Johnson v. Am. Towers, LLC

781 F.3d 693

Robert JOHNSON; Mary Johnson, Plaintiffs–Appellants

v. AMERICAN TOWERS, LLC ; Farmers Telephone Cooperative, Inc.; Cellco Partnership, d/b/a Verizon Wireless; Sprint Cellular Company of South Carolina; Sprint Communications Company L.P.; Alltel Communications, LLC; T–Mobile USA Tower LLC ; T–Mobile USA Inc.; AT & T Inc.; AT & T Mobility LLC; AT & T Mobility Services, LLC; Verizon Wireless, LLC; Verizon Wireless Service LLC; Verizon Wireless of the East LP; Tracfone Wireless, Inc., Defendants–AppelleesandCellco Telephone Company of the Southeast, LLC; Alltel Communications, Incorporated; Alltel Mobile Communications of South Carolina, Inc., Defendants.

No. 13–1872.

United States Court of Appeals, Fourth Circuit.

Argued: Oct. 29, 2014.

Decided: March 25, 2015.

ARGUED:John E. Parker, Peters, Murdaugh, Parker, Eltzroth & Detrick, PA, Hampton, South Carolina, for Appellants. Scott H. Angstreich, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C.; Jeremy Cook Hodges, Nelson Mullins Riley & Scarborough LLP, Columbia, South Carolina, for Appellees. ON BRIEF:William F. Barnes, III, Peters, Murdaugh, Parker, Eltzroth & Detrick, PA, Hampton, South Carolina, for Appellants.John M.S. Hoefer, Willoughby & Hoefer, P.A., Columbia, South Carolina; Andrew E. Goldsmith, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C., for Appellees Cellco Partnership, Sprint Cellular Company of South Carolina, Alltel Communications, LLC, Verizon Wireless, Verizon Wireless Service LLC, and Verizon Wireless of the East LP. Robert W. Foster, Jr., Nelson Mullins Riley & Scarborough LLP, Columbia, South Carolina, for Appellee Farmers Telephone Cooperative, Inc. Daniel R. Settana, Jr., Janet Brooks Holmes, McKay, Cauthen, Settana & Stubley, P.A., Columbia, South Carolina, for Appellees AT & T Inc., AT & T Mobility LLC, and AT & T Mobility Services, LLC. Eric G. Fosmire, The Fosmire Law Firm, LLC, Columbia, South Carolina, for Appellees T–Mobile USA Tower LLC and T–Mobile USA, Incorporated. Elbert S. Dorn, Myrtle Beach, South Carolina, Burl F. Williams, Nexsen Pruet, LLC, Greenville, South Carolina, for Appellee American Towers, LLC. David S. Cox, Matthew E. Tillman, Womble Carlyle Sandridge & Rice, LLP, Charleston, South Carolina, for Appellee Sprint Communications Company L.P. Daniel B. White, Gallivan, White & Boyd, P.A., Greenville, South Carolina, for Appellee TracFone Wireless, Inc.

Before SHEDD and FLOYD, Circuit Judges, and DAVIS, Senior Circuit Judge.

Opinion

Affirmed by published opinion. Judge FLOYD wrote the opinion, in which Judge SHEDD and Senior Judge DAVIS joined.

FLOYD, Circuit Judge:

This suit presents a novel but flawed legal theory applied to admittedly tragic facts. Robert Johnson, a prison guard in Bishopville, South Carolina, was shot multiple times in his home. The ensuing investigation revealed that the attack was ordered by an inmate at the prison where Mr. Johnson worked using a contraband cell phone. Mr. Johnson survived the attack and, with his wife, later brought suit. The Johnsons did not, however, sue the typical defendants—i.e., the shooter or any prison inmate or employee. Rather, the Johnsons sued several cellular phone service providers and owners of cell phone towers. According to the Johnsons, these defendants are liable for Mr. Johnson's injuries because they were aware that their services facilitated the illegal use of cellphones by prison inmates and yet failed to take steps to curb that use.

In this appeal by the Johnsons, we address two issues: (1) whether the district court properly concluded that it had federal jurisdiction over the Johnsons' state-law claims; and (2) if so, whether the district court properly dismissed the Johnsons' claims on the merits. For the reasons set forth below, we affirm the judgment.

I.

A.

Captain Robert Johnson was an employee of the Lee Correctional Institution in Lee County, South Carolina. As a correctional officer, Mr. Johnson was responsible for seizing cell phones and other contraband from inmates.

In March 2010, an assailant entered Mr. Johnson's home and shot him six times in the chest and stomach. His wife, Mary Johnson, witnessed the attack. Mr. Johnson survived but underwent eight surgeries and months of rehabilitation.

