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Combs v. Spring Creek Produce, LLC

United States District Court, E.D. Tennessee, Knoxville

August 25, 2017

JORDAN COMBS, doing business as COMBS FARMS, Plaintiff,
v.
SPRING CREEK PRODUCE, LLC, Defendant.

          MEMORANDUM OPINION

         This case is before the undersigned pursuant to 28 U.S.C. § 636(c), Rule 73(b) of the Federal Rules of Civil Procedure, and the consent of the parties, for all further proceedings, including entry of judgment [Doc. 19].

         Now before the Court is Plaintiff's Motion to Remand [Doc. 5]. The Defendant has responded in opposition [Doc. 11] to the Motion. The parties appeared telephonically before the Court on July 10, 2017, for a motion hearing. Attorney Thomas Leveille appeared on behalf of the Plaintiff. Attorney Jason Klinowski appeared on behalf of the Defendant. Accordingly, for the reasons more fully set forth below, the Plaintiff's Motion [Doc. 5] will be GRANTED. This case will be REMANDED to the Chancery Court of Grainger County, Tennessee.

         I. BACKGROUND

         The Plaintiff filed the instant action in the Chancery Court of Grainger County, Tennessee. [Doc. 1-2]. The Complaint alleges that the Plaintiff grows fruits and vegetables in Grainger County. [Id. at ¶ 3]. The Defendant purchases vegetables and fruits and resells them to various retailers. [Id. at ¶ 4]. The Complaint continues that the Defendant purchased produce from the Plaintiff in October 2015. [Id. at ¶ 5]. Following this sale, the Plaintiff and the Defendant entered into an oral agreement in which the Defendant agreed to purchase produce from the Plaintiff during the 2016 growing season. [Id. at ¶ 6]. The Complaint states that as part of the parties' oral agreement, the Defendant agreed to purchase and install at Combs Farms industrial walk-in coolers, and the Defendant would receive a credit against purchases of produce for the expense of the coolers. [Id. at 7]. The Complaint alleges that beginning in June 2016, the Defendant placed two of its employees to work on the premises of Combs Farms to accept deliveries of produce into the coolers. [Id. at ¶ 9]. The Complaint states that the Defendant's representatives maintained exclusive control over the coolers once the deliveries of produce began. [Id. at ¶ 11].

         The Complaint alleges that Defendant's representatives informed the Plaintiff that the Defendant would pay a minimum of $1.00 per box over the United States Department of Agriculture's prices for each item of produce. [Id. at ¶ 15]. The Complaint continues that the Plaintiff delivered the produce between June and October 2016. [Id.]. The Complaint states that the Defendant began making payments to the Plaintiff in August 2016 and that the Defendant received credit for all expenses related to the coolers. [Id. at ¶¶ 14, 16]. The Complaint alleges that the Defendant began to fall behind on its payments and currently owes $626, 850.10 for the produce that Plaintiff delivered. [Id. at ¶¶ 17-18]. The Complaint requests that the Plaintiff be awarded a money judgment against the Defendant in an amount up to and including $626, 850.10 and that the Plaintiff be awarded pre-judgment and post-judgment interest. [Id. at 6].

         Relevant to the instant Motion, the Defendant removed this action on April 3, 2017, claiming that this Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1441, 1446. [Doc. 1]. On May 2, 2017, the Plaintiff moved to remand this case.

         II. POSITIONS OF THE PARTIES

         The Plaintiff's Motion [Doc. 5] asserts that the Court does not have jurisdiction under the well-pleaded complaint rule and that the Plaintiff has only pled a state law cause of action. The Plaintiff states that while the Notice of Removal asserts that the civil action arises under the Perishable Agricultural Commodities Act of 1930 (“PACA”), the Complaint does not reference PACA or any federal law. The Plaintiff argues that federal preemption provides an exception to the well-pleaded complaint rule but that PACA, by its own terms, does not provide for preemption. The Plaintiff asserts that there is no substantial federal question in this case that warrants removal. The Plaintiff continues that the presence of a defense based on federal law is insufficient to confer federal jurisdiction and will not provide a basis for removal. Further, the Plaintiff contends that the reference to the United States Department of Agriculture (“USDA”) market report price in the Complaint is simply a reference to a federal unit of measurement and would not require the state court to interpret any provision of federal law. The Plaintiff continues that the artful pleading doctrine does not apply to this case as a basis for bringing the case within federal question jurisdiction. Finally, the Plaintiff states that he is entitled to attorney's fees and costs upon remand of this case to state court.

         The Defendant responds [Doc. 11] that the well-pleaded allegations of the Complaint invoke a federal claim under PACA. The Defendant disagrees with the Plaintiff's characterization of the Complaint as alleging a state cause of action for breach of oral contract and states that the Complaint does not cite a cause of action. The Defendant continues that the substance of the Complaint reveals allegations covered by PACA. The Defendant contends that the Complaint and the calculation of the Plaintiff's alleged damages involve the Court's interpretation of federal claims. The Defendant states that the Complaint alleges a violation of a PACA-imposed duty. Further, the Defendant argues that the true nature of the Plaintiff's allegations arise under PACA.

         The Defendant continues that even if the Court does not find that the Plaintiff's well-pleaded allegations state a claim under PACA, several exceptions to the well-pleaded complaint rule apply to invoke the Court's jurisdiction. The Defendant states that PACA preempts state law to the extent state law conflicts with PACA. In addition, the Defendant states that removal was appropriate under the artful pleading doctrine. The Defendant also contends that the Complaint raises substantial federal questions that justify removal. The Defendant argues that the cause of action necessarily raises a disputed federal issue, the federal interest in resolving this PACA claim is substantial, and that the Court's exercise of jurisdiction would not disturb the balance of federal and state court power. Finally, the Defendant asserts that costs and attorney's fees are not warranted in this case.

         III. ANALYSIS

         The Court has considered the parties' positions, and the Court finds the Plaintiff's request well-taken. As an initial matter, the Defendant asserts that the Complaint fails to cite a cause of action. In several footnotes, the Defendant explains that it did not seek dismissal in state court because motions to dismiss are not designed to correct inartfully worded pleadings. It is unclear whether the Defendant is raising this issue in its Response. Given that the Court will remand this case, however, the Court declines to address the Defendant's argument.

         As mentioned above, the Defendant argues that the well-pleaded allegations of the Complaint invoke a federal claim under PACA. In addition, the Defendant asserts that even if the Court does not find that the Plaintiff's well-pleaded allegations state a claim under PACA, several exceptions to the well-pleaded complaint rule apply to invoke the Court's jurisdiction. The Court will discuss each of these arguments and then address the Plaintiff's request for attorney's fees.

         A. ...


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