The Commercial Bank of Ozark v. Pearson et al
MEMORANDUM OPINION AND ORDER GRANTING plaintiff's 8 MOTION to Remand; REMANDING this action to the Circuit Court of Dale County, AL pursuant to 28 USC 1447(c); directing the clerk to take appropriate steps to effectuate the remand. Signed by Chief Judge William Keith Watkins on 10/15/14. (Attachments: # 1 civil appeals checklist). Also mailed to Clerk Circuit Court Dale County.(djy, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
THE COMMERCIAL BANK OF
OZARK a/k/a COMMERCIAL
BANK OF OZARK,
CLARISSA A. LAMPLEY
PEARSON and LORENZO
CASE NO. 1:14-CV-715-WKW
MEMORANDUM OPINION AND ORDER
Defendants, who are proceeding pro se, removed this action from the Circuit
Court of Dale County, Alabama, pursuant to 28 U.S.C. §§ 1331, 1332(a), 1441,
and 1446(b). Before the court is Plaintiff’s motion to remand (Doc. # 8), which
has been fully briefed. (Docs. # 19–21.) After careful consideration of the motion
and arguments, the court finds that the motion to remand is due to be granted.
I. STANDARD OF REVIEW
Federal courts have a strict duty to exercise the jurisdiction conferred on
them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996).
At the same time, “[f]ederal courts are courts of limited jurisdiction.” Burns v.
Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Hence, in actions removed
from state court to federal court, federal courts strictly construe removal statutes,
resolve all doubts in favor of remand, and place the burden of establishing federal
jurisdiction on the defendant. Miedema v. Maytag Corp., 450 F.3d 1322, 1328–30
(11th Cir. 2006).
The Complaint alleges the following facts.
On June 3, 2010, The
Commercial Bank of Ozark (“Plaintiff”) foreclosed its mortgages on two parcels of
property owned by Clarissa A. Lampley Pearson and Lorenzo Pearson
(“Defendants”). Notwithstanding that Plaintiff now is the “legal title owner” of
those properties in Dale County, Defendants “are occupying the premises and . . .
otherwise are continuing to assert control over the same and [have] refused to
vacate and/or relinquish control and deliver possession of the premises to
(Compl., at 2.)
Plaintiff demands possession of the property and
“requests a judgment for such.” (Compl., at 2.) Defendants removed this action to
this court, and Plaintiff moved to remand.
As grounds for removal, Defendants contend that this action falls within the
court’s original jurisdiction under 28 U.S.C. §§ 1331 and 1332(a). See 28 U.S.C.
§ 1441(a) (allowing removal of civil actions over which the district courts have
original jurisdiction). On the other hand, Plaintiff contends that neither a federal
question nor diversity of citizenship exists and that, therefore, remand is required.
The proposed jurisdictional bases for removal are addressed in turn.
A district court has original jurisdiction over civil actions “arising under”
federal law. § 1331. “Whether a claim ‘arises under’ a federal law ‘is generally
determined by the well-pleaded complaint rule, which provides that federal
jurisdiction exists only when a federal question is presented on the face of the
plaintiff’s properly pleaded complaint.’” Hill v. BellSouth Telecomms., Inc., 364
F.3d 1308, 1314 (11th Cir. 2004) (quoting Smith v. GTE Corp., 236 F.3d 1292,
1310 (11th Cir. 2001)). “[A] defense which presents a federal question cannot
create removal jurisdiction. Thus, a case may not be removed to federal court on
the ground of a federal question defense alone, even if that defense is valid.”
Kemp v. Int’l Bus. Mach. Corp., 109 F.3d 708, 712 (11th Cir. 1997); see also Bank
of N.Y. v. Angley, 559 F. App’x 956, 957 (11th Cir. 2014) (“There can be no
federal question jurisdiction or removal based on an argument raised by the
defense, whether that argument is a defense or a counterclaim.”). An exception to
the well-pleaded complaint rule exists, however, where federal law completely
preempts an area of state law. Caterpillar Inc. v. Williams, 482 U.S. 386, 393
(1987) (discussing the complete-preemption doctrine).
Here, the Complaint does not plead a federal cause of action on its face, and
Defendants do not contend that it does. Rather, Defendants argue that federalquestion jurisdiction exists based upon the Truth in Lending Act (“TILA”), in
particular, 15 U.S.C. § 1635(f), and the TILA’s Regulation Z, which governs
disclosures that lenders must make to consumers in specified credit transactions.
