Opinion
Civil Action No: 98-1823 SECTION: "J"(1)
January 5, 2001
ORDER AND REASONS
Before the Court are Plaintiffs' Motion to Remand (Rec. Doc. 108), Defendant's Motion to Add the Federal Deposit Insurance Corporation ("FDIC") as a Necessary Party Defendant (Rec. Doc. 110), and FDIC's Motion for Leave to Intervene as a Party Defendant (Rec. Doc. 103). The motions were set for hearing with oral argument on December 20, 2000, at which time the Court took the matter under advisement. After considering the memoranda and argument presented by counsel, the Court concludes that it is without subject matter jurisdiction to hear this case. Accordingly, Plaintiffs' motion to remand this case to the Civil District Court for the Parish of the Orleans is GRANTED remaining two motions are DISMISSED AS MOOT.
Background
In 1998, Patricia Heaton filed a class action suit against defendant Monogram Credit Card Bank of Georgia ("Monogram") in state court alleging that Monogram had violated the Louisiana Consumer Credit Law ("LCCL") by charging excessive credit card late fees and interest. Monogram removed the case to this Court and Plaintiffs' subsequent motion to remand was denied. Resigned to pursuing their case in federal court, Plaintiffs then, over Monogram's objection, amended their complaint to add a federal Truth in Lending Act ("TILA") claim. However, as the case progressed in this Court, Plaintiffs discovered information which prompted them to reurge their motion to remand. On November 22, 1999, this Court determined that it was without subject matter jurisdiction and remanded the case to state court. At the same time, the Court permitted Plaintiffs to dismiss their federal TILA claim.
Rather than proceed in state court, Monogram sought to appeal the remand order to the Fifth Circuit Court of Appeals. On November 2, 2000, the Fifth Circuit dismissed Monogram's appeal concluding that 28 U.S.C. § 1447(d) precluded appellate review. Heaton v. Monogram Credit Card Bank, 231 F.3d 994, 995 (5th Cir. 2000). However, the Fifth Circuit reinstated the TILA claim noting that Monogram would have immediate grounds to once again remove the case to federal court — this time based on federal question jurisdiction due to the pending TILA claim. Id. at 1000 n. 6. Shortly after the Fifth Circuit issued its ruling, however, Plaintiffs amended their state court petition to delete the federal TILA claim. Monogram then, for the second time, removed the case to this Court. Soon thereafter, FDIC moved to intervene in the suit, Monogram sought to add FDIC as a necessary party, and Plaintiffs once again moved to remand the case to state court.
Discussion
The Court begins its analysis with Plaintiffs' motion to remand. The arguments made by both sides are essentially the same as those made over a year ago when Plaintiffs last moved to remand this case. Monogram argues that it qualifies as a "State bank" under the Federal Deposit Insurance Act ("FDIA") ( 12 U.S.C. § 1811, et seq.) and that section 1831d(a) of the FDIA preempts state law causes of action against State banks. Moreover, Monogram argues that the preemption created by section 1831d(a) is complete so as to allow removal of this case to federal court. Monogram also asserts that the possibility of attorney's fees as part of Plaintiffs' potential award meets the jurisdictional amount for diversity jurisdiction. Plaintiffs, on the other hand, argue that the Court is without subject matter jurisdiction because Monogram is not a State bank, and even if it is, section 1831d(a) does not completely preempt state law claims so as to allow removal to a federal court.
The Court considered the State bank issue over a year ago when the case was remanded the first time. At that time, the Court determined that Monogram, a "credit card" bank chartered under Georgia law, was not a State bank within the meaning of the FDIA. Heaton v. Monogram, 1999 WL 1789422, at 1 (E.D. La. Nov. 22, 1999). In reaching that conclusion, the Court relied on the plain language of 12 U.S.C. § 1813(a)(2) which defines a State bank as "any bank . . . engaged in the business of receiving deposits . . . and incorporated under the laws of any State . . ." Although Monogram received deposits from its parent company, it was not "engaged in the business" of receiving deposits from its customers. Accordingly, the Court concluded that Monogram was not a State bank, and therefore, federal preemption did not apply. Heaton, 1999 WL 1789422, at 1.
