JAAAT Technical Service, LLC, v. Tetra Tech Tesoro, Inc.
Filing
32
MEMORANDUM OPINION. Signed by District Judge M. Hannah Lauck on 03/29/2016. (ccol, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
JAAAT TECHNICAL SERVICES, LLC,
Plaintiff,
v.
Civil Action No. 3:15cv235
TETRA TECH TESORO, INC.,
Defendant.
MEMORANDUM OPINION
This matter comes before the Court on two motions: (1) Defendant Tetra Tech Tesoro,
Inc.'s ("Tesoro") Motion to Dismiss for Lack of Subject-Matter Jurisdiction ("Motion to
Dismiss"), (ECF No. 18); and, (2) Tesoro's Motion to Disregard Improper Filing, (ECF No. 23).
With respect to the Motion to Dismiss, Tesoro contends, pursuant to Federal Rule of Civil
Procedure 12(b)(l), 1 that the Amended Complaint fails to adequately plead this Court's subject
matter jurisdiction. (ECF No. 19.) Plaintiff JAAAT Technical Services, LLC ("JAAAT'')
responded to the Motion to Dismiss, Tesoro replied, and JAAAT filed a surreply. 2 (ECF Nos.
20, 21, 22.)
In response to JAAAT's surreply, Tesoro filed the Motion to Disregard Improper Filing,
which argues, pursuant to United States District Court for the Eastern District of Virginia Local
Rule of Civil Procedure 7(F)(l), that the Court should strike JAAAT's filing as improper. (ECF
1
"[A] party may assert the following defenses by motion: (1) lack of subject-matter
jurisdiction." Fed. R. Civ. P. 12(b)(l).
2
JAAAT titled its surreply as "Supplemental Authority in Opposition to Motion to
Dismiss Amended Complaint for Lack of Subject Matter Jurisdiction." (ECF No. 22.)
No. 24.) JAAAT responded to the Motion to Disregard Improper Filing, and Tesoro replied.
(ECF Nos. 25, 26.)
The materials before the Court adequately present the facts and legal contentions, and
argument would not aid the decisional process. Both matters are ripe for disposition. For the
reasons stated below, the Court will deny both Tesoro's Motion to Dismiss and Tesoro's Motion
to Disregard Improper Filing.
I. Rule 12lb)(l) Standard
On a motion to dismiss under Federal Rule of Civil Procedure 12{b)(l) challenging the
Court's subject matter jurisdiction, the burden rests with the plaintiff, the party asserting
jurisdiction, to prove that federal jurisdiction is proper. See Int'/ Longshoremen 's Ass 'n v. Va.
Int'/ Terminals, Inc., 914 F. Supp. 1335, 1338 (E.D. Va. 1996) (citing McNutt v. Gen. Motors
Acceptance Corp., 298 U.S. 178, 189 (1936); Adams v. Bain, 691 F .2d 1213, 1219 (4th Cir.
1982)). A Rule 12(b)(l) motion to dismiss can attack subject matter jurisdiction in two ways.
First, a Rule 12(b)(l) motion may attack the complaint on its face, asserting that the complaint
fails to state a claim upon which subject matter jurisdiction can lie. See Int'/ Longshoremen 's
Ass'n, 914 F. Supp. at 1338; see also Adams, 691 F.2d at 1219. In such a facial challenge, a
court assumes the truth of the facts alleged by plaintiff, thereby functionally affording the
plaintiff the same procedural protection he or she would receive under Rule 12(b)(6)
consideration. 3 See Int'/ Longshoremen 's Ass 'n, 914 F. Supp. at 1338; see also Adams, 691
F.2d at 1219.
3
Tesoro limits its challenge to a facial one. (Def. Mem. Supp. Mot. Dismiss 2 ("As this
matter is before the Court on a facial challenge to subject-matter jurisdiction, a detailed
description of the dispute is of little benefit.").)
