The State of Texas v. Community Capital Partners LP, et al.

Summary

The United States District Court for the Eastern District of Texas grants the State of Texas’s motion to remand its Texas Securities Act action against Community Capital Partners LP and related defendants. The court holds that the defendants’ anticipated NSMIA preemption defense does not create federal-question jurisdiction under the Grable doctrine because the complaint asserts only state-law claims. The court remands the case to the 416th Judicial District Court of Collin County, Texas, but declines to award costs or attorney’s fees.

Holdings

1. The complaint did not present a federal question because it asserted only Texas Securities Act claims, none of which was created by federal law or premised on a federal duty.
2. The anticipated or pleaded NSMIA preemption defense did not create federal-question jurisdiction under Grable because it remained an ordinary federal defense rather than a federal issue necessarily embedded in the state-law claims.
3. Because the court lacked subject-matter jurisdiction, remand to state court was required.
4. Texas was not entitled to costs or attorney fees under § 1447(c) because the defendants had an objectively reasonable basis for removal.

Questions Presented

1. Whether the defendants' removal of Texas's Texas Securities Act claims was proper under federal-question jurisdiction.
2. Whether Texas's anticipation and pleading of the inapplicability of an NSMIA preemption defense created federal-question jurisdiction under the Grable doctrine.
3. Whether Texas was entitled to costs and attorney fees under 28 U.S.C. § 1447(c) following remand.

Disposition

remanded