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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2006

## Text

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1612%3A4. Public record. Not legal advice.