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McClellon v. Wells Fargo Bank, N.A.

United States District Court, W.D. Washington, Seattle

July 31, 2018

DONTE MCCLELLON, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant.

          ORDER

          JOHN C. COUGHENOUR, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendant's motion to dismiss (Dkt. No. 10) and Plaintiff's motion to remand (Dkt. No. 17). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS Defendant's motion to dismiss (Dkt. No. 10) and DENIES Plaintiff's motion to remand (Dkt. No. 17) for the reasons explained herein.

         I. BACKGROUND

         Plaintiff Donte McClellon (“McClellon”) alleges that Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) negligently mismanaged his funds, which prevented him from purchasing 14, 829.46 Ethereum.[1] (Dkt. No. 1-2 at 1.) Before filing this action, McClellon submitted his claims to arbitration. (Dkt. No. 11 at 5-7.) In arbitration, McClellon sued Wells Fargo for negligence, breach of contract, and violation of Regulation E and Regulation Z because Wells Fargo failed to prevent a series of fraudulent transactions from McClellon's checking accounts. (Id. at 30.) McClellon also alleged that this failure prevented him from purchasing 14, 829.46 Ethereum. (Id. at 34, 36.) McClellon requested damages of 14, 829.46 Ethereum and $349, 000. (Id. at 36.) The arbitrator dismissed McClellon's claim with prejudice because he could not prove damages. (Id. at 6.) The arbitrator also found that “some, if not all” of McClellon's evidence was fraudulent. (Id.)

         Before the arbitrator issued a final judgment, McClellon sued Wells Fargo in King County Superior Court. (Dkt. No. 1-2.) In his complaint, McClellon makes the following allegations against Wells Fargo:

This is an action under the Uniform Commercial Code (4.2.005 to 925) and Washington Consumer Protection Act, RCW 19.86.020, based upon Defendant's blatant self-dealing and other intentional negligent misconduct in conversion, freezing, pooling, otherwise manipulating Plaintiff's funds without Plaintiff's authorization.
Plaintiff further allege that the Defendant violated the Washington State Securities Act, Regulation E and committed the tort of negligence in handling of Plaintiff's funds. The Plaintiff seeks compensatory damages and all other damages (i.e., direct and consequential damages) allowed by law, and payment of costs and attorneys' fees.

(Id. at 1.) McClellon also alleged that Wells Fargo's action prevented him from purchasing 14, 829.46 Ethereum. (Id. at 3). On June 12, 2018, Wells Fargo removed the case to this Court. (Dkt. No. 1 at 2.) Wells Fargo moved to dismiss based on res judicata, asserting that the claims were already resolved in arbitration. (Dkt. No. 10 at 1.) In response, McClellon filed a motion to remand (Dkt. No. 17).

         II. DISCUSSION

         A. McClellon's Motion to Remand

         1. Legal Standard

         A party to a civil action brought in state court may remove that action to federal court if the district court would have had original jurisdiction at the time of both commencement of the action and removal. See 28 U.S.C. § 1441(a); 14B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3723 (4th ed. 2013). Once removed, the case can be remanded to state court for either lack of subject-matter jurisdiction or defects in the removal procedure. See 28 U.S.C. § 1447(c). The removing party bears the burden of establishing federal jurisdiction. Emrich v. Touche Ross & Co, 846 F.2d 1190, 1195 (9th Cir. 1988).

         2. Analysis

         McClellon asserts that this Court lacks subject matter jurisdiction over his claims because there is not a complete diversity of citizenship, the amount in controversy requirement is not met, and none ...


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