Hood v. Jpmorgan Chase & Co.
| Decision Date | 31 July 2013 |
| Docket Number | Civil Action Nos. 3:12–cv–565–WHB–LRA, 3:12–cv–571,3:12–cv–572,3:12–cv–573,3:12–cv–575.,3:12–cv–574 |
| Citation | 958 F.Supp.2d 681 |
| Court | U.S. District Court — Southern District of Mississippi |
| Parties | Jim HOOD, Attorney General of The State of Mississippi, ex rel. The State of Mississippi, Plaintiff v. JPMORGAN CHASE & CO., and Chase Bank USA, N.A., Defendants Jim Hood, Attorney General of The State Of Mississippi, ex rel. The State Of Mississippi, Plaintiff v. HSBC Bank Nevada, N.A. HSBC Card Services, Inc.; and HSBC Bank USA, N.A., Defendants Jim Hood, Attorney General of The State of Mississippi, ex rel. The State Of Mississippi, Plaintiff v. Citigroup Inc.; Citibank, N.A.; and Department Stores National Bank, Defendant Jim Hood, Attorney General of The State of Mississippi, ex rel. The State of Mississippi, Plaintiff v. Discover Financial Services, Inc.; Discover Bank; DFS Services, L.L.C.; and American Bankers Management Company, Inc., Defendants Jim Hood, Attorney General of The State of Mississippi, ex rel. The State of Mississippi, Plaintiff v. Bank of America Corporation and FIA Card Services, N.A., Defendants Jim Hood, Attorney General of The State of Mississippi, ex rel. The State of Mississippi, Plaintiff v. Capital One Bank (USA) N.A., and Capital One Services, LLC, Defendants. |
OPINION TEXT STARTS HERE
George W. Neville, Geoffrey C. Morgan, Office of the Attorney General, Bridgette Williams Wiggins, Mississippi Attorney General's Office, Jackson, MS, Laura Jean Baughman, S. Ann Saucer, Baron & Budd, PC, Dallas, TX, for Plaintiff.
Alan Walter Perry, Phillip S. Sykes, Forman, Perry, Watkins, Krutz & Tardy, LLP, Mark H. Tyson, Stephen T. Masley, McGlinchey Stafford, PLLC, H. Hunter Twiford, III, Taylor Allison Heck, McGlinchey Stafford, Christopher Daniel Meyer, Dorsey R. Carson, Jr., Burr & Forman, LLP, Jackson, MS, Andrew Soukup, Robert D. Wick, Covington & Burling, LLP, David L. Permut, Goodwin Procter, LLP, Washington, DC, David W. Moon, Jason S. Yoo, Julia Strickland, Strook, Strook & Lavan, LLP, Los Angeles, CA, Elizabeth T. Bufkin, Jeffrey S. Dilley, William Kurt Henke, Henke Bufkin, Clarksdale, MS, Noah A. Levine, Robert W. Trenchard, Wilmer Cutler Pickering Hale and Dorr, LLP, New York, NY, Charles E. Griffin, Butler, Snow, O'Mara, Stevens & Cannada, PLLC, Ridgeland, MS, Markham R. Leventhal, Jorden Burt, LLP, Miami, FL, for Defendants.
This cause is before the Court on the Motions of Plaintiff to Remand. Having considered the pleadings, the attachments thereto, as well as supporting and opposing authorities, the Court finds the Motions are not well taken and should be denied.
In June of 2012, the State of Mississippi, by and through its Attorney General, Jim Hood (“Hood”), brought the following lawsuits in the Chancery Court for the First Judicial District of Hinds County, Mississippi “to protect citizen consumers of Mississippi”:
Jim Hood, Attorney General of the State of Mississippi, ex rel. the State of Mississippi v. JPMorgan Chase & Co. and Chase Bank USA, N.A. (“ Chase Action”)
Jim Hood, Attorney General of the State of Mississippi, ex rel. the State of Mississippi v. HSBC Bank Nevada, N.A.; HSBC Card Services, Inc.; and HSBC Bank USA, N.A. (“ HSBC Action”)
Jim Hood, Attorney General of the State of Mississippi, ex rel. the State of Mississippi v. Citigroup Inc.; Citibank, N.A.; and Department Stores National Bank (“ Citigroup Action”)
Jim Hood, Attorney General of the State of Mississippi, ex rel. the State of Mississippi v. Discover Financial Services, Inc.; Discover Bank; DFS Services, L.L.C.; and American Bankers Management Company, Inc. (“ Discover Action”)
Jim Hood, Attorney General of the State of Mississippi, ex rel. the State of Mississippi v. Bank of America Corporation and FIA Card Services, N.A. (“ BOA Action”)
Jim Hood, Attorney General of the State of Mississippi, ex rel. the State of Mississippi v. Capital One Bank (USA) N.A. and Capital One Services, LLC (“ Capital One Action”) 1Amended Complaints were filed in each lawsuit in August of 2012. The subject lawsuits are predicated on the following allegations:
These actions stem from the Defendants' marketing, selling, and administering to Mississippi consumers fee-based products, which are ancillary to their credit cards.
