Haun v. Retail Credit Co.

• Decision Date: 01 October 1976
• Docket Number: Civ. A. No. 76-773.
• Parties: Gerald M. HAUN, Plaintiff, v. RETAIL CREDIT COMPANY, now known as Equifax, Inc., d/b/a Equifax Services, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

420 F. Supp. 859

Gerald M. HAUN, Plaintiff, v. RETAIL CREDIT COMPANY, now known as Equifax, Inc., d/b/a Equifax Services, Defendant.

Civ. A. No. 76-773.

United States District Court, W. D. Pennsylvania.

October 1, 1976.

Charles F. Gilchrest, Sharon, Pa., for plaintiff.

John P. McComb, Jr., Pittsburgh, Pa., Ronald T. Heiman, Sharon, Pa., for defendant.

OPINION

SNYDER, District Judge.

Plaintiff commenced an action in the Court of Common Pleas of Mercer County, Pennsylvania, seeking recovery under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (1970) hereinafter FCRA and certain related causes of action.¹ Defendant answered in State Court and then filed a petition for removal to this Court in accordance with 28 U.S.C. § 1446 (1970). Plaintiff now requests a remand to the State Court, alleging that FCRA cases are not removable² and that, in any event, Defendant waived his right to remove by pleading in the State Court.

I. THE STATUTORY LANGUAGE

An action brought in a state court over which federal district courts also have original jurisdiction may be removed to a federal court under 28 U.S.C. § 1441(a) (1970) "except as otherwise expressly provided by Act of Congress." This statute reflects a longstanding Congressional policy of providing defendants as well as plaintiffs access to a federal forum in cases of concurrent state and federal jurisdiction³ unless Congress has created an explicit statutory exception for special circumstances. Such exceptions are few, and when Congress has deemed that exceptional considerations warrant a removal prohibition it has manifested its intent by clear and unambiguous statutory language. See 28 U.S.C. §§ 1445(a) (FELA cases "may not be removed"), 1445(b) (suit against a common carrier for shipping damages "may not be removed to any district court of the United States unless the matter in controversy exceeds $3,000"), 1445(c) (workmen's compensation cases "may not be removed"); Securities Act of 1933, 15 U.S.C. § 77v ("no case . . . brought in any State court of competent jurisdiction shall be removed"); and Bankruptcy Act, 11 U.S.C. § 205(j) ("Proceedings under this section . . . shall not be grounds for the removal").

The specific issue presented here is whether Congress intended such a removal exception in Section 1681p of the FCRA when it provided that suit "may be brought in any appropriate United States district court without regard to amount in controversy, or in any other court of competent jurisdiction . . .." This Court has been referred to only one other case directly on point. In Ruth v. Westinghouse Credit Co., Inc., 373 F.Supp. 468 (W.D.Okl.1974), the district court relied on cases interpreting similar language in the Fair Labor Standards Act, 29 U.S.C. § 219 (1970) hereinafter FLSA as a removal prohibition and thus held FCRA cases nonremovable.

Analysis of FLSA cases does not compel such a conclusion, for courts are divided on whether Congress intended a removal prohibition in the FLSA.⁴ Moreover, although the FSLA and the FCRA are similar in that both allow suit in state or federal court, the language of the two statutes is not identical. The FLSA permits a plaintiff to "maintain" an action in any other court of competent jurisdiction, whereas the FCRA provides that suit "may be brought" in any other court of competent jurisdiction. This slight change in language produces more than a slight change in meaning. The word "maintain" arguably carries the connotation that an action may not only be commenced but also carried on to conclusion.⁵ Thus, one may argue that permitting a plaintiff to "maintain" his FLSA suit in a state court is logically inconsistent with permitting the defendant to remove the action to federal court under § 1441(a). Therefore, when Congress used the word "maintain", it intended to create an express exception to the removal statute.⁶

The FLSA language presents a close question as to whether a removal prohibition was actually intended, but to hold that the FCRA language "may be brought . . . in any other court of competent jurisdiction" produces the same logical inconsistency with § 1441(a) would require a strained interpretation of the FCRA language. Permitting a suit to be "brought" in a particular court allows the plaintiff to commence an action in that court, but it does not connote an assurance that he will be able to keep it there.⁷ Congress intended the word "brought" to mean no more than its usual connotation of "commenced" when it provided in § 1441(a) for removal of cases "brought in a State court", and the FCRA contains no indication in its language or in its legislative history that Congress intended the word to carry any other significance there. The only purpose of the language in question is to permit concurrent jurisdiction, and the mere provision of concurrent jurisdiction does not effect a guarantee against removal. (See, e. g., Section 77v of the Securities Act of 1933, supra, in which Congress provided for concurrent jurisdiction but, to create a bar to removal, deemed it necessary to also include specific language prohibiting removal. The FCRA is void of such express language.)

