Flinn v. Santander Bank, N.A.

• Citation: 359 F.Supp.3d 128
• Decision Date: 11 February 2019
• Docket Number: CIVIL ACTION NO. 18-11599-WGY
• Parties: Eugene FLINN, Plaintiff, v. SANTANDER BANK, N.A., Santander Holdings USA, Inc., Defendants.
• Court: U.S. District Court — District of Massachusetts

359 F.Supp.3d 128

Eugene FLINN, Plaintiff,

v.SANTANDER BANK, N.A., Santander Holdings USA, Inc., Defendants.

CIVIL ACTION NO. 18-11599-WGY

United States District Court, D. Massachusetts.

Filed February 11, 2019

Christina A. Madek, Peter J. Riordan, Jantzen & Associates, Boston, MA, for Plaintiff.

Jeffrey D. Adams, Juan S. Lopez, Wayne E. George, Parker Ibrahim & Berg, LLP, Christopher J. Somma, Seyfarth Shaw, Boston, MA, for Defendants.

AMENDED MEMORANDUM OF DECISION^*

WILLIAM G. YOUNG, DISTRICT JUDGE

I. INTRODUCTION

This suit, removed from the Massachusetts Superior Court sitting in and for the County of Middlesex, is the second episode in this Court of the saga of Eugene Flinn ("Flinn") and his allegedly stolen fortune. See Flinn v. Minnesota Life Ins. Co., Civ. A. No. 18-10868-WGY, 353 F.Supp.3d 110, 113–14, 2018 WL 5982021, at *1 (D. Mass. Nov. 14, 2018) ; Notice of Removal, Flinn v. FMR LLC, Civ. A. No. 18-10970-WGY (D. Mass. May, 14, 2018), ECF No. 1. This Court need only make a cameo appearance in this episode, however, because it lacks subject matter jurisdiction over Flinn's cause. Therefore, the Court remands the case to Massachusetts Superior Court for it to unspool in full.

II. BACKGROUND

The Court briefly summarizes Flinn's allegations relating to subject matter jurisdiction.¹ After Flinn's wife, Joyce Flinn, passed away, his sister-in-law, Joan Oliveira ("Oliveira"), convinced him that his wife had left all her assets to Oliveira in a will. Compl. Jury Demand ("Compl.") ¶ 15, ECF No. 1-1. Flinn now asserts that his wife passed away intestate, Compl. ¶ 12, and that Oliveira stole from Flinn's estate assets due to pass to him, Compl. ¶ 22.

Flinn alleges that Oliveira squirreled away more than $ 800,000 of Flinn's funds in Santander Bank, N.A. ("Santander Bank") accounts. Compl. ¶¶ 24-25. According to Flinn, she set up a fiduciary account in Flinn's name, using a forged power of attorney for Flinn. Compl. ¶¶ 19, 21, 24. Flinn further asserts that Santander Bank and its holding company, Santander Holdings USA, Inc. ("Santander Holdings" and, collectively with Santander Bank, "Santander") stood by while Oliveira pillaged the account for her personal expenses. Compl. ¶¶ 17-41. Flinn alleges that Oliveira frittered away all the account's cash on herself, her husband, and her mother -- and that she never once paid Flinn from the account. Compl. ¶¶ 25-26, 41.

Flinn discovered Oliveira's alleged fraud and filed a state court suit against her in May 2015. Compl. And Jury Demand, Flinn v. Oliveira, Civ. A. No. 15-3581 (Mass. Super. Ct. May 26, 2015), Dkt. No. 1. Oliveira eventually filed for bankruptcy, leading Flinn to "recover[ ] only a fraction of the funds stolen." Compl. ¶¶ 45-46. Flinn subsequently initiated this suit in Middlesex Superior Court against Santander on June 25, 2018. Compl. 1. In this action, Flinn alleges that Santander is liable to him for negligence, breach of contract, various violations of Massachusetts law governing bank deposits, conversion, breach of fiduciary duty, and violation of the Massachusetts Consumer Protection Act, Massachusetts General Laws chapter 93A ("Chapter 93A"). Compl. ¶¶ 53-149.

Although Flinn's complaint alleges that both Santander entities maintain principal places of business in Boston, Compl. ¶¶ 4-6, Santander removed the case to this Court in July 2018. Notice of Removal ("Notice"), ECF No. 1. Santander asserted that diversity jurisdiction obtained because Santander Bank's home office is in Delaware. Notice ¶ 5 (citing 12 U.S.C. § 1464(x) ; Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 306, 126 S.Ct. 941, 163 L.Ed.2d 797 (2006) ; Roberts v. Santander Bank, N.A., 141 F.Supp.3d 164, 165 (D. Mass. 2015) (Burroughs, J.) ). Santander neither controverted Flinn's allegation that Santander Holdings' principal place of business is in Boston nor claimed that Flinn fraudulently joined Santander Holdings to destroy diversity. See generally Notice; Compl. ¶¶ 5-6.

