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California Shock Trauma Air Rescue v. State Compensation

March 31, 2011

CALIFORNIA SHOCK TRAUMA AIR RESCUE, PLAINTIFF-APPELLANT,
v.
STATE COMPENSATION INSURANCE FUND; ZURICH AMERICAN INSURANCE COMPANY; ZENITH INSURANCE COMPANY; REDWOOD FIRE & CASUALTY INSURANCE COMPANY; SEABRIGHT INSURANCE COMPANY; ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY; EMPLOYERS DIRECT INSURANCE COMPANY; XL SPECIALTY INSURANCE COMPANY; APPLIED UNDERWRITERS, INC.; NATIONAL LIABILITY & FIRE INSURANCE COMPANY; AIMS INSURANCE SERVICES; ARCH INSURANCE COMPANY; BROADSPIRE SERVICES, INC.; CHURCH MUTUAL INSURANCE COMPANY; ALASKA NATIONAL INSURANCE COMPANY; EMPLOYERS INSURANCE COMPANY OF WAUSAU; INSURANCE COMPANY OF THE WEST; EMPLOYERS COMPENSATION INSURANCE COMPANY; FLORISTS' MUTUAL INSURANCE COMPANY; SAFECO INSURANCE COMPANY OF AMERICA; SAFETY NATIONAL CASUALTY CORPORATION; ACE AMERICAN INSURANCE COMPANY; CYPRESS INSURANCE COMPANY; SIERRA PACIFIC INDUSTRIES, INC.; FIRE ASSOCIATION SELF-INSURANCE SYSTEM; CONTRA COSTA COUNTY SCHOOLS INSURANCE GROUP; CALIFORNIA STATE ASSOCIATION OF COUNTIES EXCESS INSURANCE AUTHORITY; PROTECTED INSURANCE PROGRAMS FOR SCHOOLS; NORCAL WASTE SYSTEMS, INC.; SPECIAL DISTRICT RISK MANAGEMENT AUTHORITY; MANPOWER, INC.; REDWOOD EMPIRE MUNICIPAL INSURANCE FUND; EAST BAY REGIONAL PARK DISTRICT; TRINDEL INSURANCE FUND; COUNTY OF MARIN; BARRETT BUSINESS SERVICES, INC.; NORTHERN CALIFORNIA SPECIAL DISTRICTS INSURANCE AUTHORITY; CITY OF MONTEREY; COUNTY OF SOLANO; LAKE VALLEY FIRE PROTECTION DISTRICT; COUNTY OF SANTA BARBARA; 99 CENT ONLY STORES; COUNTY OF EL DORADO; CITY OF PLEASANTON; COUNTY OF STANISLAUS; MUNICIPAL POOLING AUTHORITY; THE DAVEY TREE
EXPERT; ACE PROPERTY AND INSURANCECOMPANY; CONOCOPHILLIPS COMPANY; ABC SUPPLY COMPANY INC.; LABOR READY SOUTHWEST INC.; CITY OF WATSONVILLE; LOWE'S HIW, INC.; AGRIUM US INC.; AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA; IRWIN INDUSTRIES, INC.; WASTE CONNECTIONS, INC., DEFENDANTS-APPELLEES.
CALIFORNIA SHOCK TRAUMA AIR RESCUE, PLAINTIFF-APPELLANT,
v.
AIG DOMESTIC CLAIMS, INC.; AIG INSURANCE SERVICES, INC.; AIG INDEMNITY INSURANCE COMPANY; STATE FARM GENERAL INSURANCE COMPANY; STATE FARM EMPLOYEES ACTIVITIES ASSN.; REGENTS OF THE UNIVERSITY OF CALIFORNIA; MCM CONSTRUCTION, INC.; ENDURANCE REINSURANCE CORPORATION OF AMERICA; ENVIRONMENTAL ALTERNATIVES; AMERICAN HOME ASSURANCE COMPANY; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA; COMMERCE AND INDUSTRY INSURANCE COMPANY; MAINSTAY BUSINESS SOLUTIONS; MONTEREY COUNTY LOCAL AGENCIES INSURANCE AUTHORITY; E.I. DU PONT DE NEMOURS AND COMPANY; CAMBRIDGE INTEGRATED SERVICES GROUP, INC.; SCHOOLS INSURANCE AUTHORITY; SCHOOLS INSURANCE GROUP; PEBBLE BEACH COMPANY, DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Eastern District of California Morrison C. England, District Judge, Presiding D.C. No. 2:09-cv-00759- MCE-JFM D.C. No. 2:09-cv-00090-MCE-JFM

The opinion of the court was delivered by: Wallace, Senior Circuit Judge:

FOR PUBLICATION

OPINION

Argued and Submitted January 14, 2011-San Francisco, California

Before: J. Clifford Wallace, John T. Noonan, and Barry G. Silverman, Circuit Judges.

Opinion by Judge Wallace

OPINION

These consolidated appeals arise from two separate actions that involve California Shock Trauma Air Rescue (CAL-STAR). Both actions turn on the same jurisdictional question: is the expectation of a federal defense, without more, sufficient to establish federal jurisdiction over a state-law claim?

Despite CALSTAR's arguments to the contrary, we reiterate that the well-pleaded complaint rule precludes the exercise of federal subject matter jurisdiction over purely state-law causes of action, like the one raised here.

I.

CALSTAR provides air-ambulance rescue services to employees injured in the course of their employment, and whose employers are either self-insured or have purchased workers' compensation insurance. CALSTAR alleges that these employers and various insurance companies (collectively, Employers) have underpaid CALSTAR for its services. Rather than pay the amount billed by CALSTAR, Employers have paid a lesser amount as specified under the California's workers' compensation statute. See Cal. Code Regs. tit. 8 § 9789.70 (now obsolete in relevant part).

In 2009, CALSTAR filed its actions in the Eastern District of California, alleging state-law claims of quantum meruit, unjust enrichment, and open book account. CALSTAR also sought a declaratory judgment that the state statute regulating air-ambulance rates is pre-empted by federal law. In the 1970s, the federal government adopted legislation-the Federal Aviation Act of 1958 (FAA), as amended by the Airline Deregulation Act of 1978, codified at 49 U.S.C. § 41713(b)(1)-to increase airline competition and lower airfare prices. According to CALSTAR, the FAA preempts the workers' compensation statute at issue.

The FAA preemption question is the sole basis on which CALSTAR attempts to have its actions adjudicated in federal court. Relying on Federal Rule of Civil Procedure 12(e)(1), the district court concluded that subject matter jurisdiction was lacking and dismissed CALSTAR's claims. CALSTAR now appeals. We review the district court's dismissal for lack of subject matter ...


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