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Archive for the ‘Jurisdiction’ Category

Fru-Con Construction Corp. v. Controlled Air, Inc., No. 08-1712.

Fru-Con Construction Corporation and Austin Maintenance and Construction, Inc. (collectively “Fru-Con”), hired Controlled Air to construct the gain receiving, storage, and milling system for an ethanol production facility in Ravenna, Nebraska.  The parties entered into a contract that required all disputes (1) be brought in Missouri state court or the federal district court for the Eastern District of Missouri and (2) be governed by Missouri law.  A dispute arose between the parties.  Controlled Air supplied labor and materials until January 14, 2007, and Fru-Con assumed responsibility for the work on January 17, 2007.

Controlled Air then filed a construction lien under the Nebraska Construction Lien Act against Fru-Con for unpaid labor and materials.  Fru-Con filed a breach of contract claim against Controlled Air in the federal court.  Controlled Air subsequently filed a complaint against Fru-Con to foreclose the construction lien in Nebraska state court.  Both parties filed motions to dismiss the other’s complaint, arguing that federal court and state court, respectively, could litigate the entire dispute.  The Nebraska court refused to dismiss Controlled Air’s complaint, but the federal court abstained and dismissed Fru-Con’s complaint.

On appeal, the Eighth Circuit reversed the trial court’s decision.  The court discussed the six Colorado River factors requiring abstention by a federal court, but focused on whether the claim pending in state court were parallel to the claim pending in federal court.  The court specifically held that the two cases were not parallel because the state case related to a statutory lien for labor and materials provided prior to January 14, 2007, while the federal case revolved around a common law breach of contract claim for losses after January 17, 2007.  The court wrote, “While both actions stem from the same project and contractual relationship, each is premised on a different wrong arising from different occurrences.”

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Bates v. Missouri & Northern Arkansas Railroad Company, Inc., No. 07-3002.

Plaintiff sued MNA in state court after he suffered damages from a collision between his vehicle and an MNA train.  MNA removed the case to federal court, arguing that plaintiff’s claim under the Federal Railroad Safety Act (FRSA) provided federal question jurisdiction.  When plaintiff amended his complaint to remove the claim, the federal court remanded the case to state court.

On appeal, the court distinguished complete preemption and preemption as a defense.  Complete preemption is a narrow doctrine that allows a defendant to remove a case to federal court if federal law has wholly displaced state law as to that issue.  Courts are reluctant to conclude complete preemption exists unless the federal statute has “extraordinary pre-emptive power.”  Preemption as a defense, on other hand, has no jurisdictional implications; it merely dictates what law will be applied to the claim.

The court had previously held that claims related to track inspection were completely preempted by the FRSA.  Lundeen v. Canadian Pacific Railway Co., 447 F.3d 606 (8th Cir. 2006) (Lundeen I).  Once Congress amended the FRSA to state that the FRSA did not create a federal cause of action, the court overruled its prior decision.  Lundeen v. Canadian Pacific Railway Co., 532 F.3d 682 (8th Cir. 2008) (Lundeen II).

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