# Petition for Writ of Certiorari — Ford Motor Credit Co. v. United States District Court

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1988
- **Citation:** 484 U.S. 1041

## Text

|

87 =3 1 a TCE U.S.
NES oni Sut 2 B6T
In the Supreme Court
of the United States

OCTOBER TERM, 1986

FORD MOTOR CREDIT COMPANY, a corporation,
Petitioner,
Vv

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON,

Respondent,
and
JOHN STRIBLING FORD, INC., a corporation,
Real Party in Interest.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

JAMES H. CLARKE JAMES H. CLARKE
JAMES E. BARTELS 800 Pacific Building
SPEARS, LUBERSKY, 520 S.W. Yamhill Street

CAMPBELL, BLEDSOE, Portland, Oregon 97204-1383
ANDERSON & YOUNG Telephone: (503) 226-6151
800 Pacific Building Counsel of Record
520 S.W. Yamhill Street For Petitioner
Portland, Oregon 97204-1383
Telephone: (503) 226-6151
Counsel for Petitioner

STEVENS-NESS LAW PUB.CO., PORTLAND, OR. 97204 877

QUESTION PRESENTED

Whether a district court has authority to remand
a properly removed case to state court on grounds not
authorized by statute — i.e., elimination of the federal
claim that formed the basis for removal — a question
that divides the circuits and is pending before the
Court in Carnegie-Mellon University v. Cohill, (No.
86-1021) cert. granted, 107 S. Ct. 1283, 94 L. Ed.2d
141 (1987).

ii
LIST OF PARTIES and RULE 28.1 LIST

This is a petition for a writ of certiorari to review
an order of the Court of Appeals denying an applica-
tion for a writ of mandamus. Parties to the proceeding
below were petitioner Ford Motor Credit Company,
respondent The United States District Court for the
District of Oregon, and the real party in interest,
John Stribling Ford, Inc. '

Pursuant to Rule 28.1, petitioner Ford Motor
Credit Company is a wholly owned subsidiary of Ford
Motor Company. Ford Motor Credit Company has no
subsidiaries whose stock is publicly traded. Ford
Motor Company’s affiliates are listed in Appendix G,
infra at A22.

1 The caption of the Court of Appeals’ Order denying the
application for writ of mandamus included John Stribling as
a real party in interest (Al). The real party in interest is the
corporation, John Stribling Ford, Inc.

ili

TABLE OF CONTENTS

Page

Question Presented - Rants cee ae
List of Parties and Rule 28. 1 List - nein li
Table of Authorities
EN ee 2
Jurisdiction... J RO NRE ee 2
De 3
Statement of the Case _ eR ies ate
1. Proceedings in the District Court. EE I 5

2. Proceedings in the Court of Appeals... 7
Reasons for Granting the Writ. =. t—‘<ité«SBS

1. The question presented for review —
whether a district court has authority to re-
mand a properly removed case on grounds
not authorized by statute — is pending be-
fore the Court in Carnegie-Mellon Univer-
sity v. Cohill, (No. 86-1021) cert. granted,
107 S. Ct. 12838, 94 L. Ed.2d°141 (1987)... 8
2. The question presented for review is an im-
portant question of federal jurisdiction that
this Court should decide, and which the
Court of Appeals decided in a way contrary
to a controlling decision of this Court ___ 9
3. The Court of Appeals’ decision allowing the
district court to remand a properly removed
case to state court on grounds not author-
ized by statute conflicts with decisions of
other circuits, and that conflict should be
resolved by this Court. ti«idO

i tC«sdR
ee |

iv

TABLE OF AUTHORITIES
CASES
Page
Browning v. Navarro, 743 F.2d 1069 (5th Cir.
I ice hticcaee cls hells dalieliiomintet conidia ictal 11

Carnegie-Mellon University v. Cohill, (No. 86-
1021) cert. granted, 107 S. Ct. 12838, 94 L.

Base 141: (ies) SLE Lea i, 8,9
Cook v. Weber, 698 F.2d 907 (7th Cir. 1983)... 11
Fox v. Custis, 712 F.2d 84 (4th Cir. 1983) ......_. 11
In re Greyhound Lines, Inc., 598 F.2d 883 _—

i I ii dcanetaiengn . , ._ i
Hofbauer v. Northwestern Nat. Bank of Roches-

ter, 700 F.2d 1197 (8th Cir. 1983) _-.....--.. 11
IMFC Professional, Etc. v. Latin Am. Home

Health, 676 F.2d 152 (5th Cir. 1982) -..... 11

Levy v. Weissman, 671 F.2d 766 (8rd Cir. 1982)... 11
In re Merrimack Mut. Fire Ins. Co., 587 F.2d

RN Oe Ne IIE seinen cctivececcctnececnenniyscnccenin 11
Naylor v. Case & McGrath, Inc., 585 F.2d 557

I I csc eteeeeenac os peas 11
In re Romulus Community Schools, 729 F.2d 431

I les cbainlisinagheinns 11, 12

Ryan v. State Bd. of Elections fe State ibis Ill,
661 F.2d 1130 (7th Cir. 1981) _- oe |

TABLE OF AUTHORITIES (Cont.)

CASES
Page
Salveson v. Western States Bankcard Ass’n., 525
F. Supp. 566 (N.D. Cal. 1981), aff'd. in part,
rev'd. in part, Salveson v. Western States
Bankcard Ass’n., 731 F.2d 1423 (9th Cir.
I wit ce tikeened eteeeee ea ainowas 10

Sheet Metal Workers Intern. Ass’n., AFL-CIO v.
Seay, 693 F.2d 1000 (10th Cir. 1982), modi-
fied on other grounds on reh’g., 696 F.2d
tow (ince Car, 1968) 11

Thermtron Products, Inc. v. Hermansdorfer, 423
Um ooe (3976)... OG 1, 22

United Mine Workers vy. Gibbs, 383 U.S. 715

(eee? ....<.... Mera 9S Slr AME et ah IND ._ 9,11
Wren v. Sletten Const. Co., 654 F.2d 529 -

Cir. 1981) _ EEE LE OT

STATUTES

i UAm oie oe. _.............. 5
Be Se De, 2
28 U.S.C. § 1831 TI em ers FLORES EO 5
28 U.S.C. § 1441 RAEN ANEE Rhee A REN 1 to a
DP OD ii. 5
Se ee eee nn 11
28 U.S.C. § 1442(a) (1) saan eae 11

tS nc o
MUSC £4).

ee

In the Supreme Cot
of the United States

OCTOBER TERM, 1986

FORD MOTOR CREDIT COMPANY, a corporation,
Petitioner,
v.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON,

Respondent,
and

JOHN STRIBLING FORD, INC., a corporation,
Real Party in Interest.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

Petitioner Ford Motor Credit Company (Ford
Credit) réspectfully prays for a writ of certiorari to
review the Order of the United States Court of Ap-
peals for the Ninth Circuit entered April 3, 1987.

