Opinion
A3-00-167.
December 21, 2000.
MEMORANDUM AND ORDER
I. Introduction
Before the Court is plaintiff's motion for a summary remand of this case, which defendants removed to this Court from the state courts of North Dakota. Defendants have resisted the motion. The motion came on for hearing on Friday, December 15, at 8:30 a.m. For the reasons set forth below, the motion to remand this case to state court is GRANTED.
II. Facts
For purposes of this analysis, the complete underlying factual details and legal issues of plantiff's claim are not required. Briefly, the underlying case is a contract claim, by which plaintiff sought specific performance of a land option contract by defendants. Plaintiff won a judgment in its favor in state trial court, a judgment the North Dakota Supreme Court affirmed. See Matrix Properties Corp. v. TAG Investments, 2000 ND 88, 609 N.W.2d 737. Following this ruling, the case was remanded to state district court for execution of the judgment.
It is at this point that plaintiff and defendants disagree on precisely what happened and what should have happened. Without reviewing the details of the dispute, the parties vigorously disagreed on what steps were required to effectuate the specific performance judgment. Eventually, the state judge ruled defendant was required "to transfer property in accordance with Matrix Properties Corporation's exercise of an option under the parties 1996 agreements," a ruling ultimately affirmed by the North Dakota Supreme Court. See Matrix Properties Corp. v. TAG Investments, 2000 ND 213. However, after the initial ruling but before its affirmation by the supreme court, defendants filed a notice of removal, leading plaintiff to seek remand.
III. Analysis
Defendants have advanced several bases for removal, all of which are unavailing. Additionally, removal is barred by the Rooker-Feldman doctrine. These points will be addressed in turn.
In its notice of removal, defendants invoke 28 U.S.C. § 1441, the general removal statute. § 1441 allows cases to be removed either on the basis of diversity or federal question, so long as the action is one over which the "district courts of the United States have original jurisdiction." 28 U.S.C. § 1441. Neither basis is applicable here, as the Court concludes it would not have had original jurisdiction over this matter had it been filed in federal court initially.
First, removal on the basis of diversity is impossible on these facts. The initial requirements for diversity are satisfied: Plaintiff is a Minnesota corporation while defendants are North Dakota citizens and the amount in controversy exceeds $75,000. However, § 1441 allows removal of diversity cases only if none of the "defendants is a citizen of the State in which such action is brought." Here, the action was brought and litigated in North Dakota, where both defendants are citizens. Therefore, removal on this basis is impossible.
Second, removal on the basis of federal question is also unavailable, though for different reasons. A recent Eighth Circuit case summarized when a case presents a federal question allowing removal:
A federal question is raised in those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law. This well-pleaded complaint rule requires that a federal cause of action must be stated on the face of the complaint before the defendant may remove the action based on federal question jurisdiction. A federal defense . . . does not give the defendant the right to remove to federal court. . . . However, [a] plaintiff's characterization of a claim as based solely on state law is not dispositive of whether federal question jurisdiction exists.
In re Otter Tail Power Co., 116 F.3d 1207, 1213 (8th Cir 1997) (internal citations and quotations omitted). Thus, the issue is whether or not the issues and facts presented in the complaint would have given plaintiff a right to bring this action in federal court as a federal question initially. Id.
It seems quite apparent that plaintiff could not have done so. The issue in the case was interpretation and enforcement of a land option contract under North Dakota law. Federal courts do not usually view this as a topic presenting a federal question. See generally Iowa Mgmt. Consultants, Inc. v. Sac Fox Tribe of Mississippi in Iowa, 207 F.3d 488 (8th Cir. 2000) (holding "a routine contract action" did not belong in federal court solely because an Indian tribe was a party); see also McNeill v. Franke, 171 F.3d 561 (8th Cir. 1999) (rejecting jurisdiction in a contract action when there was no "substantial, disputed question of federal law"). Notably, the North Dakota Supreme Court's opinion in this case also does not make any reference to federal law, employing instead North Dakota and other states' precedent and various treatises. See Matrix Properties Corp, 2000 ND 88. As these facts show, contract law is generally and properly viewed as a state matter, and no facts here allow federal question jurisdiction in the first instance.
