FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CALIFORNIA SHOCK TRAUMA AIR
RESCUE,
Plaintiff-Appellant,
v.
STATE COMPENSATION INSURANCE
FUND; ZURICH AMERICAN INSURANCE
COMPANY; ZENITH INSURANCE
COMPANY; REDWOOD FIRE &
CASUALTY INSURANCE COMPANY;
SEABRIGHT INSURANCE COMPANY;
ALLIED PROPERTY AND CASUALTY
INSURANCE COMPANY; EMPLOYERS
DIRECT INSURANCE COMPANY; XL
SPECIALTY INSURANCE COMPANY;
APPLIED UNDERWRITERS, INC.;
NATIONAL LIABILITY & FIRE
INSURANCE COMPANY; AIMS
INSURANCE SERVICES; ARCH
INSURANCE COMPANY; BROADSPIRE
SERVICES, INC.; CHURCH MUTUAL
INSURANCE COMPANY; ALASKA
NATIONAL INSURANCE COMPANY;
EMPLOYERS INSURANCE COMPANY OF
WAUSAU;
4299
4300 CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS.
INSURANCE COMPANY OF THE WEST;
EMPLOYERS COMPENSATION
INSURANCE COMPANY; FLORISTS’
MUTUAL INSURANCE COMPANY;
SAFECO INSURANCE COMPANY OF
AMERICA; SAFETY NATIONAL
CASUALTY CORPORATION; ACE
AMERICAN INSURANCE COMPANY;
CYPRESS INSURANCE COMPANY;
SIERRA PACIFIC INDUSTRIES, INC.;
FIRE ASSOCIATION SELF-INSURANCE
SYSTEM; CONTRA COSTA COUNTY
SCHOOLS INSURANCE GROUP;
CALIFORNIA STATE ASSOCIATION OF
COUNTIES EXCESS INSURANCE
AUTHORITY; PROTECTED INSURANCE
PROGRAMS FOR SCHOOLS; NORCAL
WASTE SYSTEMS, INC.; SPECIAL
DISTRICT RISK MANAGEMENT
AUTHORITY; MANPOWER, INC.;
REDWOOD EMPIRE MUNICIPAL
INSURANCE FUND; EAST BAY
REGIONAL PARK DISTRICT; TRINDEL
INSURANCE FUND; COUNTY OF
MARIN;
CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS. 4301
BARRETT BUSINESS SERVICES, INC.;
NORTHERN CALIFORNIA SPECIAL
DISTRICTS INSURANCE AUTHORITY;
CITY OF MONTEREY; COUNTY OF
SOLANO; LAKE VALLEY FIRE
PROTECTION DISTRICT; COUNTY OF
SANTA BARBARA; 99 CENT ONLY
STORES; COUNTY OF EL DORADO;
CITY OF PLEASANTON; COUNTY OF
STANISLAUS; MUNICIPAL POOLING No. 09-16810
AUTHORITY; THE DAVEY TREE
EXPERT; ACE PROPERTY AND D.C. No.
2:09-cv-00090-
INSURANCE COMPANY; MCE-JFM
CONOCOPHILLIPS COMPANY; ABC
SUPPLY COMPANY INC.; LABOR
READY SOUTHWEST INC.; CITY OF
WATSONVILLE; LOWE’S HIW, INC.;
AGRIUM US INC.; AMERICAN
CASUALTY COMPANY OF READING,
PENNSYLVANIA; IRWIN INDUSTRIES,
INC.; WASTE CONNECTIONS, INC.,
Defendants-Appellees.
4302 CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS.
CALIFORNIA SHOCK TRAUMA AIR
RESCUE,
Plaintiff-Appellant,
v.
AIG DOMESTIC CLAIMS, INC.; AIG
INSURANCE SERVICES, INC.; AIG
INDEMNITY INSURANCE COMPANY;
STATE FARM GENERAL INSURANCE
COMPANY; STATE FARM EMPLOYEES
ACTIVITIES ASSN.; REGENTS OF THE
UNIVERSITY OF CALIFORNIA; MCM
CONSTRUCTION, INC.; ENDURANCE No. 09-16874
REINSURANCE CORPORATION OF
D.C. No.
AMERICA; ENVIRONMENTAL
ALTERNATIVES; AMERICAN HOME 2:09-cv-00759-
ASSURANCE COMPANY; NATIONAL MCE-JFM
UNION FIRE INSURANCE COMPANY OF OPINION
PITTSBURGH, PA; COMMERCE AND
INDUSTRY INSURANCE COMPANY;
MAINSTAY BUSINESS SOLUTIONS;
MONTEREY COUNTY LOCAL
AGENCIES INSURANCE AUTHORITY;
E.I. DU PONT DE NEMOURS AND
COMPANY; CAMBRIDGE INTEGRATED
SERVICES GROUP, INC.; SCHOOLS
INSURANCE AUTHORITY; SCHOOLS
INSURANCE GROUP; PEBBLE BEACH
COMPANY,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of California
Morrison C. England, District Judge, Presiding
CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS. 4303
Argued and Submitted
January 14, 2011—San Francisco, California
Filed March 31, 2011
Before: J. Clifford Wallace, John T. Noonan, and
Barry G. Silverman, Circuit Judges.