In opposition to the current motion to remand, Monogram urges the Court to reconsider its prior conclusion on the State bank issue. In support of its position, Monogram directs the Court's attention to several factors that the Court did not have the benefit of considering last time. First, FDIC has since issued General Counsel's Opinion No. 12 ("GCO-12"), in which FDIC sets forth its interpretation of "engaged in the business of receiving deposits." Monogram's Exh. F. According to GCO-12, the statutory requirement of being "engaged in the business of receiving deposits" is satisfied by the continuous maintenance of one or more non-trust deposits in the aggregate amount of $500,000. Id. at 1 ( 65 Fed. Reg. 14568). Second, Monogram points out that it does in fact receive "deposits" from its customers because Monogram accumulates credit balances from customers who overpay their credit card accounts. Finally, Monogram points out that pursuant to recent changes in Georgia law, it now accepts deposits from unaffiliated parties. Monogram's Exh. H, ¶ 2-3.
In its memorandum and at oral argument, Monogram also argued of the potential chaos that would ensue if courts began to "second-guess" FDIC's determination of State bank status. Implicit in FDIC's 1988 decision to insure Monogram was a finding by FDIC that Monogram was a State bank. While Monogram and FDIC made persuasive arguments on this point, those policy arguments are best left for Congress to resolve rather than the judiciary.
It is important to note that the issue is not whether Monogram "receives deposits" — it likely does. But section 1813(a)(2) does not define a State bank as one that "receives deposits." Rather, a State bank is one engaged in the business of receiving deposits. 12 U.S.C. § 1813(a)(2). While the statute does not define "engaged in the business," the Court must assume that Congress added the phrase for some purpose, and therefore, must interpret section 1813(a)(2) 50 as to give meaning to the phrase. Thus, even assuming that overpayments by credit card customers would qualify as "deposits" under 12 U.S.C. § 1813(1), a premise that in and of itself is not completely clear, it does not necessarily follow that Monogram is engaged in the business of receiving deposits as that term is used in the statute.
Similarly, the fact that the Georgia statutes under which Monogram is chartered now allow Monogram to accept deposits from non-affiliates does not necessarily lead to the conclusion that Monogram is engaged in the business of receiving deposits. Even with the changes in Georgia's banking law, Monogram's ability to accept deposits is still extremely limited. See Ga. Stat. § 7-5-3(7). And the law under which Monogram is chartered still dictates that Monogram may only engage in the business of soliciting, processing, and making loans pursuant to credit card accounts . . . ." Ga. Stat. § 7-5-3(6). Thus, the per se restrictions imposed by the state law governing Monogram's operations militate against finding that Monogram engages in the business of receiving deposits.
Furthermore, the statutory changes at issue were made well after Plaintiffs' cause of action arose and this suit was filed. Accordingly, the changes in Georgia law would likely be inapplicable to this lawsuit.
Finally, GCO-12 does not convince the Court that Monogram engages in the business of receiving deposits. Undoubtedly, Monogram's activities qualify as "engaged in the business of receiving deposits" as FDIC interprets the phrase in GCO-12, and if the Court were bound by GCO-12 it would be compelled to find that Monogram is a State bank. But given that GCO-12 is an opinion letter, it is not entitled to Chevron deference.Christensen v. Harris County, 529 U.S. 576, 120 S.Ct. 1655, 1662-63, 146 L.Ed.2d 621 (2000). Rather, it is "entitled to respect" but only to the extent that the opinions and interpretations expressed therein have the power to persuade. Id. Reviewing GCO-12 in light of section 1813(a)(2) it would seem that FDIC's interpretation of "engaged in the business of receiving deposits" ignores at least one aspect of the statute. Section 1813(a)(2) refers to deposits in the plural which would seem to indicate that Congress envisioned a State bank to have at minimum more than one deposit. FDIC, on the other hand, seems to completely ignore this and under its interpretation, a single deposit of $500,000 suffices. At oral argument, counsel was unable to explain the significance of the $500,000 figure chosen by FDIC. Simply said, the Court is unable to discern how FDIC's interpretation of "engaged in the business of receiving deposits," as explained in GCO-12, gives effect to the language of the statute as Congress wrote it. Accordingly, the Court does not find GCO-12 persuasive.
Thus, having considered Monogram's new arguments, the Court once again concludes that Monogram is not "engaged in the business of receiving deposits." Consequently, it does not meet the definition of a State bank under the FDIA. Given that Monogram is not a State bank, preemption, whether ordinary or complete, does not apply.
