                             In the

United States Court of Appeals
               For the Seventh Circuit

No. 12-2037

N ORTHEASTERN R URAL E LECTRIC
M EMBERSHIP C ORPORATION,
                                                 Plaintiff-Appellant,
                                 v.


W ABASH V ALLEY P OWER A SSOCIATION, INC.,

                                                Defendant-Appellee.


            Appeal from the United States District Court
     for the Southern District of Indiana, Indianapolis Division.
     No. 1:12-cv-00144-SEB-DML—Sarah Evans Barker, Judge.



  A RGUED S EPTEMBER 25, 2012—D ECIDED F EBRUARY 22, 2013




 Before K ANNE, T INDER, and H AMILTON, Circuit Judges.
  H AMILTON, Circuit Judge. This appeal tests the
boundaries of federal-question subject matter jurisdic-
tion. The issue is whether a claim for breach of a long-
term requirements contract for wholesale electricity
arises under federal law or state law. We conclude that
the claim arises under state law, that the district court
2                                             No. 12-2037

therefore lacked jurisdiction to enter its preliminary
injunction, and that the case should be remanded to
state court.
  Defendant Wabash Valley Power Association, Inc.
(Wabash Valley) is a not-for-profit power generation
cooperative. Plaintiff Northeastern Rural Electric Mem-
bership Corporation (Northeastern) is a member of
Wabash Valley that purchases electricity from Wabash
Valley and resells it to consumers. In 1977, Northeastern
and Wabash Valley entered into a wholesale power supply
contract under which Northeastern agreed to purchase
all of its electric power from Wabash Valley for the
next forty years. The contract provided that Northeastern
would pay for the electricity at rates to be set by the
Wabash Valley board of directors “[s]ubject to the
approval of the Public Service Commission of Indiana,”
though the key contractual provision also stated that
revised rates would not be effective unless approved
by the ambiguously phrased “applicable regulatory
authorities,” as well as the administrator of the fed-
eral Rural Electrification Administration.
  On January 5, 2012, Northeastern filed this suit in
Indiana state court seeking a declaratory judgment
that Wabash Valley materially breached the 1977
contract by taking action in 2004 that had the effect of
transferring regulation of its rates from the Indiana Com-
mission to the Federal Energy Regulatory Commission
No. 12-2037                                                  3

(FERC).1 Northeastern contends that the “applicable
regulatory authorities” in the 1977 contract are limited to
the Indiana Commission, while Wabash Valley believes
that the contract language is flexible enough to permit
rate regulation by either regulatory body.
  Wabash Valley removed the case to federal court
under 28 U.S.C. § 1441(a) on the theory that the claim
for breach of contract necessarily arises under the
Federal Power Act (FPA), 16 U.S.C. §§ 791a et seq. North-
eastern moved to remand to state court while Wabash
Valley moved for a preliminary injunction to prevent
Northeastern from ceasing performance under the con-
tract. The district court denied Northeastern’s motion
for remand and granted Wabash Valley’s motion for a
preliminary injunction, agreeing with Wabash Valley
that federal jurisdiction exists because Northeastern’s
suit is “a collateral attack on the FERC-filed rate,” and
thus raises a question of federal law. Northeastern has
appealed both rulings, arguing that the suit does not
attack a filed rate.
  We have appellate jurisdiction to consider the prelimi-
nary injunction under 28 U.S.C. § 1292(a)(1). The appeal of
the district court’s denial of remand also fits within
the narrow doctrine of pendent appellate jurisdiction
because the preliminary injunction appeal presents pre-



1
  In 1987, the Public Service Commission of Indiana was
renamed the Indiana Utility Regulatory Commission. We
refer to this continuing regulatory body as simply “the Indiana
Commission.”
4                                               No. 12-2037

cisely the same question of subject matter jurisdiction as
the motion to remand. The denial of a motion to remand
ordinarily cannot be appealed, see 28 U.S.C. § 1447(d),
but here the denial of remand is “inextricably inter-
twined” with the appealable preliminary injunction. See,
e.g., Research Automation, Inc. v. Schrader-Bridgeport Int’l,
Inc., 626 F.3d 973, 977 (7th Cir. 2010) (exercising pendent
appellate jurisdiction over non-appealable transfer
order that presented same issue as appealable denial of
injunction to block litigation in transferee district); cf.
Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 669 (7th
Cir. 2012) (holding that appellate jurisdiction over denial
of motion to dismiss based on foreign sovereign im-
munity defense did not support pendent appellate juris-
diction over rejection of separate statute of limitations
defense).
   Turning to the merits of the appeal, we agree with
Northeastern and conclude that the federal courts lack
subject matter jurisdiction over this case. North-
eastern’s claim is limited to a construction of the parties’
rights under the 1977 contract and does not necessarily
raise a question of federal law. To prove its claim, North-
eastern needs to show only that it had a valid contract
and that Wabash Valley’s voluntary action to transfer
regulatory jurisdiction from the Indiana Commission
to FERC breached the contract. Neither of these elements
necessarily raises a question of federal law. While North-
eastern may eventually attempt to use a favorable state
court judgment to seek FERC’s permission to terminate
its obligations under the tariff filed with FERC, North-
eastern agrees that such relief cannot be achieved in
No. 12-2037                                                  5

this suit. If Northeastern prevails on the merits of its
claim, it will then need to seek that relief directly
from FERC. Northeastern has therefore pled a claim
that does not arise under federal law. We vacate the pre-
liminary injunction and order remand of this action
to state court.


