United States District Court, D. Maine
ORDER ON DARLING'S MOTION TO STAY AND MOTION TO REMAND
NANCY TORRESEN, District Judge.
Before the Court are Darling's motion to remand Darling's v. Chrysler Group, LLC, 1:14-cv-00208-NT ("Case 208") and Darling's motion to stay Chrysler Group, LLC v. Darling's, 1:14-cv-00136-NT ("Case 136"). For the reasons stated below, both motions are GRANTED.
Darling's, the plaintiff in Case 208 and the defendant in Case 136, is a Maine corporation that operates car dealerships in Augusta and Ellsworth. Chrysler Group, LLC ("Chrysler"), the defendant in Case 208 and the plaintiff in Case 136, is a Delaware limited liability corporation with its principal place of business in Michigan which manufactures and distributes automobiles. Under a franchise relationship with Chrysler, Darling's provides free warranty service to qualified owners of Chrysler cars and then submits labor invoices to Chrysler for compensation.
In Maine, car warranty service arrangements like this are regulated by the Business Practices Between Motor Vehicle Manufacturers, Distributors and Dealers Act (the "Dealers Act"), 10 M.R.S. §§ 1171 to 1190-A. This dispute primarily implicates three provisions of the Dealers Act. First, 10 M.R.S. § 1176 requires a franchisor (like Chrysler) to reimburse a franchisee (like Darling's) "at the retail rate customarily charged by that franchisee for the same labor when not performed in satisfaction of a warranty, " as long as the franchisee's retail rate is "routinely posted in a place conspicuous to its service customer[s]." Second, 10 M.R.S. § 1187 establishes the Maine Motor Vehicle Franchise Board (the "Maine Franchise Board" or the "Board"), a body made up of seven voting members appointed by Maine's governor and Secretary of State and empowered to hear complaints regarding conduct governed by the Dealers Act. See 10 M.R.S. § 1188. Third, 10 M.R.S. § 1190-A provides that an action in a "court of competent jurisdiction" must be stayed if the action "gives rise or could give rise to a claim or defense" under the Dealers Act and "a party to the action" files a timely complaint with the Maine Franchise Board.
Chrysler claims that § 1176 of the Dealers Act and various sales and service agreements entitle it to certain information from Darling's to verify both the retail labor rate Darling's says it "customarily charge[s]" and the details of individual repairs Darling's claims it has performed. Darling's disagrees and alleges that Chrysler has been improperly withholding portions of the warranty labor payments it owes since November of 2013.
Chrysler kicked off this litigation in March of 2014, when it filed a complaint before this Court (Case 136) asserting diversity jurisdiction under 28 U.S.C. § 1332 and seeking a declaration of Chrysler's rights under § 1176 of the Dealers Act and its sales and service agreements with Darling's. Darling's responded by filing a complaint with the Maine Franchise Board (Case 208) regarding the same dispute seeking civil penalties. Next, Chrysler filed an opposition to Darling's motion to stay and a notice purporting to remove Case 208 to this Court under 28 U.S.C. § 1441(a), which allows a defendant to remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." Finally, Darling's moved to remand Case 208 to the Maine Franchise Board, arguing that removal is improper because the Board is not a "State court." See 28 U.S.C. § 1441(a). Chrysler opposed the motion for remand.
After reviewing the issues involved in the pending motions in both cases, the Court requested further argument from the parties to determine whether the Board is a "State court" for removal purposes. Each party submitted supplemental briefing on the issues raised by the Court.
DISCUSSION OF MOTION FOR REMAND IN CASE 208
I. The Governing Law
The issue before the Court deals primarily with the reach of the federal removal statute, 28 U.S.C. § 1441(a). However, because the relevant analysis requires the Court to consider the nature of federal district courts' subject-matter jurisdiction more broadly, the Court also describes the jurisdictional landscape in which the removal statute sits.
Article III of the United States Constitution allows Congress to authorize lower courts to hear a number of categories of cases and controversies, including "Controversies... between Citizens of different States" rooted in state law, known as "diversity" cases, and "Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority, " known as federal question cases. U.S. Const. art. III, § 2, cl. 1.
Congress conferred original jurisdiction on federal trial courts to hear diversity cases in 1789. Judiciary Act of 1789, § 11, 1 Stat. 73, 78; see generally Erwin Chemerinsky, Federal Jurisdiction §§ 1.2, 5.3.2 (6th ed. 2012). As amended and codified at 28 U.S.C. § 1332, the diversity jurisdiction statute provides that "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000... and is between... citizens of different States." Congress conferred original jurisdiction on federal trial courts to hear federal question cases in 1875. Act of Mar. 3, 1875, ch. 137, § 1, 18 Stat. 470, 470; see generally Erwin Chemerinsky, Federal Jurisdiction §§ 1.2, 5.2 (6th ed. 2012). As amended and codified at 28 U.S.C. § 1331, the federal question jurisdiction statute provides that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."
Original jurisdiction is augmented by a legal concept known as supplemental jurisdiction. See 28 U.S.C. § 1367(a); United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966); Osborn v. Bank of the U.S., 22 U.S. 738, 823 (1824). Supplemental jurisdiction arises from an interpretation of Article III which allows federal district courts to hear claims that would not satisfy the prerequisites for jurisdiction on their own, but are factually intertwined with claims that do. As Professor Chemerinsky explains,
The constitutional basis for such jurisdiction stems from Article III's authorization for federal courts to decide "cases" and "controversies." A case or controversy is said to refer to a single set of facts. A case or controversy includes all claims arising from a set of facts, and thus a federal court may decide the entire matter, even though only part of it meets the requirements for federal court jurisdiction.
Erwin Chemerinsky, Federal Jurisdiction § 5.4 (6th ed. 2012).
Though supplemental jurisdiction was originally a creature of case law, see Osborn, 22 U.S. at 823, Congress enshrined it in statute in 1990. Judicial Improvements Act of 1990, Pub. L. 101-650, § 310, 104 Stat. 5089, 5113-14. Subject to certain exceptions,  the supplemental jurisdiction statute, codified at 28 U.S.C. § 1367, provides that a federal district court with "original jurisdiction" over a "civil action" has "supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367(a).
Because plaintiffs choose where to bring suits in the first instance, these jurisdictional statutes provide only plaintiffs a pathway to federal district court. Their benefits are extended to defendants through removal jurisdiction. The general removal jurisdiction statute, 28 U.S.C. § 1441(a), allows a "defendant" to remove to federal district court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." Courts interpret 28 U.S.C. § 1441(a) to allow defendants to remove only "state-court actions that originally could have been filed in federal court." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).
Whether a state tribunal is acting as a "State court" in a particular case is decided as a matter of federal law, based on statutory interpretation of the removal statute, not as a matter of state statutory labels. Volkswagen de P.R. v. P.R. Labor Relations Bd., 454 F.2d 38, 44 (1st Cir. 1972). A two-pronged functional test guides this analysis. See Volkswagen de P.R., 454 F.2d at 44. Under the first prong of the test, the court analyzes the tribunal's "functions, powers, and procedures, " Floeter, 597 at 1102, and the "locus of traditional jurisdiction" over the subject matter at issue. Volkswagen de P.R., 454 F.2d at 4. Under the second prong of the test, the court analyzes "the respective state and federal interests" in the subject matter of the case and in the forum where the case is heard. Id. The balance of interests changes depending on ...