United States District Court, Northern District of California
October 12, 1999
TOM JOHNSON, PLAINTIFF,
CIRCUIT CITY STORES, INC., FRY'S ELECTRONICS, INC., THE GOOD GUYS, INC. COMPUSA INC., COMPUSA STORES, L.P., STAPLES, INC., OFFICEMAX, INC., AND DOES 1-250, DEFENDANTS. AND RELATED CROSS CLAIMS.
The opinion of the court was delivered by: Chesney, District Judge.
ORDER GRANTING PLAINTIFF'S MOTION FOR REMAND; DENYING ATTORNEY'S
Before the Court is the motion of plaintiff Tom Johnson for
remand of this action to the Superior Court of California, County
of Contra Costa. Having considered the papers submitted in
support of and in opposition to the motion, the Court deems the
matter appropriate for decision on the papers, and rules as
On January 14, 1999, plaintiff filed suit against defendants in
the Superior Court of California, County of Contra Costa.
Plaintiff alleges that defendants have misrepresented and failed
to reveal material information to their customers concerning Year
2000 ("Y2K") compliance*fn1 of their products in contravention
of the California Unfair Trade Practices Act, Cal.Bus. &
Prof.Code. § 17200 et seq., and the False Advertising Act,
Cal.Bus. & Prof.Code § 17500. (Compl. at ¶ 32-41.) Plaintiff's
complaint seeks an injunction requiring defendants to accurately
and adequately disclose to their customers, the Y2K compliance of
the computer hardware and software that they sell. (Pl.Mem.Mot.
On July 20, 1999, while the state court action was proceeding,
the Y2K Act, 15 U.S.C. § 6601 et seq. (West 1999), legislation
intended to address problems concerning litigation arising out of
Y2K failures, was signed into law. On July 22, 1999, two days
after the signing of the Y2K Act, defendants filed a notice of
removal to federal court based on federal question jurisdiction.
28 U.S.C. § 1331.
On August 3, 1999, plaintiffs brought the present motion for
remand of this action to the Contra Costa County Superior Court.
This motion was originally scheduled to be heard on September 17,
1999 before Senior Judge Samuel Conti. However, on September 3,
1999, Judge Conti entered an order recusing himself from this
action, and, by order dated September 9, 1999, the case was
reassigned to this Court and all matters scheduled for hearing
1. Legal Standard
Pursuant to 28 U.S.C. § 1441, where a civil action over which
the federal courts have original jurisdiction is brought in state
court, the defendant may remove the action to the federal
The Ninth Circuit has consistently held that 28 U.S.C. § 1441
is to be strictly construed against removal jurisdiction, and
that "[f]ederal jurisdiction must be rejected if there is any
doubt as to the right of removal in the first instance." Gaus v.
Miles, 980 F.2d 564, 566 (9th Cir. 1992), citing to Libhart v.
Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979).
After removal, a plaintiff may move to remand the action to
state court under 28 U.S.C. § 1447 for lack of federal
jurisdiction or for procedural defects. The defendant bears the
burden of establishing federal jurisdiction and must "overcome a
strict construction of the removal statute against removal."
Mangini v. R.J. Reynolds Tobacco Co., 793 F. Supp. 925, 927
(N.D.Ca. 1992) citing Ethridge v. Harbor House Restaurant,
861 F.2d 1389, 1393 (9th Cir. 1988).
In the present action, plaintiff has brought the instant motion
for remand based on four separate grounds: (1) lack of subject
matter jurisdiction; (2) lack of federal standing; (3) failure to
join a defendant, and (4) the voluntary/ involuntary rule.
Plaintiff also requests that costs and attorney's fees be granted
in the event that his motion for remand is granted.
Federal question jurisdiction is provided by 28 U.S.C. § 1331,
which states that federal courts "shall have original
jurisdiction of all civil actions arising under the Constitution,
laws or treaties of the United States." Whether federal question
jurisdiction exists over a case is determined by the "
"well-pleaded complaint rule," which provides that federal
jurisdiction exists only when a federal question is presented on
the face of the plaintiff's properly well pleaded complaint."
Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct.
