ORDER DENYING PLANTIFF’S MOTION FOR REMAND AND GRANTING DEFENDANTS’ MOTIONS TO DISMISS
The Plaintiff, TPS Utilicom Services, Inc. (“TPS”), filed suit in state court for: 1) unfair business practices under California Business & Professions Code § 17200 et seq.; and 2) interference with prospective economic advantage, against the defendant telecommunications companies AT & T Corp., AT & T Wireless PCS Interests, L.L.C., AT & T Wireless PCS, L.L.C., AT & T Communications of California, Inc., AT & T Wireless Services, Inc., AT & T Wireless Services of California, L.L.C. (collectively, “AT & T”), and Alaska Native Wireless, L.L.C. (“ANW”)(“Defendants”). Two of the Defendants— AT & T Communications of California, Inc. and AT & T Wireless Services of California, L.L.C. (“resident defendants”)—are California citizens for purposes of diversity.
The Defendants removed the action on the basis of diversity and federal question jurisdiction through complete preemption. The Plaintiff now seeks to remand the action; the AT & T defendants move to dismiss on grounds of preemption, referral under the doctrine of primary jurisdiction, and failure to state a claim under state law; and the ANW defendant moves to dismiss on those grounds and in the alternative for lack of personal jurisdiction. The AT & T Defendants join ANW’s Opposition to TPS’s motion to remand. ANW joins the AT & T Defendant’s motion to dismiss.
The motions present an intricate question of subject matter jurisdiction. The Court must ascertain its jurisdiction before it can reach any of the AT & T defendants’ arguments for dismissal. 1
*1094 Having considered the papers and arguments presented in this matter, the Court finds that subject matter jurisdiction is not conferred by complete preemption under the Federal Communications Act. However, TPS has fraudulently joined the resident Defendants in an effort to defeat diversity. Accordingly, the Court has subject matter jurisdiction based on diversity, and the Court DENIES the Plaintiffs application for remand.
On the merits the complaint is deficient. The allegation of interference with prospective economic advantage fails on state law grounds. In any event both claims are subject to express and conflict preemption under the FCA. Accordingly, the Court GRANTS the Defendants’ motions to dismiss and dismisses the complaint.
I.Introduction.
This lawsuit concerns a Federal Communications Commission (“FCC”) auction for four hundred twenty two (422) wireless telecommunication spectrum licenses. The auction for a subset of the licenses was limited to “designated entities;” for the remaining licenses subject to open bidding, designated participants benefitted from “auction credits” that improved their bidding positions. The Plaintiff participated in the auction as a designated entity and lost various bids to one of the Defendants, a designated entity named Alaska Native Wireless, L.L.C. (“ANW”). The Plaintiff contends that ANW was a Trojan horse by which AT & T—a majority shareholder of ANW—entered auctions under the guise of a designated entity.
The Plaintiff filed suit in state court against ANW and several AT & T affiliates, as set forth above, alleging unfair business practices and interference with prospective economic advantage. The Plaintiff seeks in excess of $1 billion in damages and restitution. The Defendants removed on the basis of diversity, claiming fraudulent joinder of the resident defendants, and claiming complete preemption under the Federal Communications Act of 1934.
Several motions are now pending before the Court. The AT & T defendants move to dismiss under theories of preemption, failure to state a claim, or in the alternative in conjunction with a FCC referral under the primary jurisdiction doctrine. ANW moves to dismiss for lack of personal jurisdiction. The Plaintiff moves to remand, arguing that the resident Defendants are properly joined and defeat removal on grounds of diversity.
II. Facts.
The underlying facts of this action are extensively discussed in the moving papers. Other than as identified in the analysis there are no material facts in dispute.
III. Analysis.
The Court must ascertain its subject matter jurisdiction before testing either ANW’s challenge to personal jurisdiction, or AT & T’s challenges to the choice of law, the forum or the adequacy of the complaint.
A federal court may exercise removal jurisdiction over a case only if jurisdiction existed over the suit as originally brought by the plaintiff.
