Those folks over at Pite Duncan must think its Christmas because they are sure into shopping – forum shopping that is. I sure would like to understand how Pite Duncan can file Notice of Removal, based on Freddie Mac being a “federal agency”. Ignoring the state claims of the action; yet they file UD’s in the state court all the time, based on the only cause of action being a state claim. Are the folks at Pite Duncan confused or forum shopping?
Two weekends ago I had one member send me a “Notice of Removal” on their state complaint (that has ONLY state claims) to Federal Court based on Freddie Mac being a “federal agency”, while another member had the Federal Court questioning why a State Claim complaint (Unlawful Detainer) filed by Freddie Mac should be removed to Federal Court. Both cases are state only claims, and both cases involve Freddie Mac. Why is Federal Court appropriate for one and not the other?
If what Pite Duncan argues, that Freddie Mac, under Title U.S.C. § 28 is considered a “federal agency” and Federal Courts have jurisdiction based on Freddie Mac being a federal agency and should hear all complaints (whether they are plaintiff or defendant), then why aren’t they filing their UD’s in Federal Court? Is this forum shopping?
In the first member’s case, I suspect that Pite Duncan has done the Notice of Removal with the intent to file a Motion to Dismiss within five minutes, based on the complaint having NO federal claims. Now some people are saying..Hey that is fraud upon the court! Not sure that it rises to fraud upon the court but the removal is being done in bad faith and I think it DOES warrant sanctions. Especially when Freddie Mac argues it IS NOT a Federal Agency when it benefits them (and they argue this both ways under U.S.C. § 28)
It is my understanding (and would love comments on this understanding) that Federal Courts automatically have jurisdiction on any legal proceedings concerning a “federal agency” or “officer” under Title 28. One could argue that the lawsuit should have been commenced in the Federal Court in the first place, and that the Plaintiff’s should have pled federal claims; others may argue this is a clever procedural maneuver where the Plaintiff is beat procedurally before the merits of the case are even considered. I think it is a disgusting move and from what I understand, Pite Duncan does it routinely.
Personally, I will go with the 9th Circuit Court’s finding. I found an interesting case in which a Servicer who had been collecting mortgage payments for Freddie Mac was terminated by Freddie Mac. The Servicer, ABM, argued that Freddie Mac was a Federal Agency and therefore the Federal Court had jurisdiction; Freddie Mac argued they WERE NOT A FEDERAL AGENCY. Huh? Yep. I swear. Read it here.
In AMERICAN BANKERS MORTG. v. FEDERAL HOME LOAN MORTG., 75 F. 3d 1401 – Court of Appeals, 9th Circuit 1996, the Court found that Freddie Mac is not a government agency. The 9th Circuit analysis found that “ABM argues that Freddie Mac is a federal agency because 12 U.S.C. § 1452(f) provides that the corporation “shall be deemed to be an agency included in sections 1345 and 1442 of … Title 28″. Those sections of the judicial code grant federal district courts original jurisdiction over suits “commenced … by any agency”, 28 U.S.C. § 1345, and removal jurisdiction over suits “commenced in a State court against any … officer of the United States or any agency thereof”, 28 U.S.C. § 1442. The fact that Congress felt it necessary to provide in Freddie Mac’s governing statute that the corporation shall be deemed an agency under those provisions–”[n]otwithstanding section 1349 of Title 28″, 12 U.S.C. § 1452(f), which provides that mere federal incorporation shall not confer federal jurisdiction–demonstrates that Congress did not believe that Freddie Mac was an “agency”, at least for Title 28 purposes. Further, federal jurisdiction for suits for or against the corporation is only one factor to be considered in determining the governmental purposes and control of a federally chartered corporation.”
The 9th Circuit Court goes on to analyze the structure and governance of Freddie Mac, determining that its additional Directors and Shareholders would not qualify Freddie Mac as a government agency.
I wonder how many people get this Notice of Removal and then a quick Motion to Dismiss, who don’t even know they can OPPOSE the Notice of Removal and Request for a Remand back to the State Court? There are pros and cons to litigating actions in both State and Federal Courts; the Court’s recognize that the Plaintiff is the “master of the claim” – The “well pleaded” complaint rule makes the plaintiff the “master of the claim” for purposes of removal jurisdiction. This means that, absent diversity, a case is removable only where a federal question is presented on the face of plaintiff’s petition: “The party who brings the suit is master to decide what law he will rely upon.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, fn.7, 96 L.Ed.2d 318 (1987). Thus, where a plaintiff could maintain claims under both federal and state law, plaintiff can prevent removal by ignoring the federal claim and alleging only state law claims
If you have done your homework and for whatever reasons, determine the State Court is where you want to be, then don’t let Pite Duncan or Freddie Mac or Fannie Mae dictate WHERE your litigation will take place. Fight back!
and if you need help fighting a Notice of Removal and/or Remand to State Court, let us know. We will share what we know!
KEEP UP THE FIGHT!
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