Texoma Woodworks, LLC v. De Jesus et al

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
TEXOMA WOODWORKS, LLC
v.
CARLOS DE JESUS, ET AL.
§
§
§
§
§
CIVIL NO. 4:25-CV-460-SDJ
MEMORANDUM ORDER AND OPINION
Before the Court is Plaintiff Texoma Woodworks, LLC’s Amended Motion to
Remand. (Dkt. #10). Having considered the motion, the parties’ filings, and the
applicable law, the Court determines that there is no basis for federal question
jurisdiction; therefore, this case was improperly removed and will be remanded.
I. B ACKGROUND
Plaintiff Texoma Woodworks, LLC (“Woodworks”) purchased a CNC panel
beam 	saw 	through 	an 	online 	auction 	that, 	because 	of 	its 	size, 	needed 	to 	be
decommissioned and transported in two separate trailers. (Dkt. #8 ¶¶ 10–13).
Woodworks contracted with Defendant ATS Logistics Services, Inc. (“ATS”) to deliver
the beam saw in two different loads after being advised that ATS had carriers for the
shipment. (Dkt. #8 ¶¶ 12–13). The first shipment was driven by Defendant Carlos De
Jesus, a driver employed by Defendant Leo’s Trucking TX, LLC (“Leo’s Trucking”).
(Dkt. #8 ¶¶ 14, 16).
While driving Woodworks’s shipment, De Jesus was involved in a car accident
that destroyed Woodworks’s beam saw. (Dkt. #8 ¶ 16). Woodworks filed this action in
state court, asserting state-law claims of negligence against De Jesus, vicarious
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liability against ATS and Leo’s Trucking, and breach of contract against ATS.
(Dkt. #8 ¶¶ 18–26).
ATS timely filed a Notice of Removal, invoking federal question jurisdiction
under 28 U.S.C. § 1331.1 (Dkt. #1). Woodworks challenges the propriety of removal
and seeks remand, contending that federal question jurisdiction is absent because
there is no federal claim raised in its complaint and no other legitimate ground
asserted for jurisdiction under 28 U.S.C. § 1331. (Dkt. #10).
II. LEGAL S TANDARD
“Federal courts are courts of limited jurisdiction, possessing only that power
authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256, 133 S.Ct.
1059, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)) (cleaned up). Thus, when
a plaintiff sues in state court, a defendant can remove the suit to federal court under
28 U.S.C. § 1441(a) only if the plaintiff could have filed the suit in federal court under
a jurisdiction-granting statute. See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386,
392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing 28 U.S.C. § 1441(a)). However,
“[t]he removing party bears the burden of showing that federal jurisdiction exists and
that removal was proper.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720,
723 (5th Cir. 2002) (collecting cases).
1 ATS originally removed the case to the United States District Court for the Northern
District of Texas, Dallas Division. (Dkt. #1). However, the court sua sponte transferred the
case to the Eastern District of Texas.
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One such jurisdiction-granting statute is 28 U.S.C. § 1331, which gives federal
courts subject-matter jurisdiction over all claims “arising under” federal law. Courts
apply the well-pleaded complaint rule to determine whether a claim arises under
federal law. Under that rule, federal question jurisdiction exists “only when a federal
question 	is 	presented 	on 	the 	face 	of 	the 	plaintiff’s 	properly 	pleaded
complaint.” Caterpillar, 482 U.S. at 392 (citing Gully v. First Nat’l Bank, 299 U.S.
109, 112–13, 57 S.Ct. 96, 81 L.Ed. 70 (1936)). For cases removed from state court, “[i]f
at any time before final judgment it appears that the district court lacks subject
matter 	jurisdiction,” 	then 	the 	federal 	court 	must 	remand 	the 	case 	to 	state
court. 28 U.S.C. § 1447(c).
Generally, under the well-pleaded complaint rule, a case does not arise under
federal law, and thus is not removable, if the complaint does not affirmatively allege
a federal claim and instead asserts only state-law causes of action. See Kramer v.
Smith Barney, 80 F.3d 1080, 1082 (5th Cir. 1996) (citing Franchise Tax Bd. v. Constr.
Laborers Vacation Tr., 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)). As the
Fifth Circuit has explained, “[t]he well-pleaded complaint rule precludes a plaintiff
from 	predicating 	federal 	jurisdiction 	on 	an 	anticipated 	federal 	defense 	to 	his
claim.” La. Indep. Pharm. Ass’n v. Express Scripts, Inc., 41 F.4th 473, 478 (5th Cir.
