Hawaii ex rel. Louie v. JP Morgan Chase & Co.
907 F. Supp. 2d 1188
D. Haw.2012Background
- Attorney General filed six state UDAP/related complaints against major banks seeking remand and relief for Hawai'i consumers.
- Defendants removed six actions to federal court arguing CAFA and complete preemption under NBA and DID A.
- Court held removal proper: payments for ancillary products are debt cancellation/suspension contracts; fees are interest under NBA.
- Court rejected CAFA jurisdiction for parens patriae actions; actions not true class actions under CAFA.
- Court concluded complete preemption applies to usury-like claims against national banks and to Discover under DID A, with supplemental jurisdiction for remaining claims.
- Removal-related expenses denial; court kept proceedings and denied remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA jurisdiction | Chimei/Banks show parens patriae not CAFA class actions. | CAFA applies to state class actions; parens patriae actions are removable if similar to class actions. | CAFA removal not proper; remand denied on CAFA ground. |
| Complete preemption under NBA (usury claims) | No true usury claims; no NBA preemption. | Plan fees are interest; NB A §85/86 preempt state claims; exclusive federal remedy. | Complete preemption applies; jurisdiction exists over usury-like claims. |
| Complete preemption under DID A (Discover Bank) | Discover claims not preempted under DIDA. | DIDA preempts related claims when charges are interest; Discover charges exceed Hawai'i rate. | DIDA preemption applies; Discover cases properly removed with supplemental jurisdiction for others. |
| Whether plan fees are interest | Fees are not interest; not a basis for preemption/removal. | Fees related to debt cancellation/suspension contracts are interest under NBA. | Court finds plan fees constitute interest under NBA/Regulations. |
| Removal expenses | Removal was improper; fees should be recoverable as costs. | Issues were substantial and first-impression; no clear rule to recover removal costs. | Removal-related expenses denied. |
Key Cases Cited
- Washington v. Chimei Innolux Corp., 659 F.3d 842 (9th Cir. 2011) (parens patriae actions not CAFA-class actions; CAFA requires true class action)
- Nevada v. Bank of Am. Corp., 672 F.3d 661 (9th Cir. 2012) (rejects mass-action/claims-based CAFA theories; supports remand posture)
- Beneficial Nat'l Bank v. Anderson, 539 U.S. 1 (U.S. 2003) (complete preemption for usury claims in NBA context)
- JPMorgan Chase Bank, N.A. v. City of Hartford? (cited as JPMorgan Chase), not provided (citation not provided) (cases addressing whether plan fees constitute interest under NBA)
- Smiley v. Citibank (S.D.), N.A., 517 U.S. 735 (Supreme Court) (deference to agency interpretation of ‘interest’ under NBA)
- Bank of America v. City of ??? (cited as Bank of America), 672 F.3d 661 (9th Cir. 2012) (reiterates CAFA-parens patriae analysis; mass action concept)
- Spirent Holding Corp. v. Hawaii Dept. of Taxation, 121 Hawai‘i 220 (Haw. App. 2009) (statutory interpretation principle: specific statute controls when in conflict)