Keller v. Bank of Am., N.A.

• Decision Date: 13 January 2017
• Docket Number: Case No. 16–2538
• Citation: 228 F.Supp.3d 1247
• Parties: Eric David KELLER, Plaintiff, v. BANK OF AMERICA, N.A., Defendant.
• Court: U.S. District Court — District of Kansas

228 F.Supp.3d 1247

Eric David KELLER, Plaintiff,

v.BANK OF AMERICA, N.A., Defendant.

Case No. 16–2538

United States District Court, D. Kansas.

Signed January 13, 2017

Eric David Keller, Lawrence, KS, pro se.

Michael T. Hosmer, McGuireWoods, LLP, Charlotte, NC, Toby Crouse, Foulston Siefkin LLP, Overland Park, KS, for Defendant.

MEMORANDUM & ORDER

CARLOS MURGUIA, United States District Judge

This matter comes before the court upon defendant Bank of America, N.A.'s Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) (Doc. 9) and plaintiff Eric David Keller's Motion to Remand (Doc. 11).

I. Plaintiff's motion to remand

Plaintiff seeks to remand this case to the District Court of Douglas County, Kansas, because he argues that his claims are all state law causes of action. (Doc. 11, at 1–2.) Plaintiff brings claims for (1) fraudulent business practice; (2) neglect and lack of concern for consumer credit; (3) identity theft; and (4) personal injury. (Doc. 1–1, at 2.) Defendant removed this action because it claims that plaintiff's "neglect and lack of concern for consumer credit" claim is completely preempted by the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681s–2(a), 1681t(b)(1)(F), and it argues that the court should exercise supplemental jurisdiction over plaintiff's remaining three claims because they arise out of the same operative facts. (Doc. 1, at 1–2.)

A. Legal standard for motions to remand

"Federal courts are courts of limited jurisdiction; they must have a statutory basis for their jurisdiction." Dutcher v. Matheson , 733 F.3d 980, 984 (10th Cir. 2013) (quoting Rural Water Dist. No. 2 v. City of Glenpool , 698 F.3d 1270, 1274 (10th Cir. 2012) ). A federal court has jurisdiction over a claim if it is one "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Civil actions filed in state courts over which district courts 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). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).

The well-pleaded complaint rule usually governs whether a claim arises under federal law. Sharp v. Wellmark, Inc. , 744 F.Supp.2d 1191, 1194 (D. Kan. 2010). It provides that federal jurisdiction lies where plaintiff's "well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Smoky Hills Wind Farm, LLC v. Midwest Energy, Inc. , No. 15-1116-JTM, 2015 WL 3833378, at *2 (D. Kan. June 22, 2015) (quoting Morris v. City of Hobart , 39 F.3d 1105, 1111 (10th Cir. 1994) ). "Even if a federal question appears on the face of a well–pleaded complaint, federal jurisdiction is not automatic." Nicodemus v. Union Pac. Corp. , 440 F.3d 1227, 1232 (10th Cir. 2006). For removal to be appropriate, the federal question must be "contested and substantial." Id. (quoting Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg. , 545 U.S. 308, 312, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005) ).

The well-pleaded complaint rule allows a plaintiff to be the master of his own claim by allowing him to avoid federal jurisdiction by choosing to raise only state law claims. Id. Potential defenses are generally not a sufficient basis for removal. Dutcher , 733 F.3d at 985. "As a general rule, absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege a federal claim." Beneficial Nat'l Bank v. Anderson , 539 U.S. 1, 6, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003).

The party claiming jurisdiction has the burden to show it by a preponderance of the evidence. Karnes v. Boeing Co. , 335 F.3d 1189, 1193 (10th Cir. 2003). There is a presumption against finding federal jurisdiction, until the party invoking it makes an adequate showing. Id. at 1194. "Doubtful cases must be resolved in favor of remand." Colbert v. Union Pac. R. R. Co. , 485 F.Supp.2d 1236, 1239 (D. Kan. 2007) (quoting Thurkill v. The Menninger Clinic, Inc. , 72 F.Supp.2d 1232, 1234 (D. Kan. 1999) ).

