Drawhorn v. Qwest Communications International, Inc.Drawhorn v. Qwest Communications International, Inc.
MEMORANDUM OPINION
Before the court is Paul D. Drawhorn’s, Jeanatte Mazzu’s, Robert C. Barr’s and Barbara S. Barr’s, as well as all others similarly situated .(collectively referred to as the “Plaintiffs”) Motion to Remand. The court, after reviewing the Motion, the responses in opposition, the pleadings of record, and hearing the arguments of the parties is of the opinion that this Motion should be DENIED.
I. FACTS AND PROCEEDINGS
The plaintiffs in this case are owners of two tracts of land in Texas and Colorado, and seek to be class representatives of owners of land throughout the United States whose property is or was subject to easements by railroads, pipelines, energy or other utility companies. The plaintiffs allege that the defendants have installed or maintained fiber optic cable on the land owned by the plaintiffs. The plaintiffs further allege that the defendants have main *557 tained these cables on their property without obtaining the consent of the plaintiffs and without just compensation.
The defendants are the operators of a nationwide network of fiber optic cables that are used for the high-speed transmission of telephone messages and other electronic data. Pursuant to agreements with railroad companies made in 1991, the defendants have been authorized to construct and operate their fiber optic cables on railroad and utility rights of way located throughout the country.
The plaintiffs have alleged that the easements owned by the railroads and utilities did not include the right to permit the defendants to install fiber optic networks. Accordingly, the plaintiffs have brought actions for trespass, unjust enrichment, slander of title, and declaratory relief.
This case was originally filed as a nationwide class action in the District Court of Jefferson County, Texas, 172nd Judicial District on May 13, 1999. On July 6, 1999, pursuant to
Plaintiffs, on the other hand, contend that any federal issues raised in this case will be the result of a defense thus precluding federal question jurisdiction under the longstanding principle that federal defenses do not give rise to federal jurisdiction.
See, e.g., Rivet v. Regions Bank of Louisiana,
II. DISCUSSION
A. General Principles
The Constitution gives federal courts the power to hear cases “arising under” the Constitution, laws, and treaties of the United States.
Even though there is not a set standard for determining whether a claim
*559
involves a federal question, there are some guiding principles which aid courts in their evaluations of claims. For instance, in removal cases the defendant bears the burden of establishing federal jurisdiction over the state-court suit.
Carpenter v. Wichita Falls Indep. Sch. Dist.,
B. Federal Jurisdiction Exists if the Plaintiffs’ Well-Pleaded State Law Claims Contain a Substantial Federal Issue.
It is a well settled principle that the plaintiff is the master of her complaint.
Healy v. Sea Gull Specialty Co.,
In this case, plaintiffs’ complaint on its face is based on state law. The plaintiffs’s complaint brings state law causes of actions in trespass, unjust enrichment, slander of title, and declaratory relief. Nevertheless, this court’s inquiry is not at an end because the Fifth Circuit has held that district courts “should inspect the complaint carefully to determine whether a federal claim is necessarily presented, even if the plaintiff has couched his pleading exclusively in terms of state law. The reviewing court looks to the substance of the complaint, not the labels used in it.”
In re Carter,
The Supreme Court first recognized this form of the artful pleading doctrine in
Smith v. Kansas City Title & Trust Co.,
C. Federal Question Jurisdiction Extends to State Law Claims Involving Substantial Federal Issues.
Relying on cases like
Smith,
numerous federal courts have pierced through state law complaints to determine whether the causes of action plead involved substantial federal issues.
See, e.g., U.S. Valves Inc. v. Dray,
The defendants here maintain that each one of the plaintiffs’ claims will turn on the interpretation of various federal railway rights of way statutes.
See, e.g.,
A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws, for a suit does not so arise unless it really and substantially involves a dispute or controversy respecting the validity, construction or effect of such a law, upon the determination of which the result depends. This is especially so of a suit involving rights to land acquired under a law of the United States. If it were not, every suit to establish title to land in the central and western States would so arise, as all titles in those States are traceable back to those laws.
Id.
