Taylor v. Scott Motors, Inc. d/b/a Scott Volkswagen

Filing 11

ORDER GRANTING 4 Motion to Remand; and, DISMISSING AS MOOT 7 Motion to Stay. So Ordered by Senior Judge Mary M. Lisi on 3/15/2016. (Feeley, Susan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
CATHERINE TAYLOR,
Plaintiff
v.

C.A. No. 16-083-ML

SCOTT MOTORS, INC.
d/b/a SCOTT VOLKSWAGEN,
Defendant
MEMORANDUM AND ORDER
The plaintiff in this case, Catherine Taylor (“Taylor”),
seeks to rescind her sales contract (the “Contract”) with the
Defendant, Scott Motors, Inc. (“Scott Motors”), after learning
that the VW diesel automobile she purchased from Scott Motors is
equipped with emissions masking software. Amended Complaint (the
“Complaint”) ¶ 7. The matter is before the Court on (1) Taylor’s
emergency motion to remand the case to the Rhode Island state
court (Dkt. No. 4), and (2) Scott Motors’ motion to stay the case
pending

transfer

Litigation

by

(“JPML”)

the
as

Judicial

one

of

a

Panel

on

Multidistrict

number

of

multidistrict

litigation (“MDL”) cases related to VW emissions testing software
(Dkt. No. 7).
I.

Factual Summary and Procedural Posture
In November 2012, Taylor purchased a 2013 Volkswagen Jetta

TDI diesel station wagon (the “VW Diesel”) from Scott Motors.
Complaint ¶ 5. According to Taylor, she was induced to purchase
1

the VW Diesel upon Scott Motors’ representation that the car
offered

fuel

efficiency

and

sport

wagon

performance

while

complying with all emissions requirements.
In September 20, 2015, the manufacturer (“Volkswagen”) of
the VW Diesel disclosed that the VW Diesel was equipped with
emissions masking software. Complaint ¶ 7. Volkswagen generally
admitted

that

diesel

cars

sold

in

the

United

States

were

programmed to sense when emissions were tested and that they
contained equipment that reduced such emissions, or that “the
cars had better fuel economy and performance, but produced as
much

as

40

times

the

allowed

amount

of

nitrogen

oxide,

a

pollutant that can contribute to respiratory problems including
asthma, bronchitis and emphysema.” Complaint ¶ 8.
On October 1, 2015, Taylor filed a complaint in Rhode Island
state court (Dkt. No 1-2), seeking (Count I) rescission of the
Contract on the grounds of material misrepresentation; and (Count
II) revocation of her acceptance after discovering the emissions
testing issue.

In

support

of

the

factual

contentions

in

her

complaint, Taylor attached (1) the Contract at issue (Ex. A, Dkt.
No. 1-2 at Page 10 of 34); (2) a September 21, 2015 article from
The New York Times, titled Volkswagen Stock Falls as Automaker
Tries

to

Contain

Fallout,

Ex.

B,

id.

at

12-16;

and

(3)

a

September 22, 2015 article from the same publication, titled
2

Volkswagen Says 11 Million Cars Worldwide Are Affected in Diesel
Deception, Ex. C, id. at 18-21.
On December 22, 2015, Taylor filed an amended complaint in
state court, adding (Count III) a claim pursuant to the Rhode
Island Motor Vehicle Dealers Business Practices Act, R.I. Gen.
Laws § 31-5.1. The parties then engaged in, at times, contentious
motion practice. On the afternoon of February 22, 2016, the day
before scheduled arguments on Scott Motors’ motion to dismiss the
Complaint, Scott Motors filed a notice of removal (Dkt. No. 1) in
this Court. In support of its 10-page notice of removal, Scott
Motors attached more than 300 pages of exhibits, including most,
if not all, of the parties’ filings in state court (Dkt. Nos. 12, 3, 3-1, 3-2).
The removal is based on Scott Motors’ assertion that in
Taylor’s

February

5,

2016

Reply

to

Scott

Motors’

Second

Supplemental Memorandum in support of its objection to Taylor’s
motion to strike and for sanctions (filed in state court), Taylor
is

“now

pollution

seeking
caused

recovery
by

for

Defendant’s

Plaintiff’s
alleged

contribution

violation

of

to

federal

clean air standards.” Notice of Removal at Page 4 of 10 (Dkt. No.
1).