2
A Rule l 2(b)( 1) motion may also challenge the existence of subject matter jurisdiction in
fact, apart from the pleadings. See Richmond, Fredericksburg & Potomac R.R. Co. v. United
States, 945 F.2d 765, 768 (4th Cir. 1991); Int'/ Longshoremen 's Ass 'n, 914 F. Supp. at 1338; see
also Adams, 697 F .2d at 1219. In such a factual challenge, no presumptive truthfulness attaches
to the plaintiffs allegations, and the existence of disputed material facts will not preclude the
trial court from evaluating for itself the merits of jurisdictional claims. See Int 'l Longshoremen 's
Ass 'n, 914 F. Supp. at 1338; see also Adams, 697 F.2d at 1219.
If the facts necessary to determine jurisdiction are intertwined with the facts central to the
merits of the dispute, the proper course of action is for the court to find that jurisdiction exists
and then to resolve the factual dispute on the merits unless the claim is made solely for the
purpose of obtaining jurisdiction, or is determined to be wholly insubstantial and frivolous. Bell
v. Hood, 327 U.S. 678, 682-83 (1946); United States v. North Carolina, 180 F.3d 574, 580 (4th
Cir. 1999); Adams, 697 F.2d at 1219.
II. Factual and Procedural Background
A.
Summary of Allegations in the Amended Complaint4
This dispute arises from Tesoro's alleged breach of five subcontracts regarding five
construction projects at three military bases (the "Military Base Projects"). 5 At each Military
Base Project, JAAAT acted as the general contractor and Tesoro acted as a subcontractor.
4
The Court assumes the well-pleaded factual allegations in the Complaint to be true and
will view them in the light most favorable to Plaintiff, as would be required for Rule l 2(b)(6)
review. See Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993).
5
The military bases at issue are: (1) Fort Bragg (located in North Carolina); (2) Fort
Gordon (located in Georgia); and, (3) Fort Benning (located in Georgia) (collectively, the
"Military Bases"). The subcontracts between JAAAT and Tesoro at Fort Bragg concerned the
construction of a training facility ("Fort Bragg Training Facility Project"), a flight simulator
("Fort Bragg Flight Simulator Project"), and a brigade headquarters ("Fort Bragg Brigade
Headquarters Project").
3
Specifically, Tesoro "was to serve as the project manager for each of the [Military Base Projects]
and do the majority of the work on each project and was solely responsible for the management,
scheduling, and impact of any delay for the work that it performed." (Am. Compl. tjf 26.)
"[Tesoro] breached the pertinent Subcontract[s] and its duties" by "fail[ing] to adequately
perform the work required" and incurring "substantial delays·in the performance of its work on
each project." (Id tjf 28.) JAAAT alleges that it has suffered damages as a result ofTesoro's
breaches. JAAAT seeks damages with regard to each project, costs and expenses, and pre- and
post-judgment interest.
B.
Procedural History
On April 17, 2015, JAAAT filed its Complaint against Tesoro seeking damages for
Tesoro's alleged breach of five subcontracts regarding the Military Base Projects at the Military
Bases. 6 (ECF No. 1.) JAAAT contended subject matter jurisdiction exists pursuant to federal
enclave jurisdiction. On May 11, 2015, Tesoro moved to dismiss for lack of subject matter
jurisdiction. (ECF No. 5.) JAAAT responded, and Tesoro replied. (ECF Nos. 10, 11.)
On July 8, 2015, the parties appeared for oral argument on the motion to dismiss for lack
of subject matter jurisdiction and an evidentiary hearing on JAAAT's jurisdictional allegations.
On July 9, 2015, the Court granted the motion to dismiss. (ECF No. 15.) The Court further
granted JAAAT leave to file an amended complaint. On July 15, 2015, JAAAT filed the
Amended Complaint, attaching numerous exhibits it has defined as "Jurisdictional Documents."
(See Am. Compl. tjf 12.) In light of the allegations contained in and appended to the Amended
Complaint, Tesoro' s motion to dismiss now presents, as characterized by the party, "a pure
question oflaw." (Def. Mem. Supp. Mot. Dismiss 3, ECF No. 19.) JAAAT has responded to
6
This dispute is one of many between JAAAT and Tesoro across numerous federal and
state jurisdictions regarding the Military Base Projects.
