Reported / Citable
Background
In June 2025, Tracy Graham sued Credit One Bank NA in Texas justice court, alleging violations of the Consumer Financial Protection Bureau’s 7-in-7 Rule (found in Regulation F), the Telephone Consumer Protection Act, and harassment under the Fair Debt Collection Practices Act. The bank was served with process in August 2025 and filed a notice of removal to federal court in September 2025, asserting federal question jurisdiction. Graham responded with a motion to remand, arguing that her claims arise under state law and do not depend on resolution of any federal issue.
The Court’s Holding
The magistrate judge recommended denying Graham’s motion to remand, finding that removal was proper. The court held that the notice of removal was filed timely—29 days after service, within the 30-day deadline under 28 U.S.C. § 1446(b). More importantly, the complaint itself alleges only federal causes of action: violations of the Fair Debt Collection Practices Act (15 U.S.C. § 1692d), the CFPB’s 7-in-7 Rule under Regulation F (12 C.F.R. § 1006.14(b)(2)), and the Telephone Consumer Protection Act (47 U.S.C. § 227 et seq.). Because the complaint exclusively pleads federal claims on its face, federal question jurisdiction under 28 U.S.C. § 1331 exists.
The court also found that the bank complied with all procedural requirements for removal under 28 U.S.C. § 1446(a), including filing a short and plain statement of grounds for removal and attaching copies of all relevant pleadings and processes. Under Fifth Circuit precedent, federal jurisdiction depends on what appears in the face of a well-pleaded complaint, not on how the plaintiff later characterizes the claims. Graham’s assertion that her causes of action “arise under state law” was directly contradicted by the record.
Key Takeaways
- A defendant may properly remove a case to federal court based on federal question jurisdiction when the complaint alleges federal statutory claims, regardless of the plaintiff’s characterization of the dispute as state law-based.
- Federal removal procedures must be strictly observed, but here the 30-day filing deadline was met and all documentary requirements were satisfied.
- Removal statutes are strictly construed in favor of remand, but this presumption is overcome when federal claims appear on the face of a well-pleaded complaint.
Why It Matters
This decision clarifies an important principle for creditors and debt collectors: if a plaintiff alleges violations of federal consumer protection statutes such as the FDCPA or TCPA, the case qualifies for removal to federal court. Plaintiffs cannot circumvent removal by characterizing federal claims as arising under state law or framing the dispute in terms of state consumer protection statutes after filing. The court looks to the face of the complaint at the time of removal, not to post-hoc characterizations.
For practitioners, the holding reinforces that pleading strategy matters in consumer protection litigation. A plaintiff who relies exclusively on federal statutes for her claims forecloses the option of keeping the case in state court through removal. Conversely, defendants facing consumer claims in state court should carefully review the complaint for federal law allegations that would support removal.