Opinion by Judge Wallace
CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS. 4305
COUNSEL
Kathryn Dol (argued) and John E. Fischer of Murphy Austin
Adams Schoenfeld LLP, Sacramento, California, for appellant
California Shock Trauma Air Rescue.
Moe Keshavarzi (argued), Frank Falzetta, and James F.
McShane of Sheppard Mullin Richter & Hampton LLP, Los
Angeles, California; Peter Roan and Ronald D. Kurtz of
Locke Lord Bissell & Liddell LLP, Los Angeles, California,
for appellees State Compensation Insurance Fund et al.
OPINION
WALLACE, Senior Circuit Judge:
These consolidated appeals arise from two separate actions
that involve California Shock Trauma Air Rescue (CAL-
STAR). Both actions turn on the same jurisdictional question:
is the expectation of a federal defense, without more, suffi-
cient to establish federal jurisdiction over a state-law claim?
4306 CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS.
Despite CALSTAR’s arguments to the contrary, we reiterate
that the well-pleaded complaint rule precludes the exercise of
federal subject matter jurisdiction over purely state-law
causes of action, like the one raised here.
I.
CALSTAR provides air-ambulance rescue services to
employees injured in the course of their employment, and
whose employers are either self-insured or have purchased
workers’ compensation insurance. CALSTAR alleges that
these employers and various insurance companies (collec-
tively, Employers) have underpaid CALSTAR for its services.
Rather than pay the amount billed by CALSTAR, Employers
have paid a lesser amount as specified under the California’s
workers’ compensation statute. See Cal. Code Regs. tit. 8
§ 9789.70 (now obsolete in relevant part).
In 2009, CALSTAR filed its actions in the Eastern District
of California, alleging state-law claims of quantum meruit,
unjust enrichment, and open book account. CALSTAR also
sought a declaratory judgment that the state statute regulating
air-ambulance rates is pre-empted by federal law. In the
1970s, the federal government adopted legislation—the Fed-
eral Aviation Act of 1958 (FAA), as amended by the Airline
Deregulation Act of 1978, codified at 49 U.S.C.
§ 41713(b)(1)—to increase airline competition and lower air-
fare prices. According to CALSTAR, the FAA preempts the
workers’ compensation statute at issue.
The FAA preemption question is the sole basis on which
CALSTAR attempts to have its actions adjudicated in federal
court. Relying on Federal Rule of Civil Procedure 12(e)(1),
the district court concluded that subject matter jurisdiction
was lacking and dismissed CALSTAR’s claims. CALSTAR
now appeals. We review the district court’s dismissal for lack
of subject matter jurisdiction de novo, Kildare v. Saenz, 325
F.3d 1078, 1082, 1085 (9th Cir. 2003), and we affirm.
CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS. 4307
II.
Under 28 U.S.C. § 1331, federal courts have jurisdiction
over those actions “arising under the Constitution, laws, or
treaties of the United States.” While plaintiffs usually invoke
section 1331 jurisdiction for violations of federal law, they
also may invoke it over certain state-law claims. Grable &
Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308,
312 (2005).
[1] In determining whether a federal district court has
“arising under” jurisdiction over a claim, we must keep in
mind “the basic principle marking the boundaries of the fed-
eral question jurisdiction of the federal district courts”: the
well-pleaded complaint rule. Metro. Life Ins. Co. v. Taylor,
481 U.S. 58, 63 (1987). Under the well-pleaded complaint
rule, we must determine whether “a right or immunity created
by the Constitution or laws of the United States must be an
element, and an essential one, of the plaintiff’s cause of
action.” See Gully v. First Nat’l Bank, 299 U.S. 109, 112
(1936).
[2] We thus are required to consider whether CALSTAR’s
complaints satisfy the well-pleaded complaint rule. CAL-
STAR is suing Employers under various state-law theories.
CALSTAR anticipates that Employers will respond by assert-
ing, as a defense, that they correctly paid CALSTAR pursuant
to California’s air-ambulance rate regulation. In response to
that defense, CALSTAR anticipates arguing that the state’s
air-ambulance rate regulation is inapplicable because the FAA
preempts the state regulation. It is evident that CALSTAR’s
federal preemption argument is not necessary to its state-law
claims—it is merely a potential response to a defense.
