1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 SIGIFREDO PEREZ JR., an No. 2:20-cv-02003-JAM-JDP individual, on behalf of 12 himself and all others similarly situated, 13 ORDER GRANTING MOTION TO REMAND Plaintiff, 14 v. 15 SIERRA MOUNTAIN EXPRESS INC., 16 a limited liability company; WILLIAM E. SCANLON, an 17 individual; and DOES 1 through 10, inclusive, 18 Defendants. 19 20 This matter is before the Court on Sigifredo Perez Jr.’s 21 (“Plaintiff”) Motion to Remand. Mot. to Remand (“Mot.”), ECF No. 22 11. Sierra Mountain Express, Inc. and William Scanlon 23 (“Defendants”) filed an opposition, Opp’n, ECF No. 16, to which 24 Plaintiff replied, Reply, ECF No. 17. For the reasons set forth 25 below, the Court GRANTS Plaintiff’s Motion to Remand.1 26
27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for January 12, 2021. 1 I. BACKGROUND 2 Defendant Sierra Mountain Express (“SME”) is a federally 3 licensed motor carrier engaged in the business of transporting 4 new automobiles on behalf of various auto-manufacturers. Not. of 5 Removal ¶¶ 12,15, ECF No. 1. Defendant William Scanlon is SME’s 6 President and Chief Executive Officer. Id. at ¶ 12. SME uses 7 independent contractors to transport automobiles throughout 8 California and interstate. Id. at ¶ 13. Plaintiff is one such 9 individual who transported automobiles for SME. Id. at ¶ 14. 10 On May 21, 2020, Plaintiff filed a wage and hour class 11 action complaint against Defendant SME in Sacramento County 12 Superior Court. See Compl., Ex. A to Not. of Removal. Plaintiff 13 added William Scanlon as a defendant when he filed an amended 14 complaint. See First Amended Compl. (“FAC”), Ex. B to Not. of 15 Removal. Plaintiff brings eleven state law claims against 16 Defendants for: (1) failure to pay minimum wages, (2) failure to 17 provide meal periods, (3) failure to permit paid rest breaks, 18 (4) failure to pay all wages to piece-rate workers for time spent 19 in rest breaks, (5) failure to pay wages upon separation of 20 employment, (6) failure to pay wages within the required time, 21 (7) failure to provide accurate itemized wage statements, 22 (8) failure to reimburse necessary business expenses, (9) failure 23 to refrain from unlawful deductions, (10) violation of California 24 Business and Professions Code § 17200 et seq., and 25 (11) Enforcement of Labor Code § 2698 et seq. FAC ¶¶ 37-116. 26 On October 6, 2020, Defendants filed a Notice of Removal, 27 invoking this Court’s federal question jurisdiction. Not. of 28 Removal at 2 (citing to 28 U.S.C. § 1331). Although Plaintiff 1 has pled only state law claims, Defendants removed on the grounds 2 that Plaintiff’s second, third, and fourth causes of action are 3 preempted by the Motor Carrier Safety Act of 1984 (“MCSA”). Id. 4 at ¶¶ 17-24. In response, Plaintiff filed this motion to remand. 5 See Mot. 6 II. OPINION 7 A. Legal Standard 8 Under 28 U.S.C. § 1441, a defendant may remove a civil 9 action from state to federal court if there is subject matter 10 jurisdiction over the case. See City of Chicago v. Int’l Coll. 11 of Surgeons, 522 U.S. 156, 163 (1997). Courts strictly construe 12 the removal statute against removal and federal jurisdiction 13 must be rejected if there is any doubt as to the right of 14 removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 15 1992); see also Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 16 1241, 1244 (9th Cir. 2009)(“[A]ny doubt about the right of 17 removal requires resolution in favor of remand.”) The party 18 seeking removal bears the burden of establishing jurisdiction. 19 Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 20 1988). 21 Courts have federal question jurisdiction over all civil 22 actions “arising under the Constitution, laws, or treaties of 23 the United States.” 