In Maher v. Nusret New York LLC, 2022 WL 443619 (S.D.N.Y. Feb. 14, 2022), the court granted plaintiff’s motion to remand this case back to state court, due to the absence of federal subject matter jurisdiction.
From the decision:
The purported federal question raised, in defendant’s view, is whether CPLR § 7515 is preempted by or inconsistent with federal policies embodied in the Federal Arbitration Act, 9 U.S.C. § 1. et seq.
But no federal question is alleged on the face of the plaintiff’s allegations. Specifically, Maher alleges that he is of Hispanic background was hired to work at a steakhouse owned and operated by defendant, and that in the course of his employment he was “routinely discriminated against due to his ethnic background” and was terminated for speaking out against racially motivated treatment of non-Turkish employees and subjected to a hostile work environment, all in violation of the New York City Human Rights Law and New York State Human Rights Law. He seeks damages in excess of $1 million.
To support its claim of federal question jurisdiction, defendant relies upon the Second Circuit’s decision in Tantaros v. Fox News Network, LLC, 12 F.4th 135, 147 (2d Cir. 2021), affirming Judge Carter’s denial of a motion to remand. The plaintiff in Tantaros sought declaratory judgment that CPLR § 7515 bars a pending arbitration of her sexual harassment claim. Id. at 139 (19 cv 7131 (ALC); DE 1 at ¶15.) The majority held that the petitioner’s invocation of section 7515 in her pleading necessarily presented a federal question whether the arbitration fell within the “where inconsistent with federal law” exception in section 7515. Id at 143 (“Tantaros’s claim necessarily raises a federal question.”).
The key difference between the present case and Tantaros is that the federal question in Tantaros was presented on the face of plaintiff’s state law complaint. In contrast, Maher does not refer to arbitration or CPLR § 7515 anywhere in his pleading. He asserts garden-variety employment discrimination and retaliation claims exclusively under state law. It is the defendant who raises the prospect of arbitration and the prediction of plaintiff’s opposition to arbitration under CPLR § 7515. The well-pleaded complaint rule remains viable and requires the federal question to arise from the plaintiff’s pleading and not an anticipated defense to that pleading.
In reaching this conclusion, the court cited Supreme Court case law for the proposition that it has long been “settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff’s complaint, and even if both parties admit that the defense is the only question truly at issue in the case.”