Stewart v. Bureaus Inv.
| Decision Date | 10 June 2011 |
| Docket Number | CASE NO. 3:10-CV-1019-WKW [WO] |
| Parties | ALLIE STEWART, Plaintiff, v. BUREAUS INVESTMENT GROUP # 1, Defendant. |
| Court | U.S. District Court — Middle District of Alabama |
ALLIE STEWART, Plaintiff,
v.
BUREAUS INVESTMENT GROUP # 1, Defendant.
CASE NO. 3:10-CV-1019-WKW [WO]
UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF ALABAMA EASTERN DIVISION
DONE: June 10, 2011
Defendant filed a Notice of Removal (Doc. # 1) on December 2, 2010, invoking federal question and supplemental jurisdiction over plaintiff's causes of action. This case is before the court on Plaintiff's timely-filed Motion to Remand (Doc. # 6), which includes a request for attorney's fees pursuant to 28 U.S.C. § 1447(c). The motion has been fully briefed and is ready for adjudication. Based upon the arguments of counsel and the applicable law, Plaintiff's motion to remand and motion for attorney's fees are due to be denied.
Litigation in this case commenced in the Circuit Court of Macon County, Alabama, when Bureaus Investment Group # 1 ("Bureaus") filed a debt collection lawsuit against Allie Stewart. (Notice of Removal 1 (Doc. # 1).) Ms. Stewart later asserted counterclaims in a counter-complaint. (Doc. # 1, Attach. 3.) Among them is a claim under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1962 et seq. After Bureaus dismissed its
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debt collection complaint, the only claims remaining in the case were Ms. Stewart's counterclaims, including the FDCPA claim, against Bureaus. In light of this development, Bureaus moved to realign the parties, and the motion was granted by the circuit court. (Order of Realignment (Doc. # 1, Attach. 5).) Subsequent to the realignment, Defendant Bureaus removed Plaintiff Stewart's claims to this court, and invokes this court's federal question and supplemental jurisdiction, pursuant to 28 U.S.C. §§ 1331 and 1367.
"[F]ederal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress." Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). However, "[f]ederal courts are courts of limited jurisdiction." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994); see also Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994). Thus, with respect to cases removed to this court pursuant to 28 U.S.C. § 1441, the law of the Eleventh Circuit favors remand where federal jurisdiction is not absolutely clear. "[R]emoval statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand." Burns, 31 F.3d at 1095.
Federal question jurisdiction exists if the plaintiffs action "arises under" the "Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. "Generally, an action 'arises under' federal law when federal law creates the cause of action." Johnson v. Wellborn, No. 10-12494, 2011 WL 914302, at *4 (11th Cir. March 17, 2011) (quoting Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1373 (11th Cir. 1998)). When the removing defendant invokes both federal question and supplemental jurisdiction, the court "ha[s]
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discretion to retain jurisdiction over state law claims even after [the plaintiff] amend[s] the complaint to remove any federal cause of action." Behlen v. Merrill Lynch, 311 F.3d 1087, 1095 (11th Cir. 2002).
Ms. Stewart unsurprisingly makes no argument that the court does not have federal question jurisdiction over FDCPA claims generally, nor does she argue that the court should, in its discretion, decline to exercise supplemental jurisdiction over her state law claims. Rather, Ms. Stewart argues that the litigation history in this case forbids removal, and asserts that "[r]emoval jurisdiction cannot arise from a federal question counterclaim." (Mot. to Remand ¶ 7.) She cites a number of cases that purport to support her position. Most of the cases are inapplicable and will not be addressed explicitly. The issue, which appears not to have been addressed by the Eleventh Circuit, or any circuit, see Hrivnak v. NCO Portfolio Mgmt., Inc., 723 F. Supp. 2d 1020, 1023 (N.D. Ohio 2010), is whether an order of realignment by a state court can allow a former plaintiff, now defendant, to remove a case to federal court based upon a pleading that was originally filed as a counter-complaint.
A. Removal Is Limited to Defendants
Removal is a litigation device reserved exclusively for the use of state court defendants. 28 U.S.C. § 1441(a) states, in relevant part:
[A]ny 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.
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In Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941), the Supreme Court construed the 1887 version of the removal statute, now 28 U.S.C. § 1441, as authorizing removal only by the "defendant or defendants" in the case.1 The plaintiff in Shamrock removed the defendant's counterclaim to federal court, and then argued that "although [it was] nominally a plaintiff in the state court it was in point of substance a defendant to the cause of action asserted in the counterclaim . . . ." Id. at 104. Giving a "strict construction" to the 1887 amendments that again restricted the use of removals to state court defendants, the Supreme Court held that the removal, initiated by the state court plaintiff, was improper. Removal is limited to defendants.
Attempting to stretch the amount of guidance that Shamrock has to offer to the present case, Ms. Stewart argues that Shamrock establishes as a point of law that "once a plaintiff always a plaintiff[;] likewise once a defendant always a defendant." (Pl.'s Suppl. Br. 6 (Doc. # 9).) Nowhere in Shamrock is such a principle elaborated, suggested, or even implicated. Aside from its holding that removal is limited to defendants, Shamrock is otherwise unhelpful to the present inquiry. In Shamrock, the removing plaintiff still had pending claims from its original complaint, and indeed had secured a judgment on its original claims in the federal district court before the Fifth Circuit vacated the judgment and remanded to the district court with instructions to remand to state court. Although the plaintiff in Shamrock
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was in substance a defendant on the counterclaim, it was also in substance a plaintiff on its own claims. Unlike the removing plaintiff in Shamrock, Bureaus is nominally, substantively and exclusively a defendant in this case on account of the state court's Order of Realignment.
B. Is a Realigned Defendant a "Defendant" under 28 U.S.C. § 1441(a)?
Because the removal statute limits removal to state court defendants, the question then becomes whether a state court plaintiff, through the use of realignment, can become a defendant within the meaning of the removal statute and then remove a case based upon a pleading originally filed as a counter-complaint. Although this exact question has not been answered, see supra, there are two well established principles of removal law, Supreme Court dicta, and another nearly factually-identical district court decision, all tending to support the position that such removals are allowable in...
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