State of Minnesota v. GoodLeap LLC

Background

The State of Minnesota originally sued GoodLeap LLC, Sunlight Financial LLC, Solar Mosaic LLC, and Dividend Solar Finance LLC in Hennepin County District Court. The complaint asserted five state-law claims: violations of Minnesota’s Prevention of Consumer Fraud Act, the Uniform Deceptive Trade Practices Act, and the False Statement in Advertising Act; deceptive lending; and usury for lending businesses.

Dividend and Sunlight removed the case to federal court in April 2024. In an earlier order, the Court denied Minnesota’s first motion to remand. It determined that the usury claim against Dividend was actually a claim against Dividend’s successor, Fifth Third Bank N.A. Because Fifth Third is a national bank, the Court concluded that the National Bank Act completely preempted that state-law usury claim, meaning federal law replaced the state-law basis of the claim for jurisdictional purposes. The Court therefore found that federal-question jurisdiction supported removal.

Minnesota had said that, if the Court found the usury claim completely preempted, it would amend its complaint to remove that claim and seek remand. Minnesota did so on November 14, 2024. The amended complaint kept the same lineup of claims except that it eliminated the usury claim against Dividend/Fifth Third.

Legal issue

Minnesota renewed its motion to remand, arguing that removing the usury claim eliminated the only federal-question claim. The parties waited for the Supreme Court’s decision in a related case concerning whether a federal court may keep state-law claims after an amended complaint removes all federal claims. The Supreme Court affirmed the Eighth Circuit and held that, when an amendment deletes all federal claims that enabled removal, the federal court cannot adjudicate the remaining state-law case and must return it to state court.

Ruling

Judge Katherine Menendez held that Minnesota’s amended complaint superseded the original complaint and that jurisdiction had to be assessed from the amended pleading. The defendants conceded that the amended complaint eliminated all federal-question claims. The Court therefore held that it could not exercise supplemental jurisdiction—the authority to hear related state-law claims—over the claims that remained.

The Court granted Minnesota’s renewed motion to remand. It directed the Clerk of Court to remand State of Minnesota v. GoodLeap LLC, et al., No. 24-cv-1181, to Hennepin County District Court. The order addressed federal jurisdiction and remand; it did not decide the merits of Minnesota’s remaining state-law claims.