2425, 96 L.Ed.2d 318 (1987).
In Merrell Dow, Pharmaceuticals Inc. v. Thompson,
478 U.S. 804, 808, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986), the Supreme
Court held that a claim "arises under" federal law, within the
meaning of 28
1029 U.S.C. § 1331, if: (1) "federal law creates the cause of action,"
or (2) "the vindication of a right under state law necessarily
turn[s] on some construction of federal law."
In Merrell Dow, the plaintiff claimed that the defendants'
alleged violations of federal Food and Drug Administration
regulations created federal question jurisdiction over his state
law claims for negligence under the latter theory of
jurisdiction. The Supreme Court found that even though the
resolution of the plaintiff's dispute may have rested on the
interpretation of federal regulations, the plaintiff's claim did
not "arise under" federal law because the Food and Drug
Administration's regulations did not create a private right of
action. Id. at 817, 106 S.Ct. 3229. As the Ninth Circuit
explained in Utley v. Varian Assoc., Inc., 811 F.2d 1279, 1283,
"[u]nder Merrell Dow, if a federal law does not provide a private
right of action, then a state law action based on its violation
perforce does not raise a `substantial' federal question"
sufficient to confer federal-question jurisdiction. See also
Millers Nat'l Ins. Co. v. Axel's Express, Inc., 851 F.2d 267,
270 (9th Cir. 1988) ("Because [the plaintiff] possesses no
private right of action under federal law, the fact that federal
law might be an element in its state law claim is not sufficient
to present a federal question supporting jurisdiction under
28 U.S.C. § 1331.").
In the present case, defendants, relying on 28 U.S.C. § 1331,
argue that this action "arises under" the Y2K act because
"plaintiff's right to relief necessarily depends upon the
resolution of a substantial question of federal law."*fn2
(Def.Mem.Opp. at 8.)
The Y2K Act does create a number of procedural requirements
that arguably apply to plaintiff's claims. In actions based on
injuries suffered by reason of the actual or potential failure of
electronic equipment due to the date transition from 1999 to
2000, the Y2K Act creates, inter alia, heightened pleading
requirements, and provides for notice and opportunity to cure.
See 15 U.S.C. § 6601 et seq. What the Y2K act does not create,
however, is a federal cause of action. Indeed, Congress expressly
manifested its intent not to create a federal cause of action in
Section 4(b). See 15 U.S.C. § 6603(4)(b). ("NO NEW CAUSE OF
ACTION CREATED. — Nothing in this Act creates a new cause of
action . . .")
Further, the legislative history of the Y2K Act indicates that
Congress, in enacting the legislation, did not intend to preempt
the field. Appearing before the House Judiciary Committee on
April 13, 1999, the Honorable Walter K. Stapleton testified that
"[w]hile federal defenses and liability limitations established
in the legislation may be raised in [state court actions], the
bill recognizes that state courts are fully capable of applying
these provisions and carrying out federal policy." 1999 Westlaw
16945862 at 2 (West 1999).
Accordingly, the Court finds that plaintiff's complaint does
not present a claim "arising under" federal law, and that federal
jurisdiction under 28 U.S.C. § 1331 does not exist over the
present action.*fn3 Plaintiff's motion to remand is GRANTED.
3. Attorney's Fees
Plaintiff requests an award of attorney's fees and costs for
that plaintiff has incurred in bringing his present motion for
28 U.S.C. § 1447(c) authorizes the district court, within its
discretion, to "require payment of just costs and any actual
expenses, including attorney fees, incurred as a result of the
removal." Such an award need not be based on a finding of bad
faith. See Moore v. Permanente Medical Group, Inc.,
981 F.2d 443, 447 (9th Cir. 1992). Given that removal in the present case
was prompted by newly-enacted federal legislation, however, the
Court declines to exercise its discretion to award fees and costs
in this instance. Accordingly, the Court DENIES plaintiff's
request for attorney's fees and costs under 28 U.S.C. § 1447(c).
Based on the reasons expressed, the Court hereby GRANTS
plaintiff's motion and REMANDS this action to the Contra Costa
County Superior Court.
The Clerk shall close the file.
IT IS SO ORDERED.