(emphasis added);
see also Shoshone Mining Co. v. Rutter,
1. Plaintiffs Request for a Declaratory Judgment Involves Substantial Issues of Federal Law.
Plaintiffs asked for declaratory relief in their complaint. Specifically, the plaintiffs requested that the “Court de *562 clare that Qwest has no legal rights to exercise dominion and control over the right of way land or any other interest in the right of way land.” Plaintiffs’ Nationwide Class Action Petition at ¶ 58. In a part of plaintiffs’ petition labeled “Facts Applicable to All Counts,” the plaintiffs asserted that Qwest did not have a valid easement permitting them to install fiber optic cable over the plaintiffs’ land. Id. at ¶ 18(i), 26, 30, 31, 35 and 38. In order to prove this, Qwest’s rights will have to be determined. This undoubtedly puts the interpretation of the federal railroad statutes at issue since Qwest takes whatever rights the railroads had under Qwest’s 1991 agreement to use the railroads’ rights of way. 9
The chain of title that these plaintiffs will have to disprove in order to recover is two-fold. The first link is between the United States of America and the Railroads — due to the railroad statutes granting railroad companies rights of way over public lands. The second link is between the railroads and Qwest. To declare the rights of all the parties in this suit there is no way around the fact that a court is going to have to interpret the various federal railroad statutes and that this is going to be a necessary and substantial part of the suit. Plaintiffs cannot walk into court and ask to have their rights declared without the court interpreting the federal statutes since the railroads’ rights derive from these statutes. This is not a matter of defense since plaintiffs must prove their chain of title does not contain an easement to Qwest, which allegedly comes from the railroads, in order to succeed under then-action for declaratory judgment. Therefore, the rights of all the parties is a necessary and substantial part of the action for declaratory judgment. 10
2. Plaintiffs’ Well-Pleaded Claim for Unjust Enrichment Involves a Substantial Issue of Federal Law.
Under Texas law, a cause of action for unjust enrichment requires the plaintiffs to allege and prove that the defendants have obtained a benefit from another by fraud, duress, or taking an undue advantage.
Texas Carpenters Health Benefit Fund v. Philip Morris, Inc.,
In order to succeed on their claim for unjust enrichment, the plaintiffs must demonstrate that Qwest has “wrongfully secured a benefit” by installing its fiber optic cables on the easements it has acquired from the railroad companies. The easements at issue in the case
sub judice
were given to the railroad companies by federal statutes.
See, e.g.,
Plaintiffs’ counsel has contended that any federal issues that arise in this case are the result of a defense. However, this analysis ignores the fact that in order for the plaintiffs’ to succeed on any one of their claims they must establish that the federal railroad statutes did not grant the railroads the right to assign their easements to Qwest. 11 For the claim of unjust enrichment, the plaintiffs must prove by a preponderance of the evidence that Qwest has “wrongfully secured a benefit” to which it was not entitled. In order to do this, plaintiffs must prove that the railroads were not allowed to assign their easements to Qwest under the federal railroad statutes. Thus, it is apparent that federal law is a necessary and substantial part of this suit.
3. Plaintiffs’ Claim for Slander of Title Involves a Substantial Issue of Federal Law.
Similarly, the plaintiffs’ claim for slander of title also involves a substantial issue of federal law. Slander of title is defined under Texas law as a false and malicious statement made in disparagement of a person’s title to property which causes him special damage.
Hill v. Heritage Resources, Inc.,
Accordingly, to prevail on then-case for slander of title, the plaintiffs are required to allege and prove that the defendants’ assertion that it has the right to install its fiber optic cable in the railroads’ right of way was false. The federal issue of whether the railroads could give the defendants the right to install a fiber optic cable thus arises as a necessary part of plaintiffs’ claim for slander of title.
See Additive Controls,
D. The Federal Issues in a State Law Cause of Action must be Essential Elements of the “Well-Pleaded Complaint” and Not a Defense.
As mentioned earlier, the mere presence of a federal issue in this lawsuit is, by itself, insufficient to confer jurisdiction.
Shoshone Mining Co. v. Rutter,
The plaintiffs have repeatedly characterized the federal issues involved in this suit as defenses. The court does not see them as so. First of all, the interpretation of the federal statutes, as detailed above, is a necessary and substantial part of the plaintiffs’ own causes of action. Second, the federal issues involved in this case are not similar to other claims which have been found to be defenses.
