Marquette Nat. Bank v. First Nat. Bank of Omaha, 4-76 Civ. 251.

• Decision Date: 19 November 1976
• Docket Number: No. 4-76 Civ. 251.,4-76 Civ. 251.
• Citation: 422 F. Supp. 1346
• Parties: MARQUETTE NATIONAL BANK OF MINNEAPOLIS, Plaintiff, v. FIRST NATIONAL BANK OF OMAHA et al., Defendants.
• Court: U.S. District Court — District of Minnesota

422 F. Supp. 1346

MARQUETTE NATIONAL BANK OF MINNEAPOLIS, Plaintiff, v. FIRST NATIONAL BANK OF OMAHA et al., Defendants.

No. 4-76 Civ. 251.

United States District Court, D. Minnesota, Fourth Division.

November 19, 1976.

John Troyer, and J. Patrick McDavitt, Levitt, Palmer, Bowen, Bearmon & Rotman, Minneapolis, Minn., for plaintiff.

Clay R. Moore and Frank A. Dvorak, Mackall, Crounse & Moore, Minneapolis, Minn., together with Donald J. Buresh, Swarr, May, Smith & Andersen, Omaha, Neb., for defendants First National Bank of Omaha and First of Omaha Service Corporation.

James W. Brehl, Maun, Hazel, Green, Hayes, Simon & Aretz, St. Paul, Minn., for defendant Credit Bureau of St. Paul, Inc.

MEMORANDUM ORDER

ALSOP, District Judge.

The plaintiff, Marquette National Bank of Minneapolis (Marquette Bank), is a national banking association located and having its principal place of business in Minneapolis, Minnesota. The defendant First National Bank of Omaha (Omaha Bank) is a national banking association located and having its principal place of business in Omaha, Nebraska. The defendant First of Omaha Service Corporation (Omaha Service Corporation) is a Nebraska corporation qualified to do business in Minnesota. The defendant Credit Bureau of St. Paul, Inc. (Credit Bureau) is a Minnesota corporation.

The case was commenced in the District Court of Hennepin County, Minnesota, by service of a summons and complaint on the Omaha Bank, the Omaha Service Corporation and the Credit Bureau. The Credit Bureau filed an answer. Pursuant to 28 U.S.C. § 1441 et seq., the defendants then joined to remove the case to this court. Subsequent to the filing of the removal petition, the plaintiff voluntarily dismissed as to the Omaha Bank. The plaintiff moves to remand.

The complaint sets forth the plaintiff's causes of action in five counts. Count I substantially alleges that through acts of the Omaha Service Corporation and the Credit Bureau the Omaha Bank has induced Minnesota residents to contract with the Omaha Bank's BankAmericard program and that the Omaha Bank's BankAmericard program assesses finance charges at rates in excess of those allowed by the Minnesota Bank Credit Card Act, Minn.Stat.Ann. § 48.185.¹

Count II, after repeating the allegations of Count I, alleges in effect that the defendants Omaha Service Corporation and the Credit Bureau have themselves violated and have conspired with the Omaha Bank to violate the Minnesota Bank Credit Card Act.

Count III, repeating all previous allegations, substantially alleges that the solicitation campaign conducted by the defendants on behalf of the Omaha Bank's BankAmericard program is carried on in violation of the Minnesota Deceptive Trade Practices Act, Minn.Stat.Ann. § 325.772. Specific deceptive trade practices are then alleged.

Count IV, repeating all previous allegations, alleges in effect that the defendants have violated and have conspired to violate both the Bank Credit Card Act and the Deceptive Trade Practices Act.

Count V, repeating all previous allegations, alleges that the defendants engaged in unfair competition and tortiously interfered with the plaintiff's contractual relationships with the plaintiff's BankAmericard customers.

The plaintiff seeks a permanent injunction, compensatory damages, and punitive damages.

Preliminarily, it should be noted that, in general, removability of an action under 28 U.S.C. § 1446 is to be determined as of the time the removal petition is filed. Therefore, the proceedings in a case subsequent to removal will not defeat federal jurisdiction. 1A J. Moore, Federal Practice ¶ 0.15712, at 155 (2d ed. 1974).

The determination of whether a case commenced in a state court may be removed to federal court is governed by the provisions of 28 U.S.C. § 1441:

(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States 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.

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

(c) Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction.

