New York v. International Joint Commission

• Decision Date: 13 September 2021
• Docket Number: 6:20-cv-06091-EAW
• Citation: 559 F.Supp.3d 146
• Parties: State of NEW YORK, Plaintiff, v. INTERNATIONAL JOINT COMMISSION, Defendant.
• Court: U.S. District Court — Western District of New York

559 F.Supp.3d 146

State of NEW YORK, Plaintiff,

v.INTERNATIONAL JOINT COMMISSION, Defendant.

6:20-cv-06091-EAW

United States District Court, W.D. New York.

Signed September 13, 2021

Matthew J. Sinkman, New York Attorney General's Office, New York, NY, for Plaintiff.

Daniel A. Eisenberg, Hilary Tess Jacobs, Pro Hac Vice, John C. Cruden, Pro Hac Vice, Nessa Horewitch Coppinger, Pro Hac Vice, Beveridge & Diamond, P.C., Washington, DC, Nicole Bishop Weinstein, Beveridge & Diamond, P.C., New York, NY, Kevin M. Hogan, Phillips Lytle LLP, Buffalo, NY, for Defendant.

DECISION AND ORDER

ELIZABETH A. WOLFORD, Chief Judge

I. INTRODUCTION

The above-captioned matter was commenced by plaintiff the State of New York ("the State") in New York State court. Defendant the International Joint Commission ("the IJC") removed the case to federal court on the basis of federal question jurisdiction. (Dkt. 1). The State has filed a motion to remand. (Dkt. 10). For the reasons discussed below, the Court denies the motion to remand because it finds that this is one of those rare cases where the state law claims asserted in the complaint necessarily raise a federal issue which is actually disputed, substantial, and capable of resolution in federal court without disrupting the federal-state balance approved by Congress. However, because this Decision and Order "involves a controlling question of law as to which there is substantial ground for difference of opinion" and "an immediate appeal from" this Decision and Order would potentially "materially advance the ultimate termination of the litigation," 28 U.S.C. § 1292(b), the Court will permit the State to seek an interlocutory appeal.

II. BACKGROUND

The State filed this action against the IJC in New York State Supreme Court, Monroe County, on November 15, 2019. (Dkt. 1 at ¶ 1). The IJC is a "binational U.S.-Canadian entity created by the U.S.-Great Britain Boundary Waters Treaty of 1909 (the Boundary Waters Treaty), 36 Stat. 2448," and "is responsible for controlling the flow of water from Lake Ontario down the St. Lawrence River by directing the operation" of the Moses-Saunders Power Dam (the "Dam"), through which the border between Canada and the United States runs. (Dkt. 1-4 at ¶¶ 1, 4). The complaint seeks damages caused by "serious flooding on the south shores of Lake Ontario" in 2017 and 2019. (Id. at ¶ 2). The State alleges that the flooding was caused by the IJC's failure to implement its flood relief protocol which required the IJC to increase outflows through the Dam. (Id. ). The State further alleges that implementation of the flood relief protocol is a non-discretionary duty on the part of the IJC, as to how it is supposed to operate the Dam during periods of extremely high water levels in Lake Ontario. (Id. at ¶ 6). The State asserts four causes of action against the IJC: (1) negligence; (2) public nuisance; (3) private nuisance; and (4) trespass. (Id. at ¶¶ 72-96).

On February 20, 2020, the IJC removed the action based on federal question jurisdiction under 28 U.S.C. § 1331, citing two theories of federal jurisdiction: (1) the Boundary Waters Treaty, 36 Stat. 2448; and (2) the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605 ("FSIA"), and the International Organizations Immunities Act, 22 U.S.C. § 288a(b). (Dkt. 1 at ¶ 2). On April 6, 2020, the State filed the instant motion to remand the matter to state court. (Dkt. 10). The State argues that the Boundary Waters Treaty does not give rise to federal jurisdiction and that, under the well-pleaded complaint rule, the fact that the IJC will assert federal defenses under the FSIA to the claims in this action under the FSIA does not give rise to federal jurisdiction. (Dkt. 10-1).

The IJC filed a memorandum in opposition to the motion to remand on April 27, 2020 (Dkt. 11), and the State filed a reply memorandum on May 11, 2020 (Dkt. 13). Oral argument was held before the undersigned on January 21, 2021 (Dkt. 19), at which time the Court reserved decision.