The U.S. Attorney for the District of South Carolina concluded after a thorough investigation that a group of inmates ordered the attack in retaliation for Mr. Johnson's prior confiscation of their contraband cell phones and other goods.¹ The U.S. Attorney further found that an unnamed inmate had used a cell phone to communicate with the shooter, Sean Echols. That inmate also paid Echols. Echols eventually pleaded guilty to conspiracy to use interstate facilities in murder-for-hire under 18 U.S.C. § 1958(a). United States v. Echols, No. 3:13–cv–00211–JFA (D.S.C. Aug. 13, 2014) (judgment of the district court).

B.

In February 2013, the Johnsons filed suit in South Carolina state court seeking to recover under state-law negligence and loss of consortium theories. They seek to recover against two groups of Defendants: (1) wireless service providers;² and (2) owners of towers that lease space to those providers for the provisions of wireless service.³ The Johnsons alleged that both sets of Defendants “were aware of the illegal use of cellphones by inmates using signals emitted and received at the defendants' towers” and that “this use created an unreasonable risk of harm to others.” Appellants' Br. at 6. The Johnsons sought compensatory and punitive damages.

The Defendants timely removed the case to federal court, asserting both federal question jurisdiction under 28 U.S.C. § 1331 and complete diversity under 28 U.S.C. § 1332. In April 2013, the Johnsons moved to remand the case to state court. The district court denied the Johnsons' motion on two grounds. First, the district court concluded it had federal question jurisdiction because the Federal Communications Act (“Communications Act”) completely preempted all of the Johnsons' state law claims. Second, the district court found that it had diversity jurisdiction because the only non-diverse defendants were fraudulently joined and the amount in controversy exceeded $75,000.

On June 19, 2013, the district court consolidated the Defendants' motions to dismiss and granted the motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure. It did so for three reasons: (1) the Johnsons' claims were barred by express and conflict preemption; (2) South Carolina law did not impose a duty on Defendants to prevent inmates from illegally using their cell phone services; and (3) the Johnsons' claims were implausible and so did not meet pleading standards. This appeal followed.

II.

The Johnsons contend that the district court lacked subject matter jurisdiction over their state law claims, and thus erred in denying their motion to remand. We review questions of subject matter jurisdiction de novo, including questions related to the propriety of removal. Lontz v. Tharp, 413 F.3d 435, 439 (4th Cir.2005). As set forth below, we find that the Communications Act does not completely preempt the Johnsons' claims. Accordingly, the district court erred in finding the existence of federal question jurisdiction. Nevertheless, because the district court properly exercised jurisdiction on the basis of diversity of citizenship of the parties, however, we affirm the district court's denial of the Johnsons' motion to remand.

A.

We first consider whether the district court correctly found federal question jurisdiction. 28 U.S.C. § 1331. The district court determined it had jurisdiction on this basis because the Johnsons' claims were completely preempted by the Communications Act. In doing so, the district court relied on three provisions of the Act: (1) Section 332, the Act's preemption provision; and (2) Sections 201 and 207, which when read in conjunction allow private parties to recover damages resulting from a common carrier's breach of its obligation to ensure that “all ... practices ... for and in connection with communication service” are “just and reasonable.” 47 U.S.C. §§ 201(b), 207, 332. This was error.

At the outset, we note that complete preemption only applies in a “very narrow” range of cases. Marcus v. AT & T Corp., 138 F.3d 46, 54 (2d Cir.1998). “The limited applicability of the complete preemption doctrine is evidenced by the fact that the [Supreme] Court has only approved its use in three areas,” none of them pertinent to the Communications Act. Id. In fact, we have recognized a presumption against finding complete preemption. Lontz, 413 F.3d at 440 (citing Custer v. Sweeney, 89 F.3d 1156, 1167 (4th Cir.1996) ). This presumption—of course a rebuttable one—exists, in part, because “[f]ederalism concerns strongly counsel against imputing to Congress an intent to displace ‘a whole panoply of state law in [a certain] area’ absent some clearly expressed direction.” Custer, 89 F.3d at 1167 (quoting Painters of Phila. Dist. Council No. 21 Welfare Fund v. Price Waterhouse, 879 F.2d 1146, 1153 n. 7 (3d Cir.1989) ).

The foundation of the district court's complete preemption finding is § 332 of the Communications Act. See 47 U.S.C. § 332(c)(3)(A) (“[N]o State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service....”); Farina v. Nokia, Inc., 625 F.3d 97, 105–06 (3d Cir.2010) ( “The FCC's jurisdiction extends to wireless telephone service, and FCC authority over the technical aspects of radio communications is ‘exclusive.’ ” (citations omitted)). As set forth in Section III.A, infra, we agree that Section 332 expressly preempts the Johnsons' claims on the merits. But complete preemption and express preemption are different animals.

Complete preemption and ordinary preemption on the merits “are not as close kin jurisprudentially as their names suggest.” Lontz, 413 F.3d at 440. Unlike...