2

OPINIONS BELOW

The Court of Appeals’ Order of April 3, 1987
denying Ford Credit’s Application for Writ of Man-
damus has not been reported. A copy is attached as
Appendix A, infra at Al.

The district court’s Order of October 2, 1986
granting Stribling Ford’s “conditional” motion to re-
mand the underlying action to state court has not been
reported. A copy is attached as Appendix B, infra at
A2. The district court’s Opinion of October 17, 1986
stating its reasons for granting the motion has not
been reported. A copy is attached as Appendix C, infra
at A4.

The Judgment of the district court entered Octo-
ber 17, 1986 remanding the underlying action to state
court has not been reported. A copy is attached as Ap-
pendix D, infra at A19.

JURISDICTION

January 7, 1987 petitioner Ford Credit filed
an Application for Writ of Mandamus. A copy of
material parts of the application is attached as Ap-
pendix F, infra at A21. The Court of Appeals denied
the application on April 3, 1987 and Petitioner timely
filed a petition for rehearing, which was denied on
May 11, 1987. A copy of the order denying the petition
is attached as Appendix E, infra at A20. The juris-
diction of this Court is invoked under 28 U.S.C. §
1254(1).

{LAGOA ELIOT POET

3
STATUTES INVOLVED

The statutes involved are 28 U.S.C. § 1441 and
28 U.S.C. § 1447. 28 U.S.C. § 1441 provides:

§ 1441. Actions removable generally

(a) Except as otherwise expressly provided
_by Act of Congress, any 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 or the defendants, to
the district court of the United States for the
district and division embracing the place where
such action is pending.

(b) Any civil action of which the district
courts have original jurisdiction founded on a
claim or right arising under the Constitution,
treaties or laws of the United States shall be re-
movable without regard to the citizenship or resi-
dence of the parties. Any other such action shall
be removable only if none of the parties in interest
properly joined and served as defendants is a
citizen of the State in which such action is brought.

(c) Whenever a separate and independent
claim or cause of action, which would be remov-
able if sued upon alone, is joined with one or more
otherwise non-removable claims or causes of
action, the entire case may be removed and the
district court may determine all issues therein,
or, in its discretion, may remand all matters not
otherwise within its original jurisdiction.

(d) Any civil action brought in a State court
against a foreign state as defined in section

4

1603(a) of this title may be removed by the
foreign state to the district court of the United
States for the district and division embracing the
place where such action is pending. Upon removal
the action shall be tried by the court without jury.
Where removal is based upon this subsection, the
time limitations of section 1446(b) of this chapter
may be enlarged at any time for cause shown.

(e) The court to which such civil action is
removed is not precluded from hearing and de-
termining any claim in such civil action because
the State court from which such civil action is
removed did not have jurisdiction over that claim.

28 U.S.C. § 1447 provides:

§ 1447. Procedure after removal generally

(a) In any case removed from a State court,
the district court may issue all necessary orders
and process to bring before it all proper parties
whether served by process issued by the State
court or otherwise.

(b) It may require the petitioner to file with
its clerk copies of all records and proceedings in
such State court or may cause the same to be
brought before it by writ of certiorari issued to
such State court.

(c) If at any time before final judgment it
appears that the case was removed improvidently
and without jurisdiction, the district court shall
remand the case, and may order the payment of
just costs. A certified copy of the order of remand
shall be mailed by its clerk to the clerk of the

eee. Se ee —- aie

5

State court. The State court may thereupon pro-
ceed with such case.

(d) An order remanding a case to the State
court from which it was removed is not reviewable
on appeal or otherwise, except that an order re-
manding a case to the State court from which it
was removed pursuant to section 1448 of this title
shall be reviewable by appeal or otherwise.

STATEMENT OF THE CASE
1. Proceedings in the District Court.

On September 5, 1984, John Stribling and the real
party in interest, John Stribling Ford, Inc. (Stribling
Ford), filed a complaint in the Klamath County Cir-
cuit Court for the State of Oregon against Ford Motor
Company (Ford Motor) and petitioner Ford Motor
Credit Company (Ford Credit), alleging violations of
the Automobile Dealers’ Day in Court Act (ADDCA),
15 U.S.C. §§ 1221 et seg.; Oregon securities laws; and
state common law claims for breach of contract, con-
version, and interference with a prospective business
advantage. Defendants removed the case to the Dis-
trict Court for Oregon (CR 1) based on the ADDCA
claims.* They invoked the jurisdiction of the district
court pursuant to 28 U.S.C. §§ 1831 and 1441(b)
(CR 1 at 2).

On July 28, 1986, after nearly two years of litiga-
tion, the district court granted defendants’ motions

2 References to CR identify the clerk’s record in the re-
moved action.

:
.
~ 5
}

for summary judgment on both plaintiffs’ claims
against Ford Motor, on Stribling’s claims against
Ford Credit, and on Stribling Ford’s securities law
claims against Ford Credit (CR 59, 61, 85).

Ford Credit then moved for summary judgment
on Stribling Ford’s remaining claims against it, which
consisted of the ADDCA claim and three state common
law claims (CR 90). Stribling Ford then filed a “con-
ditional’ motion to remand the case to the state court

if summary judgment were granted on the ADDCA
claim, since only state law claims would then remain
(CR 95). Ford Credit opposed the motion on the
ground that the district court could not remand a
properly removed case on grounds not authorized by
statute and applicable statutes do not authorize the
district court to r-mand a properly removed case to !
state court after the federal claim is disposed of (CR
91, 101; See A12; CR 112 at 8).

