Today, the Eleventh Circuit reversed and remanded dismissal of a petition to compel arbitration.  The underlying case involved claims for usury under Georgia law against a "payday loan" company.  A payday loan lasts only two weeks or a month — until the next payday — but earns annual interest rates up to several hundred percent. 

Following its precedent, Tamiami Partners Ltd., ex rel. Tamiami Development Corp. v. Miccosukee Tribe of Indians of Florida, 177 F.3d 1212 (11th Cir. 1999), the court held that the district court should have looked not only at the plaintiff’s pleadings but also the petition to compel arbitration to determine whether federal question jurisdiction existed.  The petition sought a declaratory judgment against the plaintiff — including on his claim under the Georgia version of the federal Racketeer-Influenced anc Corrupt Organizations Act.  Because the plaintiff could have alleged a federal RICO claim, the court held, federal question jurisdiction existed; and the district court erred in dismissing the petition to compel arbitration.  Two judges specially concurred, lamenting that Tamiami remained binding precedent in the Eleventh Circuit. Community State Bank v. Strong, No. 06-11582 (11th Cir. Apr. 27, 2007).

Blawgletter shares the concurrers’ lament.  Tamiami deviated from the rule that, as master of his complaint, the plaintiff may choose not to allege federal claims, and the defendants can’t do anything about it.  Tamiami lets defendants force federal claims on the plaintiff and thus to manufacture federal jurisdiction.  Let’s hope Strong either goes en banc or to the Supremes for correction of the bizarre Tamiami rule.

Barry Barnett

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