Anderson v. H&R Block, Inc., 01-11863.

• Decision Date: 03 April 2002
• Docket Number: No. 01-11863.,01-11863.
• Citation: 287 F.3d 1038
• Parties: Marie ANDERSON, Alvester Brafort, et al., Plaintiffs-Appellants, v. H&R BLOCK, INC., Beneficial National Bank, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

287 F.3d 1038

Marie ANDERSON, Alvester Brafort, et al., Plaintiffs-Appellants, v. H&R BLOCK, INC., Beneficial National Bank, et al., Defendants-Appellees.

No. 01-11863.

United States Court of Appeals, Eleventh Circuit.

April 3, 2002.

K. Stephen Jackson, Jeff S. Daniel, Jackson, Fraley & Shuttlesworth, P.C., Birmingham, AL, for Plaintiffs-Appellants.

Peter Sean Fruin, Maynard, Cooper & Gale, P.C., Montgomery, AL, Stewart M. Cox, Bradley, Arant, Rose & White, A. Inge Selden, III, Stephen Clark Jackson, Maynard, Cooper & Gale, P.C., Birmingham, AL, Burt M. Rublin, Ballard, Spahr, Andrews & Ingersoll, LLP, Philadelphia, PA, for Defendants-Appellees.

Appeal from the United States District Court for the Middle District of Alabama.

Before TJOFLAT, BARKETT and WILSON, Circuit Judges.

WILSON, Circuit Judge:

The issue we decide on this appeal is whether the plaintiffs' state-law usury claims are completely preempted by the National Bank Act (NBA), 12 U.S.C. §§ 85 and 86, and therefore properly removable to federal court. Although the plaintiffs alleged only state-law claims in their complaint, the district court determined that it had jurisdiction based on the doctrine of complete preemption. We disagree and reverse.

BACKGROUND

The plaintiffs, who as customers of H&R Block, Inc. had taken out tax refund anticipation loans¹ from Beneficial National Bank, brought suit in state court against H&R Block, Beneficial National Bank, and Beneficial Tax Masters, Inc., alleging usury violations² along with other state-law claims. The defendants removed the case to federal court on the basis of federal question jurisdiction. The defendants argued that since the NBA provides the exclusive remedy for claims alleging excessive interest against national banks, the plaintiffs' state-law usury claims should be recharacterized as federal claims under the doctrine of complete preemption. The plaintiffs moved to remand the case back to state court, arguing that while §§ 85 and 86 of the NBA may provide a defense to state-law usury claims, these provisions do not accomplish complete preemption. The district court denied the motion to remand, holding that removal was proper because federal question jurisdiction existed based on complete preemption. Recognizing that the issue was unsettled in this Circuit, the district court certified for interlocutory appeal the question of whether §§ 85 and 86 of the NBA completely preempt state-law usury claims so as to confer removal jurisdiction. We hold that these sections do not accomplish complete preemption.

DISCUSSION

The question of whether §§ 85³ and 86⁴ of the NBA completely preempt state-law usury claims against a national bank has been the subject of disagreement among other circuits and among district courts within this Circuit.⁵ What is at stake in this inquiry is whether §§ 85 and 86 not only provide a defense to state-law usury claims under ordinary preemption, but also confer on defendants the ability to remove the case from state to federal court under the complete preemption doctrine. For the reasons that follow, we hold that §§ 85 and 86 do not accomplish complete preemption. We begin by describing the complete preemption doctrine and analyzing how the doctrine has been applied by the Supreme Court and this Court. Our analysis reveals that the complete preemption inquiry turns on congressional intent — whether Congress not only intended for a federal statute to provide a defense to state-law claims, but also intended to confer on defendants the ability to remove a case to a federal forum. We conclude that §§ 85 and 86 of the NBA do not accomplish the extraordinary result of complete preemption, because clear congressional intent to permit removal under these sections is lacking.

I

Whether a district court may exercise jurisdiction over this case based on complete preemption is a question of law that we review de novo. BLAB T.V. of Mobile, Inc. v. Comcast Cable Communications, Inc., 182 F.3d 851, 854 (11th Cir.1999). As courts of limited jurisdiction, lower federal courts may decide a case only when Article III of the Constitution provides that the federal judicial power extends to the case and when Congress has granted jurisdiction. Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir.1999). When a federal court acts outside its jurisdiction, it violates principles of separation of powers and federalism, interfering with Congress's authority to demarcate the jurisdiction of lower federal courts, and with the states' authority to resolve disputes in their own courts. Id. at 409-10. For this reason, when there are doubts as to whether removal jurisdiction is proper, we favor remand of removed cases. Id. at 411.

