The People of the State of California, and v. General Motors Corporation, a Delaware Corporation, Does I Through C, And

The sole problem presented by this appeal is whether the action was properly removed to the federal court as one arising under the laws of the United States. The district court thought it was and denied a motion to remand. We disagree and reverse.

California has a law forbidding the use of misleading statements in the course of the sale of property and fixing civil penalties for violations. The Attorney General of California filed this action on behalf of the People of California seeking an injunction and civil penalty in the amount of $2,500.00 for each car sold by General Motors in California between July 3, 1968 and the date of the filing of the complaint.

The complaint alleges that General Motors affixed sticker labels to its cars and that such labels are misleading in that they lead and tend to lead members of the public in California to believe that such sticker prices are the prevailing retail prices at which such automobiles are sold by automobile dealers to members of the public in California, while in fact the price shown on the sticker is often several hundred dollars more than the prevailing price. Although the complaint alleges that General Motors is required by…