Jersey allegedly based upon both federal question and diversity jurisdiction. According to Greenwood Trust, removal is proper on federal question jurisdiction grounds since this action necessarily requires the construction and interpretation of federal banking laws, namely the National Bank Act, 12 U.S.C. § 85, and Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 ("DIDA"), 12 U.S.C. § 1831d(a). Furthermore, Greenwood Trust asserts that removal is supported by diversity jurisdiction since the parties are citizens of different states and the amount in controversy exceeds $ 50,000. After the case was removed to this court, the plaintiff filed the instant motion to remand this matter to New Jersey state court claiming an inadequate basis for federal court jurisdiction.
II. Discussion of Law
A state court action may properly be removed to federal court only if it is an action over which the federal court would have had original jurisdiction. See 28 U.S.C. § 1441 (a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 96 L. Ed. 2d 318, 107 S. Ct. 2425 (1987); Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 19 n.18, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983); Trent Realty Associates v. First Fed. Sav. & Loan Assoc., 657 F.2d 29, 36 (3d Cir. 1981). The United States Supreme Court long ago recognized that "the first and fundamental question is that of jurisdiction . . . this question the court is bound to ask and answer itself, even when not otherwise suggested, and without respect to the relation of the parties to it." Bender v. Williamsport Area School District, 475 U.S. 534, 547, 89 L. Ed. 2d 501, 106 S. Ct. 1326 (1986) (quoting Mansfield C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 28 L. Ed. 462, 4 S. Ct. 510 (1884)).
It is axiomatic that federal courts are courts of limited jurisdiction, empowered to hear cases only as provided for under Article III of the Constitution and congressional enactments pursuant thereto. U.S. Const. art. III, § 2, cl. 1; Bender, 475 U.S. at 547; Employers Ins. of Wausau v. Crown Cork & Seal Co., 905 F.2d 42, 45 (3d Cir. 1990). Congress has specifically provided two independent bases for subject matter jurisdiction in the federal courts - federal question jurisdiction and diversity jurisdiction - under 28 U.S.C. §§ 1331 & 1332. Without the existence of at least one of these bases, a controversy is not properly removable from state to federal court. Caterpillar, 482 U.S. at 392; Krashna v. Oliver Realty, Inc., 895 F.2d 111, 113 (3d Cir. 1990); United Jersey Banks v. Parell, 783 F.2d 360, 365 (3d Cir. 1986), cert. denied, First Fidelity Bancorporation v. Parell, 476 U.S. 1170, 90 L. Ed. 2d 979, 106 S. Ct. 2892 (1986).
When removal is sought, the removing party bears the burden of proving that federal subject matter jurisdiction exists, that removal was timely, and that removal was proper. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085, 112 L. Ed. 2d 1046, 111 S. Ct. 959 (1991); Steel Valley Auth. v. Union Switch and Signal Division, 809 F.2d 1006, 1011 (3d Cir. 1987), cert. dismissed, 484 U.S. 1021 (1988); Moore v. DeBiase, 766 F. Supp. 1311, 1315 n.5 (D.N.J. 1991). Significantly, the removal statutes are to be strictly construed against removal and all doubts are to be resolved in favor of remand. Boyer, 913 F.2d at 111; Steel Valley Auth., 809 F.2d at 1010. Nevertheless, a "federal court should be cautious about remand, lest it erroneously deprive a defendant of the right to a federal forum." 14A Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction and Related Matters 2d § 3721 at 218-19 (2d ed. 1985); see also Crier v. Zimmer, 565 F. Supp. 1000, 1001 (E.D. La. 1983) (recognizing that a federal district court should not erroneously deprive a defendant of the right to a federal forum). In light of these pronouncements, Greenwood Trust must establish that plaintiff could have originally filed this matter in federal court based on either federal question or diversity jurisdiction.