In that February 5, 2016 Reply, Taylor states that “in

addition to her financial loss from owning a defective car, she
has suffered the injury of being an involuntary and unwilling
3

emitter of three years of illegal diesel pollution.” Reply at 2
(Dkt. No. 3-2). In addition, Taylor states that “[t]here is no
readily ascertainable value for clean air, or other measure by
which to compensate Plaintiff for her unwanted role in polluting
the environment to generate greater profits for Volkswagen and
Scott.” Id.
Within the hour of the filing of Scott Motors’ Notice of
Removal, Taylor filed an emergency1 motion to remand the case to
state court, reaffirming that she is not seeking damages from
Scott Motors or anyone else for the “value of her unwilling
contribution to allegedly illegal diesel pollution,” but that she
only seeks the equitable remedy of rescission from the state
court on the grounds that she has no adequate remedy at law. Mem.
Mot. Remand at 2 (Dkt. No. 4-1). The following day, Taylor filed
a supplemental memorandum (Dkt. No. 5) in support of her motion
to remand, in which she notes that Scott previously acknowledged
in

state

court

that

a

claim

for

compensation

for

Taylor’s

unwanted role in polluting the environment “is neither sought in
her amended complaint nor shown to be available under any pled
cause of action.” Scott Motors’ Reply to Taylor’s February 5th,
2016 Reply (Dkt. No. 5-1).
1

Taylor’s assertion of an emergency is based on the contention
that the case had been excessively delayed by Scott Motors’ motion
practice in state court.
4

On

February

25,

2016,

counsel

for

Volkswagen

Group

of

America, Inc. (“VWGoA”) filed a Notice of Potential Tag Along
Actions with the JPML. (Dkt. No. 9-5). Taylor asserts, and Scott
Motors has not disputed, that of the eighteen lawsuits included
in this transfer, only Taylor’s action did not involve claims
against Volkswagen. Taylor’s Response at 3-4 (Dkt. No. 9).
On February 26, Scott Motors filed a motion to stay the case
pending transfer by the JPML or, in the alternative, an objection
to Taylor’s motion to remand (Dkt. Nos. 7, 8). In its motion,
Scott Motors asserts that Taylor’s “minimalist pleadings sounding
in contract initially obscured the federal question that is the
gravamen of her suit.” Mot. Stay at 1 (Dkt. No. 7. Although Scott
Motors concedes that Taylor did not name VWGoA as a party, it
further suggests that “all of her claims arise out of, and are
based

upon,

allegations

that

Scott

Motors...through

VWGoA,

violated the Clean Air Act and EPA regulations.” Id.
On March 3, 2016, Taylor filed a response to Scott Motors’
motion for stay and objection to remand (Dkt. No. 9), to which
she attached numerous pleadings submitted by the parties in the
state court action (Ex. A-H, Dkt. Nos. 9-1 through 9-8). In her
response, Taylor reiterates that she makes no claims that Scott
Motors violated the Clean Air Act. Id. at 1.

Taylor also points

out that, as early as November 20, 2015, Scott Motors argued in
5

state court pleadings that the case was related to cases “based
on allegations concerning the Environmental Protection Agency’s
notice of violation,” and that its notice of removal based on the
purported sudden discovery of a federal claim, filed three months
after such assertion, was untimely. Id. at 3.
On March 4, 2016, this Court received notice from Judge
Sarah S. Vance, the Chair of JPML, that a notice of opposition to
a conditional transfer had been filed in this case, MDL No. 2672
IN RE: Volkswagen “Clean Diesel” Marketing, Sales Practices, and
Products Liability Litigation, 3:15-md-2672 (the “VW Clean Diesel
MDL”)

.

The

notice

also

advised

that

this

Court

retains

jurisdiction over pending motions, including motions for remand
to state court, unless and until transfer to the MDL becomes
effective. At the time this case was included in a group of cases
that were conditionally transferred by the JPML, Taylor’s motion
to remand was already pending in this Court. Accordingly, the
Court

will

proceed

to

determine

whether

there

is

federal

jurisdiction over this case.
On March 14, 2016, Scott Motors filed a reply in support of
its motion to stay proceedings pending transfer to the MDL (Dkt.
No. 10), in which it maintains that the removal determination
should be made by United States District Court for the Northern
District of California to which the case has been conditionally
6

transferred as part of the VW Clean Diesel MDL. Scott Reply at 1.
In light of the extensive briefings already submitted in this
litigation,

the

Court

is

of

the

opinion

that

no

hearing

is

required to render a decision on the parties’ motions.
II. Standard of Review
A.

