Opinion
Civil Action Nos. DKC 2004-3481, DKC 2004-3482.
February 9, 2005
MEMORANDUM OPINION
These two cases, each purporting to bring a class action challenging the practice of Bank of America of charging fees to persons who cash checks drawn on business accounts at the bank when the persons do not themselves maintain an account there, were removed from the Circuit Court for Montgomery County on the basis of diversity of jurisdiction on October 28, 2004. On November 1, 2004, a divided panel of the United States Court of Appeals for the Fourth Circuit decided Wachovia Bank, N.A. v. Schmidt, 388 F.3d 414 (4th Cir. 2004), holding that, within the meaning of 28 U.S.C. § 1348, a national bank is "located" where it operates branch offices, and therefore, a citizen of that state for purposes of diversity jurisdiction. Because application of that ruling to these cases would preclude the exercise of diversity removal jurisdiction, the removing parties were directed to address the issue in response to the court's ordinary standing order for removed actions. See Paper 10.
The purported class in Civil Action No. DKC 04-3481 is "All Bank of America business account holders who issued checks to employees/payees for wages that were cashed at the Bank of America by the employees/payees and who were charged a $5.00 check cashing service fee by the Bank of America in Maryland." In Civil Action No. DKC 04-3482, the class is "All persons in Maryland who received a check for wages from an employer drawn on a Bank of America account, and who were charged a $5.00 check cashing fee or suffered other damage as a result of Bank of America's check cashing fee."
A federal district court has original jurisdiction over civil actions where the amount in controversy exceeds $75,000 and is between citizens of different States. 28 U.S.C. § 1332(a). Such actions may be removed from state court, but "only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." Id. § 1441(b). Moreover, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." Id. § 1447(c).
Section 1348 provides in part, "All national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located." 28 U.S.C. § 1348.
Plaintiffs moved to remand, pursuant to 28 U.S.C. § 1447(c), and requested a stay of Defendants' pending motion to dismiss until the remand issue could be resolved. See Papers 12, 13. Defendants suggested that the court should defer ruling until the Fourth Circuit considered the petition for rehearing en banc that had been filed in the Wachovia case, conceding that, if the ruling were to stand, these cases would have to be remanded. See Paper 17 at 2. Although no formal order was entered at that time, the court took no further action in these cases.
On January 28, 2005, the Fourth Circuit denied rehearing or rehearing en banc. Now, Defendants ask this court again to defer ruling until the United States Supreme Court decides whether to grant certiorari review in the Wachovia case or in similar cases from other circuits. If certiorari is granted, Defendants seek a stay pending final decision by the Supreme Court. Plaintiffs oppose a further stay.
Defendants also note that Wachovia has filed a motion with the Fourth Circuit to stay the issuance of its mandate in that case, and request in the alternative that this court defer its ruling on the remand issue at least until the Fourth Circuit addresses Wachovia's motion. By seeking a discretionary stay, Defendants apparently concede that although a stay of the Wachovia mandate may affect what the district court can do in that case, it does not prevent the Fourth Circuit decision from having precedential value and binding authority on the undersigned in the matter sub judice. See, e.g., Abukar v. Ashcroft, 2004 WL 741759 (D.Minn. 2004) (noting that neither party addressed the effect on the precedential value of an opinion when the mandate is stayed, but exercising its discretion to grant stay). Accordingly, deferring a decision on the remand issue until the Fourth Circuit addresses the requested stay in Wachovia is not warranted.
While the court recognizes the significant split of authority on this issue and assumes that, ultimately, the Supreme Court will have to resolve the split, the equities at this time favor immediate decision and remand of these cases. At issue is whether this court has removal diversity jurisdiction over these cases raising only state law claims.
Defendants initially ask the court to stay the cases until March 28, 2005, when the decision might be made on whether to grant certiorari review in the similar cases. Even if review is granted, briefing and hearing would not likely occur before the expiration of the Court's current term. Thus, with briefing and argument next term, a decision might not be announced until the end of next term, or as late as June of 2006.
Plaintiffs initiated these actions in state court and removal jurisdiction is to be strictly applied. See Richardson v. Phillip Morris Inc., 950 F.Supp. 700, 702 (D.Md. 1997) (recognizing "[c]ourts strictly construe the removal statute and resolve all doubts in favor of remanding the case to state court."). The issue before the Supreme Court will only resolve the question of which court will decide the complaints raised by Plaintiffs. The merits of the parties' disputes will not turn on which court system decides the cases. The Circuit Court for Montgomery County will ably handle the cases on remand.
Under current Fourth Circuit precedent, Defendant is considered a citizen of every state in which it is located, including Maryland. Wachovia Bank, 388 F.3d at 415. Accordingly, the court lacks diversity jurisdiction and as a citizen of the state in which this court sits, Defendant is not permitted to remove these cases. See 28 U.S.C. § 1441(b).
Separate orders will be entered in each case, remanding them to the Circuit Court for Montgomery County.