Defendants insist that removal is proper because "justice cannot be achieved in the North Dakota judicial system, nor can [defendants] enforce their Federally protected rights within the North Dakota judicial system." Def.'s Notice of Removal, ¶ V. Indeed, they allege a series of equal protection and due process violations, as well as an unconstitutional taking of their property. Id. ¶ VI. Notably, however, all of these allegations relate to the judicial process in state court and all arose pursuant to the execution of judgment, not the underlying contract claims made by the plaintiff.
The basis for removal, however, is that the "well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." In re Otter Tail Power Co., 116 F.3d at 1213. Here, contrarily, the plaintiff's cause of action clearly arose under state law, and its right to relief had nothing to do with resolution of federal issues. Allegations of violations of defendants' due process and equal protection rights and their rights against illegal takings, all purportedly committed by the North Dakota court system, do arguably pose a federal question. However, even if true, they cannot serve as a basis for removal. Rather, as § 1441 makes clear, a case may be removed only if it could have been brought in federal court originally, and the underlying contract case here could not have been.
Defendant devotes much energy to arguing that 28 U.S.C. § 1443 provides a basis for removal. That statute makes removal from state court available to "any person who is denied or cannot enforce in the courts of such State a right under any law providing for the equal civil rights of citizens of the United States, or of all persons within the jurisdiction thereof." The United States Supreme Court has interpreted the phrase "under any law providing for the equal civil rights of citizens" to mean "any law providing for specific civil rights stated in terms of racial equality." State of Georgia v. Rachel, 384 U.S. 780, 791-92 (1966). Thus, defendants must show that they are denied or cannot enforce in North Dakota state court a civil right stated in terms of racial equality.
Defendants have attempted to do so by referring to 42 U.S.C. § 1981 and 1982, which guarantee that all citizens may enforce contracts (§ 1981) and property rights (§ 1982) in the same fashion as that "enjoyed by white citizens." Thus, facially at least, the statutes to which defendants refer qualify under 28 U.S.C. § 1443. However, defendants do not allege that they are being denied any rights on the basis of race. Rather, they merely cite the statutes and assert this provides a basis for removal.
Several courts have considered and rejected this very argument. In one such case, a district court wrote:
This court has no doubt that this statute [§ 1981] is precisely the type envisioned by 28 U.S.C. § 1443 as one providing for "equal civil rights." This court is equally free from doubt that Sec. 1981 is a statute which was intended to confer upon blacks a civil status equivalent to that enjoyed by whites, that its purpose is to provide equality between persons of different races, and that to predicate an action thereupon a plaintiff must allege a deprivation of a right which under similar circumstances would have been accorded a person of a different race. In the absence of even a scintilla of an allegation that race discrimination is at all involved in this case, defendants enjoy no standing to raise claims under Sec. 1981 in support of their removal petition.
Board of Ed. of City of Atlanta v. Am. Fed'n of State, County and Mun. Emp., 401 F. Supp. 687, 692 (D.C. Ga. 1975). Other courts have reached similar conclusions. See, e.g., City of Winston-Salem v. Chauffeurs, Teamsters Helpers Local Union No. 391, 470 F. Supp. 442, 445-46 (D. N.C. 1979) (finding the invocation of § 1981 without evidence of race-based action "clearly frivolous"); see also West Virginia State Bar v. Bostic, 351 F. Supp. 1118, 1122 (D. W. Va. 1972) (rejecting § 1981 — based removal because "[t]here are no racial overtones in this case").
As these cases show, mere invocation of 42 U.S.C. § 1981 (or § 1982) is insufficient to justify removal under 28 U.S.C. § 1441. Rather, defendant must allege that the deprivations they claim occurred in state court resulted from race discrimination. However, there is not "even a scintilla of an allegation that race discrimination is at all involved in this case." Board of Ed. of City of Atlanta, 401 F. Supp. at 692. Therefore, defendants may not remove this action based on 28 U.S.C. § 1441.
Because the Court concludes defendants cannot show the first half of the Rachel test, it will not evaluate whether the second prong, that defendants cannot enforce the right at issue in state court, is met.
