The opinion of the court was delivered by: Honorable Gary Allen Feess
Proceedings: (In Chambers)
Plaintiff Claremont 1st Street Investors ("Claremont") obtained title to certain real property on April 5, 2010, and subsequently served written notice on defendant Alfonso Espinoza ("Espinoza"), demanding that he quit the premises within three (3) days. (Not., Docket No. 1 [Complaint for Unlawful Detainer ¶¶ 8-11].) Espinoza failed to deliver possession of the property within the three-day period, and Claremont filed the present suit. (Id. [¶ 13].)
On May 11, 2010, Espinoza removed the action to this Court pursuant to 28 U.S.C. § 1441. The same day, he filed a related action in this Court, No. CV 10-3526 GAF DTBx, alleging that Claremont, among others, violated the federal Truth in Lending Act ("TILA"), the Real Estate Settlement Procedures Act ("RESPA"), and the Protecting Tenants at Foreclosure Act ("PTFA").
In his removal notice, Espinoza acknowledges that "removal, on the grounds of federal question, is ordinarily based on the face of plaintiff's complaint." (Not. ¶ 5.) However, he claims that an exception to the general rule exists in this case because the TILA, RESPA, and PTFA provisions raised in his related complaint completely pre-empt Claremont's state law claim. (Id.)
The Court concludes that Claremont's suit does not arise under federal law and hereby REMANDS the case for lack of subject matter jurisdiction.
Under Federal Rule of Civil Procedure 12(h)(3), "[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." FED. R. CIV. P. 12(h)(3). "[A] court may raise the question of subject matter jurisdiction, sua sponte, at any time during the pendency of the action . . . ." Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002); see also United Life Ins. Co. v. Waddell & Reed, Inc., 360 F.3d 960, 966 (9th Cir. 2004) ("Here, the district court had a duty to establish subject matter jurisdiction over the removed action sua sponte, whether the parties raised the issue or not.").
The Ninth Circuit has held that courts must "strictly construe the removal statute against removal jurisdiction" and reject federal jurisdiction "if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted). "The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citations omitted).
Under 28 U.S.C. § 1441, a defendant may remove to federal court any state court action arising under the Constitution, treaties or laws of the United States. 28 U.S.C. § 1441; see also 28 U.S.C. § 1331. "Under the well-pleaded complaint rule, a suit 'arises under' federal law 'only where the plaintiff's statement of his own cause of action shows that it is based upon federal law.'" Vaden v. Discover Bank, 129 S.Ct. 1262, 1272 (2009) (quoting Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908)). Thus, "[a] federal law defense to a state-law claim does not confer jurisdiction on a federal court, even if the defense is that of federal preemption and is anticipated in the plaintiff's complaint." Valles v. Ivy Hill Corp., 410 F.3d 1071, 1075 (9th Cir. 2005) (citing to Franchise Tax Bd. of State of California v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 14 (1983)). Instead, a case may "arise under" under federal law only where the ...