Defendants market such ancillary products as protection for consumers against improper or unauthorized charges on their credit cards, identity theft, and lost or stolen credit cards and/or as providing benefits in the event of unemployment or disability. Each ancillary product is marketed only to the Defendants' current card holders, and the products themselves are attached to the cardholders' specific account at issue.
Upon information and belief, when consumers apply for and receive Defendants' credit cards, a process is triggered whereby a consumer can unknowingly and unintentionally sign up to receive ancillary products.
Additionally, Defendants often enroll consumers in these products even though the consumers did not assent to pay for them. This process is referred to as “slamming.” Enrollment may be based on highly deceptive and misleading telemarketing calls, forged or non-existent mailers or online applications, or nothing at all. In each instance, unknowing consumers are hit with monthly fees without their meaningful consent or understanding that their credit card will be charged for these products. Defendants are in a position to do this because, unlike a typical marketer or seller, they are already the consumer's credit card company and already have their credit card number.
Further, for certain types of ancillary products ... that all offer similar coverage (hereinafter collectively referred to as “Payment Protection Plans” or “Plans”), that purport to pay the consumer's required minimum monthly payment for a limited period of time under certain triggering circumstances, such as involuntary unemployment, illness, or changes in family status, thus preventing the account from becoming delinquent, Defendants make no effort to determine whether consumers are even eligible for the benefits at the time of sale. As a consequence, Defendants bill ineligible Mississippi citizens for this coverage, even though their status at the time of enrollment prevents them from receiving benefits under the terms of these Payment Protection Plans.
The Defendants commit unfair and deceptive business practices and violate statutory and common law by charging consumers for ancillary products, including Payment Protection Plans, who either did not want them or were not entitled to benefit from them, and by the unfair and deceptive manner in which Defendants offer and administer claims for benefits by consumers.
As a result of these unfair and deceptive practices, Defendants have amassed substantial sums of money with virtually no benefits to Mississippi citizens who are nevertheless charged for these products month in and month out.
SeeChase Action, Am. Compl., ¶¶ 1–7; HSBC Action, Am. Compl., ¶¶ 1–7; Citigroup Action, Am. Compl., ¶¶ 1–7; Discover Action Am. Compl., ¶¶ 1–7; BOA Action Am. Compl., ¶¶ 1–7; Capital One Action Am. Compl., ¶¶ 1–7. The State further alleges that “[b]y marketing, promoting, advertising and selling Payment Protection Plans, Defendants have engaged in unfair methods of competition affecting commerce and unfair or deceptive trade practices” thereby violating the Mississippi Consumer Protection Act (“MCPA”), codified at Mississippi Code Annotated Section 95–24–1 et seq. See Chase Action, Am. Compl., ¶¶ 70–78; HSBC Action, Am. Compl., ¶¶ 71–79; Citigroup Action, Am. Compl., ¶¶ 71–79; Discover Action, Am. Compl., ¶¶ 75–83; BOA Action, Am. Compl., ¶¶ 70–78; Capital One Action, Am. Compl., ¶¶ 70–78. Through its Amended Complaints, the State of Mississippi seeks the following: (1) injunctive relief barring Defendants from engaging in unfair or deceptive practices that violate the MCPA; 2 (2) monetary judgments “for disgorgement and restitution of monies acquired by Defendants by means of any practice prohibited by the MCPA”; 3 (3) declarations that the alleged acts of Defendants constitute multiple violations 4 of the MCPA, and civil penalties for each alleged violation; 5 and (4) attorneys fees and costs as permitted under the MCPA as well as pre- and post-judgment interest.
Each of the lawsuits was removed to this Court. In their Notices of Removals, Defendants allege that the exercise of diversity-based federal subject matter jurisdiction is proper under the Class Action Fairness Act (“CAFA”), codified at 28 U.S.C. § 1332(d), because each of the subject lawsuits is a class action and/or a mass action under the terms of that Act. Defendants further allege that the exercise of federal question subject matter jurisdiction is proper because the state law claims alleged in the subject lawsuits are either (1) completely pre-empted under the National Bank Act (“NBA”), codified at 12 U.S.C. §§ 85–86, or the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDA”), codified at 28 U.S.C. § 1332(d); or (2) raise a substantial federal question that must be resolved in accordance with the NBA.
Following removal, Motions to Remand were filed in each of the subject lawsuits. The lawsuits were thereafter consolidated for the purpose of deciding those Motions. SeeChase Action, Order [Docket Nos. 19 and 20]. The lawsuits were later stayed pending a decision by the United States Court of Appeals for the Fifth Circuit in Mississippi ex re. Hood v. AU Optronics Corp., et al., Appeal No. 12–60704. See Order [Docket No. 24].
In deciding AU Optronics, the Fifth Circuit found, inter alia, that that parens patriae
lawsuit was a mass action over which federal subject matter jurisdiction could be exercised under the CAFA.6See Mississippi ex rel. Hood v. AU Optronics Corp., et al., 701 F.3d 796 (5th Cir.2012). After AU...
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...gross disparity between the amount charged and the benefit received are a challenge to the fees themselves. See Hood v. JPMorgan Chase & Co., 958 F.Supp.2d 681 (S.D.Miss.2013) (specifically disagreeing with W. Virginia ex rel. McGraw v. JPMorgan Chase & Co., 842 F.Supp.2d 984 (S.D.W.Va.2012......
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