28 U.S.C. § 1331. Removal pursuant to 24 § 1331 is governed by the “well-pleaded complaint rule,” which 25 provides that federal question jurisdiction exists only when “a 26 federal question is presented on the face of plaintiff’s 27 properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 28 U.S. 386, 392 (1987). An “independent corollary to the well- 1 pleaded complaint rule” is the “complete pre-emption doctrine.” 2 Id. at 393 (internal quotation marks and citation omitted). 3 That doctrine provides a basis for federal question jurisdiction 4 when a federal statute has “such extraordinary pre-emptive 5 power” that it “converts an ordinary state common law complaint 6 into one stating a federal claim for purposes of the well- 7 pleaded complaint rule.” Retail Prop. Trust v. United Bhd. of 8 Carpenters & Joiners of Am., 768 F.3d 938, 947 (9th Cir. 2014). 9 When complete preemption applies, a defendant may remove the 10 preempted state law claims to federal court. Beneficial Nat’l 11 Bank v. Anderson, 539 U.S. 1, 8 (2003). 12 B. Analysis 13 The parties dispute whether federal question jurisdiction 14 exists to support the removal of this case from state court. 15 Defendants acknowledge Plaintiff has only pled state-law claims, 16 but argue the Court nevertheless has federal jurisdiction over 17 this lawsuit because complete preemption applies. Opp’n at 3-9. 18 Specifically, Defendants argue that three of Plaintiff’s state 19 law claims — the second, third, and fourth causes of action for 20 failure to provide meal and rest breaks — fall squarely within 21 the scope of the Federal Motor Carrier Safety Administration’s 22 (“FMCSA”) Hours of Service Regulations — regulations that 23 effectuate the MCSA — and thus are completely preempted by the 24 MCSA. Opp’n at 1. Plaintiff, on the other hand, argues that 25 the preemption at issue here is merely “ordinary preemption,” an 26 anticipated defense that is insufficient to confer federal 27 question jurisdiction. Mot. at 2-3; Reply at 1. As explained 28 below, the Court agrees with Plaintiff that only ordinary 1 preemption, not complete preemption, applies here and that 2 ordinary preemption does not provide grounds for removal. 3 The complete preemption doctrine applies only in select 4 cases where the federal statute at issue has such “extraordinary 5 pre-emptive power” that it “converts an ordinary state common law 6 complaint into one stating a federal claim for purposes of the 7 well-pleaded complaint rule.” Retail Prop. Trust, 768 F.3d at 8 947. The Supreme Court has identified only a few federal 9 statutes whose preemptive force is so extraordinary: (1) The 10 Labor Management Relations Act (“LMRA”), 29 U.S.C. Section 11 186(a), see Avco Corp v. Aero Lodge No. 735, 390 U.S. 557 (1968); 12 (2) the Employee Retirement Income Security Act of 1974 13 (“ERISA”), 29 U.S.C. Section 1001 et seq., see Metro Life Ins. 14 Co. v.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 SIGIFREDO PEREZ JR., an No. 2:20-cv-02003-JAM-JDP individual, on behalf of 12 himself and all others similarly situated, 13 ORDER GRANTING MOTION TO REMAND Plaintiff, 14 v. 15 SIERRA MOUNTAIN EXPRESS INC., 16 a limited liability company; WILLIAM E. SCANLON, an 17 individual; and DOES 1 through 10, inclusive, 18 Defendants. 19 20 This matter is before the Court on Sigifredo Perez Jr.’s 21 (“Plaintiff”) Motion to Remand. Mot. to Remand (“Mot.”), ECF No. 22 11. Sierra Mountain Express, Inc. and William Scanlon 23 (“Defendants”) filed an opposition, Opp’n, ECF No. 16, to which 24 Plaintiff replied, Reply, ECF No. 17. For the reasons set forth 25 below, the Court GRANTS Plaintiff’s Motion to Remand.1 26
