Amicus Curiae Brief — Lundeen v. Canadian Pacific Railway Co (No. 06-528)

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No. 06-528 DEC 18 2059

|_OFFICE OF THE CLERK

In The

Supreme Court of the United States

+ ——

TOM LUNDEEN, et al.,

Petitioners,

vs.

CANADIAN PACIFIC RAILWAY COMPANY, et ai.,

Respondents.

S

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Eighth Circuit

o

BRIEF OF AMICI CURIAE STATES OF NORTH

DAKOTA, CALIFORNIA, INDIANA, IOWA,

MARYLAND, MINNESOTA, MISSISSIPPI,

MISSOURI, MONTANA, NEVADA,

NEW HAMPSHIRE, OKLAHOMA, OREGON,

SOUTH DAKOTA, UTAH, VIRGINIA, WASHINGTON,

WEST VIRGINIA, WISCONSIN, AND WYOMING

IN SUPPORT OF PETITIONERS

.

WAYNE STENEHJEM

Attorney General

of North Dakota

LYLE G. WITHAM*

DEAN J. HAAS

Assistant Attorneys General

500 North 9th Street

Bismarck, ND 58501-4509

(701) 328-3640

*Counsel of Record

Counsel for Amici Curiae States

| Additional Counsel Listed On Inside Cover]

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

BILL LOCKYER

Attorney General

State of California

MANUEL M. MEDEIROS

Solicitor General

OFFICE OF THE

ATTORNEY GENERAL

1300 I Street, Suite 125

P.O. Box 944255

Sacramento, CA 94244

(916) 323-1996

STEVE CARTER

Attorney General

State of Indiana

Indiana Governmental Ctr. S.

302 W. Washington St.

Indianapolis, IN 46204

(317) 232-6201

TOM MILLER

Attorney General

State of lowa

Iowa Attorney General’s

Office

Des Moines, [A 50319

(515) 281-5191

J. JOSEPH CURRAN, JR.

Attorney General of

Maryland

200 Saint Paul Place

Baltimore, MD 21202

(410) 576-6300

MIKE HATCH

Attorney General of

Minnesota

102 State Capitol

75 Rev. Dr. Martin Luther

King, Jr. Blvd.

St. Paul, MN 55155-1609

(681) 282-5721

JIM HOOD

Mississippi Attorney General

DEPARTMENT OF JUSTICE

P.O. Box 220

Jackson, MS 39205

(601) 359-3680

JEREMIAH W. (JAY) NIXON

Attorney General

State of Missouri

Supreme Court Bldg.

207 West High Street

Jefferson City, MO 65101

(573) 751-3321

MIKE MCGRATH

Attorney General of Montana

P.O. Box 201401

Helena, MT 59620-1401

(406) 444-2026

GEORGE J. CHANOS

Attorney General

State of Nevada

Nevada Dept. of Justice

100 North Carson Street

Carson City, NV 89701

(775) 684-1112

KELLY A. AYOTTE

Attorney General

of New Hampshire

33 Capitol Street

Concord, NH 03301

(603) 271-1202

W.A. DREW EDMONDSON

Attorney General

of Oklahoma

313 N.E. 21st Street

Oklahoma City, OK

73105-4894

(405) 521-3921

HARDY MYERS

Attorney General

State of Oregon

1162 Court Street N.E.

Salem, OR 97301

(503) 378-6002

LAWRENCE E. LONG

Attorney General

State of South Dakota

1302 E. Hwy. 14, Suite 1

Pierre, SD 57501-8501

(605) 773-3215

MARK L. SHURTLEFF

Utah Attorney General

Utah State Capitol Comp.

East Office Bldg., Suite 320

Salt Lake City, UT

84114-2320

(801) 538-9600

ROBERT F. MCDONNELL

Attorney General

State of Virginia

WILLIAM E. THRO

State Solicitor General

OFFICE OF THE ATTORNEY

GENERAL

900 East Main Street

Richmond, VA 23219

(804) 786-2436

RoB MCKENNA

Attorney General

State of Washington

1125 Washington Street

P.O. Box 40100

Olympia, WA 98504-0100

(360) 753-6200

DARRELL V. MCGRAW, JR.

Attorney General of

West Virginia

OFFICE OF ATTORNEY

GENERAL

State Capitol, Rm. 26-E

Charleston, WV 25305

(304) 558-2021

PEGGY A. LAUTENSCHLAGER

Attorney General

State of Wisconsin

LINDA K. WELLS

Executive Staff Assistant

Division of Legal Services

WI DEPARTMENT OF JUSTICE

P.O. Box 7857

Madison, WI 53707-7857

(608) 266-7369

PATRICK J. CRANK

Wyoming Attorney General

CRISS CARLSON

Executive Assistant

ATTORNEY GENERAL'S

OFFICE

123 State Capitol

Cheyenne, WY 82002

(307) 777-7841

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...........00..cccceseseceeseeeeserees il