On October 2, 1986 the district court granted Ford
Credit’s motion for summary judgment on Stribling
Ford’s ADDCA claim, but denied it as to the remain-
ing state law claims, and granted Stribling Ford’s
conditional motion to remand the case to state court
(A2-3; CR 109).

In an Opinion dated October 17, 1986 the district
court identified the question before it as “whether or
not to exercise its discretion to retain a case that was
properly filed in state court and removed to federal
court by the defendant because a federal claim has

a renner en F

7

since been dismissed” (A13; CR 112 at 9). It dis-
cussed this Court’s decision in Thermtron Products,
Inc. v. Hermansdorfer, 423 U.S. 336 (1976) and noted
the conflict in decisions of the courts of appeals (A14-
15; CR 112 at 10-11). The court concluded that it had
discretion under Ninth Circuit decisions to remand the
case to state court, and that it should do so (A15-17;
CR 112 at 11-13). The Court remanded the case to
Klamath County Circuit Court (A19; CR 113).

2. Proceedings in the Court of Appeals.

On January 7, 1987 Ford Credit filed in the Court
of Appeals an Application for Writ of Mandamus
directing the district court to vacate its order remand-
ing the case to state court (A21).% On April 3, 1987
the Court of Appeals denied the application, on the
ground that Ford Credit had not demonstrated that
the district court “clearly erred in remanding pendent
state claims after the federal claims permitting re-
“moval were decided” (A1). :

Ford Credit timely filed a petition for rehearing,
which the court denied on May 11, 1987 (A20).

3 On November 17, 1986 petitioner appealed from the dis-
trict court’s order of remand (CR 117). The Court of Appeals
dismissed the appeal for lack of jurisdiction, holding that the
court’s order was reviewable only by mandamus.

Both plaintiffs have appealed from the judgment in favor
of Ford Motor (CR 116), and Stribling has appealed from the
judgment in favor of Ford Credit (CR 131). Those appeals
have been consolidated and are pending in the Court of Appeals.

8
REASONS FOR GRANTING THE WRIT

1. The question presented for review — whether a dis-
trict court has authority to remand a properly removed
case on grounds not authorized by statute — is pending
before the Court in Carnegie-Mellon University v. Cohill,
(No. 86-1021) cert. granted, 107 S. Ct. 1283, 94 L. Ed.2d
141 (1987).

On February 23, 1987 the Court granted certiorari
in Carnegie-Mellon Universiy v. Cohill, (No. 86-1021)
cert. granted, 107 S. Ct. 1283, 94 L. Ed.2d 141 (1987),
which presents the same question raised by this peti-

tion. The question presented in Cohill is:

Whether a district court has authority to re-
mand a properly removed case to state court for
a reason not set forth in 28 U.S.C. § 1447(c) —
i.e., elimination, by amendment of the complaint,
of the federal claim that had formed the basis for
removal — a question as to which the circuits are
split and as to which the appellate court below,
sitting in banc, was evenly divided.

Cohill Petition at i.

This case is indistinguishable from Cohill. In
Cohill, the plaintiffs alleged violations of state and
federal law in an action filed in state court. Defen-
dants removed the case to federal court based on the
federal claims. Plaintiffs then amended their com-
plaint to eliminate the federal claims and moved to
remand the case to state court. The district court al-
lowed the motion as an exercise of its discretion.

= ee

9 \

A panel of the Third Circuit concluded that the
district court lacked jurisdiction to remand the case
under Thermtron Products, Inc. v. Hermansdorfer,
supra, 423 U.S. 336, which precludes the remand of a
properly removed case except for reasons provided by
statute. The Cohill panel directed the district court to
vacate its order of remand; however, on rehearing en
bane the full court denied the writ by an equally
divided vote. This Court granted certiorari to review
that decision.

In this case the district court adjudicated the fed-
eral claim on which its jurisdiction was based and
then asserted discretionary authority to remand the
remaining state law claims over which it had pendent
jurisdiction. United Mine Workers v. Gibbs, 383 U.S.
715, 726 (1966). The two cases are indistinguishable,
and both deserve review in resolving the important
question before the Court. 4

2. The question presented for review is an important
question of federal jurisdiction that this Court should de-
cide, and which the Court of Appeals decided in a way
contrary to a controlling decision of this Court.

Whether a district court has authority to remand
an action to state court on grounds not authorized by
statute is an important and recurring question of fed-

4 In fact, this case is a stronger case for refusing to per-
mit a remand than Cohill in that plaintiffs could assert the
ADDCA claims in their pending appeals; but it is like Cohill
in that they may abandon those claims in their effort to re-
turn to state court.

10

eral jurisdiction that has troubled the lower courts.
See Salveson v. Western States Bankcard Ass’n., 525
F, Supp. 566, 580, 581 n. 17 (N.D. Cal. 1981), aff'd.
in part, rev’d. in part, Salveson v. Western States
Bankcard Ass’n., 731 F.2d 1423 (9th Cir. 1984).
It is also a question that this Court decided in Therm-
tron Products, Inc. v. Hermansdorfer, supra, 423 U.S.
336 in a way contrary to the Court of Appeals’ deci-
sion. In Thermtron, the district court asserted dis-
cretionary authority to remand an action because its
docket was overcrowded. This Court held in plain
terms that district courts have no discretion to remand
properly removed cases except on grounds provided
by statute; Congress did not intend
“to extend carte blanche authority to the dis-
trict courts to revise the federal statutes govern-
ing removal by remanding cases on grounds that

seem justifiable to them but which are not recog-
nized by the controlling statute.”

423 U.S. at 351.

The petition should be granted, because the Court
of Appeals has decided an important question in a way
contrary to this Court’s decision in 'Thermtron.