Santander moved to dismiss the complaint for failure to state a claim on October 30, 2018, Defs.' Mot. Dismiss Pl.'s Compl., ECF No. 18, and the parties fully briefed the motion, Defs.' Mem. Law Supp. Mot. Dismiss Pl.'s Compl. ("Santander Mem."), ECF No. 19; Pl.'s Mem. Law. Supp. Opp'n Defs.' Mot. Dismiss ("Flinn's Opp'n"), ECF No. 23; Defs.' Reply Mem. Resp. Pl.'s Mem. Law. Supp. His Opp'n Defs.' Mot. Dismiss Pl.'s Compl. ("Santander Reply"), ECF No. 27. While Flinn did not move to remand, he observed in his opposition to Santander's motion to dismiss that "the Defendants do not dispute that Santander Holdings has a principal place of business in Massachusetts, and therefore, knew that removal was improper in the first instance." Flinn's Opp'n 3.

III. ANALYSIS

Although Flinn does not challenge this Court's subject matter jurisdiction, this Court may consider the issue on its own motion. See 28 U.S.C. § 1447(c) ; Miara v. First Allmerica Fin. Life Ins. Co., 379 F.Supp.2d 20, 26 (D. Mass. 2005) (citing Wisconsin Dep't of Corr. v. Schacht, 524 U.S. 381, 392, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998) ). Here, the Court remands the case because no party disputes that both Flinn and Santander Holdings are Massachusetts citizens, thereby destroying diversity. Compl. ¶¶ 1, 6. Nor does Flinn's complaint furnish any other grounds for subject matter jurisdiction. Cf. Flinn, 353 F.Supp.3d at 117–18, 2018 WL 5982021, at *4 (determining that the Court had diversity jurisdiction where a federal question -- the defendants' proposed basis of removal jurisdiction -- was absent (citing Sexual Minorities Uganda v. Lively, 899 F.3d 24, 32 (1st Cir. 2018) ).

A. Diversity Jurisdiction

In its Notice of Removal, Santander suggests solely that diversity of citizenship provides this Court with subject matter jurisdiction. Notice ¶ 3 (citing 28 U.S.C. § 1332 ). " Section 1332(a)(1) provides that this Court ‘shall have original jurisdiction over all civil actions where the matter in controversy exceeds the sum or value of $ 75,000, exclusive of interests and costs, and is between citizens of different states.’ " Wolf v. Altitude Costa LLC, 347 F.Supp.3d 106, 108–09, 2018 WL 5984109, at *2 (D.P.R. 2018). Where, as here, a plaintiff sues two defendants, "the presence of but one nondiverse party divests the district court of original jurisdiction over the entire action." See DCC Operating, Inc. v. Siaca (In re Olympic Mills Corp.), 477 F.3d 1, 6 (1st Cir. 2007) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806) ).

Santander Holdings and Flinn are both Massachusetts citizens, thereby destroying complete diversity. Compl. ¶¶ 1, 6; see also Jon Chesto, Scott Powell Is Running Santander Under Less Stress, Boston Globe (Nov. 11, 2018), https://www.bostonglobe.com/business/2018/11/11/running-santander-under-less-stress/woazzP2nR6YF83MJCa7oGM/story.html (describing "Santander US chief executive's quarters overlooking Boston's State Street"). Therefore, Santander Holdings' presence divests this Court of subject matter jurisdiction.²

B. Federal Question Jurisdiction

At the hearing, Santander attempted to shift course and defended removal on federal question jurisdiction grounds. See 28 U.S.C. § 1331 (providing federal district courts with "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States"). Where, as here, the complaint contains only state law claims, "federal [question] jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress." See Gunn v. Minton, 568 U.S. 251, 258, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013) (citing Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 313–14, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005) ). Alternatively, "Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Lawless v. Steward Health Care Sys., LLC, 894 F.3d 9, 17 (1st Cir. 2018) (observing that the Labor Management Relations Act, 29 U.S.C. § 185(a), completely preempts state law claims relating to collective bargaining agreements) (quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63–64, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) ).

Santander implicitly spurned reliance on the former theory by proffering only that Lawless legitimizes federal question jurisdiction here.³ The Court observes that Flinn's complaint fails at Gunn's first prong, for it does not "necessarily raise[ ]" a federal issue. See Gunn, 568 U.S. at 258, 133 S.Ct. 1059. True, the complaint's Chapter 93A counts allege Santander violated the Gramm-Leach-Bliley and Federal Bank Secrecy acts. See Compl. ¶¶ 128-29 (citing 15 U.S.C. § 6801 et. seq. ; 31 U.S.C. § 5311 ; 31 C.F.R. § 1020.220 et. seq. ). But Chapter 93A claims do not require proof of a violation of a federal statute. See Mass. Gen. Laws ch. 93A § 2(a) ; cf. McDermott v. Marcus, Errico, Emmer & Brooks, P.C., 775 F.3d 109, 122-24 (1st Cir. 2014) (citing Klairmont v. Gainsboro Rest., Inc., 465 Mass. 165, 987 N.E.2d 1247 (2013) ) (observing an act violates Chapter 93A if it is either unfair or deceptive or if an independent Massachusetts or federal statute states that its breach violates Chapter 93A or the Federal Trade Commission Act). Consequently, Santander did not misfire when it forsook reliance on Gunn generating jurisdiction.

But it did misfire for two reasons when it compared Flinn's complaint to that of the Lawless plaintiff. First, the cases' facts clash, so Lawless does not directly control. There, the First Circuit in Lawless determined that the Labor Management Relations Act provided the sole recourse for a plaintiff seeking unpaid wages under a collective bargaining agreement, 894 F.3d at 18-19, whereas Flinn does not invoke any such labor issues here.

Second, and...