United States District Court, S.D. New York
November 10, 2004.
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Plaintiff,
AMERICAN WAREHOUSING OF NEW YORK, INC., Defendant.
The opinion of the court was delivered by: GERARD E. LYNCH, District Judge
OPINION AND ORDER
The Port Authority of New York and New Jersey ("the Port
Authority"), a governmental agency, brought this action in the
Civil Court of the City of New York for Kings County, seeking to
evict defendant American Warehousing of New York, Inc.
("American"), from Pier 7, a marine terminal in Brooklyn owned by
the Port Authority. On August 5, 2004, American removed the case
to this Court. Shortly thereafter, American moved to dismiss, or
in the alternative to stay the proceedings pending determination
of a related complaint filed by American against the Port
Authority before the Federal Maritime Commission ("FMC"), which
American filed simultaneously with its removal petition. The Port
Authority cross-moved to remand the case to the state courts, challenging this Court's
jurisdiction. Because the Court has no jurisdiction, the case
will be remanded. This resolution makes it unnecessary, and
indeed improper, for the Court to address the merits of
As a preliminary matter, the Court notes that the defendant
removed the case to the wrong court. Cases within federal
jurisdiction may be removed "to the district court . . . for the
district and division embracing the place where such action is
pending." 28 U.S.C. § 1441(a). Kings County where the Port
Authority originally filed the case is in the Eastern District
of New York, not the Southern. The removal was thus procedurally
improper. However, the Port Authority has neither objected to the
removal on this ground nor sought a change of venue. Since
objections to venue are waived if not timely raised, Fed.R. Civ.
P. 12(h)(1), it has been held that "removal to the wrong district
is a procedural defect, like improper venue, which [is] waived by
the failure to object to it timely." Cook v. Shell Chemical
Co., 730 F. Supp. 1381, 1382 (M.D. La. 1990). Although the Court
may have discretion to transfer such a case to the proper
district, see Mortensen v. Wheel Horse Prods., Inc.,
772 F. Supp. 85 (N.D.N.Y. 1991); cf. Addison v. North Carolina Dep't of
Crime & Public Safety, 851 F. Supp. 214 (M.D.N.C. 1994), here a
fundamental jurisdictional defect requires that the case be
remanded to state court.
A state court action may be removed to the federal courts if it
is a "civil action . . . of which the district courts of the
United States have original jurisdiction." 28 U.S.C. § 1441(a).
American claims that this Court has such original jurisdiction
because this case is "founded on a claim or right arising under
the Constitution, treaties or laws of the United States."
28 U.S.C. § 1441(b). This is manifestly incorrect. The Port
Authority's action lacks foundation in any federal claim or
right. Its complaint straightforwardly pleads an ordinary
landlord's claim to premises against a tenant whose lease has expired, pursuant to
New York Real Property Actions and Proceedings Law § 731(3). As
the Port Authority's claim is based entirely on New York real
property law, this Court thus does not have original jurisdiction
over the suit.
American argues that this Court has jurisdiction because the
Port Authority's claim is preempted by federal law. (D. Mem.
7-9.) Assuming arguendo that this is so, it does not provide a
basis for jurisdiction. Preemption is a defense, and "a case may
not be removed to federal court on the basis of a federal
defense, . . . even if both parties admit that the defense is the
only question truly at issue in the case." Franchise Tax Bd. v.
Construction Laborers Vacation Trust for Southern California,
463 U.S. 1, 14 (1983). Rather, "[t]he presence or absence of
federal-question jurisdiction is governed by the `well-pleaded
complaint rule,' which provides that federal jurisdiction exists
only when a federal question is presented on the face of the
plaintiff's properly pleaded complaint." Caterpillar, Inc. v.
Williams, 482 U.S. 386, 392 (1987). A defense, however, "is not
part of a plaintiff's properly pleaded statement of his or her
claim." Rivet v. Regions Bank, 522 U.S. 470, 475 (1998).
