United States District Court, E.D. Tennessee, Winchester Division
MURIEL L. and ELSIE
TD AMERITRADE, INC., Defendant.
THOMAS W. PHILLIPS, Senior District Judge.
There are several pending motions to be resolved in this civil case which the Court will address in the most logical order.
I. Plaintiffs' Motion to Remand
This civil case was removed to this Court from the General Sessions Court of Coffee County, Tennessee, on March 10, 2014, on the grounds that the complaint asserts claims arising under federal question jurisdiction pursuant to 28 U.S.C. § 1331. [Doc. 1.] Plaintiffs have filed two Motions to Remand [Docs. 12, 20], contesting the removal jurisdiction of this Court and requesting that it be remanded. Defendant has responded to the motion [Doc. 25] and the parties have filed several supplemental pleadings on the motion [Docs. 27, 28, 29]. The Court has carefully reviewed the relevant pleadings and the motion is ripe for determination.
Plaintiffs filed an unsigned Statement of Claim (hereinafter the "Complaint") in the General Sessions Court of Coffee County, Tennessee, on January 24, 2014 [Doc. 1-3], and a Civil Summons was issued on February 11, 2014 [Doc. 1-2]. Defendant received notice of the claim through service on the Corporation Service Company on February 19, 2014 [Doc. 1-1]. Defendant then filed a Notice of Removal [Doc. 1] in this Court on March 10, 2014, in accordance with 28 U.S.C. § 1446. Plaintiffs filed the motion to remand [Doc. 12] on March 20, 2014.
The Complaint asserts that on August 24, 2005, David Harris purchased 48, 000 shares of Bancorp International Group, Inc. stock in an account with Defendant. [Doc. 1-3 at ¶ 3.] On December 12, 2006, Mr. Harris transferred 3, 000 of those shares to the Plaintiffs' account with Defendant. [ Id. ] Plaintiffs and Mr. Harris have requested that the shares be transferred to their name and registered on the books of Bancorp International but claim that Defendant has refused to do so. [ Id. at ¶ 4.] Notably, the introductory paragraph of the Complaint asserts that Defendant has refused to register the shares "in contravention of their obligations under Uniform Commercial Code 8-508, Section 15c3-3(1) Securities Exchange Act 1934." [ Id. at ¶ 1.] The Complaint quotes the Securities Exchange Act and a purported attorney with the Securities and Exchange Commission. [ Id. at ¶ 12.] The Complaint also quotes section 8-504 of the Uniform Commercial Code and a Nevada statute [ Id. at ¶¶ 11, 13].
Plaintiffs argue that their claims are "dependent on Tennessee interpretation of contracts, legal ownership, equitable ownership, and punitive damages" and that there is no federal question to be resolved. [Doc. 12 at pp. 2, 3.] Defendant argues that the Complaint, on its face, references claims under the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a, et seq., and SEC Rule 15c3-3, 17 C.F.R. § 240.15c3-3, and therefore the Plaintiffs cannot credibly claim that they have not asserted some federal claims. [Doc. 25 at pp. 5-7.]
This Court has jurisdiction of "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The well-pleaded complaint rule provides that "federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). "To determine whether a claim arises under federal law, a court, under the well-pleaded-complaint rule, generally looks only to the plaintiff's complaint." Gentek Bldg. Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 325 (6th Cir. 2007). The plaintiff is the master of the complaint and may "decide what law he will rely upon." Loftis v. United Parcel Serv., Inc., 342 F.3d 509, 515 (6th Cir. 2003) (quoting The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25 (1913)).
Because the Plaintiffs are proceeding pro se, the Court will liberally construe their Complaint and hold it to a less stringent standard than a similar pleading drafted by attorneys. Hahn v. Star Bank, 190 F.3d 708, 715 (6th Cir. 1999) (citing Haines v. Kerner, 404 U.S. 519, 520-21 (1972)). While Plaintiffs claim that the federal law cited in the Complaint "run[s] parallel and are ancillary" to the state law claims [Doc. 12 at p. 4], Plaintiffs misunderstand the nature of federal jurisdiction. Ancillary, or supplemental, jurisdiction refers to jurisdiction over a claim not otherwise within the jurisdiction of the court. See Hudson v. Coleman, 347 F.3d 138, 141-42 (6th Cir. 2003). A federal district court's jurisdiction over a federal claim is therefore not ancillary or supplemental. Rather, any state law claims may be supplemental or ancillary to a federal claim. See United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966).
Plaintiffs seem to request that this Court construe the Complaint more stringently and conclude that the references to the Securities and Exchange Act are just that, references but not asserted claims. However, to do so would go beyond the well-pleaded-complaint rule and excise claims that plainly appear on the face of the Complaint. Plaintiffs clearly assert that Defendant has failed to satisfy obligations arising under the Securities and Exchange Act and SEC Rule 15c3-3. Thus, they are seeking a remedy for Defendant's failure to fulfill its statutory duties. While Plaintiffs may have asserted state law claims also, those claims do not preclude their assertion of a claim under federal law. The Court finds that the Complaint asserts a claim under federal law and therefore jurisdiction in this Court is proper. See Musson Theatrical, Inc. v. Fed. Express Corp., 89 F.3d 1244, 1249 (6th Cir. 1996) ("a non-frivolous claim confers power to decide that it has no merit, as well as to decide that it has'") (quoting Montana-Dakota Utils. Co. v. Northwestern Pub. Serv. Co., 341 U.S. 246, 249 (1951)).
Accordingly, Plaintiffs' Motions to Remand [Docs. 12, 20] will be DENIED.
II. Defendant's Motion for Relief from Judgment
Subsequent to the Defendant's removal of this action on March 10, 2014, the General Sessions Court of Coffee County entered a default judgment for $24, 951.50 on March 12, 2014. Defendant has moved for relief from this judgment pursuant to Fed.R.Civ.P. 60(b)(4) [Doc. 7].
The record reflects that Defendant filed the Notice of Removal [Doc. 1] in this Court on March 10, 2014, and also filed a Notice of Filing Notice of Removal in the General Sessions Court on March 10, 2014 [Doc. 8-1]. Further, Defendant obtained an Acknowledgment of Filing Removal signed by the Clerk of the General Sessions Court certifying that the Clerk had received a copy of the Notice ...