Opinion
NO. 4:02CV65-PB
April 3, 2002
MEMORANDUM OPINION
This cause is before the Court on the plaintiffs' Motion to Remand. The Court, having considered the motions, the responses thereto, and the briefs and authorities cited, is prepared to rule. The Court finds as follows, to-wit:
FACTUAL BACKGROUND
The plaintiffs, Lucy Evon Willis, Beverly G. Willis and Clara Mae Yates, filed this action in the Circuit Court of LeFlore County, Mississippi, against Life Insurance Company of Georgia ("Life of Georgia") and Jessie McCrory, one of its agents, asserting various theories of recovery arising out of alleged racial discrimination on the part of the defendant in its dealings with customers. Life of Georgia removed the action to this Court based on diversity jurisdiction, as well as federal question jurisdiction, arguing that: (1) McCrory was fraudulently joined and (2) the plaintiff's complaint actually alleged violation of federal law.
The theories of recovery advanced by the plaintiffs include fraud, fraudulent inducement, breach of the duty of good faith and fair dealing, tortious breach of contract, breach of fiduciary duty, assumpsit, unjust enrichment, negligence and/or gross negligence, violations of Mississippi Code Annotated § 83-7-3 and § 75-24-1, and conversion.
On May 30, 2001, this Court granted the plaintiffs' motion to remand, finding no fraudulent joinder and holding that the complaint, which expressly disavows any reliance on federal law, did not state a federal claim, although replete with allegations of racial discrimination. Discovery proceeded until, finally, on March 15, 2002, the defendant removed the case once again from the Circuit Court of LeFlore County pursuant to 28 U.S.C. § 1446(b). According to the defendant, a March 8, 2002, letter from Lewis Garrison, counsel in another case, as well as certain questions asked in depositions relating to this case, clearly contain heretofore unknown revelations that the plaintiffs are pursuing a federal claim . . .
The plaintiffs now seeks remand of the action to the Circuit Court of LeFlore County, Mississippi, arguing that the "other paper" relied on by the defendant for jurisdiction reveals no federal claim and, thus, this Court lacks the necessary subject matter jurisdiction.
LEGAL ANALYSIS
Federal courts are courts of limited jurisdiction as defined by the Constitution and statute. See generally B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. 1981). Indeed, this Court is well advised to "be certain of its jurisdiction before embarking upon a safari in search of a judgment on the merits." B, Inc., 663 F.2d at 548. As the removing party, the defendants must bear the burden of demonstrating that this action is properly before the Court. Id. at 549; See also Village Fair Shopping Co. v. Sam Broadhead Trust, 588 F.2d 431 (5th Cir. 1978); Ray v. Bird and Son Asset Realization Co., Inc., 519 F.2d 1081 (5th Cir. 1975). Moreover, the removal statutes are to be strictly construed, and any doubts are to be resolved in favor of remand. Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992).
"As a general proposition, removal hinges on whether a federal district court could have asserted original jurisdiction over the state court action had it initially been filed in federal court." Rivet v. Regions Bank of Louisiana, 108 F.3d 576, 582 (5th Cir. 1997), rev'd on other grounds, 522 U.S. 470 (1998). Thus, there are two situations in which removal is proper: (1) where the case involves diversity jurisdiction, 28 U.S.C. § 1332; or (2) where the dispute is one "arising under the Constitution, laws or treaties of the United States." 28 U.S.C. § 1331. At issue here is the latter, known as federal 28 U.S.C. § 1446(b) provides:
If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.
Life of Georgia points chiefly to a letter dated March 8, 2002, arguing that this "other paper" clearly conveys the plaintiff's intent to proceed based on federal law. The March 8th letter is written by Mr. Garrison, counsel for Rosie Lee McDonald in a separate case. The defendant argues, however, that Garrison is lead discovery counsel in both the McDonald action and the instant case. Thus, according to the defendant, the correspondence from Garrison should be treated as correspondence from Willis' counsel.
Garrison is plaintiff's counsel in McDonald v. Life Ins. Co. of Georgia. question jurisdiction.