Interest of the Amici ..........ccccccsccsessscrsesssscesserecsesecoees 1

REASONS FOR GRANTING THE PETITION ......... 2

I. By disregarding the boundaries placed on the

complete preemption doctrine in Beneficial

National Bank — under which the doctrine

applies only when two specific showings are

made — the Eighth Circuit improperly broad-

ened the doctrine’s SCOPC........ccccccceeereeerseeeeeees 2

A. The Eighth Circuit disregarded the nar-

row scope of the complete preemption

doctrine, as set forth in Beneficial Na-

Soma] BOAR ....cccescesccvesecvesecovenescosceccosessees 4

B. The complete-preemption doctrine is a

particularly poor fit for the FRSA............ 7

Il. The Eighth Circuit’s vast and erroneous

expansion of the complete preemption doc-

trine has numerous negative consequences.... 11

A. The Eighth Circuit’s rule undermines

practical and federalism values served

by the well-pleaded complaint rule and

the presumption against removal............ 11

B. The Eighth Circuit rule threstens re-

moval of state-law actions commonly

brought by state Attorneys General......... 13

C. The Eighth Circuit rule would increase

the time, and drive up the expense, of

OIE I IE occ 0vccresevsesenecensvnesenscnerenevcncscessees 16

Cee ........ .ccsccndsvnnnencevscesiantesepuieninenesennsnctaooseiiien 18

i

TABLE OF AUTHORITIES

Page

CASES

Auco Corp. v. Machinists, 390 U.S. 557 (1968)...........c000000- 3

Bates v. Dow Agrosciences L.L.C., 544 U.S. 431

GIT chsnhasibesstiesicieuhieiieiomn-ccheeneiehteipesiiauiasiicadieeniiesdeibiasidedebaniien 3

Beneficial Natl Bank v. Anderson, 539 U.S. 1

Srearaa cabiaelclasesciieeenneiaaeinilopcedcnsieéatiaicendiatoaesianianenies passim

Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d

ee SN Ae i citscencnnccitisersnncmeiindaicenienienadanetanieies 13

Carson v. Dunham, 121 U.S. 421 (1887) .......... eee eeeeeee seen 13

Caterpillar Inc. v. Williams, 482 U.S. 386 (1987)...........00+ 5

CSX Transp., Inc. v. Easterwood, 507 U.S. 658

Era ssihsiisethatectiisddiehnisianmmiadcebeeessiphiasaniiadabaiinhditaetelbsalaiadbsleessdoet 7,8

Doe v. Allied-Signal, Inc., 985 F.2d 908 (7th Cir.

PUT i isccitchiesicuiesioici setae siniibieiliniddaaiaaieniaiinaenianibeéi 13

Empire Healthchoice Assur., Inc. v. McVeigh, 126

as EEN CTD cistinssiasiesiennisniiciicepeloniatantinsibicaaseendiiniinienies 5

Gaming Corp. of Am. v. Dorsey & Whitney, 88 F.3d

Se EE ANS i stictnistsicictesosensitisinisllicdncsicandinnteniitaiaiscmll 6

Grable & Sons Metal Prods., Inc. v. Darue Eng’g &

ig OO Ure Fe Ce itcrsesivccctannintnontdesninidasineny 5, 7, 16

Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473

TED sssinssssiesisiieeiniaiieheapecelhdlisishasideatastgacion Sapianauamalpenesiapiiteonines 12

Gully v. First Nat'l Bank, 299 U.S. 109 (1936)............ 11,12

In re Derailment Cases, 416 F.3d 787 (8th Cir. 2005) ...... 14

Kalan Enterprises, LLC v. BNSF Ry. Co., 415

F. Sep. 2d OFT (DD. Mim. BOOB) .cccecencccasscccvecceecovesecsacs 14

Lontz v. Tharp, 413 F.3d 435 (4th Cir. 2005)... 3

TABLE OF AUTHORITIES -— Continued

Louisville & Nashville R.R. Co. v. Mottley, 211 U.S.

149 (1908)

Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996)

Mehl v. Canadian Pacific Ry., Ltd., 417 F. Supp. 2d

1104 (D.N.D. 2006)

Merrell Dow Pharm., Inc. v. Thompson, 478 U.S.

804 (1986)

Metcalf v. Watertown, 128 U.S. 586 (1888)

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58

(1987)

Mulcahey v. Columbia Organic Chem. Co., Inc., 29

F.3d 148 (4th Cir. 1994)

New York v. U.S., 505 U.S. 144 (1992)

Osborn v. Bank of the United States, 22 U.S. 738

(1824)

Peters v. Union Pac. R.R., 80 F.3d 257 (8th Cir. 1996)

Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100

(1941)

Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984)

South Dakota ex rel. S.D. R.R. Auth. v. Burlington

Northern & Santa Fe Ry. Co., 280 F. Supp. 2d 919

(D.S.D. 2003) ;

State of North Dakota v. Canadian Pacific Ry. Co.

