Saxton v. Capital One Bank

• Decision Date: 29 September 2005
• Docket Number: No. CIV.A. 304CV905WS.,CIV.A. 304CV905WS.
• Citation: 392 F.Supp.2d 772
• Parties: Eli SAXTON, Tanda Saxton, and Angela Jones Plaintiffs v. CAPITAL ONE BANK Defendant.
• Court: U.S. District Court — Southern District of Mississippi

392 F.Supp.2d 772

Eli SAXTON, Tanda Saxton, and Angela Jones Plaintiffs v. CAPITAL ONE BANK Defendant.

No. CIV.A. 304CV905WS.

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

September 29, 2005.

COPYRIGHT MATERIAL OMITTED

Mark I. Burton, Burton & Burton, PLLC, Kosciusko, MS, Charles C. Edwards, Law Office of Marc Boutwell, Lexington, MS, for Plaintiffs.

Thomas Neal Jamerson, Phelps Dunbar, Jackson, MS, Kenneth J. Grigsby, James Shelson, John W. Robinson, III, for Defendant.

MEMORANDUM OPINION AND ORDER GRANTING REMAND

WINGATE, Chief District Judge.

Before the court are the following two (2) motions: (1) a motion by plaintiffs to remand this civil lawsuit to the Circuit Court of Holmes County, Mississippi, pursuant to Title 28 U.S.C. § 1447(c)¹ [docket # 4]; and (2) a motion by plaintiffs to amend or correct their rebuttal memorandum in support of their motion to remand [docket # 10].

Plaintiffs' motion to amend is unopposed. Further, the court finds it to be well taken. Accordingly, this court grants said motion.

Plaintiffs' motion to remand requires this court to address the jurisprudence of Title 28 U.S.C. § 1332, diversity of citizenship, and more specifically, whether this lawsuit features the requisite amount in controversy. Plaintiffs' motion also obligates this court to review federal question jurisdiction, Title 28 U.S.C. § 1331, and more specifically, whether the protections afforded by the Depository Institutions Deregulation and Monetary Control Act of 1980 ("DIDA") apply to this dispute.

For the reasons enunciated below, this court finds (1) that diversity jurisdiction is lacking in this case and (2) that federal question jurisdiction also is lacking because this court is not convinced that DIDA here applies, even in light of Beneficial National Bank v. Anderson, 539 U.S. 1, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003). Therefore, this court is persuaded to remand this case to state court for lack of subject-matter jurisdiction.

I. Pertinent Facts and Procedural Posture

On October 4, 2004, plaintiffs filed a lawsuit against defendant in the Circuit Court of Holmes County, Mississippi, asserting the following state-law claims:

1. breach of contract and tortious/intentional breach of contract;

2. breach of covenant of good faith and fair dealing;

3. deceptive advertising;²

4. economic duress;

5. violation of the Mississippi Consumer Protection Act, Miss.Code Ann. § 75-24-3 et seq.;

6. unconscionability;

7. negligent, grossly negligent and wanton failure to monitor and train agents 8. conversion and civil theft;

9. intentional and/or negligent infliction of mental and emotional distress and anguish;

10. gross, intentional or negligent misrepresentation; and

11. negligent enrichment.

Plaintiffs' claims all relate to interactions they had with defendant in connection with credit cards issued to them by defendant. On November 8, 2004, defendant timely removed this litigation to this federal forum pursuant to both this court's federal-question jurisdiction under Title 28 U.S.C. § 1331³ and its diversity jurisdiction under § 1332.⁴

Thereafter, on November 22, 2004, plaintiffs filed a motion to remand this matter to state court. Plaintiffs contend that federal diversity jurisdiction does not exist because the amount-in-controversy requirement has not been satisfied. Further, say plaintiffs, federal-question jurisdiction is lacking because since defendant is not a national bank, it is thereby not entitled to claim preemption under the National Bank Act.⁵

In response, defendant acknowledged that it incorrectly stated that it was a national bank and, instead, stated that it is actually a federally insured, state-chartered bank to which section 521 of DIDA applies. In addition, defendant contends that DIDA, like the National Bank Act, completely preempts plaintiffs' state-law claims. Also, defendant reiterates its position that this court has diversity jurisdiction over the parties.