Pendency of Conditional Transfer to MDL

At the outset, the Court notes that, pursuant to the JPML
rule of procedure, as explicitly confirmed by the March 4, 2016
notification from the JPML to this Court, the pending conditional
transfer

in

this

case

does

not

limit

the

Court’s

pretrial

jurisdiction. Rule 2.1 of the Rules of Procedure of the United
States Judicial Panel on

Multidistrict Litigation

provides that

“ [t]he pendency of a motion, order to show cause, conditional
transfer

order

or

conditional

remand

order

before

the

Panel

pursuant to 28 U.S.C. § 1407 does not affect or suspend orders
and pretrial proceedings in any pending federal district court
action and

does

not

limit

the

pretrial

jurisdiction

of

that

court. An order to transfer or remand pursuant to 28 U.S.C. §
1407 shall be effective only upon its filing with the clerk of
the transferee district court.” R.P.J.P.M.L. 2.1(d).
B.

Motion to Remand

Removal of a state-court action to federal court requires
that the federal court has original jurisdiction. 28 U.S.C. §
7

1441(a) (providing that “any 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.”). In
other words, only “state-court actions that originally could have
been filed in federal court may be removed to federal court by
the defendant.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392,
107

S.Ct.

2425,

2429

(1987).

Unless

the

requirements

for

diversity jurisdiction are met, there must be a federal question
for the court to exercise its jurisdiction. Id.
Removal statutes are strictly construed in favor of state
court jurisdiction and the party asserting jurisdiction bears the
burden of establishing it. Danca v. Private Health Care Systems,
Inc., 185 F.3d 1, 4 (1st Cir. 1999)(citing Shamrock Oil & Gas
Corp. v. Sheets, 313 U.S. 100, 108–09, 61 S.Ct. 868, 85 L.Ed.
1214 (1941) and BIW Deceived v. Local S6, Industrial Union of
Marine and Shipbuilding Workers of America, IAMAW District Lodge
4, 132 F.3d 824, 831 (1st Cir.1997)).
Pursuant to 28 U.S.C. § 1446), “[t]he notice of removal of a
civil action or proceeding shall be filed within 30 days after
the receipt by the defendant, through service or otherwise, of a
copy of the initial pleading setting forth the claim for relief
upon which such action or proceeding is based, or within 30 days
after the service of summons upon the defendant if such initial
8

pleading has then been filed in court and is not required to be
served on the defendant, whichever period is shorter. 28 U.S.C. §
1446(b). See, e.g., T&K Asphalt Services, Inc. V. DDRC Gateway,
LLC, 976 F.Supp.2d 38, 42 (D. Mass. Oct.8, 2013) (noting that
“‘the burden is upon the removing party to show that federal
subject matter jurisdiction exists, that removal was timely, and
that removal was proper.’”)(citation omitted).
Whether federal-question jurisdiction exists “is governed by
the ‘well-pleaded complaint rule,’” pursuant to which a federal
question

must

be

presented

on

the

face

of

the

plaintiff’s

properly pleaded complaint. Caterpillar Inc. v. Williams, 482
U.S. at 392, 107 S.Ct. at 2429, (quoting Gully v. First National
Bank, 299 U.S. 109, 112–113, 57 S.Ct. 96, 97–98, 81 L.Ed. 70
(1936).

The plaintiff is the “master of the claim; he or she may

avoid federal jurisdiction by exclusive reliance on state law.”
Caterpillar Inc. v. Williams, 482 U.S. at 392, 107 S.Ct. at 2429
(1987); Danca v. Private Health Care Systems, Inc., 185 F.3d at 4
(noting that the plaintiff “has the prerogative to rely on state
law alone although both federal and state law may provide a cause
of action”).
Accordingly, unless the complaint “implicates an area of
federal law for which Congress intended a particularly powerful
preemptive sweep,” id. (citing Metropolitan Life Ins. Co. v.
9

Taylor,

481

U.S.

58,

63-64,

107

S.Ct.

1542,

95

L.Ed.2d

55

(1987)), the Court’s analysis of whether federal jurisdiction
exists is limited to what can be ascertained from the face of the
state court complaint. Danca v. Private Health Care Systems,
Inc., 185 F.3d at 4); Franchise Tax Bd. v. Construction Laborers
Vacation Trust, 463 U.S. 1, 9–10, 103 S.Ct. 2841, 77 L.Ed.2d 420
(1983); BIW Deceived v. Local S6, Indus. Union of Marine and
Shipbuilding Workers of America, IAMAW Dist. Lodge 4, 132 F.3d
824,

831

(1st

jurisdiction
sentry—the

Cir.

are

1997)

(“The

customarily

well-pleaded

gates

patrolled

complaint

of

federal

by

a

rule—which,

question

steely-eyed
in

general,

prohibits the exercise of federal question jurisdiction if no
federal claim appears within the four corners of the complaint”).
III. Discussion
A. Timeliness
Taylor filed her initial complaint on October 1, 2015. She
subsequently amended it on December 22, 2015 by adding a claim
pursuant to the Rhode Island Motor Vehicle Business Practices
Act, R.I. Gen. Laws § 31-5.1. Scott Motors filed a notice of
removal on February 22, 2016, long after the statutory time limit
specified in 28 U.S.C. § 1446(b) had expired. Seemingly aware
that

the

removal

could

be

considered

untimely,

Scott

Motors

suggests that at a January 22, 2016 hearing, it was revealed, for
10

the first time, that “the instant action was not a simple claim
for vehicle value, but rather a much broader claim premised on
VWGoA’s

purported

EPA

standards

and

regulations.”