2022). Even when a plaintiff brings state-law claims that implicate federal law, “those
claims cannot alone sustain federal jurisdiction.” Manyweather v. Woodlawn Manor,
Inc., 40 F.4th 237, 242 (5th Cir. 2022). Likewise, “[a] defendant cannot remove an
action to federal court unless the plaintiff pleaded a federal question on the face of
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his complaint.” Id.; see also Stump v. Potts, 322 F.App’x 379, 380 (5th Cir. 2009) (per
curiam) (“It is not sufficient for the federal question to be raised in the answer or in
the petition for removal.”). After all, the plaintiff “is master of his complaint and may
generally allege only a state law cause of action even where a federal remedy is also
available.” Bernhard v. Whitney Nat’l Bank, 523 F.3d 546, 551 (5th Cir. 2008).
III. DISCUSSION
Woodworks argues that, because its well-pleaded complaint alleges only state-
law claims that do not raise a federal-law question, this case must be remanded. ATS
resists remand, maintaining that the Court has federal question jurisdiction because
Woodworks’s state-law claims are completely preempted by the Federal Aviation
Administration Authorization Act (“FAAAA”). Alternatively, ATS suggests that
Woodworks’s state-law claims raise a significant federal issue that creates federal
jurisdiction under the Grable doctrine. In Grable, the Supreme Court recognized that
“in certain cases federal-question jurisdiction will lie over state-law claims that
implicate significant federal issues.” Grable & Sons Metal Prods., Inc. v. Darue
Eng’g & Mfg., 545 U.S. 308, 312, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005).
Neither of ATS’s arguments survives scrutiny. ATS’s complete preemption
argument fails because, although the FAAAA may afford ATS a preemption defense,
it does not meet the prerequisites for complete preemption and therefore cannot
create federal question jurisdiction. ATS’s Grable argument is equally unavailing.
The doctrine applies only to a “special and small” category of cases, “typically a state-
law claim premised on some component of federal law.” Mitchell v. Advanced HCS,
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L.L.C., 28 F.4th 580, 588 (5th Cir. 2022) (internal quotation marks and citation
omitted). When, as here, the alleged “federal issue” is raised as a defense, it does not
appear on the face of Plaintiff’s complaint and Grable does not apply.
Because there is no basis for federal question jurisdiction, this case was
improperly removed and will be remanded.
A. Complete Preemption
1. ATS fails to address the prerequisites for complete preemption.
Federal preemption “is ordinarily a federal defense to the plaintiff’s suit” and,
as a result, does not support federal question jurisdiction. Metro. Life Ins. Co. v.
Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); see also Caterpillar,
482 U.S. at 393 (explaining that it is “settled law that a case may not be removed to
federal court on the basis of a federal defense, including the defense of pre-emption”).
Complete preemption is an exception to the well-pleaded complaint rule. It creates
federal jurisdiction if Congress, by statute, “completely pre-empt[s] a particular area
[such] that any civil complaint raising [the] select group of claims is necessarily
federal in character.” Metro. Life Ins., 481 U.S. at 63–64. That happens when a federal
law creates an “exclusive cause of action” and “set[s] forth procedures and remedies
governing that cause of action,” such that it “wholly displaces the state-law cause of
action.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8, 123 S.Ct. 2058, 156 L.Ed.2d
1 (2003).
The scope of complete preemption is “narrow.” Manyweather, 40 F.4th at 243.
It applies only when three conditions are met. First, federal law “creates a cause of
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action that both replaces and protects the analogous area of state law.” Mitchell,
28 F.4th at 585 (citation omitted). Second, Congress has empowered federal courts to
hear that cause of action. Id. And third, Congress clearly intended that grant of
jurisdiction to be exclusive. Id. Once those conditions are met, the party invoking
federal jurisdiction must show that the plaintiff “could have brought his state-law
claims 	under 	th[at] 	federal 	cause 	of 	action.” 	Id. 	(citation 	omitted); 	see 	also
Manyweather, 40 F.4th at 243 (same).