4
this legal challenge, Tesoro has replied, and JAAAT has filed a surreply. (ECF Nos. 20, 21,
22.)7
III. Analysis
For the reasons stated below, the Court will deny Tesoro's Motion to Dismiss. Framing
its facial challenge here as a matter of first impression, Tesoro contends that subject matter
jurisdiction does not exist because JAAAT's breach of contract claims do not arise under federal
law. Tesoro advances this argument despite conceding, for purposes of its facial challenge, that
the Military Bases constitute federal enclaves. Tesoro likewise does not refute JAAAT's
allegations-or evidence 8-that the federal government possesses exclusive legislative power
over the Military Bases.
Instead, Tesoro outlines the issue as follows: "Does a federal court have subject-matter
jurisdiction to hear a contractual dispute over events on a federal enclave if the parties have
contracted to have state law apply and the suit raises no substantial federal question?"
7
In response to JAAAT's surreply, Tesoro filed the Motion to Disregard Improper Filing.
(ECF No. 23.) JAAAT has responded to that motion, and Tesoro has replied. (ECF Nos. 25, 26.)
Despite Tesoro's objection, the Court elects to consider JAAAT's improperly filed
surreply, as well as the subsequent filings submitted by each party. Local Civil Rule 7(F)(l)
states in pertinent part: Fallowing the submission of a responsive brief and a reply brief, "[n]o
further briefs or written communications may be filed without first obtaining leave of Court."
E.D. Va. Loe. Civ. R. 7(F)(l). Notwithstanding JAAAT's failure to comply with Local Civil
Rule 7(F)(l ), in the interest ofjustice, the Court will consider all filings before it. Tesoro
utilized its Motion to Disregard Improper Filing to attack the new arguments set forth by JAAAT
and will not be prejudiced by consideration of the filing along with its own motion. The Court
will deny Tesoro's Motion to Disregard Improper Filing.
8
JAAAT's Amended Complaint attaches the Jurisdictional Documents, which purport to
establish that the Military Bases are federal enclaves over which the United States has exclusive
jurisdiction. (See ECF Nos. 16-1-16-11.) Tesoro does not challenge the sufficiency of the
Jurisdictional Documents. While subject matter jurisdiction may be challenged at any time,
Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006), the Court presumes that Tesoro, in the
interest of judicial economy, would have disputed the exclusivity of federal jurisdiction at the
earliest possible opportunity.
5
(Def. Mem. Supp. Mot. Dismiss 3.) Faced with this clear-cut question oflaw, the extensive
briefing from the parties perplexes the Court. A longstanding body of constitutional law
analyzing federal enclaves squarely demonstrates that Tesoro's argument is misguided.
"A federal enclave is created when a state cedes jurisdiction over land within its border to
the federal government and Congress accepts that cession." Alison v. Boeing Laser Tech. Servs.,
689 F.3d 1234, 1235 (10th Cir. 2012). "[A]fter a state has transferred authority over a tract of
land creating a federal enclave, the state may no longer impose new state laws on the land. " 9 Id.
Rather, the state law in place at the time of cession continues in force as federal law. See James
Stewart & Co. v. Sadrakula, 309 U.S. 94, 100 (1940). This so-called "federalized" state law, in
turn, confers on federal courts subject matter jurisdiction over claims otherwise characterized as
"state law," such as the contract disputes here. See Alison, 689 F.3d at 1235.
The parties' contractual agreement to apply Virginia law does not disturb this conclusion.
The Supremacy Clause of the United States Constitution10 establishes that the application of
federal law supersedes the application of state law. The Supremacy Clause mandates that when
events giving rise to a lawsuit occur on a federal enclave, the Court must apply the enclave's
9
This also is true for state common law causes of action developed after a state cedes its
land. Courts have identified this logical corollary: "it would be an odd arrangement if a state
judicial branch had the power to create binding common law that exceeded the reach of the state
legislative branch." Alison, 689 F.3d at 1240
10
The Supremacy Clause provides:
This Constitution, and the Laws of the United States which shall be made in
Pursuance thereof; and all Treaties made, or which shall be made, under the
Authority of the United States, shall be the supreme Law of the Land; and the
Judges in every State shall be bound thereby, any Thing in the Constitution or
Laws of any State to the Contrary notwithstanding.