3. The Court of Appeals’ decision allowing the district
court to remand a properly removed case to state court
on grounds not authorized by statute conflicts with de-
cisions of other circuits, and that conflict should be resolved
by this Court. ;

There is no doubt that, despite Thermtron, the
Courts of Appeals remain sharply divided on the

question presented for review. Cases in the Third,

— SE

il

Fifth, Seventh and Tenth Circuits follow Thermtron
and hold that the remand of a properly removed case
is limited to grounds specified in 28 U.S.C. §§
1441(c) and 1447(c). Under those decisions, the dis-
trict court must dismiss the state claims if it exercises
its discretion under United Mine Workers v. Gibbs,
supra, not to retain pendent jurisdiction. See Brown-
ing v. Navarro, 743 F.2d 1069, 1076 n. 21 (5th Cir.
1984); Cook v. Weber, 698 F.2d 907, 909-910 (7th
Cir. 1983) ; Levy v. Weissman, 671 F.2d 766 (3d Cir.
1982) ; Sheet Metal Workers Intern. Ass’n., AFL-CIO
v. Seay, 693 F.2d 1000, 1002-1006 (10th Cir. 1982),
modified on other grounds on reh’g., 696 F.2d 780
(10th Cir. 1983); Ryan v. State Bd. of Elections of
State of Ill., 661 F.2d 1130, 1133 (7th Cir. 1981);
In re Greyhound Lines, Inc., 598 F.2d 883 (5th Cir.
1979) ; In re Merrimack Mut. Fire Ins. Co., 587 F.2d
642, 644 (5th Cir. 1978) ; cf. IMFC Professional, Etc.
v. Latin Am. Home Health, 676 F.2d 152, 159-160
(5th Cir. 1982) (discretion to remand based on an-
cillary jurisdiction under federal officer removal stat-
ute, 28 U.S.C. § 1442(a) (1)).

The Second, Fourth, Sixth, and Eighth Circuits
have held that properly removed cases may be re-
manded in the district court’s discretion for reasons
not prescribed by statute. See In re Romulus Com-
munity Schools, 729 F.2d 481 (6th Cir. 1984); Fox
v. Custis, 712 F.2d 84, 89-90 (4th Cir. 1983); Hof-
bauer v. Northwestern Nat. Bank of Rochester, 700
F.2d 1197 (8th Cir. 1983) ; Naylor v. Case & McGrath,

12

Ine., 585 F.2d 557 (2d Cir. 1978). The Ninth Circuit
has also held that a district court has discretion to
remand a case to state court when the federal claim
is eliminated. Wren v. Sletten Const. Co., 654 F.2d
529, 530 (9th Cir. 1981). Of these cases, only Romulus
considers Thermtron. 729 F.2d at 436.

This serious and persistent refusal by roughly
half of the courts of appeals to consider — much less
follow — Thermtron has created a deep conflict among
the circuit courts that this Court should resolve.

CONCLUSION
The petition should be granted.
Respectfully submitted,

JAMES H. CLARKE
Counsel of Record for Petitioner

June 30, 1987.

JAMES H. CLARKE
800 Pacific Building
520 S.W. Yamhill Street
Portland, Oregon 97204-1383
Telephone: (503) 226-6151
Counsel of Record =
For Petitioner

JAMES H. CLARKE

JAMES E. BARTELS

SPEARS, LUBERSKY,
CAMPBELL, BLEDSOE,
ANDERSON & YOUNG

800 Pacific Building

520 S.W. Yamhill Street

Portland, Oregon 97204-1383

Telephone: (503) 226-6151
Counsel for Petitioner

Al

APPENDIX A FILED
APR 3 1987

CATHY A. CATTERSON
Clerk, U.S. Court of Appeals

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

FORD MOTOR COMPANY, )
Petitioner, )
vs. )
) No. 87-7029
UNITED STATES )
DISTRICT COURT FOR THE ) DC # CYV-84-

DISTRICT OF OREGON, ) 1291-BE
Respondent, ) Oregon
and ) (Portland)
)
JOHN STRIBLING, ) ORDER

an individual, et al., )

)

Real Parties in Interest. )

Before: WALLACE, ALARCON and NELSON,
Circuit Judges

The petition for writ of mandamus is denied.
Petitioner has not demonstrated that the district
court clearly erred in remanding pendent state claims
after the federal claims permitting removal were de-
cided. Levin Metals Corp. v. Parr-Richmond ‘Terminal,
799 F.2d 1812 (9th Cir. 1986) ; Swett v. Schenk, 792
F.2d 1447 (9th Cir. 1986); Gallea v. United States,
779 F.2d 1403 (9th Cir. 1985).

MoCal 3/23/87

A2

APPENDIX B

FILED
OCT 2 12:28 PM ’86

Clerk, U.S. District Court
District of Oregon

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

JOHN STRIBLING, an individual,
and

JOHN STRIBLING FORD, INC.,

Civil No.

Plaintiffs, 84-1291-BE

VS.

FORD MOTOR COMPANY,
a corporation, and
FORD MOTOR
CREDIT COMPANY,
a corporation,

)
)
)
)
)
)
) ORDER
)
)
)
)
)
)

Defendants.

Defendant’s motion for summary judgment on
claim one, the Automobile Dealer’s Day in Court Act
(ADDCA) claim, is granted. Defendant’s motion for
summary judgment on the remaining claims, breach
of contract, conversion and interference with pros-
pective business relationships, is denied. Now, the
federal claim has been dismissed and only state claims
remain. Plaintiff’s conditional motion to remand to
state court is considered.

In determining the apprcvriate course of action,

— A3

I have considered the recent Third Circuit opinion,
Carnegie-Mellon University v. Cohill, No. 85-8619
(3rd Cir. 1986) and Thermtron Products, Inc. v. Her-
mansdorfer, 423 U.S. 336 (1976). However, where all
federal claims have been dismissed before trial, I find
the law in the Ninth Circuit directs me to remand
this case to state court. United Mine Workers v. Gibbs,
383 U.S. 715 (1966), Wren v. Sletten Construction
Co., 654 F.2d 529 (9th Cir. 1981). Plaintiff’s motion
to remand to state court is granted.

Defendant’s motion for summary judgment is
granted on the ADDCA claim and is denied on the
conversion, breach of contract and interference with
prospective business relationship claims. Plaintiff’s
motion to remand to state court is granted.