See
28 U.S.C. § 1441(a). A strong presumption exists against removal jurisdiction.
See Gaus v. Miles, Inc.,
In this matter the Defendants argue that there is a federal question un *1095 der the doctrine of complete preemption, and diversity under the fraudulent joinder analysis. 2
A. Subject Matter Jurisdiction.
The Court may have subject matter jurisdiction of this action through federal question jurisdiction or diversity. Although the complaint pleads only two state causes of action, AT & T argues that it nonetheless presents a federal question as a function of complete preemption by the Communications Act of 1934, as amended, 47 U.S.C. §§ 151 et. seq (“FCA”). AT & T also argues that this Court has diversity jurisdiction, on grounds that the Plaintiff fraudulently joined the two resident Defendants. TPS, in turn, argues that the Court has no jurisdiction over this action. 3
*1096 The Court finds several of Plaintiffs admissions in the moving papers significant. The Plaintiff admits that “the core issue in this action is whether defendants unfairly and deceptively employed a series of sham corporations and other shell entities—including, among others, AT & T of California and AT & T Wireless of California —to mask the true nature of the entity through which they hoped to acquire wireless telecommunications licenses reserved for small- and minority-owned businesses.” Plaintiffs Mem. in Opp. to Motion to Dismiss (“Pl.Opp.”) at 5. The Plaintiff admits that the gravamen of the complaint is the allegation that ANW, with its partial-AT & T ownership, did not qualify to participate as a designated entity in the relevant auctions. “[The Plaintiff] alleges that defendants raised the prices bid by legitimate entrepreneurs in the small-business auction through unfair manipulation of a series of shell corporations and other entities.” Pl. Opp. at 15, citing Compl. ¶¶ 3, 22-28. “TPS Utilicom and other small companies (and, as a result, consumers) nonetheless have been injured by .defendants’ conduct because Alaska Native’s very participation in Auction No. 35—regardless of any licenses it may receive—raised overall prices in the auction.” Pl. Opp. at 16. The Plaintiff admits that it rests its unfair business practices claim on the Defendants’ entry into Auction No. 35—that such entry was a “business act” for the unfair competition claim, and that the entry.was a violation of the law. Pl. Opp. at 19.
1. There is no complete preemption of state claims by the Communications Act of 1934, as amended.
AT & T argues that the Communications Act of 1934, as amended, 47 U.S.C. §§ 151 et. seq (“FCA”) bars these state claims under 1) express; 2) field; and 3) conflict preemption. As regards its subject matter jurisdiction the Court limits its attention to the question of whether there is complete preemption under the FCA without considering whether the Defendants raise a valid federal preemption defense. 4 A federal preemption defense does not convert state claims into a federal question except in the special case of complete preemption. 5 Preemption alone does not confer removal or federal question jurisdiction.
A. Complete preemption.
Complete preemption is a judicially crafted “independent corollary” to the well-pleaded complaint rule. When the Court concludes “that the pre-emptive force of a statute is so ‘extraordinary’ that it ‘converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’
[Met. Life Ins. Co. v. Taylor,
Complete pre-emption is a narrow doctrine.
See, e.g., Marcus v. AT&T Corp.,
Neither the Supreme Court nor the Ninth Circuit has formulated a precise test to determine whether to apply the complete preemption doctrine to any given federal statute. The Supreme Court has made it clear that the “touchstone of the federal district court’s removal jurisdiction is ... the intent of Congress.”
Met. Life,
Other circuits specify more detailed tests for whether a federal statute completely preempts state law. The Third Circuit, for example, considers: 1) whether the federal statute contains civil enforcement provisions under which the plaintiffs state claims could be brought; and 2) whether the federal statute contains a “clear indication of a Congressional intention to permit removal despite the plaintiffs exclusive reliance on state law.”
Goepel v. National Postal Mail Handlers Union,
*1098 B. There is no Congressional intent to confer removal jurisdiction under the FCA.
1. The contours of FCA preemption.
The FCA expressly preempts any state regulation of rates or market entry into telecommunications. The FCA states that “no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating other terms and conditions of commercial mobile services.” 47 U.S.C. § 332(c)(3)(A).
The FCA includes a savings clause, which provides that “[njothing in this chapter shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.” 47 U.S.C. § 414.
2. The character of § 332(c)(3)(A) preemption.
a. Nonbinding authority.
The Ninth Circuit has not decided whether the express preemption clause at 47 U.S.C. § 332(c)(3)(A) provides complete preemption. 8 Other courts split on the character of *FCA preemption under § 332(c)(3)(A).
The Seventh Circuit holds that § 332(c)(3)(A) completely preempts conflicting state law.
See Bastien v. AT&T Wireless Services, Inc.,
*1099
The Second Circuit reaches the opposite conclusion.
See Marcus v. AT&T Corp.,
The majority of district courts outside the Seventh Circuit that have reached this issue find no complete preemption under a more searching analysis of the Congressional intent underlying 47 U.S.C. § 332(c)(3)(A).
See, e.g., Bryceland v. AT & T Corp.,
b. The FCA lacks Congressional intent to confer removal jurisdiction.
As a matter of first impression the Court looks to the statute for evidence of Congressional intent to confer removal jurisdiction.
