BOROUGH OF CARTERET, NEW JERSEY v. CONSOLIDATED RAIL CORPORATION

Filing 8

MEMORANDUM. Signed by Judge Esther Salas on 1/3/18. (DD, )

Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

BOROUGH OF CARTERET, a body
corporate and politic, State of
New Jersey,
Plaintiff,

Civil Action No. 17-13204 (ES) (MAll)

v.

MEMORANDUM

CONSOLIDATED RAIL
CORPORATION,
Defendant.

SALAS, DISTRICT JUDGE

The Court writes primarily for the parties and assumes their familiarity with the factual
allegations and procedural history. Briefly, this case arises from Plaintiff Borough of Carteret’s
(the “Borough” or “Carteret”) claim that Defendant Consolidated Rail Corporation (“Conrail”)
improperly denied the Borough access to Conrail’s property (the “Property”) to conduct certain
investigations. (See generally D.E. No. 1-I at 8-15 (“Compl.”)).’ In particular, the Borough’s
state-court complaint alleges that its “consultants and experts require access and entry onto the
Property for the purpose of making studies, surveys, tests, soundings, borings, appraisals and
examinations pursuant to [certain New Jersey statutes], and so that the Borough can make
informed decisions regarding the condition of the Property,

.

.

.

the existence of environmental

contamination and the estimated costs of remediation, and any other information relevant to the
acquisition and development of the Property.”

(See Id. at 13).

“[T]he Borough demands

For ease of reference, the cited page numbers in docket-entry citations in this Memorandum correspond to
those generated by the Court’s ECF system.

judginent in its favor granting the right to access the Property and such other relief as the Court
deems just and equitable.” (Id. at 15).
Conrail removed this matter from state court, asserting subject matter jurisdiction under
both 28 U.S.C.

§ 1331 and 1332. (Sec D.E. No. 1-1 at 2-3 (“Removal Notice”)). “[B]ecause

subject matter jurisdiction is non-waivable, courts have an independent obligation to satisfy
themselves of jurisdiction if it is in doubt.” Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 76-77
(3d Cir. 2003).2 “A necessary corollary is that the court can raise sna sponte subject-matter
jurisdiction concerns.” Id. at 77. Having done so in this matter, the Court finds this action must
be REMANDED to state court for the reasons below.
I.

Removal Jurisdiction
“Federal courts are courts of limited jurisdiction” and “possess only that power

authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of An,., 511 U.S.
375, 377 (1994) (citations omitted).

“Congress has conferred on the district courts original

jurisdiction in federal-question cases—civil actions that arise under the Constitution, laws, or
treaties of the United States.” Exxon Mobil Corp. v. Allapattah Sen’s., Inc., 545 U.S. 546, 552
(2005) (citing 28 U.S.C.

§ 1331). And, “to provide a neutral forum for what have come to be

known as diversity cases, Congress also has granted district courts original jurisdiction in civil
actions between citizens of different States, between U.S. citizens and foreign citizens, or by
foreign states against U.S. citizens.” Id. (citing 28 U.S.C.

§ 1332). “To ensure that diversity

See also Ruhigas AG i’. Marathon Oil Co., 526 U.S. 574, 583 (1999) (“[S]ubject matter delineations must
be policed by the courts on their own initiative
); Zambelli Fireirorkv Mfg. Co. i’. Wood, 592 F.3d 412, 418 (3d
Cir. 2010) (“Federal courts are courts of limited jurisdiction, and when there is a question as to our authority to hear
a dispute, ‘it is incumbent upon the courts to resolve such doubts, one way or the other, before proceeding to a
disposition on the merits.”) (quoting Carisbeig Res. Corp. v. anshria Sui’. & Loa;i Ass n, 554 F.2d 1254, 1256 (3d
Cir. 1977)).
2

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jurisdiction does not flood the federal courts with minor disputes,

§

1332(a) requires that the

matter in controversy in a diversity case exceed a specified amount, currently $75,000.” Id.
Under 28 U.S.C.

§

144 1(a), a defendant may remove a state-court civil action to a federal

court that has original jurisdiction over the action. But a removing party “carries a heavy burden
of showing that at all stages of the litigation the case is properly before the federal court.”
Manning

i’.

Merrill Lynch Pierce Fenner & Smith, Inc., 772 F.3d 158, 162 (3d Cir. 2014)

(internal quotation marks and citation omitted). In fact, “the removal statute should be strictly
construed and all doubts should be resolved in favor of remand” because “lack of jurisdiction
would make any decree in the case void and the continuation of the litigation in federal court
futile.” Abels v. State Earn, Fire & Cas. Co., 770 F.2d 26,29 (3d Cir. 1985).
II.

