SW Legal studies in Business

Intrastate Dispute With No Federal Question Pleaded Must Remain in State Court
Description Federal appeals court held that an antitrust suit filed in state court that involved two parties from the same state was subject to state court jurisdiction and could not be removed to federal court. Federal antitrust law does not preempt state antitrust law, so the plaintiff's choice of state court stands.
Topic Court Procedure
Key Words Jurisdiction; Federal Question; Removal; Well-Pleaded Complaint; Artful Pleading
C A S E   S U M M A R Y
Facts THI, a home health care agency, sued TGMC in Louisiana state court contending that it conspired with an HMO to terminate THI as a preferred provider and to favor the HMO. THI asserted this was a violation of Louisiana antitrust and unfair competition laws. TGMC removed the case to federal court. The federal district court refused to remand the case to state court on the grounds that the state antitrust claims were actually federal in nature because they involved interstate commerce. The court held that THI had artfully pleaded its complaint to avoid a necessary federal question, so the federal court had jurisdiction. THI appealed.

Vacated and remanded with instructions. "The well-pleaded complaint rule governs whether a defendant can remove a case based on the existence of a federal question. Under the well-pleaded complaint rule, ‘federal jurisdiction exists only when a federal question is presented on the face of plaintiff's properly pleaded complaint.' The artful pleading doctrine is a narrow exception to the well-pleaded complaint rule, and it prevents a plaintiff from defeating removal by failing to plead necessary federal questions. The artful pleading doctrine does not apply, however, unless federal law completely preempts the field." State antitrust laws are not completely preempted by federal antitrust law. The federal court lacks jurisdiction over the matter since the matter involved intrastate commerce subject to state law.

Citation Terrebonne Homecare, Inc. v. SMA Health Plan, Inc., 271 F.3d 186 (5th Cir., 2001)

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