See DeGeorge v. United States District Court,
“The first step in ascertaining congressional intent is to look to the plain language of the statute. To determine the plain meaning of a particular statutory provision, and thus congressional intent, the court looks to the entire statutory scheme.”
United States v. Daas,
The FCA does'not expressly confer removal jurisdiction on claims under the Act. 12 The language that “no State or local government shall have any authority to regulate the entry of or the rates charged,” 47 U.S.C. § 332(c)(3)(A)(empha-sis added), only supports the proposition that the FCA preempts state claims within the scope of this provision. The titles of the statutory sections confirm the limited reach of the preemption provision to choice of law rather than extending to removal jurisdiction. Section 332(c) is addressed to “Regulatory treatment of mobile services,” and subsection 3 is titled “State preemption.” See 47 U.S.C. § 332(c).
The Seventh Circuit reads too much into this plain language and interprets the preemption clause as conferring removal jurisdiction. The Defendants argue that the Seventh Circuit properly infers Congressional intent to confer removal jurisdiction because the state courts are included in the recitation of “no State or local government.” See supra note 9. Under that reading' the plain language of § 332(c)(3)(A) strips the state courts of the power to adjudicate claims within the preemptive reach of the FCA.
Even if the language addressed by the Seventh Circuit could support an inference of intent to confer removal jurisdiction, that intent is not so clearly stated as to support complete preemption.
Cf. Goepel,
2. There is diversity jurisdiction and the action as properly removed under § 1441(b), based on exclusion of the citizenship of fraudulently joined resident Defendants.
Ordinarily a resident defendant cannot remove an action.
See
28 U.S.C. § 1441(b)(“[any action not based on a federal question] 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 the action is brought.”). Section 1441(b) does not prevent removal of an action to which the plaintiff fraudulently joins resident defendants.
See Morris v. Princess Cruises, Inc.,
The fraudulent joinder argument is joined in a confusing mix of briefs. Neither the AT & T Defendants’ Motion to Dismiss nor its Reply in Support of the motion to dismiss present argument or evidence relating to the alleged fraudulent joinder of any resident defendants, except insofar as the AT & T Defendants generally challenge the state claims for failure to state a claim against any Defendant. However, the AT & T Defendants join in the Defendant ANW Opposition to TPS’s application for remand.
ANW’s Opposition raises the fraudulent joinder argument, and TPS joins issue with this argument in its Motion to Remand and the Reply in support of the motion to remand. Accordingly, the Court considers whether there is diversity in this action. As described below, TPS fraudulently joined two resident defendants.
A. Citizenship of the ‘resident’ defendants.
The AT & T Defendants AT & T Communications of California, Inc. and AT & T Wireless Services of California, L.L.C. are resident defendants.
The citizenship of a corporation is both the place of incorporation and its principle place of business. .See 28 U.S.C. ¶ 1332(c)(1). The parties agree that AT & T Communications of California, Inc., has a principal place of business in California. See, e.g., Complaint ¶ 9; Addendum to Civil Cover Sheet item IX (stating places of incorporation and headquarters of Defendants).
A limited liability company (“L.L.C.”) is treated like a partnership for the purpose of establishing citizenship under diversity jurisdiction.
See Cosgrove v. Bartolotta,
The complaint neither .identifies nor.aL leges the citizenship of all partners to AT &, T Wireless Services . of California, L.L.C.—or any Defendant L.L.C.’s—though it does allege that this particular entity “is a limited liability company formed under the laws of Delaware and registered and conducting business on behalf of AT & T Wireless in California, the general partner of which is AT & T Wireless.” Complaint ¶ 11. The complaint alleges that AT & T Wireless, in turn, is now a Delaware corporation —at the time of the accused conduct a wholly owned subsidiary of AT & T—with headquartérs in the State of Washington. See Complaint ¶ 10.
It falls to the removing Defendants to establish that none of the properly joined Defendants are California residents. To do this the Defendants must show: 1) that TPS fraudulently joined AT & T Communications of California, Inc.; and 2) either
*1102
a) that none of the partners of
any
defendant L.L.C. —in particular, AT & T Wireless Services of California, L.L.C.—are California citizens, or b) that TPS fraudulently joined any defendant L.L.C. having at least one California partner.
See Gaus v. Miles, supra,
The Notice of Removal implies that AT & T Wireless Services of California, L.L.C. is the only resident defendant L.L.C. See Notice of Removal ¶ 3 (arguing only that AT & T Communications of California, Inc. and AT & T Wireless Services of California, L.L.C. were fraudulently joined). The Notice asserts that there is otherwise complete diversity. Id. ¶ 2. TPS argues that the Defendants admit the California citizenship of these two entities by the Addendum to Civil Cover Sheet item IX. That Addendum admits that AT & T Communications of California, Inc. is incorporated in California, and that AT & T Wireless Services of California, L.L.C. is “incorporated” in California with principal place of business in San Francisco. The Court takes this addendum as an averment of the law under which the L.L.C. is organized.
