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Federal National Mortgage Association v. Armando Sandoval

March 15, 2011

FEDERAL NATIONAL MORTGAGE ASSOCIATION, PLAINTIFF,
v.
ARMANDO SANDOVAL, ET AL.,
DEFENDANTS.



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

FINDINGS & RECOMMENDATIONS

Defendants Armando and Yadira Sandoval, proceeding pro se, filed on January 14, 2011 a Notice of Removal of an unlawful detainer action filed against them in state court. Plaintiff Federal National Mortgage Association ("Fannie Mae") has now filed an ex parte application for remand. Defendants have not filed a response. After reviewing the application, the court recommends that the case be remanded to state court.*fn1

BACKGROUND

Defendants 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 a petition for removal, alleging that the notice to vacate the premises was defective. They claim the court has federal question jurisdiction pursuant to 28 U.S.C. § 1441(a) because "[t]he complaint presents federal questions." (Defs.' Notice of Removal at 2.) Plaintiff moves ex parte for summary remand, contending that the removal was filed for purposes of delay.

DISCUSSION

I. Federal Question 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 have not raised any federal questions, and 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 stating so 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).

II. Original Jurisdiction Based on Fannie Mae's Federal Charter

Courts are split over whether Fannie Mae's charter confers federal jurisdiction. In Pirelli v. Armstrong Tire Corporation Retiree Medical Benefits Trust v. Raines, 534 F.3d 779 (D.C. Cir. 2008), the court relied on American National Red Cross v. Solicitor General, 505 U.S. 247, 112 S.Ct. 2465 (1992), to so hold. Fannie Mae's charter provides for it "to sue and be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal." 12 U.S.C. § 1723a(a).*fn2 The Pirelli court found that this language was similar to the charter providing that the Red Cross was authorized "to sue ...


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