question by asserting an issue of federal law in a pleading or in a petition for removal. Kerr-McGee, 677 F.2d at 575. On the other hand, removal is proper if the plaintiff has attempted to avoid a federal forum by drafting an essentially federal claim in terms of state law. Kerr-McGee, 677 F.2d at 575. To provide grounds for removal the federal question must be a key element of the plaintiff's complaint. Kerr-McGee, 677 F.2d at 575.
A federal question does not appear on the face of the plaintiff's complaint when a defense of federal preemption is raised. Lister v. Stark, 890 F.2d 941, 943 (7th Cir. 1989), cert. denied, 112 L. Ed. 2d 584, 111 S. Ct. 579 (1990). Therefore, a preemption defense does not authorize removal of a case to federal court. Lister, 890 F.2d at 943. The Supreme Court, however, has created an exception to this rule. Lister, 890 F.2d at 943 (citing Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 66, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987)). Under this exception, removal is proper when Congress has completely preempted an area of state law. When the complete preemption exception applies, the plaintiff's state-law claim is recharacterized as a federal claim. Lister, 890 F.2d at 943. Whether a cause of action has been completely preempted depends on the intent of Congress. Lister, 890 F.2d at 943.
Two inquiries are necessary to resolve the jurisdictional question of this case. Lister, 890 F.2d at 944. The first inquiry is whether a federal question appears on the face of plaintiff's complaint. If so, then the removal was proper. If no federal question appears on the complaint, the second inquiry is whether removal is proper under the complete preemption exception. Lister, 890 F.2d at 944.
In this case, AIPS' complaint does not allege a federal claim and federal law has not completely preempted state law in this area. As a result, this court does not have subject matter jurisdiction and must remand the matter to state court.
1. AIPS' Complaint
In the present case, Count I of AIPS' complaint alleges breach of a verbal contract entered into on or about March 12, 1990. Count II alleges violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. Sprint argues, however, that AIPS' complaint alleges a breach of a written contract for long distance service entered into by the parties on May 15, 1990. Sprint contends that a tariff is incorporated into this contract and, as a result, AIPS is alleging a breach of a tariff.
In fact, AIPS' complaint alleges breach of a verbal contract. Neither count alleges a violation of the Communications Act or any other federal law or of Sprint's tariff. A defendant cannot create a federal question by asserting an issue of federal law in a pleading or in a petition for removal. Kerr-McGee, 677 F.2d at 575. Therefore, no federal cause of action appears on the face of AIPS' complaint. As a result, the second inquiry is whether removal is proper under the complete preemption exception.
To determine whether the complete preemption exception applies requires an inquiry into Congress' intent in enacting a statute. Lister, 890 F.2d at 943. A few courts have addressed preemption in the context of the Communications Act. In Ivy Broadcasting Co. v. American Telephone & Telegraph Co., 391 F.2d 486 (2d Cir. 1968), the Second Circuit Court of Appeals found that the Communications Act completely preempted state common law actions against a telephone carrier for negligence or breach of contract. Ivy involved claims against AT & T for negligence and breach of contract. The court held that issues of duties, charges, and liabilities of telephone companies with respect to interstate communications service were to be governed solely by federal law. Ivy, 391 F.2d at 491. The court found that the states were precluded from acting in this area. The Ivy court considered various provisions of the Communications Act and found a congressional purpose of uniformity and equality of rates and service. Ivy, 391 F.2d at 491. According to the Ivy court, this purpose could be achieved only by the application of uniform federal law.
The court declines to follow Ivy for a number of reasons. First, the Ivy court did not address the "savings clause" of the Communications Act. The savings clause provides:
Nothing in this chapter contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.
47 U.S.C. § 414. Since Ivy, other courts have addressed the remedies Congress had in mind when enacting § 414. See Comtronics, Inc. v. Puerto Rico Tel. Co., 553 F.2d 701 (1st Cir. 1977). The Comtronics, court interpreted § 414 as preserving state court claims for breaches of duties which are distinguishable from duties created by the Communications Act, such as breach of contract claims. Comtronics, 553 F.2d at 708, n.6. Other courts have approved state-law claims for fraud and deceit as well. See In Re Long Distance Telecommunications Litigation, 831 F.2d 627, 633 (6th Cir. 1987).
