Wednesday, June 27, 2007

Complete Preemption Considerered

On June 13th, I did a posting about preemption and res judicata. The posting dealt with whether a state court decision on the preempted nature of a state claim has res judicata effect when the same claim is subsequently brought in federal court. I think so, although others disagreed. Given our dual system of courts, such uncertainties are common, although not inevitable: Congress could, for example, grant concurrent jurisdiction to state and federal courts, even to enforce a wholly federally created right like copyright (at least in published works). The first Copyright Act of 1790 did not provide federal question jurisdiction for adjudicating copyright claims, and it should not be surprising therefore that the first cases under the 1790 Act were heard by state courts. In 1819, the circuit courts were given original, but not exclusive jurisdiction over copyright claims under the 1790 statute. Exclusive jurisdiction was not granted until 1873, two years before general federal question jurisdiction was given to the federal courts in the Judiciary Act of March 3, 1875. (The "Midnight Judges Act" of 1801 had earlier granted federal question jurisdiction, but it was repealed the next year).

Claims arising under the federal copyright act have been exclusive in the federal courts continuously since 1873, a fact that heightens the need to determine when a claim arises under the federal act. A related issue is preemption. There is now a statutory preemption provision in 17 USC 301, but preemption existed under the Supremacy Clause before then. Courts have created various approaches to deal with these thorny issues, including the well-pleaded complaint rule, which in one facet, precludes the exercise of federal question jurisdiction where the federal question is raised by defendant rather than plaintiff. The principal reason for this is docket control: permitting defendants to create federal jurisdiction by raising federal defenses and the like might lead to massive removal of state claims to federal courts, inundating federal courts. Plaintiffs however, are said to be the masters of their own complaints and if they want to forego federal jurisdiction in order to pursue a state claim, that's their cohice.

But as with all rules, there is an exception to letting the plaintiff be the master of its own complaint, called complete preemption. Complete preemption permits courts to look beyond the face of the complaint to see if a federal claim has been clothed in state court garb, to avoid removal (e.g., a federal copyright claim is brought as a state unfair competition claim). The theoretical basis for complete preemption has been explored in a new article by Professor Gil Seinfeld of the University of Michigan Law School, called "The Puzzle of Complete Preemption," to be published in 155 U.Pa. L. Rev. 537 (2007), but available here through ssrn. Unfortunately, while copyright provides an excellent field for him to test his theories, he doesn't mention it, but the article is worthy reading generally.

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