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Fannie Mae, Also Known As Federal National Mortgage Association v. Michelle Cabesas

March 2, 2011

FANNIE MAE, ALSO KNOWN AS FEDERAL NATIONAL MORTGAGE ASSOCIATION, PLAINTIFF,
v.
MICHELLE CABESAS, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge

FINDINGS & RECOMMENDATIONS

Defendants Michelle Cabesas and Leticia Edillo, proceeding pro se, filed on November 19, 2010 a Notice of Removal of an unlawful detainer action filed against them in state court. Plaintiff Fannie Mae has now filed a motion to remand and request for attorneys' fees and costs. Defendants have not filed an opposition.*fn1 After reviewing the motion, the court recommends that the case be remanded to state court.*fn2

BACKGROUND

Defendants Cabesas and Edillo were sued in state court in an unlawful detainer action for their refusal to quit and deliver possession of residential real property purchased by plaintiff at a non-judicial foreclosure sale.

Defendants filed the instant petition for removal, alleging that the foreclosure sale was "improper and illegal," and therefore violated the Truth in Lending Act, the Real Estate Settlement Procedures Act, and state law, which they claim provides the court with federal question jurisdiction. Defendants also allege diversity jurisdiction.

DISCUSSION

I. Federal Question and Diversity Jurisdiction

A district court has an independent duty to examine its own jurisdiction and remand a removed action "since removal is permissible only where original jurisdiction exists at the time of removal or at the time of the entry of final judgment ...." Sparta Surgical Corp. v. National Ass'n. of Securities Dealers, Inc., 159 F.3d 1209, 1211 (9th Cir. 1998), quoting Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 43, 118 S. Ct. 956, 966 (1998); FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 229, 110 S. Ct. 596, 606-07 (1990); Harris v. Provident Life and Acc. Ins. Co., 26 F.3d 930, 932 (9th Cir. 1994).

Removal jurisdiction statutes are strictly construed against removal. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992). "The burden of establishing federal jurisdiction falls on the party invoking removal." Harris v. Provident Life and Accident Ins. Co., 26 F.3d 930 (9th Cir.1994) (quoting Gould v. Mut. Life Ins. Co. of New York, 790 F.2d 769, 771 (9th Cir.1986)).

A plaintiff may bring suit in federal court if his claim "arises under" federal law. 28 U.S.C. § 1331. In that situation, the court has original jurisdiction. A defendant cannot invoke the federal court's original jurisdiction. But he may in some instances invoke the court's removal jurisdiction. The requirements to invoke removal jurisdiction are often identical to those for invoking its original jurisdiction. The requirements for both relate to the same end, that is, federal jurisdiction.

Removal of a state court action is proper only if it originally could have been filed in federal court. 28 U.S.C. § 1441. "[F]ederal courts have jurisdiction to hear, originally or by removal, only those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action, or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 27-28, 103 S. Ct. 2841, 2855-56 (1983). Mere reference to federal law is insufficient to permit removal. See Smith v. Industrial Valley Title Ins. Co., 957 F.2d 90, 93 (3d Cir. 1992). A defense to an action, based on constitutional rules of general applicability, is not a sufficient basis to remove an action to federal court. See id.; Berg v. Leason, 32 F.3d 422, 426 (9th Cir. 1994) ("[N]either an affirmative defense based on federal law . . . nor one based on federal preemption . . . renders an action brought in state court removable."). Defendants Cabesas and Edillo have not shown that they are unable to raise their federal constitutional rights in state court.

This court has no jurisdiction over unlawful detainer actions which are strictly within the province of state court. Defendants' apparent attempt at creating federal subject matter jurisdiction by simply adding claims or defenses to a petition for removal will not succeed. See Catee v. Capital One, F.S.B. 479 F.3d 1143, 1145 (9th Cir. 2007) (even previously asserted counterclaims raising federal issue will not permit removal).

Defendants' assertion of diversity jurisdiction also fails because according to Fannie Mae, the amount of holdover damages requested is less than $26,000, and ...


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