Accordingly, "[t]he mere existence or invocation of a federal
defense does not furnish a sufficient basis for jurisdiction to
attach." City of Rome v. Verizon Communications Inc.,
362 F.3d 168, 174-75 (2d Cir. 2004).
American relies on an exception to this rule, noting that the
Supreme Court acknowledged in Rivet that a plaintiff "may not
defeat removal by omitting to plead necessary federal questions"
by "artful pleading." 522 U.S. at 475 (internal quotation marks
and citation omitted). (D. Mem. 8-9.) This exception applies,
primarily, in cases of "complete preemption," where an area of
law has been so thoroughly occupied by federal regulation that
state law has been entirely displaced, so much so that "any claim
purportedly based on that preempted state-law claim is considered, from its inception, a federal claim, and
therefore arises under state law." Id. at 475-76 (internal
quotation marks and citation omitted). But this circumstance is
quite rare. The Supreme Court recently had occasion to explain
the doctrine, noting that it applies only where Congress has
expressly so provided (which is not the case here), or in limited
cases where "the federal statutes at issue provide? the
exclusive cause of action for the claim asserted and also set
forth procedures and remedies governing that cause of action."
Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 8 (2003).
Outside the unique context of certain tribal claims, Oneida
Indian Nation v. County of Oneida, 414 U.S. 661 (1974), the
Supreme Court has only found "complete preemption" to apply with
respect to three statutes: the Labor Management Relations Act,
Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557 (1968); the
Employee Retirement Income Security Act, Metropolitan Life Ins.
Co. v. Taylor, 481 U.S. 58 (1987), and the National Bank Act,
Beneficial Nat'l Bank, 539 U.S. 1. Even while expanding this
doctrine to apply to an additional statute in Beneficial
National Bank, the Court re-emphasized that complete preemption
is a rarity, and reaffirmed the general applicability of the
well-pleaded complaint rule. 539 U.S. at 6-8.
Complete preemption presents a question of congressional
intent. As one treatise explains it, "complete preemption does
not just represent a difference in the scope of the preemption of
a state cause of action by federal law; rather it is a difference
in kind. In complete preemption a federal court finds that
Congress desired to control the adjudication of the federal cause
of action to such an extent that it did not just provide a
federal defense to the application of state law; rather, it
replaced the state law with federal law and made it clear that
the defendant has the ability to seek adjudication of the federal
claim in a federal forum." 14B Wright, Miller and Cooper, Federal Practice and Procedure, § 3722.1 at 512 (3d
ed. 1998). "We must therefore look at whether Congress intended
[the federal statutory regime] to provide an exclusive cause of
action." City of Rome, 362 F.3d at 178 (emphasis added), citing
Beneficial Nat'l Bank, 539 U.S. at 9. But American provides no
evidence whatsoever of a congressional intent that the Federal
Shipping Act provide an exclusive remedy for breaches of leases
in maritime terminals.
Rather than analyze the congressional purpose behind the
federal Shipping Act, American argues that it will suffer
irreparable harm if the Port Authority's remand motion is
granted, while the Port Authority will suffer no comparable harm
if the action is not remanded. (D. Mem. 12-13.) This argument is
both incorrect and irrelevant. It is incorrect because the injury
American argues it will suffer does not turn on the court in
which the case will be heard, but on the outcome of the case. If
American has legitimate federal defenses that would prevail in
this Court, those defenses are equally applicable in state court
under the Supremacy Clause of the Constitution. It is irrelevant
because subject matter jurisdiction is conferred on the federal
courts by statute and not by a party's necessity; however
grievous a harm a party faces, this Court has no power to prevent
or remedy that harm absent proper jurisdiction.
Finally, American argues that the Court has jurisdiction, once
a complaint with the FMC has been filed, to enjoin conduct in
violation of the federal Shipping Act. 46 U.S.C. § 1710(h)(2).
(D. Mem. 10 n. 4.) However, neither party has filed an action
seeking such a remedy. That a party to a dispute could file a
proper federal action of its own does not authorize it to remove
an action brought against it in state court, based entirely on
state law, merely because it grows out of the same dispute. To
the extent American argues that a court should defer to the
expertise of a federal regulatory agency, that argument can and
should be presented to the state court which has jurisdiction over the case.
For the reasons stated above, this Court lacks jurisdiction
over this matter. Accordingly, the Port Authority's motion is
granted, and the case is remanded to the Civil Court for Kings
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