The substance of the letter is as follows:
Dear Joe:
At the deposition of Mr. Thompson yesterday, he referenced some studies which may reveal the number of industrial policies issued by Life of Georgia subsequent to 1960, and the breakdown of the number of whites and African-Americans assigned Table A and whites and African-Americans assigned Table R. I believe he said there was some "data" produced at meetings which reflected this information.
We believe this information is germane to our claims that Life of Georgia continued assigning the high rate (Table A) to African-Americans even after socio-economic underwriting commenced, and that the statistics would indicate that this should not have been done absent an intention of Life of Georgia to do so. We believe this information is also relevant to the issue of punitive damages.
Although this information has previously been requested through discovery, it has not been produced. Perhaps there is no such information or "data" which would reveal this information as referenced by Mr. Thompson.
However, if there is information which would provide this data, we again request it. Even if you contend that same is work product, we request it, because we have no means by which we can determine this information.
Thus, please let us know whether there is any documentation or "data" responsive to this information, and if so, whether you will voluntarily produce same without our seeking court intervention.
As you know, time is short, so please let us know whether this information exists no later than Wednesday, March 13, 2002.
(Pl. Exh. A).
As a preliminary matter, the Court harbors serious reservations as to whether this letter constitutes "other paper" within the meaning of 28 U.S.C. § 1446, not because of the nature of the letter, but because of the fact that the letter, as at least a technical matter, derives from litigation in a separate case. See, e.g., Growth Realty Companies v. Burnac Mortg. Investors, Ltd., 474 F. Supp. 991, 996 (D.P.R. 1979) ("The phrase `other paper'. . . cannot refer to pleadings [or correspondence] filed in a separate, distinct case in which the parties are not the same and which has not been consolidated as allowed by local laws of civil procedure with the case at the bar"). The McDonald case, to the Court's knowledge, has not been consolidated with the instant case under local rule or otherwise.
Nevertheless, assuming such a pitfall is paved over by Mr. Garrison's status as lead counsel of — as the defendant puts it — the "discovery team" for both cases, the Court remains unconvinced that the contents of the letter contain some revelation of federal question jurisdiction. The letter contains little more than what is present on the face of the plaintiff's complaint. Indeed, the complaint itself is littered with allegations of racial discrimination of the precise nature revealed in the letter. Conspicuously absent from the letter, just as in the complaint, is any explicit reference to a federal statute or other source of federal law.
The Court enumerated many of these allegations in its Memorandum Opinion remanding this case originally. See Willis v. life Ins. Co. of Georgia, No. 4:00CV323, at *2 (N.D.Miss. May 30, 2001).
As the defendants are aware, this Court has already evaluated the complaint and held that remand was warranted, despite the numerous charges of racial discrimination contained therein. The Court based its ruling on the Fifth Circuit's unequivocal statement that "[w]ithout complete preemption, the artful pleading doctrine does not apply." Waste Control Specialists, LLC v. Envirocare of Texas, Inc., 199 F.3d 781, 783 (5th Cir. 2000). In that case, the district court, although it found complete preemption did not apply to the statute at issue, employed the artful pleading doctrine to re-characterize the plaintiff's Texas law antitrust claims as federal claims. The district court denied the plaintiff's motion to remand upon concluding that the plaintiff's claims were not viable under state law and, by default, the plaintiff's only claim was federal. In overturning the district court, the Fifth Circuit explained that the practice of determining whether the real nature of the claim is federal, regardless of plaintiff's characterization, is "correctly confine[d] . . . to areas of the law pre-empted by federal substantive law." Waste Control Specialists, 199 F.3d at 783-84 (citing Caterpillar, Inc., 482 U.S. at 397 n. 11). According to the court:
As the Court stated, "if this was once a matter of debate, the Supreme Court has recently put the issue to rest." Waste Control Specialists, 199 F.3d at 783 (citing Rivet v.Regions Bank of Louisiana, 522 U.S. 470 (1998). Notably, many of the decisions relied upon by the defendant in this case were made without the benefit of the Fifth Circuit's pronouncements in Waste Control Specialists and Terebonne — that is, they were decided while debate on the issue was open.