However, the place of organization of an L.L.C. is not relevant to its citizenship for diversity purposes. See Carden, supra. The Defendants have not carried their burden of establishing the citizenship of the L.L.C. defendants. Nonetheless, TPS’s failure to dispute the citizenship of the L.L.C.’s other than AT & T Wireless Services of California, L.L.C. is construed as an admission that these other limited liability companies are not resident defendants. Accordingly, the Court draws the inference against the removing party and considers AT & T Wireless Services of California, L.L.C. a resident defendant. It falls to the Defendants to establish that this defendant was fraudulently joined.
B. TPS fraudulently joined both of the resident Defendants.
There is fraudulent joinder when there is no possibility of recovery against a resident defendant “according to the settled rules of the state.”
McCabe; see also Ritchey v. Upjohn Drug Co.,
While the test for fraudulent joinder resembles a Rule 12(b)(6) analysis in that the Court accepts non-conclusory factual allegations in the complaint as true and does not consider the merits of defenses (other than procedural bars) claimed by the resident defendant, the Court’s inquiry is broader than under Rule 12(b)(6). “The defendant seeking removal to the federal court is entitled to present the facts showing the joinder to be fraudulent.”
McCabe,
Whether or not a plaintiff may recover on the stated claims against the resident defendants does not include consideration of whether, with further discovery, the plaintiff may uncover a factual basis for its claims — rather, the deference given to the plaintiff in a fraudulent joinder analysis means that the court refrains from delving into the merits of defenses that do not present a procedural bar to the action.
In this action TPS’ claims of unfair business practices and interference *1103 with prospective economic advantage against both AT & T Communications of California, Inc. and AT & T Wireless Services of California, L.L.C. (“resident defendants”) are wholly deficient. The complaint contains no factual allegation of factual basis for asserting either claim against these defendants. There is no allegation of conduct by these defendants that would satisfy the conduct element of either claim.
TPS argues that the resident defendants are properly joined because 1) they are AT & T affiliates; and 2) “one element of the scheme [alleged in the complaint] included the acquisition of the wireless telecommunications license covering Los Angeles reserved for small and minority-owned businesses.” TPS Mot. to Remand at 11:9-11. TPS implies that the resident defendants are somehow destined to acquire this Los Angeles area license. Nothing in the complaint, however, alleges any conduct on the part of the resident defendants in relation to the auction at issue. TPS bases its joinder of the resident defendants on speculation about future conduct. This is insufficient.
TPS cannot allege these claims against the resident defendants merely by asserting that they were, at the time of the accused conduct corporate, affiliates and subsidiaries of AT & T. See
McCabe v. Henpil, Inc.,
TPS cannot resist the fraudulent joinder analysis by arguing that future discovery might turn up a factual basis for alleging unfair practices or interference with prospective economic advantage against these resident defendants.
See, e.g., Poulos v. Naas Foods, Inc.,
The factual allegations in the complaint against the resident defendants are wholly inadequate under California law to state a claim for either unfair business practices or interference with prospective economic advantage. Under California Bus.
&
Prof.Code § 17200, a claim of unfair business practices requires an “unlawful, unfair or fraudulent business
act
or
practice
[or] unfair, deceptive, untrue or misleading advertising [or] any
act
prohibited [by Chapter 1, § 17500 et seq.]”. Cal. Bus.
&
Prof.Code § 17200 (emphasis added). A claim for intentional interference with prospective economic advantage requires “intentional acts on the part of the defendant. designed to disrupt the [economic] relationship.”
Pacific Gas & Elec. Co. v. Bear Stearns & Co.,
TPS makes striking admissions in its motion for remand. First, TPS admits that it does not have a factual basis.for asserting claims against the resident defendants but only joined them “out of a reasonable belief that [each] defendant may have been a responsible party.” TPS Mot. to Remand at 5:7-8. TPS then asserts that it named the resident defendants, not because it had a factual basis for asserting these two state claims against them, but “because those [the resident defendants] are the AT & T affiliates doing business in California.” Id. at 5:20.
*1104 TPS has not stated a claim against either resident defendant. The resident defendants are fraudulently joined, and the Court disregards their citizenship when testing for diversity.
C. The Court has diversity jurisdiction.
As discussed above, TPS admits that the none of the remaining L.L.C. defendants have California citizenship for purposes of diversity. Furthermore, it is undisputed that the remaining defendants have diverse citizenship. The complaint alleges damages in excess of $75,000. See Complaint ¶ 49. Accordingly, this Court has diversity jurisdiction under 28 U.S.C. § 1332 and removal was proper under 28 U.S.C. § 1441. TPS’s motion to remand must be denied.
