The ‘Well-Pleaded Complaint Rule’ and Pushing the Bounds Post-‘McCulloch’

The minute a state court complaint is served on a defendant, a thirty-day countdown clock starts ticking as the defendant must decide whether removal is appropriate under theories of diversity or federal question jurisdiction pursuant to 28 U.S.C. §1446(b)(2)(B). With respect to federal question jurisdiction, it is basic hornbook law that if a complaint does not specifically allege a cause of action subject to federal law, then the defendant has the burden of showing that one or more of the causes of action are subject to federal court jurisdiction. However, that task of removal—and thereafter defeating a motion to remand to keep the action in federal court—is becoming increasingly difficult and, at times, prejudicial to defendants. Because the difference between federal and state court litigation can often mean different applicable or persuasive law, lengthier discovery, and/or longer and costlier litigation, some skilled plaintiffs’ counsel have taken to drafting their complaints to blatantly avoid pleading grounds for federal court jurisdiction. In so doing, plaintiffs’ counsel is effectively forum-shopping to avoid potentially unfavorable federal circuit case law (and/or statutes) and the typically shorter time between filing and trial found in federal courts.

As the “master of their complaints,” plaintiffs are given immense flexibility in presenting their claims as they see fit. However, in attempting to circumvent federal question jurisdiction, some plaintiffs are increasingly and deliberately pleading federal law claims as arising solely under state law. Consequently, plaintiffs are requiring defendants who routinely remove state law actions to federal court to establish that a given plaintiff’s state law claims, in fact, arise under federal law, such that federal question jurisdiction exists, so as to prevent the inevitable motion to remand. This imbalance has been furthered by recent appellate and district-court decisions putting additional emphasis on 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 v. Williams, 482 U.S. 386, 392 (1987). The “well-pleaded complaint rule” “makes the plaintiff the master of the claim” and generally permits the plaintiff to “avoid federal jurisdiction by exclusive reliance on state law.” Id.