SAIA v. UNIVERSAL CARD SERVICES CORP., (E.D.La. 2000)

MOREY L. SEAR, United States District Judge.

This matter comes before the Court on Plaintiff's motion to remand. Because the Court lacks subject matter jurisdiction, this matter is remanded to the 32nd Judicial District Court for the Parish of Terrebonne.

BACKGROUND

Plaintiff, John L. Saia, commenced this action in the 32nd Judicial District Court for the Parish of Terrebonne against Defendants, Universal Card Services Corporation ("Universal Card"), ATT Corporation ("ATT"), Universal Bank, N.A. ("Universal Bank") and Experian Information Solutions, Inc. ("Experian"), improperly named as Experian Information Services, Inc., seeking compensatory damages, costs, attorney's fees and interest for injuries to Plaintiff's reputation and credit by Defendants' alleged failure to correct adverse credit reporting. Plaintiff asserts only state law negligence and contract claims.

Plaintiff served Defendants on March 30, 2000. Experian, with the consent of the other Defendants, timely removed the action to the Eastern District of Louisiana on April 28, 2000, alleging subject matter jurisdiction based on 28 U.S.C. § 1331 and 15 U.S.C. § 1681p. Experian avers that it is a "consumer credit agency" within the meaning of 15 U.S.C. § 1681a(f) and Plaintiff's claims against it arise under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq.

MOTION

On June 2, 2000, Plaintiff filed a motion, arguing that the Court lacks subject matter jurisdiction. Plaintiff asserts that because the FCRA does not completely preempt his state law claims, no basis for Experian's removal exists. Defendants oppose Plaintiff's motion.

DISCUSSION

A. Well-Pleaded Complaint Doctrine

Title 28, United States Code, Section 1441(a) provides that a defendant may remove to a federal district court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction" unless certain exceptions apply. Pursuant to 28 U.S.C. § 1441(b), "any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable." Because "the effect of removal is to deprive the state court of an action properly before it, removal raises significant federalism concerns, which mandate strict construction of the removal statute."

To support removal of a state court action pursuant to § 1441(b), the defendant bears the burden of establishing that a federal question exists. District courts, in determining whether an action presents a federal question, look to the allegations in the plaintiff's well-pleaded complaint. Generally, an action presents a federal question "if there appears on the face of the complaint some substantial, disputed question of federal law." Therefore, to support removal,

[T]he defendant must locate the basis of federal jurisdiction in those allegations necessary to support the plaintiff's claim, ignoring his own pleadings and petition for removal. A defendant may not remove on the basis of an anticipated or even inevitable federal defense, but instead must show that a federal right is "an element, and an essential one, of the plaintiff's cause of action."

Here, it is clear that the allegations of Plaintiff's complaint present no apparent federal question upon which Defendants may rely to support their petition for removal. Plaintiff alleges only state law negligence and contract claims arising out of Defendants' alleged failures to correct the adverse credit reports.

B. Artfully-Pleaded Complaint Doctrine

Nevertheless, as Defendants correctly assert, a narrow exception to the well-pleaded complaint rule exists. "[W]here the plaintiff necessarily has available no legitimate or viable state cause of action, but only a federal claim, the plaintiff may not avoid removal by artfully casting his federal suit as one arising exclusively under state law." This exception to the well-pleaded complaint rule provides that where a defendant carries its burden of showing that complete preemption of the plaintiff's state law claims exists, removal is proper. Thus, the artful pleading doctrine "does not convert legitimate state claims into federal ones, but rather reveals the suit's necessary federal character."

To establish complete preemption, a defendant must show that "(1) the statute contains a civil enforcement provision that creates a cause of action that both replaces and protects the analogous area of state law; (2) there is a specific jurisdictional grant to the federal courts for enforcement of the right; and (3) there is a clear Congressional intent that claims brought under the federal law be removable." As the Fifth Circuit expressed, "[f]ew federal statutes can meet such an exacting standard." Indeed, the Supreme Court has clearly sanctioned removal based on complete preemption only under the Labor Management Relations Act and the Employee Retirement Income Security Act.

In contrast, the more common conflict preemption, which arises either by express statutory terms or by direct conflict with the operation of federal and state law, is not a basis for federal subject matter jurisdiction. Because conflict preemption merely provides a federal defense, it does not appear on the face of the complaint and, therefore, does not support removal jurisdiction. As the Fifth Circuit recently explained,

Conflict preemption simply fails to establish federal question jurisdiction. Rather than [converting] a state cause of action into a federal one, as occurs with complete preemption, conflict preemption serves as a defense to a state action. "When the doctrine of complete preemption does not apply, but the plaintiff's state claim is arguably preempted . . . . the district court, being without removal jurisdiction, cannot resolve the dispute regarding preemption. It lacks the power to do anything other than remand to the state court where the preemption issue can be addressed and resolved.

Here, Defendants invoke the artfully pled complaint doctrine and argue that FCRA preempts Plaintiff's state law claims. Because Defendants fail to establish the prerequisites to support their complete preemption claim, Defendants fail to carry their burden of establishing that federal subject matter jurisdiction exits.

Defendant sets forth nothing that supports any finding that (1) the FCRA contains a civil enforcement provision, which creates a cause of action that replaces and protects the state law claims of Plaintiff; (2) the FCRA contains a specific grant of federal jurisdiction for enforcement of Plaintiff's asserted rights; and (3) the legislative history or the FCRA itself establish that Congress intended state law claims, such as Plaintiff's, to be removable. Therefore, there is no basis for a finding that the FCRA completely preempts Plaintiff's state law negligence and contract claims or that federal jurisdiction exits.

B. Timely Motion to Remand

Despite Defendants' argument to the contrary, Plaintiff's motion to remand is not time-barred. Title 28, United States Code, Section 1447(c) clearly states that "[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a). Parties may neither consent to nor waive federal subject matter jurisdiction, and federal courts may examine the basis of jurisdiction sua sponte, even on appeal. As § 1447(c) makes clear, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."

Accordingly,

IT IS ORDERED that plaintiff's motion to remand is GRANTED.

IT IS FURTHER ORDERED that this case be REMANDED to the Civil District Court for the Parish of Orleans.