For instance, in
Oklahoma Tax Comm’n v. Graham,
As set out earlier in this opinion, in Smith a shareholder sought to enjoin the corporation from investing pursuant to a statute the shareholder claimed was unconstitutional. Establishing the constitutionality of the statute was a defense in the sense that it defeated the plaintiffs case in chief. Nevertheless, at the same time, alleging the wrongfulness of the defendant’s conduct was an essential element of the plaintiffs case as well. The plaintiff demonstrated wrongfulness by alleging the unconstitutionality of the federal statute upon which the defendant relied. Here, similarly, the plaintiffs allege that Qwest’s intrusion unto their lands is unlawful. In order to prove this, federal statutes must be interpreted. The interpretation of these statutes is not an incidental part of *565 the plaintiffs’ cause of action since the plaintiffs’ are seeking to certify a nationwide class. The court takes judicial notice that many of the lands west of the 100th parallel are subject to these railroad easements. 13 Thus, the federal issue involved in this case is substantial.
The plaintiffs cite
Burat’s Heirs v. Board of Levee Comm’rs.,
first, questions as to the title and rights to land within a state are of primary concern to that state and are not the customary business of federal courts; second, the fact that title derives from an Act of Congress or a United States patent does not raise a federal jurisdictional question; and third, federal jurisdiction must appear from those allegations necessary to state plaintiffs’ own claim and cannot rest upon the assertion that the defense raises or will raise a federal question.
Id. at 1338.
After noting these principles, the Fifth Circuit held that there was no federal question jurisdiction because there were not any “substantial federal issues, the determination of which would be decisive of plaintiffs’ claim.” Id. at 1341-42.
Burat is entirely consistent with this court’s determination that federal jurisdiction exists' in the case sub judice. The Burat heirs claimed under a federal patent, but the case presented no real issue about the' scope or validity of that patent. Id. at 1338, 1340. In Burat, there was nothing more than a federal patent that was the foundation of plaintiffs’ title in fee simple. There was no dispute over the proper interpretation of that patent. In this case, the interpretation of the statutes granting the rights of way to the railroads represents a substantial dispute between the parties. See Plaintiffs’ Pet. at ¶ 18(i), 19(e), 25, 26, 29-31, 35-38. Unlike the issues in Burat, the issues here are substantial and would be decisive of the plaintiffs’ claims. 14
Furthermore, in Burat the plaintiffs only had to plead their own title under the Louisiana petitory action.' This is not so here. In order for the plaintiffs to prevail in this suit under their claims for unjust enrichment, slander of title, and declaratory judgment the plaintiffs must negate Qwest’s claim' of title. Thus, a federal issue is necessarily raised since the federal statutes must be interpreted to determine *566 whether Qwest has unlawfully intruded upon plaintiffs’ lands.
The presence of the substantial federal issue in this case is similar to the one found in
Hidalgo County Water Control and Improvement Dist. v. Hedrick,
Similarly, in this case, the resolution of plaintiffs’ state law claims will turn on the interpretation of the federal railroad right of way statutes. Neither the plaintiffs’ rights nor Qwest’s rights in the land at issue here can be determined without interpreting the various federal railway statutes. From an early time, the Supreme Court has held that “a case ... may truly be said to arise under the Constitution or a law of the United States, whenever its correct decision depends on the construction of either.”
Cohens v. Virginia,
III. CONCLUSION
In summary, removal is proper on the basis of federal question jurisdiction. The claims for unjust enrichment, slander of title, and declaratory judgment, even if well-pleaded, all raise substantial issues of federal law in otherwise state law causes of action. The fact that title at dispute in a suit originally derives from a United States patent does not mean that there is federal question jurisdiction. The federal issues must be a necessary and substantial part of the plaintiffs’ “well-pleaded complaint” as they are here. The federal issues in this case are not defenses. Rather, they are decisive issues to many of the potential class members claims thus giving this court federal question jurisdiction.
Notes
.
(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded.
(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
(c) Whenever a separate and independent claim or cause of action within the jurisdiction conferred bysection 1331 of this title is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which State law predominates.
