Powell et al v. The Huntington National Bank

Filing 97

MEMORANDUM OPINION AND ORDER granting in part the 64 MOTION to Certify, insofar as it requests amendment of the 57 Opinion to include certification for interlocutory appeal and a stay in the proceedings pending appeal, and denying said motio n to Certify, insofar as it requests that the Court certify Defendant's proffered controlling question of law; denying as moot the 66 MOTION to Expedite Briefing Schedule, Defendant's 90 REQUEST for Hearing, and the 70 MOTIO N to File Memorandum as Amici Curiae; directing that its 9/26/2014 57 Memorandum Opinion and Order is hereby amended to include the following additional paragraph, and as set forth more fully herein; the Court STAYS these proceedings pending the determination of the Fourth Circuit as to this interlocutory appeal; directing this case removed from the Court's active docket. Signed by Judge Thomas E. Johnston on 5/1/2015. (cc: counsel of record; any unrepresented party) (taq)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION

JEREMY A. POWELL, et al.,
Plaintiffs,
v.

CIVIL ACTION NO. 2:13-cv-32179

THE HUNTINGTON NATIONAL BANK,
Defendant.

MEMORANDUM OPINION AND ORDER
Pending before the Court are Defendant‘s Motion to Certify the Court‘s September 26,
2014 Order for Interlocutory Review (the ―Motion to Certify‖), (ECF 64), Defendant‘s Motion to
Expedite Briefing Schedule (the ―Motion to Expedite‖), (ECF 66), Defendant‘s Request for a
Hearing, (ECF 90), and the Motion by American Bankers Association and Consumer Bankers
Association for Leave to File a Memorandum as Amici Curiae in Support of Defendant‘s Motion
to Certify an Interlocutory Appeal (the ―Motion to File Memorandum as Amici Curiae‖), (ECF
70). For the reasons discussed herein, the Court GRANTS IN PART and DENIES IN PART the
Motion to Certify and DENIES AS MOOT the Motion to Expedite, the Request for a Hearing,
and the Motion to File Memorandum as Amici Curiae.
I. Background
Plaintiffs filed the Complaint in the Circuit Court of Kanawha County, West Virginia, on
October 15, 2013. (ECF 1-1.) The Complaint alleges that Plaintiffs ―bring this action on his [sic]
own behalf and on behalf of a class of West Virginia consumers who have had unlawful late fees
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charged to their home loan accounts.‖ (Id. ¶ 1; see also id. ¶¶ 12–16 (alleging that this matter is a
class action brought pursuant to West Virginia Rule of Civil Procedure 23).) The Complaint
includes two claims for relief. Count I alleges that Defendant illegally assessed late fees in
violation of the terms of Plaintiffs‘ mortgage loan contract and West Virginia Consumer Credit
and Protection Act (―WVCCPA‖), Section 46A-3-112. (Id. ¶¶ 17–22.) Count II is a
misrepresentation claim under Section 46A-2-127 of the WVCCPA. (Id. ¶¶ 23–24.)
On December 13, 2013, Defendant timely removed the state case to this Court. (See ECF
1.) In the notice of removal, Defendant argued this Court has diversity jurisdiction over this matter
under the Class Action Fairness Act of 2005 and based on federal-question jurisdiction. (Id.) As to
the latter, Defendant argued that the Complaint includes only usury claims that are completely
preempted by the National Bank Act (―NBA‖), 12 U.S.C. §§ 85 and 86. (Id. ¶¶ 11–28.) Defendant
then moved for judgment on the pleadings. (ECF 6.)
In its Memorandum Opinion and Order, dated September 26, 2014 (the ―Opinion‖), the
Court found that ―Plaintiffs‘ claims are not pre-empted by the NBA‖ and, ―[c]onsequently,
Defendant improperly removed this case from state court on the basis of federal question
jurisdiction.‖ (ECF 57 at 12.) However, the Court found that it does have diversity jurisdiction
over this matter under 28 U.S.C. § 1332(d). (Id. at 12–13.)
On October 7, 2014, Defendant filed the Motion to Certify,1 (ECF 64), and the Motion to
Expedite, (ECF 66). On October 9, 2014, the American Bankers Association and the Consumer
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In the Motion to Certify, Defendant requests that the Court certify the following question:
Whether the National Bank Act provisions codified at 12 U.S.C. §§ 85-86, and federal law
interpreting the NBA, which permit Huntington Bank to export Ohio‘s laws governing the amount
and manner of assessing late fees and other interest charges, preempt Plaintiffs‘ claims that W.Va.
Code § 46A-3-112 prohibits Huntington Bank from charging late fees that are permissible under
Ohio law.

