Faircloth v. AR Resources, Inc.
- Joseph Spero
- 3:19-cv-05830
- U.S. District Court · Northern District of California
- 2
In Faircloth v. AR Resources, Judge Spero ordered the parties to explain why the remaining state claim should not be remanded for lack of jurisdiction.
James Faircloth and AR Resources, Inc.; the order addresses whether their remaining state-law claim should stay in federal court or be remanded to state court.
What happened
In Faircloth v. AR Resources, Inc., James Faircloth’s case began in California state court and included federal and state claims against AR Resources. AR Resources moved the case to federal court because of the federal claims.
After earlier rulings, only Faircloth’s state-law claim under the California Consumer Credit Reporting Agencies Act remained. AR Resources filed a motion to dismiss that claim, arguing that federal law preempted it, but the court had not decided that motion.
Judge Joseph C. Spero ordered both sides to show why the case should remain in federal court instead of being sent back to state court. The order did not decide whether to remand the case or whether the claim was preempted.
The detailed version
- Faircloth v. AR Resources, Inc. · No. 3:19-cv-05830
- Joseph Spero
- Apr. 20, 2020
Background
James Faircloth originally filed the case in California Superior Court for Contra Costa County. His original complaint asserted claims under the federal Fair Debt Collection Practices Act and Fair Credit Reporting Act, along with state-law claims under the Rosenthal Fair Debt Collection Practices Act and the California Consumer Credit Reporting Agencies Act.
AR Resources removed the case to federal court based on federal-question jurisdiction, which generally allows federal courts to hear claims arising under federal law. In response to an earlier motion to dismiss, Faircloth filed an amended complaint that omitted his Fair Credit Reporting Act claim and, inadvertently, his California consumer-reporting claim. The court later dismissed the remaining Fair Debt Collection Practices Act and Rosenthal Act claims with leave to amend and allowed Faircloth to reassert the California consumer-reporting claim.
Faircloth’s second amended complaint asserted only the California state-law claim. AR Resources’ pending motion sought dismissal of that claim on the ground that it was preempted—displaced or overridden—by the federal Fair Credit Reporting Act. The opinion did not decide that motion.
Jurisdiction Concern
Because only a state-law claim remained, the court stated that it likely had jurisdiction, if at all, through supplemental jurisdiction. Supplemental jurisdiction can allow a federal court to hear related state-law claims alongside federal claims. The court noted that there was no indication that diversity jurisdiction applied, including the required diversity of citizenship and amount in controversy.
The court also explained that when all federal claims have been dismissed before trial, federal courts ordinarily consider declining supplemental jurisdiction based on judicial economy, convenience, fairness, and respect for state courts. It further noted that a federal defense, such as preemption, does not itself create federal-question jurisdiction.
Order
The court ordered the parties to show cause—explain why—why it should retain jurisdiction over the remaining state-law claim rather than remand the case to state court for lack of subject-matter jurisdiction. The parties had to confer by April 24, 2020. If both agreed to remand, they had to file a joint statement by April 27, 2020. If either opposed remand, the parties had to address the issue in the remaining briefing on AR Resources’ motion to dismiss.
The order did not grant or deny the pending motion to dismiss, did not decide whether the claim was preempted, and did not remand the case.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.