A single court in this district has considered this question. In Bruss Co. v. Allnet Communication Services, Inc., 606 F. Supp. 401, 411 (N.D. Ill. 1985), Judge Nordberg determined that a complaint which alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Deceptive Trade Practices Act, was saved from preemption by § 414. In Bruss, the plaintiffs, former subscribers to the defendants' long-distance service, brought state-law claims for common law fraud and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Deceptive Trade Practices Act. Defendants moved to dismiss, arguing that the Communications Act preempted the state-law claims. Bruss, 606 F. Supp. at 409. The court applied § 414 to preserve the state-law actions, reasoning that the duties owed by defendants under these causes of action were distinct from the duties created by the Communications Act. Bruss, 606 F. Supp. at 411. Moreover, the court reasoned that the state-law causes of action prohibited different conduct from that prohibited by the Communications Act. Bruss, 606 F. Supp. at 411. In addition, the causes of action did not conflict with the provisions of the Communications Act or interfere with Congress' regulatory scheme. Bruss, 606 F. Supp. at 411.
AIPS, like the plaintiff in Bruss, is alleging Sprint violated the Illinois Consumer Fraud and Deceptive Business Practices Act. In addition, AIPS alleges that the Sprint breached a verbal contract. We agree with the Bruss court that a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act is preserved by § 414 of the Communications Act. In addition, we are persuaded by the Bruss court's reasoning to conclude that the duties created by the verbal contract are distinct from the duties created by the Communications Act. We also find that the contract claim neither conflicts with the provisions of the Communications Act nor interfere with the regulatory scheme of the Act. The alleged verbal contract between AIPS and Sprint set up a business relationship whereby Sprint would sell long distance service under certain terms and that AIPS would buy the long distance service under the terms stated.
Sprint argues that the terms of the alleged contract, that Sprint would waive certain telephone surcharges, would provide forward pricing discounts and would protect AIPS from fraudulent telephone calls raise an issue of whether Sprint's charges are "fair and reasonable". Memorandum of Law in Support of Defendant's Petition for Removal, at 3. If this were true, then AIPS' suit would be specifically preempted by the Communications Act. 47 U.S.C. §§ 201(b), 207.
However, the duty set forth in § 201(b) requiring "just and reasonable" practices is different than the duty allegedly breached by Sprint. AIPS is not alleging that Sprint's verbal promises were not just and reasonable. AIPS is alleging that Sprint made the promises to provide forward discounting, to waive certain surcharges and to protect AIPS from fraudulent charges and then did not fulfill these promises. AIPS is not alleging Sprint breached its statutory duty to act in a just and reasonable manner. Rather, AIPS is alleging Sprint failed to abide by a verbal contract the parties allegedly entered into, a contract imposing duties different than those found in the Communications Act.
While not controlling on us here, we note that the Illinois Supreme Court, in a case involving facts similar to Bruss, reached the same conclusion as that of the Bruss court. See Kellerman v. MCI Telecommunications Corp., 112 Ill. 2d 428, 493 N.E.2d 1045, 98 Ill. Dec. 24 (Ill.), cert. denied, 479 U.S. 949, 93 L. Ed. 2d 384, 107 S. Ct. 434 (1986). In Kellerman, plaintiffs, who were subscribers to the defendant's long-distance service, brought action under the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Uniform Deceptive Trade Practices Act. The Kellerman plaintiffs charged that the defendant's advertising practices constituted breach of contract and common law fraud. Kellerman, 493 N.E.2d at 1045. The court found that § 414 indicated Congress' desire to preempt only those claims which interfered with the congressional objective, embodied in the Communication Act, of providing a national communication system with adequate facilities at reasonable charges. However, the Illinois Supreme Court concluded § 414 would not preempt state-law claims for breach of contract and fraud which were not contrary to the Act's objectives.
It is reasonable to presume that State laws which interfere with Congress' objective of creating "a rapid, efficient, Nation-wide, * * * communication service with adequate facilities at reasonable charges" (47 U.S.C. sec. 151 (1982)), such as State attempts to regulate interstate carriers' charges or services, would be preempted by the Act. (See, e.g. Komatz Construction, Inc. v. Western Union Telegraph Co. (1971), 290 Minn. 129, 186 N.W.2d 691 (action against telegraph company for damagers caused by delay in transmission of telegram is governed by Federal law).) However, we believe that section 414, when considered in the context of the entire act, should be construed as preserving State-law "causes of action for breaches of duties distinguishable from those created under the Act. . . ." State law remedies which do not interferer with the Federal government's authority over interstate telephone charges or services, and which do not otherwise conflict with an express provision of the Act, are preserved by section 414.