Wanamaker v. Lawson

• Decision Date: 14 May 2012
• Docket Number: 4:11–cv–61.,Nos. 4:11–cv–60,s. 4:11–cv–60
• Parties: Anthony WANAMAKER, et al., Plaintiffs, v. Jeffrey A. LAWSON d/b/a Jeffrey A. Lawson Insurance Agent, et al., Defendants. Dusty Wanamaker, et al., Plaintiffs, v. Jeffrey A. Lawson d/b/a Jeffrey A. Lawson Insurance Agent, et al., Defendants.
• Court: U.S. District Court — Eastern District of Tennessee

871 F.Supp.2d 735

Anthony WANAMAKER, et al., Plaintiffs,

v.Jeffrey A. LAWSON d/b/a Jeffrey A. Lawson Insurance Agent, et al., Defendants.

Dusty Wanamaker, et al., Plaintiffs,

v.Jeffrey A. Lawson d/b/a Jeffrey A. Lawson Insurance Agent, et al., Defendants.

Nos. 4:11–cv–60, 4:11–cv–61.

United States District Court, E.D. Tennessee.

May 14, 2012.

Ira S. Kilburn, Law Office of Ira S. Kilburn, Salt Lick, KY, Stephen E. Neal, Mt. Sterling, KY, for Plaintiffs.

James Matthew Drake, Brad A. Fraser, Leitner, Williams, Dooley & Napolitan, PLLC, Knoxville, TN, Defendants.

MEMORANDUM AND ORDER

SUSAN K. LEE, United States Magistrate Judge.

The Court ordered the parties to brief the issue of its subject matter jurisdiction over these related cases [4:11–cv–60, Doc. 27; 4:11–cv–61, Doc. 28]. In response, only Plaintiffs briefed the issue of subject matter jurisdiction [4:11–cv–60, Doc. 28; 4:11–cv–61, Doc. 29]. After considering the Plaintiffs' arguments and the applicable law, and for the reasons outlined below, the Court will ORDER these cases be REMANDED to the Circuit Court for Grundy County, Tennessee.

I. BACKGROUND AND PROCEDURAL HISTORY

These actions assert state law contract and tort claims related to crop losses against an insurance agency located in Tennessee and an individual insurance agent residing in Tennessee and his estate. Both cases were removed to this Court from the Circuit Court for Grundy County, Tennessee on November 1, 2011. In the respective notices of removal, Defendants state that removal of each case is proper pursuant to 28 U.S.C. § 1331, because the case arises under federal question jurisdiction by virtue of the Federal Crop Insurance Act (“FCIA”), 7 U.S.C. § 1501 et seq. [4:11–cv–60, Doc. 1 at PageID# : 2; 4:11–cv–61, Doc. 1 at PageID# : 2]. Plaintiffs did not timely file a motion to remand either case to state court. However, as noted above, the Court directed the parties to address the issue of its subject matter jurisdiction in each case.¹

II. ANALYSIS

In compliance with the Court's order to address subject matter jurisdiction, Plaintiffshave asserted that they did not seek remand because of the judicial economy of having certain similar cases pending before the same Court, but have also argued against any suggestion that the FCIA preempts their state law claims against Defendants [4:11–cv–60, Doc. 28; 4:11–cv–61, Doc. 29]. Defendants, in failing to respond to the Court's order to brief the jurisdiction issue and in spite of their removal of the cases to this Court, have offered no arguments in support of this Court's subject matter justification.

As a preliminary matter, judicial economy does not create subject matter jurisdiction, and the parties cannot agree to federal question jurisdiction where it does not exist. See Holman v. Laulo–Rowe Agency, 994 F.2d 666, 668 n. 1 (9th Cir.1993) (“The parties cannot ... create federal court subject matter jurisdiction by stipulation”). Instead, it is afforded by diversity jurisdiction, which is not claimed to exist in this case, or by “federal question” jurisdiction. For federal question jurisdiction, 28 U.S.C. § 1331 states “[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” Removal of cases filed in state court to federal court is governed by 28 U.S.C. § 1441, which dictates that “state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). In conjunction with these statutes, the existence of federal question jurisdiction is governed by the “well-pleaded complaint rule,” which focuses on whether federal questions are asserted in the complaint without regard to any federal defenses. City of Warren v. City of Detroit, 495 F.3d 282, 286 (6th Cir.2007).

