CITY OF CAPE MAY v. KIMMEL BOGRETTE ARCHITECT + SITE INC. et al
OPINION. Signed by Judge Robert B. Kugler on 2/29/2016. (TH, )
NOT FOR PUBLICATION
(Doc. Nos. 41 & 58)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CITY OF CAPE MAY,
Civil No. 14–8119 (RBK/KMW)
KIMMEL BOGRETTE ARCHITECT +
SITE INC., et al.,
KUGLER, United States District Judge:
This matter comes before the Court upon its Order to Show Cause why the case should
not be dismissed for lack of subject matter jurisdiction (Doc. No. 58). Plaintiff City of Cape May
submitted a brief responding to this Court’s Order to Show Cause on February 22, 2016 (Doc.
No. 59). For the reasons set forth below, the matter shall be dismissed. Defendant Fralinger
Engineering, P.A.’s (“Defendant Fralinger”) motion to dismiss for failure to state a claim (Doc.
No. 41) shall be denied for lack of subject matter jurisdiction.
Federal courts are courts of limited subject matter jurisdiction and “possess only that
power authorized by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of America,
511 U.S. 375, 377 (1994). This Court therefore must be assured of its own jurisdiction
throughout all stages of litigation. Kontrick v. Ryan, 540 U.S. 443, 455 (2004) (citing Mansfield,
C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382 (1884)). Plaintiff brought this case pursuant to 28
U.S.C. § 1331. See Pl.’s Am. Compl. at 4. Plaintiff therefore has the burden of establishing
jurisdiction. Kokkonen, 511 U.S. at 377.
The parties are not diverse, and Plaintiff’s sole basis for original jurisdiction is federal
question jurisdiction pursuant to 28 U.S.C. § 1331. See Pl.’s Am. Compl. at 2–4. “The 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). Federal question jurisdiction exists where “federal law creates the cause of action[.]”
Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808 (1986). But Plaintiff does
not plead any cause of action created by federal law. See generally Pl.’s Am. Compl.
Plaintiff pleads state law claims for breach of contract, negligence, and unjust enrichment,
among others. See generally id.
This Court has jurisdiction pursuant to 28 U.S.C. § 1331 over a state law claim only if
“the vindication of a right under state law necessarily turn[s] on some construction of federal
law.” Merrell Dow Pharmaceuticals Inc., 478 U.S. at 808 (quoting Franchise Tax Bd. v.
Construction Laborers Vacation Trust, 463 U.S. 1, 9 (1983)). But “[n]ot every question of
federal law emerging in a suit is proof that a federal law is the basis of the suit.” Gully v. First
Nat. Bank, 299 U.S. 109, 115 (1936). To confer jurisdiction, a federal issue must be “(1)
necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal
court without disrupting the federal-state balance approved by Congress.” Gunn v. Minton, 133
S. Ct. 1059, 1065 (2013) (citing Grable & Sons Metal Products, Inc. v. Darue Engineering &
Mfg., 545 U.S. 308, 313–14 (2005)). This test applies to determine “arising under” jurisdiction
pursuant to 28 U.S.C. § 1331, as well as 28 U.S.C. § 1338(a). See id. at 1064. The Supreme
Court has “interpreted the phrase ‘arising under’ in both sections identically, applying [its] §
1331 and § 1338(a) precedents interchangeably.” Id.
Plaintiff does not bring any cause of action created by the National Flood Insurance Act
(“NFIA”), 42 U.S.C. § 4001 et seq. The mere mention of the NFIA and its implementing
regulations in Plaintiff’s Amended Complaint does not necessarily raise a federal issue. Plaintiff
asserts that, for example, Defendant Kimmel Bogrette Architect + Site Inc. (“Defendant
Kimmel”) breached its contract with Plaintiff by “among other things, failing to properly design
the Project, and/or failing to prepare the Project plans and specifications with sufficient detail
and information, and/or by failing to abide by City, County, State and/or Federal regulations in
the development of the design preparations of plans, specifications and construction
administration.” Pl.’s Am. Compl. at 8. Simply asserting that Defendant Kimmel breached its
contractual obligations by failing to abide by federal regulations does not necessarily raise a
disputed federal issue. This Court could resolve Plaintiff’s breach of contract claim against
Defendant Kimmel without analyzing the meaning of the federal regulations mentioned. Because
Plaintiff’s Amended Complaint does not necessarily present a federal issue on its face, Plaintiff
has not met its burden to establish the existence of federal jurisdiction. See Caterpillar Inc., 482
U.S. at 392.
