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Central Valley Medical Group, Inc. v. Independent Physician Associates Medical Group, Inc.

United States District Court, E.D. California

July 25, 2019

CENTRAL VALLEY MEDICAL GROUP, INC., Plaintiffs,
v.
INDEPENDENT PHYSICIAN ASSOCIATES MEDICAL GROUP, INC., dba ALLCARE IPA, DOES 1 through 10, inclusive, Defendants.

          MEMORANDUM DECISION AND ORDER ON PLAINTIFF'S RENEWED MOTION TO REMAND. (ECF NO. 22) AND PLAINTIFF'S REQUEST FOR A TEMPORARY RESTRAINING ORDER (ECF NO. 31)

          LAWRENCE J. O'NEILL UNITED STATES CHIEF DISTRICT JUDGE

         I. INTRODUCTION

         This case concerns claims brought by Central Valley Medical Group, Inc. (“CVMG”) against Independent Physician Associates Medical Group, Inc., dba AllCare (“AllCare”) and Does 1 through 10. This case was originally filed in Stanislaus County Superior Court on March 19, 2019. ECF No. 1, Ex. A. On March 27, 2019, AllCare filed a notice of removal to this Court. ECF No. 1. On April 5, 2019, CVMG filed a motion to remand, followed by an opposition from AllCare on April 22, 2019 and a reply from CVMG on April 29, 2019. ECF Nos. 6, 8, 9. That motion to remand was denied without prejudice on June 14, 2019. ECF No. 20. On July 8, 2019, CVMG filed a first amended complaint (“FAC”). ECF No. 21. On July 15, 2019, CVMG filed a renewed motion to remand, including a request for frees and costs. ECF No. 22. The same day, CVMG also filed an ex parte request for a shortened briefing schedule, which the Court granted in part. ECF No. 30. On July 22, 2019, CVMG filed a motion for a temporary restraining order. ECF No. 31. Due to the urgency of CVMG's request for a TRO, the Court issued an order notifying the parties it would rule on the motion to remand without a reply. ECF No. 32. AllCare filed its opposition to the renewed motion to remand on July 24, 2019. ECF No. 34. Pursuant to Local Rule 230(g), the Court finds this matter suitable for decision on the papers

         For the following reasons, CVMG's motion to remand is GRANTED. CVMG's request for a temporary restraining order is DENIED as moot.

         II. BACKGROUND

         The Court incorporates by reference its prior recitation of the facts of this case. See ECF No. 20 at 1-2. CVMG's amended complaint pleads a significant number of additional factual and legal bases for its claims. ECF No. 21. Most pertinent to this motion, CVMG amended its Unfair Business Practices cause of action to remove the references to federal antitrust law, and instead pleaded as the necessary predicate violation for the § 17200 Unfair Competition Law (“UCL”) unfair business practices claim that AllCare's conduct “offends the policies of free competition and free trade, and significantly threatens or harms competition.” Id. ¶ 183.

         III. STANDARD OF DECISION

         A defendant may remove a civil case from state court to federal court if the action presents either a federal question or the action's parties are citizens of different states and the amount in controversy is over $75, 000. 28 U.S.C. §§ 1331, 1441. Subject-matter jurisdiction (in the form of either federal question or diversity jurisdiction) may be challenged at any time prior to final judgment. Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 571 (2004).

         The artful pleading doctrine prevents a plaintiff from circumventing federal jurisdiction by embedding federal issues within state law causes of action. See Franchise Tax Bd. of State of Cal. v. Const. Laborers Vacation Trust for So. Cal., 463 U.S. 1, 14 (1983) (“Even though state law creates appellant's causes of action, its case might still ‘arise under' the laws of the United States if a well-pleaded complaint established that its right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties.”); Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 312 (2005) (“[F]ederal question jurisdiction will lie over state-law claims that implicate significant federal issues.”). The Ninth Circuit has elaborated that

the artful pleading doctrine allows federal courts to retain jurisdiction over state law claims that implicate a substantial federal question. A state law claim falls within this . . . category when: (1) “a substantial, disputed question of federal law is a necessary element of . . . the well-pleaded state claim, ” . . . or the claim is an “inherently federal claim” articulated in state-law terms, . . . or (2) “the right to relief depends on the resolution of a substantial, disputed federal question . . . .” A careful reading of artful pleading cases shows that no specific recipe exists for a court to alchemize a state claim into a federal claim-a court must look at a complex group of factors in any particular case to decide whether a state claim actually “arises” under federal law.

Lippitt v. Raymond James Fin. Servs., Inc., 340 F.3d 1033, 1042-43 (9th Cir. 2003), as amended (Sept. 22, 2003) (internal citations and quotation marks omitted); see also Gunn v. Minton, 568 U.S. 251, 258 (2013) (explaining substantial federal question jurisdiction will lie “if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.”); Grable, 545 U.S. at 312 (explaining substantial federal question doctrine “captures the commonsense notion that a federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law”).

         “Courts have fashioned a number of proxies to determine whether a state claim depends on the resolution of a federal question to such an extent as to trigger subject matter jurisdiction.” Lippitt, 340 F.3d at 1045. In evaluating whether jurisdiction exists, a court must determine if the federal question goes to the gravamen of a plaintiff's claims, or, in other words, “[i]s the federal question ‘basic' and ‘necessary' as opposed to ‘collateral' and ‘merely possible'? Is the federal question ‘pivotal' as opposed to merely ‘incidental'? Is the federal question ‘direct and essential' as opposed to ‘attenuated?”' Id. (internal citations omitted). Nevertheless, “the mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction.” Id. at 1040.

         Finally, a plaintiff may be able to defeat federal jurisdiction if an “alternative and independent” violation of state antitrust policies is offered as a basis for an unfair competition claim, even if a federal basis is also offered. See Rains v. Criterion Systems, Inc., 80 F.3d 339, 346 (9th Cir. 1996) (“When a claim can be supported by alternative and independent theories-one of which is a state law theory and one of which is a federal law theory-federal question jurisdiction does not attach because federal law is not a necessary element of the claim.”).

         IV. ...


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