1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 BENCHMARK CONTRACTING, INC., Case No.: 2:20-cv-01528-APG-DJA

4 Plaintiff Order Remanding Case for Lack of Subject Matter Jurisdiction 5 v.

6 NEVADA PARTNERS, INC.,

7 Defendant

8 Plaintiff Benchmark Contracting Inc. sued defendant Nevada Partners, Inc. in state court 9 for breach of a contract to construct a building, alleging that Nevada Partners did not pay 10 Benchmark for work related to some change orders on the project. Nevada Partners removed the 11 action to this court on the basis of federal question jurisdiction and contends that the contract at 12 issue required the parties to comply with various federal statutes and regulations. Nevada 13 Partners argues in its removal petition that the complaint thus raises a federal question because 14 the decision whether to make payments to Benchmark may depend on whether Benchmark 15 complied with federal laws and regulations. I ordered Nevada Partners to show cause why this 16 action should not be remanded for lack of subject matter jurisdiction. ECF No. 5. Nevada 17 Partners’ response does not show subject matter jurisdiction exists, so I remand this case. 18 Federal courts have jurisdiction over “all civil actions arising under the Constitution, 19 laws, or treaties of the United States.”

. “An action arises under federal law 20 only if federal law creates the cause of action or a substantial question of federal law is a 21 necessary element of the plaintiff’s well-pleaded complaint.” Coeur d’Alene Tribe v. Hawks, 933

(9th Cir. 2019) (quotation omitted). A defense based on federal law or mere 23 1}| reference to federal laws or regulations is not sufficient where no substantial federal question is essential to the plaintiff’ claim. Jd. 3 Benchmark’s claims for breach of contract, breach of the covenant of good faith and fair 4! dealing, and unjust enrichment arise under state law. The claims also do not, on their face, raise substantial federal question. Rather, Benchmark alleges it performed work under a contract for which it has not been paid. Nevada Partners intends to argue that it did not pay for the change 7|| orders because Benchmark did not comply with various federal laws and regulations incorporated into the contract. But jurisdiction cannot be based on a federal defense. Additionally, even if compliance with the federal laws and regulations were a condition 10|| precedent to payment, Nevada Partners does not identify a substantial federal question at issue this case would settle and that “would be controlling in numerous other cases.” Empire 12|| Healthchoice Assur., Inc. v. McVeigh,

(2006). Instead, the question of whether a contractor breached a contract because it failed to comply with contractual provisions that incorporated federal law is a “‘fact-bound and situation-specific” question that does not raise 15||a substantial question of federal law. See

. I lack subject matter jurisdiction over 16]| this dispute, so I remand it. 17 I THEREFORE ORDER that the case is remanded to the state court from which it was 18|| removed for all further proceedings. The clerk of the court is instructed to close this case. 19 DATED this 21st day of September, 2020. Zo a 20 em ANDREW P. GORDON 21 UNITED STATES DISTRICT JUDGE 22 23