(N.D. Dist. Court, Ward Cty., Civ. no. 03-C-1003,

July 15, 2003)

Stone v. Powell, 428 U.S. 465 (1976)

Wilson v. Republic Iron & Steel Co., 257 U.S. 92

(1921)

1V

TABLE OF AUTHORITIES — Continued

Page

CONSTITUTION, STATUTES, AND RULES

12 U.S.C. §§ 85, 86 (§§ 85, 86 of the National Bank

TIE Sacbieceadiengsashesdltsadsindiamieseindenosvaiseesiabiibhintinneibianibidoasabaniauaiiaten 3

I calcd ieee anal 4

SI aa SP SU ats bisciencsandeticeictiensiaiiennitianninenatiadbaneniaiaiuatentied 4,5

Lo Fak ff: SEER ance en NC ee ea OER ES 8

29 U.S.C. § 185 (§ 301 of the Labor Management

FS SELASSIE aR TEM TF NOD AAS at ON EE 3

29 U.S.C. § 1132 (§ 502 of ERISA)..........cccccccrcrccrrsssereecereees 3

PIS OI IU cic arctan encanta taneaiaiaaiaee 10

A Ae Sen aiciantetincicdcnseveatasininesinitaicdiesaiiededmegnaunienneianion 1

Sle Cas UOT Tis: UF Siicccuchlicta sncsdnssnanentniccnmuanmbieadeaalbuccueds 4

SE, RS Ee eee ee ee eT 2

Fe 8: a eo eNO 14

ok A * Na CON 14

nadia NE IIE hcicaacaressihiiveiseenietsicseieanantinienibeaneiaiiiteeensiaeusiunsinnelion 14

N.D. Admin. Code §§ 33-16-02.1-08, 33-15-01-15............. 15

N.D. Admin. Code ch. 33-16-02.1............cccccscocossssssesseeeees 15

OTHER AUTHORITIES

Arthur R. Miller, Artful Pleading: A Doctrine in

Search of a Definition, 76 Tex. L. Rev. 1781, 1797

SUsPenTTTUITLs sitll ieciaciahadecillechdaitidamsbataichetaapaneeniasaanedeaseieiaiiaaimaliacariantdies 1

TABLE OF AUTHORITIES — Continued

Steven Plitt, and Joshua D. Rogers, Charting a

Course for Federal Removal Through the Absten-

tion Doctrine: A Titanic Experience in the Sar-

gasso Sea of Jurisdictional Manipulation, 56

DePaul L. Rev. 107, 107 (2006).........::cecceeseeeeeeeeeeeees

Richard Posner, The Federal Courts: Crisis and

Reform 190 (1985) ....cccceceesceeesessesesersersesereeteeseeeees

Garrick B. Pursley, Rationalizing Complete Pre-

emption After Beneficial National Bank v. Ander-

son: A New Rule, A New Justification, 54 Drake

L. Rev. 371, 372 (2006)............cccccccscccrereccecererseserssees

Restatement (Third) of Torts § 14 .....ccccccceceecceeeeeeeeeeeees

Track Safety Standards; Inspections of Joints in

Continuous Welded Rail (CWR), 71 Fed. Reg.

59677 (Oct. 11, 2006)........cccccceseeceecerereeeereeeeentereeeenes

Page

INTEREST OF THE AMICI

The amici States have an interest in preserving state

court jurisdiction over state-law tort claims and other

state-law causes of action, an exercise of state authority

compromised by the Eighth Circuit’s novel application of

the “complete preemption” removal doctrine. Displacing

state-court jurisdiction over state-law tort claims under-

cuts the traditional division of authority between state

and federal courts and, more fundamentally, long-standing

federalism principles. It is of particular concern here,

where the federal statute relied on for removal — the

Federal Railroad Safety Act (FRSA), 49 U.S.C. § 20101 e¢

seq. — does not create a federal cause of action or remedy,

and ultimately results in dismissal of the action.

State and federal courts are partners in fulfilling the

country’s judicial responsibilities. The well-pleaded com-

plaint rule is a core component of the partnership and

recognizes state-court competence. Broadening the com-

plete-preemption doctrine as an exception to the well-

pleaded complaint rule has “obvious federalism implica-

tions,” Arthur R. Miller, Artful Pleading: A Doctrine in

Search of a Definition, 76 Tex. L. Rev. 1781, 1797 (1998),

and undermines the division of authority that the rule has

preserved since enunciated in 1888. See Louisville & N. R.

R. Co. v. Mottley, 211 U.S. 149, 154 (1908) (citing Metcalf

v. Watertown, 128 U.S. 586 (1888), as the original well-

pleaded complaint decision). State judicial systems are not

only capable of handling tort claims, but have developed

sophisticated processes and long-standing precedents for

adjudicating negligence actions. And they do so efficiently.

Further, they are capable and have developed a credible

record applying federal law, including substantive preemp-

tion law. The amici have an abiding interest in ensuring

2

that this partnership is not unjustifiably revised to lessen

the role of state courts.

The well-pleaded complaint rule has kept state-law

causes of action in state court when substantive preemp-

tion defenses have been raised. Complete preemption

removal jurisdiction has attached only in those rare

circumstances when Congress wholly displaces the state-

law cause of action with a federal cause of action, and also

sets forth procedures and remedies governing that cause of

action — i.e., when the two-part test in Beneficial National

Bank v. Anderson, 539 U.S. 1, 8 (2003), is satisfied. The

Eighth’s Circuit’s decision eviscerates the well-pleaded

complaint rule, ignores Beneficial’s two-part test, and

thereby disrupts the federal-state balance in this area of

the law.