B. The Court has no personal jurisdiction over ANW.
The Court has no general or specific jurisdiction over ANW based on the allegations in the complaint. 16 While there are grounds to permit further discovery regarding general jurisdiction over members of ANW that might subject ANW itself to general jurisdiction, that additional discovery is unnecessary in light of the complaint’s failure to state a claim.
The plaintiff bears the burden of establishing personal jurisdiction.
See Ziegler v. Indian River County,
The California long arm statute extends to the limitation of due process in the Constitution.
See
California Code Civ. P. § 410.10;
Ziegler,
1. There is no general jurisdiction over ANW.
General jurisdiction under the due process clause requires systematic and continuous contacts with the forum state and the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice.
Ziegler,
2. There is no specific jurisdiction over ANW.
Specific jurisdiction exists when: 1) the defendants purposefully avail themselves of the privilege of conducting activities in California, thereby invoking the protections of its laws; 2) the plaintiffs claims arise out of the defendants’ California-related activities;
and/or
3) the exercise of jurisdiction would be reasonable.
See Ochoa,
Where “considerations of reasonableness dictate,” “jurisdiction may be established on a lesser showing of minimum contacts.”
Ochoa,
This complaint does not sufficiently allege a basis of purposeful availment. TPS argues that ANW won the auction for the wireless communication license in Los Angeles. TPS is a New York corporation. TPS claims that it was injured 1) by ANW’s participation in the auction when ANW drove up the bidding prices (the unfair business practices claim); 2) by ANW’s winning various licenses on grounds that TPS would have won but for ANW’s participation, thereby depriving TPS of a license it would have won and depriving TPS of a prospective economic advantage of future customers under the license.
Neither of the cases relied upon by TPS for testing purposeful availment speak to the facts alleged in this complaint. In
Shute v. Carnival Cruise Lines,
The factual allegations here are distinguishable from the basis of purposeful availment in
Roth v. Garcia Marquez,
3. Although the Plaintiff would otherwise have further discovery to determine whether there is general jurisdiction over ANW through general jurisdiction over the members of ANW, the point is mooted by the Plaintiffs failure to state a claim over any Defendant.
The Plaintiff makes no showing that the members of ANW are subject to general jurisdiction, thereby subjecting ANW—as an L.L.C.—to general jurisdiction. Instead, TPS asserts that one of ANW’s members is AT & T Wireless PCS Interests L.L.C. TPS does not present any factual basis for its claim that AT & T Wireless PCS Interests L.L.C. is subject to general jurisdiction in California, but argues only that this Defendant has consented to personal jurisdiction by failing to join ANW’s motion to dismiss for lack of personal jurisdiction. See TPS Opp. to ANW Mot. to Dismiss at 9.
Were the complaint otherwise viable, the Court would grant TPS further discovery to determine if there is general jurisdiction over ANW by virtue of general jurisdiction over any member of ANW.
Cf. Data Disc,
C. Both claims must be dismissed.
The Defendants argue that the claims must be dismissed on grounds of express, conflict and field preemption; to enable referral to the FCC under the doctrine of primary jurisdiction; and for failure to state a claim under state law.
TPS fails to state a claim for interference with prospective economic advantage under state law. In any event, both claims are preempted by the FCA and must be dismissed.
1. The interference with prospective economic advantage claim is defective under state law because it doe not allege interference with any ongoing economic relationship.
A claim for interference with prospective economic advantage requires allegation of an ongoing economic relationship between the plaintiff and a third party with which the defendant has interfered.
See Buckaloo v. Johnson,
This complaint alleges no more than interference with potential customers with which TPS has no existing relation.
See
Complaint ¶ 47(a) (“TPS had a valid an enforceable expectation of an economic relationship with thousands of consumers residing in markets
it plans to serve,
’^(emphasis added). TPS misplaces the law’s emphasis on expectations: an expectation of an economic relation is not actionable. Rather, an expectation of economic advantage based on an ongoing economic relationship is required. TPS has not stated a claim for interference with prospective economic advantage.
Cf. Blank v. Kirwan,
*1108 2. Even if TPS stated a claim for unfair competition or interference with prospective economic advantage, the FCA expressly preempts these claims on the factual basis asserted in the complaint.
Both state claims come within the express preemption clause of the FCA at 47 U.S.C. § 332(c)(3)(A) and must be dismissed. In the alternative, both claims are subject to conflict preemption under the FCA.
