The opinion of the court was delivered by: Present: Honorable VIRGINIA A. Phillips, U.S. District Judge
Marva Dillard None Present Courtroom Deputy Court Reporter
PROCEEDINGS: MINUTE ORDER REMANDING CASE FOR LACK OF SUBJECT-MATTER JURISDICTION (IN CHAMBERS)
On November 1, 2011, Plaintiff Yolanda Jones filed the instant action in the California Superior Court for the County of San Bernardino, alleging Defendants Well Fargo Bank, N.A., and First American Trustee Servicing Solutions, LLC ("First American"), committed various torts in issuing, and then attempting to foreclose, a mortgage loan on Jones's property. (See Ex. 1 to Not. of Removal (Doc. No. 1).) On November 30, First American filed a Declaration of Non-Monetary Status in superior court. (See Ex. 4 to Not. of Removal.) On December 2, Defendants filed a Notice of Removal premised on the parties' complete diversity, as the only non-diverse party, First American, allegedly became a non-entity for the purpose of determining diversity when it filed its Declaration of Non-Monetary Status. See Silva v. Wells Fargo Bank NA, No. CV 11-3200 GAF (JCGx), 2011 WL 2437514, at *4
(C.D. Cal. June 16, 2011). Problematically for the removing Defendants, as discussed below, First American did not yet have non-monetary status at the time of removal. Without non-monetary status, First American was a non-diverse Defendant. If First American was non-diverse, this Court lacked subject-matter jurisdiction at the time of removal. Without subject-matter jurisdiction, Defendants could not remove the action to this Court.
Removal jurisdiction is governed by statute. See 28 U.S.C. §1441. The Ninth Circuit applies a strong presumption against removal jurisdiction, ensuring "the defendant always has the burden of establishing that removal is proper." Gaus v. , 980 F.2d 564, 566 (9th Cir. 1992) (citing Nishimoto v. Federman--Bachrach & Assocs., 903 F.2d 709, 712 n.3 (9th Cir. 1990)); see also In re Ford Motor Co./Citibank, 264 F.3d 952, 957 (9th Cir. 2001) ("The party asserting federal jurisdiction bears the burden of proving the case is properly in federal court."). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c); FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990) ("federal courts are under an independent obligation to examine their own jurisdiction"); see also Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.")
Defendants removed this action based on the Court's diversity jurisdiction. Diversity jurisdiction exists when no plaintiff resides in the same state as any defendant (the complete diversity rule), and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). The Ninth Circuit recognizes an exception to the complete diversity rule, however, and allows the exercise of diversity jurisdiction over a case in which a non-diverse party is merely a "nominal or formal party who ha[s] no interest in the action . . . ." Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 873 (9th Cir. 2000). Courts in this district have recognized that a party's successful declaration of non-monetary status, under California Civil ...