539 U.S. 1 (2003), 02-306, Beneficial National Bank v. Anderson

Docket Nº:No. 02-306
Citation:539 U.S. 1, 123 S.Ct. 2058, 156 L.Ed.2d 1, 71 U.S.L.W. 4409
Party Name:Beneficial National Bank v. Anderson
Case Date:June 02, 2003
Court:United States Supreme Court
 
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539 U.S. 1 (2003)

123 S.Ct. 2058, 156 L.Ed.2d 1, 71 U.S.L.W. 4409

Beneficial National Bank

v.

Anderson

No. 02-306

United States Supreme Court

June 2, 2003

Argued April 30, 2003

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

Syllabus

Respondents, who secured loans from petitioner national bank filed a state court suit against the bank and two other petitioners seeking damages on the theory, among others, that the bank's interest rates violated "the common law usury doctrine" and an Alabama usury statute. The complaint did not refer to any federal law. Petitioners removed the case to Federal District Court, asserting that the National Bank Act governs the interest rate that a national bank may charge, see 12 U.S.C. § 85, that the rates charged to respondents complied with § 85, that § 86 provides the exclusive remedies available against a national bank charging excessive interest, and that respondents' action was therefore one "arising under" federal law that could be removed under 28 U.S.C. § 1441. The District Court denied respondents' motion to remand the case to state court, but certified the question whether it had jurisdiction to the Eleventh Circuit. In reversing, the latter court held that under the "well pleaded complaint" rule, removal is not permitted unless the complaint expressly alleges a federal claim, and that the narrow exception known as the complete preemption doctrine did not apply because there was no evidence of clear congressional intent to permit removal under §§ 85 and 86.

Held: respondents' cause of action arose only under federal law and could therefore be removed under § 1441. Pp. 6-11.

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(a) As a general rule, absent diversity jurisdiction, a case is not removable if the complaint does not affirmatively allege a federal claim. Potential defenses, including a federal statute's preemptive effect, Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, do not provide a basis for removal. One exception to the general rule occurs when a federal statute completely preempts a cause of action. Where this Court has found such preemption, the federal statutes at issue -- the Labor Management Relations Act, 1947, see Avco Corp. v. Machinists, 390 U.S. 557, and the Employee Retirement Income Security Act of 1974, see Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 -- provided the exclusive cause of action for the claim asserted and also set forth procedures and remedies governing that cause of action. Pp. 6-8.

(b) Because respondents' complaint expressly charged petitioners with usury, Metropolitan Life, Avco, and Franchise Tax Bd. provide the framework for answering the question whether the National Bank Act provides the exclusive cause of action for usury claims against national banks. Section 85 sets substantive limits on the interest rates that national banks may charge, while § 86 prescribes the remedies available to borrowers who are charged higher rates and the procedures governing such claims. If the interest charged here did not violate § 85 limits, the statute preempts any common law or Alabama statutory rule that would treat those rates as usurious, and would thus provide a federal defense. That defense would not justify removal. Only if Congress intended § 86 to provide the exclusive cause of action for usury claims against national banks would the statute be comparable to the provisions construed in Avco and Metropolitan Life. This Court has long construed the National Bank Act as providing the exclusive federal cause of action for usury against national banks. See, e.g., Farmers' and Mechanics' Nat. Bank v. Dearing, 91 U.S. 29. The Court has also recognized the special nature of federally chartered banks. Uniform rules limiting their liability and prescribing exclusive remedies for their overcharges are an integral part of a banking system that needed protection from possible unfriendly state legislation. The same federal interest supports the established interpretation of §§ 85 and 86 that gives those provisions the requisite preemptive force to provide removal jurisdiction. Pp. 9-11.

287 F.3d 1038, reversed.

STEVENS, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and O'CONNOR, KENNEDY, SOUTER, GINSBURG, and BREYER, JJ., joined. SCALIA, J., filed a dissenting opinion in which THOMAS, J., joined, post, p. 11.

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OPINION

STEVENS, JUSTICE.