+

REASONS FOR GRANTING THE PETITION

I. By disregarding the boundaries placed on the

complete preemption doctrine in Beneficial

National Bank - under which the doctrine

applies only when two specific showings are

made - the Eighth Circuit improperly broad-

ened the doctrine’s scope.

The Eighth Circuit removed 49 separate tort cases

from state court by wrongly conflating substantive pre-

emption with the “complete preemption” doctrine. Ordi-

nary substantive preemption arises from the force of the

Supremacy Clause, which declares that the “Constitution,

and the Laws of the United States ... shall be the su-

preme Law of the Land;... any ... Laws of any State to

the Contrary notwithstanding.” U.S. Const. Art. VI, cl. 2.

3

This Court has crafted a complex body of law governing

when federal law displaces state law, and, along with the

lower state and federal courts, addresses claims of express,

implied, and field preemption with some frequency. See,

e.g., Bates v. Dow Agrosciences L.L.C., 544 U.S. 431 (2005);

Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996). The “complete

preemption” doctrine is a different creature altogether.

When a state-law claim is completely preempted, it is

converted into a federal-law claim by operation ot law, and

therefore removable under the federal courts’ “arising

under” jurisdiction. See Beneficial Nat'l Bank, 539 U.S. at

8. As the Fourth Circuit has put it, “[clomplete preemption

is a ‘jurisdictional doctrine,’ while ordinary preemption

simply declares the primacy of federal law, regardless of

the forum or the claim.” Lontz v. Tharp, 413 F.3d 435, 440

(4th Cir. 2005). Whereas myriad federal laws have been

found to preempt state laws, this Court has so far found

only three federal statutory provisions that completely

preempt state law: Sections 85 and 86 of the National

Bank Act, see Beneficial Nat’l Bank, 539 U.S. at 9-11; § 301

of the Labor Management Relations Act (LMRA), see Avco

Corp. v. Machinists, 390 U.S. 557 (1968); and § 502 of

ERISA, see Metropolitan Life Ins. Co. v. Taylor, 481 U.S.

58 (1987).

By holding that the FRSA completely preempts state

law — thereby converting petitioners’ state-law claims into

federal claims — based solely on its (mistaken) conclusion

that the FRSA preempts petitioners’ state actions in the

ordinary sense, the Eighth Circuit has fundamentally

misapplied the complete preemption doctrine. Unless this

Court corrects the Eighth Circuit’s improper expansion of

the complete preemption doctrine, plaintiffs around the

nation — including state Attorneys General — can expect to

4

expend significant time and resources litigating this

removal issue.

A. The Eighth Circuit disregarded the narrow

scope of the complete preemption doctrine,

as set forth in Beneficial National Bank.

1. Congress has never authorized federal courts to

hear claims under their “arising under” jurisdiction to the

full extent permitted by the Constitution. In Osborn uv.

Bank of the United States, 22 U.S. 738, 822-23 (1824), the

Court held that “arising under” jurisdiction within the

meaning of Article III, § 2, exists when the resolution of a

federal question might determine the outcome of the case.

Yet because Article III’s grant of judicial power to federal

courts other than the Supreme Court is not self-executing,

“it was not until the Judiciary Act of 1875 that Congress

gave the federal courts general federal-question jurisdic-

tion.” Merrell Dow Pharm., Inc. v. Thompson, 478 U.S.

804, 807 (1986) (citing 28 U.S.C. § 1331, which contains

the same “arising under” language as Article III, § 2). Ina

series of cases culminating in Louisville & Nashville R.R.

Co. v. Mottley, 211 U.S. 149, 152 (1908), the Court held

that a federal court lacks subject-matter jurisdiction under

§ 1331 if the plaintiff’s complaint asserts on its face only

state-law causes of action, regardless of whether the

defendant asserts defenses (such as preemption) that are

based on a potentially displacing federal law. Whether a

civil action arises under a federal statute turns, in other

words, on what is pleaded within the four corners of a

plaintiff’s complaint, and not on issues raised in the

answer.

The removal statute ~ 28 U.S.C. § 1441 — limits

removal jurisdiction to “any civil action” over which the

5

federal district courts “have original jurisdiction” except

when “otherwise expressly provided” by Congress. The

vast majority of cases removed under federal-question

jurisdiction are cases “in which federal law creates the

cause of action.” Merrell Dow, 478 U.S. at 808. Conse-

quently, a state-law claim “may not be removed to federal

court on the basis of a federal defense, including the

defense of pre-emption, even if the defense is anticipated

in the plaintiff’s complaint, and even if both parties

concede that the federal defense is the only question truly

at issue.” Caterpillar Inc. v. Williams, 482 U.S. 386, 393

(1987). In Merrell Dow, the Court confirmed that even

when federal issues are elements of state-law causes of

action, removal under federal-question jurisdiction is

improper. 478 U.S. at 808.

