Boyle v. MTV Networks, Inc.
1991 WL 104369, 766 F. Supp. 809 (1991)
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Rule of Law:
A defendant may not remove a case to federal court based on a federal defense, including preemption, unless the federal statute completely preempts the state law claims, converting them into federal claims. Additionally, a federal court lacks subject matter jurisdiction if the plaintiff does not have Article III standing, which requires a personal injury.
Facts:
- MTV Networks, Inc. ('MTV') conducted lotteries on its nationwide television channels.
- AT&T, Inc. ('AT&T') provided a '900' telephone number service for call-in entries to these lotteries, and the two companies divided the fees earned.
- Pacific Bell, Inc. ('PACBELL') billed California consumers for these '900' calls.
- A plaintiff, suing on behalf of the general public of California, alleged that this system constituted an illegal game of chance under the California Penal Code, and thus an unfair business practice.
- The plaintiff specifically alleged that she was suing only on behalf of the general public and had not personally suffered any injury from the defendants' actions.
Procedural Posture:
- Plaintiff filed an amended complaint in San Mateo Superior Court, a state trial court, against MTV, AT&T, and PACBELL.
- Defendants removed the action to the U.S. District Court for the Northern District of California, a federal trial court.
- Plaintiff filed a motion to remand the case back to state court, arguing the federal court lacked subject matter jurisdiction.
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Issue:
Does a federal district court have subject matter jurisdiction over a case removed from state court when the plaintiff's complaint alleges only state law claims, but the defendant argues those claims are preempted by the Federal Communications Act and that the plaintiff has "artfully pleaded" to avoid a federal question?
Opinions:
Majority - Judge Fern M. Smith
No. A federal district court lacks subject matter jurisdiction and must remand the case to state court for three independent reasons. First, under the 'well-pleaded complaint' rule, federal jurisdiction is determined from the face of the plaintiff's complaint, which here only raises state law claims for unfair business practices. A defendant's assertion of a federal defense, such as preemption under the Federal Communications Act (FCA), is insufficient to establish federal question jurisdiction. Second, the 'complete preemption' doctrine, a narrow exception to this rule, does not apply because Congress did not clearly manifest an intent for the FCA to completely displace state law in this area, and the plaintiff's claim does not fall within the scope of the FCA's civil enforcement provisions. Third, the plaintiff lacks Article III standing to sue in federal court because she admits to having suffered no personal injury, which is an irreducible minimum requirement for federal jurisdiction.
Analysis:
This decision reinforces the high bar for removing a case from state to federal court based on federal question jurisdiction. It clearly distinguishes between ordinary defensive preemption, which is a merits argument to be heard in state court, and the rare jurisdictional doctrine of complete preemption. The opinion provides a clear application of the Supreme Court's test for complete preemption outside the established contexts of LMRA and ERISA, demonstrating judicial reluctance to expand this narrow exception. Furthermore, it underscores that Article III standing is a non-waivable jurisdictional requirement that can independently defeat removal, even if a potential federal question otherwise existed.