Neither Diversity Jurisdiction nor Federal-Question Jurisdiction Exists Here
First, Conrail invokes diversity jurisdiction because there is complete diversity between

the parties and the amount in controversy purportedly exceeds $75,000. (Removal Notice

¶J

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11). As here, when a plaintiff’s state-court complaint “does not state the amount in controversy,
the defendant’s notice of removal may do so.” Dart Cherokee Basin Operating C’o. v. Owens,
135 S. Ct. 547, 551 (2014) (citing 28

§

1446(c)(2)(A)).

And, “as specified in

§

1446(a), a

defendant’s notice of removal need include only a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold. Evidence establishing the amount is required
by

§

1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant’s

allegation.” Id. at 554 (emphasis added).3 Further, like here, “[w]here the plaintiff in a diversity
action seeks injunctive or declaratory relief, the amount in controversy is often not readily
determinable. Under those circumstances, the amount in controversy is determined by the value
Sec cilso Fed. R. Civ. P. 28 U.S.C. § l446(c)(2)(B) (“[Rjemoval of the action is proper on the basis of an
amount in controversy asserted [in the notice of removal] if the district court finds, by the preponderance of the
evidence, that the amount in controversy exceeds the amount specified in section 1332(a).”).

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of the object of the litigation.” Columbia Gas Transmission Corp.

i’.

Tarbuck. 62 F.3d 538, 541

(3d dr. 1995) (internal quotation marks and citations omitted); see also In

ic

Corestates Trust

Fee Litig., 39 F.3d 61, 65 (3d Cir. 1994) (“In injunctive actions, it is settled that the amount in
controversy is measured by the value of the right sought to be protected by the equitable relief”).
The issue here is the jurisdictional amount in controversy. In its removal notice, Conrail
alleges that the requisite amount in controversy is met because the Borough “seeks Judgement
authorizing it to enter upon and interfere with Conrail’s property, pursuant to its ‘authority to
condemn’ Conrail’s property.” (Removal Notice

¶9

10-lI). Afier removal, the Court held a

telephonic conference to, among other things, inquire how the amount-in-controversy is
sufficient to confer diversity jurisdiction.

Conrail was then required to come forward with

evidence—which it was provided an opportunity to do—showing that the jurisdictional amount
in controversy is met. See, e.g., Truglio v. Planet Fitness, Inc., No. 15-7959, 2017 WL 3595475,
at *3 (D.N.J. Aug. 21, 2017) (“When the sufficiency of the jurisdictional allegations in a notice
of removal is challenged, the parties must submit proofs for the court to decide, by a
preponderance of the evidence, whether the jurisdictional requirements are satisfied.”) (citation
omitted).
But Conrail has failed to do so. It avers only that “the value of the property at issue and
the value of an injunction, which ultimately seeks condemnation of Conrail’s property, exceeds
the amount in controversy” requirement. (D.E. No. 3 at 11). It asserts that the “issue here is the
value of Conrail’s property,” and “[t]he value of Conrail’s property—to the Borough or to
Conrail—exceeds the amount in controversy.” (Id. at 12-13).
It is simply unclear how such attorney argument from a removing party establishes—by a
preponderance of the evidence—subject matter jurisdiction.

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See Goldberg v. Healthport

Technologies, LLC, No. 14-2810, 2014 WL 3749210, at *4 (D.N.J. July 30, 2014) (“Defendant
has not submitted facts sufficient for the Court to analyze whether the jurisdictional threshold is
reached and so has not met its burden.”) (citations omitted).

Moreover, Conrail’s

characterization that the Borough seeks an injunction condemning the Property (e.g., D.E. No. 3
at 11-13) is puzzling because the Borough’s complaint seeks access—not condemnation—to
conduct certain investigations (see Compl. at 10, 13-l6). Conrail’s conflation of this distinction
confirms for this Court that it has failed to meet its burden of showing the jurisdictional amount
in controversy exists here.

ci: Martin v.

IVal-Man Stores, Inc.. 709 F. Supp. 2d 345. 350 (D.N.J.

2010) (“Defendant’s suspicion that Plaintiffs claims may be worth more than the jurisdictional
amount falls far short of establishing by a preponderance the Court’s subject-matter
jurisdiction.”); Valerio v. Musrabasic. No. 07-0534, 2007 WL 2769636, at *4 (D.N.J. Sept. 21,
2007) (“[A] removing party must provide more than tenuous inferences and assumptions about
the amount in controversy to satisfy’ its burden.”).5 As such, the Court finds that Conrail has
failed to meet its burden of showing the requisite amount in controversy and, therefore,
jurisdiction cannot be premised on 28 U.S.C.

§ 1332.

Second. Conrail claims this Court has federal-question jurisdiction because, based on the
Interstate Commerce Commission Termination Act, 49 U.S.C.

