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50 by 50 Reo, LLC v. Butler

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


April 14, 2009

50 BY 50 REO, LLC, PLAINTIFF,
v.
EWAO BUTLER; AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.

The opinion of the court was delivered by: Margaret M. Morrow United States District Judge

ORDER REMANDING ACTION TO LOS ANGELES SUPERIOR COURT FOR LACK OF SUBJECT MATTER JURISDICTION

I. FACTUAL AND PROCEDURAL BACKGROUND

On January 27, 2009, plaintiff 50 By 50 Reo, Inc. ("50 By 50") filed this unlawful detainer action against pro se defendant Ewao Butler in Los Angeles Superior Court. Butler was served on January 31, 2009, and removed the action to this court on March 10, 2009.*fn1 In its complaint, 50 By 50 alleges that it purchased the property located at 811 Silver Lake Blvd., Los Angeles, California 90026 ("the property") at a non-judicial foreclosure sale conducted in compliance with California Civil Code § 2924, and recorded a deed of trust upon sale on November 27, 2007.*fn2 On December 3, 2008, Butler was served with a written notice to vacate the property.*fn3 The notice expired at midnight on January 26, 2009; since then, Butler has remained in possession of the property without 50 By 50's consent.*fn4 Consequently, 50 By 50 filed an unlawful detainer action on January 27, 2009. Its complaint contains a single state law cause of action under California Code of Civil Procedure §§ 1161(a) and 1161(b). Butler removed, alleging that California Code of Civil Procedure §§ 1161(a) et seq. and 2924 violate due process and are therefore unconstitutional.*fn5 He asserts on this basis that the action implicates a federal question and thus that a federal court has jurisdiction to hear it.

II. DISCUSSION

A. Legal Standard Governing Removal

"Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). "If at any time before final judgment[, however,] it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).

The Ninth Circuit "strictly construe[s] the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988), and Takeda v. Northwestern Nat'l Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985)). Thus, "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Id. (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). "The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990), and Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988)).

Removal jurisdiction can be based on diversity of citizenship or on the existence of a federal question. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) ("Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant. Absent diversity of citizenship, federal-question jurisdiction is required"); see also 28 U.S.C. § 1441(b); id. at § 1331 (the district courts "have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States").

Federal question jurisdiction is presumed to be absent unless a defendant, as the party seeking removal, shows that the plaintiff has either alleged a federal claim (American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916)), a state cause of action that requires resolution of a substantial issue of federal law (Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9 (1983); Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 199 (1921)), or a state cause of action that Congress has transformed into an inherently federal claim by completely preempting the field (Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 560 (1968); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)).

Since a defendant may remove a case under § 1441(b) only if the claim could originally have been filed in federal court, whether removal jurisdiction exists must be determined by reference to the "well-pleaded complaint." Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986). It is not enough for removal purposes that a federal question may arise in connection with a defense or counterclaim. "[F]ederal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, 482 U.S. at 392; see also Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908).

Federal courts have a duty to examine their subject matter jurisdiction whether or not the parties raise the issue. See United Investors Life Ins. Co. v. Waddell & Reed, Inc., 360 F.3d 960, 966 (9th Cir. 2004) ("[A] district court's duty to establish subject matter jurisdiction is not contingent upon the parties' arguments," citing Mitchell v. Maurer, 293 U.S. 237, 244 (1934)); see also Attorneys Trust v. Videotape Computer Products, Inc., 93 F.3d 593, 594-95 (9th Cir. 1996) (lack of subject matter jurisdiction may be raised at any time by either party or by the court sua sponte); Thiara v. Kiernan, No. C06-03503 MJJ, 2006 WL 3065568, *2 (N.D. Cal. Oct. 25, 2006) ("A district court has an independent obligation to examine whether removal jurisdiction exists before deciding any issue on the merits").

Where a case has been removed, the court may remand for lack of subject matter jurisdiction at any time before final judgment. See 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded"). The court may -- indeed must -- remand an action sua sponte if it determines that it lacks subject matter jurisdiction. See Kelton Arms Condominium Owners Ass'n, 346 F.3d at 1192 ("[W]e have held that the district court must remand if it lacks jurisdiction," citing Sparta Surgical Corp. v. Nat'l Ass'n Sec. Dealers, Inc., 159 F.3d 1209, 1211 (9th Cir. 1998)).

B. Whether the Court Has Subject Matter Jurisdiction

In his notice of removal, Butler contends that the court has subject matter jurisdiction under 28 U.S.C. §§ 1331, 1441, and 1443.*fn6 Specifically, he contends that California Code of Civil Procedure §§ 1161(a) et seq. and California Civil Code § 2924 are unconstitutional because they do not afford a party an adequate opportunity to defend against a wrongful foreclosure.*fn7 Therefore, he contends that 50 By 50's claim presents a federal question under §1331.*fn8 Butler also asserts that this is a civil rights case under 42 U.S.C. §1983, and that the court has jurisdiction over § 1983 claims by virtue of §1443.*fn9

50 By 50's complaint does not plead a federal cause of action. As explained, a claim "arises under" federal law only if a federal question appears on the face of plaintiff's complaint.

Assuming only state law claims are pled, removal jurisdiction is lacking, even if Butler wishes to assert a defense based exclusively on federal law.*fn10 Because 50 By 50's complaint raises only state law issues, Butler's removal was improper. Accordingly, the court must remand the case to state court.

III. CONCLUSION

For the foregoing reasons, the court remands this action to the Los Angeles Superior Court forthwith.


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