Armstrong Ford, Inc. v. Ford Motor Co.

• Docket Number: 5:23-CV-167-D
• Decision Date: 18 July 2023
• Citation: 682 F.Supp.3d 495
• Parties: ARMSTRONG FORD, INC., et al., Plaintiffs, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of North Carolina

682 F.Supp.3d 495

ARMSTRONG FORD, INC., et al., Plaintiffs, v. FORD MOTOR COMPANY, Defendant.

No. 5:23-CV-167-D

United States District Court, E.D. North Carolina, Western Division

Signed July 18, 2023

Shawn D. Mercer, Bass Sox Mercer, Raleigh, NC, for Plaintiffs.

Jimmy Chang, David W. Sar, Brooks, Pierce, McLendon, Humphrey & Leonard, Greensboro, NC, for Defendant.

ORDER

JAMES C. DEVER III, United States District Judge

This action concerns Ford Motor Company's ("Ford" or "defendant") Model e Program (the "EV Program"), which is a voluntary, national program made available to all Ford dealers who wish to invest in Ford's transition into increased production of electronic vehicles.See[D.E. 1-1]; [D.E. 12] 1-5; [D.E. 13] 1.On March 7, 2023, Armstrong Ford, Inc., along with 45 other franchised Ford dealerships, (collectively, "plaintiffs") filed a petition with the Commissioner of the North Carolina Division of Motor Vehicles(the "Commissioner") claiming that the EV Program violated the North Carolina Motor Vehicle Dealers and Manufacturers Licensing Law, N.C. Gen. Stat. §§ 20-285, etseq.(the "Dealer Act"), including multiple provisions of section 20-305.See[D.E. 1-1].Plaintiffs asked the Commissioner to prohibit Ford from implementing the EV Program.Seeid. at 34.

On March 31, 2023, Ford removed the action to this court[D.E. 1].On April 20, 2023, plaintiffs moved to remand [D.E. 12].On May 11, 2023, Ford responded in opposition [D.E. 13].On May 17, 2023, Ford moved for a protective order staying deadlines pending the court's ruling on plaintiffs' motion to remand[D.E. 15].As explained below, the court grants plaintiffs' motion to remand, remands the action to the North Carolina Division of Motor Vehicles, and denies as moot Ford's motion for a protective order.

I.

Ford premised removal on 28 U.S.C. §§ 1332,1441, and1446.See[D.E. 1] 2.As for 28 U.S.C. § 1332, the parties agree that they are diverse but dispute whether the amount-in-controversy requirement for federal diversity jurisdiction is satisfied.As for 28 U.S.C. §§ 1441and1446, the parties dispute whether plaintiffs' pending claims before the Commissioner of the North Carolina Division of Motor are a "civil action brought in a State court" that Ford can remove to federal court.See28 U.S.C. § 1441.

"[F]ederal courts, unlike most state courts, are courts of limited jurisdiction, created by Congress with specified jurisdictional requirements and limitations."Strawn v. AT & T Mobility, LLC, 530 F.3d 293, 296(4th Cir.2008);seeKokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391(1994);Priselac v. Chemours Co., 561 F. Supp. 3d 562, 568-69(E.D.N.C.2021).Under 28 U.S.C. § 1441,

[e]xcept as otherwise expressly provided by Act of Congress, any civil action brought in a Statecourt of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a)(emphasis added);seeAetna Health Inc. v. Davila, 542 U.S. 200, 207, 124 S.Ct. 2488, 159 L.Ed.2d 312(2004);Colo. Bankers Life Ins. Co. v. AT Den. Invs., APS, 526 F. Supp. 3d 118, 123(E.D.N.C.2021).Under 28 U.S.C. § 1332, the district court has jurisdiction where the "matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States."28 U.S.C. § 1332(a).

The removing party"bears the burden of showing removal is proper," including showing that the federal court has subject-matter jurisdiction over the case.Mayor of Balt. v. BP P.L.C., 31 F.4th 178, 197(4th Cir.2022)(quotation omitted);seeBartels ex rel. Bartels v. Saber Healthcare Grp., LLC, 880 F.3d 668, 680(4th Cir.2018);Prince v. Sears Holdings Corp., 848 F.3d 173, 176(4th Cir.2017);Strawn, 530 F.3d at 296-97;Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151(4th Cir.1994).If a court lacks subject-matter jurisdiction over a removed case, the proper remedy is to remand rather than dismiss.See28 U.S.C. § 1447(c)("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.");Roach v. W. Va. Reg'l Jail & Corr. Facility Auth., 74 F.3d 46, 49(4th Cir.1996).

The court"must strictly construe removal jurisdiction," and if federal jurisdiction over the removed case "is doubtful,"the court must remand the case.Mayor of Balt., 31 F.4th at 197(quotations omitted);see28 U.S.C. § 1447(c);Common Cause v. Lewis, 956 F.3d 246, 252(4th Cir.2020);Mulcahey, 29 F.3d at 151;Colo. Bankers Life Ins. Co., 526 F. Supp. 3d at 123.Put differently, a court should "resolve doubts in favor of remand."Palisades Collections, LLC v. Shorts, 552 F.3d 327, 336(4th Cir.2008);seeElliott v. Am. States Ins. Co., 883 F.3d 384, 390(4th Cir.2018);Colo. Bankers Life Ins. Co., 526 F. Supp. 3d at 123.