§ 10101. ct seq. (the “ICCTA”),

the Borough’s “cause of action is completely preempted by federal law.” (See Removal Notice ¶
Indeed, Conrail’s removal notice says as much: “The Borough of Cafleret seeks Judgement authorizing itto
enter upon and interfere with Conrail’s property, pursuant to its ‘authority to condemn’ Conrail’s property, in
connection with a redevelopment plan that includes Conrail’s property.” (Removal Notice ¶ 10).
To be sure, the Borough’s allegations suggest that it is a prospective condernnor of the Property. (See, e.g.,
Compl. at 10, 13). And, as set forth in the Borough’s pre-suit letter to Conrail. “the Borough’s intention is to
construct a bicycle circulation path around the Borough, including over a portion of the property currently occupied
by the Conrail line.” (See D.E. No. I-I at 34). But Conrail nevertheless fails to provide: (I) a basis in law or fact

supporting that this is actually a condemnation action despite the relief requested by the Borough and, in any event,
(2)the valuation of the Property. Thus, it falls short of meeting its burden. See Darter i’. Saie-A-Lot, No. 16-45 10,
2016 WL 6213074, at *4 (ED. Pa. Oct. 25, 2016) (“The Court cannot substitute Defendants’ expectations nor its
own assumptions— for the evidence necessary to support federal jurisdiction.”).

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12). “A complaint without a federal question presented on its face is beyond the power of a
federal court to adjudicate, and a defendant may not circumvent this requirement by asserting a
federal defense, such as preemption, to the complaint.” Williams v. Nai’ient Solutions, LLC, No.
17-6509, 2017 WL 3784039, at *1 (D.N.J. Aug. 3!, 2017).

“[T]he question of whether the

[federal statute] is preemptive of state law claims as an affinnative defense is a question distinct
from whether it is completely preemptive of state law and thus sufficient to justify removal
despite the absence of a federal question on the face of the complaint.” Id. at *2. “Only in
relatively rare circumstances. where ‘the preemptive force of a statute is so extraordinary that it
converts an ordinary state common-law complaint into one stating a federal claim for purposes of
the well-pleaded complaint rule.’ does preemption warrant federal question jurisdiction on
removal.” Id. at *1 (quoting caterpillar. Inc. v. IVillianis, 482 U.S. 386, 393 (1987)).6
Here, Conrail contends “that condemnation of rail road property is preempted by the
ICCTA.”

(D.E. No. 3 at 14).

Its preemption argument thus assumes that the Borough’s

complaint seeks “condemnation or eminent domain of railroad property.” (See it!. at 15). But as
discussed above, this is not what the Borough’s state-court complaint seeks. Further. Conrail
fails to advance any argument that seeking entry and access pursuant to state law (like the
Borough’s complaint aims to do) is completely preempted by the ICCTA. See Williams, 2017
WL 3784039, at *1 (“For Defendant to remove properly, it bears the burden of showing the
[federal statute] not only preempts, but complete/v preempts any and all state law claims relating
to the [federal statute].”) (emphasis in original). Nor does it appear that Conrail could. See, e.g.,
christetisen v. BNSF Railway

Co., 242 F. Supp. 3d 1186, 1191-93 (D. Kan. 2017) (concluding

that “the ICCTA does not completely preempt plaintiffs’ claim for an injunction”); Shupp

i’.

See l!so Johnson v. NBC Universal, Inc., 409 F. App’s 529, 531 (3d Cir. 20)0) (“Under the doctrine of
complete preemption, Congress may so completely preempt a particular area that any civil complaint raising this
select group of claims is necessarily federal in character.”) (internal quotation marks and citation omitted).

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Reading Blue Mountain, 850 F. Supp. 2d 490, 496 (M.D. Pa. 2012) (“The Defendant has not
provided, and the Court is not aware

.

.

.

of any binding authority that indicates that the ICCTA

presents complete preemption of state law. In fact, the reported cases weigh heavily against this
proposition.”) (internal quotation marks and citation omitted). Accordingly, the Court finds that
Conrail has failed to show that removal is proper based on the complete-preemption doctrine
and, therefore, jurisdiction cannot be premised on 28 U.S.C.
III.

§ 1331.

The Conrt Must Remand this Action to State Court
“A federal court’s entertaining a case that is not within its subject matterjurisdiction is no

mere technical violation; it is nothing less than an unconstitutional usurpation of slate judicial
power.” Martin, 709 F. Supp. 2d at 346 (quoting Wright & Miller. 13 Fed. Prac. & Proc. Civ.
3522 (3d ed. West 2010)). As noted, 2$ U.S.C.

§

§ 1441 “is strictly construed, requiring remand if

any doubt exists over whether removal was proper”—and “[t]he party seeking removal caries
the burden of proving that removal is proper.” Car/vie fm. Mgmt. LLC v Moonniouth Co. S.1,
779 F.3d 214. 21$ (3d Cir. 2015).
Mindflul of these precepts and the burden Conrail caries as the removing party. the Court
cannot find the amount in controversy here exceeds S75.000 to confer jurisdiction under 2$
U.S.C.

§ 1332 or that complete preemption exists to confer jurisdiction under 28 U.S.C. § 1331.

Consequently, the Court remands this matter to stale court consistent with the accompanying
Order.
s/Esther Salas
Esther Salas, U.S.D.J.

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