Here, ATS has invoked federal question jurisdiction based, in part, on its
contention that the FAAAA completely preempts Woodwork’s state-law claims. But
in its remand briefing, ATS fails to even reference the three, above-described
conditions that must be met, under controlling Fifth Circuit precedent, in order to
apply 	the 	complete 	preemption 	doctrine. 	See, 	e.g., 	Mitchell, 	28 	F.4th 	at 	585;
Manyweather, 40 F.4th at 243. ATS’s failure to acknowledge the conditions for
application of complete preemption, much less demonstrate how the FAAAA meets
those conditions as to the state-law claims in this case, dooms this removal argument
at the outset. “The removing party bears the burden of showing that federal
jurisdiction 	exists 	and 	that 	removal 	was 	proper.” 	Manguno, 	276 	F.3d 	at 	723
(collecting cases).
2. The text of the FAAAA does not support ATS’s argument.
Even if it had attempted to do so, ATS could not have demonstrated that the
complete preemption doctrine applies in this case. Both the text of the FAAAA and
its history confirm that the Act does not create any cause of action whatsoever, much
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less a civil enforcement remedy that replaces the Texas common law of negligence
and breach of contract applicable here.
The Court’s textual analysis of the FAAAA is informed by Supreme Court
precedent on complete preemption. To begin, complete preemption is vanishingly
rare. The Supreme Court has applied the doctrine to confer jurisdiction in only three
instances. First, in Avco Corp. v. Machinists, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d
126 (1968), the Court held that Section 301 of the Labor Management Relations Act
(“LMRA”) not only preempted state law but also authorized removal of actions that
sought relief under state law. 390 U.S. at 559–62. Section 301 of the LMRA, codified
at 29 U.S.C. § 185, provides federal courts with jurisdiction to adjudicate certain
“[s]uits for violation of contracts between an employer and a labor organization
representing employees in an industry affecting commerce.” As described by the
Supreme Court, “[t]he necessary ground of decision [in Avco] was that the preemptive
force of § 301 is so powerful as to displace entirely any state cause of action for
violation of contracts between an employer and a labor organization.” Franchise Tax
Bd., 463 U.S. at 23 (internal quotation marks omitted). The Court went on to explain
that “Avco stands for the proposition that if a federal cause of action completely
preempts a state cause of action any complaint that comes within the scope of the
federal cause of action necessarily ‘arises under’ federal law.” Id. at 23–24.
Second, in Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542,
95 L.Ed.2d 55 (1987), the Court determined that the complete preemption doctrine
applied to state common-law causes of action asserting improper processing of benefit
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claims under a plan regulated by the Employment Retirement Income Security Act
of 1974 (“ERISA”). 481 U.S. at 67. The Court focused on Section 502(a)(1)(B) of
ERISA, which provides that a civil action may be brought by an ERISA plan
participant or beneficiary “to recover benefits due” under the terms of the plan, to
enforce rights under the terms of the plan, or to clarify rights and future benefits
under the plan. See id. at 64–66; see also 29 U.S.C. § 1132(a)(1)(B). As explained by
the Court in Beneficial, there were two reasons for its decision in Metropolitan Life
that complete preemption applied: (1) ERISA’s statutory text not only provided an
express federal remedy for the plaintiffs’ claims, but also used jurisdictional language
similar to the LMRA’s statutory language at issue in Avco, “thereby indicating that
the two statutes should be construed in the same way”; and (2) ERISA’s legislative
history “unambiguously” revealed an intent to treat claim processing actions subject
to ERISA “as arising under the laws of the United States in similar fashion to those
brought under section 301 of the [LMRA].” Beneficial, 539 U.S. at 7–8 (quoting Metro.
Life Ins., 481 U.S. at 65–66).
Finally, in Beneficial, the Court considered whether the National Bank Act
completely preempted claims asserted in state court against a national bank for
allegedly charging excessive interest in violation of “the common law usury doctrine”
and an Alabama statute. 539 U.S. at 3–4. The Court noted that Section 85 of the
National Bank Act provides “substantive limits on the rates of interest that national
banks may charge,” and Section 86 of the Act “sets forth the elements of a usury claim
against a national bank, provides for a 2-year statute of limitations for such a claim,
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and prescribes the remedies available to borrowers who are charged higher rates and
the procedures governing such a claim.” Id. at 9. The Court went on to conclude that,
“[i]n actions against national banks for usury,” Sections 85 and 86 of the Act
“supersede both the substantive and the remedial provisions of state usury laws and
create a federal remedy for overcharges that is exclusive,” even when a plaintiff relies
entirely on state law. Id. at 11.
