CALSTAR v. State Compensation Ins. Fund
636 F.3d 538
| 9th Cir. | 2011Background
- CALSTAR provides air-ambulance services to employees covered by self-insured or workers’ comp regimes and alleges underpayment by Employers and insurers.
- CALSTAR filed two state-law claims in the Eastern District of California: quantum meruit, unjust enrichment, and open book account, plus a declaratory judgment on FAA preemption of a state air-ambulance fee schedule.
- Defendants moved to dismiss for lack of federal subject-matter jurisdiction, arguing no federal question and no independent basis for jurisdiction.
- The district court dismissed under Rule 12(b)(1) for lack of jurisdiction, and CALSTAR appealed.
- The Ninth Circuit affirmed, reiterating the well-pleaded-complaint rule and holding there is no arising-under jurisdiction, including for declaratory relief against private parties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal jurisdiction lies under arising-under doctrine. | CALSTAR argues Grable allows preemption issues to confer jurisdiction. | CALSTAR’s claims are state-law and rely on a potential federal defense, not a federal element. | No arising-under jurisdiction; well-pleaded complaint rule applies. |
| Whether declaratory relief claim creates federal jurisdiction. | Shaw/Supremacy-Clause basis could confer jurisdiction. | Declaratory-judgment act is procedural and cannot create jurisdiction against private parties. | No federal jurisdiction for declaratory judgment against private parties. |
| Whether Phillips Petroleum preemption framework applies to create jurisdiction. | Federal preemption would render state-law claims federal in nature. | Preemption defenses do not convert state-law claims into federal questions; only the defense existence is insufficient. | Phillips Petroleum controls; no arising-under jurisdiction. |
Key Cases Cited
- Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 545 U.S. 308 (U.S. 2005) (limits arising-under to cases meeting well-pleaded rule and substantial federal issue)
- Phillips Petroleum Co. v. Texaco, Inc., 415 U.S. 125, 415 U.S. 125 (U.S. 1974) (federal issue must be an element of the state claim, not a defense)
- Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (U.S. 1987) (well-pleaded complaint rule precludes federal-question jurisdiction)
- Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (U.S. 1950) (declaratory judgments are procedural; do not by themselves create jurisdiction)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (U.S. 1983) (Ex parte Young extension for state-officials; not applicable to private-party disputes)