27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for January 12, 2021. 1 I. BACKGROUND 2 Defendant Sierra Mountain Express (“SME”) is a federally 3 licensed motor carrier engaged in the business of transporting 4 new automobiles on behalf of various auto-manufacturers. Not. of 5 Removal ¶¶ 12,15, ECF No. 1. Defendant William Scanlon is SME’s 6 President and Chief Executive Officer. Id. at ¶ 12. SME uses 7 independent contractors to transport automobiles throughout 8 California and interstate. Id. at ¶ 13. Plaintiff is one such 9 individual who transported automobiles for SME. Id. at ¶ 14. 10 On May 21, 2020, Plaintiff filed a wage and hour class 11 action complaint against Defendant SME in Sacramento County 12 Superior Court. See Compl., Ex. A to Not. of Removal. Plaintiff 13 added William Scanlon as a defendant when he filed an amended 14 complaint. See First Amended Compl. (“FAC”), Ex. B to Not. of 15 Removal. Plaintiff brings eleven state law claims against 16 Defendants for: (1) failure to pay minimum wages, (2) failure to 17 provide meal periods, (3) failure to permit paid rest breaks, 18 (4) failure to pay all wages to piece-rate workers for time spent 19 in rest breaks, (5) failure to pay wages upon separation of 20 employment, (6) failure to pay wages within the required time, 21 (7) failure to provide accurate itemized wage statements, 22 (8) failure to reimburse necessary business expenses, (9) failure 23 to refrain from unlawful deductions, (10) violation of California 24 Business and Professions Code § 17200 et seq., and 25 (11) Enforcement of Labor Code § 2698 et seq. FAC ¶¶ 37-116. 26 On October 6, 2020, Defendants filed a Notice of Removal, 27 invoking this Court’s federal question jurisdiction. Not. of 28 Removal at 2 (citing to 28 U.S.C. § 1331). Although Plaintiff 1 has pled only state law claims, Defendants removed on the grounds 2 that Plaintiff’s second, third, and fourth causes of action are 3 preempted by the Motor Carrier Safety Act of 1984 (“MCSA”). Id. 4 at ¶¶ 17-24. In response, Plaintiff filed this motion to remand. 5 See Mot. 6 II. OPINION 7 A. Legal Standard 8 Under 28 U.S.C. § 1441, a defendant may remove a civil 9 action from state to federal court if there is subject matter 10 jurisdiction over the case. See City of Chicago v. Int’l Coll. 11 of Surgeons, 522 U.S. 156, 163 (1997). Courts strictly construe 12 the removal statute against removal and federal jurisdiction 13 must be rejected if there is any doubt as to the right of 14 removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 15 1992); see also Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 16 1241, 1244 (9th Cir. 2009)(“[A]ny doubt about the right of 17 removal requires resolution in favor of remand.”) The party 18 seeking removal bears the burden of establishing jurisdiction. 19 Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 20 1988). 21 Courts have federal question jurisdiction over all civil 22 actions “arising under the Constitution, laws, or treaties of 23 the United States.” 28 U.S.C. § 1331. Removal pursuant to 24 § 1331 is governed by the “well-pleaded complaint rule,” which 25 provides that federal question jurisdiction exists only when “a 26 federal question is presented on the face of plaintiff’s 27 properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 28 U.S. 386, 392 (1987). An “independent corollary to the well- 1 pleaded complaint rule” is the “complete pre-emption doctrine.” 2 Id. at 393 (internal quotation marks and citation omitted). 3 That doctrine provides a basis for federal question jurisdiction 4 when a federal statute has “such extraordinary pre-emptive 5 power” that it “converts an ordinary state common law complaint 6 into one stating a federal claim for purposes of the well- 7 pleaded complaint rule.” Retail Prop. Trust v. United Bhd. of 8 Carpenters & Joiners of Am., 768 F.3d 938, 947 (9th Cir. 2014). 