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Bankers Association filed the Motion to File Memorandum as Amici Curiae. (ECF 70.) Plaintiffs
subsequently filed their response to the Motion to Certify, the Motion to Expedite, and the Motion
to File Memorandum as Amici Curiae on October 21, 2014, (ECF 74), and Defendant filed its
reply in support of the Motion to Certify on October 28, 2014,2 (ECF 78).
II. Discussion
―In general, appellate review is reserved for final judgments.‖ Ohio Valley Envtl. Coal.,
Inc. v. Fola Coal Co., Civil Action No. 2:13–5006, 2015 WL 1599638, at *2 (S.D. W. Va. Apr. 8,
2015) (citations omitted). ―[F]inality is an important component of the judicial structure, for, as a
general matter, it prevents the entanglement of the district and appellate courts in each other‘s
adjudications in an unruly and ultimately inefficient way.‖ Evergreen Int’l (USA) Corp. v.
Standard Warehouse, 33 F.3d 420, 423 (4th Cir. 1994); see also United States v. Nixon, 418 U.S.
683, 690 (1974) (―The finality requirement of 28 U.S.C. [§] 1291 embodies a strong congressional
policy against piecemeal reviews, and against obstructing or impeding an ongoing judicial
proceeding by interlocutory appeals.‖ (citing Cobbledick v. United States, 309 U.S. 323, 324–26
(1940))); Millville Quarry, Inc. v. Liberty Mut. Fire Ins. Co., 217 F.3d 839, at *3 (4th Cir. 2000)
(stating that piecemeal review of ongoing district court proceedings ―would not only delay the
ultimate resolution of disputes by spawning multiple appeals, it would also ‗undermine the
independence of the district judge‘ in conducting court proceedings‖ (quoting Firestone Tire &
Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981))).

(ECF 65 at 1.)
2
Defendant later filed the Request for a Hearing on December 10, 2014. (ECF 90.)

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28 U.S.C. § 1292(a) provides an exception to this finality rule and states, in relevant part,
that ―the courts of appeals shall have jurisdiction of appeals from . . . [i]nterlocutory orders of the
district courts of the United States.‖ Section 1292 further provides the following:
When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order involves a
controlling question of law as to which there is substantial ground for difference of
opinion and that an immediate appeal from the order may materially advance the
ultimate termination of the litigation, he shall so state in writing in such order. The
Court of Appeals which would have jurisdiction of an appeal of such action may
thereupon, in its discretion, permit an appeal to be taken from such order, if
application is made to it within ten days after the entry of the order: Provided,
however, That application for an appeal hereunder shall not stay proceedings in the
district court unless the district judge or the Court of Appeals or a judge thereof
shall so order.
28 U.S.C. § 1292(b). ―Section 1292(b) is best suited for use in a dispute that involves ‗a narrow
question of pure law whose resolution will be completely dispositive . . . .‘‖ Stewart v. W. Va.
Emp’rs Mut. Ins. Co., Civil Action Nos. 2:09-126, 2:09-127, 2010 WL 1286623, at *1 (S.D. W.
Va. Mar. 29, 2010) (quoting Difelice v. U.S. Airways, Inc., 404 F. Supp. 2d 907, 908 (E.D. Va.
2005)).
―Although courts have discretion to certify an issue for interlocutory appeal, interlocutory
appeals are rarely allowed . . . [and] the movant bears the burden of showing that exceptional
circumstances justify a departure from the basic policy of postponing appellate review until after
the entry of final judgment.‖ Nat’l Cmty. Reinvestment Coal. v. Accredited Home Lenders Holding
Co., 597 F. Supp. 2d 120, 122 (D.D.C. 2009) (internal quotation marks and citation omitted).
Ultimately, ―§ 1292(b) should be used sparingly and . . . its requirements must be strictly
construed.‖ Myles v. Laffitte, 881 F.2d 125, 127 (4th Cir. 1989) (citation omitted).