A. Federal question Jurisdiction
Removal of a state court action based on federal question jurisdiction is proper only if the action asserts a claim "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. §§ 1331, 1441(b); see United Jersey Banks, 783 F.2d at 365. Ordinarily, a case "arises under" federal law only when a federal question appears on the face of the plaintiff's "well-pleaded complaint." Caterpillar, 482 U.S. at 392 (citing Gully v. First National Bank, 299 U.S. 109, 112-13, 81 L. Ed. 70, 57 S. Ct. 96 (1936)); Franchise Tax Board, 463 U.S. at 10; United Jersey Banks, 783 F.2d at 365. Under the well-pleaded complaint rule, a case cannot be removed based upon a federal defense to a state law claim, including the defense of preemption, even if the defense is anticipated in the complaint and both parties concede that it is the only question at issue. Caterpillar, 482 U.S. at 393; Franchise Tax Board, 463 U.S. at 12; Railway Labor Exec. v. Pittsburgh & Lake Erie R.R., 858 F.2d 936, 939 (3d Cir. 1988). Rather, "[A] right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Franchise Tax Board, 463 U.S. at 10-11 (quoting Gully, 299 U.S. at 112); see also United Jersey Banks, 783 F.2d at 366 (recognizing that a substantial, disputed question of federal law must be a necessary element of one of the well-pleaded state claims for federal jurisdiction to exist).
An independent corollary to the well-pleaded complaint rule which similarly confers federal question jurisdiction for removal purposes is the "complete preemption doctrine." Krashna, 895 F.2d at 113; Railway Labor, 858 F.2d at 939. Under complete preemption, the preemptive force of a statute can be "so extraordinary that it converts an ordinary state common-law complaint into one stating a federal claim for the purposes of the well-pleaded complaint rule." Krashna, 895 F.2d at 113 (quoting Caterpillar, 482 U.S. at 393). The complete preemption doctrine holds that Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character. Krashna, 895 F.2d at 113-14; Railway Labor, 858 F.2d at 939. For the purposes of removal, "once an area of state law has been completely preempted, any claim purportedly based on that preempted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Krashna, 895 F.2d at 114 (quoting Caterpillar, 482 U.S. at 393).
Defendant does not invoke the complete preemption doctrine as a basis for federal question jurisdiction, so this court will not consider whether federal preemption arises through the federal banking statutes.
Thus, in order to establish federal question jurisdiction defendant Greenwood Trust must demonstrate that plaintiff's well-pleaded complaint presents a federal question on its face.
The Well-Pleaded Complaint Rule
This court begins with the proposition that in filing a complaint a plaintiff may choose not to assert a federal right that is available and rely on state law since ultimately he is the master of his own claim. Krashna, 895 F.2d at 113; Allstate Ins. Co. v. 65 Sec. Plan, 879 F.2d 90, 93 (3d Cir. 1989); United Jersey Banks, 783 F.2d at 365. Plaintiff herein asserts that he, as master of his own claim, has alleged only New Jersey state law claims rather than any claims "arising under" federal law thereby depriving this court of original jurisdiction and thus preventing removal of his action to the federal level. Specifically, plaintiff asserts that his complaint merely anticipated a federal preemption defense and did not, as defendant suggests, allege a private cause of action under federal law. Greenwood Trust, on the other hand, claims that plaintiff has pled a federal question on the face of his complaint in accordance with the "well-pleaded complaint" rule. Greenwood Trust specifically cites to the following provisions of plaintiff's complaint as support for its position:
23. Although New Jersey law clearly limits the interest rates that New Jersey banks and finance agencies may charge their customers, it does not limit the interest rates out-of-state banks may charge, even where their customers are residents of New Jersey. This is because federal law specifically addresses "interest rates" charged by national or state chartered banks. Under the National Bank Act, 12 U.S.C. § 85, out-of-state banks are permitted to charge their customers any interest rate that is permitted by the law of the state in which the bank is located. Taking advantage of this law to attract the business of credit card issuers in the early 1980s, several states - most notably Delaware and South Dakota - virtually eliminated interest rate and other usury restrictions, encouraging banks such as Greenwood to locate there.
24. Although federal law permits out-of-state banks such as defendant to export to New Jersey and other states the interest rates permitted in their state of location, it does not permit them to export late fees or any other charges, fees or terms to a borrower's state. Yet, as evidenced by this case, state and national banks located in deregulated states, including defendant here, have knowingly and repeatedly misused and misconstrued federal authority as a pretext and vehicle to evade state laws prohibiting non-interest rate charges such as late fees or other substantive requirements such as right-to-cure notices, both of which are specifically addressed by New Jersey law.