The clerk is directed to enter final judgment under
Fed. R. Civ. P. 54(b) on motions granted and denied
on July 23, 1986.

Defendant’s motion to compel answers to interro-
gatories is denied as moot.

A full opinion with reasoning will follows.
IT IS SO ORDERED.
DATED this 2 day of October, 1986.

/s/ ROBERT C. BELLONI
United States District Judge

A4

APPENDIX C

FILED
OCT 17 11:00 AM ’86

Clerk, U.S. District Court
District of Oregon

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

JOHN STRIBLING, an individual; )
and )
JOHN STRIBLING FORD, INC., )

a corporation, ) Civil No.

Plaintiffs, ) 84-1291-BE
Vs. )
) OPINION

FORD MOTOR COMPANY, )
a corporation; and )
FORD MOTOR )
CREDIT COMPANY, )
a corporation, )
Defendants. )

MICHAEL L. WILLIAMS
WILLIAMS & 'TROUTWINE

1100 S.W. 6th Avenue
Suite 1100
Portland, Oregon 97202

Attorneys for Plaintiffs

HERBERT H. ANDERSON

JAMES E. BARTELS

SPEARS, LUBERSKY, CAMPBELL,
BLEDSOE, ANDERSON & YOUNG
520 S.W. Yamhill Street

Suite 800

Portland, Oregon 97204

Attorneys for Defendants

A5

BELLONI, Judge.

Defendant Ford Motor Credit Company moves for
summary judgment on all four remaining counts
against John Stribling Ford, Inc. If the motion is
granted with respect to Count I, plaintiff moves to
remand to state court. Defendant moves to compel
answers to interrogatories.

John Stribling Ford, Ine. and John Stribling filed
this action against Ford Motor Company and Ford
Motor Credit Company (Ford Credit) in the Circuit
Court of the State of Oregon for Klamath County.
They alleged violation of the Automobile Dealers Day
in Court Act (““ADDCA”) 15 U.S.C. § 1221 (1982),
breach of an implied covenant of good faith and fair
dealing, conversion, intentional interference with a
business opportunity and violation of Oregon’s blue
sky laws. Defendants removed to the United States
District Court for the District of Oregon under 28
U.S.C. § 1441(b) (1982) alleging federal question
jurisdiction under 28 U.S.C. § 138381 (1982).

On October 2, 1986, I issued an order in which I
ruled on the motions discussed below. This opinion
explains my reasoning.

FACTS
John Stribling Ford, Ince. (Stribling Ford) was
established when the dealership entered into a Ford

Sales and Service Agreement to be an authorized
dealer on May 30, 1978. Stribling Ford refinanced

A6

through the Small Business Administration (SBA)
by pledging Stribling’s personal real estate and dealer-
ship assets. The inventory was financed through Ford
Credit. Ford Credit provided floor plan financing so
that the vehicles themselves secured the financing.
When a vehicle was sold, the dealership was to repay
the unpaid balance secured by that vehicle. Ford
Credit also retained a security interest in the dealer-
ship assets which had been created as security for the
capital loan.

After Stribling Ford refinanced, Ford Motor Com-
pany advised that the dealership was undercapitalized.
John Stribling and Stribling Ford were unable to bor-
row more money because all their assets were encum-
bered to provide security for the SBA loan and in-
ventory refinancing. Stribling Ford lost $405,000 in
1980, $115,000 in 1981, and $139,000 by August, 1982.

On September 7, 1982, Stribling Ford’s check for
a sold vehicle was returned unpaid to Ford Credit for
nonsufficient funds. On September 13, 1982, Ford
Credit received notice that a second check would be
returned unpaid. The two checks totaled $20,238.49.
Ford Credit terminated its inventory financing and
seized files and documents which were necessary for
Stribling Ford to continue in operation. Stribling Ford
closed on September 15, 1982 and John Stribling ar-
ranged to sell the dealership.

In order to transfer the franchise and assets to a
new dealer, the sales and service agreement required

aa aaa

ee

A7

Ford’s approval. Under the agreement, approval could
not be unreasonably withheld and it further provided
that Stribling Ford could demand that Ford purchase
the inventory of new undamaged parts in return for
a release from liability. Stribling executed the release
and assigned the parts return privilege to the purchas-
er, Harvest Ford. At Stribling’s request, Harvest Ford
later waived the parts return privilege in order to
facilitate Ford’s approval for the transfer of the fran-
chise and assets. Stribling needed the quick transfer
of the dealership to prevent greater financial loss.

John Stribling and Stribling Ford filed this law-
suit alleging violation of the federal Automobile Deal-
ers Day in Court Act (ADDCA), breach of an implied
covenant of good faith and fair dealing, conversion,
intentional interference with prospective business op-
portunity, and violation-of the Oregon blue sky laws.
Earlier, summary judgment was granted which re-
moved John Stribling from the lawsuit for lack of
standing, removed the blue sky claims and dismissed
all claims against Ford Motor Company.

SUMMARY JUDGMENT — ADDCA CLAIMS

Summary judgment is appropriate when the mov-
ing party meets the burden of presenting evidence
which demonstrates the nonexistence of any genuine
issue of material fact and that the movant is entitled
to judgment as a matter of law. Addickes v. S. H.
Kress, 398 U.S. 144 (1970).

A8

To be subject to the ADDCA, a defendant must be
an automobile manufacturer and a party to the fran-
chise agreement or, if not a party to the agreement,
an agent of the manufacturer. 15 U.S.C. § 1221
(1982). The Ninth Circuit has adopted a narrow view
of agency in this context and holds that a wholly
owned subsidiary credit agency of an automobile
manufacturer is not an agent for liability purposes
under the ADDCA. Marguis v. Chrysler Corp., 577
F.2d 624, 629 (9th Cir. 1978) ; Stansifer v. Chrysler
Motors Corporation, 487 F.2d 59, 65 (9th Cir. 1973).

Here, the parties agree that Ford Credit is not
an automobile manufacturer and not a party to the
franchise agreement. Stribling Ford concedes that the
Ninth Circuit view of agency, although narrower than
some circuits, applies and that Ford Credit is not an
agent under the ADDCA. Thus, defendant’s motion
for summary judgment as to the first claim is granted,

SUMMARY JUDGMENT — OTHER CLAIMS

Defendant moves for summary judgment on the
claims of conversion, breach of contract and interfer-
ence with prospective business advantage. Defendant
generally argues that plaintiff cannot make a prima
facie case on any of these claims and that with respect
to the conversion claim, Stribling Ford released it’s
claim.

