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Black v. Mantei & Associates

United States District Court, D. South Carolina, Columbia Division

October 10, 2019

DONALD BLACK, MARCIA BLACK, LARRY MARTIN, REBECCA MARTIN, BARBARA THOMPSON, and JAMES THOMPSON, for themselves and a class of similarly situated plaintiffs, Plaintiffs,
v.
MANTEI & ASSOCIATES, RICKEY ALAN MANTEI, CINDY CHIELLINI, CENTAURUS FINANCIAL, INC., and J.P. TURNER & CO., LLC, Defendants.

          MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS MOTION TO REMAND AND FOR ATTORNEY FEES

          MARY GEIGER LEWIS UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiffs Donald Black, Marcia Black, Larry Martin, Rebecca Martin, Barbara Thompson, and James Thompson, for themselves and a class of similarly situated plaintiffs, (collectively, Plaintiffs) brought this action for various South Carolina state law claims. Defendants Mantei & Associates, Rickey Alan Mantei, Cindy Chiellini, Centaurus Financial, Inc., and J.P. Turner & Company, LLC (collectively Defendants) removed the action to federal court under 15 U.S.C. § 78bb(f)(2).

         Pending before the Court is Plaintiffs' motion to remand the action to state court and for attorney fees. Having carefully considered Plaintiffs' motion, the response, the reply, the record, and the applicable law, it is the judgment of the Court Plaintiffs' motion to remand and for attorney fees will be denied.

         II. PROCEDURAL HISTORY

         Plaintiff brought this action in the Lexington County Court of Common Pleas. Plaintiffs allege Defendants “advertised and sold illiquid debt instruments to unsophisticated investors.” Complaint ¶ 4. More specifically, Plaintiffs allege the suit involves “products includ[ing] structured certificates of deposit . . ., principal protected notes . . ., and ‘medium term' corporate bonds, all of which shared the same characteristics that Defendants willfully misrepresented and/or concealed from Named Plaintiffs and other Class Members.” Id. Plaintiffs, in the complaint, further assert:

All of the [products included in the suit] were debt securities exempt from registration pursuant to rules issued by the Securities and Exchange Commission under the Securities Act of 1933, [which] were not issued by investment companies registered under or which have filed registration statements under the Investment Company Act of 1940, and/or [which] otherwise did not qualify as “covered securities” for purposes of the Securities Litigation Uniform Standards Act of 1998 [(SLUSA)].

Id. ¶ 5. Importantly, neither the definition, nor any other portion of the complaint, identifies specific products subject to the suit.

         Defendants removed the action to federal court based on 15 U.S.C. § 78bb(f)(2). Plaintiffs filed a motion to remand the action to state court and to collect attorney fees. Defendants responded and Plaintiffs replied. The court, having been fully briefed on the relevant issues, is prepared to adjudicate Plaintiffs' motion.

         III. STANDARDS OF REVIEW

         A. Remand

         “[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction may be removed by the defendant.” 28 U.S.C. § 1441(a). “Because removal jurisdiction raises significant federalism concerns, [a court] must strictly construe removal jurisdiction.” Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148, 151 (4th Cir. 1994). “If federal jurisdiction is doubtful, a remand is necessary.” Id.

         Federal courts have jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331. Under federal question jurisdiction, the well-plead compliant rule applies. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). This requires “a federal question [be] presented on the face of the plaintiff's properly pleaded complaint.” Id. This means a plaintiff “may avoid federal jurisdiction by exclusive reliance on state law.” Id.

         A notable exception to the well-plead compliant rule is where there is complete preemption of the claim under federal law. Id. at 393. “Once an area of state law has been completely preempted, any claim purportedly based on that pre-empted state law is considered, from its ...


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