Tashombe v. Truist Bank

Background

Truist Bank removed Taj Tashombe’s action from the San Francisco Superior Court, Small Claims Division, to the federal court. Truist relied on federal-question jurisdiction under 28 U.S.C. § 1331. Because the court questioned whether it had authority to hear the case, it ordered Truist to explain why removal was proper.

The removed complaint alleged a state-law breach-of-contract claim and sought $9,000 in damages. Truist argued that the claim implicated the Fair Credit Reporting Act, a federal statute, based on Truist’s records and Tashombe’s subpoena requests concerning credit reporting. Truist also argued that Tashombe had used “artful pleading” to present what was essentially a federal claim as a state-law contract claim.

Analysis

A defendant may remove a state-court case only when the federal court would have original jurisdiction. Federal-question jurisdiction generally exists when a federal question appears on the face of the plaintiff’s properly pleaded complaint. A possible federal defense, or facts raised outside the complaint, does not ordinarily create federal jurisdiction.

The court found that the complaint made no reference to the Fair Credit Reporting Act and alleged only that Truist breached a contract. The court also noted that Truist’s motion for a more definite statement described the complaint as alleging only a breach of contract. Truist did not establish that the action actually arose under the Fair Credit Reporting Act or that the complaint improperly omitted a necessary federal claim.

Disposition

The court concluded that Truist had not shown a basis for federal subject-matter jurisdiction. It therefore REMANDED the action to the San Francisco Superior Court, Small Claims Division. The order did not decide the underlying breach-of-contract claim or the alleged credit-reporting issues.