As previously discussed, the FCA expressly preempts any state regulation of rates or market entry into telecommunications. The FCA states that “no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating other terms and conditions of commercial mobile services.” 47 U.S.C. § 332(c)(3)(A). For purposes of § 332(c)(3)(A), state regulation of entry includes lawsuits and state judicial action.
See, e.g., In re Wireless Consumers Alliance, Inc.,
15 F.C.C.R. 17021, No. 00-292,
The FCA includes a savings clause, which provides that “[n]othing in this chapter shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.” 47 U.S.C. § 414.
The basis of TPS’s complaint is that it was injured by the Defendants’ participation in the license auction. Whether or not the Defendants participation in the auction was legitimate is purely a question of federal law as administered by the FCC. Absent a determination that such participation was in some manner wrongful under federal law, the current claims under California law cannot proceed.
TPS’s claims are an attempt to regulate entry into the market for wireless communication by challenging the FCC eligibility criteria for competitive bidding on wireless licenses. The claims fall with the express preemption at § 332(c)(3)(A). The criteria for participation in the auctions for “commercial mobile service” are established by the FCC pursuant to its authority under title 47 and as set forth by FCC regulation at 47 C.F.R. §§ 1.2101-1.2113. Whether or not TPS seeks to “invalidate” the licenses acquired by the Defendants in this auction is irrelevant.
Entry to the wireless communication market requires access to the FCC license. The manner by which a party may acquire such a license is determined by the FCC. The express preemption at 47 U.S.C. § 332(e)(3)(A) prevents second guessing of the FCC auction participation criteria by challenge under state law. The structure of the act confirms this analysis. See, e.g., 47 U.S.C. §§ 307(a)-(c)(authority to issue licenses); 308(a), (b) (requirements for licenses); 309(j)(3) (specifying comprehensive scheme of competitive bidding for licenses). The act further provides the FCC with a disciplinary mechanism for resolving disputes over eligibility and license awards. See, e.g., 47 U.S.C. §§ 208(a)(investigation of complaints); 209 (award of damages); 303(m)(l)(license suspension); 309(a) (specifying review process for parties who disagree with FCC licensing determinations); 309(d)(party that objects to an FCC eligibility determination can file a petition with the FCC to deny the license); 312 (license revocation). The two claims in this action are an attempt to challenge the FCC eligibility determina *1109 tions under state law. Those challenges are expressly preempted. 19
TPS’s unfair business and tortious interference claims would interfere with Congress’s full purpose and objectives under the FCA Congress authorized the FCC to develop a competitive bidding process that included “safeguards to protect the public interest in the use of the spectrum” and to promote the varied purposes of the FCA. See 47 U.S.C. § 309(j)(3). The FCC complied with that mandate by publishing regulations governing spectrum auctions. See 47 C.F.R. §§ 1.2101-1.2113. The regulations specify precise eligibility requirements for the auction and bidding at issue here. See id. § 1.2110.
TPS’s unfair business claim under California Bus.
&
Prof.Code § 17203 seeks to test the FCC eligibility determinations by different criteria. These state criteria have no place in the FCC auction scheme. The same holds for the tortious interference claim based on the Defendants’ conduct in the relevant auctions.
Cf. Broyde v. Gotham Tower, Inc.,
IV. Conclusion.
The Court has diversity jurisdiction. The Plaintiffs motion to remand is DENIED.
The Defendants’ motions to dismiss are GRANTED. The Plaintiff fails to state a claim interference with prospective economic advantage under state law, and that claim is dismissed on state law grounds. Even if the Plaintiff had plead actionable state causes of action, the FCA preempts both of these claims through express preemption under § 332 and conflict preemption.
Accordingly, the claims are DISMISSED.
IT IS SO ORDERED.
Notes
. The issue is complicated by the Defendants' failure to assert federal question jurisdiction under 28 U.S.C. § 1331 through the artful pleading exception to the well-pleaded complaint rule as a basis for removal in their notice of removal.
. The Court only reaches federal question jurisdiction as an alternative basis of subject matter jurisdiction. Although not discussed in the Order, the two claims in this complaint undoubtedly arise under the Federal Communications Act and provide subject matter jurisdiction under 28 U.S.C. § 1331.
The problem with this action in its current posture is whether the Defendants have waived this basis of subject matter jurisdiction by failing to raise it in their notice of removal. Subject matter jurisdiction is the basic question of the power of this Court to decide the matter before it. Although parties may not collude to manufacture subject matter jurisdiction, a party may through ineptitude waive its right to claim this Court's jurisdiction. The parties vigorously dispute whether the Court has the power to consider, on its own motion, a theory of federal question jurisdiction that the Defendants failed to assert in their notice of removal. The issue appears unresolved.