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Defendant argues—and Plaintiffs do not contest—that the Opinion involves a controlling
question of law and that immediate appeal from the Opinion may materially advance the
termination of this litigation. (ECF 65 at 5–6, 10–12; see ECF 74 at 2 (constituting Plaintiff‘s
opposition to the Motion to Certify and stating that ―[t]he first and third conditions‖ of an
interlocutory appeal ―are arguably met here, as with the majority of pre-discovery dispositive
motions, because the legal question presented is inherently controlling, and the litigation will be
delayed or advanced by the appeal depending on whether the appeal courts [sic] affirms or
reverses‖).) As such, the parties only dispute whether there is ―substantial ground for difference of
opinion‖ as to the controlling legal question. (See ECF 74 at 2–6; ECF 78 (―Plaintiffs first concede
that two of the three prerequisites to an interlocutory appeal have been met.‖ (citing ECF 74 at 2–
3)).
―The question of whether there is ‗substantial ground for difference of opinion‘ must be
considered not from the perspective of the parties, but from that of the courts.‖ Ohio Valley Envtl.
Coal. v. Elk Run Coal Co., Civil Action No. 3:12–0785, 2014 WL 4660782, at *3 (S.D. W. Va.
Sept. 17, 2014) (citing Lynn v. Monarch Recovery Mgmt., Inc., 953 F. Supp. 2d 612, 624 (D. Md.
2013)). ―Mere disagreement, even if vehement, with a court‘s ruling does not establish a
substantial ground for difference of opinion sufficient to satisfy the statutory requirements for an
interlocutory appeal.‖ Nat’l Cmty. Reinvestment Coal., 597 F. Supp. 2d at 122 (quoting Judicial
Watch, Inc. v. Nat’l Energy Policy Dev. Grp., 233 F. Supp. 2d 16, 20 (D.D.C. 2002)); see also
Lynn, 953 F. Supp. 2d at 626 (―[F]or purposes of § 1292(b), the litigants‘ positions are
irrelevant—otherwise, every contested decision would be appropriate for immediate interlocutory
appeal.‖). Additionally, ―[t]hat a controlling issue of law may be an issue of first impression does
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not necessarily translate into there also being substantial ground for difference of opinion.‖ Elk
Run Coal Co., 2014 WL 4660782, at *3 (citing Lynn, 953 F. Supp. 2d at 624). ―Furthermore, that a
question of law is complex or difficult does not justify immediate appeal pursuant to 28 U.S.C.
§ 1292(b).‖ Id. (citing In re S. African Apartheid Litig., 624 F. Supp. 2d 336, 339 (S.D.N.Y.
2009)); see also Lynn, 953 F. Supp. 2d at 623 (―Interlocutory appeal should not be sought ‗to
provide early review of difficult rulings in hard cases.‘‖ (quoting Abortion Rights Mobilization,
Inc. v. Regan, 552 F. Supp. 364, 366 (S.D.N.Y. 1982))).
Defendant argues there is ―substantial ground for difference of opinion‖ as to whether
Sections 85 and 86 of the NBA preempt Plaintiffs‘ claims regarding Defendant‘s assessment of
late fees during months Plaintiffs allege they were current on payments. (ECF 65 at 6–10; ECF 78
at 3–7.) As the Court noted in the Opinion, it is ―not a novel interpretation‖ to find—as the Court
did—that a claim regarding the practice of charging a ―late fee when no late fee should be charged
in the first place‖ is different than a claim asserting that a fee is excessive or usurious. (ECF 57 at
11); see, e.g., Hood ex rel. Miss. v. JP Morgan Chase & Co., 737 F.3d 78, 92–94 (5th Cir. 2013)
(finding that ―[n]one of the State‘s claims can be fairly construed as allegations that [the
defendants] violated the NBA‖ where ―[t]he [plaintiff] never alleges that [the defendants] charge
an interest rate greater than allowed by § 85‖); Young v. Wells Fargo & Co., 671 F. Supp. 2d 1006,
1021 (S.D. Iowa 2009) (―[T]he basis of the alleged excessiveness is that Wells Fargo charged fees
when they should not, a wholly different claim from a claim that Wells Fargo applied an illegal
interest rate. As such, [the plaintiffs‘] claims are not usury claims and are not subject to complete
preemption by § 86 of the NBA.‖); Cross-Cnty. Bank v. Klussman, No. C–01–4190–SC, 2004 WL
966289, at *6 (N.D. Cal. Apr. 30, 2004) (―[The plaintiff] does not challenge the legality of the rate
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of interest charged by [the defendants]. Rather, [the plaintiff] claims that various interest fees were
not disclosed, were unwarranted, were based on charges that were themselves improper, and in
short, should never have been charged at all.‖). However, the Court recognizes that the definition
of ―interest‖ under the NBA presents ―legal issues that are neither easy to decide nor well-settled,‖
Haw. ex rel. Louie v. JP Morgan Chase & Co., 921 F. Supp. 2d 1059, 1067 (D. Haw. 2013), and
the proper application of the definition of ―interest‖—and particularly whether ―interest‖ includes
various fees—is an issue that has garnered different interpretations in courts throughout the
country. See, e.g., New Mexico v. Capital One Bank (USA) N.A., 980 F. Supp. 2d 1314, 1328–29
(D.N.M. 2013) (discussing a division between courts relating to whether claims relating to fees are
usury claims). Compare W. Va. ex rel. McGraw v. JPMorgan Chase & Co., 842 F. Supp. 2d 984,
992 (S.D. W. Va. 2012) (determining that fees associated with the defendants‘ payment protection
plans ―are not interest under the NBA‖), and W. Va. ex rel. McGraw v. Capital One Bank USA
N.A., Civil Action No. 3:10–0211, 2010 WL 2901801, at *3–4 (S.D. W. Va. July 22, 2010)
(finding that the plaintiff‘s state-law claims were not preempted by Sections 85 or 86 of the NBA
because the claims challenged the imposition of over-the-limit fees, not the amount of those fees),
with Hood v. JPMorgan Chase & Co., 958 F. Supp. 2d 681, 703–04 (S.D. Miss.) (specifically
disagreeing with the holding in W. Va. ex rel. McGraw, 842 F. Supp. 2d 984, and finding that fees
associated with the defendants‘ payment protection plans ―constitute interest under the NBA‖),
rev’d Hood ex rel. Miss., 737 F.3d 78 (2013), and Akopyan v. Wells Fargo Home Mortg., Inc., 155
Cal. Rptr. 3d 245, 269 (Cal. Ct. App. 2013) (noting that the case did not involve an allegation of
fraudulent activity and stating that ―the allegations that the [plaintiffs] were improperly assessed
late fees for one additional month at the rate of six percent arguably gives rise to a claim of usury‖).
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Given the complexity of this issue and the divergent interpretations of courts regarding
whether various fees are ―interest‖ for purposes of the NBA, the Court finds there is a substantial
ground for difference of opinion as to the controlling issue of law—whether Plaintiffs‘ claims are
preempted by the NBA—as addressed in the Opinion. See, e.g., Elk Run Coal Co., 2014 WL
4660782, at *3 (discussing the standard relating to ―substantial ground for difference of opinion‖).
The Court therefore finds that the three requirements for interlocutory appeal are met in this case
and that certification for interlocutory appeal is appropriate. 3 See 28 U.S.C. § 1292(b). (See
generally ECF 74 at 2 (providing Plaintiff‘s opposition to the Motion to Certify and noting that
―[t]he first and third conditions‖ of an interlocutory appeal ―are arguably met here‖).)
Nonetheless, the Court declines to certify Defendant‘s proposed controlling question of
law. (See ECF 64.) The discussion and findings in the Opinion regarding whether Plaintiffs‘
state-law claims are preempted by the NBA are sufficient to provide the Fourth Circuit with the
specific controlling question of law presently at issue. (See ECF 57.)
III. Conclusion
For the reasons discussed above, the Court GRANTS the Motion to Certify, insofar as it
requests amendment of the Opinion to include certification for interlocutory appeal and a stay in
the proceedings pending appeal. (ECF 64.) However, the Court DENIES the Motion to Certify,
insofar as it requests that the Court certify Defendant‘s proffered controlling question of law. (Id.)
The Court further DENIES AS MOOT the Motion to Expedite Briefing Schedule, (ECF 66),