CONVERSION

Conversion is “an intentional exercise of dominion
or control over a chattel which so seriously interferes

nN ©

A9

with the right of another to control it that the actor
may justly be required to pay the other the full value
of the chattel.” Mustola v. Toddy, 253 Or. 658, 456
P.2d 1004 (1969).

Here, Ford Credit argues that its actions in as-
serting its right to repossession of Stribling Ford’s
collateral do not amount to conversion. Ford Credit
argues that by sending nonsufficient fund checks,
plaintiff defaulted on loan obligations to Ford Credit
and thus, Ford Credit had the right to the manufactu-
rers’ statements of origin, the titles and the autos.
Alternatively, Ford Credit argues that Stribling Ford
released any claims of conversion when it signed the
release.

Plaintiff goes to great length in arguing that the
nonsufficient funds check was not a default under the
contract. And, if the check was a default, plaintiff
argues that Ford Credit had no right to a self help
remedy of repossession of the collateral and instead
only had the right to the files, paperwork, —,
and keys to the cars.

Here, there is a genuine issue of material fact
remaining. Inter alia, the parties dispute whether the
nonsufficient funds check was a default under the con-
tract and if it was, what type of self help remedy, if
any, Ford Credit could use. Defendant’s motion for
summary judgment as to the conversion claim is
denied.

A10

BREACH OF IMPLIED COVENANT

Ford Credit argues that its exercise of rights pur- .
suant to a written agreement cannot breach an implied
covenant of good faith. Specifically, Ford Credit ar-
gues that each activity that plaintiff claimed breached
the contract was expressly permitted under the terms
of the contract.

Plaintiffs again argue that there was not a default
under the terms of the contract. Thus, defendants
treated them unfairly and specifically breached the
implied covenant of good faith and fair dealing that
Oregon contract law provides in every contract.

Here, as in the conversion claim, there is a genuine
issue of material fact as to default. Defendant’s mo-
tion for summary judgment on the breach of implied
covenant is denied.

INTENTIONAL INTERFERENCE WITH BUSINESS
OPPORTUNITIES

In order to establish intentional interference with
a business opportunity, a plaintiff must “prove that
the defendants intentionally interfered with its eco-
nomic relationships, that they interfered for an im-
proper purpose or used improper means and that, as
a result, the petitioner was injured beyond the mere
fact of the interference itself.” Straube v. Larson, 287
Or. 357, 361, 600 P.2d 871 (1979).

Here, plaintiff alleges that Ford Credit interfered
with plaintiff’s prospective business relations when

All

Ford Credit repossessed its collateral, sent a notice of
private sale, cancelled it’s inventory financing agree-
ment, cancelled plaintiff’s sight draft privileges and
refused to release “capital reserve” funds and other
collateral.

Defendant argues that none of these acts, alone
or in combination were for an improper purpose nor
by improper means. In addition, defendant argues
that plaintiff defaulted and that it’s actions were in
accordance with the contract. Plaintiff, here too, ar-
gues that it did not default.

Here, questions of material fact remain. Again,
the parties dispute whether a default occurred and
thus do not agree on defendant’s motives after plain-
tiff tendered the nonsufficient funds check. Defend-
ant’s motion for summary judgment on the intentional
interference with business opportunity claim is denied.

MOTION TO REMAND

If defendant’s motion for summary judgment is
granted with respect to the single remaining federal
claim, plaintiff moves to remand to state court. Plain-
tiff argues that there is no continuing federal juris-
diction over the state claims that remain. However, if
the court finds that it has power to proceed to trial
over the state claims, plaintiff urges the court to ex-
ercise it’s discretion not to do so. Plaintiff argues that
the state claims remaining are best left to state courts
for resolution. Plaintiff cites United Mine Workers v.

A12

Gibbs, 383 U.S. 715 (1966) and Wren v. Sletten Con-
struction Co., 654 F.2d 529 (9th Cir. 1981).

Defendant argues that UMW v. Gibbs does not
require remand and cites Thermtron Products, Inc. v.
Hermansdorfer, 423 U.S. 336 (1976) for the proposi-
tion that the federal court is not able to remand to
state court except for statutorily stated reasons. De-
fendant argues that the recent case, Carnegie-Mellon
University v. Cohill, No. 85-3619 (3rd Cir. August 29,
1986), is on point and persuasive.

The doctrine of pendent jurisdiction was discussed
by the United States Supreme Court in UMW v. Gibbs.
Pendent jurisdiction, in the sense of judicial power,
exists when there is a substantial federal claim and
the relationship between it and the asserted state
claims permits the conclusion that the entire action

before the court comprises one “case”. UMW v. Gibbs,
383 U.S. at 725. The court stated that the doctrine is

one of discretion and is justified by judicial economy,
convenience and fairness to the litigants. Jd. at 726.
The court went on to say “(n)eedless decisions of
state law should be avoided, both as a matter of comity
and to promote justice between the parties, by procur-
ing for them a sure-footed reading of applicable law.”
Id. And even more specifically, the court said “‘(c) er-
tainly, if the federal claims are dismissed before trial,
even though not insubstantial in a jurisdictional sense,
the state claims should be dismissed as well.” 7d.

Here, a similar question of judicial discretion

A13

arises. The case at hand is analogous because the court
is deciding whether or not to exercise its discretion to
retain a case that was properly filed in state court
and removed to federal court by the defendant because
a federal claim has since been dismissed.