The first issue presented to the court is whether this court has removal jurisdiction based upon diversity of citizenship. Removal jurisdiction is keyed to original federal jurisdiction. Original jurisdiction in diversity cases in which the amount in controversy exceeds $10,000 requires that there be complete diversity. 28 U.S.C. § 1332. Removal jurisdiction requires both that there be complete diversity and that no defendant be a citizen of the forum state. 28 U.S.C. § 1441; 1A J. Moore, Federal Practice ¶ 0.1611, at 197, 205 (2d ed. 1974).

If the court were to accept the characterizations of the parties as plaintiff and defendant as contained in the complaint, it is clear that there would be neither original nor removal jurisdiction based on diversity of citizenship. There would be no original jurisdiction because both the plaintiff and the defendant Credit Bureau are citizens of Minnesota. There would be no removal jurisdiction because the defendant Credit Bureau is a citizen of Minnesota, and Minnesota is the state in which the action is brought.

It is also clear, however, that the characterizations of the complaint are not controlling if there has been fraudulent joinder. 1A J. Moore, Federal Practice ¶ 0.1611, at 199 (2d ed. 1974). Under such circumstances parties must be aligned according to their real interests. Boatmen's Bank v. Fritzlen, 135 F. 650 (8th Cir.), cert. denied, 198 U.S. 586, 25 S.Ct. 803, 49 L.Ed. 1174 (1905). Therefore, a defendant who is fraudulently joined is to be disregarded in determining the existence of diversity jurisdiction. 1A J. Moore, Federal Practice ¶ 0.1612, at 210 (2d ed. 1974). Whether the joinder is fraudulent or not depends on whether the plaintiff really intended to obtain a judgment against the defendant whose joinder is alleged to be fraudulent. Bolstad v. Central Surety & Ins. Corp., 168 F.2d 927 (8th Cir. 1948); Harrelson v. Missouri Pac. Transp. Co., 87 F.2d 176 (8th Cir. 1936); Huffman v. Baldwin, 82 F.2d 5 (8th Cir.), cert. denied, 299 U.S. 550, 57 S.Ct. 12, 81 L.Ed. 405 (1936); Leonard v. St. Joseph Lead Co., 75 F.2d 390 (8th Cir. 1935).

The plaintiff's complaint states causes of action based on conspiracy, deceptive trade practices and tortious interference with contractual relations against the Credit Bureau. Although it denies liability, the Credit Bureau admits certain of the acts complained of. It, therefore, seems that the plaintiff really intends to obtain a judgment against the Credit Bureau. Thus, the plaintiff's joinder of the Credit Bureau is not fraudulent, and removal on the basis of diversity of citizenship would be improper.

The second issue presented to the court is whether this court has removal jurisdiction based on a claim which, in fact, arises under the Constitution or laws of the United States. It is clear that the causes of action relating to conspiracy,² deceptive trade practices, unfair competition and tortious interference with contractual relations do not state claims arising under federal law. The dispute concerning original jurisdiction based upon a federal question derives from the cause of action alleging that the interest rates charged by the Omaha Bank's BankAmericard program violate Minnesota law. The plaintiff argues that the complaint as filed in state court neither raises nor asserts any federal right or question, but that to the contrary it is one based solely on rights created by the Minnesota Bank Credit Card Act. The defendants, on the other hand, contend that the cause of action alleging an illegal interest rate, notwithstanding the plaintiff's characterization thereof as a violation of Minnesota law, must be construed as a claim that 12 U.S.C. § 85³ has been violated. The defendants urge that because 12 U.S.C. § 85 preempts state regulation of interest rates charged by national banking associations, any claim that interest rates are excessive can only be litigated as a claim arising under that statute. If the plaintiff's claim does raise a federal question based solely upon 12 U.S.C. § 85, it is undisputed that original federal jurisdiction is invoked pursuant to 28 U.S.C. § 1337. Burns v. American Nat'l Bank & Trust Co., 479 F.2d 26 (8th Cir. 1973).

If the cause of action alleging the charging of excessive interest rates actually set forth claims which arise only under 12 U.S.C. § 85, removal was clearly in order; if it does not, remand is required. The court concludes that the plaintiff's claim based on the allegation that the Omaha Bank charges excess rates of interest does not arise under 12 U.S.C. § 85, and, therefore, remand is required.

The traditional rule in removal proceedings prohibits the court from looking outside the plaintiff's own complaint to determine whether or not a suit arises under federal law. The Supreme Court has stated the applicable tests in Gully v. First Nat'l Bank, 299 U.S. 109, 113, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936):

A right or immunity created by the Constitution or laws of the United States

...