Opinion
Case No. 3:08-cv-995-TFM.
February 27, 2009
MEMORANDUM OPINION AND ORDER
This action is assigned to the undersigned magistrate judge to conduct all proceedings and order entry of judgment by consent of all the parties (Docs. ## 14-15, filed January 14, 2009) and 28 U.S.C. § 636(c). Pending before the Court is Plaintiffs' Opposition to Defendants' Notice of Removal and Motion to Remand (Doc. # 5, filed January 6, 2009), Defendants' Response to Plaintiffs' Motion to Remand (Doc. # 18, filed January 30, 2009), Plaintiff's Response to Defendants' Response to Plaintiffs' Motion to Remand (Doc. # 19, filed February 6, 2009), and Defendants' Reply to Plaintiffs' Response to Defendants' Response to Plaintiff's Motion to Remand (Doc. # 22, filed February 13, 2009). Upon consideration of the motion to remand and the arguments of the parties, the court concludes that the motion is due to be GRANTED.
I. BACKGROUND
In an amended complaint filed in an action then pending in the Circuit Court of Tallapoosa County, Plaintiffs Tony and Wendy Bishop assert claims against Holloway Credit Solutions, LLC and John M. Holloway ("the Holloway defendants") and Russell Medical Center ("Russell"). Plaintiffs allege that a different Tony Bishop ("Uncle Tony") — not the plaintiff — incurred a debt for medical treatment at Russell. According to Plaintiffs, Nell Lloyd (credit counselor at Russell) verified that Uncle Tony's street address was 740 Hillabee Street, Alexander City, Alabama. This was not Uncle Tony's address, but was the address for property then owned by Plaintiffs. After Lloyd's debt collection efforts were unsuccessful, the Holloway defendants pursued debt collection activities on behalf of Russell against Uncle Tony, using the incorrect address provided by Nell Lloyd. The Holloway defendants were also unsuccessful and, in 2003, Russell filed suit in the District Court of Tallapoosa County against Uncle Tony, again using the plaintiffs' address.
Plaintiffs have now filed an amended complaint in this court which omits some of the allegations on which Defendants based their removal. ( See Doc. # 23). However, in resolving the issue of removal jurisdiction, the court considers the allegations of the complaint at the time of removal — in this case, the August 2008 amendment in the state court. See Tillman v. R.J. Reynolds Tobacco, 253 F.3d 1302, 1306 n. 1 (11th Cir. 2001) ("For purposes of considering the specific jurisdictional question before us, we consider only the original complaint, however, because the question of diversity subject matter jurisdiction is determined on the plaintiff's pleadings at the time of removal.") (citations omitted). In this memorandum opinion and order, the court's references to the "state court complaint" are to the complaint as amended in state court before removal.
According to the state court complaint, Russell obtained a default judgment against Uncle Tony and recorded it in the Tallapoosa County Probate Office as a judgment against "Tony Bishop, 740 Hillabee Street, Alexander City, Alabama 35010." The judgment created a lien against Plaintiffs' property. Plaintiffs allege that they learned of the judgment when, in March 2005, they were denied a loan because of the outstanding judgment. They further allege that the delay of their loan application required them to file for Chapter 7 bankruptcy protection.
The amended state court complaint added the Holloway defendants as parties and was served on them by certified mail on November 20, 2008. (Notice of Removal, ¶ 4). On December 16, 2008, the defendants removed the action to this court pursuant to 28 U.S.C. § 1331, alleging federal question jurisdiction.
The Holloway defendants were sued in the original complaint, but had been dismissed as defendants by subsequent order of the Circuit Court.
II. STANDARD OF REVIEW
Federal courts have a strict duty to exercise jurisdiction conferred on them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S.Ct. 1712, 1720, 135 L.Ed.2d 1 (1996). However, federal courts are courts of limited jurisdiction and possesses only that power authorized by Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 1675, 128 L.Ed.2d 391 (1994). Defendants, as the parties removing this action, have the burden of establishing federal jurisdiction. See Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (11th Cir. 2002) (citing Williams v. Best Buy Co., 269 F.3d 1316, 1318 (11th Cir. 2001)). Further, the federal removal statutes must be construed narrowly and doubts about removal must be resolved in favor of remand. Allen v. Christenberry, 327 F.3d 1290, 1293 (11th Cir. 2003) (citing Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996)); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (citations omitted).