The Ninth Circuit has considered a similiar situa-
tion. Wren v. Sletten, 654 F.2d 529 (9th Cir. 1981).
In Wren, former employees brought an action in Mon-
tana state court against their former employer to re-
cover unpaid wages, overtime compensation and other
monies under the Fair Labor Standards Act of 1938
and the Montana Wage Claim Act. The case was re-
moved to federal district court. The federal claim was
dismissed due to plaintiff’s failure to exhaust arbitra-
tion and grievance procedures under the collective bar-
gaining agreement. On appeal, the Wren court noted
that the doctrine of pendent jurisdiction is one of dis-
cretion, not of power and is one which remains open
throughout litigation. 7d. at 536. The court did not
find the argument for retention of jurisdiction by the
district court persuasive and ordered the case remand-
ed to the district court with directions to remand the
state claims to the Montana state court. See Anderson
v. Allstate Ins. Co., 680 F.2d 677, 681 n. 3 (9th Cir.
1980) ; Cf. Swett v. Schenk, 792 F.2d 1447, 1450 (9th
Cir. 1986) (district court has discretion, once the
basis for 28 U.S.C. § 1442(a) (1) removal jurisdiction
is dropped, to hear the rest of the action or remand it
to the state court from which it was removed).

Al4

Defendant argues that the recent Third Circuit
opinion, Carnegie-Mellon University v. Cohill, No. 85-
8619 (August 29, 1986) is persuasive. In Cohull, the
Third Circuit held that where a case was properly re-
moved to federal district court, and the federal and
state claims arise out of the same facts, the court can-
not remand to state court after all the federal claims
are dismissed. Jd. Instead, if the trial] court chooses
not to exercise pendent jurisdiction, its only option
is to dismiss the pendent claims, because there is no
statutory basis for remand. Jd. slip op. at 8.

Cohill relies on Thermtron Products, Inc. v. Her-
mansdorfer, 423 U.S. 336 (1976) and an earlier
Third Circuit opinion. Levy v. Weissman, 671 F.2d
766 (3rd Cir. 1982). In Thermtron two residents and
citizens of Kentucky filed an action in a Kentucky
state court against an Indiana corporation and em-
ployee without office or place of business in Kentucky.
Plaintiffs were seeking recovery for damages arising
out of an automobile accident between plaintiff’s auto-
mobile and defendant’s employee’s automobile. The
Supreme Court held that the district court judge in
the diversity case erred in remanding a properly re-
moved case to state court because his docket was over-
crowded. Thermtron, 423 U.S. at 345. Specifically, the
Supreme Court held that the district court exceeded
its authority in remanding a case on grounds not per-
mitted by either 28 U.S.C. § 1441(c) or 28 U.S.C. §
1447(c). Id.

Al5

Cohill noted that the courts of appeals are divided
over interpretation of Thermtron. Cohill slip. op. at
19-20. The Seventh, Tenth and Fifth circuits seem to
interpret it as imposing a rigid rule that limits re-
mand to grounds specified in the statute. (citations
omitted) Jd. However, the Sixth, Second, Fourth and
Eighth Circuits have held that courts have discretion
to remand a properly removed action when the federal
causes of action have been removed from the com-
plaint. (citations omitted) Id.

I find that the Ninth Circuit follows the latter
interpretation and this court has discretion to remand
a properly removed action to state court once the fed-
eral causes of action have been eliminated from the
case. Wren, 654 F.2d at 536. In exercising discretion
the court must weigh the advantages and disadvan-
tages of remand by considering judicial economy, con-
venience and fairness to the litigants.

Defendant urges the court to retain the case under
it’s discretion for reason of judicial economy and fair-
ness. Specifically, defendant argues that the case has
been here since 1984, all claims had a common nucleus
of fact, plaintiff has benefited from using the liberal
discovery rules, time and effort have been expended
by the parties, the court is familiar with the case and
the pretrial order is lodged. Finally, defendant argues
that if the case is remanded to state court, the state
court could not set the case for trial for several
months.

A16

Plaintiff argues that this is an appropriate case
for remand because the federal claims have been dis-
missed before trial. According to plaintiffs, remand
is not unfair in terms of discovery benefits to plaintiff
because defendant chose to remove the case to federal
court. Further, the completed discovery will continue
to be a basis for the state action. Finally plaintiff
notes that defendant chose the timing of the motions
for summary judgment.

Here, only state claims remain. The state claims
are in no way related to federal policy. All the federal
claims have been dismissed prior to trial. As a matter
of comity, needless decisions of state law should be
avoided.

I find that any benefits plaintiff raight have re-
ceived from federal court discovery were a risk that
defendant chose to face when defendant removed the
action to federal court. Further, the discovery that has
been completed can be used in state court proceedings.

Next, this court’s familiarity with the case is in
preparation of the prior motions and the motions be-
fore me now. Any judge’s preparation for trial will
be essentially the same, no matter whether the case
is tried in federal court or state court.

The plaintiff chose to bring this action in Klamath
County. This is a privilege that is available to a plain-
tiff in any lawsuit. At the request of the defendant
the case was removed to federal court because of the

et enn ani aaa

A17

presence of federal claims. At the request of the de-
fendant the federal issues have all been resolved in
favor of defendant.

I find that defendant’s concern on scheduling delay
if the case is remanded to state court to be a signifi-
cant concern. However, in this court, a postponement
of trial is necessary because counsel for plaintiff has
a trial in state court that is scheduled to be held at
the same time as this trial and the state court has
denied a postponement. I cannot say that a trial in
this court could be held any earlier than it could be
held in Klamath County.

I have weighed the advantages and disadvantages
of remand to a state court in terms of judicial econ-
omy, convenience and fairness to the litigants. I find
the weight to be in favor of remanding to the state
court. This case is remanded to the Circuit Court of
the State of Oregon for Klamath County.

Motion to Compel Answer to Interrogatories and
Objections to the Pretrial Order

Defendant moves to compel plaintiff to answer
two of its interrogatories. Defendant makes two ob-
jections to the pretrial order. Defendant’s motion and
objections are denied as moot.

A18

CONCLUSION

By order on October 2, 1986, the following motions
were ruled on. Defendant’s motion for summary
judgment on Count I, the ADDCA claim, is granted.
Defendant’s motion for summary judgment on the
breach of contract claim, conversion claim and inten-
tional interference with prospective business oppor-
tunity claim is denied. Plaintiff’s motion to remand
to state court is granted. Defendant’s motion to com-
pel answers to interrogatories and objections to the
pretrial order are denied as moot.

DATED this 17 day of October, 1986.

