Earlier this month, Alabama Chief District Judge Watkins issued an opinion dealing with removal procedure in Stewart v. Bureaus Investment Group #1, 2011 WL 2313213.
In the Circuit Court of Macon County, Alabama, Bureaus brought a debt-collection action against Stewart. Stewart answered and filed a counterclaim complaint, asserting a claim under the Fair Debt Collection Practices Act (FDCPA) and various state-law-based claims. Bureaus dismissed its debt-collection complaint, leaving pending only Stewart’s counterclaims.
Interestingly, Bureaus then moved to realign the parties and the state court granted its motion. Thereafter, Bureaus filed a notice of removal, asserting federal-question jurisdiction, predicated on the FDCPA claim. Stewart filed a motion to remand and argued that there was no removal jurisdiction because only defendants may remove and, when the matter was commenced Bureaus was the plaintiff.
As noted by Chief Judge Watkins, no Circuit Court of Appeals has addressed “whether an order of realignment by a state court can allow a former plaintiff, now defendant, to remove a case to federal court based upon a pleading that was originally filed as a counter-complaint.” Chief Judge Watkins determined that such a former plaintiff/now defendant could and subsequently denied Stewart’s motion to remand. Because removal jurisdiction is determined based on the situation at the time of removal, for Chief Judge Watkins, at the time of removal, Stewart was the plaintiff prosecuting claims against Bureaus, the defendant. The prior procedural history was immaterial in the analysis.
Likely, Stewart did not oppose the motion for realignment because she believed that there was no possibility of removal because Bureaus had instituted the litigation as the plaintiff. The lesson to be drawn is that, if confronted with this scenario, one should oppose a motion to realign because the motion is being filed solely to divest the state court of jurisdiction and unnecessary for any other purpose. Chief Judge Watkins’s analysis may be correct but it would be interesting to see if the Eleventh Circuit would affirm if there is ever any appellate review. Obviously, this case could turn out significantly different in another venue.
Our firm handles many cases dealing with the above issues. Most of the cases we handle involve victims of identity theft who have their credit wrecked by the credit companies, collection agencies and the credit reporting agencies who do not practice due diligence when handling someone’s credit rating and score. Credit score has become one of the single most important tools used in the financial world today. Deciding whether to file in state or federal court is a major decision when handling these types of cases. If you have been a victim of identity theft and your credit rating has been negatively affected, contact me today for a free case evaluation.