9 When complete preemption applies, a defendant may remove the 10 preempted state law claims to federal court. Beneficial Nat’l 11 Bank v. Anderson, 539 U.S. 1, 8 (2003). 12 B. Analysis 13 The parties dispute whether federal question jurisdiction 14 exists to support the removal of this case from state court. 15 Defendants acknowledge Plaintiff has only pled state-law claims, 16 but argue the Court nevertheless has federal jurisdiction over 17 this lawsuit because complete preemption applies. Opp’n at 3-9. 18 Specifically, Defendants argue that three of Plaintiff’s state 19 law claims — the second, third, and fourth causes of action for 20 failure to provide meal and rest breaks — fall squarely within 21 the scope of the Federal Motor Carrier Safety Administration’s 22 (“FMCSA”) Hours of Service Regulations — regulations that 23 effectuate the MCSA — and thus are completely preempted by the 24 MCSA. Opp’n at 1. Plaintiff, on the other hand, argues that 25 the preemption at issue here is merely “ordinary preemption,” an 26 anticipated defense that is insufficient to confer federal 27 question jurisdiction. Mot. at 2-3; Reply at 1. As explained 28 below, the Court agrees with Plaintiff that only ordinary 1 preemption, not complete preemption, applies here and that 2 ordinary preemption does not provide grounds for removal. 3 The complete preemption doctrine applies only in select 4 cases where the federal statute at issue has such “extraordinary 5 pre-emptive power” that it “converts an ordinary state common law 6 complaint into one stating a federal claim for purposes of the 7 well-pleaded complaint rule.” Retail Prop. Trust, 768 F.3d at 8 947. The Supreme Court has identified only a few federal 9 statutes whose preemptive force is so extraordinary: (1) The 10 Labor Management Relations Act (“LMRA”), 29 U.S.C. Section 11 186(a), see Avco Corp v. Aero Lodge No. 735, 390 U.S. 557 (1968); 12 (2) the Employee Retirement Income Security Act of 1974 13 (“ERISA”), 29 U.S.C. Section 1001 et seq., see Metro Life Ins. 14 Co. v. Taylor, 481 U.S. 58 (1987); and (3) the National Bank Act, 15 12 U.S.C. Sections 85-86, see Beneficial Nat’l Bank v. Anderson, 16 539 U.S. 1 (2003). The Ninth Circuit has likewise explained that 17 there are only a “handful of ‘extraordinary’ situations where 18 even a well-pleaded state law complaint will be deemed to arise 19 under federal law for jurisdictional purposes.” Holman v. Laulo- 20 Rowe Agency, 994 F.2d 666, 668 (9th Cir. 1993). 21 By contrast, ordinary preemption will not support removal 22 jurisdiction if a plaintiff chooses to frame his claim based 23 solely on state law, and preemption is raised only as a defense 24 by the defendant. Metro. Life, 481 U.S. at 63. Under ordinary 25 preemption, Congress preempts state law as the substantive law of 26 the case, but does not preempt state remedies and does not 27 deprive state courts of jurisdiction. See Retail Prop. Trust, 768 28 F.3d at 947-948 (explaining the difference between complete 1 preemption and ordinary preemption and the jurisdictional 2 consequences of each). “The fact that a defendant might 3 ultimately prove that a plaintiff’s claims are preempted under 4 [federal law] does not establish that they are removable to 5 federal court.” Caterpillar, 482 U.S. at 398. 