Dreisbach Enterprises v. Pacific Coast Container

Background

Dreisbach Enterprises, Inc., Coolport Management LLC, Cool Port Oakland, LLC, and Cool Port Oakland Freight, LLC sued Pacific Coast Container, Inc. in Alameda County Superior Court. The plaintiffs alleged that Pacific Coast Container obtained an unfair competitive advantage by operating trucks above the state’s 80,000-pound weight limit without complying with state and local laws. Their complaint asserted a violation of California Business and Professions Code section 17200 and sought an injunction barring the alleged unfair business practice.

The state court held a five-day bench trial in May 2024. Pacific Coast Container first raised federal preemption in its post-trial rebuttal brief. It argued that the requested injunction would affect the price, route, or service provided by Pacific Coast Container as a broker and freight forwarder, in violation of the Federal Aviation Administration Authorization Act, 49 U.S.C. § 14501(c). Pacific Coast Container removed the action to federal court on November 1, 2024.

Motion to Remand

The plaintiffs moved to remand the case to state court and requested attorneys’ fees and costs. The court explained that under the well-pleaded-complaint rule, a case generally arises under federal law only when a federal question appears on the face of the plaintiff’s properly pleaded complaint. A federal defense, including ordinary preemption, generally does not permit removal.

The court considered the exception for complete preemption. Complete preemption applies only when Congress clearly intended not only to displace state law but also to convert state-law claims into federal claims that may be heard in federal court. The court noted that the Ninth Circuit had held that the parallel preemption provision in the Airline Deregulation Act did not support federal jurisdiction under the complete-preemption doctrine. Because the FAAAA uses nearly identical language, the court concluded that the FAAAA likewise did not provide a basis for federal removal jurisdiction.

The court distinguished the Western District of Texas decision on which Pacific Coast Container primarily relied, explaining that the decision did not adequately distinguish ordinary preemption from complete preemption. Ordinary preemption addresses which law controls; complete preemption is a jurisdictional doctrine concerning whether a state-law claim can be treated as a federal claim for removal purposes. The court held that Pacific Coast Container had not shown that complete preemption applied.

Attorneys’ Fees and Costs

Under 28 U.S.C. § 1447(c), a court remanding a case may require payment of costs and expenses, including attorneys’ fees, caused by the removal. The court stated that fees may be awarded when the removing party lacked an objectively reasonable basis for removal.

The court granted the plaintiffs’ request for attorneys’ fees and costs. It found that Pacific Coast Container’s removal was objectively unreasonable because the Ninth Circuit had already determined that the parallel federal preemption provision did not support federal jurisdiction. The court also considered that Pacific Coast Container relied on a decision that numerous courts had found unpersuasive, removed the case nearly six years after the state proceedings began, and removed it after the five-day bench trial. The plaintiffs reported that fees related to the remand motion totaled $19,170, but the court did not set the final award in this order.

The court ordered the parties to meet and confer in person about the amount of fees. If they could not agree, the plaintiffs were required to file a supplemental declaration supporting the fees, and Pacific Coast Container could respond. The court stated that it would determine the amount under section 1447(c) after reviewing any further filings.

Disposition

Judge Jacquelyn Scott Corley granted the plaintiffs’ motion for remand and granted their motion for attorneys’ fees and costs. The action was remanded to the Superior Court of California, County of Alameda. The order disposed of Docket Nos. 9 and 13.