Because CALSTAR’s preemption issue cannot satisfy the
well-pleaded complaint rule, there is no basis for federal ques-
tion jurisdiction.
[3] Any doubt about our analysis is removed by Phillips
Petroleum Co. v. Texaco, Inc., 415 U.S. 125 (1974) (per
4308 CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS.
curiam). There, Texaco brought an action in federal court for
quantum meruit, arguing that Phillips Petroleum underpaid for
helium contained in the natural gas that Texaco sold to Phil-
lips Petroleum. Id. at 125-26. If the action had gone forward,
Phillips Petroleum would have argued that it made payments
pursuant to the terms of the parties’ contract. Id. at 128. In
response, Texaco was prepared to argue that the federal stat-
ute governing helium sales required further payment for
helium trapped within natural gas. Id. Thus, “[t]o the extent
that the [federal statutes] may bear on th[e] action for the
recovery of the reasonable value of constituent helium in nat-
ural gas, it is clear that their effect is no more than to over-
come a potential defense to the action.” Id. at 129 (emphasis
added). The Court then ruled that it “cannot be said that this
suit ‘arises under the Constitution, laws, or treaties of the
United States.’ ” Id., quoting 28 U.S.C. § 1331(a). Based on
Phillips Petroleum, which contained facts functionally identi-
cal to those at issue here, federal subject matter jurisdiction
cannot arise from CALSTAR’s complaint raising mere state-
law claims.
Ignoring Phillips Petroleum, CALSTAR invokes the
Supreme Court’s decision in Grable and argues that a federal
court may entertain any action if it involves “significant fed-
eral issues.” 545 U.S. at 312. Grable, however, does not sup-
port CALSTAR’s position. There, a plaintiff filed a state
common law quiet title action alleging superior title to a par-
cel of land previously seized by the Internal Revenue Service
(IRS). Id. at 311. The basis of Grable’s argument for superior
title, as alleged in his complaint, was the IRS’s failure to
serve notice pursuant to 26 U.S.C. § 6335(a). Id. The defen-
dant “removed the case to Federal District Court as presenting
a federal question, because the claim of title depended on the
interpretation of . . . federal tax law.” Id. The Court observed
that jurisdiction was proper because, “federal-question juris-
diction will lie over state-law claims that implicate significant
federal issues.” Id. at 312.
CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS. 4309
[4] Read in isolation, this statement arguably suggests that
federal courts may exercise jurisdiction over any state-law
claim that “implicate[s] significant federal issues.” In fact,
this is the very interpretation that CALSTAR asks us to adopt.
Nevertheless, contrary to CALSTAR’s suggestion, Grable did
not implicitly overturn the well-pleaded complaint rule—
which has long been a “basic principle marking the bounda-
ries of the federal question jurisdiction of the federal district
courts,” Metropolitan Life, 481 U.S. at 63—in favor of a new
“implicate[s] significant federal issues” test, see Grable, 545
U.S. at 312. For CALSTAR’s argument to have any merit, the
complaint in Grable would have had to violate the well-
pleaded complaint rule. But this is where CALSTAR falters.
The Grable complaint did present a federal issue on its face.
As the Court explained, the complaint in Grable “premised its
[state-law] superior title claim on a failure by the IRS to give
it adequate notice, as defined by federal law.” Id. at 314-15.
Thus, contrary to CALSTAR’s suggestion, Grable stands for
the proposition that a state-law claim will present a justiciable
federal question only if it satisfies both the well-pleaded com-
plaint rule and passes the “implicate[s] significant federal
issues” test. This test requires that the federal issue within a
state-law claim be “necessar[y], . . . actually disputed and sub-
stantial, which a federal forum may entertain without disturb-
ing any congressionally approved balance of federal and state
judicial responsibilities.” Id. at 314.
[5] Turning to the facts of this case, CALSTAR’s argu-
ment fails at the outset. Notwithstanding its declaratory judg-
ment claim, which we address later, its actions are based
entirely on California causes of action (quantum meruit,
unjust enrichment and open book account), each of which
does not, on its face, turn on a federal issue. Instead, any fed-
eral issue here would be a response to a defense to these state-
law claims. Under Phillips Petroleum, there is no arising
under jurisdiction in this context. 425 U.S. at 128.
4310 CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS.
III.
[6] The other potential basis for federal jurisdiction is
CALSTAR’s claim for declaratory relief. Pursuant to that
claim, CALSTAR seeks a declaration that the FAA preempts
the now obsolete fee schedule for air ambulances. See Cal.
Code Regs. tit. 8 § 9789.70.
