Greer v. Majr Financial Corp., No. CIV. A. 399CV803LN.

• Citation: 105 F.Supp.2d 583
• Decision Date: 22 June 2000
• Docket Number: No. CIV. A. 399CV803LN.
• Parties: Leslie GREER and Beulah Greer, Plaintiffs, v. MAJR FINANCIAL CORPORATION; Mccune and Associates, Inc.; B & M and Associates, Inc.; Hurley State Bank; Interstate Engineering, et al., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

105 F.Supp.2d 583

Leslie GREER and Beulah Greer, Plaintiffs, v. MAJR FINANCIAL CORPORATION; Mccune and Associates, Inc.; B & M and Associates, Inc.; Hurley State Bank; Interstate Engineering, et al., Defendants.

No. CIV. A. 399CV803LN.

United States District Court, S.D. Mississippi, Jackson Division.

June 22, 2000.

Edward Blackmon, Jr., Blackmon, Blackmon & Evans Canton, Richard H. Taylor, Jackson, Taylor & Martino, Mobile, AL, Marc L. Boutwell, Boutwell Law Office, Lexington, MS, for Plaintiffs.

Fred Krutz, III, Daniel J. Mulholland, Sheila Bossier, Forman, Perry, Watkins, Krutz & Tardy Jackson, MS, David M. Ott, Bryan, Nelson, Randolph and Weathers, Hattiesburg, MS, for Defendants.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This cause is before the court on the motion of plaintiffs Leslie Greer and Beulah Greer to remand this case to the Circuit Court of Holmes County, Mississippi. Defendants Hurley State Bank and Interstate Engineering separately responded in opposition to plaintiffs' motion. The court has considered the parties' arguments on the motion in the light of the record in the case and concludes, for reasons which follow, that plaintiffs' motion is due to be granted.

Plaintiffs filed their complaint in state court on October 21, 1999 asserting various state law causes of action relating to defendants' alleged conduct in connection with their solicitation, sale and financing of a vacuum cleaning system to and for plaintiffs. In the recitation of the facts underlying their claims for relief, plaintiffs alleged that in January 1999, Bobby McCune, acting as an agent for "defendants", approached them and persuaded them to purchase a "Tri-Star" Cleaning System (vacuum cleaner) manufactured and distributed by defendant Interstate Engineering. According to the complaint, McCune represented to plaintiffs that the total purchase price for the vacuum cleaner would be $1605, and that plaintiffs would own the vacuum cleaner after making monthly payments of approximately $45 for a certain number of years. He also told them they could cancel the transaction within three days. Plaintiffs state that based on McCune's representations, they agreed to purchase the vacuum cleaner and signed certain documentation to finance the purchase through defendant, Hurley State Bank. Plaintiffs allege that prior to the expiration of three days, they attempted to contact McCune to cancel the transaction "as prescribed by law" and yet he refused to return their calls or to take back the vacuum cleaner and cancel their purchase agreement. Plaintiffs further recite that "had they known the true nature of the financing details relative to this purchase, specifically, that the financing was offered as a revolving credit card account (not a simple interest loan) and only a few dollars of each payment was applied toward the principle [sic] of the purchase price of the TriStar cleaning system, the Plaintiffs would not have entered into said agreement." They charge that McCune's representations "were false and made with the intent to deceive the Plaintiffs, and further, that the Defendants had an obligation to inform them of the entire details concerning financing, particularly the fact that most of the monies paid from the approximately $45.00 monthly payment would go toward finance charges as opposed to the principle [sic], and that the system would not be paid off in a certain number of years."

Based on these allegations, plaintiffs set forth in their complaint seven state law causes of action. Five of these, as described by plaintiffs in their complaint, are varieties of "civil fraud" under Mississippi law, and include "Reckless and Intentional Misrepresentation"; "Innocent Misrepresentation"; "Willful and Wanton Misrepresentation"; "Deceit"; and "Suppression". Four of these five "civil fraud" claims are premised on McCune's alleged affirmative misrepresentations of "material facts" relating to the details of the financing for the transaction, and one, the cause of action for "suppression", is based on McCune's allegedly having "concealed and withheld material facts from the Plaintiffs that [the] purchase agreement [they executed] was, in fact, a revolving credit card application and that their minimum payments were, in fact, primarily finance charges" and upon defendants' further having "precluded the Plaintiffs from exercising their right to cancel [the] transaction as prescribed by law." In addition to these claims for relief, plaintiffs assert a claim for "Negligence and Wantonness" based broadly on "defendants"' conduct in organizing, implementing and instigating the solicitation, sale and financing of the vacuum cleaner, and a final cause of action for "Conspiracy" by defendants to commit the wrongful acts identified in the other six counts.

