The opinion of the court was delivered by: Chesler, District Judge
This matter comes before the Court upon the Court's sua sponte Order To Show Cause why this action should not be remanded for lack of subject matter jurisdiction. For the reasons discussed below, the Court is not satisfied that it has subject matter jurisdiction over this action, and therefore, this action will be remanded to the Superior Court of New Jersey, Law Division, Bergen County.
This consumer fraud class action suit was filed by Plaintiff Ira S. Hirschbach in the Superior Court of New Jersey, Law Division, Bergen County on or about November 20, 2006. The Complaint contained one count for violation of the New Jersey Consumer Fraud Act, N.J. STAT.ANN. § 56:8-1, et seq. (West 2001) in connection with the pricing, advertising, disclosure and renewal of certain certificates of deposit ("CDs") issued by Defendant NVE Bank. According to the Amended Complaint, the proposed class consists of all persons who invested in a CD issued by NVE Bank at competitive market rates and renewed at least once by NVE Bank after the initial maturity date and have received or are receiving interest on their renewed CD at below competitive market rates. At all relevant times, Defendant NVE Bank was and is a savings bank chartered and licensed by the State of New Jersey. It operates exclusively in New Jersey, and indeed, all of its branches are located in Bergen County. The bank does maintain certain FDIC-insured accounts, but it is not a national bank or a subsidiary of a national bank. The other Defendants include a bank holding company and various officers and directors of the bank.
Defendants removed this action on or about December 22, 2006 pursuant to 28 U.S.C. § 1441 (2006). In the Notice of Removal, Defendants asserted that this Court has subject matter jurisdiction over this case because (1) Plaintiff's state law claim necessarily turns on the construction of federal law and therefore "arises under" the laws of the United States pursuant to 28 U.S.C. § 1331 (2006) and (2) there is diversity jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d) (2006) ("CAFA"). After the Notice of Removal was filed, Plaintiff did not move to remand, but rather filed an Amended Complaint as of right pursuant to Federal Rule of Civil Procedure 15(a), before Defendants served their responsive pleading to the Complaint. The Amended Complaint, filed on January 14, 2007, added a second count purporting to assert a claim for violation of the Truth In Savings Act, 12 U.S.C. § 4301, et seq. (2006) ("TISA").
From its own review of the Complaint and Amended Complaint, the Court was not satisfied that it had subject matter jurisdiction over the action and issued an Order To Show Cause why the case should not be remanded. During oral argument on March 12, 2007, the Court determined that it would first address whether Plaintiff's asserted cause of action under TISA was viable, thus conferring an independent basis of federal question jurisdiction, before reaching the jurisdictional grounds pled in the Notice of Removal. Following supplemental briefing on TISA, the Court dismissed the TISA claim with prejudice on the grounds that Congress repealed the private cause of action under TISA in 2001 and that any TISA claim Plaintiff may have had prior to the repeal was barred by the applicable statute of limitations. (See May 3, 2007 Order (docket item # 22).)
Having dismissed the TISA claim, the Court returned to its review of subject matter jurisdiction based on the two independent grounds asserted in the Notice of Removal. Presently before the Court are the questions of (1) whether Plaintiff's New Jersey Consumer Fraud Act claim "arises under" federal law and (2) whether diversity jurisdiction exists under CAFA. The Court has reviewed the parties' briefing on these issues and has also considered the arguments presented orally during the proceedings of March 12, 2007. The Court has determined that it lacks subject matter jurisdiction, and its analysis of the relevant issues follows.
II. FEDERAL QUESTION JURISDICTION
This Court has an obligation to satisfy itself that it has subject matter jurisdiction over a case and to address the issue sua sponte. Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir. 1999), overruled on other grounds by Exxon Mobil Corp. v. Allapattah Svcs., Inc., 545 U.S. 546 (2005). Parties cannot waive a lack of subject matter jurisdiction or confer it upon the Court by consent. Brown v. Philadelphia Housing Auth., 350 F.3d 338, 346 (3d Cir. 2003). It is "an Art. III as well as a statutory requirement" and "it functions as a restriction on federal power." Id. at 346-47 (quoting Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982)).
In an action removed to federal court under 28 U.S.C. § 1441, the removing party bears the burden of demonstrating that there is federal subject matter jurisdiction over the action. Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004); Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). Section 1441 must be strictly construed against removal, with all doubts to be resolved in favor of remand. Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992). Federal statutory law mandates that "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(d) (2006).
Defendants, the removing parties, maintain that this Court has original federal question jurisdiction over the case because, even though the Amended Complaint pleads a state law cause of action, that claim turns on a substantial federal issue and therefore "arises under" federal law. More specifically, Defendants argue that the conduct on which Plaintiff bases his Consumer Fraud Act claim - the allegedly deceptive advertising and disclosure of interest rate changes on automatically renewing NVE Bank CDs - is governed exclusively by TISA and the regulations issued thereunder. They take the position that because the Consumer Fraud Act violations alleged by Plaintiff are predicated on violations of obligations created by federal law, that is, TISA's notice requirements, the state law claim hinges on the interpretation of federal law. Thus, according to Defendants, the federal question embedded in the state law claim gives rise to federal subject matter jurisdiction.
Defendants removed this case to federal court pursuant to 28 U.S.C. § 1441(b), which provides for removal of actions founded on claims "arising under" the laws of the United States, regardless of the citizenship of the parties. Jurisdiction here, according to Defendants, is based on the existence of a federal question. "The presence or absence of federal question is governed by the well-pleaded complaint rule, which provides that federal question jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded Complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Typically, federal question jurisdiction will lie only if the complaint pleads a federal cause of action. Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986); Louisville & Nashville Railroad v. Mottley, 211 U.S. 149 (1918). In other words, the well-pleaded complaint rule generally bars federal jurisdiction where a plaintiff's complaint on its face states only state law causes of action, even though issues of federal law may be involved. Carrington v. RCA Global Communications, Inc., 762 F. Supp. 632, 636 (D.N.J. 1991).
Of course, the Amended Complaint in this action asserts only a state law cause of action. Defendants contend that the Court nevertheless has "arising under" jurisdiction on the grounds that a "substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 23 (1983). The Supreme Court has long-recognized this variety of federal "arising under" jurisdiction, in which the federal question is embedded in a state law claim. Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 312 (2005). In Grable, the Supreme Court most recently articulated the standard for determining whether the presence of a federal issue in a purely state law claim may give rise to federal question jurisdiction under § 1331. The Court held that "the question is, does a state-law claim ...