III. DISCUSSION
In their notice of removal, Defendants acknowledge that Plaintiffs' state court complaint does not expressly invoke federal law. (Notice of Removal, ¶ 10). However, they contend that the claims asserted in the state court complaint are preempted by the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Defendants note:
In paragraph 15 of the said amendment, Plaintiffs allege that Russell Hospital failed to take certain action in regard to the Plaintiffs' "credit worthiness", including notifying [the] lending institution and "credit reporting agencies Equifax, Experian, Transunion of the erroneous information being reported to all inquiries as to the credit worthiness of Plaintiffs Tony Bishop and Wendy Bishop." The obligation of creditors in regard to the furnishing of information to credit reporting agencies is addressed and preempted by the FCRA, particularly 15 USC § 1681s-2.
(Notice of Removal, ¶ 11). Defendants contend that Plaintiffs' "cause of action, if any, is preempted by the FCRA and will require resolution of one or more substantial questions of federal law in dispute between the parties." ( Id., ¶ 12).
In the state court complaint, Plaintiffs make the following allegations:
15. The Plaintiffs aver that the Defendants were negligent in obtaining, maintaining, and/or verifying the patient information and billing records of Plaintiff Tony Bishop from that of debtor Tony Bishop. The Defendants were negligent in securing and recording a judgment against Plaintiffs Tony Bishop and Wendy Bishop, thereby placing a lien against all real property owned by Plaintiffs Tony and Wendy Bishop.
15(a). Furthermore, Plaintiffs allege that upon actual notice of the error by Plaintiff Tony Bishop to a representative of RMC that RMC and Holloway failed to assist Plaintiffs Tony and Wendy Bishop in the removal of the judgment secured against the Plaintiffs['] property; failed to notify the lending institution of the credit worthiness of the Plaintiffs in order for them to be able to secure a timely loan; and further, failed to notify credit reporting agencies Equifax, Experian, and Trans Union of the erroneous information being reported to all inquiries as to the credit worthiness of Plaintiffs Tony Bishop and Wendy Bishop[.]
(State Court Complaint, ¶¶ 15, 15(a)) (emphasis added).
Plaintiffs do not challenge removal on procedural grounds. Instead, they contend that subject matter jurisdiction is lacking. ( See Motion to Remand, Doc. # 5). Plaintiffs assert that there is no diversity of citizenship and that the state court complaint brings only state law claims of negligence, wantonness, breach of contract, and slander of title against the defendants. Plaintiffs argue that they have not made any allegation that any of the defendants "accessed, reported or transferred any information under the Fair Credit Reporting Act (FCRA)" or that "any of the Defendants furnished or disseminated information as a creditor to a consumer reporting agency." ( Id., ¶¶ 15, 16).
Defendants do not contend that this court has diversity jurisdiction.
Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendants. Absent diversity of citizenship, federal-question jurisdiction is required. The presence or absence of federal-question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.
. . . [A] case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue.Caterpillar Inc. v. Williams, 482 U.S. 386, 392-93, 107 S.Ct. 2425, 2429-2430, 96 L.Ed.2d 318 (1987) (citations and footnotes omitted) (emphasis in original). "[A]n `independent corollary' to the well-pleaded complaint rule is the further principle that `a plaintiff may not defeat removal by omitting to plead necessary federal questions. If a court concludes that a plaintiff has `artfully pleaded' claims in this fashion, it may uphold removal even though no federal question appears on the face of the plaintiff's complaint." Rivet v. Regions Bank, 522 U.S. 470, 475, 118 S.Ct. 921, 925, 139 L.Ed.2d 912 (1998) (citation omitted). Where the complaint, on its face, brings causes of action created under state law, "original federal jurisdiction is unavailable unless it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims, or that