SolarCity Corporation v. Faye Burian

Filing 10

ORDER TO SHOW CAUSE RE: SUBJECT MATTER JURISDICTION by Judge Beverly Reid O'Connell. After reviewing the Complaint, it is not clear to the Court that the Supremacy Clause or FAA give rise to federal question jurisdiction in this case. Plaintif f has also cited no authority for the proposition that a PAGA plaintiff acts under color of state law such that a PAGA claim preempted by the FAA violates a defendants federal rights. Accordingly, Plaintiff is ORDERED TO SHOW CAUSE as to why this case should not be dismissed for lack of subject matter jurisdiction. Plaintiffs response to this Order shall be filed by no later than Wednesday, June 3, 2015 at 4:00 p.m. (rfi)

LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 15-00965 BRO (DTBx)

Title

SOLARCITY CORPORATION V. FAYE BURIAN

Date

May 27, 2015

Present: The Honorable

BEVERLY REID O’CONNELL, United States District Judge

Renee A. Fisher

Not Present

N/A

Deputy Clerk

Court Reporter

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS)

ORDER TO SHOW CAUSE RE: SUBJECT MATTER JURISDICTION
Plaintiff SolarCity Corporation (“Plaintiff”) initiated this action on May 15, 2015.
(Dkt. No. 1.) According to the Complaint, Defendant Faye Burian (“Defendant”), a
former employee of Plaintiff, has indicated her intent to pursue a representative class
action against Plaintiff in the Superior Court of California under the Private Attorneys
General Act (“PAGA”), Cal. Lab. Code §§ 2698 et seq. (Compl. ¶ 9.) Plaintiff
maintains that such an action would be improper and preempted by the Supremacy
Clause of the United States Constitution and the Federal Arbitration Act (“FAA”), 9
U.S.C. §§ 1 et seq., and accordingly seeks declaratory and equitable relief. (Compl. ¶ 1.)
Plaintiff invokes this Court’s federal subject matter jurisdiction pursuant to 28 U.S.C. §
1331 on the basis that this case presents federal questions under the Supremacy Clause
and FAA. (Compl. ¶ 2.) Plaintiff also bases federal question jurisdiction on a claim for a
violation of 28 U.S.C. § 1983, contending that a PAGA claim filed by Defendant in state
court would constitute action under color of state law and would deprive Plaintiff of its
federal right to enforce an arbitration agreement. (Compl. ¶ 3.)
A federal court must determine its own jurisdiction even if there is no objection to
it. Rains v. Criterion Sys., Inc., 80 F.3d 339, 342 (9th Cir. 1996). Under 28
U.S.C. § 1331, federal courts have jurisdiction over “all civil actions arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A case “arises
under” federal law if a plaintiff’s “well-pleaded complaint establishes either that federal
law creates the cause of action” or that the plaintiff’s “right to relief under state law
requires resolution of a substantial question of federal law in dispute between the
parties.” Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1,
13 (1983).
CV-90 (06/04)

CIVIL MINUTES – GENERAL

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 15-00965 BRO (DTBx)

Title

SOLARCITY CORPORATION V. FAYE BURIAN

Date

May 27, 2015

“Although the FAA ‘creates federal substantive law requiring the parties to honor
arbitration agreements, it does not create any independent federal-question jurisdiction
under 28 U.S.C. § 1331 or otherwise.’” Valley View Health Care, Inc. v. Chapman, 992
F. Supp. 2d 1016, 1031 (E.D. Cal. 2014) (quoting Southland Corp. v. Keating, 465 U.S.
1, 16 n.9 (1984)), appeal dismissed, Aug. 7, 2014. The United States Supreme Court has
explained that
The Arbitration Act is something of an anomaly in the field of federal-court
jurisdiction. It creates a body of federal substantive law establishing and
regulating the duty to honor an agreement to arbitrate, yet it does not create
any independent federal-question jurisdiction under 28 U.S.C. § 1331 (1976
ed., Supp. IV) or otherwise. Section 4 provides for an order compelling
arbitration only when the federal district court would have jurisdiction over a
suit on the underlying dispute; hence, there must be diversity of citizenship
or some other independent basis for federal jurisdiction before the order can
issue.
Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 26 (1983).
Additionally, the Supreme Court has stated that the Supremacy Clause “is not a source of
any federal rights,” but rather “‘secure[s]’ federal rights by according them priority
whenever they come in conflict with state law.” Chapman v. Houston Welfare Rights
Org., 441 U.S. 600, 613 (1979).
After reviewing the Complaint, it is not clear to the Court that the Supremacy
Clause or FAA give rise to federal question jurisdiction in this case. Plaintiff has also
cited no authority for the proposition that a PAGA plaintiff acts under color of state law
such that a PAGA claim preempted by the FAA violates a defendant’s federal rights.
Accordingly, Plaintiff is ORDERED TO SHOW CAUSE as to why this case should not
be dismissed for lack of subject matter jurisdiction. Plaintiff’s response to this Order
shall be filed by no later than Wednesday, June 3, 2015 at 4:00 p.m.
:

IT IS SO ORDERED.
Initials of Preparer

rf

CV-90 (06/04)

CIVIL MINUTES – GENERAL

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