Salei v. Boardwalk Regency Corp.

913 F. Supp. 993, 1996 U.S. Dist. LEXIS 739, 1996 WL 32685
CourtDistrict Court, E.D. Michigan
DecidedJanuary 23, 1996
Docket94-72239-DT
StatusPublished
Cited by23 cases

This text of 913 F. Supp. 993 (Salei v. Boardwalk Regency Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Salei v. Boardwalk Regency Corp., 913 F. Supp. 993, 1996 U.S. Dist. LEXIS 739, 1996 WL 32685 (E.D. Mich. 1996).

Opinion

OPINION AND ORDER REGARDING MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION

ROSEN, District Judge.

I. INTRODUCTION

On May 6, 1994, Plaintiff Israel Salei (“Plaintiff’) filed a three-count complaint against Defendant Boardwalk Regency Corporation (“Defendant”) in Oakland County Circuit Court. Counts one and two are based on Michigan law. Count three alleges that Defendant violated the federal Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., by obtaining a credit report for an impermissible purpose.

On June 8, 1994, Defendant removed this case from state to federal court based on the federal question raised by Plaintiffs third count. Defendant followed with a Motion to Dismiss filed on June 15,1994. Plaintiff filed a Motion to Remand on June 22, 1994. Responses to both motions were filed on July 11, 1994. These two motions were referred to Magistrate Judge Thomas A. Carlson for resolution.

Magistrate Judge Carlson heard oral arguments on August 19, 1994, and considered supplemental briefs filed on August 29 and September 22. On November 10, 1994, he issued a Report and Recommendation advising the Court to grant Plaintiffs Motion to Remand, or, in the alternative, to deny Defendant’s Motion to Dismiss. Defendant filed objections to the Report and Recommendation on December 1,1994.

After reviewing the papers filed by the parties and the Magistrate Judge’s Report and Recommendation, and for the reasons stated herein, the Court remands Plaintiffs state law claims to the Oakland County Circuit Court, retains jurisdiction over Plaintiffs federal claim, and denies Defendant’s Motion to Dismiss with respect to the federal claim. In addition, because the Court finds that Plaintiffs state law claims are separate and independent from his federal claim, the Court must interpret 28 U.S.C. § 1441(c) in order to determine which of Plaintiffs claims to retain and which to remand. As discussed in detail below, the Court’s attempt to apply 28 U.S.C. § 1441(e) leads to the conclusion that the provision is unconstitutional.

II. FACTUAL BACKGROUND

The Magistrate Judge’s Report and Recommendation ably summarizes the series of events leading up to this action:

*996 Defendant Boardwalk is a New Jersey corporation, with its principal place of business in New Jersey, and operates a gambling casino in Atlantic City under the name of “Caesars Atlantic City.” In 1990 and 1991 Plaintiff visited Caesars on numerous occasions, gambled, and wrote a series of personal checks in exchange for gambling chips. When some of the checks were returned unpaid, Defendant filed suit in New Jersey state court to recover its losses; on February 6, 1992 it obtained a default judgment against Plaintiff.

In June 1992 Boardwalk filed suit in Oakland County Circuit Court against Plaintiff to enforce its New Jersey judgment. In July 1993, when the case was ready for trial, the parties entered into a settlement agreement, which, inter alia, directed Boardwalk to “discharge, set aside and vacate with prejudice the [New Jersey] judgment ... within 10 days.”

In February 1994, Salei filed a Motion for Contempt In Violating Court Order And To Impose Fine and Sanctions, in the Oakland County Circuit Court, alleging that Boardwalk had failed to discharge, set aside and vacate the New Jersey judgment, as agreed upon and ordered, and seeking for relief a finding of contempt, “an appropriate fine of not less that $10,-000 and, in addition, a continuing fine of not less than $200 per day until Caesars’ contempt is cured, and to impose such additional sanctions as may be lawful and appropriate.”

A hearing was held on the Motion for Contempt, on March 16,1994, at which the Court held that “I won’t hold them in contempt because I can understand the misunderstandings here between the two, but based upon [counsel for Salei’s] representation as an officer of the Court, you will prepare the document that comports with this wording that you agreed to.... ” (TR p. 7, filed by Defendant on 7/6/94). Boardwalk obtained the required discharge/set aside order in New Jersey on April 12,1994.

Plaintiff then filed the instant Complaint in Oakland County Circuit Court, on May 6,1994, against Defendant, alleging breach of the settlement agreement (Count I), violation of the Circuit Court’s Order of July 21, 1993 ordering Defendant to discharge and set aside the New Jersey judgment (Count II), and violation of the federal Fair Credit Reporting Act (Count III). The Complaint was based upon Defendant’s failure to set aside the New Jersey judgment for. eight months (July 1993-April 1994), and upon alleged improperly motivated investigative consumer reports, and sought damages for Plaintiffs alleged injuries to hi's credit standing and reputation and for related financial losses.

(Magistrate Judge’s Report and Recommendation at 1-3).

Neither Plaintiffs complaint nor any of his subsequent filings sets forth the factual predicate for his FCRA claim. According to Defendant, however, the claim is based on a credit report it obtained after Plaintiff filed his contempt motion in state court. Defendant alleges- that; it obtained the report to determine whether its action — or, in Plaintiffs view, failure to act — concerning the New Jersey judgment had any adverse impact on Plaintiffs credit rating.

III. PROCEDURAL BACKGROUND

The Magistrate Judge’s Report and Recommendation addresses two motions, Defendant’s Motion to Dismiss and Plaintiffs Motion to Remand. Defendant’s motion argues that, under principles of res judicata, Counts I and II of Plaintiffs complaint are barred by the rulings of the Michigan court in the prior state court action brought by Defendant. Defendant also contends that Count III of Plaintiffs complaint, the federal FCRA claim, must be dismissed because Defendant’s minimal contacts with Michigan are insufficient to give this Court personal jurisdiction over Defendant. In turn, Plaintiffs Motion to Remand is based on the contention that removal of the instant action to this Court was both improper and unjustified.

The Magistrate Judge’s Report and Recommendation advises this Court to remand the entire matter to state court. The Magistrate Judge reasoned that this Court has subject matter jurisdiction over all of Plaintiffs claims, both state and federal, under either 28 U.S.C. § 1367(a), which defines the scope of a federal court’s supplemental juris *997 diction, or 28 U.S.C. § 1441(c), which purports to confer subject matter jurisdiction over state law claims that are joined with a “separate and independent” federal claim.

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Cite This Page — Counsel Stack

Bluebook (online)
913 F. Supp. 993, 1996 U.S. Dist. LEXIS 739, 1996 WL 32685, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salei-v-boardwalk-regency-corp-mied-1996.