The opinion of the court was delivered by: Orrick, District Judge.
The following summary of the facts of this case is taken from the
allegations in plaintiffs complaint filed in the Superior Court.
The VA Program permits eligible veterans of the United States Armed
Forces to purchase homes with mortgages backed by the federal
government. (Id. ¶ 2.) State and federal law limit the type and
amount of fees and costs that a lender may charge a veteran participating
in the VA Program. (Id. ¶ 4.) Mortera alleges that North American
violates the law by charging veterans excess fees for loans originated by
mortgage brokers. (Id. ¶ 5.)
Mortera, suing on of behalf of the general public as a private attorney
general as defined in § 17204 of the California Business and
Professions Code (id. ¶ 11), does not herself claim to be a veteran
or otherwise eligible for the VA Program, nor does she allege to have
been personally injured by North American's allegedly illegal loan
practices. Her single cause of action pleads a violation of California's
Unfair Competition Act, § 17200 et seq. of the California Business
and Professions Code (id. ¶¶ 35-39). She seeks injunctive and
declaratory relief to stop North American From engaging in the allegedly
unlawful Business practices, restitution of the loan fees, and attorney's
fees and costs.
If at any time before final judgment it appears that the district court
lacks subject matter jurisdiction over a case that has been removed to
federal court, the case shall be remanded. 28 U.S.C. § 1447 (c). "We
strictly construe removal statute against removal jurisdiction." Gaus v.
Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam). This strong
presumption against removal jurisdiction means that the defendant always
has the burden of proving that removal is proper. Id.
Here, Mortera makes three independent arguments in support of her
motion to remand. First, she argues that remand is required because her
lack of Article III standing deprives this Court of original
jurisdiction. Second, she argues that this Court lacks diversity
jurisdiction because the amount in controversy requirement is not met in
this case. Third, she argues that there is no federal question
jurisdiction because her claim arises under California law. Because it is
clear that Mortera lacks standing to bring this case in federal court, it
is unnecessary to reach her remaining arguments.
The jurisdiction of federal courts is defined and limited by Article
III of the Constitution. Flast v. Cohen, 392 U.S. 83, 94, 88 S.Ct. 1942,
20 L.Ed.2d 947 (1968). Standing "is an essential and unchanging part of
the case-or-controversy requirement of Article III." Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).
The Supreme Court has established that parties seeking to invoke federal
jurisdiction must establish (1) personal injury or threat of injury; (2)
that the injury can be fairly traced to the action challenged; and (3)
that the injury is likely to be addressed by the requested relief. Id. at
561, 112 S.Ct. 2130.
In this case, Mortera does not allege that she suffered any injury as a
result of North American's allegedly unfair and illegal loan practices.
brings her claim on behalf of the public as a private attorney general
under California's Unfair Competition Act (the "UCA"), Business &
Professions Code § 17200 et seq. The UCA provides that an action
challenging wrongful business conduct may be brought "by any person
acting for the interests of itself, its members or the general public."
Id. § 17204. The California Supreme Court has held that a person
suing under the UCA does not have to prove that he or she was directly
injured by the defendant's wrongful business practice. Stop Youth
Addiction, Inc. v. Lucky Stores, Inc., 17 Cal.4th 553, 561,
71 Cal.Rptr.2d 731, 736, 950 P.2d 1086 (1998) ("`[A] private plaintiff
who has himself suffered no injury at all may sue to obtain relief for
others.'") (quoting Cal. Bus. & Prof.Code § 17204). Thus, a plaintiff
can sue in California courts under the UCA even though he or she has
suffered no injury in fact and would not have standing to sue in federal
A number of federal courts have remanded private attorney general
actions under the UCA due to lack of standing. In Toxic Injuries Corp.
v. Safety-Kleen Corp., 57 F. Supp.2d 947 (C.D.Cal. 1999), the court held
that plaintiff did not have standing because it alleged only generalized
injuries as a result of exposure to defendant's chemicals, not that
plaintiff or any of its directors suffered individual injuries.
Similarly, in Levy v. Dial Corp., 1997 WL 588925 (N.D.Cal. 1997), the
court remanded a UCA case involving misleading product packaging where
the complaint did not allege that the plaintiff ever bought the product
or was personally misled. The court in As You Sow v. Sherwin-Williams
Co., 1993 WL 560086 (N.D.Cal. 1993), held that "[plaintiffs] state
created statutory right to act as a private attorney general does not
confer "injury' on [plaintiff] sufficient to satisfy federal standing
requirements." Id. at *2. The As You Sow court cited ...