The United States Court of Appeals for the Sixth Circuit has identified four ways in which a complaint can “arise under” federal law to establish federal question jurisdiction: “it ... (1) states a federal cause of action; (2) includes state-law claims that necessarily depend on a substantial and disputed federal issue; (3) raises state-law claims that are completely preempted by federal law; or (4) artfully pleads state-law claims that amount to federal-law claims in disguise.” Ohio ex rel. Skaggs v. Brunner, 629 F.3d 527, 530 (6th Cir.2010) (citing Mikulski v. Centerior Energy Corp., 501 F.3d 555, 560 (6th Cir.2007)). Applying these ways in which a complaint may arise under federal law here, there is no federal cause of action asserted on the face of either complaint at issue ² and the Court finds no basis to conclude that Plaintiffs have engaged in any “artful pleading” to disguise federal claims as state law claims. The Court has subject matter jurisdiction over Plaintiffs' complaints, therefore, only if the state law claims asserted therein are completely preempted by federal law or the state law claims implicate a substantial question involving federal law.

A. Complete Preemption

The complete preemption doctrine is a very narrow exception to the well-pleaded complaint rule and is intended to be used sparingly for only a few “extraordinary” statutes. Palkow v. CSX Transp., Inc., 431 F.3d 543, 553 (6th Cir.2005). It is important to note that complete preemption and simple, or defensive, preemption are different principles. While a plaintiff's individual state law claims may be preempted by federal law or regulation because the state law conflicts with federal law or regulation or the law explicitly invalidates certain types of state law claims, that does not equate to complete preemption, which is “designed to occupy the regulatory field with respect to a particular subject” and mandate that all claims asserted within that field, including state law claims, be addressed exclusively in federal court. Warner v. Ford Motor Co., 46 F.3d 531, 535 (6th Cir.1995), see Strong v. Telectronics Pacing Sys., Inc., 78 F.3d 256, 260 (6th Cir.1996). “[T]he doctrine of complete preemption makes removal available automatically in those extraordinary cases where a state law claim is completely preempted.” NGS Am., Inc. v. Jefferson, 218 F.3d 519, 527 (6th Cir.2000) (citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 64–67, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). Furthermore, the Sixth Circuit has recognized precedent that only Congress can effect complete preemption of a state law cause of action and that federal regulations promulgated by federal agencies do not carry equal weight in the analysis. AmSouth Bank v. Dale, 386 F.3d 763, 776 (6th Cir.2004) (citing cases).

The United States Supreme Court has determined that the doctrine of “complete preemption” applies to the Labor Management Relations Act, the Employee Retirement Income Security Act (“ERISA”) and the National Bank Act. See Brunner, 629 F.3d at 531 (citing Metro. Life Ins. Co.,Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968), and Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003)), see also Palkow, 431 F.3d at 553 n. 6 (pointing out another area in which the Supreme Court has recognized complete preemption). The Sixth Circuit has expanded the doctrine to one other statute, the National Flood Insurance Act (“NFIA”), and has declined to further extend the doctrine. Mikulski, 501 F.3d at 564,see also Palkow, 431 F.3d at 553 n. 6 (acknowledging a number of circuit courts, including the Sixth Circuit, have also recognized preemption in a section of the Copyright Act). The Sixth Circuit does not follow a specific test for determination of complete preemption, instead looking to the statute at issue to ascertain Congress's intent. “Without evidence of Congress's intent to transfer jurisdiction to federal courts, there is no basis for invoking federal judicial power.” Musson Theatrical, Inc. v. Fed. Express Corp., 89 F.3d 1244, 1253 (6th Cir.1996).

The FCIA contains two provisions regarding lawsuits, reproduced below as they appeared during the time relevant to these cases:

(d) Suit

The Corporation, subject to the provisions of section 1508(j) of this title, may sue and be sued in its corporate name.... The district courts of the United States, including the district courts of the District of Columbia and of any territory or possession, shall have exclusive original jurisdiction, without regard to the amount in controversy, of all suits brought by or against the Corporation. The Corporation may intervene in any court in any suit, action, or proceeding in which it has an interest. Any suit against the

Corporation

shall be brought in the District of Columbia, or in the district wherein the plaintiff resides or is engaged in business.

7 U.S.C. § 1506(d) (emphasis added).

(j) Claims for losses

(1) In general

Under rules prescribed by the Corporation, the Corporation may provide for adjustment and payment of claims for losses. The rules prescribed by the Corporation shall establish standards to ensure that all claims for losses are adjusted, to the extent practicable, in a uniform and timely manner.

(2) Denial of claims

(A) In general

Subject to subparagraph (B), if a claim for indemnity is denied by the Corporation or an approved provider, an action on the claim may be brought against the Corporation or Secretary only in the United States district court for the district in which the insured farm is located.

7 U.S.C. § 1508(j) (emphasis added). These provisions specifically provide for exclusive federal jurisdiction over lawsuits filed arising from crop insurance policies, but only provide for such jurisdiction as to suits against the “Corporation,” meaning the Federal Crop Insurance Corporation (“FCIC”), or the “Secretary,” meaning the Secretary of Agriculture. See7 U.S.C. § 1502(b)(4), (7).³ These sections...