1. Alexander v. Goldome Credit Corp, (1991); pg. 61 supp., briefed 2/12/96
Prepared by Roger Martin (http://people.qualcomm.com/rmartin/)

2. Facts: Alexander took out a second mortgage on his home from Goldome to perform home improvements. Alexander hired C.J. Construction, through their agent, Capsuto, to perform the work. The Alexanders were not happy with the construction work, and so refused to sign the certificate of completion. Nevertheless, Goldome paid C.J. Construction for the job. All parties are residents of Alabama, which allows punitive damages for breach of contract.

3. Procedural Posture: Alexander brought state actions for fraud and breach of contract against Goldome, C.J. and Capsuto, and a federal question action under the Truth in Lending Act against Goldome only. Goldome signed a notice of removal, but the other two defendants did not. Alexander brought a motion to remand.

4. Issue: Whether §1441(c) allows for remanding of both the state and the concurrent jurisdiction federal claims (i.e. those which the federal courts do not have exclusive statutory jurisdiction over) back to the state court.

5. Holding: Yes.

6. Reasoning: First, the case was defectively removed under §1441(a) and (b) because of procedural defects in the notice of removal, i.e. it was not signed by all of the defendants. However, the federal court may have had jurisdiction to hear the case under 1441(c) because §1367 allows for pendent party jurisdiction, thus Goldome could have been the only signer on the notice of removal under 1441(c) because it allows for removal of the entire case by one defendant if there is a “separate and independent” claim. Here, the state claims are “separate and independent” because it is possible that the work was done correctly, but that Goldome still violated the truth in lending act. However, §1441(c) also provides that the federal court may, at its discretion, “remand all matters in which State law predominates,” and “matters” means whole cases, not just individual claims. This reflects Congress’ intent to reduce the caseload of the federal courts. This is the kind of case that is properly adjudicated in state court because the federal claim is relatively insignificant compared to the state claims.

7. Notes: These claims probably should have failed the stringent Finn test (which requires the claims to be “separate and independent”).

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