The question in this case is whether an action filed in a state court to recover damages from a national bank for allegedly charging excessive interest in violation of both "the common law usury doctrine" and an Alabama usury statute

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may be removed to a federal court because it actually arises under federal law. We hold that it may.

I

Respondents are 26 individual taxpayers who made pledges of their anticipated tax refunds to secure short term loans obtained from petitioner Beneficial National Bank, a national bank chartered under the National Bank Act. Respondents brought suit in an Alabama court against the bank and the two other petitioners that arranged the loans, seeking compensatory and punitive damages on the theory, among others, that the bank's interest rates were usurious. App. 18 30. Their complaint did not refer to any federal law.

Petitioners removed the case to the United States District Court for the Middle District of Alabama. In their notice of removal, they asserted that the National Bank Act, Rev.Stat. § 5917, as amended, 12 U.S.C. § 85,[1] is the exclusive provision

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governing the rate of interest that a national bank may lawfully charge, that the rates charged to respondents complied with that provision, that § 86 provides the exclusive remedies available against a national bank charging excessive interest,[2] and that the removal statute, 28 U.S.C. § 1441, therefore applied. App. 31 35. The District Court denied respondents' motion to remand the case to state court but certified the question whether it had jurisdiction to proceed with the case to the Court of Appeals pursuant to 28 U.S.C. § 1292(b).

A divided panel of the Eleventh Circuit reversed. Anderson v. H&R Block, Inc., 287 F.3d 1038 (2002). The majority held that, under our "well pleaded complaint" rule, removal is generally not permitted unless the complaint expressly alleges a federal claim and that the narrow exception from that rule known as the "complete preemption doctrine" did not apply because it could "find no clear congressional intent to permit removal under §§ 85 and 86." Id. at 1048. Because this holding conflicted with an Eighth Circuit decision,

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Krispin v. May Dept. Stores Co., 218 F.3d 919 (2000), we granted certiorari. 537 U.S. 1169 (2003).

II

A civil action filed in a state court may be removed to federal court if the claim is one "arising under" federal law. § 1441(b). To determine whether the claim arises under federal law, we examine the "well pleaded" allegations of the complaint and ignore potential defenses:

a suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that Constitution. It is not enough that the plaintiff alleges some anticipated defense to his cause of action and asserts that the defense is invalidated by some provision of the Constitution of the United States.

Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908); see Taylor v. Anderson, 234 U.S. 74 (1914). Thus, a defense that relies on the preclusive effect of a prior federal judgment, Rivet v. Regions Bank of La., 522 U.S. 470 (1998), or the preemptive effect of a federal statute, Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1 (1983), will not provide a basis for removal. As a general rule, absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege a federal claim.

Congress has, however, created certain exceptions to that rule. For example, the Price Anderson Act contains an unusual preemption provision, 42 U.S.C. § 2014(hh), that not only gives federal courts jurisdiction over tort actions arising out of nuclear accidents but also expressly provides for removal of such actions brought in state court even when they assert only state law claims. See El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 484 485 (1999).

We have also construed § 301 of the Labor Management Relations Act, 1947 (LMRA), 29 U.S.C. § 185, as not only preempting state law but also authorizing removal of actions

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that sought relief only under state law. Avco Corp. v. Machinists, 390 U.S. 557 (1968). We later explained that holding as resting on the unusually "powerful" preemptive force of § 301:

The Court of Appeals held, 376 F.2d at 340, and we affirmed, 390 U.S. at 560, that the petitioner's action "arose under" § 301, and thus could be removed to federal court, although the petitioner had undoubtedly pleaded an adequate claim for relief under the state law of contracts and had sought a remedy available only under state law. The necessary ground of decision was that the preemptive force of § 301 is so powerful as to displace entirely any state cause of action "for violation of contracts between an employer and a labor organization." Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301. Avco stands for the proposition that if a federal cause of action completely preempts a state cause of action, any complaint that comes within the scope of the federal cause of action necessarily "arises under" federal law.

Franchise Tax Bd., 463 U.S. at 23...

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