780 F. Supp. 2d 458
E.D. Va.2011Background
- Plaintiffs filed state court complaint in Chesapeake, Virginia, asserting breach of contract and negligent processing of a mortgage modification application, and seeking a preliminary injunction to prevent foreclosure.
- Defendants removed the case to this federal court on April 8, 2011, alleging federal question jurisdiction under 28 U.S.C. § 1331 based on the Home Affordable Modification Program (HAMP).
- Plaintiffs allege SunTrust solicited a loan modification and plaintiffs applied, but SunTrust did not approve; HAMP appears as backdrop to a state-law dispute.
- Court notes there is no private action under HAMP and that most cases where federal question jurisdiction exists involve a federal cause of action.
- Court questions whether the dispute falls within the small class where a federal question is so substantial as to arise under federal law, and directs the parties to brief jurisdiction within 10 days.
- If jurisdiction is not established, the court will remand the action to the Circuit Court of the City of Chesapeake, Virginia.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal question jurisdiction exists | Meltons: HAMP involvement creates federal question. | SunTrust: claims arise under HAMP; substantial federal issues predominate. | No federal question jurisdiction; HAMP not creating private action nor necessary to resolve state-law claims. |
| Whether the case should be remanded for lack of jurisdiction | Meltons contend removal appropriate due to federal issues. | SunTrust asserts removal is proper under federal question doctrine. | The court will remand unless jurisdiction is shown; memorandum directs parties to show proper jurisdiction within 10 days. |
Key Cases Cited
- Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (U.S. 2005) (federal question jurisdiction requires substantial federal issue embedded in state-law claim)
- Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677 (U.S. 2006) (more than a federal element is needed to open arising-under door)
- Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804 (U.S. 1986) (state-law claims must necessarily turn on construction of federal law)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (U.S. 1994) (courts possess limited jurisdiction and must presume action lies outside)
- Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257 (U.S. 1916) (federal question jurisdiction exists where federal law creates the action)
- Harless v. CSX Hotels, Inc., 389 F.3d 444 (4th Cir. 2004) (discusses construction of federal law influencing jurisdictional analysis)
- Ormet Corp. v. Ohio Power Co., 98 F.3d 799 (4th Cir. 1996) (case discusses narrow class where federal question resolution is substantial)