Adams v. General Motors Acceptance Corp.

307 F. Supp. 2d 812, 2004 U.S. Dist. LEXIS 10470
District Court, N.D. Mississippi·Decided February 13, 2004·No. No. CIV.A. 4:03CV127-M-A·Published·Cited by 1 cases

Opinion

MEMORANDUM OPINION AND ORDER

MILLS, District Judge.

This cause comes before the court on plaintiffs’ motion [73-1] to remand this case to the Circuit Court of Leflore County. Defendants have responded in opposition to the motion, and the court, having considered the memoranda and submissions of the parties, concludes that the motion is well taken and should be granted.

On November 19, 2002, plaintiffs filed suit in the Circuit Court of Leflore County, seeking recovery for fraud allegedly committed by defendants in the course of automobile financing transactions among the parties. The defendants in this case include General Motors Acceptance Corporation (GMAC) and approximately one hundred' motor vehicle dealers who, according to plaintiffs’ complaint, conspired with each other to deceive plaintiffs into financing their vehicle purchases at inflated interest rates. The complaint also includes allegations that defendants conspired to defraud African-American plaintiffs by charging them even higher rates than those charged to similarly-situated white applicants, without informing them that they were being charged higher rates. Defendants removed the case to this court, on the basis of federal question jurisdiction, see 28 U.S.C. § 1331.

In moving for remand, plaintiffs argue that they seek recovery solely under state law and that federal question jurisdiction therefore does not exist in this case. Defendants acknowledge that plaintiffs state no federal claims on the face of their complaint, but they argue that plaintiffs’ allegations that defendants employed practices which served to discriminate against African-American customers implicate the federal Civil Rights Act, 42 U.S.C. § 1981, and the Equal Credit Opportunity Act, (ECOA), 15 U.S.C. § 1691, so as to give rise to federal question jurisdiction. This argument lacks merit. It is well established that, under the well-pleaded complaint rule, “federal jurisdiction exists only when a federal question is presented on the face of plaintiffs properly pleaded [816]*816complaint.” Terrebonne Homecare, Inc. v. SMA Health Plan, Inc., 271 F.3d 186, 188 (5th Cir.2001) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). “When a plaintiff has a choice between federal and state law claims, she may proceed in state court on the exclusive basis of state law, thus defeating the defendant’s opportunity to remove.” Medina v. Ramsey Steel Co., 238 F.3d 674, 680 (5th Cir.2001).

If an area of the law is completely preempted by federal law, the artful pleading doctrine may apply. The Fifth Circuit has explained the doctrine of complete preemption as follows:

This doctrine has been used to define limited categories of state law claims that are “completely preempted” such that “any civil complaint raising this select group of claims is necessarily federal in character,” no matter how it is characterized by the complainant in the relevant pleading. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987). In effect, the application of complete preemption “converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Id. at 1547. Because they are recast as federal claims, state law claims that are held to be completely preempted give rise to ‘federal question’ jurisdiction and thus may provide a basis for removal.

McClelland v. Gronwaldt, 155 F.3d 507, 512 (5th Cir.1998). It is thus clear that complete preemption may transform state law claims into federal claims. However, the United States Supreme Court has found complete preemption, and thus the artful pleading doctrine, to exist only in the limited areas of federal labor relations law, certain ERISA cases, and usury claims against national banks. Carpenter v. Wichita Falls Independent School Dist., 44 F.3d 362, 367 (5th Cir.1995); Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 123 S.Ct. 2058, 2063, 156 L.Ed.2d 1 (2003). Outside of these limited areas, a plaintiff is free to seek recovery solely under state law, and defendants may not seek to transform these claims into federal ones through the artful pleading doctrine.

In this case, it is clear that federal discrimination laws do not completely preempt state discrimination laws, and the artful pleading doctrine therefore does not apply. Indeed, at least two other district judges in this state have remanded cases involving allegations very similar to those in the present case. See Angelia Anderson, et al. v. Nissan Motor Acceptance, Corp., No. 3:03cv6 (S.D. Miss. Aug. 22, 2003); Amos v. Ford Motor Credit Corp., 2003 WL 23199863 (N.D.Miss. Dec.29, 2003). In Anderson, Judge Lee rejected nearly identical arguments that plaintiffs’ allegations of discriminatory practices in connection with automobile financing transactions served to transform state law claims into federal discrimination claims. In so concluding, Judge Lee wrote that “since it is plain that neither the Equal Credit Opportunity Act nor the Federal Civil Rights Act completely preempts state laws on race discrimination, it thus follows that there is no federal jurisdiction in this cause.” Anderson, Slip op. at 7-8. In Amos, Judge Davidson likewise remanded under circumstances substantially identical to those in this case and in Anderson.

In asserting that jurisdiction exists, defendants stress that Mississippi law provides no cause of action for race discrimination, and they thus argue that plaintiffs’ claims must necessarily be regarded as federal claims. However, in Waste Control Specialists, LLC v. Envirocare of Tex., 199 F.3d 781, 783 (5th Cir.2000), the Fifth Circuit held that the fact that a plaintiff [817]*817asserted state law antitrust claims which were allegedly not viable did not serve to transform those claims into federal antitrust claims. Indeed, the Fifth Circuit held that the district court lacked the jurisdiction to even consider whether those state law claims were viable, considering the absence of complete preemption in the antitrust context. Id. at 784. This court likewise has no jurisdiction to consider whether plaintiffs’ claims in this case constitute valid state law claims, since it is apparent that plaintiffs are attempting to proceed solely under state law in an area not subject to complete preemption. In this case, as in Anderson,

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Adams v. General Motors Acceptance Corp., 307 F. Supp. 2d 812, 2004 U.S. Dist. LEXIS 10470 (N.D. Miss. 2004).

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Adams v. General Motors Acceptance Corp.
307 F. Supp. 2d 812 (N.D. Mississippi, 2004)