A broader exercise of federal jurisdiction over state-

law claims than allowed in Merrell Dow “would ... have

heralded a potentially enormous shift of traditionally state

cases into federal courts.” Grable & Sons Metal Prods.,

Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 318-19 (2005)

. (citing Restatement (Third) of Torts § 14).' Accordingly, the

ordinary rule is that state-law tort claims, such as the

negligence claims brought by petitioners, are not remov-

able merely because a substantive preemption defense is

raised.

' Grable established a “special and small category” of cases,

Empire Healthchoice Assur. Inc, v. McVeigh, 126 S.Ct. 2121, 2137

(2006), that fall under § 1441 removal jurisdiction because a substantial

question of federal law is a necessary element of a state-law claim and

removal wil] not upset the balance of federal and state judicial respon-

sibilities. As petitioners note (Pet. 12 n.2), that exception was not relied

on by the Eighth Circuit and is not at issue in this case.

6

2. In Beneficial, this Court confirmed the existence

of the complete preemption doctrine as a very narrow

exception to that general rule. Beneficial held that an

action asserting only state-law claims can be removed to

federal court under the complete preemption doctrine

when a two-part test is met: the federal statutes at issue

provide “the exclusive cause of action for the claim as-

serted and also set forth procedures and remedies govern-

ing that cause of action.” 539 U.S. at 8 (emphasis added).

When those two conditions are met, the “cause of action,

even if pleaded in terms of state law, is in reality based on

federal law.” Id.

Rather than apply Beneficial, the court below relied

on pre-Beneficial Eighth Circuit decisions that had

adopted a markedly different approach. See Pet. App. at

20a-29a [447 F.3d at 611-14] (citing Gaming Corp. of Am.

v. Dorsey & Whitney, 88 F.3d 536 (8th Cir. 1996); Peters v.

Union Pac. R.R., 80 F.3d 257 (8th Cir. 1996)). In doing so,

the Eighth Circuit confused and conflated the complete-

preemption doctrine with substantive preemption analy-

sis. Thus, for example, the court observed that “Congres-

sional intent is the ‘ultimate touchstone’ guiding pre-

emption analysis” and that “fi]f the statute contains an

express preemption clause, then the statutory construction

should center on its plain meaning as the best evidence of

Congress’s preemptive intent.” Pet. App. at 21a [447 F.3d

at 611-12] (citations omitted).

Nowhere did the Eighth Circuit address the Beneficial

factors that must be established to exercise complete-

preemption removal jurisdiction. The court did not address

whether the FRSA sections at issue provide “the exclusive

cause of action for the claim asserted” (Beneficial’s first

factor) or whether the FRSA sets forth “procedures and

remedies governing that cause of action” (Beneficial’s

second factor). While the court noted that regulations

adopted under the FRSA subject railroads to civil penal-

ties for violations, Pet. App. at 27a [at 614], the court did

not explain-how such an administrative non-remedial

provision satisfies either Beneficial factor. Nor could it,

had it tried. In this Court’s past complete preemption

cases, private state-law causes of action were transformed

by operation of law into private federal causes of action

under the National Bank Act, the LMRA, or ERISA. No

such transfer can occur under the FRSA, which does not

create a private cause of action into which petitioners’

state-law claims could be recast.

The decision of the Eighth Circuit broadly expands

the limited circumstances defined by Beneficial for when a

state-law claim may be removed to federal court under the

complete-preemption doctrine. By conflating the complete-

preemption doctrine with substantive preemption analy-

sis, the Eighth Circuit threatens to cause what the limit-

_ing language from Grable was intended to prevent: a

potentially enormous shift of traditionally state tort

actions into federal courts based on federal preemption

defenses, such as the 49 separate cases removed by the

Eighth Circuit below.

B. The complete-preemption doctrine is a par-

ticularly poor fit for the FRSA.

The Eighth Circuit’s failure to comprehend the com-

plete-preemption doctrine was compounded by its failure

to appreciate the substantive preemption analysis under

the FRSA. In CSX Transp., Inc. v. Easterwood, 507 U.S.

658 (1993), this Court addressed preemption claims under

8

the FRSA for the first time. The Court observed that the

FRSA preemption provision “displays considerable solici-

tude for state law in that its express pre-emption clause is

both prefaced and succeeded by express saving clauses.”

Id. at 665. To resolve the particular preemption defenses

asserted by the railroad, the Court therefore looked in

detail at the specific facts supporting the tort claim, at the

particular federal regulations purportedly relevant to the

claim, at the state’s specific use of federal funds, at

“whether the preconditions for application of either [fed-

eral] regulation have been met,” at the compatibility of

concurrent state and federal rules, and at whether the

state rules concerned local safety hazards. Id. at 665-75.