I. Regulatory, Factual, and Procedural Background
  A. Wholesale Electrical Power Regulation
  Regulation of the electricity market is divided between
federal and state regulators. In general, the federal gov-
ernment through FERC regulates the interstate whole-
sale electricity market, while the states regulate the
retail sale of this power to consumers.
  FERC regulates the sale of wholesale electricity
through rate regulation. Under the Federal Power Act,
public utilities under FERC jurisdiction may charge
only “just and reasonable” rates. 16 U.S.C. § 824d(a). The
Act grants FERC the exclusive authority to enforce
this provision by regulating the rates, terms, and condi-
tions governing the interstate transmission and sale of
wholesale energy in interstate commerce. See Mississippi
Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S.
354, 371 (1988). In practice, FERC enforces this statutory
provision through tariff filing. Public utilities regulated
by FERC are required to file tariffs that detail rates
and terms of service. 16 U.S.C. § 824d(c); 18 C.F.R. § 35.1(a).
The basis for the filed tariff is often a contract negoti-
ated privately between wholesaler and distributor that
6                                                 No. 12-2037

is then submitted to FERC. FERC will then accept the
contract as the basis for the rate as long as the terms are
“just and reasonable” and not discriminatory. Once a
rate is filed, the rate takes effect unless FERC initiates a
hearing to inquire into the reasonableness of the rate.
16 U.S.C. § 824d(e). If a utility or customer is unhappy
with a proposed term, it may protest the rate filing with
FERC or seek to intervene in any proceedings. 18 C.F.R.
§ 385.211(a) (establishing general rule that “[a]ny
person may file a protest to object to . . . [a] tariff or rate
filing”); 18 C.F.R § 385.214 (requirements for interven-
tion). An aggrieved party may seek judicial review
before a federal court of appeals within 60 days. 16 U.S.C.
§ 825l(b). Once a rate is accepted, however, the parties
to the rate filing are bound to the terms of the filed rate
and may not change them without giving notice and
making a new filing with FERC. 16 U.S.C. § 824d(d);
18 C.F.R. § 35.15 (requiring notice and filing with FERC
to cancel or terminate a rate schedule). This process
provides the exclusive method for reviewing the rea-
sonableness of the terms of filed rates.
  FERC’s exclusive jurisdiction over the reason-
ableness of rates under its jurisdiction is protected by
the “filed-rate doctrine.” The filed-rate doctrine prohibits
courts — both state and federal — from questioning a
rate that has been filed with a federal regulator, except
through the review process just noted. See Montana-Dakota
Utilities Co. v. Northwestern Public Service Co., 341 U.S.
246, 251-52 (1951). The doctrine has been expanded to
include the terms of the tariff that affect the rate and
state regulations that might indirectly achieve the same
No. 12-2037                                                 7

result. See Natural Gas Co. v. State Corporation Comm’n
of Kan., 372 U.S. 84, 91 (1963) (applying doctrine to bar
state order allocating purchases among numerous wells
in same gas field). By this reasoning, if Northeastern
had brought this action as a suit for damages or to
enjoin the rate it pays under the filed tariff, the action
would be barred by the filed-rate doctrine. An award of
damages would require a court to determine that the
rate paid was unreasonable, and any damages paid in
such a suit would effectively alter the rate Northeastern
paid for electricity under the FERC tariff during the
period in question.
   FERC would have had regulatory authority over the
original 1977 Northeastern-Wabash Valley contract but
for a relevant exception to FERC’s jurisdiction. While
the Federal Power Act generally grants FERC exclusive
jurisdiction over the regulation of wholesale power,
FERC lacks jurisdiction over utilities that are regulated
by the Rural Electrification Administration (REA), an
agency that has promoted rural electrification by
providing loans for infrastructure development. See
Dairyland Power Cooperative, 37 F.P.C. 12 (1967) (inter-
preting 16 U.S.C. § 824(f) to hold that FERC predecessor,
the Federal Power Commission, lacked jurisdiction
over wholesale rates charged by power cooperatives
financed by REA); Salt River Project Agricultural Improve-
ment & Power District v. FPC, 391 F.2d 470, 474-77 (D.C. Cir.
1968) (agreeing with FPC’s holding in Dairyland Power);
see also Wabash Valley Power Ass’n, Inc. v. Rural Electrifica-
tion Admin., 903 F.2d 445, 448 (7th Cir. 1990) (noting
the Dairyland Power rule). Unlike FERC, the REA does
8                                                  No. 12-2037

not have exclusive jurisdiction over the regulation of
wholesale electric rates. This means that state reg-
ulators may have jurisdiction to regulate wholesale
power companies that are financed by the REA.