U.S. Const. art. VI, cl. 2.
6
federalized state law. Thus, the Court cannot find that claims arising on federal enclaves-and
thus governed by federal law-somehow arise under state law. The Court concludes that the
exercise offederal enclave jurisdiction is appropriate in this case.
A.
This Court Possesses Subiect Matter Jurisdiction over JAAAT's Claims
Because the events giving rise to JAAAT's claims occurred on the Military Bases, the
Court finds that JAAAT's claims arise under federal law. Federal courts are courts oflimited
jurisdiction, and the burden of establishing jurisdiction rests with the party asserting it-here,
JAAAT. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); Hartley v. CSX
Transp. Inc., 187 F.3d 422, 425 (4th Cir. 1999). As the basis for the Court's subject matter
jurisdiction, JAAAT cites 28 U.S.C. § 1331, which provides: "The district courts shall have
original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the
United States." Thus, subject matter jurisdiction is appropriate provided JAAAT meets its
burden of demonstrating that the asserted claims arise under federal law, which JAAAT has done
by invoking the federal enclave doctrine. The Court will trace in greater detail the jurisdictional
limits of the federal enclave doctrine to explain the basis of this finding.
1.
The Jurisdictional Limits of the Federal Enclave Doctrine
a.
The Federal Enclave Doctrine Requires Courts to Apply SoCalled "Federalized State Law" When Appropriate
The federal enclave doctrine, which empowers Congress to exclusively regulate
properties acquired from state governments, arises from Article I, section 8, clause 17 of the
United States Constitution (the "Federal Enclave Clause"):
Congress shall have the Power ... To exercise exclusive Legislation in all Cases
whatsoever, over such District (not exceeding ten Miles square) as may, by
Cession of particular States, and the Acceptance of Congress, become the Seat of
the Government of the United States, and to exercise like Authority over all
Places purchased by the Consent of the Legislature of the State in which the Same
7
shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other
needful Buildings ....
U.S. Const. art. I,§ 8, cl. 17 (emphasis added).
Under the federal enclave doctrine, when "the United States acquires with the 'consent'
of the state legislature land within the borders of that State ... the jurisdiction of the Federal
Government becomes 'exclusive."' Paul v. United States, 371U.S.245, 264 (1963). This
legislative "power of Congress over federal enclaves ... is obviously the same as the power of
Congress over the District of Columbia" and "by its own weight, bars state regulation without
specific congressional action." Id. at 263. Thus, the law applied to federal enclaves must be that
of the federal government, and not the states. 11 See Pac. Coast Dairy v. Dep 't ofAg. of Cal., 318
U.S. 285, 294 (1943); see also Allison, 689 F.3d at 1237 ("The central principle of [the] federal
enclave doctrine is that Congress has exclusive legislative authority over these enclaves.").
In the absence of subsequent federal legislation displacing state law, "the [state] law in
effect at the time of the transfer of jurisdiction [from the state to United States] continues in
force" on the federal enclave. James Stewart & Co., 309 U.S. at 100. 12 Importantly, "future
11
The Supreme Court recognizes at least three exceptions to the rule that the United
States holds exclusive legislative jurisdiction over federal enclaves:
1) where Congress has, by statute, provided a different rule; 2) where the state
explicitly retained the right to legislate over specific matters at the time of
cession; and[,] 3) where minor regulatory changes modify laws existing at the
time of cession.
Allison, 689 F.3d at 1237. Tesoro does not allege, and the Court does not find, that any of these
exceptions pertain here.
12
The continuation of state law as federal law "assures that no area however small will be
left without a developed legal system for private rights." James Stewart & Co., 309 U.S. at 100.
