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AMERICAN INMATE PHONE SYS. v. US SPRINT COMMUNS. C

March 31, 1992

AMERICAN INMATE PHONE SYSTEMS, INC., Plaintiff,
v.
US SPRINT COMMUNICATIONS COMPANY LIMITED PARTNERSHIP, Defendant.


ALESIA


The opinion of the court was delivered by: JAMES H. ALESIA

Now before the court is plaintiff's motion to remand this action to state court, pursuant to 28 U.S.C. § 1447(c). Plaintiff filed its two-count complaint in state court seeking relief based on Illinois law. Defendant removed the action to this court claiming that federal law preempts plaintiff's state-law claims. For the reasons set forth below, we hold that defendant's removal was improper because this court lacks subject matter jurisdiction. Plaintiff's motion to remand is granted.

 I. FACTS

 Plaintiff American Inmate Phone Systems, Inc. ("AIPS") filed a two count complaint in the Circuit Court of Cook County against defendant US Sprint Communications Company Limited Partnership ("Sprint"). AIPS provides pay phone services to prisons and Sprint provides long distance phone service throughout the U.S.

 In Count I of its complaint, AIPS alleges that Sprint entered into a verbal agreement to provide long distance service to AIPS and breached that agreement. The terms of the alleged agreement included: Sprint would waive all phone card surcharges to AIPS; Sprint would provide AIPS with forward discounting; Sprint would introduce procedures to reduce the number of fraudulent phone calls; and Sprint would provide a written agreement including these terms. (Complaint, at 1-3) In Count II, AIPS alleges Sprint violated the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill. Rev. Stat. ch. 121-1/2, paras. 261 et. seq. (Complaint, at 3-5)

 Sprint answered the complaint and filed a counter-claim alleging that AIPS entered into a written contract for tariffed phone service and subsequently breached that contract by failing to pay for the service provided. Sprint filed a petition to remove the action to the United States District Court for the Northern District of Illinois pursuant to 28 U.S.C. § 1446(b). Sprint asserted that the federal court had original jurisdiction over the case under the Communications Act, 47 U.S.C. §§ 151 et. seq., pursuant to 28 U.S.C. § 1331.

 AIPS has now moved to remand this action to the Circuit Court of Cook County and requested attorney's fees and costs as a result of wrongful removal pursuant to 28 U.S.C. 1447(c).

 II. DISCUSSION

 A. Standard of Review

 On a motion to remand, the question before the court is its authority to hear a case pursuant to the removal statute. *fn1" Commonwealth Edison Co. v. Westinghouse Elec. Co., 759 F. Supp. 449, 451 (N.D. Ill. 1991). Whether removal was proper is determined from the record as a whole. Kennedy v. Commercial Carriers, Inc., 739 F. Supp. 406, 409 (N.D. Ill. 1990). The party seeking removal, and not the party moving to remand, has the burden of establishing that the court has jurisdiction. Commonwealth Edison, 759 F. Supp. at 452. If the district court finds that it has no jurisdiction, the district court must remand the case to state court. Commonwealth Edison, 759 F. Supp. at 452.

 B. Subject Matter Jurisdiction

 Federal district courts are courts of limited subject matter jurisdiction. In general, a civil action brought in state court may be removed to federal court only if it could have been originally brought in federal court. 28 U.S.C. § 1441. The federal courts have jurisdiction either when the parties to the lawsuit are of diverse citizenship or when the case involves a federal question. 28 U.S.C. §§ 1331, 1332. Sprint has not based its removal on diversity jurisdiction. *fn2" Therefore, the jurisdiction necessary for removal of this case must be based on a question of federal law. The appropriate inquiry is whether the AIPS' state-law claim arises under federal law. *fn3" Boyle v. MTV Networks, Inc., 766 F. Supp. 809, 812-13 (N.D. Cal. 1991).

 When deciding whether a case warrants removal because a federal question is involved, a federal court must principally determine if the federal question appears on the face of plaintiff's complaint. Illinois v. Kerr-McGee Chemical Corp., 677 F.2d 571, 575 (7th Cir.), cert. denied, 459 U.S. 1049, 74 L. Ed. 2d 618, 103 S. Ct. 469 (1982). 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. 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 ...


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