3

The Court also notes that some courts granted motions for interlocutory review when the challenged legal issue was
whether certain fees are ―interest‖ for purposes of the preemption analysis under the NBA. See Haw. ex rel. Louie, 921
F. Supp. 2d at 1068 (granting a motion for certification for interlocutory appeal on the issue of whether claims related
to fees associated with the defendants‘ payment protection plans are preempted by the NBA); Hood ex rel. Miss., 737
F.3d at 82 & 84 n.2 (noting that the district court certified for interlocutory appeal the question of whether fees
associated with the defendants‘ payment protection plans constituted ―interest‖ under the NBA).

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Defendant‘s Request for Hearing, (ECF 90), and the Motion to File Memorandum as Amici
Curiae, (ECF 70).
The Court ORDERS that its September 26, 2014 Memorandum Opinion and Order is
hereby amended to include the following additional paragraph:
The Court certifies, pursuant to 28 U.S.C. § 1292(b), that it is of the opinion that the
finding of this Memorandum Opinion and Order that Plaintiffs‘ state-law claims
are not preempted by the National Bank Act, 12 U.S.C. §§ 85 and 86, involves a
controlling question of law as to which there is substantial ground for difference of
opinion and that an immediate appeal from this Memorandum Opinion and Order
may materially advance the ultimate termination of the litigation.
The Court STAYS these proceedings pending the determination of the Fourth Circuit as to this
interlocutory appeal. The Court DIRECTS the Clerk to remove this case from the Court‘s active
docket.
IT IS SO ORDERED.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER:

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May 1, 2015