United States District Court, M.D. North Carolina
STATE OF NORTH CAROLINA, ex rel. JOSHUA H. STEIN, Attorney General, Plaintiff,
JUICE MAN LLC, Defendant.
MEMORANDUM OPINION AND ORDER
Catherine C. Eagles, District Judge.
State of North Carolina filed suit against the defendant,
Juice Man LLC, in state court alleging that Juice Man was
committing unfair and deceptive trade practices by marketing
its e-cigarettes to minors and seeking a temporary
restraining order to prohibit Juice Man from selling its
e-cigarette products in North Carolina. Juice Man removed the
case to federal court, and the State now moves to remand and
seeks attorneys' fees and costs.
Court lacks subject matter jurisdiction, the case is remanded
to state court. Because there was no objectively reasonable
basis for removing this case from state court, Juice Man must
pay the State's reasonable attorneys' fees and costs
associated with seeking removal.
Man is a California-based limited liability company that
sells e-liquid products. On August 27, 2019, the State filed
a complaint in Durham County Superior Court against Juice Man
asserting claims under N.C. Gen. Stat. § 75-1.1. Doc. 4.
The State alleged that the company had designed its products
to appeal to younger audiences, including minors; pursued
marketing strategies that it knew would attract minors; and
failed to provide age-verification techniques for internet
sales, as required by North Carolina law, thus allowing
minors to obtain its products. Id. at 16. The State
sought preliminary and permanent injunctive relief and asked
for civil penalties and disgorgement of profits pursuant to
state law. Id. at 17. The complaint included no
federal causes of action.
hearing was scheduled on the State's motion for a
temporary restraining order for September 3, but it was
apparently continued. Doc. 9 at 7; Doc. 12 at 4; Doc. 12-1 at
¶ 7. Juice Man removed the case on September 25,
contending that the Family Smoking Prevention and Tobacco
Control Act (FSPTCA) and implementing regulations by the
United States Food and Drug Administration preempt the
State's claims so as to permit federal jurisdiction. Doc.
1 at 2-4. The State now seeks a remand and
general, a defendant may remove a civil action if a federal
court would have had original jurisdiction over one or more
of the plaintiff's claims. See 28 U.S.C. §
1441(a). The party seeking removal has the burden to show the
case qualifies for it. Lontz v. Tharp, 413 F.3d 435,
439 (4th Cir. 2005). District courts “construe removal
jurisdiction strictly because of the significant federalism
concerns implicated by it, ” and “state law
complaints usually must stay in state court when they assert
what appear to be state law claims.” Id. at
courts have “original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the
United States.” 28 U.S.C. § 1331. “The
well-pleaded-complaint rule has long governed whether a case
‘arises under' federal law for purposes of §
1331.” Holmes Grp., Inc. v. Vornado Air Circulation
Sys., Inc., 535 U.S. 826, 830 (2002). Under this rule, a
case “arises under” federal law if “a
well-pleaded complaint establishes either that federal law
creates the cause of action or that the plaintiff's right
to relief necessarily depends on resolution of a substantial
question of federal law.” Franchise Tax Bd. of Cal.
v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S.
1, 27-28 (1983). The federal question “must be
disclosed upon the face of the complaint, ” Gully
v. First Nat'l Bank, 299 U.S. 109, 113 (1936);
see also Vaden v. Discover Bank, 556 U.S. 49, 59-60
(2009), and merely having a federal defense is not a basis
for federal jurisdiction. Caterpillar Inc. v.
Williams, 482 U.S. 386, 392-93 (1987); Lontz,
413 F.3d at 439.
is an “independent corollary” to the well-pleaded
complaint rule known as the “complete preemption”
doctrine. Caterpillar, 482 U.S. at 393. It applies
in those rare situations where “the pre-emptive force
of a statute is so extraordinary that it converts an ordinary
state common-law complaint into one stating a federal claim
for purposes of the well-pleaded complaint rule.”
Id. When an area of state law has been completely
preempted, “any claim purportedly based on that
pre-empted state law is considered, from its inception, [to
be] a federal claim, and therefore arises under federal
law.” Id.; accord Franchise Tax Bd.,
463 U.S. at 24 (same).
Man asserts removal is justified here based on 1) the
substantial question of federal law presented,  and 2) complete
Substantial Question of Federal Law
“slim category of cases” where federal
jurisdiction exists for a state-law claim is governed by the
Supreme Court's four-pronged test, which requires that
the federal question must be (1) necessarily raised, (2)
actually disputed, and (3) substantial, “meaning that
its resolution is important to the federal system as a whole,
” and (4) “the federal system must be able to
hear the issue without disturbing any congressionally
approved balance of federal and state judicial
responsibilities.” Burrell v. Bayer Corp., 918
F.3d 372, 380 (4th Cir. 2019) (quoting Gunn v.
Minton, 568 U.S. 251, 260 (2013); Grable & Sons
Metal Prods. v. Darue Eng'g & Mfg., 545 U.S.
308, 314 (2005)).
Man has not satisfied this test. A federal question is
“necessarily raised” only if it is a
“necessary element of one of the well-pleaded state
claims, ” Burrell, 918 F.3d at 381, and Juice
Man has not identified any element of a state Chapter 75
claim that is based on federal law. The only federal question
Juice Man has identified in non-conclusory terms is the
preemption issue, which, as an affirmative defense, is not a
federal question in this context. Id. at 386
(“[F]ederal issues that are necessarily raised by a
complaint . . . [do] not include affirmative preemption
defenses.”). The State's complaint alleges unfair
or deceptive acts or omissions in designing packaging, in
marketing, and in providing age-verification techniques,
see Doc. 4 at 16, and while these claims may involve
federal standards, “the mere presence of a federal
issue in a state cause of action is not enough to confer
[federal] jurisdiction.” Burrell, 918 F.3d at
380 (quoting Merrell Dow Pharms. Inc. v. Thompson,
478 U.S. 804, 813 (1986)). Juice Man did not address the