UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
April 30, 2012
WILMINGTON TRUST CO.
GREGORY E. VANDERPAS, ET AL.
The opinion of the court was delivered by: Present: The Honorable Margaret M. Morrow
CIVIL MINUTES - GENERAL
ANEL HUERTA N/A
Deputy Clerk Court Reporter
Attorneys Present for Plaintiffs: Attorneys Present for Defendants:
Proceedings: Order Remanding Action to Los Angeles Superior Court for Lack of Subject Matter Jurisdiction
Oh January 10, 2011, plaintiff Wilmington Trust Co. ("Wilmington") filed this unlawful detainer action against defendants Gregory E. and Pamela J. Vanderpas, and certain fictitious defendants in Los Angeles Superior Court.*fn1 Gregory Vanderpas filed a notice of removal on March 6, 2012, invoking the court's federal question jurisdiction.*fn2
Plaintiff alleges that it is the current owner of real property
located at 3822 E. Wilton St., Long Beach, California 90804, which it
acquired through a non-judicial foreclosure sale.*fn3
It asserts that its title to the property was perfected by the
recording of a trustee's deed upon sale on December 9,
2010.*fn4 Defendants are purportedly the current
occupants of the property and were the original
trustors under the foreclosed deed of trust or successors-in-interest
to the original trustors.*fn5 On December 15, 2010,
plaintiff allegedly served a notice to quit on defendants, which
required that they vacate the property within three days.*fn6
Plaintiff asserts that, although more than three days have
elapsed, defendants continue in possession of the property without its
permission or consent.*fn7 It seeks possession of the
property as well as damages of $50.00 per day (the allegedly
reasonable daily rental value of the property) for each day that
defendants remain in possession of the property.*fn8
A. Legal Standards Governing Removal Jurisdiction
Federal courts have a duty to examine their subject matter jurisdiction whether or not the parties raise the issue. See United Investors Life Ins. Co. v. Waddell & Reed, Inc., 360 F.3d 960, 966 (9th Cir. 2004) ("[A] district court's duty to establish subject matter jurisdiction is not contingent upon the parties' arguments," citing Mitchell v. Maurer, 293 U.S. 237, 244 (1934)); see also Attorneys Trust v. Videotape Computer Products, Inc., 93 F.3d 593, 594-95 (9th Cir. 1996) (lack of subject matter jurisdiction may be raised at any time by either party or by the court sua sponte); Thiara v. Kiernan, No. C06-03503 MJJ, 2006 WL 3065568, *2 (N.D. Cal. Oct. 25, 2006) ("A district court has an independent obligation to examine whether removal jurisdiction exists before deciding any issue on the merits").
The right to remove a case to federal court is entirely a creature of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal statute, 28 U.S.C. § 1441, allows defendants to remove 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. §§ 1441(a), (b); see also 28 U.S.C. §§ 1331, 1332(a). Only state court actions that could originally have been filed in federal court may be removed. 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988). The Ninth Circuit "strictly construe[s] the removal statute against removal jurisdiction," and "[f]ederal jurisdiction must be rejected 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) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988), Takeda v. Northwestern Nat'l Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985), and Libhart, 592 F.2d at 1064). "The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990), and Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988)).
B. Federal Question Jurisdiction
Under 28 U.S.C. § 1331, the district courts "have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States" (emphasis added). Federal question jurisdiction is presumed absent unless defendants, as the party seeking to invoke the court's jurisdiction, McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936), show that plaintiff has either alleged a federal cause of action, American Well Works Co. v. Layne & Bowler , 241 U.S. 257, 260 (1916) ("a suit arises under the law that creates the action"), a state cause of action that turns on a substantial dispositive issue of federal law, Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9 (1983); Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 199 (1921), or a state cause of action that Congress has transformed into an inherently federal cause of action by completely preempting the field of its subject matter, Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 560 (1968); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
Whether a claim "arises under" federal law must be determined by reference to the "well-pleaded complaint." Franchise Tax Bd., 463 U.S. at 9-10. Since a defendant may remove a case under 28 U.S.C. § 1441(b) only if the claim could have been brought in federal court, the question for removal jurisdiction must also be determined by reference to the "well-pleaded complaint." Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986). The well-pleaded complaint rule makes the plaintiff the "master of the claim" for purposes of removal jurisdiction. Caterpillar, 482 U.S. at 392. Thus, where the plaintiff could maintain claims under both federal and state law, plaintiff can prevent removal by ignoring the federal claim and alleging only state law claims. Rains v. Criterion Systems, Inc., 80 F.3d 339, 344 (9th Cir.1996).