See generally 15 U.S.C. §§ 1601, et seq.; 12 C.F.R. §§ 226.1, et seq. Defendants
contend that, even though the Complaint does not plead a cause of action under the
TILA, Plaintiff must demonstrate that it “followed federal law” in order to prove
its title to the properties at issue and that, therefore, this action raises a federal
question. (Doc. # 1, at 3.) This basis for removal jurisdiction is unfounded.
Although the parties have not cited any Eleventh Circuit authority, two
district courts in this circuit have concluded that the complete-preemption doctrine
“does not apply to the TILA.” Jackson v. Bank One, 952 F. Supp. 734, 736 (M.D.
Ala. 1996) (DeMent, J.); Monday v. Coast to Coast Wireless Cable, No. 96cv321,
1997 WL 114874, at *10 (M.D. Ala. Feb. 19, 1997) (Albritton, J.) (same). “The
TILA does not contain a civil enforcement provision that requires complete
preemption of law, nor is there any other manifestation that Congress intended
preemption.” Jackson, 952 F. Supp. at 736. Consequently, “there is no authority
for removing state law claims to federal court on the basis of the TILA.” Monday,
1997 WL 114874, at *10. Additonally, the Eighth Circuit has held that “the TILA
lacks that extraordinary preemptive power necessary to convert a state-law
complaint ‘into one stating a federal claim for purposes of the well-pleaded
complaint rule.’”1 Magee v. Exxon Corp., 135 F.3d 599, 602 (8th Cir. 1998)
To this court’s knowledge, the Eighth Circuit is the only circuit that has addressed this
issue in a published opinion.
(quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)). Based upon these
persuasive authorities, Defendants’ defense that the TILA defeats Plaintiff’s action
does not create a right of removal.2 Because a federal question does not appear on
the face of the Complaint and because the complete-preemption doctrine does not
apply to the TILA, removal under § 1331 is improper.
Diversity jurisdiction under § 1332(a) “requires that no defendant . . . be a
citizen of the same state as any plaintiff.” MacGinnitie v. Hobbs Grp., LLC, 420
F.3d 1234, 1239 (11th Cir. 2005) (per curiam), abrogated on other grounds by
Hertz Corp. v. Friend, 559 U.S. 77 (2010). “A party removing a case to federal
court based on diversity of citizenship bears the burden of establishing the
citizenship of the parties.” Rolling Greens MHP, L.P. v. Comcast SCH Holdings,
LLC, 374 F.3d 1020, 1022 (11th Cir. 2004). Additionally, diversity jurisdiction
requires an amount in controversy that exceeds $75,000. See § 1332(a).
Defendants focus solely on § 1332(a)’s amount-in-controversy requirement.
Even if Defendants’ basis for assessing the amount in controversy is correct,
jurisdiction cannot rest on § 1332(a) without complete diversity of citizenship.
Defendants undisputedly are citizens of Alabama.
Additionally, Plaintiff has
presented unrefuted evidence, which is consistent with the Complaint’s allegations,
No opinion is expressed on the merits of Defendants’ TILA-based defense or on
whether that defense is pleaded properly. Those issues are for the state court to decide.
that its state of incorporation is Alabama and that its principal place of business is
in Dale County. Plaintiff and Defendants are, therefore, citizens of Alabama for
Because there is not complete diversity between the
parties, removal under § 1332(a) is improper.3
Based upon the foregoing, the court does not have original jurisdiction over
this removed action. Accordingly, it is ORDERED that Plaintiff’s motion to
remand (Doc. # 8) is GRANTED and that this action is REMANDED to the
Circuit Court of Dale County, Alabama, pursuant to 28 U.S.C. § 1447(c). The
Clerk of the Court is DIRECTED to take appropriate steps to effectuate the
DONE this 15th day of October, 2014.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
Also, as a matter or procedure, 28 U.S.C. § 1441(b) prohibits removal on diversity
grounds by a defendant who is a citizen of the forum state. See § 1441(b)(2) (“A civil action
otherwise removable solely on the basis of the jurisdiction under section 1332(a) . . . may not be
removed if any of the parties in interest properly joined and served as defendants is a citizen of
the State in which such action is brought.”).
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