The Plaintiff correctly argues that a district court abuses its discretion to permit a removing defendant to amend a notice of removal to raise additional bases for subject matter jurisdiction after expiration of the thirty day removal period provided at 28 U.S.C. § 1446(b).
See, e.g., ARCO Environmental Remediation, L.L.C. v. Department of Health and Environmental Quality of the State of Montana,
On the other hand, the Court is not limited to the bases of jurisdiction asserted by error in a faulty notice of removal, so long as there is no objection to the Court’s actual basis of jurisdiction.
See, e.g., Prize Frize, Inc. v. Matrix (U.S.) Inc.,
. The Plaintiff does not'deal with the Defendants' complete preemption argument. To the contrary, the Plaintiff simply asserts that "Defendants do not even pretend that this action is subject to federal-question jurisdiction.” Plaintiff's Mem. in Opp. to Motion to Dismiss ("Pl.Opp.”) at 3.
In their argument for dismissal the Defendants expressly rely upon
Bastien v. AT&T Wireless Services, Inc.,
. The character, not the scope, of the FCA express preemption provision, 47 U.S.C. § 332(c)(3)(A), is at issue with respect to subject matter jurisdiction.
. The Supreme Court recognizes complete preemption in three instances: 1) ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B),
see Met. Life Ins. Co. v. Taylor,
. In
Met. Life
the Supreme Court found Congressional intent for complete preemption under ERISA on the basis of the similarity in the language of the jurisdictional subsection of ERISA § 502(f) and LMRA § 301(a), as well as through examination of the ERISA legislative history.
See Met. Life,
The venue provision of the jurisdictional grant in the LMRA states:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
LMRA § 301(a), 29 U.S.C. § 185(a).
The jurisdictional subsection of ERISA's civil enforcement provisions states:
The «district courts of the United States shall have jurisdiction, without respect to the amount iii controversy or the citizenship of the parties, to grant the relief provided for in subsection (a) of this section in any action.
ERISA § 502(f), 29 U.S.C. § 1132(f).
The relevant Congressional intent for complete preemption is to confer removal jurisdiction on preempted state actions, not an intent to preempt state law.
. The Fifth Circuit follows a similar test, considering whether: 1) the statute contains a civil enforcement provision that creates a
*1098
cause of action that both replaces and protects the analogous area of state law; 2) there is a specific jurisdictional grant to the federal courts for enforcement of the right; and 3) there is a clear Congressional intent that claims brought under the federal law be removable.
See Johnson v. Baylor University,
. The Ninth Circuit does hold that Subchap-ter II of the FCA vests exclusive jurisdiction for actions under 47 U.S.C. § 207 in both the federal courts and the FCC.
See AT & T Corp.
v.
Coeur D'Alene Tribe,
47 U.S.C. § 207 provides that "[a]ny person claiming to be damaged by any common carrier subject to the provisions of this chapter may either make complaint to the Commission as hereinafter provided for, or may bring suit for the recovery of the damages for which such common carrier may be liable under the provisions of this chapter, in any district court of the United States of competent jurisdiction; but such person shall not have the right to pursue both such remedies.” Id.
. The Seventh Circuit does not add anything beyond this conclusory analysis. The holding seems to rest on the use of the word any in § 332(c)(3)(A).
The
Bastien
reasoning is buttressed, however, by the later decided FCC opinion in
In re Wireless Consumers Alliance, Inc.,
15 F.C.C.R. 17,021, at ¶ 12,
*1099
In
Wireless
the FCC ruled on the scope of express preemption under Section 332. There was no question of intent relating to removal jurisdiction at issue in the case. Instead, the agency was required to determine whether Section 332(c)(3)(A) generally preempts state courts from awarding monetary relief as a remedy for state consumer protection, tort or contract claims.
See Wireless,
15 F.C.C.R. 17,021 at ¶¶ 10-11,
. In
Marcus,
the plaintiffs were customers who brought claims of deceptive acts and practices, false advertising, fraud and deceit, negligent misrepresentation, breach of warranty and unjust enrichment against the defendant, a long distance company. The defendants removed under a complete preemption theory, and the district court denied a motion to remand and dismissed. The Second Circuit affirmed. The Second Circuit held that there was no complete preemption under the FCA, but that a breach of warranty claim under a FCA tariff provided a federal question.
See Marcus
The analysis in
Marcus
is somewhat confused. The Court did not specifically address itself to any express preemption clause in the FCA.
See Marcus,
.
See also Aronson v. Sprint Spectrum, L.P.,
The district courts finding no complete preemption under § 332(c)(3)(A) observe that both ERISA and the LMRA lack a provision resembling FCA § 414, and that the FCA savings clause at § 414 indicates the absence Congressional intent to provide removal jurisdiction.
