61 F. Supp. 3d 1213
D.N.M.2014Background
- Tres Lotes LLC bought and began renovating a building whose south wall abuts BNSF Railway property; access/egress to part of the property requires traversing BNSF land.
- A BNSF representative (Bryant) allegedly told Tres Lotes they could use a strip of BNSF pavement for access; later BNSF revoked permission and BNSF employees told workers they were trespassing.
- Tres Lotes alleges reliance on Bryant’s representations and claims to have spent or committed over $221,000; it filed suit in New Mexico state court seeking an injunction recognizing an easement (about a 25-foot paved strip adjacent to an active spur) and, alternatively, monetary damages capped at $74,000.
- BNSF removed the action to federal court, asserting federal-question jurisdiction via complete preemption under the Interstate Commerce Commission Termination Act (ICCTA) and, alternatively, diversity jurisdiction (arguing the injunction’s value exceeds $75,000).
- The district court considered whether the ICCTA completely preempted Tres Lotes’s state-law property/contract claims and whether the plaintiff’s stated $74,000 cap could be disregarded to satisfy the federal amount-in-controversy requirement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ICCTA completely preempts Tres Lotes’s state-law claims (supporting removal under federal-question jurisdiction) | Tres Lotes argues its claims are state-law property/contract/equitable claims, not displaced by federal rail regulation | BNSF argues ICCTA’s exclusive jurisdiction over rail transportation and related facilities completely preempts state claims touching tracks/facilities | Court held ICCTA does not completely preempt these claims; they are routine property/contract disputes whose effect on rail operations is incidental, so no federal-question jurisdiction |
| Whether the amount in controversy exceeds $75,000 for diversity jurisdiction despite plaintiff’s $74,000 cap | Tres Lotes expressly capped recovery at $74,000 and limited injunctive relief to avoid >$74,000 | BNSF contends the requested injunction would cost BNSF >$75,000, so amount-in-controversy is met | Court held the plaintiff’s unambiguous cap controls; amount-in-controversy not met and diversity jurisdiction fails |
Key Cases Cited
- Caterpillar Inc. v. Lewis, 519 U.S. 61 (U.S. 1996) (removal statute and limited federal jurisdiction principles)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) (complete-preemption doctrine explanation)
- Felix v. Lucent Techs., Inc., 387 F.3d 1146 (10th Cir. 2004) (application of complete-preemption principles)
- Emerson v. Kan. City S. Ry. Co., 503 F.3d 1126 (10th Cir. 2007) (ICCTA preemption limits; incidental effects insufficient)
- Elam v. Kan. City S. Ry. Co., 635 F.3d 796 (5th Cir. 2011) (distinguishing direct regulation of rail operations from incidental impacts)
- McPhail v. Deere & Co., 529 F.3d 947 (10th Cir. 2008) (defendant bears burden to show amount-in-controversy when complaint omits figure)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (U.S. 1938) (plaintiff may limit recovery to avoid federal jurisdiction)
- Lantec, Inc. v. Novell, Inc., 306 F.3d 1003 (10th Cir. 2002) (verified complaint may be treated as affidavit for jurisdictional facts)