6 Here Defendants argue that the MCSA is a statute with such 7 extraordinary preemptive force that the application of complete 8 preemption doctrine is warranted. Opp’n at 3-5. However, 9 Defendants have not provided the Court with any caselaw, binding 10 or otherwise, in which another federal court has found the MCSA 11 to have such force. Defendants first cite to Peters v. Union 12 Pac. R.R. Co., 80 F.3d 257 (8th Cir. 1996), a non-binding Eighth 13 Circuit case that considered the Federal Railroad Safety Act, not 14 the MCSA. Opp’n at 3-4. Defendants then cite to Ctr. for Bio- 15 Ethical Reform, Inc. v. City & Cty. of Honolulu, 455 F.3d 910 16 (9th Cir. 2006), a case concerning Federal Aviation 17 Administration regulations not the MCSA and about ordinary 18 preemption not complete preemption; indeed, the Ctr. for Bio- 19 Ethical Reform Court did not mention complete preemption once. 20 Opp’n at 5-7. Additionally, Defendants refer the Court to a 21 discussion of complete preemption by Section 301 of the LMRA in 22 Harper v. San Diego Transit Corp., 764 F.2d 663, 666 (9th Cir. 23 1985). Opp’n at 7. But, the discussion in Harper about the 24 LMRA, which as noted above the Supreme Court has already 25 identified as a statute with extraordinary preemptive force, does 26 not further Plaintiff’s arguments about the MCSA likewise having 27 such force. 28 In sum, none of Defendants’ cases provide this Court with 1 authority to find the MCSA as having such extraordinary 2 preemptive power that the application of complete preemption is 3 warranted. Further, Plaintiff has brought forth persuasive 4 authority in support of its position that the MCSA and related 5 FMCSA regulations do not completely preempt California state 6 labor law claims. See Delgado v. Lincoln Transp. Serv., Inc., 7 2019 WL 7208416 (C.D. Cal. Dec. 27, 2010) (remanding plaintiff’s 8 wage and hour class action against defendant-transportation- 9 company where defendant did not meet its burden of establishing 10 complete preemption of plaintiff’s California Labor Code claims). 11 In the absence of any caselaw supporting Defendants’ contention 12 that the MCSA should be added to the short list of statutes with 13 extraordinary preemptive force, this Court declines to make such 14 a finding. 15 Because the Court finds the MCSA is not a statute with 16 extraordinary preemptive force, Defendants’ argument for removal 17 jurisdiction based on complete preemption fails. Defendants’ 18 preemption arguments, see Opp’n at 3-8, go to their anticipated 19 defense against Plaintiff’s three claims for failure to provide 20 meal and rest breaks. But, “the fact that a defendant might 21 ultimately prove that a plaintiff’s claims are preempted under 22 [federal law] does not establish that they are removable to 23 federal court.” Caterpillar, 482 U.S. at 398. This case may not 24 be removed to federal court on the basis of the anticipated 25 defense of preemption. Id. at 393 (“A case may not be removed to 26 federal court on the basis of a federal defense, including the 27 defense of preemption, even if the defense is anticipated in the 28 plaintiff’s complaint, and even if both parties concede that the eee enn meee ee OE OI SISSON OE
1 federal defense is the only question truly at issue.”) 2 Because ordinary preemption is not a proper ground for 3 removal and because Defendant raises no other grounds for removal 4 jurisdiction, Defendant has not met its burden of establishing 5 federal jurisdiction. 6 Cc. Supplemental Jurisdiction 7 The Court “may decline to exercise supplemental 8 jurisdiction over a related state claim if... (3) the 9 | district court has dismissed all claims over which it has 10 original jurisdiction.” 28 U.S.C. § 1367(c). Plaintiff’s 11 second, third, and fourth claims are the only claims over which 12 Defendants argue the Court has original jurisdiction. Given the 13 Court’s finding that it does not have original jurisdiction over 14 these three claims, it also refuses to exercise supplemental 15 jurisdiction over Plaintiff’s remaining claims. 16 Til. ORDER 17 For the reasons set forth above, the Court GRANTS 18 Plaintiff’s Motion to Remand this case to the Sacramento County 19 Superior Court. 20 IT IS SO ORDERED. 21 Dated: January 11, 2021 22 Me 23 Benlek, sunk 24 25 26 27 28