Congress has enacted some assimilated laws, particularly criminal laws, to apply in federal
enclaves. Alison, 589 F.3d at 1237. Congress also has allowed application of state law to some
civil claims, including wrongful death, workers' and unemployment compensation, and fish and
8
statutes of the state are not a part of the body of laws in the ceded area," and "Congressional
action is necessary to keep [the laws of the federal enclave] current." Id. at 100; see also Paul,
371 U.S. at 268 ("Since a State may not legislate with respect to a federal enclave unless it
reserved the right to do so when it gave its consent to the purchase by the United States, only
state law existing at the time of the acquisition remains enforceable, not subsequent laws.").
Subsequent state common law also does not apply. Allison, 689 F .3d at 1240 (explaining that
"[w]hen a state speaks through its courts, it creates new law no less than when it speaks through
the legislature").
b.
Federal Courts Possess Subject Matter Jurisdiction over
Lawsuits Arising Out of Events Occurring on Federal Enclaves
Where Congress has exclusive power to pass legislation affecting a federal enclave,
federal courts possess subject matter jurisdiction over lawsuits arising out of events that occur on
that territory. This is because, in effect, Congress's "exclusive legislative jurisdiction ...
federalizes state law." Jones v. John Crane-Houdaille, Inc., No. Civ. CCB-11-2374, 2012 WL
1197391, at *2 (D. Md. Apr. 6, 2012). Stated differently, "any law existing in territory over
which the United States has exclusive sovereignty must derive its authority and force from the
United States and is for that reason federal law." Akin v. Big Three Indus., Inc., 851 F. Supp.
819, 821-22 (E.D. Tex. 1994) (citing Mater v. Holley, 200 F.2d 123, 124 (5th Cir. 1952)). As
explained by one court of appeals, "[i]t would be incongruous to hold that although the United
game regulation. Id. "But in many important areas of law that are traditionally the responsibility
of states ... [including contract law] ... there is no federal assimilative statute." Id at 1237-38.
This circumstance does not exist in the absence of criticism. See, e.g., Chad DeVeaux,
Trapped in the Amber: State Common Law, Employee Rights, and Federal Enclaves, 77 Brook.
L. Rev. 499, 503 (2012) ("With respect to legal areas neglected by Congress, federal enclaves
have devolved into jurisprudential Jurassic Parks, 'sanctuar[ies] for the obsolete restrictions of
the common law."' (quoting Capetola v. Barclay-White Co., 48 F. Supp. 797, 800 (E.D.
Pa. 1943)).
9
States has exclusive sovereignty in the area here involved, its courts are without power to
adjudicate controversies arising there." Mater, 200 F.2d at 124.
Numerous courts of appeals, including the United States Court of Appeals for the Fourth
Circuit, have adopted this longstanding position. 13 Likewise, courts in this District have
consistently applied it. See, e.g., Federico v. Lincoln Military Rous., 901 F. Supp. 2d 654, 665
(E.D. Va. 2012) ("The law appears clear that 'where exclusive jurisdiction is ceded to the United
States, the laws of the state at the time of cession will continue in effect as federal law, and
subject matter jurisdiction under 28 U.S.C. § 1331 is proper.'" (quoting Melendez v. Glastic
Corp., No. 2:95cvl 112, 1996 WL 35020766, at *2 (E.D. Va. Mar. 7, 1996)); 14 Anderson v.
Crown Cork & Seal, 93 F. Supp. 2d 697, 700 (E.D. Va. 2000) ("Litigation arising from lands
13
See, e.g., Stokes v. Adair, 265 F.2d 662, 665--66 (4th Cir. 1959) (finding federal district
court possessed jurisdiction over non-diverse parties for personal injuries on a federal enclave);
accord Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir. 2006) (finding removal
proper where tort claims allegedly occurred on a federal enclave); Akin v. Ashland Chem. Co.,
156 F .3d 1030, 1034 (10th Cir. 1998) (finding that "[p]ersonal injury actions which arise from
incidents occurring in federal enclaves may be removed to federal district court as part of federal
question jurisdiction"); Mater, 200 F.2d at 124-25 (finding that federal courts have jurisdiction
over torts committed on federal enclaves).
14
While the Federico court favorably cited Melendez for the premise that state laws
continue as federal laws upon the cession of exclusive jurisdiction to the United States, the
Federico court disagreed with the Melendez court's decision to apply state law when concurrent
jurisdiction existed over the Norfolk Naval Base between the United States and Virginia.