[7] “[T]he operation of the Declaratory Judgment Act is
procedural only” and does not confer arising under jurisdic-
tion. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667,
671 (1950) (internal quotation marks omitted). That holding
should be the end of the discussion. Nevertheless, CALSTAR
argues that the logical extension of Shaw v. Delta Airlines,
Inc. opens the doors of the federal courts to CALSTAR’s
claim. 463 U.S. 85 (1983). The relevant portion of Shaw,
upon which CALSTAR relies, states:
It is beyond dispute that federal courts have jurisdic-
tion over suits to enjoin state officials interfering
with federal rights. Ex parte Young, 209 U.S. 123,
160-62 (1908). A plaintiff who seeks injunctive
relief from state regulation, on the ground that such
regulation is pre-empted by a federal statute which,
by virtue of the Supremacy Clause of the Constitu-
tion, must prevail, thus presents a federal question
which the federal courts have jurisdiction under 28
U.S.C. § 1331 to resolve.
Id. at 96 n.14.
[8] CALSTAR’s argument is a matter of first impression
within our circuit and therefore we must address it. In Shaw,
the Supreme Court predicated its jurisdictional holding on the
fact that a state official was the defendant. Id. Relying on Ex
parte Young, the Court held that there was arising under juris-
diction over an action against a state attorney general, acting
in his official capacity, who allegedly violated federal law.
CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS. 4311
209 U.S. at 160-62. A Supremacy Clause-related claim
against a state official was the logical extension of the juris-
dictional rule set forth in Ex parte Young. The structure of the
Shaw syllogism confirms its conclusion. In footnote 14, Shaw
reiterates its major premise: Jurisdiction exists over federal
actions to enjoin state officials. 463 U.S. at 96 n.14. When
confronted with the Shaw plaintiff’s Supremacy Clause claim
against a state official, the Court explained that such a claim
“thus presents a federal question.” Id. (emphasis added).
Because the presence of a state official is crucial to the rea-
soning in Shaw, its holding is irrelevant to CALSTAR’s
action against Employers, none of whom are state officials.
As CALSTAR is unable to cite any case in which there exists
federal subject matter jurisdiction over a declaratory judgment
claim brought by a private party against another private party,
CALSTAR’s argument necessarily fails.
Furthermore, to the extent that CALSTAR contends that
Shaw opened the door to its argument, it ignores Supreme
Court precedent that keeps that door closed. If we ruled as
CALSTAR suggests we do, we would directly contravene the
Skelly Oil rule, which held that Declaratory Judgment Act
actions are procedural claims, as opposed to substantive ones
that would confer jurisdiction. 339 U.S. at 671. For this rea-
son as well, CALSTAR’s position is untenable.
At bottom, CALSTAR’s argument is nothing more than a
“futile . . . attempt to define a ‘cause of action’ without refer-
ence to . . . context.” Gully, 299 U.S. at 117. Federal subject
matter jurisdiction jurisprudence is not an area of the law that
lends itself to the application of broad principles. It is a pre-
cise analysis. The line is clearly drawn. As the Supreme Court
cautioned,
To define broadly and in the abstract “a case arising
under the Constitution or laws of the United States”
has hazards of a kindred order. . . . [T]he courts have
formulated the distinction between controversies that
4312 CALIFORNIA SHOCK TRAUMA v. STATE COMP. INS.
are basic and those that are collateral, between dis-
putes that are necessary and those that are merely
possible. We shall be lost in a maze if we put that
compass by.
Id. at 117-18. Actions against state officials are part of those
that are “basic” and “necessary.” See Shaw, 463 U.S. at 96
n.14. Declaratory judgments against private parties, regardless
of whether the Supremacy Clause has been invoked, are not.
Skelly Oil, 339 U.S. at 671.
[9] Our analysis is strengthened by the fact that those cir-
cuits to address the argument now raised by CALSTAR have
unanimously rejected it. See Colonial Penn Grp., Inc. v. Colo-
nial Deposit Co., 834 F.2d 229, 237 (1st Cir. 1987)
(“Jurisdiction over actions for declarations of pre-emption can
logically only be asserted where a state official is the defen-
dant”); Albradco, Inc. v. Bevona, 982 F.2d 82, 87 (2d Cir.
1992) (“Because [plaintiffs] have not sued state officials to
enjoin them from enforcing an unconstitutional state law, this
case is distinguishable from Shaw”); New Orleans & Gulf
Coast Ry. Co. v. Barrois, 533 F.3d 321, 330 (5th Cir. 2008)
(Shaw “does not apply in a suit exclusively between private
parties . . .”). Accordingly, we hold that there is no federal
jurisdiction over CALSTAR’s declaratory judgment claim.
IV.
Because there is no federal jurisdiction over any of CAL-
STAR’s claims, we affirm the district court’s dismissal for
lack of jurisdiction. We therefore need not address the parties’
remaining arguments. We do, however, grant Employers’
motion to take judicial notice of CALSTAR’s state-law com-
plaint.
Costs on appeal are awarded to Employers.
AFFIRMED.