III. DISCUSSION

A. General Principles of Removal

Pursuant to 28 U.S.C. § 1447(c), federal courts may remand a case "on the basis of any defect in removal procedure" or because "the district court lacks subject matter jurisdiction." LaFarge Coppee v. Venezolana De Cementos, S.A.C.A. , 31 F.3d 70, 72 (2d Cir. 1994) (citation omitted). "In a case removed to federal court from state court, the removal statute is to be interpreted narrowly, and the burden is on the removing party to show that subject matter jurisdiction exists and that removal was timely and proper." Winter v. Novartis Pharm. Corp. , 39 F. Supp. 3d 348, 350 (E.D.N.Y. 2014) (citing Lupo v. Human Affairs Int'l, Inc. , 28 F.3d 269, 274 (2d Cir. 1994) ); see also Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ("Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree. It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." (citations omitted)). In other words, "[o]n a motion to remand, the party seeking to sustain the removal, not the party seeking remand, bears the burden of demonstrating that removal was proper." Hodges v. Demchuk , 866 F. Supp. 730, 732 (S.D.N.Y. 1994) (citing R.G. Barry Corp. v. Mushroom Makers, Inc. , 612 F.2d 651, 655 (2d Cir. 1979)) ("[T]he burden falls squarely upon the removing party to establish its right to a federal forum by competent proof." (quotation omitted) (abrogated on other grounds by Hertz Corp. v. Friend , 559 U.S. 77, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010) )); see also Blockbuster, Inc. v. Galeno , 472 F.3d 53, 57 (2d Cir. 2006) ("It is well-settled that the party asserting federal jurisdiction bears the burden of establishing jurisdiction."). Moreover, "the party seeking remand is presumed to be entitled to it unless the removing party can demonstrate otherwise," Bellido-Sullivan v. Am. Int'l Grp., Inc. , 123 F. Supp. 2d 161, 163 (S.D.N.Y. 2000), and "[a]ny doubts as to removability should be resolved in favor of remand," Payne v. Overhead Door Corp. , 172 F. Supp. 2d 475, 477 (S.D.N.Y. 2001). Thus, in this case, the IJC bears the burden to establish that the case should remain in federal court, the State is presumed to be entitled to remand unless the IJC can establish otherwise, and any doubts should be resolved in favor of remand. It is a heavy burden that the IJC faces to maintain this action in federal court. Nonetheless, for the reasons set forth below, the Court concludes that the IJC has met that burden and the case should remain in federal court.

B. General Principles of Federal Question Jurisdiction

"One category of cases over which the district courts have original jurisdiction are ‘federal question’ cases; that is, those cases ‘arising under the Constitution, laws, or treaties of the United States.’ " Metro. Life Ins. v. Taylor , 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (citing 28 U.S.C. § 1331 ). In determining whether removal based upon federal question jurisdiction is proper, the "well-pleaded complaint rule," which requires a court to consider only allegations in the complaint and not matters raised by the defendant in defense, generally applies.

Franchise Tax Bd. of the State of Cal v. Constr. Laborers Vacation Tr. , 463 U.S. 1, 9-10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) ; see also Beneficial Nat Bank v. Anderson , 539 U.S. 1, 6, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003) ("[A] defense that relies on ... the pre-emptive effect of a federal statute[ ] will not provide a basis for removal." (citations omitted)); see generally Metro. Life , 481 U.S. at 63, 107 S.Ct. 1542 ("The ‘well-pleaded complaint rule’ is the basic principle marking the boundaries of the federal question jurisdiction of the federal district courts."). "The well-pleaded-complaint rule confines the search for a basis of federal question jurisdiction to ‘what necessarily appears in the plaintiff's statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may impose.’ " Lupo , 28 F.3d at 272 (quoting Taylor v. Anderson , 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914) ). To render remand inappropriate, it is sufficient for a court to have federal question jurisdiction over one of the claims at issue in this litigation. The NASDAQ OMX Group, Inc. v. UBS Securities, LLC , 770 F.3d 1010, 1020 (2d Cir. 2014).

These general principles notwithstanding, "[t]hree situations exist in which a complaint that does not allege a federal cause of action may nonetheless ‘aris[e] under’ federal law for purposes of subject matter jurisdiction." Fracasse v. People's United Bank , 747 F.3d 141, 144 (2d Cir. 2014). Those situations may occur where "Congress expressly provides, by statute, for removal of state law claims," when "the state law claims are completely preempted by federal law," or "in certain cases if the vindication of a state law right necessarily turns on a question of federal law." Id. It is the third principle that is at issue here, which courts have termed the "substantial federal question doctrine." See Amcat Glob., Inc. v. Yonaty , 192 F. Supp. 3d 308, 312 (N.D.N.Y. 2016) ; In re Standard & Poor's Rating Agency Litig. , 23 F. Supp. 3d 378, 393 (S.D.N.Y. 2014) ; see also Veneruso v. Mount Vernon Neighborhood Health Ctr. , 933 F. Supp. 2d 613, 619 (S.D.N.Y. 2013) (describing the "substantial federal question doctrine" as a "limited exception[ ] to the well-pleaded complaint rule"), aff'd , 586 F. App'x 604 (2d Cir. 2014). "Federal jurisdiction in these circumstances is predicated on ‘the presence of a federal issue in a state-created cause of action.’ " D'Alessio v. New York Stock Exchange, Inc. , 258 F.3d 93, 99 (2d Cir. 20...