    B. The 1977 Contract
  In 1977, Northeastern and Wabash Valley entered into
a wholesale power supply contract. Wabash Valley
was within the REA’s jurisdiction at that time due
to outstanding REA debt, so state rate regulation was
permissible. See generally Wabash Valley Power Ass’n, Inc.
v. Rural Electrification Admin., 988 F.2d 1480 (7th Cir.
1993). The contract provided that Northeastern would
purchase all of its electric power and energy from
Wabash Valley for the next forty years.2 Since future
price is uncertain, such long-term contracts typically
specify a procedure for changing the rate over time.
The 1977 contract provided for the rate to be changed in
the following manner:



2
   The original contract has been amended a number of times
to alter the duration of the contract term and to provide alter-
native avenues for Northeastern to terminate its dealings
with Wabash Valley. Because Northeastern is alleging a breach
of the 1977 contract, and because we conclude that this claim
is not subject to federal court jurisdiction, we do not address
the significance of these amendments. Whether such amend-
ments ratified the alleged breach or superseded the 1977
contract would not affect the jurisdictional question. These
are questions for the state courts to consider.
No. 12-2037                                                 9

   4. Rate. Subject to the approval of the Public Service
   Commission of Indiana:
   ...
         (b) . . . The Member agrees that the rate, from time
         to time, established by the Board of Directors of
         [Wabash Valley] shall be deemed to be substituted
         for the rate herein provided and agrees to pay
         for electric power and energy furnished by
         [Wabash Valley] to it hereunder after the effective
         date of any such revision at such revised rates;
         provided, however, that no such revision shall
         be effective unless approved by applicable regulatory
         authorities and the Administrator [of the Rural
         Electrification Administration].
S.A. 72-73 (emphasis added).
   The parties disagree over the scope of the phrase
“applicable regulatory authorities.” Northeastern be-
lieves that “Subject to the approval of the Public Service
Commission of Indiana” at the beginning of subsection 4
limits the applicable regulatory authority to the Indiana
Commission. Wabash Valley believes that the term was
intentionally left undefined to allow for a change in
the regulator. Nevertheless, the parties agree that
the Indiana Commission was the applicable regulatory
authority when the contract was signed in 1977. As
noted, state regulation was permissible because
Wabash Valley still had REA debt.
 In 2004, however, Wabash Valley decided to repay its
REA debt early. Repaying the REA debt meant that
10                                                  No. 12-2037

Wabash Valley would become subject to the exclusive
regulatory jurisdiction of FERC. While Wabash Valley
was considering the move to FERC regulation, North-
eastern sent a letter to Wabash Valley to object, con-
tending that a move to FERC would breach the 1977
contract. Wabash Valley disagreed and filed a rate sched-
ule with FERC consisting of a formula rate tariff and the
1977 contract on April 30, 2004.3 FERC then assumed
exclusive jurisdiction over the rates, terms, and conditions
of the wholesale electricity services provide by Wabash
Valley. Federal law barred the Indiana Commission from



3
  Midwest ISO, another member of Wabash Valley, challenged
this initial rate-filing in front of FERC. Midwest argued that
the filing should not be accepted by FERC because the
Michigan Commission (the alleged applicable regulatory
authority under the Midwest-Wabash Valley contract) had not
approved the filing. FERC rejected this objection on June 29,
2004. Wabash Valley Power Ass’n, Inc., 107 FERC ¶ 61327 (June 29,
2004). In a decision that is not entirely clear, FERC concluded
that the language of the 1977 Midwest-Wabash Valley contract
conditioning rate changes on approval by the applicable
regulatory authorities did not “preclude application of the
proposed Formula Rate Tariff to Midwest under that con-
tract.” Id. at *3. It is unclear whether FERC concluded that this
would not be a breach of the 1977 contract, or whether
the contract was not a bar to regulation due to FERC’s statu-
tory authority. Any uncertainty about the grounds of FERC’s
decision does not matter for our jurisdictional inquiry
because collateral estoppel and res judicata are affirmative
defenses and do not provide a basis for federal jurisdiction.
Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 478 (1998).
No. 12-2037                                                 11

continuing to regulate the rates charged. See United
States v. Public Utilities Comm’n of Cal., 345 U.S. 295, 308
(1953) (observing that the Federal Power Act prohibits
state regulation of wholesale electric rates within Federal
Power Commission — now FERC — jurisdiction).


    C. The Dispute and Prior Proceedings
  Northeastern proceeded to purchase power from
Wabash Valley until December 2010. On December 27,
Northeastern sent Wabash Valley a notice of material
breach based on the change in regulatory authority
that took place in 2004 and demanded that Wabash
Valley cure by restoring rate regulation by the Indiana
Commission.4
  Following failed negotiations, Wabash Valley filed a
declaratory action with FERC seeking an order
that: (1) FERC “has exclusive jurisdiction over the
Commission-approved Formula Rate Tariff;” (2) any
“changes to the rates paid by [Northeastern] under the
Tariff . . . are subject to approval of the applicable regula-
tory authorities; and (3) the Commission is the applicable
regulatory authority with jurisdiction over the rates
[Northeastern] pays under the Tariff . . . .” Wabash Valley
Power Ass’n, Inc., 137 FERC ¶ 61148, at *1 (Nov. 21,
2011). In response, Northeastern agreed with the well-



4
 In its brief Northeastern also details several disputes it had
with Wabash Valley from 2004 through 2010, but these are not
material to the jurisdictional issue.
12                                            No. 12-2037

established law that FERC had jurisdiction over a filed
tariff and argued that the only dispute was over whether
Wabash Valley was in material breach of contract.
  FERC granted Wabash Valley’s petition and concluded
that “since 2004, the Commission has had exclusive
jurisdiction over the Tariff” and that any changes to the
rates are subject to FERC approval. Id. at *5. Because
Wabash Valley sought only a “jurisdictional declara-
tion,” FERC considered Northeastern’s claim for breach
of contract to be “beyond the scope” of the proceeding.
Id. at *6. Northeastern then filed the present case in
state court arguing that the change in regulatory
authority was a material breach of the 1977 contract.
Wabash Valley then removed to the federal district
court, which issued its preliminary injunction and
denied remand to state court.


