West Virginia ex rel. McGraw v. Fast Auto Loans, Inc.
| Decision Date | 11 January 2013 |
| Docket Number | Civil Action No. 3:12–CV–64. |
| Citation | 918 F.Supp.2d 551 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | State of WEST VIRGINIA ex rel. Darrell V. McGRAW, Jr., Attorney General, Plaintiff, v. FAST AUTO LOANS, INC., a Virginia corporation; Community Loans of America, Inc., a Georgia corporation and sole owner and parent company of Fast Auto Loans, Inc.; and Robert I. Reich, individually and in his official capacity as the president and chief executive officer of Fast Auto Loans, Inc. and Community Loans of America, Inc., Defendants. |
OPINION TEXT STARTS HERE
Norman A. Googel, Jill L. Miles, Attorney General's Office, Charleston, WV, Tanya L. Godfrey, Attorney General, Martinsburg, WV, for Plaintiff.
Christopher K. Robertson, William J. Powell, Jackson Kelly, PLLC, Martinsburg, WV, for Defendants.
Pending before the Court is the Plaintiff's Motion to Remand [Doc. 14], filed on August 8, 2012. This motion has since been fully briefed and is now ripe for decision. Having reviewed the record and considered the arguments of the parties, this Court concludes that the motion to remand must be GRANTED.
Defendant Fast Auto Loans, Inc. (“FAL”) is a Virginia corporation engaged in the business of making automobile title loans to consumers, including West Virginia consumers who travel to Virginia to obtain such loans. FAL does not have any offices in West Virginia. The title loans made by FAL are lawful in Virginia and are regulated by the Virginia Bureau of Financial Institutions pursuant to Virginia's Motor Vehicle Title Loan Statute, Va.Code § 6.2–2200 et seq. Defendant Community Loans of America, Inc. is a Georgia corporation which is the sole owner and parent company of FAL. Defendant Robert I. Reich is the president and chief executive officer of both Community Loans of America and FAL.
The Plaintiff is the Attorney General of the State of West Virginia. On June 14, 2012, the Plaintiff filed a Complaint for Injunction, Consumer Restitution, Civil Penalties, and Other Appropriate Relief (“Complaint”) [Doc. 1–1 at 5–21] in the Circuit Court of Jefferson County, West Virginia. The Complaint consisted of nine causes of action based upon various purported unfair and deceptive debt collection activities violative of the West Virginia Consumer Credit and Protection Act, W. Va.Code § 46A–1–101 et seq. (“WVCCPA”).
Specifically, the Attorney General alleged the following causes of action: (1) harassing consumers and others repeatedly or continually by telephone, in violation of W. Va.Code §§ 46A–2–125(d) and 46A–6–104; (2) wrongfully communicating information relating to alleged indebtedness to a consumer's employer or agent, in violation of W. Va.Code §§ 46A–2–126(a) and 46A–6–104; (3) unreasonable publication of information relating to alleged indebtedness of consumers to relatives or family members not residing with consumers, in violation of W. Va.Code §§ 46A–2–126(b) and 46A–6–104; (4) unreasonable publication of information relating to alleged indebtedness of consumers to other third parties, in violation of W. Va.Code §§ 46A–2–126(c) and 46A–6–104; (5) accusations or threats to accuse persons of fraud, any crime, or statements intended to disgrace or subject consumers to ridicule or contempt of society, in violation of W. Va.Code §§ 46A–2–124(b) and 46A–6–104; (6) making false threats of arrest, criminal prosecution and other prohibited actions, in violation of W. Va.Code §§ 46A–2–124(e)(1), 46A–2–124(f), and 46A–6–104; (7) failure to notify consumers of right to redeem collateral, in violation of W. Va.Code § 46A–6–104; (8) failure to send written notice following sale of vehicle accounting for proceeds and refunding surplus when one is due, in violation of W. Va.Code § 46A–6–104; and (9) employing unlicensed companies to collect alleged debts, in violation of W. Va.Code § 46A–6–104.
Pursuant to W. Va.Code § 46A–7–102, the Attorney General of West Virginia “within the limitations provided by law may ... [r]eceive and act on complaints, take action designed to obtain voluntary compliance with [the WVCCPA] or commence proceedings on his own initiative.”
In his prayer for relief, the Attorney General specifically requested:
(a) That the Court enter a Temporary Order at its first hearing as authorized by W. Va.Code § 46A–7–110:
(i) enjoining Defendants from making any new loans to West Virginia consumers and from collecting any payments or seizing vehicles that secure loans already made to West Virginia consumers until the entry of a final order herein; and
(ii) requiring Defendants to produce in hard copy and electronically all documents and information pertaining to its transactions with West Virginia consumers, including records of all loans made to, all payments collected from, all collection communications with, and seizure of all vehicles from West Virginia consumers, and all records pertaining to the marketing, advertising, and soliciting of loans in West Virginia.