Obviously anticipating that defendants might attempt to remove the case to federal court, plaintiffs in their complaint specifically stated as follows:

This is a combination contract, tort, and statutory action brought under the laws of the State of Mississippi, and under the common law of the State of Mississippi. The Plaintiffs herein bring this action based entirely upon the common laws and statutory laws of the State of Mississippi, and the Plaintiffs herein do not rely upon any federal statute, any federal: question, and do not seek relief under any federal statute or law.

To the extent that the Defendants will contend that the Plaintiffs are seeking relief under federal laws or federal questions, the Plaintiffs expressly deny said contentions, and the Plaintiffs expressly waive any relief under any federal laws or any federal question concerning the allegations of this Complaint, whether said allegations are pled or not.

Despite their assertions in this regard, defendant Hurley State Bank, joined by Interstate Engineering (the only other defendant then served), timely removed the case to this court claiming in the removal petition this court has federal question jurisdiction over plaintiffs' complaint under 28 U.S.C. § 1331, since plaintiffs' complaint, while not expressly alleging a violation of any federal law, effectively charges violations of numerous federal statutes, including the Truth in Lending Act, 15 U.S.C. § 1601 et seq.; the Fair Debt Collection Practices Act, 15 U.S.C. § 1692a et seq.; the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.; the Credit Card Disclosure Act, 15 U.S.C. § 1610, 1637; the Fair Credit Billing Act, 15 U.S.C. § 1666 et seq.; and the National Banking Act, 12 U.S.C. § 85 et seq. Plaintiffs promptly moved to remand, insisting that they clearly have not asserted any claim arising under federal law so that there is no basis for federal jurisdiction.

Under 28 U.S.C. § 1441, a defendant has a right to remove from state to federal court any case over which the federal court would have had original jurisdiction. See 28 U.S.C. § 1441(a)¹; Rivet v. Regions Bank of Louisiana, 108 F.3d 576, 582 (5th Cir.1997), rev'd on other grounds, 522 U.S. 470, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998) ("As a general proposition, removal hinges on whether a federal district court could have asserted original jurisdiction over the state court action had it initially been filed in federal court."). The district court's original jurisdiction is limited to cases involving diversity jurisdiction pursuant to 28 U.S.C. § 1332, and those involving federal question jurisdiction under 28 U.S.C. § 1331. The latter statute covers disputes "arising under the Constitution, laws or treaties of the United States." 28 U.S.C. § 1331. At issue on the present motion is whether any of plaintiffs' claims "arise under the Constitution, laws or treaties of the United States."²

Whether a claim "arises under" federal law so as to confer federal question jurisdiction under § 1331 is governed by the well-pleaded complaint rule, which "provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). Since the well-pleaded complaint rule provides for the determination of jurisdiction solely on the basis of the plaintiff's complaint, the rule makes the plaintiff "master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law." Id. at 392, 107 S.Ct. at 2429. Accordingly, even if both federal and state law provide a remedy to the plaintiff, the plaintiff can avoid federal jurisdiction by pleading state law — at the price, of course, of foregoing the federal remedies. Eastern States Health & Welfare Fund v. Philip Morris Inc., 11 F.Supp.2d 384, 389-91 (S.D.N.Y. 1998); see also Caterpillar, 482 U.S. at 392, 107 S.Ct. at 2425 (plaintiff, as master of his claim, "may avoid federal jurisdiction by exclusive reliance on state law"); see also State of New Jersey v. City of Wildwood, 22 F.Supp.2d 395, 401 (D.N.J. 1998) ("Even if the facts in plaintiff's complaint could establish a federal cause of action, the plaintiff's choice to proceed on purely state-law grounds in state court must be respected." (citations omitted)); Campbell v. General Motors Corp., 19 F.Supp.2d 1260, 1271 (N.D.Ala.1998) (plaintiff, as "`master to decide what law he will rely upon', .. has the prerogative to rely on state law alone, although both state and federal law may give him a cause of action").

The well-pleaded complaint rule, though, is not without exceptions, and while "[i]n most cases, claims pled under state law are to be taken at face value for purposes of evaluating jurisdiction[,]" there are "two types of situations [in which] the court may disregard the state law facade of a complaint, thereby bringing to the surface the federal claims lying beneath." Wynn v. Philip Morris Inc., 51 F.Supp.2d 1232, 1238 (N.D.Ala.1999).

The first instance in which federal jurisdiction can be exposed in a...