See, e.g., Bryceland,
. The relevant jurisdictional provision states that “no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating other terms and conditions of commercial mobile services." 47 U.S.C. § 332(c)(3)(A).
. The merits of AT & T’s preemption defenses relate to choice of law and must await a determination of the Court's jurisdiction.
. Fraudulent joinder is a judicially crafted exception to the rule of complete diversity.
. TPS admits as much in its Opposition to ANW's Motion to Dismiss. See TPS Opp. to ANW Mot. to Dismiss, at 8:24-27.
. ANW erroneously cites Rule 12(b)(3) as the basis of its alternative argument to dismiss for lack of jurisdiction. The Court treats the challenge under Rule 12(b)(2).
. Whether exercise of personal jurisdiction is reasonable depends on a multiple factor balancing taking into consideration: 1) the extent of defendants' purposeful interjection into the forum state's affairs; 2) the burden on the defendant; 3) conflicts of law between
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the forum state and the defendant's home jurisdiction; 4) the forum's interest in adjudicating the dispute; 5) the most efficient judicial resolution of the dispute; 6) the plaintiff's interest in complete and effective relief; and 7) the existence of an alternative forum.
See Roth,
. Although the Defendants' argument that the unfair business claim fails to allege actionable injury is correct in part, it does not dispose of the entire claim on state law grounds.
Damages are not recoverable under § 17203, and a plaintiff seeking damages has no standing to raise a claim of unfair business practices under that section.
A [§ 17203] action is an equitable action by means of which a plaintiff may recover money or property obtained from the plaintiff or persons represented by the plaintiff through unfair or unlawful business practices. It is not an all-purpose substitute for a tort or contract action. "[D]amages are not available under section 17203. [citing Dean Witter Reynolds, Inc. v. Superior Court,211 Cal.App.3d 758 , 774,259 Cal.Rptr. 789 (1989); Industrial Indemnity Co. v. Superior Court,209 Cal.App.3d 1093 , 1095-1097,257 Cal.Rptr. 655 (1989); 11 Witkin, Summary of Cal. Law Equity, § 95 at 776 (9th ed.1990); see also Chern v. Bank of America15 Cal.3d 866 , 875,127 Cal.Rptr. 110 ,544 P.2d 1310 (1976)(interpreting the nearly identical language of section 17535)].” [See also ] Bank of the West v. Superior Court,2 Cal.4th 1254 , 1266,10 Cal.Rptr.2d 538 ,833 P.2d 545 (1992).
Cortez v. Purolator Air Filtration Products Co.,
In this complaint TPS seeks “restitution in an amount to be proved at trial ... which will restore it to the position in which it would have been but for [the alleged] unlawful and unfair business acts.” Complaint ¶ 43. TPS also seeks disgorgement of “the total amount by which [the Defendants] have been .unjustly enriched, including the full amount of the savings they obtained by acquiring licenses in the closed auction that they otherwise would have obtained in the open auction .... plus the value to the defendants of the licenses they obtained in the closed auction but would have been unable to obtain in the open auction.” Complaint ¶ 44. Finally, TPS seeks a constructive trust "upon any future revenues that defendants may accrue from licenses that they obtained in the closed auction.” Complaint ¶ 45.
“[S]ection 17203 operates only to return to a person those
measurable amounts
which are
wrongfully taken
by means of an unfair business practice.”
Day v. AT & T Corp.,
Although the specific amounts identified in the complaint do not appear recoverable as equitable or restitutionary relief under § 17203—because the theory in ¶ 43 appears to disguise a prayer for compensatory damages as restitution, and the theories in ¶¶ 44-45 do not identify interests to which TPS was otherwise entitled—if TPS established that the Defendants engaged in some unfair business practice within § 17203 there is conceivably some recovery available in equity or restitution even though the precise basis of such relief is not clear from the complaint.
In the current complaint TPS disguises a claim for damages, which are not recoverable under § 17203, as a claim for equitable and restitutionary relief. TPS's own choice of language in the complaint at ¶ 43 makes this difference clear. This is a complaint for compensatory damages. "A plaintiffs remedy in tort is compensatory in nature and damages are generally intended not to punish a negligent defendant but
to restore an injured person as nearly as possible to the position he or she would have been in had the wrong not been done.” Turpin v. Sortini,
The remaining theories of injury do not identify any property interest that TPS was entitled to keep. They do not state actionable injury supporting relief under § 17203.
. If TPS brought the unfair practices and tortious interference claims — properly al leged — after a determination that a party had wrongfully participated in an FCC license auction, such claims might escape FCA preemption. That is not the case before the Court.