The doctrine of complete preemption is wholly unsuited to

such a regime. Removal occurs at the outset of a case. See

28 U.S.C. § 1446(b) (requiring “notice of removal of a civil

action” to “be filed within thirty days after” service of

process). It would make no sense for a federal district

court to oversee exhaustive discovery and trial proceedings

that might result in a determination that — because there

is no preemption on the facts of the case — it has no juris-

diction, and the case must be remanded. This case is a

prime illustration of the mismatch between the complete-

preemption doctrine and the FRSA. |

The National Transportation Safety Board concluded

that the probable cause of the Minot derailment was “an

ineffective Canadian Pacific Railway inspection and

maintenance program that did not identify and replace

cracked joint bars before they completely fractured and led

to the breaking of the rail at the joint.” The Amended

? Track Safety Standards; Inspections of Joints in Continuous

Welded Rail (CWR), 71 Fed. Reg. 59677, 59678-79 (Oct. 11, 2006).

9

Complaint (at J XII) alleges that the track where the

derailment occurred was made of 100-pound, continuous-

welded rail (CWR); that the use of 100-pound CWR on a

mainline track is rare; that the industry normally uses at

least 115-pound rail for mainline CWR track; and that

when the January 2002 derailment occurred, Canadian

Pacific was maintaining approximately 14,000 miles of

track, only approximately 65 miles of which consisted of

100-pound mainline CWR — most of it in use in the track

near Minot, North Dakota, where this derailment oc-

curred. —

In addition, the complaint alleges that the derailment

occurred at a “temporary joint” spliced into the CWR. /d.,

¥ XVIII. The railroad’s own policy required temporary

joints to be welded “as soon as possible after the rail is

laid” and in no event later than 30 days. Jd. Yet the “tem-

porary” joint that failed in the 2002 derailment had been

left in the track for about 20 months prior to the derail-

ment, id., and a track inspection conducted six months

prior to the derailment revealed that the joint that failed

was being subjected to high tensile forces. Id., {| XVIII.

Further, the complaint alleges that the railroad did not

meet either its own internal requirements, or industry

standards, for anchoring the track in a manner that

protects joints from the strong tensile forces that occur

when a track is used in cold temperatures like those that

existed when the train derailed on January 18, 2002. Id.,

q9 XXV and XXVI. Finally, the railroad failed to inspect

the track properly and left a cracked joint bar in the track

for nearly a year. Jd., { XXXI.

The FRSA regulations do not cover the salient facts

that give rise to Petitioners’ complaint. For example, they

do not establish any weight requirements for track, as this

10

is an industry standard. They also do not state the stan-

dard for anchoring CWR at joints; again, this is an indus-

try standard. They also do not address temporary joints in

CWR and how much wear is allowed or how long they may

remain in the track; plaintiffs’ claims are again based

upon industry and internal standards. Finally, the regula-

tions (in their 1998 form) do not set inspection standards

for CWR, instead asking rail:oads to come up with their

own individual standards and submit them for review.

Here, the railroad did not submit inspection policies to the

Federal Railroad Administration (FRA), as required under

49 C.FR. § 213.119, and none of the submissions were

reviewed by the FRA prior to the derailment anyway.

Thus, none of the claims are substantively preempted. At

the very least, the determination of substantive preemp-

tion requires a detailed and fact-specific analysis. There is

no basis to believe that Congress intended to create a

regime under which a federal court must undertake such

an analysis merely to determine its own jurisdiction — and

under which a plaintiff suing a railroad must prevail twice

to obtain relief, once in the federal courts (following

removal), and once in the state courts (following remand).

There is still one more reason why the complete

preemption doctrine is incompatible with the FRSA. This

Court has repeatedly held the law disfavors leaving

victims of negligence without a remedy for damages. See,

e.g., Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 251

(1984) (it is “difficult to believe that Congress would,

without comment, remove all means of judicial recourse

for those injured by illegal conduct”); Medtronic Inc., 518

U.S. at 487 (rejecting a broad interpretation of a preemp-

tion statute because that would mean “Congress effectively

11

precluded state courts from affording consumers any

protection from injuries resulting from a defective medical

device,” calling such a result “perverse” because it would

grant “complete immunity from design defect liability”).

By holding that the FRSA completely preempts state law —

even though it does not create an exclusive federal cause

of action of which plaintiffs can avail themselves — the

Eighth Circuit decision runs afoul of those admonitions.

Il. The Eighth Circuit’s vast and erroneous expan-

sion of the complete preemption doctrine has

numerous negative consequences.

Under the Eighth Circuit approach to complete

preemption — which essentially equates ordinary, substan-

tive preemption with complete preemption — the doctrine

of complete preemption will apply to countless lawsuits

filed each year. The transformation of a state-law claim to

a federal claim will become not the rare exception, but the

rule when (in the federal court’s view) substantive federal

preemption is clear. Not only does the Eighth Circuit rule

disregard the limits imposed on the doctrine in Beneficial

National Bank and the prior decisions upon which it

relied, but it will create numerous adverse consequences to

the states, litigants, and the courts.

A. The Eighth Circuit’s rule undermines prac-

tical and federalism values served by the

well-pleaded complaint rule and the pre-

sumption against removal.