II. Subject Matter Jurisdiction
  The federal courts are courts of limited jurisdiction,
and we have an obligation at each stage of the pro-
ceedings to ensure that we have subject matter jurisdic-
tion over the dispute. Where, as here, a party challenges
the removal of a case to federal court, we review de novo
a district court’s denial of a motion for remand, at least
in the absence of disputed factual issues. Chase v. Shop
‘N Save Warehouse Foods, Inc., 110 F.3d 424, 427 (7th
Cir. 1997).
  A case filed in state court may be removed to federal
court only when the case originally could have been
No. 12-2037                                                13

filed in federal court. 28 U.S.C. § 1441(a). Because the
parties here are both citizens of Indiana, diversity of
citizenship is not present, and the propriety of removal
depends on the existence of a federal question that
could confer jurisdiction under 28 U.S.C. § 1331 or
another statutory grant of jurisdiction. See Caterpillar Inc.
v. Williams, 482 U.S. 386, 392 (1987). It is well established
that such a federal question must be apparent on the
face of the plaintiff’s well-pleaded complaint. Louisville &
Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908); Gully
v. First Nat’l Bank, 299 U.S. 109, 112-13 (1936). Federal
defenses to a well-pleaded complaint, such as preemption
or preclusion, do not provide a basis for removal. See
Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 478 (1998).
   Plaintiffs, however, may not avoid removal to federal
court by omitting necessary federal questions from
their complaints through artful pleading. While plain-
tiffs are entitled to omit federal claims from their com-
plaints so as to avoid federal jurisdiction, they may not
omit necessary federal elements of an included claim.
See Franchise Tax Bd. of State of Cal. v. Constr. Laborers
Vacation Trust for Southern Cal., 463 U.S. 1, 22 (1983). Put
another way, a “plaintiff cannot frustrate a defendant’s
right to remove by pleading a case without reference to
any federal law when the plaintiff’s claim is necessarily
federal.” 14B Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 3722 (4th ed.). When a
plaintiff omits from its pleadings federal questions that
are necessary elements of a claim, courts will read the
necessary federal elements into the complaint. See Hays
v. Cave, 446 F.3d 712, 713 (7th Cir. 2006) (“What is true
14                                             No. 12-2037

is that if federal law creates the claim on which the
plaintiff is suing, the fact that he has omitted from his
complaint any reference to federal law will not defeat
removal.”). Similarly if federal law preempts all state
causes of action in an area of law, under the complete
preemption doctrine, we treat any state law claim as
necessarily arising under federal law. See Beneficial
Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003) (“When the
federal statute completely pre-empts the state-law cause
of action, a claim which comes within the scope of that
cause of action, even if pleaded in terms of state law,
is in reality based on federal law.”)
  With this background in mind, we now examine
whether Northeastern’s complaint arises under federal
law to confer federal subject matter jurisdiction. First,
we consider whether a substantial federal question
exists to confer jurisdiction under 28 U.S.C. § 1331 or the
grant of jurisdiction in the Federal Power Act, 16 U.S.C.
§ 825p. Second, we examine whether the Federal Power
Act completely preempts state causes of action in the
field of wholesale power regulation, bringing the com-
plaint within the complete preemption doctrine.


 A. Jurisdiction under 28 U.S.C. § 1331 or 16 U.S.C. § 825p
  Wabash Valley argues that there is federal jurisdic-
tion because the complaint is based on a rate filed
with FERC. This could confer “arising under” jurisdic-
tion under 28 U.S.C. § 1331, or bring the case within
the Federal Power Act’s jurisdiction provision that pro-
vides for original and exclusive federal court jurisdiction
No. 12-2037                                                15

over “all suits in equity and actions at law brought to
enforce any liability or duty created by, or to enjoin any
violation of, [the Federal Power Act] or any rule, regula-
tion, or order thereunder.” 16 U.S.C. § 825p; California
ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 843, amended
on denial of reh’g, 387 F.3d 966 (9th Cir. 2004) (finding
§ 825p provides a basis for federal court jurisdiction
when federal question jurisdiction under § 1331 may
be absent). We conclude that these two avenues do not
confer jurisdiction because Northeastern’s suit is not
based on a filed rate or a direct challenge to a filed rate.
No federal issues are necessary elements of North-
eastern’s claim.
  Northeastern’s complaint presents a claim for a dec-
laratory judgment based on state contract law. The com-
plaint thus presents a state law cause of action. We recog-
nize that the nature of the cause of action does not
always determine the existence of federal jurisdiction.
See, e.g., Smith v. Kansas City Title & Trust Co., 255 U.S.
180 (1921) (finding jurisdiction where decisive question
of federal law was embedded in state law cause of ac-
tion). Thus, we might still have federal question jurisdic-
tion under section 1331 if the state law claims in the
complaint “necessarily raise a stated federal issue,
actually disputed and substantial, which a federal forum
may entertain without disturbing any congressionally
approved balance of federal and state judicial responsi-
bilities.” Grable & Sons Metal Products, Inc. v. Darue Eng’g &
Mfg., 545 U.S. 308, 314 (2005) (disavowing a “single,
precise, all-embracing” test for federal question jurisdic-
tion when federal issues are embedded in state law
16                                              No. 12-2037