one or the other claim is `really' one of federal law." Franchise Tax Board of the State of California v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 13, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983). Thus, the "artful pleading" doctrine allows removal where: (1) a well-pleaded complaint establishes that a plaintiff's right to relief under state law "requires resolution of a substantial question of federal law in dispute between the parties" ( id.) or (2) "where federal law completely preempts a plaintiff's state law claim" ( Rivet, 522 U.S. at 475, 118 S.Ct. at 925). Defendants contend that one or more of Plaintiffs' state law claims is preempted by the FCRA. (Doc. # 18, p. 4; Doc. # 1, ¶¶ 10-12). While this may be correct, ordinary defensive preemption — as opposed to complete preemption — does not provide a basis for removal. See Cotton v. Massachusetts Mutual Life. Ins. Co., 402 F.3d 1267, 1281 (11th Cir. 2005) ("[B]ecause the original complaint asserted only state-law claims, this case . . . does not arise under federal law under the ordinary operation of the well-pleaded complaint rule. Therefore, if the case arises under federal law, it must be because it falls within the special category of federal question jurisdiction created by the doctrine of complete preemption."); BLAB T.V. of Mobile, Inc. v. Comcast Cable Communications, Inc., 182 F.3d 851, 855 (11th Cir. 1999) ("Stated simply, complete preemption functions as a narrowly drawn means of assessing federal removal jurisdiction, while ordinary preemption operates to dismiss state claims on the merits and may be invoked in either federal or state court."). The FCRA does not "completely" preempt state law as to all matters within the scope of the FCRA. Watkins v. TransUnion, L.L.C., 118 F.Supp.2d 1217 (N.D. Ala. 2000) (finding no Congressional intent in FCRA to "grant defendants . . . the extraordinary ability to recharacterize state law claims as a federal cause of action"); King v. Retailers Nat. Bank, 388 F.Supp.2d 913 (N.D. Ill. 2005) ("Because the FCRA grants concurrent jurisdiction, the Court would be hard-pressed to conclude that Congress intended for the FCRA to replace all state claims or [to] . . . allow for removal based on complete preemption."); cf. 15 U.S.C. § 1681t(a) (state laws "with respect to the collection, distribution, or use of any information on consumers" are enforceable, "except to the extent that those laws are inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency"); 15 U.S.C. § 1681h(e) (allowing state claims, in certain circumstances, when plaintiff alleges malice or intent to injure the consumer); Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 698, 126 S.Ct. 2121, 2135, 165 L.Ed.2d 131 (2006) ("[E]ven if [the Federal Employee Health Benefit Act's] preemption provision reaches contract-based reimbursement claims, that provision is not sufficiently broad to confer federal jurisdiction. If Congress intends a preemption instruction completely to displace ordinarily applicable state law, and to confer federal jurisdiction thereby, it may be expected to make that atypical intention clear. Congress has not done so here. Section 8902(m)(1)'s text does not purport to render inoperative any and all State laws that in some way bear on federal employeebenefit plans.") (citations omitted) (emphasis in original). Accordingly, the preemptive effect of FCRA on Plaintiffs' state law claims does not provide a basis for removal jurisdiction.
Defendants further contend that removal was proper because rights and duties created under the FCRA "must be interpreted for the Plaintiffs to prevail." (Doc. # 18, p. 4). To support removal under the "substantial-federal-question jurisdiction doctrine," the state law claim must "`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 responsibilities[.]'" Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1295 (11th Cir. 2008) (quoting Grable Sons Metal Products, Inc. v. Darue Engineering Manufacturing, 545 U.S. 308, 314, 125 S.Ct. 2363, 2368, 162 L.Ed.2d 257 (2005)). The Grable test permits removal in only a "`slim category'" of cases. Id. at 1296 (quoting Empire Healthchoice, 547 U.S. at 701, 126 S.Ct. at 2137).
