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Robinson v. First Hawaiian Bank

United States District Court, D. Hawaii

August 24, 2017

LINDA ROBINSON, INDIVIDUALLY AND ON BEHALF OF A CLASS OF ALL PERSONS SIMILARLY SITUATED, Plaintiff,
v.
FIRST HAWAIIAN BANK, DOE DEFENDANTS 1-50, Defendants.

          ORDER ADOPTING THE MAY 12, 2017 FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFF'S MOTION TO REMAND PURSUANT TO 28 U.S.C. § 1447

          DERRICK K. WATSON, UNITED STATES DISTRICT JUDGE.

         Plaintiff Linda Robinson filed this action, on behalf of herself and an unidentified class of persons similarly situated, in Hawai‘i state court against her debit card provider, First Hawaiian Bank (“FHB”), and Doe Defendants 1-50. See Notice of Removal, Ex. A, Compl., CV-17-1-0167-01 KTN (filed Jan. 27, 2017), ECF No. 1-2. FHB subsequently removed the action to this Court (ECF No. 1), and Robinson filed a motion to remand (ECF No. 20). On May 12, 2017, the Magistrate Judge entered his Findings and Recommendation to Grant Plaintiff's Motion to Remand Pursuant to 28 U.S.C. § 1447 (“F&R”). ECF No. 27. For the reasons stated below, the Court ADOPTS the F&R and GRANTS Robinson's Motion to Remand.

         BACKGROUND

         Robinson is an FHB debit card holder who takes issue with the overdraft-related charges on her FHB bank account, which she contends were assessed in contravention of various common law principles and laws codified in the Hawai‘i Revised Statutes (“HRS”).

         On June 15, 2016, Robinson filed a class action lawsuit against FHB in the Circuit Court for the First Circuit, State of Hawai‘i .[1] In the Complaint, Robinson challenges FHB's banking practices of imposing initial overdraft fees on debit card transactions approved and deducted on a “sufficient available balance, ” and the imposition of a continuous overdraft fee, which is assessed for each seven-day period that a customer's account has a negative balance. Compl. ¶¶ 1-15, 22-55, 59-64. As a result of these practices, the Complaint asserts that FHB is liable for: (1) violating Hawaii's Uniform Deceptive Trade Practice Act, HRS § 480-2(a) (declaring unlawful “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce”) (Compl. ¶¶ 81-86); (2) conversion of funds via the “wrongful[] collecti[on] [of] overdraft fees from Plaintiff and the members of the Class” (Compl. ¶¶ 87-98); (3) unjust enrichment “from the imposition of overdraft fees . . . in an unfair, unconscionable, and oppressive manner” (Compl. ¶¶ 99-107); and (4) violating Hawaii's interest and usury laws, codified in HRS Chapter 478, by “knowingly charg[ing] and collect[ing] Continuous [Overdraft] Fees . . . that far exceeded the legal rate” permitted by HRS § 478-2” (Compl. ¶¶ 108-21).

         FHB removed Robinson's action to federal court on March 6, 2017. ECF No. 1. FHB's removal petition is based on its assertion that Section 521 of the Depository Institution Deregulation and Monetary Control Act (“DIDA”), codified at 12 U.S.C. § 1831(d), completely preempts Robinson's fourth, state-law usury/interest claim. Notice of Removal ¶¶ 12, 14, ECF No. 1 (“State law usury claims are completely preempted by federal banking laws, including DIDA and the National Bank Act.”). Specifically, FHB alleges that Robinson's legal arguments rest on her theory equating “continuous overdraft fees” by FHB to “interest” that is usurious under Hawaii state law. Notice of Removal ¶ 14. As such, FHB argues, removal to federal court is proper because “that inquiry is properly a matter of federal law and the subject of complete preemption.” Notice of Removal ¶ 14.

         On April 4, 2017, Robinson filed her Motion to Remand Pursuant to 28 U.S.C. § 1447 (ECF No. 20), asserting that removal was improper because Robinson's state-law usury claim is not preempted by DIDA; thus, under the “well-pleaded complaint rule, ” no federal question appeared on the face of the Complaint, no exception to that rule applies, and federal jurisdiction would be inappropriate. See Mem. in Supp. of Mot., ECF No. 20-1 [hereinafter Remand Mem.]. FHB filed its Memorandum in Opposition to Robinson's Motion to Remand (ECF No. 24) on April 18, 2017.

         On May 12, 2017, the Magistrate Judge entered the F&R (ECF No. 27), finding that “DIDA does not completely preempt state-law usury claims and does not establish the federal question jurisdiction necessary for removal of this action.” F&R at 7. The Magistrate Judge therefore recommended that Robinson's Motion to Remand be granted. F&R at 13.

         Before the Court are FHB's objections to the F&R, which urge the Court to:

(1) Reject the Magistrate Judge's Findings that:
[a] this case was not properly removed to federal court, F&R at 2;
[b] DIDA does not completely preempt state-law usury claims and does not establish the federal question jurisdiction necessary for removal of this action, F&R at 7;
[c] the language contained in Section 521 of DIDA does not completely preempt state usury law and therefore, DIDA does not provide the basis for federal question jurisdiction or removal[;]
(2) Reject the Magistrate Judge's Recommendation that this Court grant Plaintiff's Motion to Remand Pursuant to 28 U.S.C. § 1447 (ECF No. 20) (the “Remand Motion”), F&R at 2, 13; and
(3) Deny the Remand Motion.

Def.'s Obj. to F&R 3, ECF No. 28 [hereinafter Objections Memorandum or Obj. Mem.] (emphasis removed) (formatting altered). Robinson responded to these objections on June 9, 2017. See Pl.'s Resp. to Def.'s Obj. to F&R, ECF No. 29.

         For the reasons stated below, the Court ADOPTS the F&R and GRANTS ...


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