causes of action, and finding federal question jurisdic-
tion in quiet title action that depended on interpretation
of federal tax law). We may also have jurisdiction if the
state law cause of action falls within the scope of the
Federal Power Act’s grant of jurisdiction. 16 U.S.C. § 825p.
   Wabash Valley contends that a substantial federal
question necessarily exists because the suit is a chal-
lenge to a federally-filed tariff. Wabash Valley rests
this argument on our previous decision holding that a
state law action seeking to enforce or challenge terms of
a federally-filed tariff arises under federal law. See
Cahnmann v. Sprint Corp., 133 F.3d 484, 488-89 (7th Cir.
1998). The reason behind this is straightforward. Tariffs
filed with federal agencies are the equivalent of federal
regulations issued by the agency. Any liability the plain-
tiff seeks to enforce necessarily arises under federal law
because federal law created the liability. Id.; see also
Marcus v. AT&T Corp., 138 F.3d 46, 56 (2d Cir. 1998). If
Northeastern’s suit sought to challenge a filed tariff,
the same reasoning would support jurisdiction under
section 825p because it would be seeking to challenge
the tariff — a regulation issued under the Federal
Power Act. See California ex rel. Lockyer, 375 F.3d at 843.
  Federal question jurisdiction does not exist, however,
where there is a federally-filed tariff, but the complaint
alleges a contract and breach of that contract that both
predate the federal tariff. In the cases defendant
Wabash Valley cites, the alleged wrongdoing was based
on conduct that occurred after a federal tariff was sub-
mitted for regulation. See Bastien v. AT&T Wireless Serv.,
No. 12-2037                                                 17

205 F.3d 983 (7th Cir. 2000); Cahnmann, 133 F.3d at 486-
87; City of Chanute v. Kansas Gas and Electric Co.,
No. 06-4096-JAR-JPO, 2007 WL 1041763 (D. Kan. 2007).
  In Cahnmann we relied on precisely this point of timing
to distinguish the iconic example of the well-pleaded
complaint rule, Louisville & Nashville R.R. v. Mottley, 211
U.S. 149 (1908). In Mottley, the Mottleys sued the
railroad to enforce a contract to give them free passes
on the railroad for the rest of their lives (as partial settle-
ment of an injury claim). The railroad’s defense was
that honoring its contract would violate a federal law
and tariff prohibiting free transportation for anyone.
The Supreme Court held that the federal courts lacked
jurisdiction over the suit because the federal issues were
all defenses to the Mottleys’ contract claim. We reasoned
in Cahnmann that because the contract in Mottley had
been made before the federal tariff, the complaint in
Mottley did not state a question of federal law. The “crucial
difference” between Cahnmann and Mottley was that:
    The requirement that the carrier provide the service
    in question in accordance with tariffed terms didn’t
    come into the law until after the contract between
    the railroad and the plaintiffs was made and went
    into effect, so the plaintiffs’ claim couldn’t have been
    thought an effort to enforce a tariff or an appeal to
    the regulatory commission’s power to invalidate
    one. It was a state-law claim whether or not subse-
    quently extinguished by the passage of the federal
    law putting the subject matter of the contract under
    tariff regulation.
133 F.3d at 489.
18                                               No. 12-2037

   Like the breach of contract in Mottley, the alleged
breach here is not based on a federally-filed tariff.
Wabash Valley’s alleged breach took place before the
filing of a federal tariff, so the rights at issue cannot be
said to arise out of the federal tariff. This means the
complaint does not necessarily raise a federal question.
For Northeastern to obtain its requested declaratory
judgment it must show only that it has a valid contract
and that Wabash Valley’s submission to the regulatory
jurisdiction of FERC breached the contract. Federal
law is not at issue in either of these questions. The
duty Northeastern claims Wabash Valley breached was
not created by federal law or a filed tariff. And North-
eastern does not seek to directly alter any duty or
liability created by a filed tariff. We recognize that
Wabash Valley will likely raise a number of federal issues
in defense, but potential federal defenses are not neces-
sary elements of the plaintiff’s claim and do not provide
a basis for jurisdiction under the well-pleaded com-
plaint rule.
  Wabash Valley contends that Northeastern’s com-
plaint asks the state court to invalidate a federal filed
rate because Northeastern seeks a declaration that it
has “no further obligation to purchase power from
Wabash Valley under the FERC filed [1977 contract],
the termination of which is a matter within FERC’s ex-
clusive jurisdiction.” We disagree. We must resolve
genuine doubts about removal in favor of state court
jurisdiction, see Schur v. L.A. Weight Loss Centers, Inc., 577
F.3d 752, 758 (7th Cir. 2009), and Wabash Valley, as the
party asserting federal jurisdiction, bears the burden of
establishing it, see Boyd v. Phoenix Funding Corp., 366 F.3d
No. 12-2037                                               19

524, 529 (7th Cir. 2004). With these standards in mind,
we read the complaint as seeking only a declaration of
rights and obligations under the 1977 contract. Such a
judgment may provide an important stepping stone
toward modifying Northeastern’s obligations under
the federally-filed tariff in a separate filing with FERC,
but the requested declaratory relief under the 1977
contract does not ask the state court to resolve the
separate and federal question of the effect of this breach
on Northeastern’s obligations under the federally-filed
tariff. If Northeastern prevails on the merits of its state
law claim, it will need to make a subsequent filing with
FERC to alter its obligations under the federal tariff, as
its counsel acknowledged in oral argument. The com-
plaint filed in state court, though, does not raise a federal
question or challenge a federally-filed tariff, so there is
no jurisdiction under section 1331 or under section 825p.


