COMPLETE PREEMPTION UNDER SECTION 521 PREVENTS REMAND

The United States District Court for the Southern District of Illinois denied the plaintiffs’ motion to remand a case removed to federal court by defendants on the basis of complete preemption under Section 521 of the Depository Institutions Deregulation and Monetory Control Act. Forness v. Cross Country Bank, Inc., 2006 WL 240535 (S.D. Ill. Jan. 13, 2006). The case was brought by a group of consumers against credit card issuers and servicers. The Plaintiffs alleged that defendants committed unfair and deceptive practices in violation of state law. In seeking remand, plaintiffs argued that their claims did not relate to fees, but were based on deceptive practices. The court rejected this position, finding that plaintiffs were challenging the amount of defendants’ fees and holding that such claims must be resolved in federal court on the basis of Section 521 of DIDA. The court determined that Section 521 completely preempts state laws attempting to limit interest and fees as Section 521 should be interpreted the same as Section 85, which has been held to be the exclusive remedy for usury claims against a national bank. The court held that any remaining state law claims were a part of the same case or controversy and should be decided in federal court in the interest of judicial economy, convenience and fairness, and comity.

Mike Tomkies and Elizabeth Anstaett