In sum, every time the Supreme Court has applied the complete preemption
doctrine, it has pointed to the text of a federal statute that (1) creates a cause of action
that supersedes analogous state law, (2) authorizes federal courts to hear that cause
of action, and (3) exhibits a clear congressional intent that the federal cause of action
be exclusive. As the Fifth Circuit has recognized, these are the prerequisites for
application of the complete preemption doctrine under controlling Supreme Court
precedent. See, e.g., Mitchell, 28 F.4th at 585; Manyweather, 40 F.4th at 243.
Contrary to ATS’s contention, on its face the FAAAA fails to meet the
prerequisites for complete preemption. ATS’s removal of this case is premised on two
preemption provisions found in the FAAAA. Specifically, ATS has invoked 49 U.S.C.
§ 14501(c)(1), which provides that no state may “enact or enforce a law, regulation,
or other provision having the force and effect of law related to a price, route, or service
of any motor carrier . . . or any motor private carrier, broker, or freight forwarder
with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). ATS also has
invoked 49 U.S.C. § 14501(b)(1), which provides that no state may “enact or enforce
any law, rule, regulation, standard, or other provision having the force and effect of
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law relating to intrastate rates, intrastate routes, or intrastate services of any freight
forwarder 	or 	broker.” 	49 	U.S.C. 	§ 	14501(b)(1). 	Taken 	together, 	these 	FAAAA
preemption provisions limit state authority to regulate prices, routes, and services of
motor carriers, freight forwarders, and brokers.2
But state law claims that are merely subject to ordinary preemption are not
recharacterized as claims arising under federal law. See Rice v. Panchal, 65 F.3d 637,
640 (7th Cir. 1995) (applying this principle in the context of conflict preemption). As
the Fifth Circuit has explained, courts and litigants must avoid confusing complete
preemption with ordinary or defensive preemption. “Complete preemption gives
federal courts the power to adjudicate a case in the first place while defensive
preemption is an affirmative defense that a defendant can invoke to defeat a
plaintiff’s state-law claim on the merits by asserting the supremacy of federal law.”
Mitchell, 28 F.4th at 585 n.2 (internal quotation marks and citations omitted).3
And neither Section 14501(c)(1) nor Section 14501(b)(1), or for that matter any
other provision of the FAAAA, creates any cause of action or federal question
jurisdiction. See generally 49 U.S.C. § 14501. Unlike the statutory provisions of
LMRA, ERISA, and the National Bank Act considered by the Supreme Court in Avco,
2 The FAAAA (Federal Aviation Administration Authorization Act of 1994, Pub. L.
No. 103-305, 108 Stat. 1569), was amended by the ICCTA (Interstate Commerce Commission
Termination Act of 1995, Pub. L. 104-88, 109 Stat. 803). Although Section 14501(c)(1) was
enacted as part of the FAAAA and Section 14501(b)(1) as part of the ICCTA, the Court
references the provisions collectively as contained in the FAAAA.
3 The Court notes that ATS primarily relies on two cases in its briefing, both of which
are inapposite because they address defensive preemption, not the complete preemption
doctrine: Ye v. GlobalTranz Enter., Inc., 74 F.4th 453 (7th Cir. 2023); and Aspen Am. Ins.
Co. v. Landstar Ranger, Inc., 65 F.4th 1261 (11th Cir. 2023).
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Metropolitan Life, and Beneficial, the FAAAA includes no federal remedy or civil
enforcement scheme, much less a scheme authorizing a cause of action that may be
heard by federal courts. Because the FAAAA, including the preemption provisions
cited 	by 	ARL, 	contains 	“no 	detailed, 	comprehensive 	civil 	enforcement 	scheme
providing exclusive federal remedies,” Raaf v. UPS Ground Freight, Inc., No. 6:18-
CV-00976-MC, 2018 WL 4609935, at *3 (D. Or. Sept. 25, 2018) (internal quotation
marks and citation omitted), the statute “does not evidence a Congressional intent to
transfer jurisdiction over all preemption claims arising thereunder from state to
federal courts,” City of Rockford v. Raymond, No. 98 C 50353, 1999 WL 218549, at *2
(N.D. Ill. Apr. 14, 1999).