The Court is not unaware of the policy issue presented here. Some courts have noted in FLSA cases that the amount in controversy may be small and some plaintiffs in rural areas may be "removed" out of a suit if they are forced to suffer the expense and inconvenience of maintaining their suit in a federal court many miles away. Therefore, they contend that Congress intended the FLSA to provide not only a broad basis for relief, but also a broad enforcement jurisdiction in a court of plaintiff's choosing, protected from a defendant's veto of forum.⁸

The FCRA also provides a broad right of relief and enforcement jurisdiction, cases may involve small amounts, and removal may create inconveniences and additional expenses for some plaintiffs. But these considerations are not so unique to FCRA cases that they require a strained inference from language creating concurrent jurisdiction that Congress intended to give FCRA plaintiffs special protection from removal, especially when Congress has been so explicit in creating exceptions in other situations. If Congress were concerned about a particular danger of removal frustrating the ability of plaintiffs to successfully recover under the FCRA because of the peculiar nature of FCRA cases, it could easily have provided express protections. (See 28 U.S.C. § 1445(b), supra.)

II. WAIVER

Since we conclude that the FCRA contains no express removal prohibition, we must now turn to Plaintiff's alternative contention that Defendant waived his right to remove by answering in state court before filing his removal petition. It has been stated that any litigation of the merits of the case or other indication of submission to state court jurisdiction, by answer or otherwise, constitutes a waiver of the right to remove. See Vendetti v. Schuster, 242 F.Supp. 746, 754 (W.D.Pa.1965); General Phoenix Corp. v. Maylon, 88 F.Supp. 502, 503 (S.D.N.Y.1949). Careful reading of the cases, however, suggests that such a statement is overbroad. Courts have found a waiver of the right to remove when a defendant attempts to experiment with the merits of his case in state court and then use removal to get a second chance or "alternative appeal" route in federal court, Rosenthal v. Coates, 148 U.S. 142, 13 S.Ct. 576, 37 L.Ed. 399 (1893); In re 73rd Precinct Station House in Borough of Brooklyn, City of New York, 329 F.Supp. 1175, 1178 (E.D. N.Y.1971); Daugherty v. Sharp, 171 F. 466 (6th Cir. 1908), or when the defendant's conduct clearly manifests an intent to submit to state court jurisdiction and have the case tried there. See Sood v. Advanced Computer Techniques Corp., 308 F.Supp. 239 (E.D.Va.1969) (filing a permissive counterclaim in state court); Briggs v. Miami Window Corp., 158 F.Supp. 229 (M.D.Ga. 1956) (filing a permissive cross-action in state court). The majority of courts seem to have held that preliminary conduct by a defendant short of his actual litigation of the merits or his voluntary invocation of state court jurisdiction for his own purposes does not constitute a waiver of his right to remove. See Malave v. Sun Life Assurance Co. of Canada, 392 F.Supp. 51 (D.P.R.1975) (motion to extend time to answer in state court is not a waiver); Genie Machine Products, Inc. v. Midwestern Machinery Co., 367 F.Supp. 897 (W.D.Mo.1974) (general appearance and filing a bond to discharge attachment is not a waiver); Champion Brick Co. of Baltimore County v. Signode Corp., 37 F.R.D. 2 (D.Md.1965) (filing an answer is not a waiver); Parkhill Produce Co. v. Pecos Valley Southern Ry., 196 F.Supp. 404 (S.D.Tex.1961) (filing a compulsive counterclaim is not a waiver); Markantonatos v. Maryland Drydock Co., 110 F.Supp. 862 (S.D.N.Y.1953) (general appearance, filing answer, and serving notice to examine plaintiff is not a waiver).

These cases are consistent with the removal procedure set forth by Congress. The purpose of § 1446(b) is to provide a uniform and definite time for a defendant to remove an action. Although waiver is possible within the 30-day time limit proscribed in § 1446(b), only conduct clearly and unequivocally inconsistent with removal should be interpreted as an intent to waive the right to remove. Genie Machine Products, Inc. v. Midwestern Machinery Co., supra; Champion Brick Co. of Baltimore County v. Signode Corp., supra; Hildreth v. General Instrument, Inc., 258 F.Supp. 29 (D.S.C.1966); Davila v. Hilton Hotels Intern., 97 F.Supp. 32 (D.P.R.1951). By merely filing an answer in state court a defendant has not acted so clearly inconsistent with his right to remove. Champion Brick Co. of Baltimore County v. Signode Corp., supra; Markantonatos v. Maryland Drydock Co., supra. Filing an answer carries no inference about the defendant's intent to remove, nor does it constitute a litigation of the merits of...