The Court's determination on this issue will have no preclusive effect in state court because a remand order is jurisdictional in nature. Heaton, 231 F.3d at 1000 (citing Smith v. Texas Children's Hosp., 172 F.3d 923, 926 (5th Cir. 1999)). Thus, all of the same defenses and arguments made to this Court, including ordinary preemption, are available to Monogram in state court.
However, assuming arguendo that Monogram is a State bank, the Court would nevertheless find removal improper because the Court is convinced that section 1831d does not completely preempt state law causes of action. While neither the Fifth Circuit nor the United States Supreme Court has addressed whether 12 U.S.C. § 1831d(a), the preemption provision of the FDIA, completely preempts state law causes of action, the Fifth Circuit has recognized that the doctrine of complete preemption is to be narrowly applied, that few federal statutes meet the standards necessary to show complete preemption, and that the doctrine should be applied with "circumscription." Heimann v. National Elevator Industry Pension Fund, 187 F.3d 493, 500 (5th Cir. 1999). Further, the Fifth Circuit requires evidence of clear Congressional intent to show that claims preempted by state law are removable. Id. Aaron v. National Union Fire Ins., 876 F.2d 1157, 1165 (5th Cir. 1989). Monogram points to nothing in the FDIA or its legislative history that evidences such intent. And while other courts have reached a contrary conclusion, see. e.g., M. Nahas Co. v. First Nat'l Bank, 930 F.2d 608 (8th Cir. 1991) (holding that the National Bank Act completely preempts state law claims for usurious interest), the Court finds the reasoning employed in cases such as Jones v. Bankboston, N.A., 115 F. Supp.2d 1350 (S.D. Ala. Oct. 2, 2000) (holding that there is no complete preemption under the NBA), more persuasive. The district judge in Jones conducted a detailed and comprehensive analysis of complete preemption under sections 85 and 86 of the National Bank Act, the sister statutes to section 1831d, and found absent the requisite congressional intent to allow removal under the complete preemption doctrine. The Court is persuaded that the reasoning employed in Jones is consistent with the standards enunciated by the Fifth Circuit in Heimann and Aaron.
Finally, the Court concludes that there is no diversity jurisdiction because Monogram has failed to demonstrate that Plaintiffs' claims meet the jurisdictional amount. Monogram argues that if Plaintiffs avail themselves of the attorney fee provisions of the LCCL then Heaton, as the sole named plaintiff, will have a claim exceeding $75,000. In re Abbott Laboratories, 51 F.3d 524 (5th Cir. 1995). However, Plaintiffs amended their state court petition prior to removal to clarify that they are not seeking attorney's fees under the LCCL. Plaintiffs' Exh. 25, at 4, ¶ 10. Plaintiffs' counsel also stipulated on the record at oral argument that Plaintiffs are not claiming and will not attempt to claim attorney's fees under the LCCL. This Court has previously held that attorney's fees are attributed to the class representative only when awarded pursuant to a specific statute. Jones v. Valvoline Co., 1999 WL 319215 (E.D. La. May 20, 1999). Given then that Plaintiffs do not seek attorney's fees pursuant to a statute, an attorney's fee award is not relevant to a claim of diversity jurisdiction in this case. Monogram has not otherwise shown that Heaton's claims meet the jurisdictional amount. Accordingly, the Court finds that it does not have diversity jurisdiction over this suit.
In conclusion, the Court finds that Monogram is not a State bank, and even if it is, Plaintiffs' claims are not completely preempted by federal law. The Court does not have diversity jurisdiction. Consequently, this Court is without subject matter jurisdiction to hear this case. The suit is remanded to state court pursuant to 28 U.S.C. § 1447(c). Given the Court's decision to remand the case, FDIC's motion to intervene and Monogram's motion to add FDIC are moot. Accordingly,
IT IS ORDERED that Plaintiffs' Motion to Remand should be and is hereby GRANTED. The case is remanded to the Civil District Court for the Parish of Orleans. The request for attorney's fees and costs is DENIED; IT IS FURTHER ORDERED that Defendant's Motion to Add the Federal Deposit Insurance Corporation as a Necessary Party Defendant is DISMISSED AS MOOT; IT IS FURTHER ORDERED that FDIC's Motion for Leave to Intervene as a Party Defendant is DISMISSED AS MOOT.