  B. Complete Preemption
  Wabash Valley’s next argument to support federal
jurisdiction appears to rely on the complete preemption
doctrine. Although it does not explicitly invoke the doc-
trine, Wabash Valley cites our decision in Bastien v. AT&T
Wireless Services — in which we found jurisdiction over
a contract claim based on complete preemption under a
section of the Federal Communications Act — for the
proposition that federal filed-rate questions support
removal when the effect of granting relief would alter
the regulation of the rates. 205 F.3d 983, 989 (7th Cir.
2000). This argument misreads Bastien and the filed-rate
20                                                        No. 12-2037

doctrine. In Bastien we found jurisdiction based on com-
plete preemption under the Federal Communications
Act, not simply on the existence of a filed rate. This is
critical because the filed-rate doctrine does not provide
an independent basis for removal absent a statute with
complete preemptive force.5 We agree with nearly all of
the other courts that have considered the question and
conclude that the Federal Power Act does not com-
pletely preempt state law.6 The complete preemption


5
  In most cases challenging filed rates, a federal court will have
jurisdiction under the theory of Cahnmann — that is, that a
federal regulation forms the basis of the contractual relation-
ship, so any claim necessarily arises under federal law.
6
   See, e.g., Jeffrey Lake Dev., Inc. v. Cent. Nebraska Pub. Power & Irr.
Dist., 4:11CV3112, 2011 WL 7122188, *6 n.4 (D. Neb. Nov. 23,
2011), report and recommendation adopted, 2012 WL 296144
(D. Neb. Feb. 1, 2012) (“there is no complete preemption under
the FPA”); Cent. Iowa Power Coop. v. Midwest Indep. Transmission
Sys. Operator, 06-CV-0053-LRR, 2007 WL 1058561, *23 (N.D. Iowa
Mar. 30, 2007), rev’d and remanded on other grounds, 561
F.3d 904 (8th Cir. 2009) (“neither in section 317 of the FPA, 16
U.S.C. § 825p, nor any other provision of the FPA does
Congress manifest an intent to completely preempt state law
in the field of electrical power regulation”); Consol. Edison Co.
of New York, Inc. v. Entergy Nuclear Indian Point 2, 05-CV-0222
(RO), 2006 WL 929208, *2 (S.D.N.Y. Apr. 7, 2006) (“there is no
evidence in the Federal Power Act of a congressional intent to
create complete preemption”); In re California Retail Natural
Gas & Elec. Antitrust Litig., 170 F. Supp. 2d 1052, 1057-58 (D. Nev.
2001) (no complete preemption under Federal Power Act or
                                                          (continued...)
No. 12-2037                                                  21

doctrine does not provide a basis for jurisdiction in
this case.


    1. The Complete Preemption Doctrine
  The complete preemption doctrine refers to a limited
set of cases in which a properly pled state law claim may



6
  (...continued)
Natural Gas Act); Hendricks v. Dynegy Power Mktg., 160 F. Supp.
2d 1155, 1159 (S.D. Cal. 2001) (“fact that the Federal Power Act
includes an exclusive jurisdiction provision does not mean
that the entire field is preempted”); Indeck Maine Energy, LLC
v. ISO New England, 167 F. Supp. 2d 675, 687 (D. Del. 2001)
(“Federal Power Act does not completely preempt state law
in the field of electrical power regulation because Congress
has not manifested an intent to do so in the statute”).
   The only cases arguably to the contrary are Franklin v. City
of Alexandria, CIV.A. 07-1011, 2007 WL 3023941 (W.D. La. Sept.
17, 2007), and AES Sparrows Point LNG, LLC v. Smith, 470
F. Supp. 2d 586 (D. Md. 2007). Smith, however, concerned a
plaintiff pleading an affirmative claim of preemption that
sought injunctive relief, bringing the claim within the purview
of Shaw v. Delta Air Lines, 463 U.S. 85 (1983). This basis for
jurisdiction is distinct from the complete preemption doctrine
and not applicable in this case. In Franklin, the court referred
to the existence of complete preemption in passing; how-
ever, jurisdiction existed under section 825p, so the court’s
reference to complete preemption was an alternative holding
without supportive reasoning. Moreover, the court did not
attempt to reconcile the finding of complete preemption with
the Supreme Court’s decision in Pan American Petroleum Corp.
v. Superior Court of Del., 366 U.S. 656 (1961), discussed below.
22                                              No. 12-2037

be said to arise under federal law because Congress
has effectively eliminated state law causes of action in
the entire field. See Beneficial Nat’l Bank v. Anderson, 539
U.S. 1, 8 (2003) (“When the federal statute completely pre-
empts the state-law cause of action, a claim which
comes within the scope of that cause of action, even
if pleaded in terms of state law, is in reality based on
federal law.”) The Supreme Court has recognized
complete preemption under sections of the Employee
Retirement Income Security Act, Metropolitan Life Ins. Co.
v. Taylor, 481 U.S. 58 (1987), the Labor Management
Relations Act, Avco Corp. v. Machinists, 390 U.S. 557
(1968), and the National Bank Act, Anderson, 539 U.S. 1.
We have recognized complete preemption under a por-
tion of the Federal Communications Act in Bastien
v. AT&T Wireless Services, 205 F.3d 983 (7th Cir. 2000)
(finding § 332(c)(3) of the Federal Communications Act
completely preempts state law causes of action). Cf. City
of Chicago v. Comcast Cable Holdings, 384 F.3d 901 (7th
Cir. 2004) (holding § 542(b) of the Federal Communica-
tions Act does not create federal jurisdiction under com-
plete preemption doctrine).
   Complete preemption exists when federal law
provides “the exclusive cause of action” for claims in a
regulated area. Anderson, 539 U.S. at 9. Thus stated, the
standard sounds admittedly circular, but there is no
doubt that any further expansion of the doctrine beyond
its origins with the Labor Management Relations Act
requires a clear showing of Congressional intent to elimi-
nate state law entirely. See In re Repository Technologies,
601 F.3d 710, 723 (7th Cir. 2010). The doctrine does not
No. 12-2037                                              23