Defendants also make a general reference to 42 U.S.C. § 1983, 1985, 1986, and 1988, all statutes guaranteeing various civil rights. The Eighth Circuit has previously affirmed remand of a § 1443 removal petition on the grounds that §§ 1983 and 1985 do not meet the requirement of Rachel that the right at issue be "stated in terms of racial equality." See Doe v. Berry, 967 F.2d 1255, 1257-58 (8th Cir 1992). Thus, defendants' invocation of those statutes is unavailing. While the Court has been unable to locate any cases considering whether §§ 1986 or 1988 would satisfy § 1443, it is clear that they would not, since they, like §§ 1983 and 1985, are phrased in terms of general civil rights and not in terms of racial equality. Thus, none of these statutes provides a basis for removal under § 1443.
C. The Rooker-Feldman doctrine
The Court also concludes that removal of this case would be barred by the Rooker-Feldman doctrine. The Rooker-Feldman doctrine generally provides that federal district courts do not have jurisdiction to review state-court decisions.
The Rooker-Feldman doctrine draws its name from two cases: Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983).
The Eighth Circuit recently summarized this rule:The Rooker-Feldman doctrine states that district courts do not have subject matter jurisdiction over challenges to state court decisions in judicial proceedings. The only court with jurisdiction to review decisions of state courts is the United States Supreme Court. A federal district court has jurisdiction over general constitutional challenges if these claims are not inextricably intertwined with the claims asserted in state court. A claim is inextricably intertwined if the federal claim succeeds only to the extent that the state court wrongly decided the issues before it. In other words, Rooker-Feldman precludes a federal action if the relief requested in the federal action would effectively reverse the state court decision or void its ruling.
Neal v. Wilson, 112 F.3d 351, 356 (8th Cir. 1997) (internal citations omitted); see also Charchenko v. City of Stillwater, 47 F.3d 981, 983 (8th Cir. 1995). Thus, the Rooker-Feldman doctrine prohibits general review of state decisions in the guise of removal. Importantly, given the claims in this case, the Rooker-Feldman doctrine applies equally to claims that procedural due process was violated by state proceedings. See Snider v. City of Excelsior Springs, 154 F.3d 809, 812 (8th Cir. 1998)
Thus, defendants may not remove unless they can demonstrate the issues they seek to remove are not "inextricably intertwined" with the claims asserted in state court. To determine whether "Rooker-Feldman bars [a] federal suit requires determining exactly what the state court held and whether the relief requested . . . requires determining the state court's decision is wrong or would void its ruling." Charchenko, 47 F.3d at 983. If so, the claim is inextricably intertwined and barred. Id.
The Court concludes that the claims asserted here are so barred. Defendants seek to distinguish between the underlying judgment, which they claim not to attack, and the procedures supplementary to execution of that judgment, which they claim are tainted by any number of serious constitutional violations. This distinction is unavailing. Most importantly, the North Dakota Supreme Court has, in fact, affirmed the trial court's post-remand actions, so defendants are clearly asking this Court to review a final determination. See Matrix Properties Corp. v. TAG Investments, 2000 ND 213.
Further, however, holding that a state court lacked the power to issue particular orders to effect a judgment of specific performance, as defendants here urge, is in this Court's view inextricably intertwined with the underlying claims asserted in state Court, review of which Rooker-Feldman forbids. See Neal, 112 F.3d at 356. To hold that the state courts did not have this power would require this Court effectively to hold that they misinterpreted the requirements of the contract at issue and thus misapplied how it was to be specifically performed. This is exactly what Rooker-Feldman prohibits this Court from doing and thus provides an independent basis for remand of this case.
IV. Fees and costs under 28 U.S.C. § 1446(c) 28 U.S.C. § 1446 allows a district court ordering remand of a case to require the removing party to pay "just costs and actual expenses, including attorney fees, incurred as a result of removal." Many courts have held that ordering costs is "discretionary and nor dependent upon a finding of bad faith ." Calloway v. Union Pacific R.R. Co., 929 F. Supp. 1280, 1283 (E.D.Mo. 1996). The Court finds this to be an appropriate case for such an award. Plaintiff is directed to file with the Court documentation of actual fees and costs incurred as a result of resisting this removal petition. Defendant is entitled to object to the amount requested in writing and may request a hearing on the subject if so desired.
V. Conclusion
For the reasons set forth above, this action is REMANDED to North Dakota state court.
IT IS SO ORDERED.