WILLIAMS v. NAVIENT SOLUTIONS, LLC
OPINION. Signed by Judge Robert B. Kugler on 8/31/17. (dd, )
NOT FOR PUBLICATION
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Civil No. 17-6509 (RBK/KMW)
NAVIENT SOLUTIONS, LLC,
KUGLER, United States District Judge:
Upon Defendant’s removal of the above-captioned action, this Court, as it must when
there is doubt about the existence of subject-matter jurisdiction, sua sponte raised the issue of its
removal jurisdiction over the matter. For the reasons that follow, the Court finds it lacks
jurisdiction and remands the action to the Superior Court of New Jersey, Law Division.
BACKGROUND AND PROCEDURAL HISTORY
On July 25, 2017, Plaintiff Daryel Williams, proceeding pro se, filed a Small Claims
Complaint in the Camden County Superior Court of New Jersey, Law Division against Navient
Solutions, LLC, demanding $2089.35 and costs. The entirety of the complaint is as follows:
I have notified all 3 credit bureaus, in addition to Navient, in order to correct the information
that Navient is reporting. In a written letter, I asked Navient to retract the negative reporting
on my accounts . . . due to the fact that my loans were in forbearance or deferment at the
time, and were related back to the dates of the reported lateness. This is really affecting my
credit history and financial status and I ask that the information be updated and corrected
immediately, or I demand the interest that has been accrued on these loans.
After being served on August 4, Defendant Navient Solutions, LLC timely removed the action
under 28 U.S.C. § 1441. Navient argues this matter lies within the Court’s jurisdiction under 28
U.S.C. § 1331 because the claim would necessarily arise under the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. § 1681, et seq., and that this provides federal-question jurisdiction over
this controversy. It does not.
Pursuant to 28 U.S.C. § 1441(a), a defendant may remove an action filed in state court to
a federal court with original jurisdiction over the action. In all cases, however, the defendant
bears the burden of showing that the federal court has jurisdiction to hear the case. Abels v. State
Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1995) (citing Pullman Co. v. Jenkins, 305 U.S.
534, 537 (1939)). Generally, where the decision to remand is a close one, district courts are
encouraged to err on the side of remanding the case back to state court. See Abels, 770 F.2d at 29
(“Because the lack of jurisdiction would make any decree in the case void and the continuation
of the litigation in federal court futile, the removal statute should be strictly construed and all
doubts should be resolved in favor of remand.”).
Removal jurisdiction is appropriate in federal-question cases “arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. It has been long settled
that removal on this basis is generally subject to the well-pleaded complaint rule, which requires
that the federal question justifying a federal court’s jurisdiction appear on the face of the
complaint. Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149 (1908). A complaint without a
federal question presented on its face is beyond the power of a federal court to adjudicate, and a
defendant may not circumvent this requirement by asserting a federal defense, such as
preemption, to the complaint. “[I]t is now settled that a case may not be removed to federal court
on the basis of a federal defense, including the defense of pre-emption, even if the defense is
anticipated in the plaintiff’s complaint, and even if both parties concede that the federal defense
is the only question truly at issue.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987)
(emphasis in original). Only in relatively rare circumstances, where “the preemptive force of a
statute is so extraordinary that it converts an ordinary state common-law complaint into one
stating a federal claim for purposes of the well-pleaded complaint rule,” does preemption warrant
federal question jurisdiction on removal. Id. at 393 (quotations omitted). This doctrine,
“complete preemption,” has provided the basis for federal-question removal under a number of
statutory schemes. See Beneficial Nat. Bank v. Anderson, 539 U.S. 1 (2003) (National Bank Act,
12 U.S.C. § 85), Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) (Employment Retirement
Income Security Act, 29 U.S.C. § 1001, et seq.), Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of
Machinists & Aerospace Workers, 390 U.S. 557 (1968) (Labor Management Relations Act, 29
U.S.C. § 185). For Defendant to remove properly, it bears the burden of showing the FCRA not
only preempts, but completely preempts any and all state law claims relating to the FCRA.