apply when the Supreme Court has held that federal
law does not completely occupy the substantive field of
law at issue. In such a case the Supreme Court
has already found such intent not to exist. See Pollitt v.
Health Care Serv. Corp., 558 F.3d 615, 616 (7th Cir. 2009)
(finding complete preemption doctrine inapplicable
because Supreme Court held federal law did not com-
pletely occupy field of health insurance coverage for
federal workers).


    2. Complete Preemption and the Federal Power Act
  Here, as in Pollitt, we find no complete preemption
because, as the Supreme Court has recognized, federal
law leaves a role for state law in wholesale power reg-
ulation. Of particular significance, the Supreme Court
has concluded that federal law does not completely
occupy the field of wholesale natural gas regulation — a
regulatory scheme that is closely analogous to wholesale
power regulation. See Pan American Petroleum Corp.
v. Superior Court of Del., 366 U.S. 656 (1961).
  The case requires our close attention here. In Pan Ameri-
can, Cities Service — an intermediate purchaser of
natural gas — brought suit against several natural gas
wholesalers in state court to seek a refund for an alleged
overpayment. The relevant facts were as follows. Cities
Service entered into contracts with the wholesalers for
purchase of natural gas at a price of less than 11 cents per
thousand cubic feet. After the contract took effect, the
State of Kansas issued an order fixing a minimum price
24                                               No. 12-2037

of 11 cents per thousand cubic feet. Because the mini-
mum price was higher than the contract price, Cities
Service paid the higher state-mandated price but
explicitly conditioned payment on its right to receive a
refund if the state order were later found invalid. While
this dispute was pending, the Supreme Court decided
Phillips Petroleum v. State of Wisconsin, 347 U.S. 672 (1954),
which held that all wholesale sales of natural gas in
interstate commerce — including the Cities Service con-
tracts — fell within the jurisdiction of the Federal Power
Commission. As a result of that decision, Cities Service
and the wholesalers filed their contracts with the Federal
Power Commission. Following the filing of the rate, the
Supreme Court held the Kansas minimum rate order
unconstitutional, and Cities Service brought a state law
action seeking a refund for excess payments. The whole-
salers contended that the Natural Gas Act — which in
relevant part is the same as the Federal Power Act —
stripped state courts of jurisdiction to hear such suits.
  The Supreme Court disagreed. Even though there was
a filed rate that would likely need to be interpreted in
the suit, the Court found that the case did not assert any
right under the Natural Gas Act. Pan American, 366 U.S.
at 663-64. The suit therefore arose under state law, and
there was no federal question jurisdiction. Inconsistent
with complete preemption, the Court noted that the
existence of state court jurisdiction did not turn on “the
extent to which the Natural Gas Act reinforces or
abrogates the private contract rights” in controversy, but
rather on the source of the right asserted. Id. at 664. The
rights at issue did “not lose their character because it
No. 12-2037                                             25

[was] common knowledge that there exist[ed] a scheme
of federal regulation of interstate transmission of natural
gas.” Id. at 663. The Supreme Court’s recognition that
state common law claims continued to exist alongside
the federal regulatory scheme indicates that the Federal
Power Act also does not completely preempt state
law causes of action, for the relevant provisions of the
Federal Power Act and the Natural Gas Act are “substan-
tially identical.” See Arkansas Louisiana Gas Co. v. Hall,
453 U.S. 571, 577 n.7 (1981) (noting “established prac-
tice of citing interchangeably decisions interpreting the
pertinent sections of the two statutes”).
   The exclusive jurisdiction provision in the Federal
Power Act, 16 U.S.C. § 825p, does not alter our conclu-
sion. The provision provides the federal district courts
with exclusive original jurisdiction only over suits to
enforce liabilities or duties created under the FPA. If the
liability or duty at issue is not created by the FPA, it
does not fall within the exclusive jurisdiction provision.
Absent a showing of Congressional intent to preempt all
state law claims in the area of wholesale power regula-
tion, there is no complete preemption. See Hendricks
v. Dynegy Power Mktg., Inc., 160 F. Supp. 2d 1155, 1159
(S.D. Cal. 2001) (“fact that the Federal Power Act
includes an exclusive jurisdiction provision does not
mean that the entire field is preempted”). To read
the exclusive jurisdiction provision to cover more than
the limits of its text would be to disregard Congress’s
intent.
26                                               No. 12-2037