In Cully v. First Nat'l Bank, 299 U.S. 109, 118 (1936),

Justice Cardozo emphasized the practical advantages of

the well-pleaded complaint rule. “If we follow the ascent

12

far enough,” he wrote, “countless claims of right can be

discovered to have their source or their operative limits in

the provisions of a federal statute or in the Constitution

itself.” The well-pleaded complaint rule is necessary,

therefore, “[t]o set bounds to the pursuit.... We shall be

lost in a maze if we put that compass by.” Jd. More con-

cretely, plaintiffs may incorrectly anticipate defendants’

defenses, the federal issue in a case may not become

apparent until well after the litigation has proceeded in

state court, or federal defenses may be “concocted purely

to confer jurisdiction.” Richard Posner, The Federal

Courts: Crisis and Reform 190 (1985). The well-pleaded

complaint rule prevents those contingencies from interfer-

ing with the orderly disposition of actions filed in state

court. The Eighth Circuit’s decision in this case, by carving

out a broad exception to the well-pleaded complaint rule,

increases the likelihood that state tort actions will be

subject to these practical complications.

The Eighth Circuit’s decision also undermines the

federalism interests served by the weli-pleaded complaint

rule and the concomitant presumption against removal.

The well-pleaded complaint rule apportions cases between

the state courts and federal courts in a manner that leaves

state courts with considerable responsibility for construing

federal law. That delegation of power to state courts

reflects the recognition by Congress and this Court that

state courts are fully capable of discharging their constitu-

tional mandate to construe federal law. See Stone v.

Powell, 428 U.S. 465, 494 n.35 (1976). It also reflects the

state courts’ historical role as primary arbiters of federal

law. See Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473,

477-78, n.4 (1981).

13

And because removal deprives state courts of jurisdic-

tion over original state-law causes of action, this Court has

recognized that removal of such claims raises significant

federalism concerns that mandate strict construction of

the removal statute: “Due regard for the rightful inde-

pendence of state governments, which should actuate

federal courts, requires that they scrupulously confine

their own jurisdiction to the precise limits which the

statute has defined.” Shamrock Oil & Gas Corp. v. Sheets,

313 U.S. 100, 109 (1941) (citations and internal quotations

omitted). For this reason, since 1887, the burden of estab-

lishing federal jurisdiction is on the party seeking re-

moval. See Carson v. Dunham, 121 U.S. 421, 425 (1887).°

The Eighth Circuit’s expansion of the complete preemption

doctrine distorts the federal-state balance by authorizing

the removal to federal court of a broad category of cases

that have traditionally been heard in state court.

B. The Eighth Circuit rule threatens removal

of state-law actions commonly brought by

state Attorneys General.

State Attorneys General play a leading role in protect-

ing the interests of consumers and in enforcing environ-

mental laws. Most consumer protection and environmental

enforcement actions brought by state Attorneys General

are instituted in state courts. The decision below seriously

threatens the states’ ability to maintain that forum of

* See also Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97

(1921) (citing Carson), Carpenter v. Wichita Falls Indep. Sch. Dist., 44

F.3d 362, 365 (5th Cir. 1995) (same); Mulcahey v. Columbia Organic

Chem. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994) (same); Doe v. Allied-

Signal, Inc. , 985 F.2d 908, 911 (7th Cir. 1993) (same).

14

thei . ..0sing, even when the Attorneys General carefully

limit ° vir causes of action to state-law claims.

Commercial enterprises that run afoul of state con-

sumer protection and environmental laws are subject to a

significant number of federal statutes and regulations, and

defendants in actions brought by states frequently assert

the defense ‘of preemption. Under the Eighth Circuit's

standard, those defendants would be entitled to have a

federal court resolve the preemption issue — and, should it

find preemption, uphold removal of the action. As a conse-

quence, actions brought under an Attorney General’s core

regulatory authority would, at the very least, face pro-

tracted litigation about whether state enforcement actions

should be removed when preemption defenses are raised,

as has occurred in the Eighth Circuit in cases arising out

of derailments such as the Minot derailment."

North Dakota, for example, settled the environmental

violations caused by the Canadian Pacific Railway Com-

pany arising out of the Minot derailment through judg-

ment entered under a consent decree. State of North

Dakota v. Canadian Pacific Ry. Co. (N.D. Dist. Court,

Ward Cty., Civ. no. 03-C-1003, July 15, 2003). That case

was an enforcement action to address violations of North

Dakota’s water (N.D.C.C. ch. 61-28), hazardous waste

(N.D.C.C. ch. 23-20.3), and air pollution (N.D.C.C. ch. 23-

25) statutes, and their implementing rules, that were

caused by the January 2002 derailment that gave rise to

the case below. As with all states who assume primacy over

‘ In re Derailment Cases, 416 F.3d 787 (8th Cir. 2005), Mehl v.

Canadian Pacific Ry., Ltd., 417 F. Supp. 2d 1104 (D.N.D. 2006); Kalan

Enterprises, LLC v. BNSF Ry. Co., 415 F. Supp. 2d 977 (D. Minn. 2006).

15

a Congressionally-enacted environmental program admin-

istered under EPA’s oversight, North Dakota assumed

these programs as part of a system of “cooperative federal-

ism,” which allows each state the choice of regulating an

activity according to federal standards or having state law

preempted by federal regulation. See, e.g., New York v.