3. The history of the FAAAA also refutes ATS’s argument.
As explained above, see supra Part III.A.2, the complete preemption doctrine
is inapplicable here because the FAAAA’s text does not create any cause of action that
“both replaces and protects the analogous area of state law,” Mitchell, 28 F.4th at 585,
namely the negligence, vicarious liability, and breach-of-contract claims at issue here
that involve property damage resulting from a motor vehicle accident. The history of
the FAAAA confirms this result.
The FAAAA was enacted in 1994 as part of “a greater push to deregulate
interstate transportation industries.” Ye, 74 F.4th at 457. It was preceded by the
Airline Deregulation Act of 1978 (“ADA”), Pub. L. No. 95-504, 92 Stat. 1705, which
largely deregulated the domestic airline industry, and by the Motor Carrier Act of
1980, Pub. L. No. 96-296, 94 Stat. 793, which extended deregulation to the trucking
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industry. In the FAAAA, “Congress completed the deregulation . . . by expressly
preempting state trucking regulation.” Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S.
251, 256, 133 S.Ct. 1769, 185 L.Ed.2d 909 (2013).
Given its history as a statute extending the ADA’s and the Motor Carrier Act’s
deregulation of transportation industries, it is unsurprising that the FAAAA contains
preemptive 	language 	nearly 	identical 	to 	that 	in 	the 	ADA: 	“a 	State, 	political
subdivision of a State, or political authority of 2 or more States may not enact or
enforce a law, regulation, or other provision having the force and effect of law related
to a price, route, or service of any motor carrier . . . with respect to the transportation
of property.” 49 U.S.C. § 14501(c)(1); see id. § 41713(b)(4)(A) (same with respect to
“air carrier or carrier affiliated with a direct air carrier through common controlling
ownership when such carrier is transporting property by aircraft or by motor
vehicle”). Because FAAAA Section 14501(c)(1) tracks the ADA, courts analyze the two
provisions similarly. See Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 370,
128 S.Ct. 989, 169 L.Ed.2d 933 (2008).4
Although 	the 	Fifth 	Circuit 	has 	not 	yet 	addressed 	whether 	the 	FAAAA
completely preempts state law, it has addressed and rejected this argument in regard
to the ADA’s preemption provision, which FAAAA Section 14501(c)(1) mirrors.
Specifically, the Fifth Circuit has held that the ADA’s preemption clause does not
provide 	federal 	question 	jurisdiction 	under 	the 	complete 	preemption 	doctrine.
See Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922, 925–26 (5th Cir. 1997)
4 FAAAA Section 14501(b)(1) also tracks the language of the ADA. Accordingly, there
is no reason to treat it differently than Section 14501(c)(1) in this analysis.
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(explaining that the ADA’s text and legislative history show “no evidence that
Congress intended the federal courts to have exclusive subject matter jurisdiction
over the [ADA’s] preemption defenses”) (quoting Musson Theatrical, Inc. v. Fed.
Express Corp., 89 F.3d 1244, 1253 (6th Cir. 1996), amended on denial of reh’g,
No. 95–5120, 1998 WL 117980 (6th Cir. Jan. 15, 1998)); see also Am. Airlines, Inc. v.
Wolens, 513 U.S. 219, 232, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995) (observing that,
unlike ERISA, the ADA “contains no hint” that it is intended to channel civil actions
into federal courts). For the same reason, the FAAAA, which uses the same language
as the ADA, does not completely preempt state-law claims. See Merrill Lynch, Pierce,
Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 85, 126 S.Ct. 1503, 164 L.Ed.2d 179 (2006)
(“[W]hen judicial interpretations have settled the meaning of an existing statutory
provision, repetition of the same language in a new statute indicates, as a general
matter, the intent to incorporate its . . . judicial interpretations as well.”) (cleaned up).
* 	* 	* 	*
Complete preemption occurs only when a federal statute has “extraordinary
preemptive power.” Griffioen v. Cedar Rapids and Iowa City Ry. Co., 785 F.3d 1182,
1189 (8th Cir. 2015) (citation omitted). “The ultimate touchstone guiding preemption
analysis is congressional intent.” Id. (internal quotation marks and citation omitted).
The text and history of the FAAAA, as well as controlling Supreme Court and Fifth
Circuit precedent, confirm that the Act does not support application of the complete
preemption doctrine, particularly as to the state-law claims at issue in this lawsuit.5
5 	ATS urges the Court to follow the decisions of certain district courts that have
addressed complete preemption under purportedly similar circumstances. But the opinions
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B. Grable Doctrine
1. The doctrine does not apply when a federal statute or regulation is
invoked as a defense.