     3. Complete Preemption and the Filed-Rate Doctrine
  We also reject the argument that the filed-rate doc-
trine itself completely preempts state law. Citing Bastien
v. AT&T Wireless Services, Wabash Valley appears to
suggest that the filed-rate doctrine brings this case
within the federal courts’ jurisdiction. Wabash Valley
cites Bastien for the proposition that, “to determine the
presence of a federal filed-rate question supporting
removal,” we ask what the nature of the claim is and
what the effect of granting the relief would be. The argu-
ment misses the critical fact that in Bastien we found
the Federal Communications Act to completely preempt
state law. Our finding of complete preemption was
a necessary prerequisite to our determination that
federal jurisdiction existed.
  The filed-rate doctrine does not on its own eliminate
state law causes of action. Plaintiffs, for example, may still
bring breach of contract claims in state court seeking
to enforce a contractually agreed wholesale rate that is
within the bounds of the federal tariff, as in Pan American.
The filed-rate doctrine prevents courts from second-
guessing the reasonableness of terms in a federally-filed
rate, but it does not divest state courts of jurisdiction
to hear all cases involving wholesale power contracts.
  The confusion may arise from the faulty premise that
the filed-rate doctrine is a jurisdictional doctrine as op-
posed to a substantive one. This is understandable
because many cases invoking the filed-rate doctrine
concern challenges based on federal tariffs. As a result,
decisions that find jurisdiction on the basis of a federal
No. 12-2037                                               27

tariff that creates the liability in the suit and that also
find a suit preempted by the filed-rate doctrine may be
over-read to suggest that the filed-rate doctrine creates
the source of jurisdiction through complete preemption.
In these cases, however, jurisdiction is based on rights
created by a federal tariff itself, see, e.g., Cahnmann, 133
F.3d at 488-89, not by the fact that the suit pertains to
the same subject matter as a filed rate. As discussed
above, the necessary implication of the holding of Pan
American that federal courts lack jurisdiction over state
law contract claims seeking refunds for overpayments is
that the filed-rate doctrine does not completely preempt
state law. It is therefore properly treated as a federal
defense rather than an affirmative basis for jurisdiction.


    4.   FERC Practice
  Finally, we find further support for our holding that
the Federal Power Act does not completely preempt
state law causes of action in FERC’s actual practices.
FERC itself recognizes a role for state contract law in
adjudicating contract disputes involving federal tariffs.
See Portland General Electric Co., 72 FERC ¶ 61009, at *3
(July 5, 1995) (“our jurisdiction to settle disputes over the
meaning of rate schedules does not as a matter of law
preclude state courts from entertaining contract litiga-
tion . . . .”); Arkansas Louisiana Gas Co. v. Hall, 7 FERC
¶ 61175, at *3 (May 18, 1979) (discussing when FERC will
exercise primary jurisdiction over contract disputes that
would otherwise be subject to state court jurisdiction);
see also PPL Montana, LLC, 96 FERC ¶ 61313 (Sept. 14,
28                                              No. 12-2037

2001) (deferring to state courts to resolve power contract
disputes). If the Federal Power Act completely pre-
empted state law causes of action, we would not expect
FERC — the agency that administers the statute — to
recognize any role for state court adjudication of con-
tract disputes involving filed tariffs.
   Portland General Electric Co. is particularly instructive.
In that case, Edison filed a complaint against Portland
General Electric in an Oregon state court alleging that
under Oregon law, Portland General Electric was in
default on a Power Agreement — which was also part of a
filed rate — as a result of a nuclear plant closure. Portland
General Electric then filed a complaint with FERC seeking
a declaratory order that FERC was the only body with
jurisdiction to resolve the contract dispute. FERC dis-
agreed. Because the complaint in Oregon state court did
not “challenge the reasonableness of any rate on file
with FERC, or make claims based on the FPA,” the state
court action was appropriate. Portland General Electric,
72 FERC ¶ 61009, at *1. FERC made clear, however, that
any decision to terminate the contract following state
court adjudication of the contract law question would
need to be filed with FERC itself. Id.; 18 C.F.R. § 35.15.
  In terms of the jurisdictional issue, the facts in Portland
General Electric are virtually indistinguishable from
the facts of this case. Northeastern has filed a complaint
that does not assert any claims based on the FPA and
does not challenge the reasonableness of a filed rate.
Northeastern simply seeks the interpretation of a
contract term to determine whether Wabash Valley
No. 12-2037                                             29

breached the contract by switching from state regula-
tion to FERC regulation. And like Edison, Northeastern
acknowledged at argument that if it prevails in state
court, it will need to file a notice with FERC before
terminating performance under the federally-filed
rate schedule, providing FERC with an opportunity to
address such remedial questions. See, e.g., Jersey Cent.
Power & Light Co., 33 FERC ¶ 61071 (Oct. 25, 1985) (de-
clining to permit withdrawal of filed rate schedule). Since
Northeastern is seeking only a declaration of state
contract rights, a declaration that cannot obligate FERC
to modify Northeastern’s obligations under the federal
tariff, we recognize that it is not at all clear whether
state courts could award meaningful relief to North-
eastern. Nevertheless, FERC’s practice in cases like
Portland General Electric suggests that FERC finds state
court contract interpretation helpful in resolving such
disputes when they eventually come before FERC.


III. Conclusion
  Northeastern has pled a state law breach of contract
claim that does not arise under federal law. The claim
does not seek to enforce or challenge any duty or liability
created by a federally-filed tariff, nor does the claim
necessarily arise under federal law through complete
preemption. In light of this conclusion, we also of course
reject Wabash Valley’s request for sanctions on the
theory that the appeal was frivolous. Because the dis-
trict court lacked jurisdiction to issue its preliminary
30                                         No. 12-2037

injunction, we V ACATE the preliminary injunction and
R EMAND the case so that the district court may remand
it to state court.




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