The removal statute, 28 U.S.C. § 1441(a), provides that any civil action brought in state court may be removed to federal court by the defendant as long as the federal court has jurisdiction in the case. Removal based on federal question jurisdiction, the grounds for removal the district court found here, generally is governed by the "well-pleaded complaint" rule, which provides that a case may be removed only if the plaintiff's properly pleaded complaint reveals that the claim is based on federal law. Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 9-10, 103 S.Ct 2841, 77 L.Ed.2d 420 (1983). Under the well-pleaded complaint rule, a case in which the plaintiff asserts only state-law claims may not be removed to federal court based on the existence of a federal defense — even the defense of ordinary preemption. Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). "Congress has long since decided that federal defenses do not provide a basis for removal." Id. at 399, 107 S.Ct. 2425.

An exception to the well-pleaded complaint rule is the "complete preemption" doctrine. BLAB T.V., 182 F.3d at 854. Under this doctrine, a defendant may remove a case to federal court even though the plaintiff raises only state-law claims in her complaint, when "the pre-emptive force of a [federal] statute is so extraordinary that it converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule."⁶ Caterpillar Inc., 482 U.S. at 393, 107 S.Ct. 2425 (internal quotation marks omitted).

The Supreme Court has found complete preemption under two federal statutes — section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, and section 502(a) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(a). BLAB T.V., 182 F.3d at 855. The complete preemption doctrine was born with little elaboration or explanation in Avco Corp. v. Aero Lodge Number 735, International Association of Machinists and Aerospace Workers, 390 U.S. 557, 560-62, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968), where the Supreme Court treated the plaintiff's state-law claim based on a collective bargaining agreement as a federal claim arising under section 301 of the LMRA, and held that the case was properly removed to federal court. The Supreme Court had not yet begun to use the term "complete preemption" to describe this result, and Avco provides little guidance on the scope of the complete preemption doctrine.⁷

The Supreme Court provided more guidance on the contours of the complete preemption doctrine when it cautiously extended the doctrine to section 502(a) of ERISA in Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 64-67, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). The Court said that without clear indications that Congress intended to permit removal of state claims that fell within the scope of ERISA's civil enforcement provision in section 502(a), the Court would have been "reluctant" to expand the "extraordinary pre-emptive power" recognized by the Avco decision under section 301 of the LMRA. Id. at 65, 107 S.Ct. 1542. After examining section 502(a), however, the Court did find clear indications of congressional intent to permit removal — explicit statements in the legislative history that Congress meant for this provision to be construed in the same fashion as section 301 of the LMRA, and close parallels between the jurisdictional subsection of ERISA's civil enforcement provision and section 301 of the LMRA. Id. at 65-66, 107 S.Ct. 1542. Because Congress "clearly manifested an intent to make [these] causes of action ... removable to federal court," the Supreme Court felt bound to "honor that intent" and find complete preemption. Id. at 66, 107 S.Ct. 1542.

Outside the contexts of the LMRA and ERISA, this Court has addressed the question of complete preemption only twice, in Smith v. GTE Corp., 236 F.3d 1292, 1310-13 (11th Cir.2001) (holding that the Federal Communications Act did not accomplish complete preemption), and BLAB T.V., 182 F.3d at 857-59 (holding that the Cable Communications Policy Act did not accomplish complete preemption). In those cases, we recognized that the complete preemption doctrine should be carefully limited in scope. We noted that "although the Supreme Court recognizes the existence of the complete preemption doctrine, the Court does so hesitatingly and displays no enthusiasm to extend the doctrine into areas of law beyond the LMRA and ERISA." Id. at 856. We recognized that the Supreme Court only "reluctant[ly]" extended the complete preemption in Taylor, based on "virtually identical" jurisdictional provisions in the LMRA and ERISA and explicit statements in the legislative history of ERISA that the two statutes should be construed in a like manner. Id. at 855 (alteration in original) (internal quotation marks omitted). Finding no similar clear manifestation of congressional intent to permit removal in BLAB T.V. or Smith, we held that the complete preemption doctrine did not create federal jurisdiction in those cases. Smith, 236 F.3d at 1313; BLAB T.V., 182 F.3d at 858.

In determining whether Congress intends for a...