ATS has also argued in the alternative that this case raises a significant
federal issue that creates federal jurisdiction under the Grable doctrine. This
argument also fails.
Grable stands for the proposition that, “in certain cases federal-question
jurisdiction will lie over state-law claims that implicate significant federal issues.”
545 U.S. at 312. Grable applies if: “(1) resolving a federal issue is necessary to
resolution of the state-law claim; (2) the federal issue is actually disputed; (3) the
federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of
federal and state judicial responsibilities.” The Lamar Co., L.L.C. v. Miss. Transp.
Comm’n, 976 F.3d 524, 529 (5th Cir. 2020) (internal quotation marks and citations
omitted). As the Fifth Circuit has observed, “[t]hese conditions are difficult to meet.”
Mitchell, 28 F.4th at 588.
relied upon by ATS are unpersuasive. For example, ATS points to Gillum v. High Standard,
LLC, No. SA-19-cv-1378-XR, 2020 WL 444371 (W.D. Tex. Jan. 27, 2020). However, as several
courts have noted, “[i]n Gillum, the court ‘did not undertake the Fifth Circuit’s complete
preemption analysis and instead appeared to evaluate ordinary preemption.’” Ubaldo v. F&A
Border Transp., LLC, No. EP-24-CV-47-KC, 2024 WL 1904545, at *4 (W.D. Tex. May 1, 2024)
(quoting Malone v. Russell, No. 3:23-cv-1, 2023 WL 3854265, at *3 (N.D. Tex. June 6, 2023)
(citation omitted)); accord Gregg v. Rodriguez, No. 23-cv-1031, 2023 WL 4053590, at *4
(D. Kan. June 16, 2023) (observing that Gillum was “based on an ordinary preemption
analysis and courts have declined to find the decision persuasive on that basis”); Est. of
Wray v. Kennedy Bros. Logistics, Inc., No. 5:22-cv-70, 2022 WL 16550315, at *4 (E.D.N.C.
Oct. 31, 2022) (“Gillum’s analysis, however, fails to distinguish between complete preemption
and ordinary preemption, and draws upon ordinary preemption principles in its complete
preemption analysis.”). ATS also cites Zamorano v. Zyna LLC, No. SA-20-cv-151-XR,
2020 WL 2316061 (W.D. Tex. May 11, 2020), but Zamorano adopted Gillum’s complete
preemption analysis and thus suffers from the same flaw.
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The Fifth Circuit has also explained that Grable is applied “in the shadow of
the well-pleaded complaint rule.” Id. (citation omitted). Accordingly, courts look to
the face of a plaintiff’s well-pleaded complaint to determine whether the issues it
raises implicate Grable. Id. Only a “special and small” category of cases can satisfy
these requirements. Id. (internal quotation marks and citations omitted). “The type
of claim that creates a federal question under Grable is typically a state-law claim
premised on some component of federal law.” Id. Thus, for example, a state-law
negligence claim creates a federal question when it is premised on the existence of a
duty established by federal law. Id.
ATS’s invocation of the FAAAA’s preemption provisions fails to implicate
Grable because the relevance of these provisions is purely defensive. When a federal
issue is raised “[a]s a defense, it does not appear on the face of a well-pleaded
complaint.” Metro. Life Ins., 481 U.S. at 63 (citation omitted). Here, ATS argues that
Woodworks “seeks to superimpose state negligence principles” on licensed brokers,
and points to 49 U.S.C. § 14501(c)(1) as a “disputed” federal issue in the case because
the statute bars certain claims against freight brokers like ATS. (Dkt. #11 at 8–9).
But unlike a paradigmatic Grable case in which a state-law claim is premised on
federal law, see Mitchell, 28 F.4th at 588, Woodworks does not allege any cause of
action premised on 49 U.S.C. § 14501(c)(1), or any other portion of the FAAAA.
Instead, ATS alone invokes the FAAAA, and specifically 49 U.S.C. § 14501(c)(1), as a
defensive bar to Woodworks’s lawsuit.
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Given that the federal issues asserted by ATS under the FAAAA are neither
raised nor disputed on the face of Woodworks’s claims for negligence, vicarious
liability, or breach of contract, Grable does not apply.6
2. The doctrine does not apply simply because a federal statute or
regulation may play a role in the case.