/s/ ROBERT C. BELLONI
United States District Judge

kee Foal ha anc aaane Na

a e

A19

APPENDIX D

FILED

OCT 17 11:08 AM ’86
Clerk, U.S. District Court
District of Oregon

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

JOHN STRIBLING, an individual;
and
JOHN STRIBLING FORD, INC.,

a corporation, Civil No.

84-1291-BE
Plaintiffs,

Vs. JUDGMENT

FORD MOTOR COMPANY,
a corporation; and
FORD MOTOR
CREDIT COMPANY,
a corporation,

)
)
)
)
)
)
)
)
)
)
)
)
)
)

Defendants.

Based upon the order entered on October 2, 1986,
and Opinion filed herewith, this case is remanded to
the Circuit Court of the State of Oregon for Klamath
County.

IT IS SO ORDERED.
DATED this 17 day of October, 1986.

/s/ ROBERT C. BELLONI
United States District Judge

A20

APPENDIX E

FILED
MAY 11 1987

CATHY A. CATTERSON
Clerk, U.S. Court of Appeals

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

FORD MOTOR COMPANY,

JOHN STRIBLING,
an individual, et al.,

)
‘Petitioner, )
vs. )
) No. 87-7029
UNITED STATES ) DC # CV-84-
DISTRICT COURT FOR THE )_ = 1291-BE
DISTRICT OF OREGON, ) Oregon
Respondent, ) (Portland)
and )
) ORDER
)
)
)
)

Real Parties in Interest.

Before: WALLACE, ALARCON and NELSON,
Circuit Judges

The petition for rehearing is denied.

MoCal 3/23/87

A21
APPENDIX F

Material parts of Petitioner’s Application for Writ
of Mandamus, at 1:

“Pursuant to 28 USC § 1651 and Rule 21(a)
Fed R App P, petitioner Ford Motor Credit Com-
pany applies for a writ of mandamus or, in the
alternative, for a writ of prohibition, directed to
respondent United States District Court for the
District of Oregon.

a
“Statement of Relief Sought

“Petitioner requests that this Court direct the
district court to vacate its order of October 2,
1986 (Ex A) and judgment of October 17, 1986
(Ex B) remanding to state court the case entitled
John Stribling and John Stribling Ford, Ine. v.
Ford Motor Company and Ford Motor Credit
Company (docket number CV 84-1291-BE) or
prohibit such remand.” (Footnote omitted. )

A22
APPENDIX G

The following is a listing of subsidiaries (except
wholly owned subsidiaries) and affiliates of Ford
Motor Company which are or may be affilates of pe-
titioner Ford Motor Credit Company: *
Subsidiaries :
Anhanguera Leasing S.A. — Arrendamento
Mercantil
Bongotti S.A. Industria e Comercio de Radiadores
Consorcio Nacional Ford Ltda.
Distribuidora Ford de Titulos e Valores
Mobiliarios Ltda.
Eik & Hausken A/S
Escorts Tractors Limited
Eveleth Taconite Company
Excel Industries
lst Nationwide Network, Inc.
Ford Administracao e Consorcios Ltda.
Ford Brasil S.A.
Ford Credit A.B.
Ford Credit A/S
| Ford Credit B.V.
= * Ford Credit Bank Aktiengesellschaft
Ford Credit N.V.
Ford Credit S.A.
Ford Distribuidora de Produtos de Petroleo Ltda.
Ford Financiadora S.A. Credito,
Financiamento e Inv.
Ford Investitions-GmbH
Ford Investitions GmbH & Co. oHG

* Latest available listing, current as of April, 1987.

A23

Ford Lio Ho Motor Company Ltd.

Ford Motor Company Aktiebolag

Ford Motor Company A/S

Ford Motor Company (Austria) K.G.

Ford Motor Company (Belgium) N.V.

Ford Motor Company of Australia Limited

Ford Motor Company of Canada, Limited

Ford Motor Company of New Zealand Limited

Ford Motor Company Private Limited

Ford Motor Company (Switzerland) S.A.

Ford Motor Credit Company of New Zealand
Limited

Ford Motor Norge A/S

Ford Nederlands N.V.

Ford Overseas Finance N.V.

Ford Sales Company of Australia Limited

Ford Versicherungs-Vermittlungs GmbH

Ford Versorgungs und Unterstutzungseinrichtung
GmbH

Ford-Werke Aktiengesellschaft

Fords Vagnskadegaranti A.B.

Hokkai Ford Tractor Co., Ltd.

Humboldt Mining Company

Oy Ford Ab

Quimica Parker, S.A. de C.V.

Saar-Industrie GmhG

Sao Francisco Maquinas e Ferramentas Ltda.

Affiliates:
Agromak, S.A. de C.V. (FTA)
Allied Tractor Limited
American Network, Inc.
Amim Holdings Sdn. Bld.
Assembly Plant Material Services, Ine.
Canapro S.A.R.L.

A24

Carnegie Group Ince.

Carplastic, S.A.

Ceradyne Advanced Products, Inc.

Compania Financiera de Inversones y Credito S.A.

Conix Corporation

Double Eagie Steel Coating Company

Essex Manufacturing

Fabrica de Tractores Agricolas S.A.

Fairlane Woods Associates

FCP Finance Corporation

Foral Services Proprietary Ltd.

Ford Credit South Africa (Proprietary) Ltd.

Ford Vehicle Finance

General Electric Credit Auto Resale Service, Inc.

Halla Climate Control Corp.

Implementos Agricolas Mexicanos, S.A.

Iveco Ford Truck Limited

Kia

Mazda Motor Corporation

Metro Investment Service Corporation

Nascote Industries, Inc.

Nemak, S.A.

New Holland Japan Inc.

New River Casting Company

Otomobil Sanayii, A.S. (Otosan)

Oy - Ford Rahoitus Ab

Renaissance Center Partnership

Renaissance Center Venture

South African Motor Corporation (Proprietary)
Limited

Sukat Real Estate Holdings

Synthetic Vision Systems, Inc.

TG Ford Associates

Trans Canada Glass Ltd.

Thace

Vitro Flex, S.A.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_2306%3A1. Public record. Not legal advice.