Federico, 901 F. Supp. 2d at 665, 668-69, 671 (distinguishing Melendez with respect to
concurrent jurisdiction analysis).
In Melendez, the district court granted a motion to remand an action alleging personal
injuries resulting from an explosion that occurred at the Norfolk Naval Base. Melendez,
1996 WL 35020766, at * 1. The Melendez court found that because Virginia and the United
States shared concurrent jurisdiction over the Norfolk Naval Base, Virginia's laws "do not
continue in effect as federal law conferring original jurisdiction under 28 U.S.C. § 1331." Id at
*3. The Melendez court remanded the action back to state court due to the lack of subject matter
jurisdiction. Id at *4.
Melendez does not affect the Court's determination here. JAAAT does not allege, nor
does Tesoro argue, that concurrent jurisdiction exists over the Military Bases.
10
obtained pursuant to [the Federal Enclave Clause] is rightfully pursued in federal court under
federal enclave jurisdiction."); McCormickv. C.E. Thurston & Sons, Inc., 977 F. Supp. 400, 402
(E.D. Va. 1997) ("[S]uits regarding property purchased [pursuant to the Federal Enclave Clause]
are to occur in the federal courts of the United States."). Thus, it is undisputed that "claims
arising on a federal enclave provide a separate and independent basis for federal question
jurisdiction." 15 Federico, 901 F. Supp. 2d at 663 n.2.
2.
JAAAT's Claims Arise Under Federal Law
a.
JAAAT's Claims Constitute Federalized State Law Claims
For purposes of this facial challenge, the parties do not dispute that each Military Base
Project is located on a federal enclave. (Def. Mem. Supp. Mot. Dismiss 4 n.1 ("Whether the
relevant military bases are actually federal enclaves is not at issue in this motion."); Def.
Reply 1, ECF No. 21 ("The dispositive issue is not whether the military bases are federal
enclaves, because Tesoro concedes they are for purposes of the motion.").) Further, JAAAT
properly alleges that the events giving rise to its breach of contract claims occurred on the
Military Bases. (Am. Compl. ~ 55.) Thus, the breach of contract claims asserted by JAAAT
constitute federalized state law claims. See Federico, 901 F. Supp. 2d at 665.
Tesoro, nonetheless, contends that causes of action asserting federalized state law do not
actually arise under federal law. Seemingly, Tesoro argues that these causes of action arise
under state law because state law originally "created" the cause of action. (See Def. Mem. Supp.
15
Congress's exclusive authority to pass legislation affecting a federal enclave does not
necessarily confer on federal courts exclusive judicial jurisdiction. See Gulf Offshore Co. v.
Mobil Oil Corp., 453 U.S. 473, 481 (1981) ("Nothing inherent in exclusive federal sovereignty
over a territory precludes a state court from entertaining a personal injury suit concerning events
occurring in the territory and governed by federal law." (citing Ohio River Contract Co. v.
Gordon, 244 U.S. 68 (1917)). Thus, in light of concurrent judicial jurisdiction, JAAAT could
have brought this case in state court.
11
Mot. Dismiss 7 (citing Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.
1994) ("In determining whether an action presents a federal question under § 1331, a court must
first discern whether federal or state law creates the cause of action.")).) This argument fails.
Tesoro misreads the effect of a state's decision to cede exclusive jurisdiction to the
United States. As multiple courts in this District flatly conclude: "When exclusive jurisdiction
is ceded to the United States, the laws of the state at the time of the cession will continue in effect
as federal law, and subject matter jurisdiction under 28 U.S. C. § 1331 is proper." Melendez,
1996 WL 35020766, at *2 (emphasis added) (citing James Stewart & Co., 309 U.S. at 97); see
also Federico, 901 F. Supp. 2d at 665; Anderson, 93 F. Supp. 2d at 699; McCormick, 977 F.
Supp. at 402. Whether a state initially "created" the cause of action has no bearing on whether a
federal court has jurisdiction over its now-federal nature. Tesoro's attempt to cherry-pick
language regarding which government "created" the law does not persuade. By their federalized
nature, JAAAT's claims arise under federal law. See Federico, 901 F. Supp. 2d at 665.
b.