U.S., 505 U.S. 144, 167 (1992) (disposal of radioactive

waste). North Dakota’s implementing rules, like most

states, are based on federal rules and, in many places,

incorporate the federal rules by reference. See, e.g., N.D.

Admin. Code §§ 33-16-02.1-08, 33-15-01-15 (cited in J 12 of

the stipulated facts in the North Dakota consent decree).

See also N.D. Admin. Code ch. 33-16-02.1, North Dakota's

water quality standards, incorporating EPA-Clean Water

Act rules throughout. Any preemption defense that could

be raised to the violation of any of these rules would be,

under the Eighth Circuit’s subsequent decision, arguably

removal to federal court. At best, this would add time and

expense, and would delay resolution of the case; at worst,

it would remove all such cases to federal district court

when a preemptive defense is raised by the defendant.

South Dakota ex rel. S.D. R.R. Auth. v. Burlington

Northern & Santa Fe Ry. Co., 280 F. Supp. 2d 919 (D.S.D.

2003) (decided a month after this Court’s decision in

Beneficial) provides an example of application of the

Eighth Circuit’s rule. There, South Dakota filed its state-

law causes of action for specific performance of a contract,

tortious interference, and injunctive relief against the

railroad in state district court. Jd. at 923. In its ruling on

the motion for remand, the federal district-court agreed

that South Dakota’s “complaint does not, on its face, allege

any claimed federal question for federal question jurisdic-

tion.” Jd. at 925. Yet the district court declined to remand

16

based on an analysis under “the doctrine of ‘complete

preemption.’” Like the Eighth Circuit’s analysis in the

case below, the district court conflated complete preemp-

tion with substantive preemption, id. at 926-35, and

denied South Dakota’s motion based primarily on the

“obstacle” form of substantive preemption. Id. at 929.

South Dakota and Burlington Northern ultimately settled

this case.

C. The Eighth Circuit rule would increase the

time, and drive up the expense, of litigation.

“Jurisdictional rules should be clear.” Grable, 545 U.S.

at 321 (Thomas, J., concurring). The case below is a prime

example of what happens when jurisdictional rules are

unclear. Five years after the derailment occurred, jurisdic-

tion remains the issue. There is no reason, moreover, to

believe this is a rare occurrence. Complete preemption

“may be the most misunderstood of all federal jurisdic-

tional rules.” Garrick B. Pursley, Rationalizing Complete

Preemption After Beneficial National Bank v. Anderson: A

New Rule, A New Justification, 54 Drake L. Rev. 371, 372

(2006). As described in the Petition for Writ of Certiorari,

the lower courts are confused about the -doctrine of ©

complete preemption and are in disarray as to how the

FRSA preemption provisions apply. See Pet. 13-24. The

Eighth Circuit’s decision is emblematic of the problem,

misreading the complete-preemption doctrine and the

FRSA preemption provision to create a result — the

transformation of traditional state-law causes of actions

against railroads into federal claims — that Congress could

not possibly have intended. As defendants around the

nation cite the Eighth Circuit opinion, it will undoubtedly

17

exacerbate the disarray and increase the toll that jurisdic-

tional battles impose on litigants and courts.

Moreover, plaintiffs commonly choose state courts

over federal courts for a reason. Tort cases typically

revolve around facts and causation, not legal technicali-

ties. State courts have a long history with those kinds of

cases; they form a more central part of state court dockets

than their federal counterparts. Federal courts are often

located far from plaintiffs’ residences. In addition, over-

burdened federal judges more often “quickly” dispose of

cases by stringently controlling discovery, aggressively

encouraging settlement, and more frequently granting

summary judgment. See Steven Plitt, and Joshua D.

Rogers, Charting a Course for Federal Removal Through

the Abstention Doctrine: A Titanic Experience in the Sar-

gasso Sea of Jurisdictional Manipulation, 56 DePaul L.

Rev. 107, 107 (2006).

The Eighth Circuit’s rule therefore creates a Hobson's

choice for those tort victims who wish to try their state-law

tort actions in state court. Under the Eighth Circuit rule,

any uncertainty as to substantive preemption — a notori-

ously complicated issue — results in uncertainty as to

whether claims are completely preempted. Because re-

‘moval is authorized if even one of a plaintiff's claims is

completely preempted, the plaintiff is left in the unenvi-

able position of having to decide whether to omit any

claim that is even arguably preempted (as a substantive

matter) or running the risk of being forced to litigate in

federal court. Federal statutes and regulations, if read

broadly for complete removal effect, will do more than

just dilute state court jurisdiction and state sovereign

interests. They will increase the financial and human

costs for accident victims. The well-pleaded complaint

18

rule, properly understood, protects against that problem.

The Eighth Circuit’s decision vastly overreads a narrow

exception to that rule, and should be rejected by this

Court. ;

¢

CONCLUSION

The Petition for Writ of Certiorari should be granted.

Dated: December 18, 2006

Respectfully submitted.

WAYNE STENEHJEM

Attorney General

of North Dakota

LYLE G. WITHAM*

DEAN J. HAAS

Assistant Attorneys General

500 North 9th Street

Bismarck, ND 58501-4509

(701) 328-3640

*Counsel of Record