This Court must inform Plaintiff that it has leave to amend its deficient complaint “within
a set period of time, unless amendment would be inequitable or futile.” Grayson v. Mayview
State Hosp., 293 F.3d 103, 108 (3d Cir. 2002). It would be futile in this case to permit Plaintiff to
amend its complaint. Perhaps Plaintiff could amend its complaint to necessarily raise a disputed
federal issue on its face. But Plaintiff’s response to this Court’s Order to Show Cause failed to
demonstrate that this case involves a substantial federal issue (Doc. No. 59). As the Supreme
Court explained in Gunn, “[t]he substantiality inquiry under Grable looks . . . to the importance
of the issue to the federal system as a whole.” 133 S. Ct. at 1066. Plaintiff argues that its claims
raise a substantial federal issue because of the importance of “uniformity in the application of
federal laws and rulings and the Federal Flood Insurance Program Regulations.” See Pl.’s Br. at
12. This Court acknowledges that there is a federal interest in the uniform application of federal
law and regulations.1 But the federal interest in uniformity cannot alone satisfy the substantiality
inquiry. Otherwise, every necessarily raised and disputed federal issue would be substantial and
confer federal jurisdiction. As the Supreme Court explained, state courts will follow federal
precedents where they exist, and a federal court will “at some point” decide any novel questions
of federal law that arise in a state court “case within a case[.]” Gunn, 133 S. Ct. at 1067. “If the
question arises frequently, it will soon be resolved within the federal system, laying to rest any
contrary state court precedent; if it does not arise frequently, it is unlikely to implicate substantial
federal interests.” Id.
Plaintiff has the burden of establishing jurisdiction, Kokkonen, 511 U.S. at 377, and it has
failed to convince this Court that its claims involve any substantial federal issue. The Supreme
Court has set a high bar for substantiality. See Gunn, 133 S. Ct. 1066–68. Plaintiff’s claims
appear to be “fact-bound and situation-specific” and do not present any “pure issue of [federal]
law[.]” Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 700 (2006). Plaintiff admits
that its newly-constructed Cape May Convention Center is “uniquely located” and a “rare”
project. Pl.’s Br. at 9. In the absence of a substantial federal issue, it would disrupt the federal-
Plaintiff cites Clearfield Trust Co. v. United States, 318 U.S. 363, 367 (1943) to support its
argument about the desirability of a uniform rule of law. But Clearfield was about choice of law
rules, not about jurisdiction. See id. The Supreme Court in Clearfield held that the strong federal
interest in uniformity in that case demanded the application of federal common law instead of
state law. See id. That concern is not relevant to this case. Furthermore, state courts are
“competent to apply federal law, to the extent it is relevant[.]” Empire Healthchoice Assur., Inc.
v. McVeigh, 547 U.S. 677, 701 (2006).
state balance approved by Congress for this Court to decide Plaintiff’s state law contract and tort
Congress considered jurisdictional issues in enacting the NFIA. See, e.g., 42 U.S.C. §
4104 (federal jurisdiction for administrative appeals); 42 U.S.C. § 4053 (exclusive federal
jurisdiction for claims against insurers regarding disallowance of flood insurance claims). The
Third Circuit “held that district courts have original exclusive jurisdiction over cases arising
from improper handling of Policy claims[.]” C.E.R. 1988 Inc. v. Aetna Cas. and Sur. Co., 386
F.3d 263, 268 (3d Cir. 2004). But Plaintiff’s case does not arise from the improper handling of
any flood insurance claims. Plaintiff’s claims for breach of contract, negligence, and unjust
enrichment “involve no right created by federal statute.” See Empire, 547 U.S. at 697.
Congress could have created a federal private cause of action against contractors that “fail to
abide by . . . Federal regulations in the development of the design preparations of plans,
specifications and construction administration.” Pl.’s Am. Compl. at 8. This Court has “no
warrant to expand Congress’ jurisdictional grant ‘by judicial decree.’” Empire, 547 U.S. at 697
(quoting Kokkonen, 511 U.S. at 377).
Because this Court does not have original jurisdiction over any of Plaintiff’s claims, the
matter shall be dismissed. Defendant Fralinger’s motion to dismiss for failure to state a claim
(Doc. No. 41) shall be denied for lack of subject-matter jurisdiction.
s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge
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