JACKSON — Attorney General Jim Hood’s lawsuit against six credit card insurers should be returned to state chancery court, a three-judge federal appeals panel ruled Monday.
But first, the panel of the 5th U.S. Circuit Court of Appeals in New Orleans, wants a federal judge in Mississippi to formally say why the case belongs in federal court.
If there is no federal jurisdiction over the case, the panel said the lawsuit should return to Hinds County Chancery Court where Hood originally filed it in June of 2012.
U.S. District Judge William H. Barbour Jr. ruled the lawsuits — now combined into one case — would remain in federal court. Hood appealed to the 5th Circuit and Barbour said he’d wait on a ruling before proceeding.
Specifically, Barbour ruled federal banking law pre-empted Hood’s allegation that the companies had violated the Mississippi Consumer Protection Act by charging consumers for products they did not want or need.
Hood is challenging the companies’ charges for Payment Protection plans, which suspend payments under certain circumstances — such as death, disaster, disability, unemployment, marriage, divorce, or hospitalization — without adverse consequences to the customer, according to court records.
The charges are ordinarily calculated as a percentage of the customer’s outstanding card balance and customers pay a separate fee for these services each month.
Hood argued he brought the lawsuits on behalf of the citizens of Mississippi and not for people everywhere. The companies argued the issue was governed by federal class action and banking laws.
The 5th Circuit panel said the companies’ argument did not provide a basis for the case staying in federal court.
“To the extent that the district court has not yet ruled on whether substantial federal question jurisdiction exists, this case is remanded for the district court to make that determination. If the district court has already ruled that there is no substantial federal question jurisdiction, or makes such a determination upon further review, then these cases should be remanded to the state court as there would be no federal jurisdiction,” the 5th Circuit panel said.
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