Com. of Mass. v. V & M MANAGEMENT, INC.

• Decision Date: 06 December 1990
• Docket Number: Civ. A. No. 90-12374-H.
• Citation: 752 F. Supp. 519
• Parties: COMMONWEALTH OF MASSACHUSETTS, Plaintiff, v. V & M MANAGEMENT, INC.; Alphonse Mourad, Individually and as the President and Officer of V & M Management; Felix Vasquez, Individually and as an Employee of V & M Management; and Mary Hill, Individually and as an Employee of V & M Management, Defendants.
• Court: U.S. District Court — District of Massachusetts

752 F. Supp. 519

COMMONWEALTH OF MASSACHUSETTS, Plaintiff, v. V & M MANAGEMENT, INC.; Alphonse Mourad, Individually and as the President and Officer of V & M Management; Felix Vasquez, Individually and as an Employee of V & M Management; and Mary Hill, Individually and as an Employee of V & M Management, Defendants.

Civ. A. No. 90-12374-H.

United States District Court, D. Massachusetts.

December 6, 1990.

Natalie Robin Hardy, Fitch, Miller & Tourse, Sarah M. Morison, Atty. Gen., Torts Div., Boston, Mass., for plaintiff.

Victor Aronow, Phoenix, Ariz., for defendants.

MEMORANDUM AND ORDER

HARRINGTON, District Judge.

Defendant V & M Management, Inc., and its sole shareholder, Alphonse Mourad, own and operate the Westminster/Willard Place low-income housing project in Roxbury, Massachusetts. The housing project is federally-subsidized as part of a Section 8 Housing Assistance Payments Contract with the United States Department of Housing and Urban Development ("HUD"). Inspections of the housing project in September, 1990 revealed numerous violations of state and federal housing statutes and regulations. The Massachusetts Attorney General, therefore, filed this action on behalf of the Commonwealth of Massachusetts (the "Commonwealth") to protect the residential tenants and to restrain defendants from committing further violations.

This action was originally filed in the Massachusetts Superior Court. Defendants now petition for removal pursuant to 28 U.S.C. § 1441(c), asserting that this Court could have entertained original jurisdiction over this action under 28 U.S.C. § 1331. It is this limited question—the propriety of removal to the federal court— which now concerns this Court.

The Nature of the Case

In 1967 the Massachusetts Legislature enacted the Massachusetts Consumer Protection Act, Mass.Gen.L. ch. 93A ("Chapter 93A"). Chapter 93A seeks to ensure an equitable relationship between consumers and persons engaged in business by protecting consumers from "unfair or deceptive acts or practices in the conduct of any trade or commerce." Mass.Gen.L. ch 93A, § 2(a). The statute charges the Attorney General of the Commonwealth with promulgating rules and regulations defining "unfair and deceptive acts," Mass.Gen.L. ch. 93A, § 2(c), and it further empowers the Attorney General to bring an action in the name of the Commonwealth to restrain individuals from engaging in such acts. Mass.Gen.L. ch. 93A, § 4.

In the case before this Court, the Attorney General exercised his authority under Chapter 93A to bring suit against the defendants for alleged mismanagement of the Westminster/Willard Place housing project, neglect of property, and complete disregard for housing laws and regulations. The entire thrust of the action is that the defendants violated the State's extensive regulatory scheme governing the landlord/tenant relationship, and, thus, that they violated the Massachusetts Consumer Protection Act. The Commonwealth seeks to restrain the defendants from further violations, because it believes that enforcement of the housing laws is a matter of vital concern to the Commonwealth and its citizens.

Count I of the Commonwealth's Complaint delineates specific violations of Massachusetts and federal housing statutes and regulations which, pursuant to the Attorney General's Landlord-Tenant Regulations, 940 C.M.R. 3.17, constitute per se violations of Chapter 93A. In particular, Count I sets forth sixteen distinct violations of Massachusetts housing statutes or regulations and five violations of federal statutes or regulations which allegedly amount to "unfair and deceptive acts and practices" under Chapter 93A. (Complaint, ¶¶ 64-65). In addition, Counts II through XIII of the Complaint allege separate and independent violations of certain of these state or federal statutes or regulations. (Complaint, ¶¶ 66-97).

The Question of Removal

Defendants contend that Counts I, V, VII, VIII, IX and XIII are all dependent for their resolution, in whole or in part, upon the interpretation of federal laws, statutes, regulations and contracts.¹ Thus, these claims, defendants argue, "arise under" the laws of the United States, and this Court has original jurisdiction over them. See 28 U.S.C. § 1331. The entire case is, therefore, one which may be removed to this Court pursuant to 28 U.S.C. § 1441(c).

In its opposition to the defendants' Petition for Removal, the Commonwealth characterizes its Complaint, not as one asserting a federal cause of action, but as one presenting a "detailed state law claim" which alleges that "defendants have engaged in an array of unfair and deceptive conduct." (Commonwealth's Memorandum of Law in Opposition to Removal, pp. 9-10). The individual violations of federal law contained in the Complaint do not function as separate claims for relief; rather, they merely serve as "evidence" of the extent of defendants' state law violation.

The Commonwealth's argument has some force. Indeed, the Supreme Court has held that the "mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction." Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 813, 106 S.Ct. 3229, 3234, 92 L.Ed.2d 650 (1986); see also Gully v. First Nat'l Bank, 299 U.S. 109, 115, 57 S.Ct. 96, 99, 81 L.Ed. 70 (1936) ("Not every question of federal law emerging in a suit is proof that a federal law is the basis of the suit"). Rather, federal-question jurisdiction extends only to those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action, or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law. Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 13, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983); see also Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (summarizing the test for federal-question jurisdiction).

In Count I of the Complaint, the Commonwealth lists five distinct violations of federal housing regulations, but these violations can only be interpreted as indicia of the defendants' numerous unfair and deceptive housing practices. The federal regulations are an "element" of the state claim, but only insofar as the Attorney General has provided for their incorporation into the definition of those "unfair and deceptive practices" that are per se violative of Chapter 93A. This Court will not construe the Commonwealth's reference to federal regulations in Count I as creating "substantial questions of federal law" sufficient to confer jurisdiction on this Court. Cf. Merrell Dow Pharmaceuticals, Inc., 478 U.S. at 814, 106 S.Ct. at 3235.

The Commonwealth, then, is correct in characterizing its Chapter 93A claim as essentially a state law claim, despite the references to federal law. And were this Court faced with a Complaint, alleging solely a violation of Chapter 93A as set forth in Count I, it would be disposed to remand the case to the Superior Court for adjudication. The Court, however, is faced with a very different case.

The Commonwealth asserts twelve additional independent counts, each alleging separate violations of state and/or...