In Grable — a case in which the Supreme Court found removal to be supported by the presence of a substantial federal issue — "the dispute . . . centered on the action of a federal agency (IRS) and its compatibility with a federal statute." Empire Healthchoice, 547 U.S. at 700, 126 S.Ct. at 2137. Additionally, the federal issue presented in Grable was "both dispositive of the case and would be controlling in numerous other cases." Id. The present case, in contrast, implicates the actions only of private parties. Additionally, Plaintiffs' claims do not depend solely — or even primarily — on Defendants' breach of a duty to contact credit reporting agencies, as alleged in paragraph 15(a) of the state court complaint. Defendants argue that the duty of a creditor to provide information to credit reporting agencies arises, if at all, under the FCRA. Even if this is so, resolution of the FCRA issue is not dispositive of the case. Plaintiffs complain of Defendants' alleged negligence in initially failing to verify the proper address for Uncle Tony before pursuing judgment in state court and before recording the default judgment using Plaintiffs' address, thereby imposing a lien on Plaintiffs' property. It is this failure which is alleged to have resulted in the denial of a loan. (State Court Complaint, ¶¶ 11-12) ("Plaintiffs . . . were denied the loan because of the outstanding judgment."). Thus, Plaintiffs' claims allege a breach of duty that may be determined without reference to federal law. Additionally, the alleged breach of the additional duty arising under the FCRA is also premised on Defendants' asserted initial negligence in failing to verify Uncle Tony's address; Plaintiffs expressly allege that Defendants failed to take specific actions "upon actual notice of the error." ( Id., ¶ 15(a)). The court concludes that the federal issue presented by the allegations set forth in paragraph 15(a) is not sufficiently "substantial" to give rise to removal jurisdiction. Cf. Willy v. Coastal Corp., 855 F.2d 1160, 1170 (5th Cir. 1988) (finding that plaintiff's wrongful termination claim did not arise under federal law where it was "supported by alternate theories, first that his discharge was wrongful because it was on account of his attempt to cause employer compliance with or refusal to violate federal law, and second that it was wrongful because it was on account of his attempt to cause his employer compliance with or refusal to violate state law"); id. at 1171 ("Our conclusion [that the claim does not arise under federal law] is strengthened by our view that the federal issues in Willy's claim are not ones in the forefront of the case, but are more collateral in nature, and are not substantial in relation to the claim as a whole, which is in essence one under state law.").
Additionally — assuming that Defendants are correct that FCRA preempts this portion of Plaintiffs' negligence and wantonness claims — Defendants' duties would be governed by 15 U.S.C. § 1681s-2(a)(8), which pertains to the obligations of a furnisher of information upon direct notice by the consumer about inaccuracies in a consumer credit report. The obligations included in § 1681s-2(a) do not give rise to a private cause of action. 15 U.S.C. § 1681s-2(c)(1); Knudson v. Wachovia Bank, 513 F.Supp.2d 1255, 1260-61 (M.D. Ala. 2007); Yelder v. Credit Bureau of Montgomery, L.L.C., 131 F.Supp.2d 1275, 1283 (M.D. Ala. 2001); cf. Steed v. EverHome Mortgage Co., 2009 WL 139507, 3 (11th Cir. Jan 21, 2009) (unpublished opinion) (no private right of action for violations of §§ 1681s-2(a)(1)(A) or 1681s-2(a)(7)(A)(I)); Green v. RBS Nat. Bank, 288 Fed. Appx. 641 (11th Cir. Aug. 4, 2008), cert. denied, 129 S.Ct. 929 (2009) (no private right of action against furnisher of information under § 1681s-2(a) for allegedly tendering false information to credit reporting agency). The absence of a federal private right of action is "`not dispositive of' congressional judgment concerning the proper balance between state and federal jurisdiction." Adventure Outdoors, 552 F.3d at 1296 (citation omitted). However, it is a relevant consideration ( id.) and further supports the court's conclusion that the federal issue presented by Plaintiffs' state court complaint does not bring this case within the "slim category" of cases exemplified by Grable and does not, therefore, provide a basis for removal. See Empire Healthcare, 547 U.S. at 701, 126 S.Ct. at 2137 (" Grable emphasized that it takes more than a federal element `to open the "arising under" door.'").
15 U.S.C. 1681s-2(b) pertains to the duties of furnishers of information upon notice of a dispute from a consumer reporting agency. Plaintiffs do not allege that they contacted a consumer reporting agency regarding the inaccuracy, or that any such agency notified Defendants of the dispute pursuant to 15 U.S.C. § 1681i(a)(2) as required to trigger the duties set forth in § 1681s-2(b).
IV. CONCLUSION
For the foregoing reasons, it is ORDERED that Plaintiffs' motion to remand (Doc. # 5) is GRANTED, and this action is REMANDED to the Circuit Court of Tallapoosa County, Alabama, pursuant to 28 U.S.C. § 1447(c) for lack of subject matter jurisdiction. Any other pending motions are left for resolution by the Circuit Court of Tallapoosa County, Alabama. The Clerk is DIRECTED to take appropriate steps to promptly effect the remand.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 486 U.S. 196 201 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. 890 F.2d 371 376 Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judg ment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , , , , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , 69S.Ct. 1221, 1225-26, (1949); , , (11th Cir. 1989); , , , , , (1964). Rev.: 4/04 : The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).