For federal question jurisdiction to attach,"a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112 (1936). Only where the "right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties" does a state law cause of action "arise under" the laws of the United States. Franchise Tax 463 U.S. at 13 (1983). A claim does not present a "substantial question" of federal law merely because a federal question is an "ingredient" of the cause of action. Indeed, "the mere presence of a federal issue in a state cause of action does not automatically confer federal question jurisdiction." Merrell Dow, 478 U.S. at 813.
Likewise, it is not enough for removal purposes that a federal question may arise during the litigation in connection with a defense or counterclaim. "[F]ederal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, 482 U.S. at 392. See also Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908). "A defense is not part of a plaintiff's properly pleaded statement of his or her claim." Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998). See also Taylor, 481 U.S. at 63; Gully,299 U.S. at 112 ("To bring a case within the [federal question removal] statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action"). Thus, "a case may not be removed to federal court on the basis of a federal defense, . . . even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case." Franchise Tax Bd., 463 U.S.
There is no federal question apparent on the face of plaintiff's complaint, which alleges only an unlawful detainer cause of action.*fn9 See Wells Fargo Bank v. Lapeen, No. C 11--01932 LB, 2011 WL 2194117, *3 (N.D. Cal. June 6, 2011) ("an unlawful detainer action, on its face, does not arise under federal law but is purely a creature of California law," citing Wescom Credit Union v. Dudley, No. CV 10-8203 GAF (SSx), 2010 WL 4916578, *2 (C.D. Cal. Nov. 22, 2010)); Galileo Financial v. Miin Sun Park, No. EDCV 09-1660 PSG, 2009 WL 3157411, *1 (C.D. Cal. Sept. 24, 2009) ("Here, the complaint only asserts a claim for unlawful detainer, a cause of action that is purely a matter of state law. Thus, from the face of the complaint, it is clear that no basis for federal question jurisdiction exists").
Defendant's notice of removal asserts that the court has federal question jurisdiction under the Securities Act and the Exchange Act.*fn10 At best, these statutes give rise to a counterclaim or defense, neither of which provides a basis for the exercise of jurisdiction. See Deutsche Bank Nat. Trust Co. , No. CV 11-1149 PA (AGRx), 2011 WL 590286, *1 (C.D. Cal. Feb. 9, 2011) ("[N]either an actual nor an anticipated federal counterclaim can form a basis for removal"); Aurora Loan Services, LLC v. Montoya, No. 2:11--cv--2485--MCE--KJN--PS, 2011 WL 5508926, *4 (E.D. Cal. Nov. 9, 2011) ("Even if they are premised upon federal law, plaintiff's potential defenses or counterclaims cannot provide the basis for removal jurisdiction here"). Because plaintiff's complaint does not present a federal question, the court does not have jurisdiction under 28 U.S.C. § 1331.
C. Diversity Jurisdiction
"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different states. . . ." 28 U.S.C. § 1332(a); see also Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) ("[J]urisdiction founded on [diversity] requires that the parties be in complete diversity and the amount in controversy exceed $75,000"). "[W]hen a state-court complaint affirmatively alleges that the amount in controversy is less than the jurisdictional threshold, the 'party seeking removal must prove with legal certainty that [the] jurisdictional amount is met.'" Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007) (quoting Lowdermilk v. U.S. Bank National Association, 479 F.3d 994, 1000 (9th Cir. 2007)). In any case where subject matter jurisdiction is premised on diversity, there must be complete diversity, i.e, all plaintiffs must have citizenship different than all defendants. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 & n. 3 (1996).
Defendant has failed to allege the citizenship of the parties; the court is thus unable to determine if their citizenship is diverse. Even if there were complete diversity of citizenship, moreover, defendant has not met his burden of demonstrating that the amount in controversy exceeds $75,000. "[W]hen a state-court complaint affirmatively alleges that the amount in controversy is less than the jurisdictional threshold, the 'party seeking removal must prove with legal certainty that [the] jurisdictional amount is met.'" Guglielmino, 506 F.3d at 699 (quoting Lowdermilk, 479 F.3d at 1000). In its complaint, plaintiff seeks damages of $50.00 per day,*fn11 and affirmatively states that it demands less than $10,000.*fn12 Because the complaint alleges an amount in controversy that is less than $75,000, defendant must demonstrate to a legal certainty that the jurisdictional threshold is met to avoid remand. Defendant has made no effort to dispute plaintiff's assertion concerning the amount in controversy.
Accordingly, there is no basis for exercising diversity jurisdiction over this action.*fn13
"The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Gaus, 980 F.2d at 566. For the reasons stated, Gregory Vanderpas has failed to carry his burden of demonstrating that the court has either diversity or federal question jurisdiction to hear this action. The clerk is therefore directed to remand the case to Los Angeles Superior Court forthwith.