The last question is whether the fact that federal regulations and standards,
such as 49 U.S.C. § 14501(c)(1), may play a role in this case means that Grable is
satisfied and federal question jurisdiction is present. The answer is no. State-law
claims that merely implicate federal laws or regulations do not establish federal
question jurisdiction. Ubaldo, 2024 WL 1904545, at *5; see also Longitude 150 LLC v.
McGee, No. 22-cv-2181, 2022 WL 16942239, at *4–5 (W.D. La. Oct. 27, 2022). As the
Fifth Circuit has explained, “a claim does not arise under the law of the United States
pursuant to either sections 1331 or 1337 if the relief sought is based entirely upon a
state cause of action in which [federal laws or] regulations are used merely as further
evidence of the right to recover under state law.” Till v. Unifirst Fed. Sav. & Loan
Ass’n, 653 F.2d 152, 155 n.2 (5th Cir. Unit A 1980) (citations omitted); see also Am.
Airlines, Inc. v. Sabre, Inc., No. 11-cv-488, 2011 WL 3468418, at *6 (N.D. Tex. Aug. 4,
2011), aff’d, 694 F.3d 539 (5th Cir. 2012) (noting that the “fact that a federal standard
is to be referenced by a state court in determining whether there has been a state-
6 Defendant ATS contends that 28 U.S.C. § 1337, which gives federal courts original
jurisdiction over “any civil action or proceeding arising under any Act of Congress regulating
commerce or protecting trade and commerce against restraints and monopolies,” also
supports removal. However, this argument fails for the same reasons Grable does not apply.
See Ubaldo, 2024 WL 1904545, at *6 n.4.
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law violation” does not “cause[ ] a state-law claim to ‘necessarily raise a stated federal
issue.’” (quoting Grable, 545 U.S. at 314)).
The Seventh Circuit’s decision in Bennett v. Sw. Airlines Co., 484 F.3d 907
(7th Cir. 2007) (Easterbrook, J.), is particularly instructive on the question of
whether the involvement of federal regulatory standards in the resolution of state-
law claims means that such claims arise under federal law. In Bennett, the court
noted that the Supreme Court has made clear that the presence of a contested
federal issue in a state lawsuit, “even an important one, usually is insufficient for
§ 1331 jurisdiction.” Id. at 909. The court pointed to Merrell Dow Pharmaceuticals
Inc. v. Thompson, 478 U.S. 804, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986), as a good
example. In that case, the plaintiff alleged that a drug approved for sale by the Food
and Drug Administration was inadequately labeled as a matter of federal law, and
that this shortcoming should lead to recovery in tort under state law. The drug’s
manufacturer argued that this claim arose under federal law because the adequacy
of the label must be assessed under federal substantive standards. The Supreme
Court granted the premise—that a court must apply federal law to determine
whether the drug had been labeled properly—but denied the conclusion that this
made the plaintiff’s claim “arise under” federal law. Instead, the Supreme Court
concluded that, “[w]hether poor labeling supports recovery, and if so what damages
are appropriate, are matters of state law that belong in state court.” Bennett, 484 F.3d
at 909.
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As then-Chief Judge Easterbrook explained in Bennett, the Supreme Court
reached a different result in Grable because that case involved a state proceeding
that “amounted to a collateral attack on a federal agency’s action.” Id. Grable
concerned the IRS’s seizure of a parcel of Grable’s land, which it then sold and applied
the proceeds to Grable’s taxes. Years later, Grable filed a quiet-title action under state
law, maintaining that it should be confirmed as the owner of the parcel of land
because the IRS’s notice did not meet federal requirements. Under the circumstances,
the Grable court concluded that “such a claim arises under federal law because, apart
from the procedural vehicle (a quiet-title action), there was nothing in it but federal
law, with the potential to affect the national government’s revenues.” Id. at 910. In
sum, because of Grable’s unusual procedural posture a federal forum was considered
appropriate for litigation “arising from a federal agency’s performance of duties under
federal law, doubly so given the effect on the federal Treasury.” Id.