Whether DIDA is entitled to the complete preemption status accorded to the National Bank Act appears to be, from the research of this court, a case of first impression in the Fifth Circuit.⁶ Still, in addressing plaintiffs' motion to remand, this court endeavors to decide whether the allegations in plaintiffs' complaint are completely preempted under the reasoning in Beneficial so as to confer original subject matter jurisdiction on this court and provide a basis for defendant's removal of plaintiffs' state-court action. Defendant argues that plaintiffs' allegations amount essentially to a claim for usury and thus are completely preempted according to the rationale of Beneficial. Plaintiffs adamantly argue that they have not asserted any usury claims against defendant and thus the case was removed improperly because there is no federal subject-matter jurisdiction over this action. Plaintiffs completely disavow any interpretation of their complaint that would include a claim alleging that they had been charged a rate of interest that is usurious under state law.

II. Relevant Law

A. Removal

Courts of limited jurisdiction,⁷ federal courts, are obligated to ascertain subject-matter jurisdiction and must presume that a suit lies outside this limited jurisdiction. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.), cert. denied, 534 U.S. 993, 122 S.Ct. 459, 151 L.Ed.2d 377 (2001). A defendant who removes an action from state court to federal court bears the "heavy" burden of demonstrating this court's subject-matter jurisdiction and that removal was proper. Travis v. Irby, 326 F.3d 644, 649 (5th Cir.2003); Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.2002); Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir.1993), cert. denied, 510 U.S. 868, 114 S.Ct. 192, 126 L.Ed.2d 150 (1993); B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir.1981); see also 14C CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3739, at 424 (3d ed. 1998) ("It is ... well-settled under the case law that the burden is on the party seeking to preserve the district court's removal jurisdiction ... to show that the requirements for removal have been met."). Furthermore, the removal statutes are to be strictly construed with all doubts and ambiguities to be resolved against a finding of proper removal. Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir.1992). If this burden is not met, the court is bound to remand this action to state court pursuant to § 1447(c).⁸ Buchner v. F.D.I.C., 981 F.2d 816, 819 (5th Cir.1993).

B. Diversity Jurisdiction

Title 28 U.S.C. § 1332 requires that, in federal civil cases predicated upon diversity jurisdiction, the parties must be completely diverse and the amount in controversy exceed $75,000.00, exclusive of interests and costs. Complete diversity is a statutory requirement under § 1332. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806); McLaughlin v. Miss. Power Co., 376 F.3d 344, 353 (5th Cir.2004). "The concept of complete diversity requires that all persons on one side of the controversy be citizens of different states than all persons on the other side." Harrison v. Prather, 404 F.2d 267, 272 (5th Cir.1968). Neither side to this dispute contests that the parties are, indeed, diverse. Rather, the thrust of plaintiffs' argument that diversity jurisdiction is absent is that the amount in controversy does not exceed $75,000.00, exclusive of interests and costs.

The Fifth Circuit recognizes "the intent of Congress drastically to restrict

federal jurisdiction in controversies between citizens of different states has always been rigorously enforced by the courts." Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 638 (5th Cir.2003) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct 586, 82 L.Ed. 845 (1938)). Thus, in § 1332, Congress instructs that a suit between diverse parties may be adjudicated in a federal forum only if "the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." The party seeking to invoke federal diversity jurisdiction bears the burden of establishing both that the parties are diverse and that the amount in controversy exceeds $75,000.00. St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir.1998). The question in this case is whether the second burden has been met. In St. Paul Mercury Indemnity, the United States Supreme Court delineated the general method for measuring the amount in controversy: "[U]nless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith." 303 U.S. at 288, 58 S.Ct. 586.

Concomitantly, the Fifth Circuit has established a clear analytic framework for resolving jurisdictional disputes over the amount in controversy. Luckett v. Delta Airlines, 171 F.3d 295, 298 (5th Cir. 1999). The removing defendant must prove, by a preponderance of the evidence, that the amount in controversy exceeds $75,000.00. Id. (citing De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir.1993)). The defendant may make this showing in one of two ways: (1) by demonstrating that it is "facially apparent" that the claims are likely in excess of $75,000.00; or (2) "by setting forth the facts in controversy — preferably in the removal petition, but sometimes by affidavit — that support a finding of the requisite amount." Id. (citing Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir.1995)); see also Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.2002) (explaining that the defendant may set forth "`summary judgment type evidence' of facts in controversy that support a finding of the requisite amount"). If a defendant satisfies this burden, the plaintiff must then prove "to a legal certainty" that the claim is less than $75,000.00. De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir.1995).

C....