B. Complete preemption

Defendant argues that this case is removable because plaintiff's state law credit reporting claim is preempted by the FCRA. The complete preemption exception to the well-pleaded complaint rule provides that "when a federal statute wholly displaces the state-law cause of action through complete pre-emption," the state claim can be removed. Sharp , 744 F.Supp.2d at 1195 (quoting Beneficial Nat'l Bank , 539 U.S. at 8, 123 S.Ct. 2058 ). Complete preemption differs from ordinary preemption because it involves a "situation in which a federal law not only preempts a state law to some degree but also substitutes a federal cause of action for the state cause of action, thereby manifesting Congress's intent to permit removal." Colbert , 485 F.Supp.2d at 1240 (quoting Schmeling v. NORDAM , 97 F.3d 1336, 1342 (10th Cir. 1996) ). To employ the exception, a court must find that a claim falls within the scope of a federal statute that Congress intended to completely displace all state law on the issue and comprehensively regulate the area. Hansen v. Harper Excavating, Inc. , 641 F.3d 1216, 1221 (10th Cir. 2011).

"Complete preemption is a rare doctrine, one that represents an extraordinary pre-emptive power." Devon Energy Prod. Co. v. Mosaic Potash Carlsbad, Inc. , 693 F.3d 1195, 1204 (10th Cir. 2012) (internal citations omitted). The United States Supreme Court warns not to imply the doctrine lightly and has recognized complete preemption in only three areas: § 301 of the Labor Management Relations Act of 1947 ("LMRA"); § 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"); and actions for usury against national banks under the National Bank Act. Id. (citing Hanson , 641 F.3d at 1221 ); Avco Corp. v. Aero Lodge No. 735 Ass'n of Machinists and Aerospace Workers , 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968) (LMRA); Metro. Life Ins. Co. v. Taylor , 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (ERISA); and Beneficial Nat. Bank , 539 U.S. 1, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003) (National Bank Act). There is a two-part test to determine whether complete preemption is appropriate: (1) whether the federal regulation at issue preempts the state law plaintiff relies on; and (2) whether Congress intended to allow removal in such cases, manifested by the creation of a federal cause of action to enforce the regulation. Devon , 693 F.3d at 1205. For complete preemption to apply, the federal remedy must provide some vindication for the same basic right or interest alleged by the plaintiff. Id. at 1207.

C. Discussion

The FCRA's purpose is "to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information...." 15 U.S.C. § 1681(b). The "FCRA enables consumers to protect their reputations, and to protect themselves against the dissemination of false or misleading credit information." Holland v. GMAC Mortg. Corp. , No. 03-2666-CM, 2006 WL 1133224, at *11 (D. Kan. Apr. 26, 2006). "The FCRA places distinct obligations on three types of entities: (1) consumer reporting agencies; (2) users of consumer reports; and (3) furnishers of information." Aklagi v. Nationscredit Fin. , 196 F.Supp.2d 1186, 1192 (D. Kan. 2002).

Defendant argues that the FCRA completely preempts state law claims based on a furnisher's alleged failure to investigate a consumer's credit dispute. (Doc. 15, at 3.) Although plaintiff does not specifically claim that defendant is a "furnisher," plaintiff alleges sufficient facts that he is a consumer within the meaning of the statute, and that defendant has provided incorrect information concerning plaintiff's bank account.

Defendant does not claim that it is a consumer reporting agency ("CRA") or user of consumer reports. "The FCRA does not define the term ‘furnisher,’ but courts have defined the term as an entity which transmits information concerning a particular debt owed by a particular consumer to consumer reporting agencies." Jarrett v. Bank of Am. , 421 F.Supp.2d 1350, 1352 n.1 (D. Kan. 2006). At this stage in the litigation, the court makes all reasonable inferences in plaintiff's favor, and concludes that plaintiff's complaint adequately alleges that defendant is a furnisher for purposes of the FCRA. Cf. Jarrett , 421 F.Supp.2d at 1351–52. Therefore, the obligations set forth in 15 U.S.C. § 1681s–2 apply to defendant as a furnisher of credit information. See Aklagi , 196 F.Supp.2d at 1192.

Plaintiff claims that there is an existing account in his name at Bank of America, defendant's bank, but he never opened or attempted to open the account. (Doc. 1–1, at 1.) Plaintiff states that he contacted defendant about this account. (Id. at 2.) Plaintiff claims that defendant was negligent by not taking action to resolve the matter and that he has been unable to continue banking at a preexisting financial institution because of defendant's negligence. He claims that this account is negatively affecting his credit. In plaintiff's response, he alleges that defendant failed to investigate and resolve his credit dispute. (Doc. 12, at 1.) Based on these allegations, the court finds that plaintiff is challenging defendant's conduct after defendant was notified of plaintiff's dispute.

Section 1681s–2 of the FCRA identifies two types of obligations owed by furnishers of information: "those addressing their duty ‘to provide accurate information’ to credit reporting agencies, as stated in [s]ection 1681s–2(a); and their duty under [s]ection 1681s–2(b),...