The Bennett court went on to explain that any argument that Grable somehow
brings within Section 1331 “all actions in which federal law may play an important
role” was expressly rejected by the Supreme Court in Empire Healthchoice Assurance,
Inc. v. McVeigh, 547 U.S. 677, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). Id. at 910. In
Empire Healthchoice, the administrator of a health insurance program for federal
employees filed suit in federal court seeking to recover from an insured who had
settled a tort claim and failed to turn over any of the proceeds as required by the
policy’s subrogation clause. The administrator asserted that, because the policy’s
terms, including the reimbursement requirement at issue, had been prescribed by
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federal regulation, the claim for reimbursement itself arose under federal law. The
Supreme Court disagreed, however, and held that the claim arose under the contract,
and, as in Merrell Dow, “the influence of federal law on the outcome of a contract (or
tort) suit is not enough to support [ ] arising-under jurisdiction.” Bennett, 484 F.3d
at 910.
Judge 	Easterbrook 	applied 	the 	lessons 	of 	Merrell 	Dow 	and 	Empire
Healthchoice to the circumstances before the Seventh Circuit in Bennett. The case
arose from an accident that occurred when a Southwest Airlines jet tried to land at
Chicago’s Midway airport during a snowstorm. The plane was unable to come to a
stop on the runway and smashed through an airport barrier, coming to rest in a city
street and causing a fatality and other injuries. Following the accident, a lawsuit was
brought in state court asserting tort claims and was removed to federal court on the
theory that the plaintiffs’ claims arose under federal law. Id. at 908. The question
before the court was “whether plaintiffs’ claims arise under federal law” because
federal aviation standards would play “a major role” in the state-law negligence
claims made against the air carrier (Southwest), the manufacturer of the plane
(Boeing), and the airport operator (Chicago). Id.
The Bennett court held that federal question jurisdiction was absent, noting
that 	the 	similar 	circumstances 	of 	Merrell 	Dow 	and 	Empire 	Healthchoice, 	as
distinguished from Grable’s unusual posture, governed its reasoning. As in Merrell
Dow and Empire Healthchoice, Bennett presented “a fact-specific application of rules
that come from both federal and state law rather than a context-free inquiry into the
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meaning of a federal law.” Id. at 910. The court noted that “[s]tate issues, such as the
amount of damages, may well predominate,” and that, unlike Grable, there was no
challenge to the validity of any federal agency’s or employee’s action. Id. Notably, the
Bennett 	court 	rejected 	the 	argument 	that 	the 	importance 	of 	federal 	aviation
standards in the case created federal question jurisdiction. Id. at 912 (“That some
standards of care used in tort litigation come from federal law does not make the tort
claim one ‘arising under’ federal law.”).
The same reasoning applies here and leads to the same conclusion. To begin
with, Woodworks has not invoked the referenced provisions of the FAAAA in its
complaint, ATS has done so as a defensive measure—invoking federal standards as
part of its preemption argument. When a federal issue is raised “[a]s a defense, it
does not appear on the face of a well-pleaded complaint.” Metro. Life Ins., 481 U.S.
at 63 (citation omitted). Given that the federal issues asserted by ATS under the
FAAAA are neither raised nor disputed on the face of Woodworks’s complaint, Grable
plainly 	does 	not 	apply. And 	even 	assuming 	arguendo 	that 	federal 	regulatory
standards applicable to motor carriers and brokers will play an important role in this
case, as ATS suggests, federal question jurisdiction remains absent. As in Merrell
Dow, Empire Healthchoice, and Bennett, the resolution of Woodworks’s claims in this
case also will turn on the fact-specific application of state law.
C. Costs and Expenses
When a case is remanded, the court may order the removing party to pay “just
costs and any actual expenses, including attorney fees, incurred as a result of the
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removal.” 28 U.S.C. § 1447(c). The Supreme Court has clarified that, absent unusual
circumstances, courts may award attorney’s fees under Section 1447(c) “only where
the removing party lacked an objectively reasonable basis for seeking removal.”
Martin v. Franklin Cap. Corp., 546 U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547
(2005). This inquiry should take into consideration “the desire to deter removals
sought for the purpose of prolonging litigation and imposing costs on the opposing
party, while not undermining Congress’ basic decision to afford defendants a right to
remove as a general matter, when the statutory criteria are satisfied.” Id. at 140.
While unsuccessful, ATS had an objectively reasonable basis for seeking
removal—that the FAAAA potentially preempts Woodworks’s state-law claims.
Therefore, the Court will not award costs or expenses to Plaintiff.
IV. CONCLUSION
It is therefore ORDERED that Plaintiff’s Amended Motion to Remand,
(Dkt. #10), is GRANTED. This case is REMANDED to the 59th Judicial District
Court in Grayson County, Texas.
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