The opinion of the court was delivered by: BY THE COURT; RONALD L. BUCKWALTER
Before the Court is defendants' Motion to Dismiss plaintiff's complaint pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. For the following reasons, defendants' Motion to Dismiss is granted.
Plaintiffs Howard W. Harrison ("Harrison"), a citizen of New York, and James D. Robbins ("Robbins"), a citizen of Connecticut, bring this suit against CoreStates Bank, N.A. ("CoreStates") in a consolidated complaint on their own behalf and on behalf of a class. Harrison and Robbins are beneficiaries of irrevocable trusts administered by CoreStates. CoreStates is a national bank with offices in Philadelphia, Pennsylvania. The class has not been certified and this motion will be decided on the two plaintiffs' consolidated complaint.
The complaint arises from CoreStates' actions as trustee of the two plaintiffs' irrevocable trust accounts. Through a computer program, CoreStates regularly sweeps fiduciary accounts to temporarily invest principal and income cash in collective investment funds. The plaintiffs allege that CoreStates charges the irrevocable trusts a fee for this service that is not charged to similarly situated commercial accounts. Plaintiffs also complain of an additional fee charged irrevocable trusts, "Regulatory Compliance Compensation", ranging from $ 300-$ 600. The plaintiffs charge that CoreStates imposed the fee without notice and that the fee amounts to double dipping because the cost of complying with recent regulations should come out of CoreStates's general overhead and not be charged to individual trust accounts.
Plaintiffs state that CoreStates' breach of fiduciary duty violates 12 U.S.C. § 92a, that the sweep fees violate 12 C.F.R. § 9.18(b)(12), and that the "Regulatory Compliance Compensation" violates 12 C.F.R. § 9.15. Plaintiffs seek a refund of the $ 300-$ 600 "Regulatory Compliance Compensation" and a refund of all sweep fees assessed against their trust accounts. Plaintiffs ask this Court to remove CoreStates from the position of corporate fiduciary of their trusts accounts and to enjoin CoreStates's practice of assessing "Regulatory Compliance Compensation" and "sweep fees". Finally, plaintiffs want a refund of all the sweep fees and "Regulatory Compliance Compensation" paid from their trust accounts to date.
CoreStates moves to dismiss the complaint under Fed. R. Civ. P. 12(b)(1) and 12(b)(6): lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. When a motion under Rule 12 is based on more than one ground, the court should consider the 12(b)(1) challenge first because if it must dismiss the complaint for lack of subject matter jurisdiction, all other defenses and objections become moot.
Plaintiffs claim federal jurisdiction over their complaint under 28 U.S.C. § 1331 (federal question) and 28 U.S.C. § 1332 (diversity). Because § 1331 provides "the district court shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States", the plaintiff seeking jurisdiction under § 1331 should allege, as part of his well-pleaded complaint, that a federal right or immunity is an essential element of his cause of action. United Jersey Banks v. Parell, 783 F.2d 360, 365 (3d Cir. 1986) (citations omitted), cert. denied First Fidelity Bancorporation v. Parell, 476 U.S. 1170, 106 S. Ct. 2892, 90 L. Ed. 2d 979 (1986). Further, the plaintiff bears the burden of persuasion to show that his claim is not wholly insubstantial when subject matter is challenged. Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991), cert. denied, 115 L. Ed. 2d 1007, 111 S. Ct. 2839 (1991).