The scope of FCRA preemption remains disputed. 15 U.S.C. § 1681t(b)(1)(F), states:
“No requirement or prohibition may be imposed under the laws of any State—(1) with respect to
any subject matter regulated under—... (F) section 1681 s–2 of this title, relating to the
responsibilities of persons who furnish information to consumer reporting agencies...” Section
1681 s–2, in turn, provides: “A person shall not furnish any information relating to a consumer to
any consumer reporting agency if the person knows or has reasonable cause to believe that the
information is inaccurate.” Although Defendant is correct that this language is broadly
preemptive, other parts of the FCRA are less expansive. Section 1681h(e) provides that
defamation, invasion of privacy, or negligence claims, while ordinarily preempted by the FCRA,
can be brought if “false information [is] furnished with malice or willful intent.” While §
1681t(b)(1)(F), a 1996 amendment to the FCRA, is in some conflict with § 1681h of the FCRA,
the scope of § 1681t’s preemption has not been resolved by the Third Circuit. Compare Manno v.
Am. Gen. Fin. Co., 439 F. Supp. 2d 418, 424, 430 (E.D. Pa. 2006) (§ 1681t preempts only state
statutory claims, but not common-law claims) with Grossman v. Trans Union, LLC, 992 F. Supp.
2d 495, 499 (E.D. Pa. 2014) (§ 1681t preempts both statutory and common-law claims); Burrell
v. DFS Servs., LLC, 753 F. Supp. 438, 448-51 (D.N.J. Dec. 2010) (same). See also Gorman v.
Wolpoff & Abramson, LLP, 584 F.3d 1147, 1166 (9th Cir.2009) (finding no conflict preemption
and that “defamation claims can proceed against [furnishers] as long as the plaintiff alleges
falsity and malice”), cert. denied, FIA Card Servs., N.A. v. Gorman, 562 U.S. 828, 131 S. Ct. 71,
178 L. Ed. 2d 23 (2010); Meisel v. USA Shade & Fabric Structures Inc., 795 F. Supp. 2d 481,
491 (N.D. Tex. 2011) (“There simply is no indication that section 1681t(b)(1)(F) was intended to
repeal section 1681h(e) and completely preempt all state law claims.”).
In any case this Court need not decide this question today, for two reasons. First,
Plaintiff’s claim of $2089.35 simply does not state any statutory or common-law claim at all and
may end up sounding in areas of state law other than those covered by the FCRA. Second, the
question of whether the FCRA is preemptive of state law claims as an affirmative defense is a
question distinct from whether it is completely preemptive of state law and thus sufficient to
justify removal despite the absence of a federal question on the face of the complaint. Defendant
has not proved the FCRA is a statutory scheme of complete preemption, and is instead removing
based off an anticipated affirmative defense which is itself subject to disagreement among
district courts of this Circuit. That he cannot do, and ultimately, the burden lies with the
Defendant to show this Court is competent to hear this case. If there is doubt of jurisdiction, as
there is here, it resolves for remand. See Abels, 770 F.2d at 29; Pitts v. Bank of Am. Corp., 2010
WL 5441678, at *2 (W.D. Pa. Dec. 28, 2010) (remanding action removed under FCRA
preemption because of doubted federal-question jurisdiction).
If the FCRA is a viable defense to this action, that is a matter the Superior Court of New
Jersey, Law Division is competent to adjudicate. But neither the FCRA nor any other federal
question is on the face of Plaintiff’s complaint, and as such, the case does not satisfy this Court’s
original, and thus removal, jurisdiction.
For the foregoing reasons, the Court directs the clerk to REMAND this case to the
Superior Court of New Jersey, Law Division. An appropriate order will follow.
s/ Robert B. Kugler
ROBERT B. KUGLER
United State District Judge
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