Gannon et al v. International Association for Correctional and Forensic Psychology

Filing 28

ORDER granting 14 Motion to Remand and declining consideration of 11 Motion to Dismiss. Signed by US District Judge Terrence W. Boyle on 5/3/2018. (Stouch, L.)

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
No. 7:17-CV-218-BO
JOHN L. GANNON, Ph.D., and
DIRECTIONS EDUCATIONAL
SERVICES, INC.,

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)
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Plaintiffs,
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v.
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INTERNATIONAL ASSOCIATION FOR )
CORRECTIONAL AND FORESNIC
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PSYCHOLOGY,
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Defendant.
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ORDER

This cause comes before the Court on plaintiffs' motion to remand and defendant's motion
to dismiss. The appropriate responses and replies have been filed, and a hearing was held before
the undersigned on April 18, 2018, at Raleigh, North Carolina. In this posture, the matters are ripe
for ruling and, for the reasons that follow, plaintiffs' motion to remand is GRANTED.
BACKGROUND
Plaintiff Directions Educational Services (DES) filed this action in New Hanover County,
North Carolina Superior Court alleging state law claims of, inter alia, breach of contract, breach
of implied covenant of good faith and fair dealing, fraud, negligent misrepresentation, and tortious
interference with contract, against defendant International Association for Correctional and
Forensic Psychology (IACFP) and The Moss Group, Inc. On October 16, 2017, DES and plaintiff
Gannon filed an amended complaint in New Hanover County Superior Court against IACFP alone,
again alleging state law contract and fraud claims. In Gannon's first claim for relief, he seeks a
declaratory judgment under N.C. Gen Stat. § 1-253 that, during his tenure as executive director,

court is determined to be doubtful, remand is required. Mulcahey v. Columbia Organic Chems.

Co., 29 F.3d 148, 151 (4th Cir. 1994). Federal district courts have original jurisdiction over "all
civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. §
1331. Generally, whether the district courts have federal question jurisdiction "is governed 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." Caterpillar Inc.

v. Williams, 482 U.S. 386, 392 (1987). While the law that creates a cause of action will almost
always determine whether the claim arises under federal or state law, Merrell Dow
.

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Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808 (1986), in a small number ofcases a federal
court will possess jurisdiction over a state law cause of action where the "state-law claim
necessarily raise[ s] a stated federal issue, actually disputed and substantial, which a federal forum
may entertain without disturbing any congressionally approved balance of federal and state judicial
responsibilities." Grable & Sons Metal Prods., Inc. v. Darue Eng g & Mfg., 545 U.S. 308, 314
(2005); see also Gunn v. Minton, 568 U.S. 251, 258 (2013) ("federal jurisdiction over a state law
claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and
(4) capable of resolution in federal court without disrupting the federal-state balance approved by
Congress.").
One of the plaintiffs, Gannon, makes reference to federal law in two of the thirteen claims
that have been alleged by plaintiffs against IACFP; plaintiffs have alleged no specific federal
statute which they contend that IACFP has violated. The "mere presence of a federal issue in a
state cause of action does not automatically confer federal-question jurisdiction." Merrell Dow,
478 U.S. at 813. Rather, "[a] plaintiff's right to relief for a given claim necessarily depends on a
question of federal law only when every legal theory supporting the claim requires the resolution

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of a federal issue." Dixon, 369 F.3d at 816; see also Flying Pigs, LLCv. RRAJ Franchising, LLC,
757 F.3d 177, 182 (4th Cir. 2014); Mulcahey, 29 F.3d at 153.
Here, plaintiffs' declaratory judgment and negligent misclassification claims may prevail
on a finding that IACFP misclassified Gannon's employment status only in violation of state law.
See, e.g., Hayes v. Bd. of Trustees of Elon Coll., 224 N.C. 11, 15 (1944) (discussing factors to be
considered in determining whether individual is employee or independent contractor under North
Carolina law). Thus, plaintiffs' reference to IACFP's noncompliance with federal law as one
theory of liability is insufficient to raise a substantial issue of federal law. Moreover, plaintiffs'
suit is fairly characterized as one which seeks to enforce state contract and tort law, not one which
seeks to enforce any federal statute. See Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning,
136 S. Ct. 1562, 1568 (2016) (federal question jurisdiction not present where plaintiff alleges for
atmospheric reasons that defendant's conduct breached federal law).

IACFP has failed to

demonstrate that a substantial federal question exists, and jurisdiction in this Court is therefore not
proper.
The Court next considers plaintiffs' request for attorneys' fees and costs related to the filing
of the instant motion. Under 28 U.S.C. § 1447(c), an "order remanding the case may require
payment of just costs and any actual expenses, including attorney fees, incurred as a result of the
removal." A court has broad discretion to determine whether (:ln award of fees shall be ordered on
remand, Martin v. Franklin Capital Corp., 546 U.S. 132, 139 (2005), and "attorney's fees should
not be awarded when the removing party has an objectively reasonable basis for removal." Id. at
136. Such a rule accounts for "the desire to deter removals sought for the purpose of prolonging
litigation and imposing costs on the opposing party," but the Court maintains "discretion to

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consider whether unusual circumstances warrant a departure from the [objectively reasonable
basis] rule in a given case." Id. at 140-41.
The Court finds that defendant had an objectively reasonable basis for removal and in its
discretion declines to award attorneys' fees to plaintiffs.
CONCLUSION
For the foregoing reasons, plaintiffs' motion to remand [DE 14] is GRANTED but an
award of attorneys' fees is DENIED. In light of its finding that remand is appropriate, the Court
declines to consider the pending motion to dismiss. [DE 11]. The clerk is DIRECTED to
REMAND this matter to New Hanover County Superior Court.

SO ORDERED, this

J

day of May, 2018.

TRRENCEW:BOYiE ,
~/Jr
JuD E
UNITED STATES DISTRICT

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