Plaintiffs argue that Ford cannot establish an amount in controversy in excess of $75,000 under 28 U.S.C. § 1332 because attorneys' fees are not included in the calculation and plaintiffs have not demanded monetary relief.To calculate an amount in controversy, interest and attorneys' fees are not included.SeeFirst Nat. Bank v. La. Highway Comm'n, 264 U.S. 308, 310, 44 S.Ct. 340, 68 L.Ed. 701(1924);Pinel v. Pinel, 240 U.S. 594, 597, 36 S.Ct. 416, 60 L.Ed. 817(1916)."In actions seeking declaratory or injunctive relief, . . . the amount in controversy is measured by the value of the object of the litigation."Francis v. Allstate Ins. Co., 709 F.3d 362, 367(4th Cir.2013)."The key inquiry in determining whether the amount-in-controversy requirement is met is not whether the plaintiff will actually recover but an estimate of the amount that will be put at issue in the course of the litigation."Scott v. Cricket Comms., LLC, 865 F.3d 189, 196(4th Cir.2017)(cleaned up);Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383(1977);McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 181, 56 S.Ct. 780, 80 L.Ed. 1135(1936);McPhail v. Deere & Co., 529 F.3d 947, 956(10th Cir.2008).

Plaintiffs do not request monetary relief other than interest and attorneys fees.See[D.E. 1-1] 35.Plaintiffs, however, challenge Ford's EV Program, and plaintiffs' participation in the EV Program would require each plaintiff to invest over $1,100,000.See[D.E. 1-1]¶¶ 87-91.Even one plaintiff's claim on its own meets section 1332's amount in controversy requirement.Therefore, the parties are diverse and meet the amount in controversy requirement under 28 U.S.C. § 1332.Cf.Hunt, 432 U.S. at 347, 97 S.Ct. 2434;McNutt, 298 U.S. at 181, 56 S.Ct. 780.

Next, the court examines whether removal under 28 U.S.C. § 1441 was proper.The court focuses on whether the North Carolina Division of Motor Vehicles is a state court and whether plaintiffs' petition with the Commissioner is a civil action brought in a state court subject to removal.When determining whether a party may remove an administrative matter to federal court under 28 U.S.C. § 1441, federal circuit courts have taken two approaches: the plain language approach and the functional approach.¹The plain language approach requires the court to examine the plain language of 28 U.S.C. § 1441.See,e.g., Porter Tr., 607 F.3d at 1254-55;Or. Bureau of Lab. & Indus. ex rel. Richardson, 288 F.3d at 418;Sun Buick, 26 F.3d at 1264.The functional approach requires the court to determine whether the administrative agency functions like a state court in the action.See,e.g., Floeter, 597 F.2d at 1102;Volkswagen de P.R., 454 F.2d at 44.The Fourth Circuit has not addressed either approach under section 1441.²Nonetheless, under either approach, Ford's arguments for removal fail because the North Carolina Division of Motor Vehicles is not a state court and does not function as a state court in this matter.

As for the plain language approach, the plain language of 28 U.S.C. § 1441 only mentions state courts not administrative agencies.See28 U.S.C. § 1441."Generally, the word 'court' in a statute is held to refer only to the tribunals of the judiciary and not to those of an executive agency with quasi-judicial powers."Sun Buick, 26 F.3d at 1264.Pursuant to North Carolina licensing laws, plaintiffs filed their petition with the Commissioner of the North Carolina Division of Motor Vehicles.SeeN.C. Gen. Stat. § 20-301(b).The Commissioner has exclusive jurisdiction to hear such petitions.Seeid.The North Carolina Division of Motor Vehicles is a subdivision of the North Carolina Department of Transportation.SeeN.C. Gen. Stat. § 20-1.The North Carolina Division of Motor Vehicles is not a subdivision of the judiciary, does not have tribunals of the judiciary, and does not conduct court proceedings.Seeid.The duties of the North Carolina Division of Motor Vehicles include overseeing licensing of motor vehicle manufacturers and dealership.SeeN.C. Gen. Stat. §§ 20-285-20-308.2.North Carolina law does not define or describe the North Carolina Division of Motor Vehicles or its duties as a "state court."Seeid.§ 20(listing the statutory provisions providing definitions related to and regulating the North Carolina Department of Motor Vehicles).

N.C. Gen. Stat. § 20-308.1(a) describes the administrative nature of a proceeding before the Commissioner.The statutory language delineates between "an administrative proceeding before the Commissioner" and "any court of competent jurisdiction."Seeid.Therefore, under the plain language approach, the North Carolina Division of Motor Vehicles is not a state court.Thus, plaintiffs' petition with the Commissioner is not a civil action brought in a state court subject to removal, and Ford's removal under 28 U.S.C. § 1441 was...