(b) That the Court enter a Final Order finding that Defendants have violated the WVCCPA as alleged herein and permanently enjoining FAL from violating the WVCCPA and other applicable consumer protection laws;
(c) That the Court enter a Final Order finding that all payments made by consumers to Defendants as a result of their threatening, coercive, oppressive, abusive, fraudulent, deceptive, misleading, unfair or unconscionable practices as set forth herein above constitute “excess charges” as defined by W. Va.Code § 46A–7–111(1) and, as such, that Defendants be ordered to pay each such aggrieved consumer a civil penalty not less than the amount of the excess charge up to ten times the amount of the excess charge as authorized by W. Va.Code § 46A–7–111(1);
(d) That the Court enter a Final Order cancelling all debts allegedly owed by West Virginia consumers to Defendants, requiring that all such accounts be closed with a zero balance, and requiring Defendants to notify consumer reporting agencies to delete all information it may have reported pertaining to these accounts;
(e) That the Court enter a Final Order finding that Defendants have engaged in a course of repeated and willful violations of the WVCCPA as alleged in the causes of action set forth herein above and requiring Defendants to pay a civil penalty of up to $5,000.00 to the State for each such violation as authorized by W. Va.Code § 46A–7–111(2);
(f) That the Court enter a Final Order as authorized by W. Va.Code § 46A–7–108 requiring that Defendants reimburse the State for all its attorney's fees and costs expended in connection with the investigation and litigation of this matter; and
(g) That the Court enter a Final Order awarding the State such other and further equitable relief as is proper and just arising from this matter.
In connection with the Complaint, the Plaintiff filed a corresponding motion for temporary relief in the circuit court [Doc. 1–1 at 53–55], moving, ostensibly pursuant to W. Va.Code § 46A–7–110, “[t]hat the Defendants be enjoined from collecting or continuing to collect any payments from West Virginia [c]onsumers and from seizing any vehicles from West Virginia [c]onsumers that secure loans already made until the final order entered herein.” The Plaintiff also moved “[t]hat the Defendants be enjoined from making any new loans to West Virginia [c]onsumers, and from placing any new liens on motor vehicles titled or registered in West Virginia, until the final order entered herein.” The circuit court granted the temporary injunction without conducting a hearing on the issue.
On July 18, 2012, the Defendants removed the instant action to this Court, asserting the existence of both federal question jurisdiction pursuant to 28 U.S.C. § 1331 and diversity jurisdiction pursuant to 28 U.S.C. § 1332. Specifically with regard to federal question jurisdiction, the Defendants argued that “[t]he question of whether the Plaintiff has the legal authority under the WVCCPA to enjoin FAL from making loans in Virginia to West Virginia residents—and whether the [c]ircuit [c]ourt properly granted such relief—depends entirely upon the construction and application of federal law, i.e. the Commerce Clause ... [t]he Plaintiff's claims therefore arise under the Constitution.”
On July 19, 2012, the Defendants moved to stay and declare void the circuit court's order granting temporary injunction [Doc. 5]. The Defendants argued that pursuant to W. Va.Code § 46A–7–110, the circuit court was required to conduct a hearing prior to entering a temporary injunction, which it did not do.
On July 25, 2012, the parties stipulated to the entry of an Order [Doc. 12], which provided, in pertinent part, “[t]hat the July 3, 2012 Order entered by the Circuit Court of Jefferson County, West Virginia, prior to removal be vacated,” and that “[i]n reaching this Stipulation, Defendant Fast Auto Loans, Inc. states that it and its affiliates have voluntarily discontinued making loans to residents of West Virginia and will voluntarily refrain from making new loans to residents of West Virginia pending further order of the court.”
On August 8, 2012, the Plaintiff filed the instant Motion to Remand [Doc. 14]. On September 7, 2012, the Defendants filed a response to the Plaintiff's motion [Doc. 21], and on September 21, 2012, the Plaintiff filed a reply [Doc. 24]. This matter is now ripe for adjudication.
Defendants in civil actions may remove a matter from state to federal court if the latter forum has original subject matter jurisdiction. This requirement can be based upon diversity jurisdiction or federal question jurisdiction. 28 U.S.C. § 1441. A federal district court has federal question jurisdiction over all civil actions arising under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331. A federal district court has diversity jurisdiction over cases...
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Bailey v. Bradford, Civil Action No. 2:13–cv–13505.
...Accordingly, his citizenship is immaterial to the determination of diversity jurisdiction. See W. Virginia ex rel. McGraw v. Fast Auto Loans, Inc., 918 F.Supp.2d 551, 563 (N.D.W.Va.2013) (observing that it is “well settled that courts should disregard nominal parties when determining whethe......