Parties Cannot "Opt Out" of the Application of Federal Law
In spite of well-settled law that even common law claims arising on a federal enclave
provide a basis for federal question jurisdiction, Tesoro posits that the choice of law clause here
somehow precludes a finding of subject matter jurisdiction. Specifically, Tesoro contends that
"[i]f the parties have selected Virginia law by an enforceable choice of law provision, then only
questions of Virginia law will be at issue." (Def. Mem. Supp. Mot. Dismiss 8.) This novel
argument-which essentially advances the idea that parties to a contract, by their choosing, may
negate the application of federal law-misses the mark.
Interpreting the Supremacy Clause, the Supreme Court has explained that "[i]t is a
seminal principle of our law 'that the constitution and the laws made in pursuance thereof are
12
supreme; that they control the constitution and laws of the respective States, and cannot be
controlled by them."' Hancock v. Train, 426 U.S. 167, 178 (1976) (quoting McCulloch v.
Maryland, 4 Wheat. 316, 426 (1819)). Corollary to this principle, "[i]t is of the very essence of
supremacy to remove all obstacles to its action within its own sphere, and so to modify every
power vested in subordinate governments, as to exempt its own operations from their own
influence." 16 Id. (quoting McCulloch, 4 Wheat. at 427). Thus, "it has been settled that state law
that conflicts with federal law is 'without effect."' Cipollone v. Liggett Grp., Inc., 505 U.S. 504,
516 (1992) (quoting Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). As noted by one court,
"[t]he [S]upremacy [C]lause of the United States Constitution establishes a constitutional choiceof-law rule, mak[ing] federal law paramount ...." Viva! Int 'l Voice For Animals v. Adidas
Promotional Retail Operations, Inc., 162 P.3do 569, 571 (Cal. 2007); see also Alison, 689 F.3d
at 123 5 ("[The] Federal enclave doctrine operates as a choice of law doctrine that dictates which
law applies to causes of action arising on these lands."). 17
Here, Tesoro argues for the application of state law in spite of the existence of federal
law-federalized state law-that governs the dispute. 18 In light of the Supremacy Clause, only
16
The Hancock court addressed the Supremacy Clause in tandem with the Federal
Enclave Clause and concluded that "the activities of the Federal Government are free from
regulation by any state." Hancock, 426 U.S. at 178 (quoting Mayo v. United States, 319 U.S.
441, 445 (1943)).
17
As one commenter has explained: "The Supremacy Clause ... dictates that courts
apply the traditional lex loci doctrine-that 'the law of the [place] where the wrong occurred'
governs an action-to transactions arising within federal enclaves." DeVeaux, supra, at 528
(quoting Lea Brilmayer, Conflict ofLaws 17 (4th ed. 1995)). Thus, "when the pertinent events
giving rise to a suit 'occurred on a federal enclave' the court must apply the federalized state law
applicable on the enclave." Id (emphasis added) (citations omitted).
18
The Court need not decide, for purposes of this motion, the precise contours of
JAAAT's causes of action as they existed, under then-applicable state law, when the United
States obtained exclusive legislative jurisdiction over the Military Bases.
13
federal law may apply to JAAAT's claims. The parties' election to the contrary does not
override the Constitution. Cf Pac. Coast Dairy, 318 U.S. at 294 ("To hold otherwise would be
to affirm that California may ignore the Constitutional provision that 'This Constitution, and the
Laws of the United States which shall be made in Pursuance thereof; ... shall be the supreme
Law of the Land; .... '" (omissions in original)). Accordingly, assuming the truth of JAAAT's
well-pleaded allegations, the claims arise under federal law, and subject matter jurisdiction is
appropriate here.
IV. Conclusion
For the foregoing reasons, the Court will deny Tesoro's Motion to Dismiss (ECF No. 18)
and will deny Tesoro's Motion to Disregard Improper Filing (ECF No. 23).
An appropriate Order shall issue.
Richmond, Vir,inia
Date:
'!, / z, q I b
14
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