Although [the plaintiff] could have alleged a federal cause of action in its state petition, it did not. It filed a complaint in state court alleging wholly state claims in a non-preempted field. Its choice is entitled to respect and precluded removing the case to federal court absent circumstances not presented here. For certain, we express no opinion as to the viability of [plaintiff's] state law claims. That is for a Texas court to decide.
Waste Control Specialists, 199 F.3d at 784. See also Terrebonne Home Care v. SMA health Plan, Inc., 271 F.3d 186, 188 (5th Cir. 2001) ("The artful pleading doctrine does not apply . . . unless federal law completely preempts the field"); Owens ex rel. Owens v. Catholic Diocese of Jackson, Mississippi, 169 F. Supp.2d 588 (S.D.Miss. 2001) (declining to apply the artful pleading doctrine to similar circumstances); Credit Acceptance Corp. v. Addison, 2001 WL 33324363 (N.D.Miss. 2000) (rejecting application of the artful pleading doctrine outside the context of complete preemption).
Indeed, as Judge Lee noted in Greer v. MAJR Financial Corp., 105 F. Supp.2d 583, 592, quoting another district court in Alabama:
Defendants' argument is essentially that federal questions are necessarily involved in this case because plaintiffs do not have a valid state claim for the remedy they seek. Of course, if this were the test, defendants could remove any state law case they felt did not have merit as long as an alternative federal action might be viable. An exception of this type would swallow the well-pleaded complaint rule. The very foundation of that rule is that plaintiffs are entitled to choose, for better or for worse, to rely only on state claims. . . . If by doing so plaintiff cannot avail himself of a remedy arguably available under federal law, then so be it. . . . Whether or not the plaintiffs, having made this choice, are entitled to prevail under state law is a matter which state courts are supremely qualified to resolve.
Greer, 105 F. Supp.2d at 592 (quoting Campbell v. General Motors Corp., 19 F. Supp.2d 1260, 1275-76 (N.D.Ala. 1998)) (internal citations omitted) (emphasis in the original). The court held, therefore, that the possibility that plaintiffs' claims were not viable under state law and could succeed only upon proof of violation of federal law, did not permit, much less mandate, a finding characterizing the claims as "arising under federal law." Greer, 105 F. Supp.2d at 593.
It is of no moment to this Court whether the plaintiffs' claims in this action are viable in Mississippi, or whether they are entitled to pursue punitive damages. Such concerns, in this context, are for a Mississippi court to decide. This Court is supremely confident that Mississippi courts are fully competent to resolve the issue.
Moreover, the "other paper" purported to confer federal jurisdiction — in this case, the March 8 letter — is not to be evaluated in the abstract. In other words, the letter must be assessed, not in isolation, but in light of the complaint. See, e.g., Sunburst v. Summit Acceptance Corp., 878 F. Supp. 77, 82 (S.D.Miss. 1995) (evaluating "other paper" by reference to, inter alia, the complaint). In this case, as the Court noted in its first Memorandum Opinion, the complaint expressly disavows, in no uncertain terms, any cause of action based on federal law. Colored by this forceful initial disavowal, subsequent "other paper" must be more substantial than the indefinite posturing of counsel in a letter requesting (apparently, not for the first time) information relating to the same claims with regard to which this Court has already stated did not mandate a finding of subject matter jurisdiction pursuant to 28 U.S.C. § 1331.
The same goes for the deposition excerpts which the defendant points to as additional "other paper." The questions posed in the depositions, moreover, like the March 8 letter, reveal little more than the complaint itself.
See Willis v. life Ins. Co. of Georgia, No. 4:00CV323, at *5 (N.D.Miss. May 30, 2001). The complaint states:
Plaintiffs bring this complaint solely under state law and not under federal law, and specifically not under the United States Constitution, or any of its amendments, or under 42 U.S.C. § 1981 or 1982, or any other federal statute, law, rule, or regulation. Plaintiffs believe and allege that a cause of action exists under the hereinafter set out state law claims for the conduct complained of herein. If this Court or the appellate courts of Mississippi were to rule that these plaintiffs have no cause of action under state law for the conduct set out herein, then these plaintiffs simply do not have any remedy, because these plaintiffs expressly waive and hereby disavow any claim for any relief whatsoever under any federal laws or any federal question concerning the allegations of this complaint, whether said allegations are pled or not.
