defendant may remove the action based on federal question jurisdiction. Gaming Corp. of Am., 88 F.3d at 542-43 (citations omitted). "A federal defense, including the defense that one or more claims are preempted by federal law, does not give the defendant the right to remove to federal court." Id. However, "a plaintiffs characterization of a claim as based solely on state law is not dispositive of whether federal question jurisdiction exists. In certain instances, the preemptive force of a federal statute is so complete that it transforms complaints styled as ordinary common-law claims into ones stating a federal claim." Peters v. Union Pac. R.R. Co., 80 F.3d 257, 260 (8th Cir.1996) (citing Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). "Once an area of state law has been completely preempted, any claim based on that preempted state law claim is considered from its inception to raise a federal claim and therefore arises under federal law." Id. (citing Humphrey v. Sequentia, Inc., 58 F.3d 1238, 1242 (8th Cir.1995)). See also, Deford v. Soo Line R.R., 867 F.2d 1080, 1084 (8th Cir.) (holding that complete preemption "prohibits a plaintiff from defeating removal by failing to plead necessary federal questions in complaint"), cert. denied, 492 U.S. 927, 109 S.Ct. 3265, 106 L.Ed.2d 610 (1989).

Each of the claims set forth on the face of Cedarapids' Complaint is premised entirely on state law. Cedarapids seeks to enjoin CC & P from using the tracks in question pursuant to Cedarapids' rights under the lease to the property over which the tracks traverse and to quiet title to the land on which the tracks are located under Iowa statutory law. Additionally, Cedarapids seeks recission of the lease and restitution for all amounts paid...

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26 practice notes
  • Bd. of Selectmen of the Town of Grafton v. Grafton & Upton R.R. Co., CIVIL ACTION NO. 12-cv-40164-TSH
    • United States
    • U.S. District Court — District of Massachusetts
    • May 22, 2013
    ...in 1995 in order to fundamentally deregulate the railroad industry. See, e.g., Cedarapids, Inc. v. Chicago, Cent. & Pac. R.R. Co., 265 F. Supp. 2d 1005, 1011 (N.D. Iowa 2003) ("Congress sought to federalize many aspects of railway regulation that previously had been reserved for the states ......
  • Mexico v. Hli Rail & Rigging, LLC, No. 11 Civ. 3238(ALC)(GWG).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • March 13, 2014
    ...commerce gave rise to STB's jurisdiction over intrastate commerce. See, e.g., Cedarapids, Inc. v. Chicago, Central & Pacific R. Co., 265 F.Supp.2d 1005, 1012–13 (N.D.Iowa 2003) (“Whereas Congress explicitly excluded wholly intrastate spur and side tracks from federal jurisdiction in the Sta......
  • Bd. of Selectmen of Grafton v. Grafton & Upton R.R. Co., CIVIL ACTION NO. 12-cv-40164-TSH
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • May 17, 2013
    ...in 1995 in order to fundamentally deregulate the railroad industry. See, e.g., Cedarapids, Inc. v. Chicago, Cent. & Pac. R.R. Co., 265 F. Supp. 2d 1005, 1011 (N.D. Iowa 2003) ("Congress sought to federalize many aspects of railway regulation that previously had been reserved for the states ......
  • Funderburk v. S.C. Elec. & Gas Co., Civil Case No.: 3:15-cv-04660-JMC
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • July 26, 2019
    ...Friberg v. Kansas City S. Ry. Co. , 267 F.3d 439, 443 (5th Cir. 2001). See also Cedarapids, Inc. v. Chi., Cent. & Pac. R.R. Co. , 265 F. Supp. 2d 1005, 1013 (N.D. Iowa 2003) ("The Court's review of the nature and purpose of the ICCTA, as evidenced by both the legislative history and the pla......
  • Request a trial to view additional results
25 cases
  • Bd. of Selectmen of the Town of Grafton v. Grafton & Upton R.R. Co., CIVIL ACTION NO. 12-cv-40164-TSH
    • United States
    • U.S. District Court — District of Massachusetts
    • May 22, 2013
    ...in 1995 in order to fundamentally deregulate the railroad industry. See, e.g., Cedarapids, Inc. v. Chicago, Cent. & Pac. R.R. Co., 265 F. Supp. 2d 1005, 1011 (N.D. Iowa 2003) ("Congress sought to federalize many aspects of railway regulation that previously had been reserved for th......
  • Mexico v. Hli Rail & Rigging, LLC, No. 11 Civ. 3238(ALC)(GWG).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • March 13, 2014
    ...gave rise to STB's jurisdiction over intrastate commerce. See, e.g., Cedarapids, Inc. v. Chicago, Central & Pacific R. Co., 265 F.Supp.2d 1005, 1012–13 (N.D.Iowa 2003) (“Whereas Congress explicitly excluded wholly intrastate spur and side tracks from federal jurisdiction in the Staggers......
  • Bd. of Selectmen of Grafton v. Grafton & Upton R.R. Co., CIVIL ACTION NO. 12-cv-40164-TSH
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • May 17, 2013
    ...in 1995 in order to fundamentally deregulate the railroad industry. See, e.g., Cedarapids, Inc. v. Chicago, Cent. & Pac. R.R. Co., 265 F. Supp. 2d 1005, 1011 (N.D. Iowa 2003) ("Congress sought to federalize many aspects of railway regulation that previously had been reserved for th......
  • Funderburk v. S.C. Elec. & Gas Co., Civil Case No.: 3:15-cv-04660-JMC
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • July 26, 2019
    ...Friberg v. Kansas City S. Ry. Co. , 267 F.3d 439, 443 (5th Cir. 2001). See also Cedarapids, Inc. v. Chi., Cent. & Pac. R.R. Co. , 265 F. Supp. 2d 1005, 1013 (N.D. Iowa 2003) ("The Court's review of the nature and purpose of the ICCTA, as evidenced by both the legislative history an......
  • Request a trial to view additional results

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