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Gebhard v. Bank of America

February 10, 2010


The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge


On January 7, 2010, Plaintiffs filed a motion in which they seek to remand this case to the San Joaquin County Superior Court in California from which it was removed. (Docket No. 9.) Plaintiffs also request an award of the attorney's fees and costs incurred in connection with preparing and filing their remand motion. Defendant Bank of America, N.A. ("BofA") opposes Plaintiffs' motion, arguing federal question jurisdiction supports the removal of this case to federal court. For the reasons stated below, Plaintiffs' motion to remand is GRANTED.


On October 14, 2009, Plaintiffs filed a complaint in the San Joaquin County Superior Court, alleging fourteen claims under state law. Specifically, Plaintiffs' complaint alleges claims for breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, deceit, promissory estoppel, fraud by intentional misrepresentation, fraud by concealment, restitution for unjust enrichment, slander of title, civil conspiracy, declaratory relief, rescission/cancellation of void instrument, preliminary and permanent injunctive relief and violations of California Business and Professions Code § 17200 et seq. and California's Rosenthal Act.

Plaintiffs' claims relate to a mortgage loan transaction involving property located at 10617 Tank House Drive in Stockton, California. (Compl. ¶ 2.) On or about December 23, 2005, Plaintiffs entered into a mortgage loan agreement with Aegis Wholesale Lending, who later transferred the loan to Countrywide Home Loans. (Id.) BofA is allegedly the "corporate successor" to Countrywide Home Loans. (Id. ¶ 3.)

On October 13, 2009, BofA filed a notice of removal, removing this action to federal court on the basis of federal question jurisdiction. (Notice of Removal ¶ 5.) BofA's notice of removal states that removal is proper since Plaintiffs' claims "arise under" two federal statutes: the Truth in Lending Act and the Real Estate Settlement Procedures Act.*fn2 (Id.) After removal, on November 20, 2009, BofA filed a motion to dismiss Plaintiffs' complaint.

Plaintiffs did not oppose BofA's dismissal motion; however, on January 7, 2010, they filed their now pending remand motion.


A. Removal

A defendant may remove to federal court "any civil action brought in a State court of which the district courts . . . have original jurisdiction . . . ." 28 U.S.C. § 1441(a). Removal, therefore, is only proper when a case originally filed in state court presents a federal question or is between citizens of different states and involves an amount in controversy that exceeds $75,000. See 28 U.S.C. §§ 1331, 1332(a). "The removal statute is strictly construed against removal jurisdiction [and] [t]he defendant bears the burden of establishing that removal is proper." Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (citations omitted). "Where doubt regarding the right to removal exists, a case should be remanded to state court." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

B. Federal Question Jurisdiction

BofA argues federal question jurisdiction supports its removal of this action. "The presence or absence of federal question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." California v. United States, 215 F.3d 1005, 1014 (9th Cir. 2000) (quoting Audette v. Int'l Longshoremen's and Warehousemen's Union, 195 F.3d 1107, 1111 (9th Cir. 1999)). "Under that rule, [a court] must look to what necessarily appears in the plaintiff's statement of his or her own claim . . . , unaided by anything alleged in anticipation of avoidance of defenses which is thought the defendant may interpose." Id. at 1014-15 (quoting Oklahoma Tax Comm'n v. Graham, 489 U.S. 838, 841 (1999)). "In addition, the plaintiff is the 'master' of her case, and if she can maintain her claims on both state and federal grounds, she may ignore the federal question, assert only state claims, and defeat removal." Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996).

It is undisputed that the face of Plaintiffs' complaint does not allege a claim under federal law. However, "[u]nder the artful pleading doctrine, a plaintiff may not defeat removal by omitting to plead necessary federal questions in a complaint. The artful pleading doctrine allows courts to delve beyond the face of the state court complaint and find federal question jurisdiction by recharacterizing a plaintiff's state-law claim as a federal claim." Lippit v. Raymond James Fin. Servs., Inc., 340 F.3d 1033, 1041 (9th Cir. 2003). The artful pleading doctrine applies to "(1) complete preemption cases, and (2) substantial federal question cases. Subsumed within this second category are those cases where the claim is necessarily federal in character or where the right to relief depends on the resolution of a substantial, disputed federal question." Id. (citations omitted).

A state law cause of action "arises under" federal law and confers federal question jurisdiction when it "necessarily raise[s] a stated federal issue, [that is] actually disputed and substantial . . . ." Grable & Sons Metal Prods. Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005). "[F]ederal law [must do] . . . more than just shape a court's interpretation of state law; the federal law must be at issue" in the plaintiff's claim. Int'l Union of Operating Eng'rs v. County of Plumas, 559 F.3d 1041, 1045 (9th Cir. 2009) (emphasis in original). Further, "[w]hen a claim can be supported by alternative and independent theories-one of which is a state law theory and one of which is a federal law theory-federal question jurisdiction does not attach because federal law is not a necessary element of the claim." Rains v. Criterion Sys., Inc., 80 F.3d 339, 346 (9th Cir. 1996).

A state law claim may also "arise under" federal law "where federal law completely preempts state law." ARCO Envtl. Remediation, L.L.C v. Dept. of Health and Envtl. Quality, 213 F.3d 1108, 1114 (9th Cir. 2000). "In such circumstances, federal law displaces plaintiff's state-law claim, no matter how carefully pleaded. This is because the claim purportedly based on a preempted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Valles v. Ivy Hill Corp., 410 F.3d 1071, 1075 (9th Cir. 2005) (quotations and citations omitted). However, "[p]reempted state law claims may be removed to federal court only in the rare instances where Congress has chosen to regulate the entire field . . . ." Id. "The [complete preemption] doctrine applies in select cases where the preemptive force of federal law is so 'extraordinary' that it converts state common law claims into claims arising under federal law for purposes of jurisdiction." Holman v. Laulo-Rowe Agency, 994 F.2d 666, 668 (9th Cir. 1993) (citation omitted). The "dispositive question" is whether a federal law provides "the exclusive cause of action" for the state claim alleged. Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 9, (2003). If the answer is yes, "the cause of action necessarily arises under federal law and the case is removable." Id. However, "[b]y drafting a purely state law complaint, the plaintiff will ordinarily remain in state court." Holman, 994 at 668.


Plaintiffs argue this action should be remanded to state court since Plaintiffs' state law claims do not involve the determination of a substantial, disputed question of federal law, nor is federal law necessary to sustain any of their claims. BofA responds, arguing federal question jurisdiction exists since Plaintiffs' deceit and breach of the implied covenant of good faith and fair dealing claims are completely preempted by the National Banking Act and regulations promulgated thereunder, and Plaintiffs' claim for ...

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