Complaint at 3-4.
Indeed, in the Court's view, a showing of federal question jurisdiction based on "other paper" must be stronger than that required to demonstrate diversity jurisdiction. For, courts often must look to extrinsic evidence, wholly outside the complaint, to determine whether a party is of diverse citizenship. Federal question jurisdiction, on the other hand, has ordinarily been determined by reference to the four corners of the complaint, ever since the Supreme Court's declaration of the "well pleaded complaint rule" in 1908. See Louisville Nashville R.R. Co. v. Motttley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). The Court recognizes that, in certain instances, "other paper" may for the first time reveal grounds for exercise of federal question jurisdiction. However, courts visiting the issue usually require that such "other paper" contain more concrete information, and generally much stronger indicia of federal question jurisdiction than the letter at issue here. Thus, the Court is led to the conclusion that a more significant showing must be made to find federal question jurisdiction based on "other paper." Accord Grefer v. Alpha Technical, 2001 WL 55715 (E.D.La. Jan. 23, 2001) (finding no federal question jurisdiction, even where plaintiff counsel's demand letter expressly cited a federal statute, partly on the basis of the differing natures of diversity and federal question jurisdiction). It is no surprise, therefore, that the majority of courts employing the "other paper" doctrine, including those cited by the defendant, do so in the context of diversity jurisdiction. See, e.g., Rawlings v. Prater, 981 F. Supp. 988 (S.D.Miss. 1997); Stramel v. GE Capital Small Business Fin., 955 F. Supp. 65 (E.D.Tex. 1997); Sunburst Bank v. Summit Acceptance Corp., 878 F. Supp. 77 (S.D.Miss. 1995).
See, e.g., Peters v. Lincoln Electric Co., ___ F.3d ___, 2002 WL 432412 (6th Cir. 2002). Peters, which the defendant cites, involved a removal based on ERISA. In contrast to the federal law which the defendant contends applies in this case, ERISA completely preempts state law. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 64-66 (1987) (ERISA complete preemption). See also, e.g., Akin v. Ashland Chemical Co., 156 F.3d 1030, 1035 (10th Cir. 1998) ("other paper" unambiguously demonstrated that the conduct sued upon took place wholly within the confines of an Air Force base and under federal direction).
Finally, to the extent the defendant attempts to have this Court re-visit the earlier remand order, its position is not well taken. Since the letter contains nothing substantially different than the information contained in the complaint, and because the Court has already remanded the case based on the complaint, the Court is now barred from reviewing the order. It is well settled under 28 U.S.C. § 1447(c) that a "federal court is completely divested of jurisdiction once it mails a certified copy of the order to the clerk of the state court." McLelland v. Gronwaldt, 155 F.3d 507, 514 n. 15 (5th Cir. 1998) (quoting Browning v. Navarro, 743 F.2d 1069, 1078-79 (5th Cir. 1984)). See also E.D. Systems v. Southwestern Bell Telephone Co., 674 F.2d 453 (5th Cir. 1982); Federal Deposit Ins. Corp. v. Santiago Plaza, 598 F.2d 634, 636 (1st Cir. 1979). Indeed, even if the Court was somehow convinced that the original remand order was wrongly decided, which, in this case, it is not, review would still be precluded. In re La Providencia Development Corp., 406 F.2d 251 (1st Cir. 1969).
More recent decisions from the Fourth and Eleventh Circuits hold that a district court may not reconsider a remand order at all under § 1447(c), even before mailing the order to the state court. See In re Loudermilch, 158 F.3d 1143, 1146 (11th Cir. 1998); In re Lowe, 102 F.3d 731, 736 (4th Cir. 1996).
Based on the foregoing analysis, the Court concludes that the defendant has failed to meet its burden of demonstrating proper subject matter jurisdiction in this Court. Consequently, the plaintiffs' Motion to Remand is granted.
CONCLUSION
After careful consideration, the Court finds that the plaintiffs' Motion to Remand is well taken and should be granted. A separate order in accordance with this opinion will be so entered.