Notice

of

Removal at Page 3 of 10 (Dkt. No. 1). Scott Motors also cites to
Taylor’s February 5, 2016 Second Supplemental Memorandum, Ex. Q
(Dkt. 3-2 at Page 13 of 79), pointing out that Taylor states she
suffered the injury of being an involuntary emitter of illegal
pollution, for which there was no readily ascertainable value to
compensate

her.

However,

a

closer

read

of

those

statements

reveals that, far from asserting a federal claim for damages
related to the pollution issue, Taylor was making a case for an
equitable remedy because no such damages were available to her.
Id. Moreover, as Taylor pointed out in her response (Dkt. No. 9)
to Scott Motors’ Motion for Stay, as early as November 20, 2015,
Scott

Motors

asked

for

a

120-day

stay

in

the

state

court

proceedings on the contention that Taylor’s claims against it
“are largely based on similar allegations” as those in hundreds
of other cases concerning the September 18, 2015 EPA notice of
violation related to VW diesel vehicles. Ex. C at 2 (Dkt. No. 9-3
at Page 3 of 8). If, as Scott Motors now contends, Taylor was
implying the assertion of a federal claim, Scott Motors already
took that position back on November 20, 2015 and should have
sought removal of the case by December 20, 2015. Under those
11

circumstances, the notice of removal was well out of time and,
for that reason alone, the case should be remanded.
B. Federal Subject Matter Jurisdiction
Even if the removal were deemed to be timely, Scott Motors
fails to meet its burden to establish federal subject matter
jurisdiction. On its face, the Complaint is strictly based on
state

law.

Taylor

asks

for

rescission

of

the

Contract

and

revocation of acceptance in connection with the purchase of her
VW

Diesel

from

Scott

Motors.

Her

claims

are

based

on

the

assertion that the representations by Scott Motors, which induced
her to purchase the vehicle, were revealed to be false after the
manufacturer disclosed that the efficiency and performance of its
diesel cars were achieved at the expense of emissions far in
excess of what was reported or legal. Notably, Taylor has not
included Volkswagen as a defendant, nor has she asserted that
Scott Motors knew of the emissions software when it sold her the
car or that it in any way contributed to the illegal pollution.
Both parties are in agreement that Taylor has not, and cannot,
raise a private action under the Clean Air Act. Rather, Taylor’s
claims

are

limited

to

alleging

that

Scott

Motors,

albeit

unknowingly, made material misrepresentations which induced her
to

enter

into

a

contract

she

now

wants

rescinded.

In

the

Complaint, Taylor claims no injury or damages for unwittingly
12

contributing

to

air

pollution

by

driving

the

VW

Diesel

she

purchased from Scott Motors. Both her assertions and request for
a

remedy

are

based

solely

on

Scott Motors’

alleged

material

misrepresentations.
Scott

Motors’

Scott Motors

for

contention
the value

that

of

Taylor

her

seeks

unwilling

damages

from

contribution

to

illegal pollution, taken from a memorandum submitted during the
parties’

extensive

and

contentious

motion

practice,

is

unsupported by the plain language of the Complaint. Conceding
that the Clean Air Act does not create a private cause of action,
Scott Motors asserts, nevertheless, that “this case . . . is in
actuality

an

attempt

to

enforce

the

emission

standards

established by the EPA.” Notice of Removal at Page 9 of 10.
The Court disagrees. Although the Complaint makes reference
to

VW

diesel

cars

“spewing

illegal

quantities

of

harmful

pollutants into the atmosphere,” that assertion serves only to
explain Taylor’s contention that this unknown consequence of the
efficiency and performance allegedly promised to her by Scott
Motors constituted a material misrepresentation. Nothing in the
Complaint

provides

the

basis

for

federal

jurisdiction.

Accordingly, Taylor’s motion is GRANTED and the case is REMANDED.

13

Scott Motors’ motion to stay is DISMISSED as MOOT.
SO ORDERED.

/s/ Mary M. Lisi
Mary M. Lisi
Senior United States District Judge
March 15, 2016

14