(d) Any civil action brought in a State court against a foreign state as defined in section 1603(a) of this title may be removed by the foreign state to the district court of the United States for the district and division embracing the place where such action is pending. Upon removal the action shall be tried by the court without jury. Where removal is based upon this subsection, the time limitations of section 1446(b) of this chapter may be enlarged at any time for cause shown.
. The petition states in pertinent part:
"Qwest knew or should have known that [the railroads' grant of fiber optic cable rights] were wholly ineffective because the [railroads] had no legal interest in some or all of the right of way land that it could transfer to Qwest for fiber optic or other telecommunications cable purposes." Plaintiffs’ Nationwide Class Action Petition at ¶ 18(i).
Qwest entered into "agreements with other entities which had no rights, to negotiate access to and the use of Class members’ land for the installation and construction of Qwest's network. Instead, Qwest or its agents entered into agreements with right of way users for the purported, but wrongful access to the right of way land." Id. at ¶ 26.
"By contract and law railroad rights of way are limited, at the time of acquisition and today, exclusively to railroad purposes.... Because the railroad rights of way are limited exclusively to railroad purposes, the railroad companies that held or hold the railroad rights of way have never held, and cannot lease, license, convey, or otherwise transfer or create any rights in, under, over or across railroad right of way land for purposes other than railroad purposes. The construction of Qwest's network is not such a purpose.” Id. at ¶¶ 30-31.
"Qwest knew or should have known that the railroad companies ... that held merely a right of way easement for limited purposes . could not grant Qwest the right to install, maintain, or operate fiber optic cable..." Id. at ¶ 35.
"Qwest has not obtained a valid easement, license, or legal occupancy permitting Defendant to install or operate fiber optic cable through the land of the members of the class, nor has it obtained any other valid right in the land of the members of the class, whether pursuant to the aforesaid agreements with [the railroads] or otherwise.” Id. at ¶ 38.
. The current version can be found at
. See Currie, The Federal Courts and the American Law Institute (Part II), 36 U. CHI. L. REV. 268 (1969) (“One difficulty with federal question jurisdiction is that nobody knows how to define it.”).
. There are three separate categories of cases in which federal courts may deviate from the well-pleaded complaint rule. All three of these categories fall under the "artful pleading” doctrine. The first category of cases are the substantial-federal-question cases discussed in this opinion. The second category are the complete preemption cases.
See Avco v. Aero Lodge No. 735, Int'l Assn. of Machinists,
. The Supreme Court has narrowed
Smith
by holding that the mere incorporation of a federal standard into a state common law cause of action does not give rise to federal question jurisdiction.
Merrell Dow Pharmaceuticals, Inc. v. Thompson,
. The court is aware of the fact that many of these cases deal with the patent jurisdictional statute,
. In
Bell v. Hood,
. "[I]t is now quite settled that federal jurisdiction exists also of a suit for a declaratory judgment that the other party does not have a right under federal law he is claiming. The federal nature of the claim appears on the face of the complaint for a declaratory judgment and the historical test is thought satisfied since the precise issue could have been litigated in a coercive action in federal court by the party claiming the federal right, and only the parties have been transposed.” 13B Wright, Miller & Cooper,
Federal Practice and Procedure: Jurisdiction
§ 3566 at 93-94 (2d ed.1984 and 1999 supp.);
see also Franchise Tax Board,
. Because the court has concluded that at least 3 of the causes of action involve substantial federal questions, it is not necessary to analyze whether the claim for trespass does. At the very least, that claim is subject to this court’s supplemental jurisdiction.
. At hearing on this motion, Plaintiffs’ counsel continuously evaded the question of whether or not a court would be required to interpret federal statutes in order to decide this case. See Trans, at 28-29.
. The defendants will surely assert that the railroad statutes dealt with telegraph lines and other "communications” thus meaning that Congress intended the railroad companies to be able to grant their easements to fiber optic cable companies.
See, e.g., Mellon v. Southern Pac. Transp. Co.,
. The defendants have estimated that at least 40% of the lands at issue in this case could be subject to the various railroad statutes.
. Supreme Court cases like
Gully v. First Nat’l Bank in Meridian, 299
U.S. 109,